CHAPTER 1. GENERAL PROVISIONS
IC 27-9
ARTICLE 9. SUPERVISION; REHABILITATION;
LIQUIDATIONIC 27-9-1
Chapter 1. General Provisions
IC 27-9-1-1
Applicability of article
Sec. 1. Proceedings under this article apply to the following:
(1) All insurers who are doing, or who have done, insurancebusiness in Indiana, and against whom claims arising from thatbusiness may exist.
(2) All insurers who purport to do insurance business inIndiana.
(3) All insurers who have insureds resident in Indiana.
(4) All other persons organized or in the process of organizingwith the intent to do an insurance business in Indiana.
(5) All nonprofit service plans, fraternal benefit societies, andbeneficial societies.
(6) All title insurance companies.
(7) All health maintenance organizations under IC 27-13.
(8) All multiple employer welfare arrangements underIC 27-1-34.
(9) All limited service health maintenance organizations underIC 27-13-34.
(10) All mutual insurance holding companies under IC 27-14.
As added by Acts 1979, P.L.255, SEC.1. Amended by P.L.274-1987,SEC.16; P.L.192-1991, SEC.4; P.L.1-1992, SEC.155; P.L.26-1994,SEC.22; P.L.5-2000, SEC.1.
IC 27-9-1-2
Definitions
Sec. 2. As used in IC 27-9:
(a) "Ancillary state" means any state other than a domiciliarystate.
(b) "Commissioner" refers to the insurance commissioner.
(c) "Creditor" means a person having a claim, whether matured orunmatured, liquidated or unliquidated, secured or unsecured,absolute, fixed or contingent.
(d) "Delinquency proceeding" means:
(1) any proceeding instituted against an insurer for the purposeof liquidating, rehabilitating, reorganizing, or conserving thatinsurer; and
(2) any summary proceeding under IC 27-9-2-1 or IC 27-9-2-2.
(e) "Doing business" includes the following acts, whether effectedby mail or otherwise:
(1) The issuance or delivery of contracts of insurance to personsresident in Indiana.
(2) The solicitation of applications for contracts or other
negotiations preliminary to the execution of contracts.
(3) The collection of premiums, membership fees, assessments,or other consideration for contracts.
(4) The transaction of matters subsequent to execution ofcontracts and arising out of them.
(5) Operating under a license or certificate of authority, as aninsurer, issued by the insurance department.
(f) "Domiciliary state" means the state in which an insurer isincorporated or organized, or, in the case of an alien insurer, its stateof entry.
(g) "Fair consideration" is given for property or obligation:
(1) when in exchange for that property or obligation, as a fairequivalent for it, and in good faith, property is conveyed orservices are provided or an obligation is incurred or anantecedent debt is satisfied; or
(2) when that property or obligation is received in good faith tosecure a present advance or antecedent debt in amount notdisproportionately small as compared to the value of theproperty or obligation obtained.
(h) "Foreign guaranty association" refers to a guaranty associationsimilar to those listed in subsection (k) established in any state.
(i) "Formal delinquency hearing" means any liquidation orrehabilitation proceeding.
(j) "General assets" means all property not specifically mortgaged,pledged, deposited, or otherwise encumbered for the security orbenefit of specified persons or classes of persons. As to specificallyencumbered property, "general assets" includes all such property orits proceeds in excess of the amount necessary to discharge the sumor sums secured by that property. Assets held in trust and on depositfor the security or benefit of all policyholders or all policyholdersand creditors, in more than a single state, shall be treated as generalassets.
(k) "Guaranty association" includes an association establishedunder:
(1) IC 27-6-8, the insurance guaranty association law; or
(2) IC 27-8-8, the life and health guaranty association law.
(l) "Insolvency" or "insolvent" means:
(1) for an insurer issuing only assessable fire insurance policies:
(A) the inability of the insurer to pay any obligation withinthirty (30) days after it becomes payable; or
(B) if an assessment be made within thirty (30) days after thedate an obligation becomes payable, the inability of the insurerto pay that obligation thirty (30) days following the datespecified in the first assessment notice issued after the date ofloss; and
(2) for all other insurers when:
(A) the insurer is unable to pay its obligations when they aredue; or
(B) the insurer's admitted assets do not exceed its liabilities,plus the greater of: (i) any capital and surplus required by law for its organization;or
(ii) the total par or stated value of its authorized and issuedcapital stock.
