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DEPARTMENT OF INSURANCE

June 4, 2014
Bulletin 208
Old Order Amish Liability Aid


This bulletin is directed to all Hoosiers considering using an Old Order Amish Liability Aid Certificate of Liability Coverage (an "Old Amish Certificate") instead of an insurance policy to fulfill a legal or contractual requirement, and to insurance producers whose clients are considering cancelling or not renewing an insurance policy in favor of an Old Amish Certificate.

Amish property owners sometimes choose to use Old Amish Certificates like the one attached to this bulletin instead of procuring insurance policies. Old Amish Certificates vary from insurance policies in many key ways:
• Old Amish Certificates are not a promise to pay. The Old Amish Certificate clearly states that the member "is responsible to make any such settlement himself to any individual or firm and upon complete legal settlement of such claim is reimbursed for his loss" by the Old Amish Aid plan.
• Old Amish Certificates are not subject to regulation by the Indiana Department of Insurance or any regulatory body outside the Old Order Amish Church.
• Old Amish Certificates are not covered by the Indiana insurance guaranty funds. Thus, if the Old Order Amish Liability Aid program has insufficient funds to pay for a loss, the party holding the certificate has no financial coverage for any liability.

It has come to the Department's attention that some Hoosiers do not understand that Old Amish Certificates are not a substitute for an insurance policy. Although individuals may typically choose to manage their risk in any manner they choose, including foregoing insurance altogether, the Department wants to emphasize that Old Amish Certificates may not fulfill any contractual or legal obligations to obtain insurance. For example, if a subcontractor has an obligation under a contract to obtain liability insurance, and the subcontractor instead obtains an Old Amish Certificate instead, it may constitute a breach of contract. As further example, an Old Amish Certificate might not fulfill a mortgagor's responsibility to his or her mortgagee to obtain flood insurance. The Department encourages Hoosiers to work with their legal counsel and other advisors to determine the best method of managing risk for their particular circumstances.

Questions regarding this bulletin should be directed to Tina L. Korty, General Counsel, at (317) 232-2417 or tkorty@idoi.in.gov.

INDIANA DEPARTMENT OF INSURANCE
______________________________________
Stephen W. Robertson
Insurance Commissioner

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Posted: 06/18/2014 by Legislative Services Agency

DIN: 20140618-IR-760140203NRA
Composed: Nov 27,2014 11:36:41AM EST
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