Indiana § 27-4-10-10 - No requirement to accept virtual claim payment; requirements; fees; waiver of requirements prohibited; violations

§ 27-4-10-10. No requirement to accept virtual claim payment; requirements; fees; waiver of requirements prohibited; violations

Sec. 10. (a) A health insurance plan may not require a dental provider to accept payment under the health insurance plan by virtual claim payment.

(b) Before an initial payment to a dental provider using an electronic funds transfer payment, including a virtual claim payment, or before modifying the method of payment, a health insurer or contracted vendor of a health insurer shall:

(1) notify the dental provider of any fees associated with the electronic funds transfer payment other than the fees imposed by the dental provider's financial institution; and

(2) concerning a virtual claim payment, advise the dental provider of the methods of payment available under the health insurance plan and provide clear instructions to the dental provider as to how to select an alternate payment method.

(c) A health insurer or contracted vendor of a health insurer may not charge a fee to a dental provider solely for transmitting an Automated Clearing House Network payment to the dental provider, unless the dental provider has consented to the fee. A provider billing agent may charge a reasonable fee to a dental provider for transmitting an Automated Clearing House Network payment as part of a fee charged by the provider billing agent for transaction management, data management, portal services, and other value added services in addition to the payment transmission that are provided by the provider billing agent to the dental provider.

(d) The provisions of this section may not be waived by contract, and any contractual clause that conflicts with the provisions of this section or that purports to waive any requirement of this section is void.

(e) Violation of this section is an unfair or deceptive act or practice in the business of insurance that is subject to enforcement by the commissioner under IC 27-4-1.

As added by P.L.31-2021, SEC.4.

IC 27-5ARTICLE 5. REPEALEDRepealed by P.L.129-2003, SEC.15.

IC 27-5.1ARTICLE 5.1. FARM MUTUAL INSURANCE COMPANIES

Ch. 1.Definitions Ch. 2.Farm Mutual Insurance Companies Ch. 3.Standard Farm Mutual Insurance Companies Ch. 4.Extended Farm Mutual Insurance Companies

IC 27-5.1-1Chapter 1. Definitions

27-5.1-1-1Application 27-5.1-1-2"Assessment" 27-5.1-1-3"Certificate of authority" 27-5.1-1-4"Commissioner" 27-5.1-1-5"Department" 27-5.1-1-6"Extended company" 27-5.1-1-7"Farm mutual insurance company" 27-5.1-1-8"First class city" 27-5.1-1-9"Initial charge" 27-5.1-1-10"Person" 27-5.1-1-11"Policyholder" 27-5.1-1-12"Policyholder surplus" 27-5.1-1-13"Premium" 27-5.1-1-14"Premium plus assessment" 27-5.1-1-15"Principal office" 27-5.1-1-16"Standard company"

IC 27-5.1-1-1Application Sec. 1. The definitions in this chapter apply throughout this article.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-1-2"Assessment" Sec. 2. "Assessment" means an amount or a policyholder's share of an amount that a farm mutual insurance company determines is necessary for any of the following:

(1) To pay the farm mutual insurance company's accrued liabilities.

(2) To meet or defray the farm mutual insurance company's anticipated needs.

(3) To add to or restore the policyholder surplus of the farm mutual insurance company.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-1-3"Certificate of authority" Sec. 3. "Certificate of authority" has the meaning set forth in IC 27-1-2-3(v).

As added by P.L.129-2003, SEC.8.

IC 27-5.1-1-4"Commissioner" Sec. 4. "Commissioner" means the insurance commissioner appointed under IC 27-1-1-2.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-1-5"Department" Sec. 5. "Department" means the department of insurance created by IC 27-1-1-1.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-1-6"Extended company" Sec. 6. "Extended company" means a farm mutual insurance company that is authorized to provide coverage as described in IC 27-5.1-4.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-1-7"Farm mutual insurance company" Sec. 7. "Farm mutual insurance company" means a company (as defined in IC 27-1-2-3) that is authorized to provide insurance coverage under this article.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-1-8"First class city" Sec. 8. "First class city" refers to a first class city as classified under IC 36-4-1-1.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-1-9"Initial charge" Sec. 9. "Initial charge" means a charge that is collected by a farm mutual insurance company before or at the time of the issuance or renewal of an insurance policy under this article.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-1-10"Person" Sec. 10. "Person" means an individual or a business entity.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-1-11"Policyholder" Sec. 11. "Policyholder" means a person who is insured by a farm mutual insurance company.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-1-12"Policyholder surplus" Sec. 12. "Policyholder surplus" means the accumulated assets of a farm mutual insurance company that exceed the farm mutual insurance company's accrued losses and expenses.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-1-13"Premium" Sec. 13. "Premium" means money given in consideration to a farm mutual insurance company on account of or in connection with an insurance policy for a specified policy period.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-1-14"Premium plus assessment" Sec. 14. "Premium plus assessment" refers to an insurance policy under which the policyholder is:

(1) obligated to pay a premium; and

(2) subject to potential assessment.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-1-15"Principal office" Sec. 15. "Principal office" means the primary office maintained by a farm mutual insurance company in Indiana.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-1-16"Standard company" Sec. 16. "Standard company" means a farm mutual insurance company that may provide insurance coverage under IC 27-5.1-3. The term does not include an extended company.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2Chapter 2. Farm Mutual Insurance Companies