For purposes of this subsection, "liabilities" include reserves requiredby law or by regulation.
(m) "Insurer" means any person who:
(1) has done, purports to do, is doing, or is licensed to doinsurance business; and
(2) is subject to the authority of any insurance commissioner asto liquidation, rehabilitation, reorganization, supervision, orconservation.
For purposes of IC 27-9, other persons included under section 1 ofthis chapter shall be considered to be insurers.
(n) "Preferred claim" means any claim with respect to which theterms of IC 27-9 accord priority of payment from the general assetsof the insurer.
(o) "Receiver" includes liquidator, rehabilitator, or conservator.
(p) "Reciprocal state" means any state other than Indiana inwhich:
(1) in substance and effect IC 27-9-3-7(a), IC 27-9-4-3,IC 27-9-4-4, and IC 27-9-4-6 through IC 27-9-4-8 are in force;
(2) provisions are in force requiring that the commissioner (orequivalent official) be the receiver of a delinquent insurer; and
(3) some provision exists for the avoidance of fraudulentconveyances and preferential transfers.
(q) "Secured claim" means any claim secured by mortgage, trustdeed, pledge, deposit as security, escrow, or otherwise, but notincluding special deposit claims or claims against general assets. Theterm also includes claims which have become liens upon specificassets by reason of judicial process.
(r) "Special deposit claim" means any claim secured by a depositmade under law for the security or benefit of a limited class orclasses of persons, but not including any claim secured by generalassets.
(s) "State" includes the District of Columbia and all otherterritories of the United States.
(t) "Transfer" includes all methods of disposing with any interestin property or with the possession of that property, or of fixing a lienupon property, or upon an interest in property, absolutely orconditionally, voluntarily, by or without judicial proceedings. Theretention of a security title to property delivered to a debtor shall beconsidered a transfer made by the debtor.
As added by Acts 1979, P.L.255, SEC.1.
IC 27-9-1-3
Jurisdiction of court and commissioner; actions by receivers; placeof action
Sec. 3. (a) A delinquency proceeding under this chapter may onlybe commenced by the commissioner. A court may not entertain, hear,
or determine a proceeding commenced by any other person.
(b) A court may not entertain, hear, or determine any complaintrequesting:
(1) the dissolution, liquidation, rehabilitation, sequestration,conservation, or receivership of any insurer; or
(2) an injunction, restraining order, or other relief preliminaryto, incidental to, or relating to those proceedings other than inaccordance with this article.
(c) In addition to other grounds for jurisdiction provided by thelaw, an Indiana court having jurisdiction of the subject matter hasjurisdiction over a person served under the Indiana rules of court orother applicable law in an action brought by the receiver of adomestic insurer or an alien insurer domiciled in Indiana if theperson served is:
(1) obligated to the insurer in any way as an incident to anyagency or brokerage arrangement that may exist or has existedbetween the insurer and the insurance producer or broker, inany action on or incident to the obligation;
(2) a reinsurer who:
(A) has at any time written a policy of reinsurance for aninsurer against which a rehabilitation or liquidation order isin effect when the action is commenced; or
(B) is an insurance producer or broker of, or for, thereinsurer in any action on or incident to the reinsurancecontract; or
(3) or has been an officer, manager, trustee, organizer,promoter, or person in a position of comparable authority orinfluence in an insurer against which a rehabilitation orliquidation order is in effect when the action is commenced inany action resulting from such a relationship with the insurer.
(d) If it appears to a receiver appointed in a proceeding under thisarticle that there has been criminal or tortious conduct, breach of anycontractual or fiduciary obligation, or other unlawful conductdetrimental to the insurer by any director, officer, manager, insuranceproducer, broker, employee, or other person or entity, the receivermay pursue all appropriate legal remedies on behalf of the insurer.
(e) If the court on motion of any party finds that any action shouldas a matter of substantial justice be tried in a forum outside Indiana,the court may enter an order to stay further proceedings on the actionin Indiana.
