Be it enacted by the General Assembly of the State of Indiana:
SECTION 1. IC 6-8-11-12 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 12. The following may
be an account administrator under this chapter:
(1) A federal or state chartered:
(A) bank;
(B) savings association;
(C) savings bank; or
(D) credit union.
(2) A trust company authorized to act as a fiduciary.
(3) An insurance company or a health maintenance organization
authorized to do business in Indiana under IC 27.
(4) A broker-dealer, an agent, or an investment advisor registered
under IC 23-2-1.
(5) A person (A) that holds a certificate of registration is licensed
as an insurance administrator or
(B) for whom the insurance commissioner has waived the
requirement of a certificate of registration as an insurance
administrator;
under IC 27-1-25-11. IC 27-1-25.
(6) An employee welfare benefit plan that is governed by the
federal Employee Retirement Income Security Act, 29 U.S.C.
1001 et seq.
each month or portion of a month that any amount due remains unpaid
after the first month. Penalties assessed under this subsection are
payable by the surplus lines producer and are not collectible from an
insured.
SECTION 3. IC 27-1-18-5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 5. At the time of filing
its annual statement, an alien or foreign company shall submit, on a
form prescribed by the department, a condensed statement of its assets
and liabilities as of December 31 of the preceding year. If the
department, on examination of such statement, determines from
information available to it that it is true and correct, it shall cause such
statement to be published in a newspaper in this state selected by the
department. In the event the department determines that the statement
submitted by a company is inaccurate or incorrect, it shall, after giving
the company notice of the proposed changes and an opportunity to be
heard, certify the corrected statement and proceed with its publication
as above provided. The company shall bear the expenses of the
publication, but in no event shall an amount exceeding forty dollars
($40) be charged for such publication. Any cost of publication that
exceeds forty dollars ($40) must be borne by the newspaper
publishing the statement.
SECTION 4. IC 27-1-25-1, AS AMENDED BY P.L.132-2001,
SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2003]: Sec. 1. As used in this chapter:
(a) "Administrator", except as provided in section 7.5 of this
chapter, means a person who directly or indirectly and on behalf of
an insurer underwrites, collects charges or premiums from, or who
adjusts or settles claims on residents of Indiana in connection with life,
annuity, or health coverage or annuities, whether offered or provided
for by an insurer. or a self-funded plan. The term "administrator" does
not include the following persons:
(1) An employer for its or a wholly owned direct or indirect
subsidiary of an employer acting on behalf of the employees or
for the employees of: a
(A) the employer;
(B) the subsidiary; or
(C) an affiliated corporation of the employer.
(2) A union acting for its members.
(3) An insurer. including:
(A) an insurer operating a health maintenance organization or
a limited service health maintenance organization; and
(B) the sales representative of an insurer operating a health
maintenance organization or a limited service health
maintenance organization when that sales representative is
licensed in Indiana and when it is engaged in the performance
of its duties as the sales representative.
(4) A life or health An insurance agent producer:
(A) that is licensed under IC 27-1-15.6;
(B) that has:
(i) a life; or
(ii) an accident and health or sickness;
qualification under IC 27-1-15.6-7; and
(C) whose activities are limited exclusively to the sale of
insurance.
(5) A creditor acting for its debtors regarding insurance covering
a debt between them.
(6) A trust established under 29 U.S.C. 186 and the trustees,
agents, and employees acting pursuant to that trust.
(7) A trust that is exempt from taxation under Section 501(a) of
the Internal Revenue Code and:
(A) the trustees and employees acting pursuant to that trust; or
(B) a custodian and the agents and employees of the custodian
acting pursuant to a custodian account that meets the
requirements of Section 401(f) of the Internal Revenue Code.
(8) A financial institution that is subject to supervision or
examination by federal or state banking authorities to the extent
that the financial institution collects and remits premiums to
an insurance producer or an authorized insurer in connection
with a loan payment.
(9) A credit card issuing company that:
(A) advances for; and
(B) collects from, when a credit card holder authorizes the
collection;
credit card holders of the credit card issuing company,
insurance premiums or charges. from its credit cardholders as
long as that company does not adjust or settle claims.
(10) An individual who A person that adjusts or settles claims in
the normal course of his the person's practice or employment as
an attorney at law and who that does not collect charges or
premiums in connection with life, annuity, or health insurance
coverage. or annuities.
(11) A health maintenance organization that has a certificate of
authority issued under IC 27-13.
(12) A limited service health maintenance organization that has
a certificate of authority issued under IC 27-13.
(13) A mortgage lender to the extent that the mortgage lender
collects and remits premiums to an insurance producer or an
authorized insurer in connection with a loan payment.