27-5.1-2-0.1Application of certain amendments to chapter 27-5.1-2-1Applicability 27-5.1-2-2Farm mutual insurance companies existing on June 30, 2003 27-5.1-2-3Proposed farm mutual insurance companies; application for certificate of authority 27-5.1-2-4Proposed farm mutual insurance company requirements for certificate of authority 27-5.1-2-5Powers and duties 27-5.1-2-6Exclusion of companies 27-5.1-2-7Exemption from Indiana insurance laws 27-5.1-2-8Application of Indiana insurance laws 27-5.1-2-9Location of insurance business 27-5.1-2-10Annual policyholder meeting 27-5.1-2-11Board of directors 27-5.1-2-12Election of director; term of office; election of officers; annual board meeting 27-5.1-2-13Articles of incorporation; amendment 27-5.1-2-14Bylaws; amendment 27-5.1-2-15Commissioner filing fee 27-5.1-2-16Form and rate filing file and use; commissioner disapproval; judicial review 27-5.1-2-17Commissioner examination 27-5.1-2-18Unsafe business practice; insufficient assets; commissioner notice; remedies; court proceedings; injunction; liquidation 27-5.1-2-19Application for coverage; policyholder status 27-5.1-2-20Insurance producers 27-5.1-2-21Merger; plan; policyholder notice 27-5.1-2-22Merger files; commissioner review; notice and hearing; approval; modification; experts; costs 27-5.1-2-23Merger plan performance; surviving company 27-5.1-2-24Certificate of merger 27-5.1-2-24.5Waiver of merger requirements 27-5.1-2-25Notice of contract to manage or control; commissioner determination; managing general agent 27-5.1-2-26Violations of law; commissioner orders 27-5.1-2-27Judicial review 27-5.1-2-28Willful violation; penalties 27-5.1-2-29Notice of intent to waive term of policy, right, or defense 27-5.1-2-30Premium plus assessment basis; policyholder liability 27-5.1-2-31Assessment collection; verification of loss 27-5.1-2-32Policyholder failure to pay assessment 27-5.1-2-33Policyholder liability after policy termination 27-5.1-2-34Notice of premium plus assessment policy; civil actions; limitation 27-5.1-2-35Payment of losses and judgments; insufficient funds; assessments 27-5.1-2-36Borrowing funds; assessment 27-5.1-2-37Policy cancellation; notice 27-5.1-2-38Discontinuation of company 27-5.1-2-39Misconduct; penalty 27-5.1-2-40Investment gain; policyholder surplus 27-5.1-2-41Election to be subject to Indiana insurance law 27-5.1-2-42Exemption from regulation 27-5.1-2-43Administrative rules 27-5.1-2-44Validity of rate or form filed under prior law

IC 27-5.1-2-0.1Application of certain amendments to chapter Sec. 0.1. The amendments made to section 8 of this chapter by P.L.137-2006 and P.L.162-2006 apply only to taxable years beginning after December 31, 2005.

As added by P.L.220-2011, SEC.431.

IC 27-5.1-2-1Applicability Sec. 1. This chapter applies to a farm mutual insurance company regulated under this article.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-2Farm mutual insurance companies existing on June 30, 2003 Sec. 2. (a) A farm mutual insurance company that holds a certificate of authority to do business in Indiana on June 30, 2003, is a standard company under this article unless the farm mutual insurance company:

(1) elects to become an extended company under IC 27-5.1-4; and

(2) is authorized by the commissioner to do business as an extended company.

(b) A standard company described in subsection (a) may elect to become an extended company at any time by:

(1) complying with IC 27-5.1-4-2(b); and

(2) submitting to an examination that may be conducted at the discretion of the commissioner.

(c) An election made under this section is effective upon the date the commissioner issues a new certificate of authority.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-3Proposed farm mutual insurance companies; application for certificate of authority Sec. 3. (a) If a proposed farm mutual insurance company does not hold a certificate of authority to do business in Indiana on June 30, 2003, an application may be made to the commissioner on a form prescribed by the commissioner for a certificate of authority for the proposed farm mutual insurance company to do business in Indiana as a standard company.

(b) An application described in subsection (a) must include the following concerning the proposed farm mutual insurance company:

(1) The name.

(2) The location and address of the principal office.

(3) The names and addresses of the officers and directors.

(4) Three (3) copies of the articles of incorporation.

(5) A copy of the bylaws.

(c) A standard company described in subsection (a), not earlier than three (3) years after it is granted a certificate of authority to do business as a standard company, may elect to obtain a certificate of authority to do business as an extended company if the standard company:

(1) has an annual direct written premium of more than one million dollars ($1,000,000); and

(2) complies with IC 27-5.1-4-2.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-4Proposed farm mutual insurance company requirements for certificate of authority Sec. 4. A farm mutual insurance company that is established after June 30, 2003, must have at least:

(1) two hundred fifty (250) applications for insurance policies; and

(2) one hundred thousand dollars ($100,000) in annual direct written premiums;

before issuing an insurance policy.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-5Powers and duties Sec. 5. (a) A farm mutual insurance company has all the powers, rights, privileges, duties, and obligations of a company organized under IC 27-1-6 except where IC 27-1-6 is inconsistent with this article.

(b) A farm mutual insurance company has the following:

(1) The power to borrow money.

(2) The ability to sue or be sued.

(3) The power to make contracts of insurance or indemnity with:

(A) a person;

(B) a firm;

(C) a public corporation;

(D) a private corporation;

(E) a board;

(F) an association;

(G) an estate; or

(H) a trustee or legal representative of an estate.

(4) The power to cede or obtain reinsurance from an insurance company legally operating in Indiana.

(5) The power to participate with a financially stable insurance company in:

(A) a plan for reinsurance; or

(B) catastrophe protection.

(6) The power to determine the qualifications and the manner by which to admit or withdraw policyholders.

(7) The power to use a common seal, which the farm mutual insurance company may change or alter.

(8) The power to purchase, lease, hold, and dispose of:

(A) real property; and

(B) personal property;

in the farm mutual insurance company's name for use in carrying out the purposes of the farm mutual insurance company.

(9) The power to classify risks according to the hazards involved.

(10) The power to establish rates according to the classification of risk.

(11) The power to determine the acceptability of risk and hazards insured.

(12) The power to determine the cost of insurance issued by the farm mutual insurance company and the adjustment and payment of losses.

(13) The power to determine the compensation of directors and officers of the farm mutual insurance company.

(14) The power to require that directors and officers of the farm mutual insurance company be bonded in the performance of the duties of the directors and officers.

(15) The power to adopt or amend bylaws and articles of incorporation of the farm mutual insurance company.

(16) The power to adopt or amend policy forms and application forms used by the farm mutual insurance company.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-6Exclusion of companies Sec. 6. A farm mutual insurance company with an annual direct written premium of more than fifteen million dollars ($15,000,000) may not function as a farm mutual insurance company and shall be regulated as a domestic mutual insurance company described in IC 27-1-6-15.

As added by P.L.129-2003, SEC.8. Amended by P.L.165-2022, SEC.11.

IC 27-5.1-2-7Exemption from Indiana insurance laws Sec. 7. Except as provided in section 8 of this chapter, a farm mutual insurance company that operates under this article is exempt from any other Indiana insurance law unless the law expressly states that the law is applicable to a farm mutual insurance company.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-8Application of Indiana insurance laws Sec. 8. The following provisions apply to standard companies and extended companies:

(1) IC 27-1-3.

(2) IC 27-1-3.1.

(3) IC 27-1-5-3.

(4) IC 27-1-7-14 through IC 27-1-7-16.

(5) IC 27-1-7-21 through IC 27-1-7-23.

(6) IC 27-1-9.

(7) IC 27-1-10.

(8) IC 27-1-13-3 through IC 27-1-13-4.

(9) IC 27-1-13-6 through IC 27-1-13-9.

(10) IC 27-1-15.6.

