IC 27-1-40
Chapter 40. Entry of Unauthorized Alien Companies
IC 27-1-40-1 "Trusteed surplus"
Sec. 1. As used in this chapter, "trusteed surplus" means the
aggregate value of a United States branch's:
(1) surplus and reserve funds required under IC 27-1-6; and
(2) trust assets described in section 4 of this chapter;
plus investment income accrued on the items described in
subdivisions (1) and (2) if the investment income is collected by the
state for the trustees, less the aggregate net amount of all of the
United States branch's reserves and other liabilities in the United
States, as determined under section 6 of this chapter. As added by P.L.173-2007, SEC.20. Amended by P.L.3-2008,
SEC.210.
IC 27-1-40-2 "United States branch"
Sec. 2. As used in this chapter, "United States branch" means:
(1) an entity that is considered, for purposes of this chapter, to
be a domestic company through which insurance business is
transacted in the United States by an alien company; and
(2) the alien company's assets and liabilities that are attributable
to the insurance business transacted in the United States. As added by P.L.173-2007, SEC.20.
IC 27-1-40-3 Indiana as state of entry for alien company
Sec. 3. Indiana may serve as a state of entry to enable an alien
company to transact insurance business in the United States through
a United States branch if the United States branch:
(1) qualifies under this title for a certificate of authority as if the
United States branch were a domestic company organized under
this title; and
(2) establishes a trust account that meets the following
conditions:
(A) The trust account is established under a trust agreement
approved by the commissioner with a United States bank.
(B) The amount in the trust account is at least equal to:
(i) the minimum capital and surplus requirements; or
(ii) the authorized control level risk based capital
requirements;
whichever is greater, that apply to a domestic company that
possesses a certificate of authority to transact the same kind
of insurance business in Indiana as the United States branch
will transact. As added by P.L.173-2007, SEC.20.
IC 27-1-40-4 Trust account; requirements; trust agreement
Sec. 4. (a) A trust account established under section 3(2) of this
chapter must contain, at all times, an amount equal to the United
States branch's reserves and other liabilities, plus the:
(1) minimum capital and surplus requirement; or
(2) authorized control level risk based capital requirement;
whichever is greater, that applies to a domestic company granted a
certificate of authority under this title to transact the same kind of
insurance business as the United States branch transacts.
(b) One (1) or more trustees must be appointed to administer the
trust.
(c) A trust agreement for a trust account established under section
3(2) of this chapter, and amendments to the trust agreement:
(1) must be authenticated in a manner prescribed by the
commissioner; and
(2) are effective only when approved by the commissioner after
the commissioner finds all of the following:
(A) The trust agreement and amendments are sufficient in
form and in conformity with law.
(B) All trustees appointed under subsection (b) are eligible
to serve as trustees.
(C) The trust agreement is adequate to protect the interests
of the beneficiaries of the trust.
(d) The commissioner may withdraw an approval granted under
subsection (c)(2) if, after notice and hearing, the commissioner
determines that one (1) or more of the conditions required under
subsection (c)(2) for approval no longer exist.
(e) The commissioner may approve modifications of, or variations
in, a trust agreement under subsection (c) if the modifications or
variations are not prejudicial to the interests of Indiana residents,
United States policyholders, and creditors of the United States
branch.
(f) A trust agreement for a trust account established under section
3(2) of this chapter must contain provisions that:
(1) vest legal title to trust assets in the trustees and lawfully
appointed successors of the trustees;
(2) require that all assets deposited in the trust account be
continuously kept in the United States;
(3) provide for appointment of a new trustee in case of a
vacancy, subject to the approval of the commissioner;
(4) require that the trustees continuously maintain a record
sufficient to identify the assets of the trust account;
(5) require that the trust assets consist of:
(A) cash;
(B) investments of the same kind as the investments in
which funds of a domestic company may be invested; and
(C) interest accrued on the cash and investments specified in
clauses (A) and (B), if collectible by the trustees;
(6) establish that the trust:
(A) is for the exclusive benefit, security, and protection of:
(i) United States policyholders of the United States
branch; and
(ii) United States creditors of the United States branch
after all obligations to policyholders are paid; and
(B) shall be maintained as long as any liability of the United
States branch arising out of the United States branch's
insurance transactions in the United States is outstanding;
and
(7) establish that trust assets, other than income as specified in
subsection (g), may not be withdrawn or permitted by the
trustees to be withdrawn without the approval of the
commissioner, except for any of the following purposes:
(A) To make deposits required by the law of any state for the
security or benefit of all policyholders of the United States
branch in the United States.
(B) To substitute other assets permitted by law and at least
equal in value and quality to the assets withdrawn, upon the
specific written direction of the United States manager of the
United States branch when the United States manager is
empowered and acting under general or specific written
authority previously granted or delegated by the alien
company's board of directors.
(C) To transfer the assets to an official liquidator or
rehabilitator under a court order.
(g) A trust agreement for a trust account established under section
3(2) of this chapter may provide that income, earnings, dividends, or
interest accumulations of the trust assets may be paid over to the
United States manager of the United States branch upon request of
the United States manager if the total amount of trust assets
following the payment to the United States manager is not less than
the amount required under subsection (a).