(14) A person that:
(A) is licensed as a managing general agent as required
under IC 27-1-33; and
(B) acts exclusively within the scope of activities provided
for under the license referred to in clause (A).
(15) A person that:
(A) directly or indirectly underwrites, collects charges or
premiums from, or adjusts or settles claims on residents of
Indiana in connection with life, annuity, or health coverage
provided by an insurer;
(B) is affiliated with the insurer; and
(C) performs the duties specified in clause (A) only
according to a contract between the person and the insurer
for the direct and assumed life, annuity, or health coverage
provided by the insurer.
(b) "Certificate of registration" refers to the certificate required by
section 11 of this chapter.
(b) "Affiliate" means an entity or a person that:
(1) directly or indirectly through an intermediary controls or
is controlled by; or
(2) is under common control with;
a specified entity or person.
(c) "Church plan" has the meaning set forth in IC 27-8-10-1.
(d) "Commissioner" refers to the insurance commissioner of
insurance appointed under IC 27-1-1-2.
(d) (e) "Control" means the direct or indirect possession of the
power to direct or cause the direction of the management and
policies of a person, whether:
(1) through ownership of voting securities;
(2) by contract other than a commercial contract for goods or
nonmanagement services; or
(3) otherwise;
unless the power is the result of an official position with the person
or a corporate office held by the person. Control is presumed to
exist if a person directly or indirectly owns, controls, holds with the
power to vote, or holds proxies representing not less than ten
percent (10%) of the voting securities of another person.
(f) "Covered individual" means an individual who is covered
under a benefit program provided by an insurer.
(g) "Financial institution" means a bank, savings association, credit
union, or any other institution regulated under IC 28 or federal law.
(e) (h) "GAAP" refers to consistently applied United States
generally accepted accounting principles.
(i) "Governmental plan" has the meaning set forth in
IC 27-8-10-1.
(j) "Home state" means the District of Columbia or any state or
territory of the United States in which an administrator is
incorporated or maintains the administrator's principal place of
business. If the place in which the administrator is incorporated or
maintains the administrator's principal place of business is not
governed by a law that is substantially similar to this chapter, the
administrator's home state is another state:
(1) in which the administrator conducts the business of the
administrator; and
(2) that the administrator declares is the administrator's
home state.
(k) "Insurance producer" has the meaning set forth in
IC 27-1-15.6-2.
(l) "Insurer" means:
(1) a person who obtains a certificate of authority under:
(A) IC 27-1-3-20;
(B) IC 27-13-3; or
(C) IC 27-13-34; or
(2) an employer that provides life, health, or annuity coverage
in Indiana under a governmental plan or a church plan.
(m) "NAIC" refers to the National Association of Insurance
Commissioners.
(n) "Negotiate" has the meaning set forth in IC 27-1-15.6-2.
(o) "Nonresident administrator" means a person that applies
for or holds a license under section 12.2 of this chapter.
(f) (p) "Person" means an individual, a corporation, a partnership,
a limited liability company, or an unincorporated association.
(g) "Self-funded plan" means a plan for providing benefits for life,
health, or annuity coverage by a person who is not an insurer. has the
meaning set forth in IC 27-1-15.6-2.
(q) "Sell" has the meaning set forth in IC 27-1-15.6-2.
(r) "Solicit" has the meaning set forth in IC 27-1-15.6-2.
(s) "Underwrite" refers to the:
(1) acceptance of a group application or an individual
application for coverage of an individual in accordance with
the written rules of the insurer; or
(2) planning and coordination of a benefit program provided
by an insurer.
(t) "Uniform application" means the current version of the
NAIC uniform application for third party administrators.
SECTION 5. IC 27-1-25-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 2. (a) An administrator
may act only if there is a written agreement between the administrator
and an insurer. employer, employee group, or any other group using the
services of an administrator. This agreement must conform to the
requirements of sections 4 through 9 of this chapter, which apply to the
functions performed by the administrator.
(b) An agreement between an administrator and an insurer
employer, employee group, or any other group must be retained by both
parties as part of their official records for a period of not less than five
(5) years after the termination of the agreement.
(c) When a policy is issued to a trustee, a copy of the trust
agreement and all amendments to it must be:
(1) furnished by the administrator to the insurer employer,
employee group, or any other group with which it holds a contract
the administrator has a written agreement; and
(2) retained as part of the official records of the administrator for
a period of not less than five (5) years after the termination of the
trust.
(d) The written agreement required under subsection (a) must:
(1) include a statement of functions that the administrator will
perform on behalf of the insurer;
(2) specify the lines, classes, or types of coverage that the
administrator is authorized to administer on behalf of the
insurer; and
(3) contain provisions concerning the standard of underwriting
required by the insurer. employer, employee group, or any other
group that is a party to the agreement.