(11) IC 27-1-18-2.

(12) IC 27-1-20-1.

(13) IC 27-1-20-4.

(14) IC 27-1-20-6.

(15) IC 27-1-20-9 through IC 27-1-20-11.

(16) IC 27-1-20-14.

(17) IC 27-1-20-19 through IC 27-1-20-21.3.

(18) IC 27-1-20-23.

(19) IC 27-1-20-30.

(20) IC 27-1-20-35.

(21) IC 27-1-22.

(22) IC 27-4-1.

(23) Except as provided in IC 27-6-1.1-6, IC 27-6-1.1-2.

(24) IC 27-6-2.

(25) IC 27-7-2.

(26) IC 27-9.

(27) IC 34-30-17.

As added by P.L.129-2003, SEC.8. Amended by P.L.137-2006, SEC.14 and P.L.162-2006, SEC.47; P.L.81-2012, SEC.21.

IC 27-5.1-2-9Location of insurance business Sec. 9. A farm mutual insurance company may engage in the business of insurance in any location in Indiana other than a first class city. However, a farm mutual insurance company may continue to insure property in a first class city in Indiana if the insurance policy under which the property is insured was originally issued before July 1, 2003, or if the insurance policy was originally issued before the city became a first class city.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-10Annual policyholder meeting Sec. 10. (a) A farm mutual insurance company shall hold an annual meeting of the policyholders of the farm mutual insurance company on the date, time, and location set forth in the articles of incorporation of the farm mutual insurance company. If the articles of incorporation do not specify the date, time, and location of the annual meeting, the meeting shall be held on the first Monday in April at the registered principal office of the farm mutual insurance company.

(b) A quorum for purposes of an annual policyholder meeting must be defined in a farm mutual insurance company's articles of incorporation.

(c) Each policyholder of a farm mutual insurance company is entitled to one (1) vote on any issue voted upon at a policyholder meeting.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-11Board of directors Sec. 11. (a) A farm mutual insurance company shall elect a board of directors consisting of at least five (5) policyholders.

(b) To be elected to the board of directors of a farm mutual insurance company, an individual must be the owner of an insurance policy issued by the farm mutual insurance company.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-12Election of director; term of office; election of officers; annual board meeting Sec. 12. (a) Unless a farm mutual insurance company's articles of incorporation specify otherwise, a director of a farm mutual insurance company must be elected at the farm mutual insurance company's annual policyholder meeting by the affirmative vote of a majority of:

(1) the policyholders present and voting; and

(2) the policyholders voting by proxy, if voting by proxy is allowed by the farm mutual insurance company's articles of incorporation.

(b) The term of office of a director must be at least one (1) year but not more than five (5) years. A farm mutual insurance company's articles of incorporation may provide for the classification of directors into three (3) groups, and the terms of the directors may be staggered. A vacancy on the board of directors may be filled for the unexpired term through an appointment made by the remaining directors.

(c) The board of directors of a farm mutual insurance company shall, by vote of a majority of the directors, elect the officers designated in the farm mutual insurance company's bylaws. The directors may also elect any additional officers that the directors determine are necessary. An officer elected under this subsection is not required to be a director.

(d) The term of an officer elected under subsection (c) may not be less than one (1) year or more than three (3) years. An outgoing officer shall hold office until the officer's successor is either elected or selected and qualified.

(e) The board of directors of a farm mutual insurance company shall hold a separate meeting of the board of directors immediately after the farm mutual insurance company's annual meeting.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-13Articles of incorporation; amendment Sec. 13. (a) Unless a farm mutual insurance company's articles of incorporation specify otherwise, the articles of incorporation of a farm mutual insurance company may be amended by an affirmative vote of two-thirds (2/3) of the farm mutual insurance company's policyholders who are voting in person or by proxy at any policyholder meeting if the policyholders are given at least thirty (30) days notice of:

(1) the meeting; and

(2) the subject matter of the proposed amendments.

(b) After a farm mutual insurance company has adopted an amendment to the farm mutual insurance company's articles of incorporation, three (3) copies of the amendment must be filed with the commissioner.

(c) The commissioner shall determine whether to approve an amendment specified under subsection (b) and, if the amendment is approved, shall return a copy of the filed amendment and a certificate of approval to the farm mutual insurance company.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-14Bylaws; amendment Sec. 14. (a) Bylaws of a farm mutual insurance company may be amended by the farm mutual insurance company in accordance with the farm mutual insurance company's articles of incorporation. All amendments to the bylaws must be filed with the commissioner.

(b) Bylaws of a farm mutual insurance company may not be inconsistent with this article, other applicable laws, or the farm mutual insurance company's articles of incorporation.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-15Commissioner filing fee Sec. 15. The commissioner may charge a farm mutual insurance company a reasonable fee, as provided in IC 27-1-3-15, for a filing under this article.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-16Form and rate filing file and use; commissioner disapproval; judicial review Sec. 16. (a) A farm mutual insurance company may not deliver or issue for delivery an insurance policy or an endorsement or a rider to an insurance policy until a copy of the form and the rates charged for the insurance policy are filed with the commissioner.

(b) A farm mutual insurance company may use any form or rate filed with the commissioner unless the commissioner notifies the farm mutual insurance company in writing that the form is disapproved not more than thirty (30) days after the commissioner's receipt of the rate or form filing. The commissioner may disapprove a rate or form for the following reasons:

(1) An inconsistency with this article or another applicable state law.

(2) A provision that is:

(A) deceptive;

(B) ambiguous; or

(C) misleading.

(c) If the commissioner disapproves a rate or form under this section, the commissioner shall notify the farm mutual insurance company of the reason that the rate or form was disapproved. The farm mutual insurance company may request a hearing before the commissioner under IC 4-21.5 concerning the disapproval.

(d) A farm mutual insurance company may seek judicial review under IC 4-21.5-5 of the commissioner's final disapproval of a rate or form under this section.

(e) The commissioner may charge a farm mutual insurance company a reasonable fee as provided in IC 27-1-3-15 for the filing of a rate or form.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-17Commissioner examination Sec. 17. (a) The commissioner may examine the affairs of a farm mutual insurance company under IC 27-1-3.1.

(b) The commissioner may take an action that may protect a policyholder's interest if the commissioner determines that a farm mutual insurance company conducts business in a manner that is:

(1) contrary to law applying to a farm mutual insurance company; or

(2) detrimental to policyholder interests.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-18Unsafe business practice; insufficient assets; commissioner notice; remedies; court proceedings; injunction; liquidation Sec. 18. (a) If the commissioner determines from:

(1) a statement filed by a farm mutual insurance company;

(2) an examination under section 17 of this chapter; or

(3) other information obtained by the commissioner;

that a farm mutual insurance company is conducting business in an unsafe manner or that a farm mutual insurance company's assets are insufficient to justify continuing the business, the commissioner shall send written notice of the commissioner's concerns regarding the farm mutual insurance company to the officers and directors of the farm mutual insurance company.