(h) A trust agreement for a trust account established under section
3(2) of this chapter may provide that written approval of the
insurance supervising official of another state in which:
(1) trust assets are deposited; and
(2) the United States branch is authorized to transact insurance
business;
is sufficient, and approval of the commissioner is not required, for
withdrawal of the trust assets in the other state if the amount of total
trust assets after the withdrawal will not be less than the amount
required under subsection (a). However, the United States branch
shall provide written notice to the commissioner of the nature and
extent of the withdrawal.
(i) The commissioner may at any time:
(1) make examinations of the trust assets of a United States
branch that holds a certificate of authority under this chapter, at
the expense of the United States branch; and
(2) require the trustees to file a statement, on a form prescribed
by the commissioner, certifying the assets of the trust account
and the amounts of the assets.
(j) Refusal or neglect of a trustee to comply with this section is
grounds for:
(1) the revocation of the United States branch's certificate of
authority; or
(2) the liquidation of the United States branch. As added by P.L.173-2007, SEC.20.
IC 27-1-40-5 Certificate of authority for United States branch; requirements
Sec. 5. (a) The commissioner shall require a United States branch
to do the following before granting the United States branch a
certificate of authority to transact insurance business as described in
section 3(1) of this chapter:
(1) Comply with this chapter and any other requirement of this
title.
(2) Submit the following:
(A) A copy of the current charter and bylaws of the alien
company that intends to transact business through the United
States branch and any other documents determined by the
commissioner to be necessary to provide evidence of the
kinds of insurance business that the alien company is
authorized to transact. Documents submitted under this
clause must be attested to as accurate by the insurance
supervisory official in the alien company's domiciliary
jurisdiction.
(B) A full statement, subscribed and affirmed as true under
penalty of perjury by two (2) officers or equivalent
responsible representatives of the alien company in a manner
prescribed by the commissioner, of the alien company's
financial condition as of the close of the alien company's
latest fiscal year, showing the alien company's:
(i) assets;
(ii) liabilities;
(iii) income disbursements;
(iv) business transacted; and
(v) other facts required to be shown in the alien company's
annual statement reported to the insurance supervisory
official in the alien company's domiciliary jurisdiction.
(C) An English translation, if necessary, of any document
submitted under this subdivision.
(3) Submit to an examination of the affairs of the alien company
that intends to transact business through the United States
branch at the alien company's principal office in the United
States. However, the commissioner may accept a report of the
insurance supervisory official in the alien company's
domiciliary jurisdiction in lieu of the examination required
under this subdivision.
(b) The commissioner may at any time hire, at a United States
branch's expense, any independent experts that the commissioner
considers necessary to implement this chapter with respect to the
United States branch. As added by P.L.173-2007, SEC.20.
IC 27-1-40-6 United States branch filing requirements
Sec. 6. (a) A United States branch shall file with the
commissioner, not later than March 1, May 15, August 15, and
November 15 of each year, all of the following:
(1) Statements of the insurance business transacted in the
United States, the assets held by or for the United States branch
in the United States for the protection of policyholders and
creditors in the United States, and the liabilities incurred against
the assets. All of the following apply to the statements filed
under this subdivision:
(A) The statements must contain information concerning
only the United States branch's assets and insurance business
in the United States.
(B) The statements must be in the same form as statements
required of a domestic company that possesses a certificate
of authority to transact the same kinds of insurance business
as the United States branch transacts.
(C) The statements must be filed as follows:
(i) Quarterly statements filed not later than May 15,
August 15, and November 15 of each year for the first
three (3) quarters of the calendar year.
(ii) An annual statement, filed not later than March 1 of
each year.
(2) A trusteed surplus statement, in a form prescribed by the
commissioner, at the end of the period covered by each
statement described in subdivision (1)(C). In determining the
net amount of the United States branch's liabilities in the United
States to be reported in the statement of trusteed surplus, the
United States branch shall make adjustments to total liabilities
reported on the accompanying annual or quarterly statement as
follows:
(A) Add back liabilities used to offset admitted assets
reported in the accompanying quarterly or annual statement.
(B) Deduct:
(i) unearned premiums on insurance producer balances or
uncollected premiums that are not more than ninety (90)
days past due;
(ii) losses reinsured by reinsurers authorized to do
business in Indiana, less unpaid reinsurance premiums to
be paid to the authorized reinsurers;
(iii) reinsurance recoverables on paid losses from
reinsurers not authorized to do business in Indiana that are
included as an asset in the annual statement, but only to
the extent that a liability for the unauthorized recoverables
is included in the liabilities report in the trusteed surplus
statement;
(iv) special state deposits held for the exclusive benefit of
policyholders of a particular state that do not exceed net
liabilities reports for the particular state;
(v) secured accrued retrospective premiums;
(vi) if the alien company transacting business through the
United States branch is a life insurer, the amount of the
alien company's policy loans to policyholders in the
United States, not exceeding the amount of legal reserve
required on each policy, and the net amount of uncollected
and deferred premiums; and
(vii) any other nontrust asset that the commissioner
determines secures liabilities in a manner substantially
similar to the manner in which liabilities are secured by
the unearned premiums, losses reinsured, reinsurance
recoverables, special state deposits, secured accrued
retrospective premiums, and policy loans referred to in
items (i) through (vi).