(e) The commissioner may require any written agreement executed
by an administrator and an insurer employer, employee group, or any
other group to be filed with the department of insurance at the time the
administrator applies for a certificate of registration, as required by
section 11 of license under this chapter. The commissioner may
require any written agreement executed subsequent to the original issue
of the certificate of registration license to the administrator to be filed
with the department at the time the administrator is applying for
renewal of the certificate of registration. license.
(f) An administrator or insurer may, with written notice,
terminate a written agreement for cause as provided in the written
agreement. The insurer may suspend the underwriting authority
of the administrator during the pendency of a dispute regarding
the cause for termination of the written agreement. The insurer
shall fulfill lawful obligations with respect to coverage affected by
the written agreement, regardless of a dispute described in this
subsection.
SECTION 6. IC 27-1-25-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 3. (a) If an insurer
utilizes the services of an administrator:
(1) the payment to the administrator of premiums or charges for
insurance coverage paid by or on behalf of the insured covered
individual are presumed considered to have been received by the
insurer when paid to the administrator; and
(2) the payment of claims or return premiums paid by the insurer
to the administrator are not presumed considered to have been
paid to the insured covered individual or claimant until the
payment is received by the insured covered individual or
claimant.
(b) This section does not limit the rights of an insurer against an
administrator resulting from the failure of the administrator to make
payments to the insurer, insured parties, covered individuals, or
claimants.
SECTION 7. IC 27-1-25-4 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 4. (a) For the duration
of the agreement and for five (5) years after the termination of an
agreement, An administrator: or successor administrator:
(1) shall maintain at its principal administrative office books and
records of all transactions between it the administrator and
insurers employers, employee group, or any other group using the
services of an administrator for at least five (5) years after the
creation of the books and records; or
(2) may transfer the books and records of transactions
between the administrator and an insurer with which the
administrator has entered into a written agreement under
section 2 of this chapter to a new administrator if:
(A) the agreement between the administrator and the
insurer is canceled; and
(B) a written agreement for a transfer of the books and
records is made between the administrator and the
insurer.
If the books and records are transferred to a new administrator
under subdivision (2), the new administrator shall acknowledge in
writing that the new administrator is responsible for retaining the
books and records of the prior administrator as required under
subdivision (1). The books and records must be maintained in
accordance with generally accepted standards of insurance
bookkeeping. record keeping.
(b) The commissioner is entitled to inspect all books and records of
the administrator for the purpose of examinations and audits. Trade
secrets contained within those books and records, including the identity
and addresses of policyholders and certificate holders, financial
information concerning the administrator, and the business plan
of the administrator, are to remain confidential. However, the
commissioner may use that confidential information in proceedings
instituted against the administrator.
(c) Any insurer, employer, employee group, or any other group
using the services of the administrator is entitled to inspect the books
and records of the administrator to the extent necessary for it to fulfill
all of its contractual obligations to insured or covered persons. The
right of the insurer, employer, employee group, or other group using the
services of an administrator under this subsection is subject to any
restrictions contained in the written agreement between such party and
administrator.
(c) An insurer is the owner of records that:
(1) are generated by an administrator with which the insurer
has entered into a written agreement under section 2 of this
chapter; and
(2) pertain to the insurer.
However, the administrator retains the right to continuing access
to books and records necessary to fulfill the administrator's
contractual obligations to covered individuals, claimants, and the
insurer.
(d) An administrator that is licensed under section 11.1 of this
chapter shall make available for inspection by the commissioner
copies of written agreements with insurers.
(e) An administrator that is licensed under section 11.1 of this
chapter shall:
(1) produce the administrator's accounts, records, and files
for examination; and
(2) make the administrator's officers available to provide
information concerning the affairs of the administrator;
whenever reasonably required by the commissioner.
(f) An administrator that is licensed under section 11.1 of this
chapter shall immediately notify the commissioner of a material
change in:
(1) the ownership or control of the administrator; or
(2) another fact or circumstance that affects the
administrator's qualification for a license.
The commissioner, upon receiving notice under this subsection,
shall report the change to an electronic data base maintained by
the NAIC or an affiliate or a subsidiary of the NAIC.
(g) An administrator that is licensed under section 11.1 of this
chapter and that administers a governmental plan or a church plan
shall maintain a bond:
(1) for the use and benefit of:
(A) the commissioner; and
(B) the insurance regulator of any state in which the
administrator is authorized to conduct business; and
(2) that covers an individual and a person that has remitted
premiums, insurance, charges, or other money to the
administrator in the course of the administrator's business;
in an amount equal to the greater of one hundred thousand dollars
($100,000) or ten percent (10%) of the total of funds administered
in connection with governmental plans or church plans in Indiana
and all other states in which the administrator is authorized to
conduct business.