(b) Not more than thirty (30) days after receiving a notice under subsection (a), the farm mutual insurance company's officers and directors shall:

(1) remedy; or

(2) establish a plan to remedy;

the commissioner's concerns.

(c) If:

(1) a farm mutual insurance company does not remedy or establish a plan to remedy the commissioner's concerns under subsection (b); or

(2) the commissioner determines that the continuation of a farm mutual insurance company is not in the best interests of the farm mutual insurance company's policyholders;

the commissioner shall institute proceedings in the Marion County circuit court to enjoin the farm mutual insurance company from conducting any further business transactions.

(d) If the commissioner seeks a permanent injunction against a farm mutual insurance company under subsection (c), the commissioner shall also institute proceedings to settle and wind up the affairs of the farm mutual insurance company and liquidate and dissolve the farm mutual insurance company, as provided in IC 27-9.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-19Application for coverage; policyholder status Sec. 19. (a) A person, including a person described in subsection (b), that has a risk that is insurable under this article in a territory in which a farm mutual insurance company operates may apply for insurance coverage with the farm mutual insurance company. If the farm mutual insurance company accepts the person as a policyholder, the person becomes a policyholder of the farm mutual insurance company and is entitled to all the rights and privileges of a policyholder.

(b) Any of the following that own property within the territory of a farm mutual insurance company may apply for insurance, enter into an agreement for an insurance policy, and hold an insurance policy issued by a farm mutual insurance company:

(1) A corporation.

(2) An estate.

(3) An association.

(c) An officer, a trustee, a board member, or a legal representative of an entity described in subsection (b) may be recognized as acting for or on behalf of the entity for the purpose of membership.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-20Insurance producers Sec. 20. A person that solicits or negotiates insurance on behalf of a farm mutual insurance company must be licensed as an insurance producer under IC 27-1-15.6.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-21Merger; plan; policyholder notice Sec. 21. (a) Two (2) or more farm mutual insurance companies may merge into one (1) farm mutual insurance company upon approval of a merger plan by the policyholders of each farm mutual insurance company as provided in subsection (b).

(b) Before a merger described in subsection (a) may take place:

(1) the board of directors of each farm mutual insurance company must approve a merger plan; and

(2) the merger plan must be approved by the affirmative vote of two-thirds (2/3) of the policyholders of each farm mutual insurance company who vote in person or by proxy.

(c) Before a meeting at which a proposed merger under this section may be considered:

(1) the policyholders of a farm mutual insurance company for which the merger is proposed must be provided, by first class mail:

(A) written notice of the date, time, and location of the meeting;

(B) written notice that a proposed merger will be discussed and voted on at the meeting; and

(C) a copy or summary of the merger plan; and

(2) a general notice stating:

(A) the date, time, and location of the meeting; and

(B) that a proposed merger or transfer will be discussed and voted on at the meeting;

must be published in a newspaper of general circulation in the county in which the principal office of the farm mutual insurance company is located.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-22Merger files; commissioner review; notice and hearing; approval; modification; experts; costs Sec. 22. (a) Each farm mutual insurance company that decides to merge under section 21 of this chapter shall file the following documents with the commissioner:

(1) A petition for merger.

(2) The farm mutual insurance company's merger plan.

(3) Articles of merger.

(4) A copy of the minutes of a meeting at which the merger plan was approved.

(5) Proof of compliance with section 21 of this chapter.

(b) The commissioner shall:

(1) review a filing submitted under subsection (a); and

(2) schedule a hearing under IC 4-21.5 if the commissioner considers a hearing necessary.

The commissioner may waive a hearing under this subsection if the commissioner determines that a proposed merger does not prejudice the interests of policyholders of the farm mutual insurance company.

(c) If the commissioner determines under subsection (b) that a hearing is necessary, the commissioner shall provide written notice of the hearing to the farm mutual insurance company that filed the petition for merger. The commissioner may require the farm mutual insurance company to provide the farm mutual insurance company's policyholders with written notice of the hearing, including the date, time, and place of the hearing.

(d) If the commissioner requires a farm mutual insurance company to provide the farm mutual insurance company's policyholders with notice of a hearing under subsection (c), the notice must meet the following requirements:

(1) Be published in at least two (2) daily newspapers that the commissioner may designate.

(2) Be published in the newspapers designated under subdivision (1):

(A) not less than one (1) time per week;

(B) for two (2) successive weeks; and

(C) on the same day of the week.

(3) The last publication of notice must appear not more than five (5) calendar days before the date of the hearing.

(e) The commissioner may require a farm mutual insurance company to provide more notice than is required by subsection (d) if the commissioner determines that more notice is required under the circumstances concerning the farm mutual insurance company.

(f) In a hearing conducted under this section, the commissioner may examine a farm mutual insurance company's business affairs by:

(1) requiring and compelling the production of documents, records, books, papers, contracts, or other evidence; and

(2) compelling the attendance of, and examining under oath, a director, an officer, an agent, an employee, a solicitor, or an attorney of the farm mutual insurance company, or another person.

(g) A person who has an interest in a hearing conducted under this section may appear and testify at the hearing.

(h) The commissioner shall approve and authorize a proposed merger if the commissioner determines the following:

(1) That the interests of policyholders of the merging farm mutual insurance companies are properly protected.

(2) That a reasonable objection to the proposed merger does not exist.

(i) The commissioner may order a modification of the merger plan or articles of merger for a proposed merger if the commissioner determines that the modification is in the best interest of policyholders.

(j) The commissioner may hire experts the commissioner considers necessary to review a merger plan filed under this section.

(k) A farm mutual insurance company that files a petition for merger shall pay the costs of a hearing under this section.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-23Merger plan performance; surviving company Sec. 23. (a) The commissioner may establish the time frame in which a farm mutual insurance company must perform the terms of a merger plan approved under section 22 of this chapter.

(b) After a farm mutual insurance company that is a party to a merger under sections 21 and 22 of this chapter performs the terms of the merger plan, the surviving farm mutual insurance company shall file with the commissioner written notice of the surviving farm mutual insurance company's compliance with the merger plan.

(c) The commissioner shall determine whether the terms of a merger plan are performed adequately by a farm mutual insurance company that is a party to a merger under sections 21 and 22 of this chapter. If the commissioner determines that the terms of the merger plan are met, the commissioner shall issue a certificate of merger to the surviving farm mutual insurance company.