(f) All action authorized by this section must be brought in theMarion County circuit court.
As added by Acts 1979, P.L.255, SEC.1. Amended by P.L.167-1986,SEC.1; P.L.178-2003, SEC.73.
IC 27-9-1-3.5
Change of judge or venue from Marion County Circuit Court inactions against receiver
Sec. 3.5. Notwithstanding the Indiana rules of trial procedure orother law to the contrary, an automatic change of judge or change of
venue from the Marion County circuit court may not be granted inany action brought by or against a receiver appointed in a proceedingunder this article. A change of judge or change of venue from theMarion County circuit court in such an action shall be granted onlyupon the filing of a verified application alleging and demonstratingone (1) or more of the specific grounds for a change of judge setforth in the Indiana rules of trial procedure or for a change of venueset forth in IC 34-35-1-1.
As added by P.L.167-1986, SEC.2. Amended by P.L.1-1998,SEC.153.
IC 27-9-1-4
Restraining orders and injunctions
Sec. 4. (a) A receiver appointed in a proceeding under IC 27-9may at any time apply for, and any court with general jurisdictionmay grant, restraining orders, preliminary and permanent injunctions,and other orders as considered necessary and proper to prevent anyof the following:
(1) The transaction of further business.
(2) The transfer of property.
(3) Interference with the receiver or with a proceeding underIC 27-9.
(4) Waste of the insurer's assets.
(5) Dissipation and transfer of bank accounts.
(6) The institution or further prosecution of any actions orprecedings.
(7) The obtaining of preferences, judgments, attachments,garnishments, or liens against the insurer, its assets or itspolicyholders.
(8) The levying of execution against the insurer, its assets, or itspolicyholders.
(9) The making of any sale or deed for nonpayment of taxes orassessments that would lessen the value of the assets of theinsurer.
(10) The withholding from the receiver of books, accounts,documents, or other records relating to the business of theinsurer.
(11) Any other threatened or contemplated action that mightlessen the value of the insurer's assets or prejudice the rights ofpolicyholders, creditors, or shareholders, or the administrationof any proceeding under IC 27-9.
(b) The receiver may apply to any court outside of Indiana for therelief described in subsection (a).
As added by Acts 1979, P.L.255, SEC.1.
IC 27-9-1-5
Cooperation of insurer with commissioner
Sec. 5. (a) An officer, manager, director, trustee, owner,employee, or insurance producer of any insurer, or any other personswith authority over or in charge of any segment of the insurer's
affairs, shall cooperate with the commissioner in any proceedingunder IC 27-9 or any investigation preliminary to the proceeding.The term "person", as used in this section, includes any person whoexercises control, directly or indirectly, over activities of an insurerthrough any holding company or other affiliate of the insurer. "Tocooperate" includes:
(1) replying promptly in writing to any inquiry from thecommissioner requesting such a reply; and
(2) making available to the commissioner all books, accounts,documents, or other records, information, or property of orpertaining to the insurer and in the insurer's possession,custody, or control.
(b) A person may not obstruct or interfere with the commissionerin the conduct of any delinquency proceeding or any investigationpreliminary to or incidental to an investigation.
(c) This section does not abridge existing legal rights, includingthe right to resist a petition for liquidation, other delinquencyproceedings, or other orders.
(d) A person who:
(1) is included within subsection (a) and who fails to cooperatewith the commissioner;
(2) obstructs or interferes with the commissioner in the conductof any delinquency proceeding or any investigation preliminaryor incidental to a delinquency proceeding; or
(3) violates any order of the commissioner under IC 27-9;
commits a Class A infraction.
As added by Acts 1979, P.L.255, SEC.1. Amended by P.L.178-2003,SEC.74.
IC 27-9-1-6
Bonds of commissioner and deputies
Sec. 6. In any proceeding under IC 27-9, the commissioner and hisdeputies are responsible on their official bonds for the faithfulperformance of their duties. If the court considers it desirable for theprotection of the insurer's assets, the court may at any time require anadditional bond from the commissioner or his deputies. Those bondsshall be paid for out of the assets of the insurer as a cost ofadministration.
As added by Acts 1979, P.L.255, SEC.1.