SECTION 8. IC 27-1-25-5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 5. An administrator
may use advertising relating to the business underwritten by an insurer
only to the extent that the advertising has been approved in writing by
that insurer before the advertising is used.
SECTION 9. IC 27-1-25-5.5 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2003]: Sec. 5.5. (a) If an insurer uses the services of an
administrator, the insurer is responsible for:
(1) determining the:
(A) benefits;
(B) premium rates;
(C) underwriting criteria; and
(D) claims payment procedures;
that apply to the coverage; and
(2) securing reinsurance.
(b) An insurer shall provide to an administrator, with the
written agreement required under section 2 of this chapter:
(1) the rules that the administrator must follow in
administering the coverage, as determined under subsection
(a); and
(2) the responsibilities of the administrator as to
administering the coverage.
(c) An insurer that uses the services of an administrator has sole
responsibility for the competent administration of benefit
programs provided by the insurer.
(d) If an administrator administers benefits for more than one
hundred (100) covered individuals on behalf of an insurer, the
insurer shall, not less than semiannually, review the operations of
the administrator. At least one (1) of the semiannual reviews must
be an onsite audit of the operations of the administrator.
SECTION 10. IC 27-1-25-6 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 6. (a) An administrator
is a fiduciary in collecting or returning premiums or charges for the
party insurer with whom it has a written agreement for administrative
services.
(b) Funds collected by the administrator shall be immediately
remitted to the person entitled to the funds or deposited in a fiduciary
bank account, which shall be established and maintained by the
administrator in a federally insured or state insured financial
institution.
(c) The administrator shall maintain records clearly showing the
deposits and withdrawals from the fiduciary bank account for each
party insurer with whom it has a written agreement for administrative
services. The administrator shall furnish to the party: insurer:
(1) upon his the insurer's request, copies of the required records;
and
(2) at intervals specified in the written agreement, a periodic
accounting of transactions performed by the administrator
pertaining to the business underwritten by the insurer.
(d) Subject to the written agreement required by section 2 of this
chapter, withdrawals from the fiduciary bank account shall only be
made for the following:
(1) Remittance to an insurer entitled to the funds.
(2) Deposit in an account maintained in the name of the party
insurer with whom the administrator has a written agreement.
(3) Transfer to and deposit in a claims paying account, with
claims to be paid as required under section 7 of this chapter.
(4) Payment to a group policyholder for remittance to the insurer
entitled to the funds.
written notice, which must first be approved by the insurer, to the
insured covered persons advising them of the relationship among the
administrator, the policyholder covered person, and the insurer.
(b) An administrator having a written agreement with an employer,
an employee group, or any other group shall provide written notice,
which must first be approved by that party, to the insured persons
advising them of the relationship among the administrator, the
policyholder, and the employer, the employee group, or any other
group.
(c) (b) When the administrator collects premiums or charges, the
administrator shall state separately the amount of any premium or
charge for insurance coverage specified by the insurer to the person
paying the premium or charge. Additional charges may not be made
for a service to the extent that the charge for the service has been
paid by the insurer.
(c) The administrator shall disclose to the insurer:
(1) charges;
(2) fees; and
(3) commissions;
received by the administrator in connection with the provision of
administrative services for the insurer, including fees or
commissions paid by insurers that provide reinsurance.
SECTION 15. IC 27-1-25-11.1 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2003]: Sec. 11.1. (a) If the home state of a
person is Indiana, the person shall:
(1) apply to act as an administrator in Indiana upon the
uniform application; and
(2) receive a license from the commissioner;
before performing the function of an administrator in Indiana.
(b) The uniform application must include or be accompanied by
the following:
(1) Basic organizational documents of the applicant,
including:
(A) articles of incorporation;
(B) articles of association;
(C) partnership agreement;
(D) trade name certificate;
(E) trust agreement;
(F) shareholder agreement;
(G) other applicable documents; and
(H) amendments to the documents specified in clauses (A)
through (G).
(2) Bylaws, rules, regulations, or other documents that
regulate the internal affairs of the applicant.