(d) The commissioner may charge a farm mutual insurance company the fee set forth in IC 27-1-3-15 for a filing made under this section.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-24Certificate of merger Sec. 24. Upon the commissioner's issuance of a certificate of merger under section 23 of this chapter, the farm mutual insurance companies that are parties to the merger plan become a single surviving farm mutual insurance company. The separate existence of each farm mutual insurance company that is a party to the merger plan ceases upon the issuance of the certificate of merger.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-24.5Waiver of merger requirements Sec. 24.5. (a) The commissioner may waive the requirements of this chapter or IC 27-1-9, whichever is applicable, for a merger or consolidation of a farm mutual insurance company with any other company (as defined in IC 27-1-2-3) if:

(1) the farm mutual insurance company is notified that it will lose reinsurance coverage within one hundred twenty (120) days; or

(2) another emergency event occurs that places the farm mutual insurance company in imminent danger of insolvency.

(b) A farm mutual insurance company that decides to merge or consolidate as a result of an emergency event described in subsection (a) shall provide notice of the emergency event to the commissioner not later than ten (10) days after the emergency event occurs.

(c) The commissioner shall issue a decision on the proposed merger or consolidation not more than ninety (90) days after receiving notice from a farm mutual insurance company under subsection (b).

As added by P.L.86-2026, SEC.10.

IC 27-5.1-2-25Notice of contract to manage or control; commissioner determination; managing general agent Sec. 25. (a) A person that intends to enter into a contract for the exclusive or dominant right to manage or control a farm mutual insurance company shall file notice of the contract with the commissioner at least thirty (30) days before entering into the contract.

(b) The commissioner may approve a contract or proposed contract described in subsection (a) only if the contract is not detrimental to:

(1) the policyholders of the farm mutual insurance company; or

(2) the public.

(c) If the commissioner disapproves a contract or proposed contract described in subsection (a), the commissioner shall provide written notice of the disapproval to the parties to the contract. A person that entered into a contract described in subsection (a) may not manage or control the farm mutual insurance company under the contract after receiving notice of the commissioner's disapproval of the contract.

(d) A person that enters into a contract for the exclusive or dominant right to manage or control a farm mutual insurance company is the managing general agent (as defined in IC 27-1-33-4) of the farm mutual insurance company and shall comply with the requirements that apply to a managing general agent under IC 27.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-26Violations of law; commissioner orders Sec. 26. If the commissioner determines, after notice and a hearing under IC 4-21.5, that a farm mutual insurance company has violated a provision of this article or a rule or order issued under this article, the commissioner may issue an order requiring the farm mutual insurance company to refrain from the unlawful practice or to take an affirmative action that the commissioner considers necessary to carry out the purposes of this article.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-27Judicial review Sec. 27. (a) A decision, a determination, or an order of the commissioner under section 26 of this chapter is subject to judicial review under IC 4-21.5-5.

(b) If a farm mutual insurance company does not seek judicial review of the commissioner's determination to issue an order under section 26 of this chapter less than thirty (30) days after the commissioner notifies the farm mutual insurance company of the commissioner's determination, the order is final.

(c) If a farm mutual insurance company seeks judicial review of the commissioner's determination under section 26 of this chapter and the commissioner's determination is upheld, the order is final.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-28Willful violation; penalties Sec. 28. If a farm mutual insurance company willfully violates a provision of an order under section 26 of this chapter, the commissioner may do the following:

(1) Impose a civil penalty on the farm mutual insurance company of not more than ten thousand dollars ($10,000).

(2) Suspend or revoke the farm mutual insurance company's certificate of authority.

(3) Institute proceedings to enjoin the farm mutual insurance company from conducting further business.

(4) Institute proceedings to wind up the affairs of the farm mutual insurance company.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-29Notice of intent to waive term of policy, right, or defense Sec. 29. (a) A farm mutual insurance company may not waive:

(1) a term of an insurance policy; or

(2) a right or defense of the farm mutual insurance company;

unless the farm mutual insurance company states in a letter or other written or printed document to a policyholder that the farm mutual insurance company intends to specifically waive the term, right, or defense.

(b) A letter or other written or printed document required under subsection (a) must include the signature of an officer or other representative of the farm mutual insurance company who is authorized to execute the particular type of waiver.

(c) A letter or other written or printed document under this section is the only admissible evidence of a waiver by the farm mutual insurance company.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-30Premium plus assessment basis; policyholder liability Sec. 30. (a) A policyholder of a farm mutual insurance company operating on a premium plus assessment basis under this article is liable for the policyholder's share of the amount necessary to:

(1) pay the losses and necessary expenses incurred by the farm mutual insurance company; and

(2) maintain an adequate reserve or safety fund as determined by the farm mutual insurance company's directors;

while the policyholder's insurance policy is in effect.

(b) Notwithstanding subsection (a), a farm mutual insurance company shall limit a policyholder's contingent liability during any one (1) year to an amount not to exceed the limitation set forth in the farm mutual insurance company's bylaws. The limitation set forth in the farm mutual insurance company's bylaws under this subsection must be an amount equal to not less than three percent (3%) of the insurance carried by the policyholder.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-31Assessment collection; verification of loss Sec. 31. (a) A farm mutual insurance company shall collect an assessment from a policyholder in the manner prescribed by the farm mutual insurance company's bylaws.

(b) After a farm mutual insurance company that operates on a premium plus assessment basis receives:

(1) notice of a loss or damage to a policyholder's property; or

(2) a judgment against the farm mutual insurance company;

the directors of the farm mutual insurance company shall verify the loss, damage, or judgment and shall, subject to the limitation set forth in the farm mutual insurance company's bylaws under section 30 of this chapter, assess each policyholder an amount proportionate to the amount of risk the policyholder has with the farm mutual insurance company.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-32Policyholder failure to pay assessment Sec. 32. (a) If a policyholder is assessed and fails to pay the assessment, the farm mutual insurance company may, upon providing written notice of failure to pay:

(1) suspend the farm mutual insurance company's liability for loss under the policyholder's insurance policy for the time during which the assessment is not paid; or

(2) cancel the policyholder's insurance policy if the assessment is not paid less than thirty (30) days after notice of the assessment is sent to the policyholder.

The farm mutual insurance company may deduct the assessment from the policyholder's deposit before returning the remainder of a deposit, if any, to the policyholder.

(b) If an assessment is paid by a policyholder after a farm mutual insurance company takes an action under subsection (a), the farm mutual insurance company may reinstate the policyholder's insurance policy effective beginning on the date on which the payment is received, but a deduction or credit may not be made to an assessment because of the suspension of the insurance policy.

