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this state.
(h) "Earned surplus" means an amount equal to the unassigned
funds of an insurer as set forth in the most recent annual statement
of an insurer that is submitted to the commissioner, excluding surplus
arising from unrealized capital gains or revaluation of assets.
(i) "Enterprise risk" means an activity, circumstance, event, or
series of events that involves at least one (1) affiliate of an insurer
that, if not remedied promptly, is likely to have a material adverse
effect upon the financial condition or liquidity of the insurer or the
insurer's insurance holding company system as a whole, including an
activity, circumstance, event, or series of events that would cause
the:
(1) insurer's risk based capital to fall into company action level
under IC 27-1-36; or
(2) insurer to be in hazardous financial condition subject to
IC 27-1-3-7 and rules adopted under IC 27-1-3-7.
(j) An "insurance holding company system" consists of two (2) or
more affiliated persons, one (1) or more of which is an insurer.
(k) "Insurer" has the same meaning as set forth in IC 27-1-2-3,
except that it does not include:
(1) agencies, authorities, or instrumentalities of the United
States, its possessions and territories, the Commonwealth of
Puerto Rico, the District of Columbia, or a state or political
subdivision of a state; or
(2) nonprofit medical and hospital service associations.
The term includes a health maintenance organization (as defined in
IC 27-13-1-19) and a limited service health maintenance organization
(as defined in IC 27-13-1-27).
(l) "NAIC" refers to the National Association of Insurance
Commissioners.
(m) "Supervisory college" means a temporary or permanent
forum:
(1) comprised of regulators, including other state, federal, and
international regulators, responsible for the supervision of:
(A) a domestic insurer that is part of an insurance holding
company system that has international operations;
(B) an insurance holding company system described in
clause (A); or
(C) an affiliate of:
(i) a domestic insurer described in clause (A); or
(ii) an insurance holding company system described in
clause (B); and
(2) established to facilitate communication and cooperation
between the regulators described in subdivision (1).
(n) A "person" is an individual, a corporation, a limited liability
company, a partnership, an association, a joint stock company, a
trust, an unincorporated organization, any similar entity or any
combination of the foregoing acting in concert, but shall not include
any securities broker performing no more than the usual and
customary broker's function.
IC 27-1-23-1.5
Dividend payments; notice; content
Sec. 1.5. (a) A domestic insurer that is a member of an insurance
holding company system may not pay a dividend unless the insurer
notifies the department of the dividend and the department receives
the notice from the insurer:
(1) not more than five (5) business days after the declaration of
the dividend or distribution; and
(2) at least ten (10) days before the payment of the dividend or
distribution.
(b) A notice provided by an insurer under subsection (a) must
contain information indicating that the surplus of the insurer as
regards policyholders will be:
(1) reasonable in relation to the outstanding liabilities of the
insurer; and
(2) adequate to the financial needs of the insurer;
following the payment of the dividend.
(c) After receiving a notice from an insurer under this section, the
department shall promptly consider the information set forth in the
notice under subsection (b). In the department's consideration of the
information, the department shall apply the factors set forth in
section 4(f) of this chapter.
As added by P.L.130-1994, SEC.29 and P.L.116-1994, SEC.39.
IC 27-1-23-2
Acquisition of domestic insurance company; statement to
commissioner; hearings; notice; approval; exceptions; process
Sec. 2. (a) No person other than the issuer shall commence a
tender offer for or a request or invitation for tenders of, or enter into
any agreement to purchase or exchange securities for, or otherwise
seek to acquire, or acquire, in the open market or otherwise, or solicit
proxies relating to, any voting security of a domestic insurer or of
any corporation controlling a domestic insurer if, after the
consummation thereof, such person would, directly or indirectly (or
by conversion or by exercise of any right to acquire), be in control of
such insurer, and no person shall enter into an agreement to acquire
control of a domestic insurer or of any corporation controlling a
domestic insurer unless, at the time any such offer, request, or
invitation is commenced or any such agreement is entered into, or
any such solicitation is begun, or prior to the acquisition of such
securities if no offer or agreement is involved:
(1) each acquiring party has filed with the commissioner and
has sent to such insurer and any such controlling corporation a
statement containing the information required by this section;
(2) the offer, request, invitation, agreement, solicitation, or
acquisition has been approved by the commissioner; and
(3) two (2) business days have elapsed following the
commissioner's determination approving the offer, request,
invitation, agreement, solicitation, or acquisition;
all in the manner prescribed in this section.
(b) Unless a statement described in subsection (a) is otherwise
filed, the following apply to an acquisition or a divestiture of a
person's controlling interest in a domestic insurer:
(1) If a controlling person of a domestic insurer seeks to divest
the person's controlling interest, the person shall:
(A) file with the commissioner a confidential notice of the
person's proposed divestiture at least thirty (30) days before
the person ceases control; and
(B) send a copy of the filing required by clause (A) to the
insurer.
(2) The commissioner shall determine whether a person:
(A) described in subdivision (1); or
(B) that seeks to acquire a controlling interest in a domestic
insurer;
is required to obtain from the commissioner approval of the
divestiture or acquisition.
(3) Information obtained by the commissioner under this
subsection is confidential until the conclusion of the divestiture
or acquisition unless the commissioner determines that
maintaining confidentiality of the information interferes with
enforcement of this section.
(c) A statement to be filed with the commissioner under this
section shall be made under oath or affirmation and shall contain the
following information:
(1) The name and address of the acquiring party.
(2) If the acquiring party is an individual, the individual's
principal occupation and all offices and positions held during
the past five (5) years, and any conviction of crimes other than
minor traffic violations during the past ten (10) years.
(3) If the acquiring party is not an individual, a report of the
nature of its business operations during the past five (5) years
or for such lesser period as the acquiring party and any
predecessors thereof shall have been in existence, including, but
not limited to:
(A) information relating to the acquisition or disposition of
control by the acquiring party of any other person and any
subsequent material change in the financial condition,
management, organization, or operations of such other
person;
(B) an informative description of the business intended to be
done by the acquiring party and its affiliates;
(C) any plans or proposals for the conduct of the business or
employment of the assets and surplus of the domestic insurer
and any corporation controlling such insurer;
(D) an informative description of any transaction in which
the acquiring party received, employed, or used any
affiliate's assets;
(E) an informative description of any transaction or
presently proposed transaction between the acquiring party
and any of its affiliates in which either such acquiring party
or such affiliate has a direct or indirect material interest;
however, no information need be given as to any such
transaction where the amount involved in the transaction or
series of similar transactions, including all periodic
payments or installments in the case of any lease or
agreement providing for periodic payments or installments,
does not or would not exceed one hundred thousand dollars
($100,000); and
(F) a list of all individuals who are or who have been
selected to become directors or officers of the acquiring
party, or who perform or will perform functions appropriate
to such positions, such list to include for each such
individual the information required by subdivision (2).
(4) The source, nature, and amount of the consideration to be
used in effecting the acquisition of control, a description of any
transaction wherein funds were or are to be obtained for any
such purpose (including any pledge of the insurer's stock, or the
stock of any of the insurer's subsidiaries or controlling
affiliates), all documents evidencing, supporting, referring to,
or relating to any such transaction and the identity of persons
who are furnishing or who will furnish such consideration.
(5) Fully audited financial information as to the earnings and
financial condition of the acquiring party for its preceding five
(5) fiscal years (or for such lesser period as such acquiring party
and any predecessors thereof shall have been in existence), and
similar unaudited information as of a date not earlier than
ninety (90) days prior to the filing of the statement.
(6) Any plans or proposals which the acquiring party may have
to liquidate such domestic insurer or such controlling
corporation, to sell its assets or merge or consolidate it with any
person, or to make any other material change in its investment
policy, business, corporate structure, or management.