(3) Any additional information that relates to the business or
assets of the alien company and is required by the
commissioner.
(b) The annual statement and trusteed surplus statement described
in subsection (a) must be signed and verified by the United States
manager, the attorney in fact, or an empowered assistant United
States manager, of the United States branch. Items of securities and
other property held under a trust agreement must be certified in the
trusteed surplus statement by the United States trustees.
(c) Each report concerning an examination of a United States
branch conducted under section 4(i) of this chapter must include a
trusteed surplus statement as of the date of examination and a general
statement of the financial condition of the United States branch. As added by P.L.173-2007, SEC.20.
IC 27-1-40-7 Issuance and renewal of certificate of authority
Sec. 7. (a) Before issuing a new or renewal certificate of authority
to a United States branch, the commissioner may require satisfactory
proof:
(1) in the charter of the alien company transacting business
through the United States branch;
(2) by an agreement evidenced by a certified resolution of the
alien company's board of directors; or
(3) otherwise as required by the commissioner;
that the United States branch will not engage in any insurance
business not authorized by this chapter and by the alien company's
charter.
(b) The commissioner shall issue a renewal certificate of authority
to a United States branch if the commissioner is satisfied that the
United States branch is not delinquent in any requirement of this title
and that the United States branch's continued insurance business in
Indiana is not contrary to the best interest of the citizens of Indiana.
(c) A United States branch may not be:
(1) granted a certificate of authority to transact any kind of
insurance business in Indiana that is not permitted to be
transacted in Indiana by a domestic company granted a
certificate of authority under this title; or
(2) authorized to transact an insurance business in Indiana if the
United States branch transacts, anywhere in the United States,
any kind of business other than an insurance business (and
business incidental to the kind of insurance business) that the
United States branch is authorized to transact in Indiana.
(d) A United States branch entering the United States through
Indiana or another state may not be authorized to transact an
insurance business in Indiana if the United States branch fails to
substantially comply with any requirement of this title that:
(1) applies to a similar domestic company that is organized after
July 1, 2007; and
(2) the commissioner determines is necessary to protect the
interest of the policyholders.
(e) Unless the commissioner determines that the kind of insurance
is not contrary to the best interest of the citizens of Indiana, a United
States branch may not transact any kind of insurance business that is
not permitted to be transacted in Indiana by a similar domestic
company that is organized after July 1, 2007.
(f) A United States branch may not be authorized to transact an
insurance business in Indiana unless the United States branch
maintains correct and complete records of the United States branch's
transactions that are:
(1) open to inspection by any person who has the right to
inspect the records; and
(2) maintained at the United States branch's principal office in
Indiana. As added by P.L.173-2007, SEC.20.
IC 27-1-40-8 Insolvency proceedings
Sec. 8. If the commissioner determines from a quarterly or annual
statement, a trusteed surplus statement, or another report that a
United States branch's trusteed surplus is less than:
(1) the minimum capital and surplus requirements; or
(2) the authorized control level risk based capital requirements;
whichever is greater, that apply to a domestic insurer granted a
certificate of authority to transact the same kind of insurance
business in Indiana, the commissioner may proceed under IC 27-9
against the United States branch as if the United States branch were
an insurer in such condition that further transaction by the insurer of
insurance business in the United States would be hazardous to the
insurer's policyholders, creditors, or residents of the United States. As added by P.L.173-2007, SEC.20.
IC 27-1-40
Chapter 40. Entry of Unauthorized Alien Companies
IC 27-1-40-1 "Trusteed surplus"
Sec. 1. As used in this chapter, "trusteed surplus" means the
aggregate value of a United States branch's:
(1) surplus and reserve funds required under IC 27-1-6; and
(2) trust assets described in section 4 of this chapter;
plus investment income accrued on the items described in
subdivisions (1) and (2) if the investment income is collected by the
state for the trustees, less the aggregate net amount of all of the
United States branch's reserves and other liabilities in the United
States, as determined under section 6 of this chapter. As added by P.L.173-2007, SEC.20. Amended by P.L.3-2008,
SEC.210.
IC 27-1-40-2 "United States branch"
Sec. 2. As used in this chapter, "United States branch" means:
(1) an entity that is considered, for purposes of this chapter, to
be a domestic company through which insurance business is
transacted in the United States by an alien company; and
(2) the alien company's assets and liabilities that are attributable
to the insurance business transacted in the United States. As added by P.L.173-2007, SEC.20.
IC 27-1-40-3 Indiana as state of entry for alien company
Sec. 3. Indiana may serve as a state of entry to enable an alien
company to transact insurance business in the United States through
a United States branch if the United States branch:
(1) qualifies under this title for a certificate of authority as if the
United States branch were a domestic company organized under
this title; and
(2) establishes a trust account that meets the following
conditions:
(A) The trust account is established under a trust agreement
approved by the commissioner with a United States bank.
(B) The amount in the trust account is at least equal to:
(i) the minimum capital and surplus requirements; or
(ii) the authorized control level risk based capital
requirements;
whichever is greater, that apply to a domestic company that
possesses a certificate of authority to transact the same kind
of insurance business in Indiana as the United States branch
will transact. As added by P.L.173-2007, SEC.20.