(c) A farm mutual insurance company may file an action to compel a policyholder to pay an assessment.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-33Policyholder liability after policy termination Sec. 33. (a) A policyholder is not liable for an assessment of losses or expenses that are incurred by a farm mutual insurance company after the policyholder has terminated the policyholder's insurance policy.

(b) A former policyholder is not liable for an assessment for obligations incurred by a farm mutual insurance company before the policyholder terminated the insurance policy on which the assessment is made unless the farm mutual insurance company gives the former policyholder notice of the assessment less than one (1) year after the date of termination of the insurance policy.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-34Notice of premium plus assessment policy; civil actions; limitation Sec. 34. (a) A premium plus assessment insurance policy must expressly and prominently state on the face page of the insurance policy that the insurance policy is a premium plus assessment insurance policy.

(b) A suit or action for a loss under a premium plus assessment insurance policy may not be commenced until:

(1) the loss is due in accordance with the premium plus assessment insurance policy; or

(2) not less than sixty (60) days after proof of loss was given to the farm mutual insurance company that issued the premium plus assessment insurance policy.

(c) Requirements that a policyholder must meet to sustain a legal cause of action under this section must be disclosed clearly and prominently on the face page of the premium plus assessment insurance policy.

(d) Notwithstanding IC 34-11-2-11, the statute of limitations for a claim on a premium plus assessment insurance policy under this section is two (2) years after the date of the loss.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-35Payment of losses and judgments; insufficient funds; assessments Sec. 35. (a) A farm mutual insurance company that operates on a premium plus assessment basis must pay losses and judgments of the farm mutual insurance company from premiums received or amounts collected on promissory notes. The amount:

(1) deducted from a policyholder's premium paid; or

(2) demanded from a policyholder's promissory note;

must bear the same relationship to the total loss as the policyholder's total premium bears to the total premiums collected in the calendar year that the loss is incurred.

(b) If funds collected under subsection (a) are insufficient to cover a loss or judgment, the directors of the farm mutual insurance company may, subject to the limitation set forth in the farm mutual insurance company's bylaws under section 30 of this chapter, assess each policyholder in the same manner. However, a farm mutual insurance company may not assess policyholders more than one (1) time in a calendar year for losses incurred by the farm mutual insurance company.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-36Borrowing funds; assessment Sec. 36. (a) A farm mutual insurance company may borrow money for the payment of accrued losses and expenses.

(b) A farm mutual insurance company that borrows money under subsection (a) shall assess policyholders the full amount necessary to fully repay the loan in the assessment immediately following the date the money is borrowed. Unless the commissioner authorizes a longer period, the assessment must be levied not more than twelve (12) months after the losses or expenses paid by the farm mutual insurance company through the loan are incurred.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-37Policy cancellation; notice Sec. 37. (a) A farm mutual insurance company may cancel, in whole or in part, a policyholder's insurance policy after giving the policyholder written notice of the cancellation as follows:

(1) The written notice must be delivered or mailed to the policyholder at the last known address of the policyholder.

(2) The written notice must specify the effective date of the cancellation.

(3) Upon request of the policyholder, the written notice must be accompanied by a written explanation of the specific reasons for the cancellation.

(b) A farm mutual insurance company shall provide the written notice specified in subsection (a) at least:

(1) ten (10) days before canceling the insurance policy, if the cancellation is for nonpayment of premium;

(2) twenty (20) days before canceling the insurance policy, if the cancellation occurs more than sixty (60) days after the date of issuance of the policy; and

(3) ten (10) days before canceling the insurance policy, if the cancellation occurs less than sixty-one (61) days after the date of issuance of the policy.

(c) If the insurance policy was procured by an independent insurance producer licensed in Indiana, the farm mutual insurance company shall deliver or mail notice of cancellation to the insurance producer not less than ten (10) days before the farm mutual insurance company delivers or mails the notice to the policyholder, unless the obligation to notify the insurance producer is waived in writing by the insurance producer.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-38Discontinuation of company Sec. 38. A farm mutual insurance company may vote to discontinue operations and settle its affairs under IC 27-1-10.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-39Misconduct; penalty Sec. 39. A director, an officer, a member, an insurance producer, or an employee of a farm mutual insurance company who knowingly or intentionally, directly or indirectly, uses or employs, or allows another person to use or employ, money, funds, securities, or assets of the farm mutual insurance company for private profit or gain commits a Level 5 felony.

As added by P.L.129-2003, SEC.8. Amended by P.L.158-2013, SEC.297.

IC 27-5.1-2-40Investment gain; policyholder surplus Sec. 40. This article does not prohibit a farm mutual insurance company from doing the following:

(1) Distributing underwriting or investment gain to policyholders of a farm mutual insurance company.

(2) Accumulating a reasonable policyholder surplus for the payment of losses or other expenses.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-41Election to be subject to Indiana insurance law Sec. 41. (a) A farm mutual insurance company may elect to be subject to the provisions of IC 27-1, as provided by IC 27-1-11-1, with the rights, privileges, and franchises provided under IC 27-1.

(b) An election under subsection (a) becomes effective on the date of issuance of a new certificate of authority under IC 27-1-11-7.

(c) An insurance policy that is:

(1) issued or bound by a farm mutual insurance company that makes an election under subsection (a); and

(2) in effect on the date the election becomes effective;

is not invalidated by IC 27-1, but remains in full force and effect until expiration or termination of the insurance policy. However, IC 27-1 applies to an insurance policy described in this subsection beginning three (3) years after the date the election becomes effective.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-42Exemption from regulation Sec. 42. A company or association organized before January 1, 1870, that provides the kind of insurance described in this article and has not made an election under IC 27-5-1-14 (before its repeal) is not subject to this article unless the company or association elects to conduct the company's or association's business under this article by a resolution:

(1) adopted by the company's or association's board of directors or policyholders;

(2) filed with the commissioner; and

(3) approved by the commissioner.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-43Administrative rules Sec. 43. The commissioner may adopt rules under IC 4-22-2 to implement this article.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-2-44Validity of rate or form filed under prior law Sec. 44. A rate or form filed by a farm mutual insurance company before July 1, 2003, is valid and remains in effect notwithstanding the repeal of IC 27-5 and the addition of this article.

As added by P.L.16-2009, SEC.28.

IC 27-5.1-3Chapter 3. Standard Farm Mutual Insurance Companies

27-5.1-3-1Standard company; supplementation of chapter; limitation on types of insurance provided 27-5.1-3-2Powers; kinds of insurance coverage 27-5.1-3-3Company territory expansion; net retention per risk; investments 27-5.1-3-4Policyholder surplus; reinsurance 27-5.1-3-5Annual statements

IC 27-5.1-3-1Standard company; supplementation of chapter; limitation on types of insurance provided Sec. 1. (a) This chapter supplements the requirements set forth for a standard company in IC 27-5.1-2.