(7) The number of shares of any security referred to in
subsection (a) which the acquiring party proposes to acquire,
the terms of the proposed offer, request, invitation, agreement,
or acquisition referred to in subsection (a), and a statement as
to the method by which the terms of the proposal were arrived
at.
(8) The amount of each class of any security referred to in
subsection (a) which is beneficially owned or concerning which
there is a right to acquire beneficial ownership by the acquiring
party.
(9) A full description of any contracts, arrangements, or
understandings with respect to any security referred to in
subsection (a) in which the acquiring party proposes to be or is
involved, including but not limited to transfer of any of the
securities, joint ventures, loan or option arrangements, puts or
calls, guarantees of loans, guarantees against loss or guarantees
of profits, division of losses or profits, or the giving or
withholding of proxies. Such description shall identify the
persons with whom such contracts, arrangements, or
understandings have been or will be entered into.
(10) A description of the purchase of any security referred to in
subsection (a) during the twelve (12) calendar months preceding
the filing of the statement by the acquiring party, including the
dates of purchase, names of the purchasers, and consideration
paid or agreed to be paid therefor.
(11) A description of any recommendations to purchase any
security referred to in subsection (a) made during the twelve
(12) calendar months preceding the filing of the statement by
the acquiring party, or by anyone, based upon interviews or at
the suggestion of such acquiring party.
(12) Copies of the proposed forms of all tender offers for,
requests or invitations for tenders of, exchange offers for, and
agreements to acquire or exchange any securities referred to in
subsection (a), and of the proposed form of additional soliciting
material relating thereto.
(13) The terms of any agreement, contract, or understanding
made or proposed to be made with any broker-dealer as to
solicitation of securities referred to in subsection (a) for tender,
and the amount of any fees, commissions, or other
compensation paid or to be paid to broker-dealers with regard
thereto.
(14) A full description of any existing or proposed contracts,
arrangements, or understandings between the acquiring party
and any present or former director, officer, or employee of the
domestic insurer or of any corporation controlling such insurer.
Such description shall identify the persons with whom such
contracts, arrangements, or understandings have been or will be
entered into.
given with respect to each partner of such partnership or limited
partnership, each member of such syndicate or group, and each
person who controls such partner or member. If any such partner,
member, person, or acquiring party is a corporation, the
commissioner may require that the information called for by
subsection (c)(1) through (c)(19) shall be given with respect to all
individuals who are or have been selected to become directors or
officers of any such corporation or who perform or will perform
functions appropriate to these positions.
(e) If the proposed acquisition of control referred to in subsection
(a) requires the filing of a registration statement under the federal
Securities Act of 1933 (15 U.S.C. 77a-15 U.S.C. 77aa) or requires
the disclosure of similar information under the federal Securities
Exchange Act of 1934 (15 U.S.C. 78a-15 U.S.C. 78kk) or under a
state law requiring similar registration or disclosure, an acquiring
party may utilize such documents in furnishing the information
called for by the statement.
(f) The commissioner shall hold a public hearing on the proposed
acquisition of control referred to in subsection (a) and shall thereafter
approve such acquisition of control only if the commissioner finds,
by a preponderance of the evidence, that:
(1) the acquisition of control would not tend to affect adversely
the contractual obligations of the domestic insurer or its ability
and tendency to render service in the future to its policyholders
and the public;
(2) the effect of the acquisition of control would not be
substantially to lessen competition in any line of insurance
business in any section of this state or tend to create a
monopoly therein;
(3) the financial condition of any acquiring party is not such as
might jeopardize the financial stability of the domestic insurer
or of any corporation controlling such insurer, or prejudice the
interest of its policyholders;
(4) the plans or proposals which any acquiring party has to
liquidate the domestic insurer or any such controlling
corporation, sell its assets or consolidate or merge it with any
person, or to make any other material change in its investment
policy, business, corporate structure, or management are fair
and reasonable to policyholders of the domestic insurer and in
the public interest; and
(5) the competence, experience, and integrity of those persons
who would control the operation of the domestic insurer are
such that the acquisition of control would not tend to affect
adversely the general capacity or intention of the domestic
insurer to transact the business of insurance in a safe and
prudent manner.
(g) For the purposes of the commissioner's application of the
competitive standard set forth in subsection (f)(2) to a proposed
acquisition:
(1) the acquiring person must file a pre-acquisition notification
that meets the requirements set forth in section 2.5(e) of this
chapter;
(2) the commissioner shall apply the provisions of section
2.5(h) of this chapter; and
(3) the commissioner may not disapprove the acquisition based
upon the application of subsection (f)(2) if the commissioner
finds that either of the conditions set forth in section 2.5(i) of
this chapter applies to the proposed acquisition.
(h) The public hearing referred to in subsection (f) shall be held
within sixty (60) days after all statements required by subsection (a)
are filed, or within such longer period after the statements are filed
as the commissioner determines upon a showing of good cause
therefor, in the city of Indianapolis at such place, date, and time as
the commissioner shall specify. At least thirty (30) days written
notice of the hearing shall be given by the commissioner to each
acquiring party, the domestic insurer, any corporation controlling
such insurer, and to other persons as the commissioner may
designate. In the event that an amendment to any such statement is
filed, the hearing shall be postponed for a further period not to
exceed sixty (60) days after the filing of such amendment, or for such
longer period after the amendment is filed as the commissioner
determines upon a showing of good cause therefor. If the proposed
acquisition of control requires the approval of the commissioners of
more than one (1) state, the public hearing may be held on a
consolidated basis upon the request of the person that files the
statement described in subsection (a). The person shall file the
statement with the NAIC not more than five (5) days after the person
makes the request for a public hearing. The commissioner of a state
may opt out of a consolidated hearing by notifying the person not
more than ten (10) days after receiving the statement described in
subsection (a). A hearing conducted on a consolidated basis must be
public and held in the United States before the commissioners of the
domiciliary states of the insurers. The commissioners shall hear and
receive evidence and may attend in person or by telecommunication.
(i) The commissioner shall give notice of the hearing by
publication in a newspaper of general circulation in the city of
Indianapolis, and in the city wherein is located the principal office of
the domestic insurer, and in such other city or cities as the
commissioner may deem appropriate. Any policyholder of the
domestic insurer who makes a written request to the commissioner
is entitled to a copy of all statements, amendments, or other material
filed with the commissioner by any acquiring party.
(j) The commissioner may retain at the acquiring party's expense
any attorneys, actuaries, accountants, and other experts not otherwise
a part of the commissioner's staff as may be reasonably necessary to
assist the commissioner in reviewing the proposed acquisition of
control. All hearing expenses, including transcript costs, expenses of
publication and of preparing and mailing material to policyholders,
shall be borne equally by each acquiring party. As security for the
payment of such expenses, each acquiring party shall file with the
commissioner an acceptable bond or other deposit in an amount to be
determined by the commissioner.
(k) At such hearing, each acquiring party, the domestic insurer,
any corporation controlling such insurer, policyholders of the
domestic insurer, and any other person whose interests may be
affected by the proposed acquisition of control shall have the right
to appear and become party to the proceeding. Each such person
shall have the right to present evidence, examine and cross-examine
witnesses, and offer oral and written arguments and in connection
therewith shall be entitled to conduct discovery proceedings in the
same manner as provided in the Indiana Rules of Trial Procedure.
The commissioner may employ any sanction or power granted courts
in the Indiana Rules of Trial Procedure, excluding the power of
contempt, to enforce the commissioner's discovery rulings or orders.
The commissioner shall make a determination within thirty (30) days
after the conclusion of such hearing and shall immediately upon
making that determination notify all persons who appeared and
became parties to the proceeding of that determination. To permit an
aggrieved party to perfect an appeal under IC 27-1-23-12, no offer,
request, invitation, agreement, or acquisition referred to in subsection
(a) may be commenced, entered into, or consummated until two (2)
business days have elapsed following the commissioner's
determination approving an acquisition of control.