(3) The NAIC biographical affidavits for individuals who are
responsible for the conduct of affairs of the applicant,
including:
(A) members of the applicant's:
(i) board of directors;
(ii) board of trustees;
(iii) executive committee; or
(iv) other governing board or committee;
(B) principal officers, if the applicant is a corporation;
(C) partners or members, if the applicant is:
(i) a partnership;
(ii) an association; or
(iii) a limited liability company;
(D) shareholders or members that hold, directly or
indirectly, at least ten percent (10%) of the:
(i) voting stock;
(ii) voting securities; or
(iii) voting interest;
of the applicant; and
(E) any other person who exercises control or influence
over the affairs of the applicant.
(4) Financial information reflecting a positive net worth,
including:
(A) audited annual financial statements prepared by an
independent certified public accountant for the two (2)
most recent fiscal years; or
(B) if the applicant has been in business for less than two
(2) fiscal years, financial statements or reports that are:
(i) prepared in accordance with GAAP; and
(ii) certified by an officer of the applicant;
for any completed fiscal years and for any month during
the current fiscal year for which financial statements or
reports have been completed.
If an audited financial statement or report required under
clause (A) or (B) is prepared on a consolidated basis, the
statement or report must include a columnar consolidating or
combining worksheet that includes the amounts shown on the
consolidated audited financial statement or report, separately
reported on the worksheet for each entity included on the
statement or report, and an explanation of consolidating and
eliminating entries.
(5) Information determined by the commissioner to be
necessary for a review of the current financial condition of the
applicant.
(6) A description of the business plan of the applicant,
including:
(A) information on staffing levels and activities proposed
in Indiana and nationwide; and
(B) details concerning the applicant's ability to provide a
sufficient number of experienced and qualified personnel
for:
(i) claims processing;
(ii) record keeping; and
(iii) underwriting.
(7) Any other information required by the commissioner.
(c) An administrator that applies for licensure under this section
shall make copies of written agreements with insurers available for
inspection by the commissioner.
(d) An administrator that applies for licensure under this
section shall:
(1) produce the administrator's accounts, records, and files
for examination; and
(2) make the administrator's officers available to provide
information concerning the affairs of the administrator;
whenever reasonably required by the commissioner.
(e) The commissioner may refuse to issue a license under this
section if the commissioner determines that:
(1) the administrator or an individual who is responsible for
the conduct of the affairs of the administrator:
(A) is not:
(i) competent;
(ii) trustworthy;
(iii) financially responsible; or
(iv) of good personal and business reputation; or
(B) has had an:
(i) insurance certificate of authority or insurance license;
or
(ii) administrator certificate of authority or
administrator license;
denied or revoked for cause by any jurisdiction;
(2) the financial information provided under subsection (b)(4)
does not reflect that the applicant has a positive net worth; or
(3) any of the grounds set forth in section 12.4 of this chapter
exists with respect to the administrator.
(f) An administrator that applies for a license under this section
shall immediately notify the commissioner of a material change in:
(1) the ownership or control of the administrator; or
(2) another fact or circumstance that affects the
administrator's qualification for a license.
The commissioner, upon receiving notice under this subsection,
shall report the change to an electronic data base maintained by
the NAIC or an affiliate or a subsidiary of the NAIC.
(g) An administrator that applies for a license under this section
and will administer a governmental plan or a church plan shall
obtain a bond as required under section 4(g) of this chapter.
(h) A license that is issued under this section is valid until:
(1) the license is:
(A) surrendered; or
(B) suspended or revoked by the commissioner; or
(2) the administrator:
(A) ceases to do business in Indiana; or
(B) is not in compliance with this chapter.
SECTION 16. IC 27-1-25-12.2 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2003]: Sec. 12.2. (a) An administrator that:
(1) performs the duties of an administrator in Indiana; and
(2) does not hold a license issued under section 11.1 of this
chapter;
shall obtain a nonresident administrator license under this section
by filing a uniform application with the commissioner.
(b) Unless the commissioner verifies the nonresident
administrator's home state license status through an electronic
data base maintained by the NAIC or by an affiliate or a subsidiary
of the NAIC, a uniform application filed under subsection (a) must
be accompanied by a letter of certification from the nonresident
administrator's home state, verifying that the nonresident
administrator holds a resident administrator license in the home
state.
(c) A nonresident administrator is not eligible for a nonresident
administrator license under this section unless the nonresident
administrator is licensed as a resident administrator in a home
state that has a law or regulation that is substantially similar to
this chapter.
(d) Except as provided in subsections (b) and (h), the
commissioner shall issue a nonresident administrator license to a
nonresident administrator that makes a filing under subsections (a)
and (b) upon receipt of the filing.
(e) Unless a nonresident administrator is notified by the
commissioner that the commissioner is able to verify the
nonresident administrator's home state licensure through an
electronic data base described in subsection (b), the nonresident
administrator shall:
(1) on September 15 of each year, file a statement with the
commissioner affirming that the nonresident administrator
maintains a current license in the nonresident administrator's
home state; and
(2) pay a filing fee as required by the commissioner.