(b) A standard company may not insure a policyholder of the farm mutual insurance company:

(1) against loss to a motor vehicle owned by the policyholder from peril;

(2) against liability resulting from the use of a motor vehicle owned by the policyholder;

(3) for property loss in connection with a specific loan or other credit transaction; or

(4) for personal, commercial, and farm liability.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-3-2Powers; kinds of insurance coverage Sec. 2. A standard company that is issued a certificate of authority under this article may:

(1) perform the business of insurance on:

(A) an assessable;

(B) a mutual; and

(C) a nonprofit;

basis;

(2) insure the property of policyholders of the standard company 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 not specifically excluded in the policy form; and

(3) insure the property of policyholders of the standard company 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.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-3-3Company territory expansion; net retention per risk; investments Sec. 3. (a) A standard company may not insure property located outside the standard company's territory, as described in the standard company's articles of incorporation, unless the standard company meets the following requirements for expansion:

(1) A standard company with annual direct written premiums that total not less than one hundred thousand dollars ($100,000) may expand the territory in which the standard company insures property to not more than ten (10) counties if the expansion is approved by the affirmative vote of a majority of the standard company's:

(A) board of directors; or

(B) policyholders present and voting at a meeting of the policyholders.

(2) A standard company with annual direct written premiums that total not less than two hundred fifty thousand dollars ($250,000) may expand the territory in which the standard company insures property to more than ten (10) counties if the expansion is approved by the affirmative vote of a majority of the standard company's:

(A) board of directors; or

(B) policyholders present and voting at a meeting of the policyholders.

(b) The net retention per risk of a standard company may not exceed two-tenths percent (0.2%) of the standard company's insurance in force.

(c) A standard company shall make investments in accordance with IC 27-1-13-3.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-3-4Policyholder surplus; reinsurance Sec. 4. A standard company may issue an insurance policy insuring against loss or damage to property of a policyholder of the standard company from the perils specified in section 2 of this chapter in a county located in Indiana if the standard company maintains a policyholder surplus or reinsurance that the commissioner determines is sufficient to protect the financial stability of the standard company.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-3-5Annual statements Sec. 5. (a) A standard 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 the standard company and individuals who are authorized to do business on behalf of the standard company; and

(3) that reflects the financial condition of the standard company as of the end of the calendar year immediately preceding the date of the annual statement.

(b) An annual statement prepared and filed under subsection (a) must be presented at the annual meeting of the standard company.

(c) An annual statement filed under subsection (a) must be accompanied by the filing fee set forth under IC 27-1-3-15.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-4Chapter 4. Extended Farm Mutual Insurance Companies

27-5.1-4-1Extended company requirements 27-5.1-4-2Companies existing on June 30, 2003; extended company election; amended certificate of authority 27-5.1-4-3Kinds of insurance coverage 27-5.1-4-4Financial and reinsurance requirements 27-5.1-4-5Collections through assessments and premiums 27-5.1-4-6Policyholder surplus 27-5.1-4-7Investments 27-5.1-4-8Annual statement

IC 27-5.1-4-1Extended company requirements Sec. 1. An extended company is subject to the requirements of IC 27-5.1-2 and this chapter.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-4-2Companies existing on June 30, 2003; extended company election; amended certificate of authority Sec. 2. (a) A farm mutual insurance company that was authorized to provide insurance in Indiana on June 30, 2003, may elect to obtain a 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 farm mutual insurance company:

(A) on a resolution to convert to an extended company; and

(B) on an amendment of the articles of incorporation of the farm mutual insurance company; and

(2) filing:

(A) the resolution;

(B) the amended articles of incorporation; and

(C) other information that the commissioner considers necessary 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 in compliance with the requirements of this article and other applicable law;

issue an amended certificate of authority to the farm mutual insurance company authorizing the farm mutual insurance company as an extended company.

(d) A farm mutual insurance company, after receiving an amended certificate of authority under subsection (c):

(1) is subject to the requirements of this chapter; and

(2) may commence the business of insurance as an extended company.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-4-3Kinds of insurance coverage Sec. 3. An extended company may:

(1) insure the property of policyholders of the extended company 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 extended company 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 the commissioner.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-4-4Financial and reinsurance requirements Sec. 4. An extended company shall comply with the following financial and reinsurance requirements if the extended company provides the types of insurance described in section 3 of this chapter:

(1) The extended company shall maintain a policyholder surplus as required under IC 27-1-6-15.

(2) The net retention per risk that an extended company may maintain may not exceed two-tenths percent (0.2%) of the extended company's insurance in force.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-4-5Collections through assessments and premiums Sec. 5. (a) An extended company:

(1) may collect a membership fee and an initial premium charge that are prescribed by the board of directors of the extended company; and

(2) shall collect, not less than annually, an amount that is sufficient to enable the extended company to:

(A) pay losses and expenses; and

(B) create and maintain a policyholder surplus in accordance with the articles of incorporation and bylaws of the extended company.

(b) Collections under subsection (a) are subject to the following requirements:

(1) Collections must be made through assessments or premiums charged by the extended company on certain insurance policies issued by the extended company as determined by the board of directors of the extended company.

(2) A policyholder that holds an insurance policy that is issued on a basis other than a premium basis:

(A) may be charged an advance assessment that is payable not later than the time at which the insurance policy is issued, as determined by the board of directors of the extended 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 this section must be clearly disclosed in the insurance policy.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-4-6Policyholder surplus Sec. 6. The following requirements apply to the policyholder surplus of an extended company:

(1) The articles of incorporation of the extended company must provide for the existence, maintenance, and use of the policyholder surplus.

(2) The policyholder surplus may be used only for the payment of losses and expenses considered necessary by the board of directors of the extended company.

(3) The existence or maintenance of the policyholder surplus does not relieve a policyholder of any assessment or other obligation 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 policyholder surplus must be treated in the same manner as any other asset of the extended company.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-4-7Investments Sec. 7. An extended company shall make investments in accordance with IC 27-1-13-3.

As added by P.L.129-2003, SEC.8.

IC 27-5.1-4-8Annual 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 the end of the calendar year immediately preceding the date of the annual 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 be accompanied by the filing fee set forth in IC 27-1-3-15.

As added by P.L.129-2003, SEC.8.