IC 27-1-40-4 Trust account; requirements; trust agreement
Sec. 4. (a) A trust account established under section 3(2) of this
chapter must contain, at all times, an amount equal to the United
States branch's reserves and other liabilities, plus the:
(1) minimum capital and surplus requirement; or
(2) authorized control level risk based capital requirement;
whichever is greater, that applies to a domestic company granted a
certificate of authority under this title to transact the same kind of
insurance business as the United States branch transacts.
(b) One (1) or more trustees must be appointed to administer the
trust.
(c) A trust agreement for a trust account established under section
3(2) of this chapter, and amendments to the trust agreement:
(1) must be authenticated in a manner prescribed by the
commissioner; and
(2) are effective only when approved by the commissioner after
the commissioner finds all of the following:
(A) The trust agreement and amendments are sufficient in
form and in conformity with law.
(B) All trustees appointed under subsection (b) are eligible
to serve as trustees.
(C) The trust agreement is adequate to protect the interests
of the beneficiaries of the trust.
(d) The commissioner may withdraw an approval granted under
subsection (c)(2) if, after notice and hearing, the commissioner
determines that one (1) or more of the conditions required under
subsection (c)(2) for approval no longer exist.
(e) The commissioner may approve modifications of, or variations
in, a trust agreement under subsection (c) if the modifications or
variations are not prejudicial to the interests of Indiana residents,
United States policyholders, and creditors of the United States
branch.
(f) A trust agreement for a trust account established under section
3(2) of this chapter must contain provisions that:
(1) vest legal title to trust assets in the trustees and lawfully
appointed successors of the trustees;
(2) require that all assets deposited in the trust account be
continuously kept in the United States;
(3) provide for appointment of a new trustee in case of a
vacancy, subject to the approval of the commissioner;
(4) require that the trustees continuously maintain a record
sufficient to identify the assets of the trust account;
(5) require that the trust assets consist of:
(A) cash;
(B) investments of the same kind as the investments in
which funds of a domestic company may be invested; and
(C) interest accrued on the cash and investments specified in
clauses (A) and (B), if collectible by the trustees;
(6) establish that the trust:
(A) is for the exclusive benefit, security, and protection of:
(i) United States policyholders of the United States
branch; and
(ii) United States creditors of the United States branch
after all obligations to policyholders are paid; and
(B) shall be maintained as long as any liability of the United
States branch arising out of the United States branch's
insurance transactions in the United States is outstanding;
and
(7) establish that trust assets, other than income as specified in
subsection (g), may not be withdrawn or permitted by the
trustees to be withdrawn without the approval of the
commissioner, except for any of the following purposes:
(A) To make deposits required by the law of any state for the
security or benefit of all policyholders of the United States
branch in the United States.
(B) To substitute other assets permitted by law and at least
equal in value and quality to the assets withdrawn, upon the
specific written direction of the United States manager of the
United States branch when the United States manager is
empowered and acting under general or specific written
authority previously granted or delegated by the alien
company's board of directors.
(C) To transfer the assets to an official liquidator or
rehabilitator under a court order.
(g) A trust agreement for a trust account established under section
3(2) of this chapter may provide that income, earnings, dividends, or
interest accumulations of the trust assets may be paid over to the
United States manager of the United States branch upon request of
the United States manager if the total amount of trust assets
following the payment to the United States manager is not less than
the amount required under subsection (a).
(h) A trust agreement for a trust account established under section
3(2) of this chapter may provide that written approval of the
insurance supervising official of another state in which:
(1) trust assets are deposited; and
(2) the United States branch is authorized to transact insurance
business;
is sufficient, and approval of the commissioner is not required, for
withdrawal of the trust assets in the other state if the amount of total
trust assets after the withdrawal will not be less than the amount
required under subsection (a). However, the United States branch
shall provide written notice to the commissioner of the nature and
extent of the withdrawal.
(i) The commissioner may at any time:
(1) make examinations of the trust assets of a United States
branch that holds a certificate of authority under this chapter, at
the expense of the United States branch; and
(2) require the trustees to file a statement, on a form prescribed
by the commissioner, certifying the assets of the trust account
and the amounts of the assets.
(j) Refusal or neglect of a trustee to comply with this section is
grounds for:
(1) the revocation of the United States branch's certificate of
authority; or
(2) the liquidation of the United States branch. As added by P.L.173-2007, SEC.20.
IC 27-1-40-5 Certificate of authority for United States branch; requirements
Sec. 5. (a) The commissioner shall require a United States branch
to do the following before granting the United States branch a
certificate of authority to transact insurance business as described in
section 3(1) of this chapter:
(1) Comply with this chapter and any other requirement of this
title.
(2) Submit the following:
(A) A copy of the current charter and bylaws of the alien
company that intends to transact business through the United
States branch and any other documents determined by the
commissioner to be necessary to provide evidence of the
kinds of insurance business that the alien company is
authorized to transact. Documents submitted under this
clause must be attested to as accurate by the insurance
supervisory official in the alien company's domiciliary
jurisdiction.