(l) If the commissioner determines that a person acquiring control
of a domestic insurer is required to maintain or restore the capital of
the insurer to the level required by Indiana law, the person shall, not
later than sixty (60) days after the closing date of the acquisition, file
with the commissioner evidence that the capital has been maintained
or restored to that level.
(m) Except as otherwise provided in this section, the hearing and
the determination made therein shall be subject to IC 4-21.5-3.
(n) The provisions of this section shall not apply to the following:
(1) Any transaction to be undertaken under a statutory
procedure for the purchase of dissenting shareholder's stock.
(2) Any transaction to be undertaken under a judicially
approved reorganization.
(3) Any offer, request, invitation, agreement, solicitation, or
acquisition respecting any security of a domestic insurer or of
any corporation controlling such insurer if any acquiring party,
immediately prior to such offer, request, invitation, agreement,
solicitation, or acquisition being commenced, entered into,
begun, or consummated, beneficially owns more than fifty
percent (50%) of all the outstanding voting securities of such
domestic insurer or corporation controlling such insurer.
(4) Any solicitation of proxies respecting any security of a
domestic insurer or of any corporation controlling a domestic
insurer that is undertaken by the management or the board of
directors of the issuer of the security for purposes other than
effecting, directly or indirectly, a transaction that would
otherwise be subject to the requirements of this section.
commissioner to be the acquiring party's true and lawful attorney
upon whom may be served all lawful process in any action, suit, or
proceeding arising out of violations of this section. Copies of all such
lawful process shall be served on the commissioner and transmitted
by registered or certified mail by the commissioner to such acquiring
party at the acquiring party's last known address.
(Formerly: Acts 1971, P.L.387, SEC.1.) As amended by Acts 1979,
P.L.252, SEC.1; Acts 1981, P.L.244, SEC.2; P.L.2-1987, SEC.38;
P.L.26-1991, SEC.9; P.L.130-1994, SEC.30; P.L.116-1994, SEC.40;
P.L.94-1999, SEC.2; P.L.81-2012, SEC.13.
IC 27-1-23-2.5
Acquisitions in which there is a change in control of an insurer;
preacquisition notification; waiting period; competitive standards;
violations; order; penalties
Sec. 2.5. (a) The following definitions apply throughout this
section:
(1) "Acquisition" means any agreement, arrangement, or
activity the consummation of which results in a person
acquiring directly or indirectly the control of another person.
The term includes the acquisition of voting securities, and the
acquisition of assets, assumption reinsurance, and mergers.
(2) "Involved insurer" includes an insurer that:
(A) acquires;
(B) is acquired;
(C) is affiliated with an acquirer;
(D) is affiliated with an acquired; or
(E) is the result of a merger.
(b) Except as provided in subsection (c), this section applies to
any acquisition in which there is a change in control of an insurer
authorized to do business in Indiana.
(c) This section does not apply to the following:
(1) An acquisition subject to approval or disapproval by the
commissioner under section 2 of this chapter.
(2) A purchase of securities solely for investment purposes, so
long as those securities are not used by voting or otherwise to
cause or attempt to cause the substantial lessening of
competition in any insurance market in this state. If a purchase
of securities results in a presumption of control under section
1(e) of this chapter, it is not solely for investment purposes
unless the commissioner of the insurer's state of domicile
accepts a disclaimer of control or affirmatively finds that
control does not exist and this disclaimer action or affirmative
finding is communicated by the domiciliary commissioner to
the commissioner of Indiana.
(3) The acquisition of a person by another person when both
persons are neither directly nor through affiliates primarily
engaged in the business of insurance, if a pre-acquisition
notification is filed with the commissioner in accordance with
subsection (d) at least thirty (30) days before the proposed
effective date of the acquisition. However, a pre-acquisition
notification is not required for an exclusion from this section if
the acquisition would otherwise be excluded from this section
by any other subdivision of this subsection.
(4) The acquisition of persons already affiliated with the
acquirer.
(5) An acquisition if, as an immediate result of the acquisition:
(A) in no market would the combined market share of the
involved insurers exceed five percent (5%) of the total
market;
(B) there would be no increase in any market share; or
(C) in no market would the combined market share of the
involved insurers:
(i) exceed twelve percent (12%) of the total market; or
(ii) increase by more than two percent (2%) of the total
market.
(6) An acquisition for which a pre-acquisition notification
would be required under this section due solely to the resulting
effect on the ocean marine insurance line of business.
(7) An acquisition of an insurer, if:
(A) the domiciliary commissioner of the insurer
affirmatively finds that:
(i) the insurer is in failing condition;
(ii) there is a lack of feasible alternatives to improving that
condition; and
(iii) the public benefits of improving the insurer's
condition through the acquisition exceed the public
benefits that would arise from not lessening competition;
and
(B) those findings are communicated by the domiciliary
commissioner to the commissioner of Indiana.
For the purposes of this subsection, a "market" means the total direct
written insurance premium of all insurers providing insurance in
Indiana for a particular line of business, as reported in the annual
statements required to be filed by insurers licensed to do business in
Indiana.
(d) An order pursuant to subsection (j) may be entered with
respect to an acquisition to which this section applies unless the
acquiring person files a pre-acquisition notification with respect to
the acquisition and the waiting period referred to in subsection (f)
has expired. An acquired person may also file a pre-acquisition
notification with respect to an acquisition. Information in
pre-acquisition notifications filed under this section is confidential
and protected from disclosure under section 6 of this chapter.
(e) A pre-acquisition notification filed under this section must be
in the form and must contain the information prescribed by the
National Association of Insurance Commissioners with respect to
markets that meet the description set forth in subsection (c)(5),
causing an acquisition not to be exempted from the provisions of this
section. The commissioner may require additional material and
information that the commissioner considers necessary to determine
whether the proposed acquisition, if consummated, would violate the
competitive standard set forth in subsection (g). The required
information may include an opinion of an economist as to the
competitive impact of the acquisition in Indiana, accompanied by a
summary of the education and experience of the economist,
indicating the economist's ability to render an informed opinion.
(f) The waiting period required with respect to a proposed
acquisition begins on the day when the commissioner receives a
pre-acquisition notification and ends:
(1) on the thirtieth day after the day the commissioner receives
the notification; or
(2) upon the commissioner's termination of the waiting period,
if earlier.
Before the end of the waiting period, the commissioner, on a
one-time basis, may require the submission of additional needed
information relevant to the proposed acquisition. If the commissioner
requests additional information under this subsection, the waiting
period ends on the earlier of the thirtieth day after receipt of the
additional information by the commissioner or the termination of the
waiting period by the commissioner.
(g) The commissioner may enter an order under subsection (j)
with respect to an acquisition if:
(1) there is substantial evidence that the effect of the acquisition
may be substantially to lessen competition in any line of
insurance in Indiana or to tend to create a monopoly in any line
of insurance in Indiana; or
(2) the insurer fails to file adequate information in compliance
with subsections (d) and (e).
(h) In determining whether a proposed acquisition to which this
section applies would violate the competitive standard set forth in
subsection (g), the commissioner shall consider the following:
(1) An acquisition to which this section applies that involves
two (2) or more insurers competing in the same market is prima
facie evidence of a violation of the competitive standard:
(A) If the market is highly concentrated and the involved
insurers possess the following shares of the market:
(i) Insurer A a share of four percent (4%) and insurer B a
share of 4% or more.
(ii) Insurer A a share of ten percent (10%) and insurer B a
share of two percent (2%) or more.
(iii) Insurer A a share of fifteen percent (15%) and insurer
B a share of one percent (1%) or more.
(B) If the market is not highly concentrated and the involved
insurers possess the following shares of the market:
(i) Insurer A a share of five percent (5%) and insurer B a
share of five percent (5%) or more.
(ii) Insurer A a share of ten percent (10%) and insurer B a
share of four percent (4%) or more.
(iii) Insurer A a share of fifteen percent (15%) and insurer
B a share of three percent (3%) or more.