(f) A nonresident administrator that applies for licensure under
this section shall:
(1) produce the accounts of the nonresident administrator;
(2) produce the records and files of the nonresident
administrator for examination; and
(3) make the officers of the nonresident administrator
available to provide information with respect to the affairs of
the nonresident administrator;
when reasonably required by the commissioner.
(g) A nonresident administrator is not required to hold a
nonresident administrator license in Indiana if the nonresident
administrator's function in Indiana is limited to the administration
of life, health, or annuity coverage for a total of not more than one
hundred (100) Indiana residents.
(h) The commissioner may refuse to issue or may delay the
issuance of a nonresident administrator license if the commissioner
determines that:
(1) due to events occurring; or
(2) based on information obtained;
after the nonresident administrator's home state's licensure of the
nonresident administrator, the nonresident administrator is unable
to comply with this chapter or grounds exist for the home state's
revocation or suspension of the nonresident administrator's home
state license.
(i) If the commissioner makes a determination described in
subsection (h), the commissioner:
(1) shall provide written notice of the determination to the
insurance regulator of the nonresident administrator's home
state; and
(2) may delay the issuance of a nonresident administrator
license to the nonresident administrator until the
commissioner determines that the nonresident administrator
is able to comply with this chapter and that grounds do not
exist for the home state's revocation or suspension of the
nonresident administrator's home state license.
SECTION 17. IC 27-1-25-12.3 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2003]: Sec. 12.3. (a) An administrator that is
licensed under section 11.1 of this chapter shall, not later than July
1 of each year unless the commissioner grants an extension of time
for good cause, file a report for the previous calendar year that
complies with the following:
(1) The report must contain financial information reflecting
a positive net worth prepared in accordance with section
11.1(b)(4) of this chapter.
(2) The report must be in the form and contain matters
prescribed by the commissioner.
(3) The report must be verified by at least two (2) officers of
the administrator.
(4) The report must include the complete names and
addresses of insurers with which the administrator had a
written agreement during the preceding fiscal year.
(5) The report must be accompanied by a filing fee
determined by the commissioner.
(b) The commissioner shall review a report filed under
subsection (a) not later than September 1 of the year in which the
report is filed. Upon completion of the review, the commissioner
shall:
(1) issue a certification to the administrator:
(A) indicating that:
(i) the financial statement reflects a positive net worth;
and
(ii) the administrator is currently licensed and in good
standing; or
(B) noting deficiencies found in the report; or
(2) update an electronic data base that is maintained by the
NAIC or by an affiliate or a subsidiary of the NAIC:
(A) indicating that the administrator is solvent and in
compliance with this chapter; or
(B) noting deficiencies found in the report.
obligation with respect to an examination when required by
the commissioner;
(4) the administrator, without just cause:
(A) refuses to pay proper claims or to perform services
arising under a written agreement;
(B) causes a covered individual to accept less than the
amount due to the covered individual; or
(C) causes a covered individual to employ an attorney or
bring suit against the administrator to secure full payment
or settlement of a proper claim;
(5) the administrator fails to meet a qualification for which
issuance of the administrator's license could have been
refused if the failure had existed and been known by the
commissioner at the time of license issuance;
(6) an individual who is responsible for the conduct of the
affairs of the administrator, including:
(A) a member of the administrator's:
(i) board of directors;
(ii) board of trustees;
(iii) executive committee; or
(iv) other governing board or committee;
(B) a principal officer, if the administrator is a
corporation;
(C) a partner or member, if the administrator is:
(i) a partnership;
(ii) an association; or
(iii) a limited liability company;
(D) a shareholder or member that holds, directly or
indirectly, ten percent (10%) or more of the:
(i) voting stock;
(ii) voting securities; or
(iii) voting interest;
of the administrator; or
(E) any other person who exercises control or influence
over the affairs of the administrator;
is convicted of or enters a plea of guilty or nolo contendere to
a felony, without regard to whether adjudication is withheld;
(7) the administrator's license has been suspended or revoked
in another state; or
(8) the administrator fails to timely file the:
(A) report required under section 12.3 of this chapter; or
(B) statement and pay the filing fee required under section
12.2(e) of this chapter.
(c) The commissioner may, in the commissioner's discretion and
without advance notice or hearing, immediately suspend the license
of an administrator if the commissioner finds one (1) or more of
the following:
(1) The administrator is insolvent or financially impaired.
(2) A proceeding for receivership, conservatorship,
rehabilitation, or other delinquency proceeding regarding the
administrator has been commenced in any state.