(B) A full statement, subscribed and affirmed as true under
penalty of perjury by two (2) officers or equivalent
responsible representatives of the alien company in a manner
prescribed by the commissioner, of the alien company's
financial condition as of the close of the alien company's
latest fiscal year, showing the alien company's:
(i) assets;
(ii) liabilities;
(iii) income disbursements;
(iv) business transacted; and
(v) other facts required to be shown in the alien company's
annual statement reported to the insurance supervisory
official in the alien company's domiciliary jurisdiction.
(C) An English translation, if necessary, of any document
submitted under this subdivision.
(3) Submit to an examination of the affairs of the alien company
that intends to transact business through the United States
branch at the alien company's principal office in the United
States. However, the commissioner may accept a report of the
insurance supervisory official in the alien company's
domiciliary jurisdiction in lieu of the examination required
under this subdivision.
(b) The commissioner may at any time hire, at a United States
branch's expense, any independent experts that the commissioner
considers necessary to implement this chapter with respect to the
United States branch. As added by P.L.173-2007, SEC.20.
IC 27-1-40-6 United States branch filing requirements
Sec. 6. (a) A United States branch shall file with the
commissioner, not later than March 1, May 15, August 15, and
November 15 of each year, all of the following:
(1) Statements of the insurance business transacted in the
United States, the assets held by or for the United States branch
in the United States for the protection of policyholders and
creditors in the United States, and the liabilities incurred against
the assets. All of the following apply to the statements filed
under this subdivision:
(A) The statements must contain information concerning
only the United States branch's assets and insurance business
in the United States.
(B) The statements must be in the same form as statements
required of a domestic company that possesses a certificate
of authority to transact the same kinds of insurance business
as the United States branch transacts.
(C) The statements must be filed as follows:
(i) Quarterly statements filed not later than May 15,
August 15, and November 15 of each year for the first
three (3) quarters of the calendar year.
(ii) An annual statement, filed not later than March 1 of
each year.
(2) A trusteed surplus statement, in a form prescribed by the
commissioner, at the end of the period covered by each
statement described in subdivision (1)(C). In determining the
net amount of the United States branch's liabilities in the United
States to be reported in the statement of trusteed surplus, the
United States branch shall make adjustments to total liabilities
reported on the accompanying annual or quarterly statement as
follows:
(A) Add back liabilities used to offset admitted assets
reported in the accompanying quarterly or annual statement.
(B) Deduct:
(i) unearned premiums on insurance producer balances or
uncollected premiums that are not more than ninety (90)
days past due;
(ii) losses reinsured by reinsurers authorized to do
business in Indiana, less unpaid reinsurance premiums to
be paid to the authorized reinsurers;
(iii) reinsurance recoverables on paid losses from
reinsurers not authorized to do business in Indiana that are
included as an asset in the annual statement, but only to
the extent that a liability for the unauthorized recoverables
is included in the liabilities report in the trusteed surplus
statement;
(iv) special state deposits held for the exclusive benefit of
policyholders of a particular state that do not exceed net
liabilities reports for the particular state;
(v) secured accrued retrospective premiums;
(vi) if the alien company transacting business through the
United States branch is a life insurer, the amount of the
alien company's policy loans to policyholders in the
United States, not exceeding the amount of legal reserve
required on each policy, and the net amount of uncollected
and deferred premiums; and
(vii) any other nontrust asset that the commissioner
determines secures liabilities in a manner substantially
similar to the manner in which liabilities are secured by
the unearned premiums, losses reinsured, reinsurance
recoverables, special state deposits, secured accrued
retrospective premiums, and policy loans referred to in
items (i) through (vi).
(3) Any additional information that relates to the business or
assets of the alien company and is required by the
commissioner.
(b) The annual statement and trusteed surplus statement described
in subsection (a) must be signed and verified by the United States
manager, the attorney in fact, or an empowered assistant United
States manager, of the United States branch. Items of securities and
other property held under a trust agreement must be certified in the
trusteed surplus statement by the United States trustees.
(c) Each report concerning an examination of a United States
branch conducted under section 4(i) of this chapter must include a
trusteed surplus statement as of the date of examination and a general
statement of the financial condition of the United States branch. As added by P.L.173-2007, SEC.20.
IC 27-1-40-7 Issuance and renewal of certificate of authority
Sec. 7. (a) Before issuing a new or renewal certificate of authority
to a United States branch, the commissioner may require satisfactory
proof:
(1) in the charter of the alien company transacting business
through the United States branch;
(2) by an agreement evidenced by a certified resolution of the
alien company's board of directors; or
(3) otherwise as required by the commissioner;
that the United States branch will not engage in any insurance
business not authorized by this chapter and by the alien company's
charter.
(b) The commissioner shall issue a renewal certificate of authority
to a United States branch if the commissioner is satisfied that the
United States branch is not delinquent in any requirement of this title
and that the United States branch's continued insurance business in
Indiana is not contrary to the best interest of the citizens of Indiana.
(c) A United States branch may not be:
(1) granted a certificate of authority to transact any kind of
insurance business in Indiana that is not permitted to be
transacted in Indiana by a domestic company granted a
certificate of authority under this title; or
(2) authorized to transact an insurance business in Indiana if the
United States branch transacts, anywhere in the United States,
any kind of business other than an insurance business (and
business incidental to the kind of insurance business) that the
United States branch is authorized to transact in Indiana.