(iv) Insurer A a share of nineteen percent (19%) and
insurer B a share of one percent (1%) or more.
For the purposes of this subdivision, a highly concentrated
market is a market in which the share of the four (4) largest
insurers is seventy-five percent (75%) or more of the market.
Percentages not referred to in this subdivision must be
interpolated proportionately to the percentages that are referred
to in this subdivision. If more than two (2) insurers are involved
in a proposed acquisition, exceeding the total of the two (2)
figures set forth for insurer A and insurer B in an item set forth
in this subdivision is prima facie evidence of violation of the
competitive standard set forth in subsection (g). For the purpose
of this subdivision, the insurer with the largest share of the
market shall be considered to be insurer A.
(2) There is a significant trend toward increased concentration
when the aggregate market share of any grouping of the largest
insurers in the market, from the two (2) largest to the eight (8)
largest, has increased by seven percent (7%) or more of the
market over a period of time extending from any base year five
(5) to ten (10) years before the acquisition up to the time of the
acquisition. Any acquisition or merger to which this section
applies involving two (2) or more insurers competing in the
same market is prima facie evidence of violation of the
competitive standard set forth in subsection (g) if:
(A) there is a significant trend toward increased
concentration in the market;
(B) one (1) of the insurers involved is one (1) of the insurers
in a grouping of those large insurers showing the requisite
increase in the market share; and
(C) the market share of another involved insurer is two
percent (2%) or more.
(3) For the purposes of this subsection:
(A) The term "insurer" includes any company or group of
companies under common management, ownership, or
control.
(B) The term "market" means the relevant product and
geographical markets. In determining the relevant product
and geographical markets with respect to an acquisition, the
commissioner shall give due consideration to, among other
things, the definitions or guidelines, if any, promulgated by
the National Association of Insurance Commissioners, and
to information, if any, submitted by parties to the
acquisition. In the absence of sufficient information to the
contrary, the relevant product market is assumed to be the
direct written insurance premium for a line of business that
is used in the annual statement required to be filed by
insurers doing business in Indiana, and the relevant
geographical market is assumed to be Indiana.
(C) The burden of showing prima facie evidence of a
violation of the competitive standard rests upon the
commissioner.
(4) Even though an acquisition is not prima facie violative of
the competitive standard under subdivisions (1) and (2), the
commissioner may establish the requisite anticompetitive effect
based upon other substantial evidence. Even though an
acquisition is prima facie violative of the competitive standard
under subdivisions (1) and (2), a party may establish the
absence of the requisite anticompetitive effect based upon other
substantial evidence. Relevant factors in making a
determination under this subdivision include, but are not limited
to, the following:
(A) Market shares.
(B) Volatility of ranking of market leaders.
(C) Number of competitors.
(D) Concentration and trend of concentration in the industry.
(E) Ease of entry into and exit from the market.
(i) An order may not be entered under subsection (j) if:
(1) the acquisition will yield substantial economies of scale or
economies in resource utilization that cannot be feasibly
achieved in any other way, and the public benefits that would
arise from those economies exceed the public benefits that
would arise from not lessening competition; or
(2) the acquisition will substantially increase the availability of
insurance, and the public benefits of that increase exceed the
public benefits that would arise from not lessening competition.
(j) If an acquisition violates the standards set forth in this section,
the commissioner may enter an order:
(1) requiring an involved insurer to cease and desist from doing
business in Indiana with respect to the line or lines of insurance
involved in the violation; or
(2) denying the application of an acquired or acquiring insurer
for a license to do business in Indiana.
(k) An order may not be entered under subsection (j) unless:
(1) there is a hearing;
(2) notice of the hearing is issued before the end of the waiting
period and not less than fifteen (15) days before the hearing;
and
(3) the hearing is concluded and the order is issued not more
than sixty (60) days after the end of the waiting period.
Every order shall be accompanied by a written decision of the
commissioner setting forth the commissioner's findings of fact and
conclusions of law.
(l) An order entered under subsection (j) shall not become final
less than thirty (30) days after it is issued, during which time the
involved insurer may submit a plan to remedy the anticompetitive
impact of the acquisition within a reasonable time. Based upon that
plan or other information, the commissioner shall specify the
conditions, if any, under which the aspects of the acquisition causing
a violation of the standards of this section would be remedied and the
order vacated or modified, and the time period within which those
aspects would have to remedied.
(m) An order entered under subsection (j) does not apply if the
acquisition to which the order applies is not consummated.
(n) A person who violates a cease and desist order issued by the
commissioner under subsection (j) while that order is in effect may,
after notice and hearing under IC 4-21.5 and upon order of the
commissioner, be subject at the discretion of the commissioner to
any one (1) or more of the following:
(1) A civil penalty of not more than ten thousand dollars
($10,000) for each day of violation.
(2) The suspension or revocation of the person's license.
(3) Both a monetary penalty under subdivision (1) and the
suspension or revocation or the person's license under
subdivision (2).
(o) An insurer or other person who fails to make any filing
required by this section and also fails to demonstrate a good faith
effort to comply with that filing requirement is subject to a civil
penalty of not more than fifty thousand dollars ($50,000).
(p) Sections 8(b), 8(c), and 10 of this chapter do not apply to an
acquisition to which this section applies.
As added by P.L.26-1991, SEC.10.
IC 27-1-23-2.6
Primary and subsidiary companies
Sec. 2.6. (a) As used in this section, "entity" means:
(1) a sole proprietorship;
(2) a corporation;
(3) a limited liability company;
(4) a partnership;
(5) an association;
(6) a joint stock company;
(7) a mutual fund;
(8) a joint venture;
(9) a trust;
(10) a joint tenancy;
(11) an unincorporated organization; or
(12) a similar entity.
(b) As used in this section, "primary company" means a domestic
insurance company that beneficially owns more than fifty percent
(50%) of one (1) or more subsidiary companies.
(c) As used in this section, "subsidiary company" means an entity
of which more than fifty percent (50%) is beneficially owned by an
insurance company.
(d) As used in this section, "total investment of the primary
company" means the total of:
(1) a direct investment by a primary company in an asset; plus
(2) the primary company's proportionate share of an investment
made by a subsidiary company of the primary company.
The primary company's proportionate share must be determined by
multiplying the amount of the subsidiary company's investment by
the percentage of the primary company's ownership interest in the
subsidiary company.
(e) A primary company may, independently or in cooperation with
another person, organize or acquire one (1) or more subsidiary
companies.
(f) A subsidiary company of a primary company may conduct
business of any kind, and the authority to conduct the business is not
limited because of the status of the subsidiary company as a
subsidiary company of the primary company.
(g) In addition to investments in common stock, preferred stock,
debt obligations, and other securities as permitted under IC 27-1-12-2
or IC 27-1-13-3, a primary company to which this section applies
may, directly or through one (1) or more subsidiary companies, also
do the following:
(1) Invest in common stock, preferred stock, debt obligations,
and other securities of one (1) or more subsidiary companies,
amounts that in total do not exceed the lesser of ten percent
(10%) of the primary company's admitted assets or fifty percent
(50%) of the primary company's surplus as regards
policyholders, if, after the investments, the primary company's
surplus as regards policyholders is reasonable in relation to the
primary company's outstanding liabilities and adequate to the
primary company's financial needs. In calculating the amount of
investments permitted under this subdivision:
(A) investments, whether made directly or through one (1)
or more subsidiary companies, in domestic or foreign
insurance subsidiary companies and health maintenance
organizations must be excluded; and
(B) to the extent that expenditures relate to an investment
other than an investment described in clause (A), the
following must be included:
(i) Total net money or other consideration expended and
obligations assumed in the acquisition or formation of a
subsidiary company, including all organizational expenses
and contributions to capital and surplus of the subsidiary
company, whether or not represented by the purchase of
capital stock or issuance of other securities.
