CHAPTER 4. EXTENDED FARM MUTUAL INSURANCE COMPANIES
IC 27-5.1-4
Chapter 4. Extended Farm Mutual Insurance Companies
IC 27-5.1-4-1
Extended company requirements
Sec. 1. An extended company is subject to the requirements ofIC 27-5.1-2 and this chapter.
As added by P.L.129-2003, SEC.8.
IC 27-5.1-4-2
Companies existing on June 30, 2003; extended company election;amended certificate of authority
Sec. 2. (a) A farm mutual insurance company that was authorizedto provide insurance in Indiana on June 30, 2003, may elect to obtaina certificate of authority as an extended company.
(b) An election under subsection (a) is made by:
(1) an affirmative vote by the board of directors of the farmmutual insurance company:
(A) on a resolution to convert to an extended company; and
(B) on an amendment of the articles of incorporation of thefarm mutual insurance company; and
(2) filing:
(A) the resolution;
(B) the amended articles of incorporation; and
(C) other information that the commissioner considersnecessary for review;
with the commissioner.
(c) The commissioner shall, upon:
(1) receiving a filing specified under subsection (b)(2); and
(2) determining that the farm mutual insurance company is incompliance with the requirements of this article and otherapplicable law;
issue an amended certificate of authority to the farm mutualinsurance company authorizing the farm mutual insurance companyas an extended company.
(d) A farm mutual insurance company, after receiving an amendedcertificate of authority under subsection (c):
(1) is subject to the requirements of this chapter; and
(2) may commence the business of insurance as an extendedcompany.
As added by P.L.129-2003, SEC.8.
IC 27-5.1-4-3
Kinds of insurance coverage
Sec. 3. An extended company may:
(1) insure the property of policyholders of the extendedcompany against loss or damage that is caused by:
(A) fire;
(B) windstorm;
(C) causes specified under an extended coverage provision;
and
(D) other perils that are specified in the policy form;
(2) insure the property of policyholders of the extendedcompany against:
(A) loss of use;
(B) loss of occupancy;
(C) loss of rents; and
(D) additional expenses;
that result from direct loss or damage to covered property; and
(3) provide other kinds of insurance that are approved by thecommissioner.
As added by P.L.129-2003, SEC.8.
IC 27-5.1-4-4
Financial and reinsurance requirements
Sec. 4. An extended company shall comply with the followingfinancial and reinsurance requirements if the extended companyprovides the types of insurance described in section 3 of this chapter:
(1) The extended company shall maintain a policyholder surplusas required under IC 27-1-6-15.
(2) The net retention per risk that an extended company maymaintain may not exceed two-tenths percent (0.2%) of theextended company's insurance in force.
As added by P.L.129-2003, SEC.8.
IC 27-5.1-4-5
Collections through assessments and premiums
Sec. 5. (a) An extended company:
(1) may collect a membership fee and an initial premium chargethat are prescribed by the board of directors of the extendedcompany; and
(2) shall collect, not less than annually, an amount that issufficient to enable the extended company to:
(A) pay losses and expenses; and
(B) create and maintain a policyholder surplus in accordancewith the articles of incorporation and bylaws of the extendedcompany.
(b) Collections under subsection (a) are subject to the followingrequirements:
(1) Collections must be made through assessments or premiumscharged by the extended company on certain insurance policiesissued by the extended company as determined by the board ofdirectors of the extended company.
(2) A policyholder that holds an insurance policy that is issuedon a basis other than a premium basis:
(A) may be charged an advance assessment that is payablenot later than the time at which the insurance policy isissued, as determined by the board of directors of theextended company; and
(B) may be assessed if a further assessment is required under
the articles of incorporation of the extended company.
(c) The terms and conditions of assessments made under thissection must be clearly disclosed in the insurance policy.
As added by P.L.129-2003, SEC.8.
IC 27-5.1-4-6
Policyholder surplus
Sec. 6. The following requirements apply to the policyholdersurplus of an extended company:
(1) The articles of incorporation of the extended company mustprovide for the existence, maintenance, and use of thepolicyholder surplus.
(2) The policyholder surplus may be used only for the paymentof losses and expenses considered necessary by the board ofdirectors of the extended company.
(3) The existence or maintenance of the policyholder surplusdoes not relieve a policyholder of any assessment or otherobligation that the:
(A) policyholder owes to the extended company; or
(B) extended company has levied against the policyholder.
(4) If the extended company is dissolved, the policyholdersurplus must be treated in the same manner as any other assetof the extended company.
As added by P.L.129-2003, SEC.8.
IC 27-5.1-4-7
Investments
Sec. 7. An extended company shall make investments inaccordance with IC 27-1-13-3.
As added by P.L.129-2003, SEC.8.
IC 27-5.1-4-8
Annual statement
Sec. 8. (a) An extended company shall, not later than March 1,prepare and file with the commissioner an annual statement:
(1) that is on a form prescribed by the commissioner;
(2) that is verified by an affidavit of the:
(A) president; and
(B) secretary;
of the board of directors of the extended company; and
(3) that reflects the condition of the extended company as of theend of the calendar year immediately preceding the date of theannual statement.
(b) An annual statement prepared and filed under subsection (a)must be presented at the annual meeting of the extended company.
(c) An annual statement filed under subsection (a) must beaccompanied by the filing fee set forth in IC 27-1-3-15.
As added by P.L.129-2003, SEC.8.