(d) A United States branch entering the United States through
Indiana or another state may not be authorized to transact an
insurance business in Indiana if the United States branch fails to
substantially comply with any requirement of this title that:
(1) applies to a similar domestic company that is organized after
July 1, 2007; and
(2) the commissioner determines is necessary to protect the
interest of the policyholders.
(e) Unless the commissioner determines that the kind of insurance
is not contrary to the best interest of the citizens of Indiana, a United
States branch may not transact any kind of insurance business that is
not permitted to be transacted in Indiana by a similar domestic
company that is organized after July 1, 2007.
(f) A United States branch may not be authorized to transact an
insurance business in Indiana unless the United States branch
maintains correct and complete records of the United States branch's
transactions that are:
(1) open to inspection by any person who has the right to
inspect the records; and
(2) maintained at the United States branch's principal office in
Indiana. As added by P.L.173-2007, SEC.20.
IC 27-1-40-8 Insolvency proceedings
Sec. 8. If the commissioner determines from a quarterly or annual
statement, a trusteed surplus statement, or another report that a
United States branch's trusteed surplus is less than:
(1) the minimum capital and surplus requirements; or
(2) the authorized control level risk based capital requirements;
whichever is greater, that apply to a domestic insurer granted a
certificate of authority to transact the same kind of insurance
business in Indiana, the commissioner may proceed under IC 27-9
against the United States branch as if the United States branch were
an insurer in such condition that further transaction by the insurer of
insurance business in the United States would be hazardous to the
insurer's policyholders, creditors, or residents of the United States. As added by P.L.173-2007, SEC.20.
IC 27-1-40
Chapter 40. Entry of Unauthorized Alien Companies
IC 27-1-40-1 "Trusteed surplus"
Sec. 1. As used in this chapter, "trusteed surplus" means the
aggregate value of a United States branch's:
(1) surplus and reserve funds required under IC 27-1-6; and
(2) trust assets described in section 4 of this chapter;
plus investment income accrued on the items described in
subdivisions (1) and (2) if the investment income is collected by the
state for the trustees, less the aggregate net amount of all of the
United States branch's reserves and other liabilities in the United
States, as determined under section 6 of this chapter. As added by P.L.173-2007, SEC.20. Amended by P.L.3-2008,
SEC.210.
IC 27-1-40-2 "United States branch"
Sec. 2. As used in this chapter, "United States branch" means:
(1) an entity that is considered, for purposes of this chapter, to
be a domestic company through which insurance business is
transacted in the United States by an alien company; and
(2) the alien company's assets and liabilities that are attributable
to the insurance business transacted in the United States. As added by P.L.173-2007, SEC.20.
IC 27-1-40-3 Indiana as state of entry for alien company
Sec. 3. Indiana may serve as a state of entry to enable an alien
company to transact insurance business in the United States through
a United States branch if the United States branch:
(1) qualifies under this title for a certificate of authority as if the
United States branch were a domestic company organized under
this title; and
(2) establishes a trust account that meets the following
conditions:
(A) The trust account is established under a trust agreement
approved by the commissioner with a United States bank.
(B) The amount in the trust account is at least equal to:
(i) the minimum capital and surplus requirements; or
(ii) the authorized control level risk based capital
requirements;
whichever is greater, that apply to a domestic company that
possesses a certificate of authority to transact the same kind
of insurance business in Indiana as the United States branch
will transact. As added by P.L.173-2007, SEC.20.
IC 27-1-40-4 Trust account; requirements; trust agreement
Sec. 4. (a) A trust account established under section 3(2) of this
chapter must contain, at all times, an amount equal to the United
States branch's reserves and other liabilities, plus the:
(1) minimum capital and surplus requirement; or
(2) authorized control level risk based capital requirement;
whichever is greater, that applies to a domestic company granted a
certificate of authority under this title to transact the same kind of
insurance business as the United States branch transacts.
(b) One (1) or more trustees must be appointed to administer the
trust.
(c) A trust agreement for a trust account established under section
3(2) of this chapter, and amendments to the trust agreement:
(1) must be authenticated in a manner prescribed by the
commissioner; and
(2) are effective only when approved by the commissioner after
the commissioner finds all of the following:
(A) The trust agreement and amendments are sufficient in
form and in conformity with law.
(B) All trustees appointed under subsection (b) are eligible
to serve as trustees.
(C) The trust agreement is adequate to protect the interests
of the beneficiaries of the trust.
(d) The commissioner may withdraw an approval granted under
subsection (c)(2) if, after notice and hearing, the commissioner
determines that one (1) or more of the conditions required under
subsection (c)(2) for approval no longer exist.
(e) The commissioner may approve modifications of, or variations
in, a trust agreement under subsection (c) if the modifications or
variations are not prejudicial to the interests of Indiana residents,
United States policyholders, and creditors of the United States
branch.