(ii) All amounts expended in acquiring additional common
stock, preferred stock, debt obligations, and other
securities and all contributions to the capital or surplus of
a subsidiary company subsequent to the subsidiary
company's acquisition or formation.
(2) Notwithstanding subdivision (1), invest an amount in
common stock, preferred stock, debt obligations, and other
securities of one (1) or more subsidiary companies engaged or
organized to engage exclusively in the ownership and
management of assets authorized as investments for the primary
company, if the subsidiary company agrees to limit the
subsidiary company's investment in an asset so that, when
combined with the investments of the primary company, the
total investment of the primary company will not exceed the
investment limitations described in subdivision (1) or in any
applicable provision of IC 27-1-12-2 or IC 27-1-13-3.
(3) Notwithstanding subdivision (1), with the prior approval of
the commissioner, invest a greater amount in common stock,
preferred stock, debt obligations, or other securities of one (1)
or more subsidiary companies, if, after the investment, the
primary company's surplus as regards policyholders is
reasonable in relation to the primary company's outstanding
liabilities and adequate to the primary company's financial
needs.
(h) Investments that are made under this section in common stock,
preferred stock, debt obligations, or other securities of a subsidiary
company are not subject to restrictions or prohibitions under
IC 27-1-12-2 or IC 27-1-13-3 that otherwise apply to investments of
primary companies.
(i) Before a primary company to which this section applies makes
an investment described in subsection (g), a primary company shall
make a determination regarding whether the proposed investment
meets the applicable requirements by determining the applicable
investment limitations as though the investment has been made,
considering:
(1) the currently outstanding principal balance on previous
investments in debt obligations; and
(2) the value of previous investments in equity securities as of
the day that the investments in equity securities were made;
net of any return of capital invested.
(j) If a primary company ceases to control a subsidiary company,
the primary company shall dispose of any investment in the
subsidiary company made under this section not more than:
(1) three (3) years from the time of the cessation of control; or
(2) the period determined appropriate by the commissioner;
unless the investment meets the requirements for investment under
any applicable provision of IC 27-1-12-2 or IC 27-1-13-3 and the
primary company has notified the commissioner that the investment
meets the requirements.
(k) A primary company, at the time of establishing a subsidiary
company, must possess:
(1) assets of not less than twenty-five million dollars
($25,000,000); or
(2) not less than three million five hundred thousand dollars
($3,500,000) of:
(A) combined capital and surplus in the case of a stock
company; and
(B) surplus in the case of a mutual company.
(l) The department has the power to:
(1) conduct periodic examinations of a subsidiary company;
(2) require reports that reflect the effect of the condition and
operation of a subsidiary company on the financial condition of
a primary company; and
(3) make additional examinations or require other reports with
respect to a subsidiary company that are necessary to carry out
the purposes of this section.
A noninsurance subsidiary company shall annually furnish the
department financial statements that are prepared under generally
accepted accounting principles and certified by an independent
certified public accountant and the department may rely on the
statements. If a subsidiary company conducts the business of the
subsidiary company in a manner that clearly tends to impair the
capital or surplus fund of the primary company, or otherwise makes
the operation of the primary company financially unsafe, the
department may act under IC 27-1-3-19 with respect to the primary
company.
(m) A primary company and a subsidiary company shall, in all
respects, stand before the law as separate and distinct companies and
neither company is liable to the creditors, policyholders, or
stockholders of the other company, acts or omissions of an officer,
director, stockholder, or member of either company notwithstanding.
(n) The board of directors and officers of a primary company and
a subsidiary company may be identical. However, the affairs of each
company shall be carried on separate and distinct from the other
company.
(o) A foreign subsidiary company shall be treated in the same
manner as other foreign companies, except that the treatment may be
withheld or suspended with respect to a subsidiary company that is
domiciled in a state that does not treat a:
(1) primary company; or
(2) subsidiary company;
that is domiciled in Indiana in a manner equal to a foreign or
domestic company doing business in the other state.
(p) Interests in a subsidiary company that are owned by a primary
company must be registered in the name of the primary company
except for shares that are required under Indiana law to be registered
in the name of another person.
As added by P.L.126-2001, SEC.3.
IC 27-1-23-3
Registration statement; amendments; termination; disclaimer of
affiliation; enterprise risk reports; civil penalty
Sec. 3. (a) Every insurer which is authorized to do business in this
state and which is a member of an insurance holding company
system shall register with the commissioner, except a foreign insurer
subject to disclosure requirements and standards adopted by statute
or regulation in the jurisdiction of its domicile which are
substantially similar to those contained in:
(1) this section;
(2) section 4(a) and 4(c) of this chapter; and
(3) section 4(b) of this chapter or a provision such as the
following:
Commission under the Securities Act of 1933 or the federal
Securities Exchange Act of 1934, both as amended.
(6) Statements reflecting that the insurer's:
(A) board of directors oversees corporate governance and
internal controls; and
(B) officers or senior management have approved and
implemented and maintain and monitor corporate
governance and internal control procedures.
(7) Other matters concerning transactions between registered
insurers and any affiliates as may be included from time to time
in any registration forms prescribed by the commissioner.
(8) Other information that the commissioner requires under
rules adopted under IC 4-22-2.
(c) Every registration statement must contain a summary outlining
all items in the current registration statement representing changes
from the prior registration statement.
(d) No information need be disclosed on the registration statement
filed pursuant to subsection (b) if such information is not material for
the purposes of this section. Unless the commissioner by rule or
order provides otherwise, sales, purchases, exchanges, loans or
extensions of credit, or investments, involving one per cent (1%) or
less of an insurer's admitted assets as of the 31st day of December
next preceding shall not be deemed material for purposes of this
section.
(e) Each registered insurer shall keep current the information
required to be disclosed in its registration statement by reporting all
material changes or additions on amendment forms prescribed by the
commissioner within fifteen (15) days after the end of the month in
which it learns of each such change or addition.
(f) A person within an insurance holding company system subject
to registration under this chapter shall provide complete and accurate
information to an insurer when that information is reasonably
necessary to enable the insurer to comply with this chapter.
(g) The commissioner shall terminate the registration of any
insurer which demonstrates that it no longer is subject to the
provisions of this section.
(h) The commissioner may require or allow two (2) or more
affiliated insurers subject to registration under this section to file a
consolidated registration statement or consolidated reports amending
their consolidated registration statement or their individual
registration statements.
(i) The commissioner may allow an insurer which is authorized to
do business in this state and which is a member of an insurance
holding company system to register on behalf of any affiliated
insurer which is required to register under subsection (a) and to file
all information and material required to be filed under this section.
(j) The provisions of this section shall not apply to any insurer,
information, or transaction if and to the extent that the commissioner
by rule or order shall exempt the same from the provisions of this
section.
IC 27-1-23-4
Material transactions; standards; prohibitions; review; notice;
financial status; payment of extraordinary dividends; shareholder
distributions; civil penalty
Sec. 4. (a) Material transactions within an insurance holding
company system to which an insurer subject to registration is a party
shall be subject to the following standards:
(1) The terms shall be fair and reasonable.
(2) Agreements concerning cost sharing services and
management must include provisions required by the
commissioner in rules adopted under IC 4-22-2.
(3) The charges or fees for services performed shall be
reasonable.
(4) The expenses incurred and payment received shall be
allocated to the insurer in conformity with customary insurance
accounting practices consistently applied.
(5) The books, accounts, and records of each party as to all
transactions described in this subsection shall be so maintained
as to clearly and accurately disclose the nature and details of the
transactions, including accounting information necessary to
support the reasonableness of the charges or fees to the
respective parties.
(6) The insurer's surplus as regards policyholders following any
transactions with affiliates or shareholder dividend shall be
reasonable in relation to the insurer's outstanding liabilities and
adequate to its financial needs.