(3) The financial condition or business practices of the
administrator pose an imminent threat to the public health,
safety, or welfare of residents of Indiana.
(d) If the commissioner determines that cause exists for the
suspension or revocation of a license issued under this chapter, the
commissioner may, instead of suspension or revocation, impose a
civil penalty not to exceed twenty-five thousand dollars ($25,000)
per act or violation upon the administrator. A civil penalty
imposed under this subsection may be enforced in the same
manner as a civil judgment. Civil penalties collected under this
subsection shall be deposited in the state general fund.
SECTION 19. IC 27-1-25-13 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 13. (a) Except as
provided by section 4(b) of this chapter, and except that all provisions
of the written agreement between the administrator and an insurer
employer, employee group, or any other group using the services of an
administrator shall be treated by the commissioner as confidential and
shall not be open to any member of the public for inspection or
copying, all documents submitted to the commissioner under this
chapter are public documents:
(1) when filed by the commissioner; or
(2) thirty (30) days after their receipt by the department.
(b) Any financial information concerning an administrator
submitted by an administrator to the commissioner must remain
confidential and is not open to any member of the public for inspection
or copying. However, the commissioner may use the financial
information in a proceeding under section 11(b) 12.4 of this chapter.
SECTION 20. IC 27-1-25-15 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 15. (a) An
administrator acting without the certificate of registration required
under section 11 of a license issued under this chapter commits a
Class C infraction.
(b) The commissioner shall notify the prosecuting attorney or the
attorney general of Indiana of violations under subsection (a).
SECTION 21. IC 27-1-25-16 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2003]: Sec. 16. (a) A presumption of control
arising under section 1(e) of this chapter may be rebutted by a
showing made in the manner provided under IC 27-1-23-3(k) that
control does not exist in fact.
(b) In the absence of a presumption that control exists in fact,
the commissioner may determine that control exists in fact after:
(1) providing notice and an opportunity to be heard under
IC 4-21.5 to all interested parties; and
(2) making specific findings of fact to support the
determination.
SECTION 22. IC 27-1-25.1 IS ADDED TO THE INDIANA CODE
AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2003]:
Chapter 25.1. Certain Insurer Responsibilities
Sec. 1. As used in this chapter, "affiliate" has the meaning set
forth in IC 27-1-25-1(b).
Sec. 2. As used in this chapter, "insurer" has the meaning set
forth in IC 27-1-25-1(l).
Sec. 3. As used in this chapter, "person" refers to a person
described in IC 27-1-25-1(a)(15).
Sec. 4. The insurer with which a person is affiliated is
responsible for:
(1) the acts of the person; and
(2) providing the person's books and records to the
commissioner.
SECTION 23. IC 27-1-31-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 3. (a) If an insurer
refuses to renew a policy of insurance written by the insurer, the insurer
shall provide written notice of nonrenewal to the insured:
(1) at least forty-five (45) days before the expiration date of the
policy, if the coverage provided is for one (1) year, or less; or
(2) at least forty-five (45) days before the anniversary date of the
policy, if the coverage provided is for more than one (1) year.
(b) A notice of nonrenewal is not required if:
(1) the insured is transferred from an insurer to an affiliate of
the insurer for future coverage as a result of a merger, an
acquisition, or a company restructuring;
(2) the transfer results in the same or broader coverage; and
(3) the insured approves the transfer.
operate under IC 27-13.
(4) An insurance administrator that holds a certificate of
registration issued is licensed under IC 27-1-25.
(5) An individual qualified and acting as an expert witness under
the Indiana Rules of Trial Procedure.
SECTION 26. IC 27-8-16-1.5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 1.5. (a) As used in this
chapter, "claim review consultant" means a person who:
(1) makes a recommendation or provides consultation to:
(A) an entity engaged in performing medical claims review; or
(B) an insurance company, a health maintenance organization,
or another benefit program providing payment,
reimbursement, or indemnification for health care costs to an
enrollee;
concerning the appropriateness of a health care service or the
amount charged for a health care service delivered to an enrollee
in Indiana; and
(2) is not an employee of an entity referred to in subdivision
(1)(A) or (1)(B).
(b) Making a recommendation or providing consultation concerning
a health care service does not render a person a claim review consultant
under this section if the recommendation or consultation concerns:
(1) coverage provided; or
(2) medical services rendered;
under IC 22.
(c) The term "claim review consultant" does not include the
following:
(1) An insurance company authorized under IC 27 to do business
in Indiana.
(2) An entity acting on behalf of the federal or state government.
However, an agent described in this subdivision who performs
medical claims review for a person other than the federal or state
government is a claim review agent who is subject to the
requirements of this chapter.