(f) A trust agreement for a trust account established under section
3(2) of this chapter must contain provisions that:
(1) vest legal title to trust assets in the trustees and lawfully
appointed successors of the trustees;
(2) require that all assets deposited in the trust account be
continuously kept in the United States;
(3) provide for appointment of a new trustee in case of a
vacancy, subject to the approval of the commissioner;
(4) require that the trustees continuously maintain a record
sufficient to identify the assets of the trust account;
(5) require that the trust assets consist of:
(A) cash;
(B) investments of the same kind as the investments in
which funds of a domestic company may be invested; and
(C) interest accrued on the cash and investments specified in
clauses (A) and (B), if collectible by the trustees;
(6) establish that the trust:
(A) is for the exclusive benefit, security, and protection of:
(i) United States policyholders of the United States
branch; and
(ii) United States creditors of the United States branch
after all obligations to policyholders are paid; and
(B) shall be maintained as long as any liability of the United
States branch arising out of the United States branch's
insurance transactions in the United States is outstanding;
and
(7) establish that trust assets, other than income as specified in
subsection (g), may not be withdrawn or permitted by the
trustees to be withdrawn without the approval of the
commissioner, except for any of the following purposes:
(A) To make deposits required by the law of any state for the
security or benefit of all policyholders of the United States
branch in the United States.
(B) To substitute other assets permitted by law and at least
equal in value and quality to the assets withdrawn, upon the
specific written direction of the United States manager of the
United States branch when the United States manager is
empowered and acting under general or specific written
authority previously granted or delegated by the alien
company's board of directors.
(C) To transfer the assets to an official liquidator or
rehabilitator under a court order.
(g) A trust agreement for a trust account established under section
3(2) of this chapter may provide that income, earnings, dividends, or
interest accumulations of the trust assets may be paid over to the
United States manager of the United States branch upon request of
the United States manager if the total amount of trust assets
following the payment to the United States manager is not less than
the amount required under subsection (a).
(h) A trust agreement for a trust account established under section
3(2) of this chapter may provide that written approval of the
insurance supervising official of another state in which:
(1) trust assets are deposited; and
(2) the United States branch is authorized to transact insurance
business;
is sufficient, and approval of the commissioner is not required, for
withdrawal of the trust assets in the other state if the amount of total
trust assets after the withdrawal will not be less than the amount
required under subsection (a). However, the United States branch
shall provide written notice to the commissioner of the nature and
extent of the withdrawal.
(i) The commissioner may at any time:
(1) make examinations of the trust assets of a United States
branch that holds a certificate of authority under this chapter, at
the expense of the United States branch; and
(2) require the trustees to file a statement, on a form prescribed
by the commissioner, certifying the assets of the trust account
and the amounts of the assets.
(j) Refusal or neglect of a trustee to comply with this section is
grounds for:
(1) the revocation of the United States branch's certificate of
authority; or
(2) the liquidation of the United States branch. As added by P.L.173-2007, SEC.20.
IC 27-1-40-5 Certificate of authority for United States branch; requirements
Sec. 5. (a) The commissioner shall require a United States branch
to do the following before granting the United States branch a
certificate of authority to transact insurance business as described in
section 3(1) of this chapter:
(1) Comply with this chapter and any other requirement of this
title.
(2) Submit the following:
(A) A copy of the current charter and bylaws of the alien
company that intends to transact business through the United
States branch and any other documents determined by the
commissioner to be necessary to provide evidence of the
kinds of insurance business that the alien company is
authorized to transact. Documents submitted under this
clause must be attested to as accurate by the insurance
supervisory official in the alien company's domiciliary
jurisdiction.
(B) A full statement, subscribed and affirmed as true under
penalty of perjury by two (2) officers or equivalent
responsible representatives of the alien company in a manner
prescribed by the commissioner, of the alien company's
financial condition as of the close of the alien company's
latest fiscal year, showing the alien company's:
(i) assets;
(ii) liabilities;
(iii) income disbursements;
(iv) business transacted; and
(v) other facts required to be shown in the alien company's
annual statement reported to the insurance supervisory
official in the alien company's domiciliary jurisdiction.
(C) An English translation, if necessary, of any document
submitted under this subdivision.
(3) Submit to an examination of the affairs of the alien company
that intends to transact business through the United States
branch at the alien company's principal office in the United
States. However, the commissioner may accept a report of the
insurance supervisory official in the alien company's
domiciliary jurisdiction in lieu of the examination required
under this subdivision.
(b) The commissioner may at any time hire, at a United States
branch's expense, any independent experts that the commissioner
considers necessary to implement this chapter with respect to the
United States branch. As added by P.L.173-2007, SEC.20.
IC 27-1-40-6 United States branch filing requirements
Sec. 6. (a) A United States branch shall file with the
commissioner, not later than March 1, May 15, August 15, and
November 15 of each year, all of the following:
(1) Statements of the insurance business transacted in the
United States, the assets held by or for the United States branch
in the United States for the protection of policyholders and
creditors in the United States, and the liabilities incurred against
the assets. All of the following apply to the statements filed
under this subdivision:
(A) The statements must contain information concerning
only the United States branch's assets and insurance business
in the United States.
(B) The statements must be in the same form as statements
required of a domestic company that possesses a certificate
of authority to transact the same kinds of insurance business
as the United States branch transacts.