(b) The following transactions involving a domestic insurer and
any person in its insurance holding company system (including
amendments or modifications to affiliate agreements previously filed
under this chapter) that are subject to any materiality standards
described in subdivisions (1) through (5) may not be entered into
unless the insurer has notified the commissioner in writing of its
intention to enter into such transaction at least thirty (30) days prior
thereto, or such shorter period as the commissioner may permit, and
the commissioner has not disapproved it within that period:
(1) Sales, purchases, exchanges, loans or extensions of credit,
guarantees, or investments, provided those transactions are
equal to or exceed:
(A) with respect to nonlife insurers, the lesser of three
percent (3%) of the insurer's admitted assets or twenty-five
percent (25%) of surplus as regards policyholders; and
(B) with respect to life insurers, three percent (3%) of the
insurer's admitted assets;
each as of December 31 next preceding.
(2) Loans or extensions of credit to any person who is not an
affiliate, where the insurer makes those loans or extensions of
credit with the agreement or understanding that the proceeds of
such transactions, in whole or in substantial part, are to be used
to make loans or extensions of credit to, to purchase assets of,
or to make investments in, any affiliate of the insurer making
such loans or extensions of credit, provided those transactions
are equal to or exceed:
(A) with respect to nonlife insurers, the lesser of three
percent (3%) of the insurer's admitted assets or twenty-five
percent (25%) of surplus as regards policyholders; and
(B) with respect to life insurers, three percent (3%) of the
insurer's admitted assets;
each as of December 31 next preceding.
(3) Reinsurance agreements or modifications thereto, including:
(A) reinsurance pooling agreements; and
(B) agreements under which:
(i) a reinsurance premium;
(ii) a change in the insurer's liabilities; or
(iii) the projected reinsurance premium;
in any of the immediately succeeding three (3) years equals
or exceeds five percent (5%) of the insurer's surplus as
regards policyholders, as of December 31 next preceding,
including those agreements that may require as consideration
the transfer of assets from an insurer to a nonaffiliate, if an
agreement or understanding exists between the insurer and
nonaffiliate that any portion of the assets will be transferred
to one (1) or more affiliates of the insurer.
(4) Management agreements, service contracts, cost-sharing
arrangements, lease agreements, and tax allocation agreements.
(5) Material transactions, specified by rule, that the
commissioner determines may adversely affect the interests of
the insurer's policyholders.
This subsection does not authorize or permit any transactions that, in
the case of an insurer not a member of the same insurance holding
company system, would be otherwise contrary to law. Notice
concerning amendments or modifications of a transaction must
include the reasons for the change and the financial impact on the
domestic insurer. Not more than thirty (30) days after an agreement
that was previously filed under this section is terminated, the
domestic insurer shall send written notice of the termination to the
commissioner. The commissioner shall determine whether a filing
concerning the termination is required and shall notify the domestic
insurer of the commissioner's determination.
(c) A domestic insurer may not enter into transactions that are part
of a plan or series of like transactions with persons within the
insurance holding company system if the purpose of those separate
transactions is to avoid the statutory threshold amount and thus avoid
the review that would occur otherwise.
(d) The commissioner, in reviewing transactions pursuant to
subsection (b), shall consider whether the transactions comply with
the standards set forth in subsection (a) and whether the transactions
may adversely affect the interests of policyholders.
(e) The commissioner shall be notified within thirty (30) days of
any investment of the domestic insurer in any one (1) corporation if
the total investment in that corporation by the insurance holding
company system exceeds ten percent (10%) of the corporation's
voting securities.
(f) For purposes of this chapter, in determining whether an
insurer's surplus is reasonable in relation to the insurer's outstanding
liabilities and adequate to its financial needs, the following factors,
among others, shall be considered:
(1) The size of the insurer as measured by its assets, capital and
surplus, reserves, premium writings, insurance in force and
other appropriate criteria.
(2) The extent to which the insurer's business is diversified
among the several lines of insurance.
(3) The number and size of risks insured in each line of
business.
(4) The extent of the geographical dispersion of the insurer's
insured risks.
(5) The nature and extent of the insurer's reinsurance program.
(6) The quality, diversification, and liquidity of the insurer's
investment portfolio.
(7) The recent past and projected future trend in the size of the
insurer's surplus as regards policyholders.
(8) The surplus as regards policyholders maintained by other
comparable insurers in respect of the factors described in
subdivisions (1) through (7).
(9) The adequacy of the insurer's reserves.
(10) The quality and liquidity of investments in subsidiaries,
except that the commissioner may discount or treat any such
investment in subsidiaries as a disallowed asset for purposes of
determining the adequacy of surplus whenever in the
commissioner's judgment such investment so warrants.
(11) The quality of the earnings of the insurer and the extent to
which the reported earnings of the insurer include extraordinary
items.
(g) No domestic insurer subject to registration under section 3 of
this chapter shall pay an extraordinary dividend or make any other
extraordinary distribution to its security holders until:
(1) thirty (30) days after the commissioner has received notice
of the declaration thereof and has not within such period
disapproved such payment; or
(2) the commissioner shall have approved such payment within
such thirty (30) day period.
(h) For purposes of subsection (g), an extraordinary dividend or
distribution is any dividend or distribution of cash or other property
whose fair market value, together with that of other dividends or
distributions made within the twelve (12) consecutive months ending
on the date on which the proposed dividend or distribution is
scheduled to be made, exceeds the greater of:
(1) ten percent (10%) of such insurer's surplus as regards
policyholders as of the most recently preceding December 31;
or
(2) the net gain from operations of such insurer, if such insurer
is a life insurer, or the net income, if such insurer is not a life
insurer, for the twelve (12) month period ending on the most
recently preceding December 31.
(i) Notwithstanding any other provision of law, a domestic insurer
may declare an extraordinary dividend or distribution which is
conditional upon the commissioner's approval thereof, but such a
declaration shall confer no rights upon shareholders until:
(1) the commissioner has approved the payment of such
dividend or distribution; or
(2) the commissioner has not disapproved the payment within
the thirty (30) day period referred to in subsection (g).
(j) The commissioner may impose a civil penalty of five thousand
dollars ($5,000) on a person who fails to file a transaction as required
by this section. The commissioner shall deposit a civil penalty
collected under this subsection in the department of insurance fund
established by IC 27-1-3-28.
(Formerly: Acts 1971, P.L.387, SEC.1.) As amended by Acts 1981,
P.L.244, SEC.4; P.L.26-1991, SEC.12; P.L.130-1994, SEC.31;
P.L.116-1994, SEC.41; P.L.11-2011, SEC.17; P.L.81-2012, SEC.15.
IC 27-1-23-5
Examination of registered insurer records; liability for expenses;
noncompliance
Sec. 5. (a) Subject to the limitations contained in this section and
in addition to the powers which the commissioner has under the
insurance laws of this state relating to the examination of insurers,
the commissioner shall have the power to do the following:
(1) Examine an insurer registered under section 3 of this
chapter, and affiliates of the insurer, to ascertain the financial
condition of the insurer, including the enterprise risk to the
insurer by:
(A) the person who ultimately controls the insurer;
(B) one (1) or more other persons within the insurance
holding company system; or
(C) the insurance holding company system;
on a consolidated basis.
(2) Order any insurer registered under section 3 of this chapter
to produce such records, books, or other information papers in
the possession of the insurer or its affiliates as are reasonably
necessary to ascertain the financial condition or legality of
conduct of such insurer. In the event such insurer fails to
comply with such order, the commissioner shall have the power
to examine such insurer or affiliates to obtain such information.
(b) The commissioner shall exercise the commissioner's power
under subsection (a) only if the examination of the insurer under the
insurance laws of this state is deemed inadequate for the purposes of
this chapter or if the interests of the policyholders of such insurer
may be adversely affected.