(3) A health maintenance organization or limited service health
maintenance organization that holds a certificate of authority to
operate under IC 27-13.
(4) An insurance administrator who holds a certificate of
registration issued that is licensed under IC 27-1-25.
(5) An individual qualified and acting as an expert witness under
the Indiana Rules of Trial Procedure.
(6) A person who engages in the prospective, concurrent, or
retrospective utilization review of health care services.
(7) A person who engages in the identification of alternative,
optional medical care that:
(A) requires the approval of the enrollee or covered individual;
and
(B) does not affect coverage or benefits if rejected by the
enrollee or covered individual.
(8) An individual who is a licensed health care provider who
makes a recommendation or provides consultation concerning the
appropriateness of health care service. However, this exception
does not apply if the individual:
(A) makes any recommendations or provides consultation
concerning the amount charged for a health care service
delivered in Indiana;
(B) makes any recommendations or provides consultation
concerning the appropriateness of hospital services provided
by a hospital licensed under IC 12-25 or IC 16-21;
(C) is employed by or under contract with an entity that is
required to be registered under this chapter; or
(D) has received more than five thousand dollars ($5,000) in
compensation during the present calendar year for providing
consultation services concerning the appropriateness of health
care services delivered to enrollees in Indiana.
(9) A claim review agent under section 1 of this chapter.
SECTION 27. IC 35-43-5-1, AS AMENDED BY SEA 320-2003,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2003]: Sec. 1. (a) The definitions set forth in this section apply
throughout this chapter.
(b) "Claim statement" means an insurance policy, a document, or a
statement made in support of or in opposition to a claim for payment
or other benefit under an insurance policy, or other evidence of
expense, injury, or loss. The term includes statements made orally, in
writing, or as a computer generated document, including the following:
(1) An account.
(2) A bill for services.
(3) A bill of lading.
(4) A claim.
(5) A diagnosis.
(6) An estimate of property damages.
(7) A hospital record.
(8) An invoice.
(9) A notice.
or
(B) initiate a transfer of funds.
(i) "Insurance policy" includes the following:
(1) An insurance policy.
(2) A contract with a health maintenance organization (as defined
in IC 27-13-1-19).
(3) An administrator contract A written agreement entered into
under IC 27-1-25.
(j) "Insurer" has the meaning set forth in IC 27-1-2-3(x).
(k) "Manufacturer" means a person who manufactures a recording.
The term does not include a person who manufactures a medium upon
which sounds or visual images can be recorded or stored.
(l) "Make" means to draw, prepare, complete, counterfeit, copy or
otherwise reproduce, or alter any written instrument in whole or in part.
(m) "Metering device" means a mechanism or system used by a
utility to measure or record the quantity of services received by a
customer.
(n) "Public relief or assistance" means any payment made, service
rendered, hospitalization provided, or other benefit extended to a
person by a governmental entity from public funds and includes poor
relief, food stamps, direct relief, unemployment compensation, and any
other form of support or aid.
(o) "Recording" means a tangible medium upon which sounds or
visual images are recorded or stored. The term includes the following:
(1) An original:
(A) phonograph record;
(B) compact disc;
(C) wire;
(D) tape;
(E) audio cassette;
(F) video cassette; or
(G) film.
(2) Any other medium on which sounds or visual images are or
can be recorded or otherwise stored.
(3) A copy or reproduction of an item in subdivision (1) or (2)
that duplicates an original recording in whole or in part.
(p) "Slug" means an article or object that is capable of being
deposited in a coin machine as an improper substitute for a genuine
coin, bill, or token.
(q) "Utility" means a person who owns or operates, for public use,
any plant, equipment, property, franchise, or license for the production,
storage, transmission, sale, or delivery of electricity, water, steam,
telecommunications, information, or gas.
(r) "Written instrument" means a paper, a document, or other
instrument containing written matter and includes money, coins,
tokens, stamps, seals, credit cards, badges, trademarks, medals, retail
sales receipts, labels or markings (including a universal product code
(UPC) or another product identification code), or other objects or
symbols of value, right, privilege, or identification.
SECTION 28. THE FOLLOWING ARE REPEALED [EFFECTIVE
JULY 1, 2003]: IC 27-1-25-11; IC 27-1-25-12.
SECTION 29. [EFFECTIVE JULY 1, 2003] (a) An administrator
that has a certificate of registration issued under IC 27-1-25, before
amendment by this act, on June 30, 2003, is considered to be
licensed under IC 27-1-25, as amended by this act, until the
expiration of the certificate of registration.
(b) This SECTION expires June 30, 2006.