IC 27-6ARTICLE 6. REINSURANCE; INTERINSURANCE; RECIPROCAL INSURANCE

Ch. 1.Repealed Ch. 1.1.Reinsurance Ch. 2.Farmers' Mutual Insurance Companies─Additional Reinsurance Ch. 3.Reciprocal Exchange May Reinsure Ch. 4.Reinsurance─Effect on Worker's Compensation Insurers Ch. 5.Repealed Ch. 6.Interinsurance Ch. 7.Lawsuits Concerning Interinsurance─Procedure Ch. 8.Property and Casualty Insurance and Guaranty Association Law Ch. 9.Reinsurance Intermediaries Ch. 10.Repealed Ch. 10.1.Credit for Reinsurance

IC 27-6-1Chapter 1. RepealedRepealed by P.L.260-1983, SEC.8.

IC 27-6-1.1Chapter 1.1. Reinsurance

27-6-1.1-1Definitions 27-6-1.1-2Indemnity reinsurance; ceding agreements 27-6-1.1-3Repealed 27-6-1.1-4Termination of indemnity reinsurance transaction 27-6-1.1-5Assumption reinsurance agreement; approval; exemptions; notice to policyholders 27-6-1.1-6Application of chapter

IC 27-6-1.1-1Definitions Sec. 1. As used in this chapter:

"Accepting insurer" means the insurer that is a party to a reinsurance transaction and that reinsures insurance, annuity, and endowment risks or liabilities of another insurer.

"Assumption reinsurance" means a transaction in which one (1) insurer assumes all or a portion of the insurance, annuity, and endowment risks or liabilities of another insurer and thereby becomes directly and primarily liable to the insured, beneficiary, or policyholder under the policies and contracts subject to the reinsurance transaction.

"Ceding insurer" means the insurer that is a party to a reinsurance transaction and whose insurance, annuity, and endowment risks or liabilities are reinsured.

"Indemnity reinsurance" means a transaction in which one (1) insurer agrees to indemnify another insurer for all or a portion of the insurance, annuity, and endowment risks or liabilities of the ceding insurer.

As added by P.L.260-1983, SEC.1.

IC 27-6-1.1-2Indemnity reinsurance; ceding agreements Sec. 2. (a) A domestic insurer may cede indemnity reinsurance to any insurer authorized to do business in this state, in any other state of the United States, or in the District of Columbia, or to any alien insurer.

(b) A domestic ceding insurer must file with the commissioner for approval any proposed agreement that would cede indemnity reinsurance of previously retained insurance if the reserves and other liabilities with respect to previously retained insurance that are transferred by the insurer under the proposed agreement and under all other agreements that cede previously retained insurance exceed twenty-five percent (25%) of the total reserves and other liabilities of the domestic ceding insurer. As used in this subsection, "previously retained insurance" means insurance issued before the date of reinsurance and not previously reinsured.

(c) Any agreement that is filed as provided in subsection (b) shall be deemed approved unless the commissioner notifies the insurer within thirty (30) days after submission of an intent to hold a hearing in accordance with section 4 of this chapter.

(d) A transaction of indemnity reinsurance does not create any legal right or relation between the insured, beneficiary, or policyholder and the accepting insurer.

As added by P.L.260-1983, SEC.1.

IC 27-6-1.1-3RepealedAs added by P.L.260-1983, SEC.1. Repealed by P.L.116-1994, SEC.78.

IC 27-6-1.1-4Termination of indemnity reinsurance transaction Sec. 4. The commissioner may require the termination of any indemnity reinsurance transaction, whether or not the applicable agreement was required to be filed for approval, if after a hearing under IC 4-21.5-3, the commissioner finds that the transaction creates an unsafe condition for the policyholders of a domestic insurer.

As added by P.L.260-1983, SEC.1. Amended by P.L.7-1987, SEC.152.

IC 27-6-1.1-5Assumption reinsurance agreement; approval; exemptions; notice to policyholders Sec. 5. (a) A domestic insurer must file any proposed agreement of assumption reinsurance with the commissioner for the commissioner's approval. The agreement must be executed by each insurer in a manner consistent with its articles and bylaws and the applicable law.

(b) The requirement for filing and approval provided in subsection (a) is not applicable to an agreement if:

(1) the ceding insurer is not a domestic insurer; and

(2) the reserves and liabilities assumed under the agreement are not greater than twenty percent (20%) of the corresponding outstanding reserves and liabilities of the domestic accepting insurer without regard to the agreement.

(c) The commissioner shall approve a reinsurance agreement within sixty (60) days after it is filed as provided in subsection (a) if the commissioner determines that:

(1) the agreement was legally executed by both insurers;

(2) in case one (1) of the parties to the agreement is a foreign or alien insurer, the agreement received the sanction and approval of the law of the foreign or alien jurisdiction, if necessary; and

(3) the agreement deals equitably and fairly with the contract and property rights of insurance, annuity, and endowment policy or contract holders of both insurers.

(d) The commissioner's approval of any agreement of reinsurance that is required to be filed as provided in subsection (a) shall be a condition precedent to the validity of the agreement. On the commissioner's approval, the agreement shall become effective as of the date of the agreement or as of such other date as may be specifically provided in the agreement.

(e) Within the period of forty-five (45) days following the commissioner's approval of an agreement of assumption reinsurance, or within the period of forty-five (45) days following the effective date of an agreement of assumption reinsurance for which the approval of the commissioner is not required, the accepting insurer shall mail a written notification to each reinsured insurance, annuity, and endowment policy or contract holder. The notification must:

(1) specify each policy or contract subject to reinsurance and the effective date of the reinsurance transaction;

(2) offer to provide a copy of the agreement of assumption of reinsurance upon the written request of the policy or contract holder;

(3) state that the accepting insurer assumes all of the rights and obligations of the ceding insurer with respect to the policies and contracts that are subject to the agreement of assumption reinsurance; and

(4) state that the rights and benefits of the policy or contract holder under the policy or contract that is subject to reinsurance, including the right to surrender the policy or contract subject to the terms of the policy or contract, are not affected by the reinsurance.

(f) This section does not apply to an assumption reinsurance agreement to which a domestic ceding insurer is a party if the insurer is the subject of a proceeding under IC 27-9-3.

As added by P.L.260-1983, SEC.1. Amended by P.L.256-1985, SEC.1; P.L.248-1989, SEC.1.

IC 27-6-1.1-6Application of chapter Sec. 6. This chapter does not apply to any of the parties to a contract of merger or consolidation under IC 27-5.1-2-21.

As added by P.L.260-1983, SEC.1. Amended by P.L.129-2003, SEC.9.

IC 27-6-2Chapter 2. Farmers' Mutual Insurance Companies─Additional Reinsurance

27-6-2-1Authorization 27-6-2-2Construction of acts