(c) The commissioner may order an insurer registered under
section 3 of this chapter to produce information that is not in the
possession of the insurer if the insurer is able to obtain the
information under contractual relationships, statutory obligations, or
another method. If the insurer is unable to obtain the information, the
insurer shall provide to the commissioner a detailed explanation of
the reason for the insurer's inability and the identity of the person
that holds the information. If the commissioner determines that the
detailed explanation is without merit, the commissioner may:
(1) after notice and hearing, impose on the insurer a civil
penalty of not more than one thousand dollars ($1,000) for each
day that the insurer does not produce the information; or
(2) suspend or revoke the insurer's certificate of authority.
The commissioner shall deposit a civil penalty collected under this
subsection in the department of insurance fund established by
IC 27-1-3-28.
(d) The commissioner may retain at the registered insurer's
expense such attorneys, actuaries, accountants, and other experts not
otherwise a part of the commissioner's staff as shall be reasonably
necessary to assist in the conduct of the examination under
subsection (a). Any persons so retained shall be under the direction
and control of the commissioner and shall act in a purely advisory
capacity.
(e) Each registered insurer producing for examination records,
books, and papers pursuant to subsection (a) shall be liable for and
shall pay the expense of such examination.
(f) If an insurer fails to comply with an order under this section,
the commissioner may:
(1) examine affiliates of the insurer to obtain information;
(2) issue subpoenas;
(3) administer oaths; and
(4) examine under oath any person;
to determine compliance with this section. The commissioner may
petition a court with jurisdiction for an order to compel a person that
refuses to comply with a subpoena to testify or produce evidence. A
witness who testifies under this section is entitled to the same
compensation as the compensation to which a witness is entitled
under IC 34, which must be paid by the insurer that is under
examination.
(Formerly: Acts 1971, P.L.387, SEC.1.) As amended by Acts 1981,
P.L.244, SEC.5; P.L.26-1991, SEC.13; P.L.81-2012, SEC.16.
IC 27-1-23-5.1
Supervisory college
Sec. 5.1. (a) The commissioner may participate in a supervisory
college for a domestic insurer that is part of an insurance holding
company system that has international operations, and any affiliate
of the insurer, to do the following:
(1) Determine whether the insurer or affiliate is in compliance
with this chapter.
(2) Assess the business strategy, financial position, legal and
regulatory position, risk exposure, risk management, and
governance processes that apply to the insurer or affiliate.
(3) Examine the insurer or affiliate.
(b) The powers of the commissioner under subsection (a) include
the following:
(1) Initiation of the establishment of the supervisory college.
(2) Clarification of the membership and participation of other
supervisors in the supervisory college.
(3) Clarification of the functions of the supervisory college and
the role of other regulators, including the establishment of a
group supervisor.
(4) Coordination of the activities of the supervisory college,
including planning meetings and information sharing
procedures.
(5) Establishment of a crisis management plan.
(c) An insurer that is described in subsection (a) shall pay the
commissioner's reasonable expenses of participation in a supervisory
college, including travel expenses. The commissioner may establish
a regular assessment to the insurer for payment of the expenses.
(d) The commissioner may enter into agreements in accordance
with the requirements that apply to an agreement entered into with
the NAIC under section 6 of this chapter to specify the activities of
the commissioner and other regulators participating in the
supervisory college.
(e) This section does not delegate to a supervisory college a
commissioner's authority to regulate or supervise the insurer
described in subsection (a) or the insurer's affiliates within the
commissioner's jurisdiction.
As added by P.L.81-2012, SEC.17.
IC 27-1-23-6
Confidential and privileged information; sharing of information;
requirements
Sec. 6. (a) Documents, materials, and other information in the
possession or control of the department that are obtained by or
disclosed to the commissioner or any other person in the course of an
examination or investigation made pursuant to section 5 of this
chapter and all information reported pursuant to sections 2(c)(17),
2(c)(18), 3, and 4 of this chapter are confidential and privileged and
shall not be subject to subpoena, discoverable, or admissible in
evidence in a private civil action. However, the commissioner may
use the documents, materials, and other information in the
performance of the commissioner's duties as described in subsections
(c) and (d). The commissioner shall not make the materials,
documents, or other information public without the prior written
consent of the insurer to which it pertains unless the commissioner,
after giving the insurer and its affiliates who would be affected
thereby notice and opportunity to be heard, determines that the
interests of policyholders or the public will be served by the
publication thereof, in which event the commissioner may publish all
or any part thereof in such manner as the commissioner considers
appropriate.
(b) The commissioner and any other person:
(1) who receives documents, materials, or other information
while acting under the authority of the commissioner; or
(2) with whom the documents, materials, or other information
are shared;
under this chapter is not permitted or required to testify in a private
civil action concerning any documents, materials, or other
information that is confidential under subsection (a).
(c) The commissioner may do the following:
(1) Except as provided in subdivision (2), share documents,
materials, and other information described in this section with
the following if the recipient agrees in writing, and provides
written verification that the recipient has the legal authority, to
maintain the confidential and privileged status of the
documents, materials, and other information:
(A) Other state, federal, and international regulatory
agencies.
(B) The NAIC and affiliates and subsidiaries of the NAIC.
(C) State, federal, and international law enforcement
authorities.
(D) Members of a supervisory college described in section
5.1 of this chapter.
(2) With respect to confidential and privileged documents,
materials, and other information reported under section 3(l) of
this chapter, share the documents, materials, and other
information with commissioners who:
(A) regulate insurance in states with a law that is
substantially similar to subsection (a); and
(B) have agreed in writing not to disclose the documents,
materials, or other information.
(3) Receive documents, materials, or other information from:
(A) the NAIC and affiliates and subsidiaries of the NAIC;
(B) regulatory and law enforcement officials of domestic or
foreign jurisdictions;
if the commissioner maintains the confidential or privileged
status of the documents, materials, and other information that
are received with notice or the understanding that the
documents, materials, and other information are confidential or
privileged under the laws of the jurisdiction that is the source of
the documents, materials, and other information.
(d) The commissioner shall enter into written agreements with the
NAIC governing sharing and use of information provided under this
chapter, including the following:
(1) Procedures and protocols concerning the confidentiality and
security of information shared:
(A) with the NAIC and affiliates and subsidiaries of the
NAIC under this chapter; and
(B) by the NAIC with other state, federal, and international
regulators.
(2) A statement that, with respect to information shared with
and used by the NAIC and affiliates and subsidiaries of the
NAIC under this chapter:
(A) the commissioner maintains ownership of the
information; and
(B) the use of the information is subject to the direction of
the commissioner.
(3) A requirement that, if confidential information of an insurer
that is in the possession of the NAIC under this chapter is
subject to a request or subpoena to the NAIC for production or
disclosure, the NAIC will provide prompt notice to the insurer.
(4) A requirement that the NAIC and affiliates and subsidiaries
of the NAIC will allow intervention by an insurer in a judicial
or administrative action under which the NAIC or affiliates or
subsidiaries of the NAIC may be required to disclose
confidential information concerning the insurer that has been
shared with the NAIC or affiliates or subsidiaries of the NAIC
under this chapter.
(e) The sharing of information by the commissioner under this
chapter is not considered to be a delegation of regulatory authority.
The commissioner is solely responsible for the administration,
implementation, and enforcement of this chapter.
(f) Disclosure to or sharing by the commissioner of documents,
materials, or other information under this chapter is not a waiver of
any applicable privilege or claim of confidentiality in the documents,
materials, or other information.
(g) Documents, materials, and other information in the possession
or control of the NAIC under this section are:
(1) confidential;
(2) privileged;
(3) not subject to subpoena; and
(4) not discoverable or admissible in evidence in a private civil
action.
(Formerly: Acts 1971, P.L.387, SEC.1.) As amended by Acts 1981,
P.L.244, SEC.6; P.L.26-1991, SEC.14; P.L.81-2012, SEC.18.
