CHAPTER 2. SUMMARY PROCEEDINGS
IC 27-9-2
Chapter 2. Summary Proceedings
IC 27-9-2-1
Practices or condition of domestic insurers requiring control orsupervision
Sec. 1. (a) Whenever the commissioner has reasonable cause tobelieve, and determines, after a hearing held under IC 4-21.5-3, thatany domestic insurer has committed or engaged in, or is about tocommit or engage in, any act, practice, or transaction that wouldsubject it to a delinquency proceeding under IC 27-9-3-1 orIC 27-9-3-6, the commissioner may make and serve upon the insurerand any other persons involved, any orders reasonably necessary tocorrect, eliminate, or remedy that conduct, condition, or ground.
(b) If the commissioner has reasonable cause to believe that anydomestic insurer is in such condition as to render the continuance ofits business hazardous to the public or to holders of its policies orcertificates of insurance, or if that domestic insurer gives its consent,the commissioner shall upon his determination issue an order:
(1) notifying the insurer of his determination; and
(2) providing the insurer with a written list of thecommissioner's requirements to correct its business practices.
(c) If the commissioner makes a determination to supervise aninsurer subject to an order under subsection (a) or (b), thecommissioner shall notify the insurer that it is under the supervisionof the commissioner. If the insurer is a reorganized insurer underIC 27-14, the commissioner may also determine to supervise themutual insurance holding company that is affiliated with thereorganized insurer, regardless of whether another basis exists forsupervising the mutual insurance holding company. If thecommissioner makes a determination to supervise a mutual insuranceholding company, the commissioner shall notify the mutual insuranceholding company that it is under the supervision of thecommissioner.
(d) During the period of supervision, the commissioner mayappoint a supervisor to supervise the insurer. The order appointinga supervisor must direct the supervisor to enforce orders issued undersubsection (a) or (b). The order may also provide that the insurer maynot do any of the following things, during the period of supervision,without the prior approval of the commissioner or his supervisor:
(1) Dispose of, convey, or encumber any of its assets or itsbusiness in force.
(2) Withdraw funds from any of its bank accounts.
(3) Lend any of its funds.
(4) Invest any of its funds.
(5) Transfer any of its property.
(6) Incur any debt, obligation, or liability.
(7) Merge or consolidate with another company.
(8) Enter into any new reinsurance contract or agreement.
(9) Restrict the writing of new business on the renewal of
existing business.
(e) Any insurer subject to an order under this section must complywith the lawful requirements of the commissioner and, if placedunder supervision, has sixty (60) days from the date the supervisionorder is served within which to comply with the requirements of thecommissioner. In the event of the insurer's failure to comply withinthose time requirements, the commissioner may institute proceedingsunder IC 27-9-3-1 or IC 27-9-3-6 to have a rehabilitator or liquidatorappointed, or extend the period of supervision.
(f) During the period of supervision, the insurer may request thecommissioner to review any action taken or proposed to be taken bythe supervisor, specifying the reason the action complained of isbelieved not to be in the best interest of the insurer.
(g) If a person violates a supervision order issued under thissection, he is civilly liable up to ten thousand dollars ($10,000).
(h) The commissioner may apply for and the Marion Countycircuit court may grant, under IC 4-21.5-6, orders as are necessaryand proper to enforce a supervision order.
(i) In the event that a person subject to this article knowinglyviolates any valid order of the commissioner issued under thissection and, as a result of that violation, the net worth of the insureris reduced or the insurer suffers loss it would not otherwise havesuffered, that person is personally liable to the insurer for the amountof that reduction or loss. The commissioner or supervisor isauthorized to bring an action on behalf of the insurer in the MarionCounty circuit court to recover the amount of the reduction or losstogether with any costs.
As added by Acts 1979, P.L.255, SEC.1. Amended by P.L.7-1987,SEC.155; P.L.5-2000, SEC.2.
IC 27-9-2-2
Petition; orders
Sec. 2. (a) The commissioner may file in the Marion Countycircuit court a petition alleging, with respect to a domestic insurer:
(1) that there exist grounds that justify a court order for a formaldelinquency proceeding against the insurer under IC 27-9;
(2) that the interests of policyholders, creditors, or the publicwill be endangered by delay; and
(3) other matters the commissioner considers necessary.
(b) Upon a filing under subsection (a), the Marion County circuitcourt may issue, ex parte, and without a hearing, the requested orderthat must:
(1) Direct the commissioner to take possession and control anypart of the property, books, accounts, documents, and otherrecords of an insurer.
(2) Direct the commissioner to take possession of the premisesoccupied by the insurer for transaction of its business.
(3) Until further order of the Marion County circuit court,enjoin the insurer and its officers, managers, agents, andemployees from disposition of its property and from transaction
of its business except with the written consent of thecommissioner.
(c) The Marion County circuit court shall specify the order'sduration, which shall be such time as the court considers necessaryfor the commissioner to determine the condition of the insurer. Onmotion of either party or on its own motion, the Marion Countycircuit court may hold hearings as it considers desirable after givingnotice as it considers appropriate, and may extend, shorten, ormodify the terms of the seizure order. The Marion County circuitcourt shall vacate the seizure order if the commissioner fails tocommence a formal proceeding under IC 27-9 after having had areasonable opportunity to do so. An order of the Marion Countycircuit court under a formal proceeding under IC 27-9 shall ipso factovacate the seizure order.
(d) Entry of a seizure order under this section does not constitutean anticipatory breach of any contract of the insurer.
(e) An insurer subject to an ex parte order under this section maypetition the Marion County circuit court at any time after theissuance of the order for a hearing and review of the order. TheMarion County circuit court shall hold a hearing and review not morethan fifteen (15) days after the request. A hearing under thissubsection may be held privately in chambers, and the hearing mustbe held in chambers if the petitioning insurer requests it.
(f) If, at any time after the issuance of an order, it appears to theMarion County circuit court that any person whose interest is or willbe substantially affected by the order did not appear at the hearingand has not been served, the Marion County circuit court may ordernotice to be given to that person. An order that notice be given doesnot stay the effect of any order previously issued by the court.
As added by Acts 1979, P.L.255, SEC.1.
IC 27-9-2-3
Confidential nature of records and documents
Sec. 3. In all proceedings and judicial reviews of thoseproceedings under sections 1 and 2 of this chapter, all records of theinsurer, other documents, and all insurance department files, andcourt records and papers, so far as they concern or are a part of therecord of the proceedings, shall remain confidential except as isnecessary to obtain compliance with those proceedings or judicialreviews, unless and until the Marion County circuit court, afterhearing arguments from the parties in chambers, shall orderotherwise, or unless the insurer requests that the matter be madepublic. Until the Marion County circuit court issues an order, allpapers filed with the clerk of the Marion County circuit court mustbe held by him in a confidential file.
As added by Acts 1979, P.L.255, SEC.1.