(C) The statements must be filed as follows:
(i) Quarterly statements filed not later than May 15,
August 15, and November 15 of each year for the first
three (3) quarters of the calendar year.
(ii) An annual statement, filed not later than March 1 of
each year.
(2) A trusteed surplus statement, in a form prescribed by the
commissioner, at the end of the period covered by each
statement described in subdivision (1)(C). In determining the
net amount of the United States branch's liabilities in the United
States to be reported in the statement of trusteed surplus, the
United States branch shall make adjustments to total liabilities
reported on the accompanying annual or quarterly statement as
follows:
(A) Add back liabilities used to offset admitted assets
reported in the accompanying quarterly or annual statement.
(B) Deduct:
(i) unearned premiums on insurance producer balances or
uncollected premiums that are not more than ninety (90)
days past due;
(ii) losses reinsured by reinsurers authorized to do
business in Indiana, less unpaid reinsurance premiums to
be paid to the authorized reinsurers;
(iii) reinsurance recoverables on paid losses from
reinsurers not authorized to do business in Indiana that are
included as an asset in the annual statement, but only to
the extent that a liability for the unauthorized recoverables
is included in the liabilities report in the trusteed surplus
statement;
(iv) special state deposits held for the exclusive benefit of
policyholders of a particular state that do not exceed net
liabilities reports for the particular state;
(v) secured accrued retrospective premiums;
(vi) if the alien company transacting business through the
United States branch is a life insurer, the amount of the
alien company's policy loans to policyholders in the
United States, not exceeding the amount of legal reserve
required on each policy, and the net amount of uncollected
and deferred premiums; and
(vii) any other nontrust asset that the commissioner
determines secures liabilities in a manner substantially
similar to the manner in which liabilities are secured by
the unearned premiums, losses reinsured, reinsurance
recoverables, special state deposits, secured accrued
retrospective premiums, and policy loans referred to in
items (i) through (vi).
(3) Any additional information that relates to the business or
assets of the alien company and is required by the
commissioner.
(b) The annual statement and trusteed surplus statement described
in subsection (a) must be signed and verified by the United States
manager, the attorney in fact, or an empowered assistant United
States manager, of the United States branch. Items of securities and
other property held under a trust agreement must be certified in the
trusteed surplus statement by the United States trustees.
(c) Each report concerning an examination of a United States
branch conducted under section 4(i) of this chapter must include a
trusteed surplus statement as of the date of examination and a general
statement of the financial condition of the United States branch. As added by P.L.173-2007, SEC.20.
IC 27-1-40-7 Issuance and renewal of certificate of authority
Sec. 7. (a) Before issuing a new or renewal certificate of authority
to a United States branch, the commissioner may require satisfactory
proof:
(1) in the charter of the alien company transacting business
through the United States branch;
(2) by an agreement evidenced by a certified resolution of the
alien company's board of directors; or
(3) otherwise as required by the commissioner;
that the United States branch will not engage in any insurance
business not authorized by this chapter and by the alien company's
charter.
(b) The commissioner shall issue a renewal certificate of authority
to a United States branch if the commissioner is satisfied that the
United States branch is not delinquent in any requirement of this title
and that the United States branch's continued insurance business in
Indiana is not contrary to the best interest of the citizens of Indiana.
(c) A United States branch may not be:
(1) granted a certificate of authority to transact any kind of
insurance business in Indiana that is not permitted to be
transacted in Indiana by a domestic company granted a
certificate of authority under this title; or
(2) authorized to transact an insurance business in Indiana if the
United States branch transacts, anywhere in the United States,
any kind of business other than an insurance business (and
business incidental to the kind of insurance business) that the
United States branch is authorized to transact in Indiana.
(d) A United States branch entering the United States through
Indiana or another state may not be authorized to transact an
insurance business in Indiana if the United States branch fails to
substantially comply with any requirement of this title that:
(1) applies to a similar domestic company that is organized after
July 1, 2007; and
(2) the commissioner determines is necessary to protect the
interest of the policyholders.
(e) Unless the commissioner determines that the kind of insurance
is not contrary to the best interest of the citizens of Indiana, a United
States branch may not transact any kind of insurance business that is
not permitted to be transacted in Indiana by a similar domestic
company that is organized after July 1, 2007.
(f) A United States branch may not be authorized to transact an
insurance business in Indiana unless the United States branch
maintains correct and complete records of the United States branch's
transactions that are:
(1) open to inspection by any person who has the right to
inspect the records; and
(2) maintained at the United States branch's principal office in
Indiana. As added by P.L.173-2007, SEC.20.
IC 27-1-40-8 Insolvency proceedings
Sec. 8. If the commissioner determines from a quarterly or annual
statement, a trusteed surplus statement, or another report that a
United States branch's trusteed surplus is less than:
(1) the minimum capital and surplus requirements; or
(2) the authorized control level risk based capital requirements;
whichever is greater, that apply to a domestic insurer granted a
certificate of authority to transact the same kind of insurance
business in Indiana, the commissioner may proceed under IC 27-9
against the United States branch as if the United States branch were
an insurer in such condition that further transaction by the insurer of
insurance business in the United States would be hazardous to the
insurer's policyholders, creditors, or residents of the United States. As added by P.L.173-2007, SEC.20.