IC 27-1-23-7
Rules and orders
Sec. 7. The commissioner may adopt, under IC 4-22-2, such rules
and orders as are necessary to carry out this chapter, including
emergency rules under IC 4-22-2-37.1.
(Formerly: Acts 1971, P.L.387, SEC.1.) As amended by Acts 1981,
P.L.244, SEC.7; P.L.26-1991, SEC.15.
IC 27-1-23-8
Enjoining violations; seizure or sequestration of securities
Sec. 8. (a) Whenever it appears to the commissioner that any
person has committed or is about to commit a violation of this
chapter or of any rule or order issued by the commissioner
hereunder, the commissioner may apply to the circuit court for the
county in which such person resides or, in the case of a corporation
or other entity, has its principal office, or if such person has no such
residence or office in this state then to the circuit court of Marion
County, for an order enjoining such person from violating or
continuing to violate this chapter or any such rule or order, and for
such other equitable relief as the nature of the case and the interests
of policyholders or the public may require.
(b) No security which is the subject of any agreement or
arrangement regarding acquisition, or which is acquired or to be
acquired, in contravention of the provisions of this chapter or of any
rule or order issued by the commissioner hereunder may be voted at
any shareholders' meeting, or may be counted for quorum purposes,
and any action of shareholders requiring the affirmative vote of a
percentage of shares may be taken as though such securities were not
issued and outstanding; but no action taken at any such meeting shall
be invalidated by the voting of such securities, unless the action
would materially affect control of a domestic insurer or any
corporation controlling such insurer or unless the courts of this state
have so ordered. If a domestic insurer, any corporation controlling
such insurer or the commissioner has reason to believe that any
security of the domestic insurer or any corporation controlling such
insurer has been or is about to be acquired in contravention of the
provisions of this chapter or of any rule or order issued by the
commissioner hereunder, the domestic insurer, any corporation
controlling such insurer or the commissioner may apply to the circuit
court of Marion County or to the circuit court of the county in which
the domestic insurer or corporation controlling such insurer has its
principal place of business to enjoin any offer, request, invitation,
agreement or acquisition commenced, entered into, or consummated
in contravention of this chapter or any rule or order issued by the
commissioner under this chapter, to enjoin the voting of any security
so acquired, to void any vote of such security already cast at any
meeting of shareholders, and for such other equitable relief as the
nature of the case and the interests of the domestic insurer's
policyholders or the public may require.
(c) In any case where a person has acquired or is proposing to
acquire securities in violation of this chapter or any rule or order
issued by the commissioner hereunder, the circuit court of Marion
County or the circuit court of the county in which the domestic
insurer or any corporation controlling such insurer has its principal
place of business may, on such notice as the court deems appropriate,
upon the application of the domestic insurer, any corporation
controlling such insurer or the commissioner, seize or sequester any
such securities owned directly or indirectly by such person, and issue
such orders with respect thereto as may be appropriate to effectuate
the provisions of this chapter. Notwithstanding any other provision
of law, for the purposes of this chapter the situs of the ownership of
the securities of domestic insurers and corporations controlling such
insurers shall be deemed to be in this state.
(d) Violation of this chapter or any rule or order issued by the
commissioner under this chapter shall be deemed to be irreparable
harm for the purpose of obtaining any form of equitable relief.
(Formerly: Acts 1971, P.L.387, SEC.1.) As amended by Acts 1981,
P.L.244, SEC.8.
IC 27-1-23-9
Repealed
(Repealed by Acts 1981, P.L.244, SEC.12.)
IC 27-1-23-10
Seizure of property of domestic insurer
Sec. 10. Whenever it appears to the commissioner that any person
has committed a violation of this chapter which so impairs the
financial condition of a domestic insurer as to threaten insolvency or
make the further transaction of business by it hazardous to its
policyholders or the public, the commissioner may proceed as
provided in the insurance laws of this state to take possession of the
property of such domestic insurer and to conduct the business
thereof. A determination made under this section must be
accompanied by specific findings of fact and conclusions of law.
(Formerly: Acts 1971, P.L.387, SEC.1.) As amended by Acts 1981,
P.L.244, SEC.9; P.L.26-1991, SEC.16.
IC 27-1-23-10.5
Receiver's right to recover upon liquidation or rehabilitation
Sec. 10.5. (a) If an order for liquidation or rehabilitation of a
domestic insurer has been entered, the receiver appointed under the
order has a right to recover on behalf of the insurer:
(1) from any parent corporation or holding company or person
or affiliate that otherwise controlled the insurer, the amount of
distributions other than distributions of shares of the same class
of stock paid by the insurer on the insurer's capital stock; or
(2) any payment in the form of a bonus, a termination
settlement, or an extraordinary lump sum salary adjustment
made by the insurer or the insurer's subsidiaries to a director, an
officer, or an employee;
if the distribution or payment described in subdivision (1) or (2) is
made at any time during the one (1) year preceding the petition for
liquidation, conservation, or rehabilitation, as the case may be,
subject to the limitations of subsections (b), (c), and (d).
(b) A distribution is not recoverable if the parent or affiliate
shows that, when paid, the distribution was lawful and reasonable
and that the insurer did not know and could not reasonably have
known that the distribution might adversely affect the ability of the
insurer to fulfill the insurer's contractual obligations.
(c) Any person that was a parent corporation or holding company
or a person that otherwise controlled the insurer or affiliate at the
time distributions described in subsection (a) were paid shall be
liable up to the amount of distributions or payments under subsection
(a) that the person received. Any person that otherwise controlled the
insurer at the time the distributions were declared shall be liable up
to the amount of distributions the person would have received if the
distributions had been paid immediately. If at least two (2) persons
are liable with respect to the same distributions, they are jointly and
severally liable.
(d) The maximum amount recoverable under this section shall be
the amount needed in excess of all other available assets of the
impaired or insolvent insurer to pay the contractual obligations of the
impaired or insolvent insurer and to reimburse any guaranty funds.
(e) To the extent that any person liable under subsection (c) is
insolvent or otherwise fails to pay claims due from the person, the
person's parent corporation or holding company or the person that
otherwise controlled the person at the time the distribution was paid
is jointly and severally liable for any resulting deficiency in the
amount recovered from the parent corporation or holding company
or person that otherwise controlled the person.
As added by P.L.130-1994, SEC.32 and P.L.116-1994, SEC.42.
IC 27-1-23-12
Review of actions of commissioner; stay; mandamus
Sec. 12. (a) Any person aggrieved by any agency action of the
commissioner pursuant to this chapter may petition for judicial
review thereof in accordance, so far as practical, with IC 4-21.5-5.
(b) Notwithstanding IC 4-21.5-5, the filing of a petition for review
of the commissioner's determination approving an acquisition of
control under section 2 of this chapter shall stay the application of
any such determination or other action of the commissioner unless
the court to which the petition is directed, after giving the petitioner
notice and an opportunity to be heard, determines that such a stay
would be detrimental to the interests of policyholders or the public.
(c) Any person aggrieved by any failure of the commissioner to
act or make a determination required by this chapter may bring an
action for mandate in the circuit court of Marion County to compel
the commissioner to act or make such determination forthwith.
(Formerly: Acts 1971, P.L.387, SEC.1.) As amended by Acts 1981,
P.L.244, SEC.10; P.L.7-1987, SEC.141.
IC 27-1-23-13
Application of chapter
Sec. 13. This chapter, while independent in its enactment of any
other law, shall be supplemental to the Indiana Insurance Law (IC
27-1-2 through IC 27-1-20). All provisions of IC 27-1-2 through
IC 27-1-20 shall be fully and completely applicable to this chapter in
the same manner as if the provisions of this chapter had been an
original part of IC 27-1-2 through IC 27-1-20. This chapter shall be
controlling in the event there exists any conflict between this chapter
and IC 27-1-2 through IC 27-1-20.
(Formerly: Acts 1971, P.L.387, SEC.1.) As amended by Acts 1981,
P.L.244, SEC.11.