CHAPTER 6. FORMATION OF DOMESTIC COMPANIES
IC 27-1-6
Chapter 6. Formation of Domestic Companies
IC 27-1-6-1
Authority to incorporate; excluded kinds of insurance
Sec. 1. Any number of natural persons, not less than seven (7), all
of whom are eighteen (18) years of age or older, at least a majority
of whom are residents of the state of Indiana and citizens of the
United States, may form a corporation under the provisions of this
chapter for the purpose of making any kind or kinds of insurance
described in any one class set out in IC 27-1-5-1, other than
reciprocal, farm mutual, fraternal, and assessment insurance, by
complying with the provisions of this chapter.
(Formerly: Acts 1935, c.162, s.61; Acts 1973, P.L.270, SEC.1.) As
amended by P.L.252-1985, SEC.15.
IC 27-1-6-2
Applicable rights, powers, privileges, duties, obligations, and
liabilities
Sec. 2. Any insurance company incorporated as such under this
chapter, and its successors shall have the rights and powers, shall be
entitled to the privileges, and shall be subject to the duties,
obligations, and liabilities as prescribed in this article.
(Formerly: Acts 1935, c.162, s.62.) As amended by P.L.252-1985,
SEC.16.
IC 27-1-6-3
Names; required and prohibited words; similarity of names;
change of name
Sec. 3. The name of any company organized under this article
shall contain the word "insurance" and the word "company,"
"corporation" or "incorporated," or shall end with an abbreviation of
one of these words, except that the word "company" or the
abbreviation "Co." may be used only if that word or abbreviation is
not immediately preceded by the word "and," or any substitute
therefor.
No company organized under this article shall:
(a) Use as a part of its corporate name the words "United States,"
"Federal," "government," "official," or any word that would imply
that the company was an administrative agency of the state of Indiana
or of the United States, or is subject to supervision of any department
other than the department of insurance of the state of Indiana.
(b) Take or assume a corporate name the same as, or confusingly
similar to, the name of any other insurance company then existing
under the laws of this state or authorized to transact business in this
state, unless at the same time (1) such other company shall change its
corporate name or withdraw from transacting business in this state,
and (2) the written consent of such company, signed and verified
under oath by its secretary, shall be filed with the department.
Any company organized under this article may change its
corporate name at any time by amending its articles of incorporation
in the manner hereinafter provided. The provisions of this section
shall not affect the right of any insurance company which is existing
under the laws of this state on March 8, 1935, or of any such
company which thereafter reorganizes or reincorporates under this
article or of any company authorized to transact business in this state
on March 8, 1935, to continue the use of its corporate name.
(Formerly: Acts 1935, c.162, s.63.) As amended by Acts 1977,
P.L.281, SEC.3; P.L.1-2009, SEC.145.
IC 27-1-6-4
Articles of incorporation; contents
Sec. 4. The incorporators shall execute articles of incorporation,
not inconsistent with the provisions of this article, setting forth the
following:
(a) The name of the proposed corporation.
(b) The post office address of its principal office.
(c) A precise and accurate statement of the purpose or purposes
for which the company is organized, which shall be restricted
to the kind or kinds of insurance comprised within one (1) of
the classes of insurance specified in IC 27-1-5-1, and that it is
organized under this article.
(d) The term for which it is to continue as a corporation, which
may be perpetual.
(e) In the case of a stock company, the amount of its capital and
the aggregate number of shares which the company shall have
authority to issue and the par value thereof.
(f) The amount of paid-in capital with which the company will
begin business.
(g) The plan or principle upon which the business is to be
transacted.
(h) The name, occupation, and post office address of each of the
incorporators.
(i) The names of the first officers and directors, their post office
addresses, and their terms of office.
(j) Any other provisions, consistent with the laws of this state,
for the regulation of the business and conduct of the affairs of
the company and creating, defining, limiting, or regulating the
powers of the company, of the directors, or of the shareholders
or any class or classes of shareholders.
(Formerly: Acts 1935, c.162, s.64.) As amended by P.L.252-1985,
SEC.17.
IC 27-1-6-5
Publication of notice of intention to organize
Sec. 5. At least ten (10) and not more than twenty (20) days prior
to the presentation of the articles of incorporation to the department
as provided in section 6 of this chapter, the incorporators shall
publish at least once in a newspaper of general circulation, printed
and published in the English language, in the county in which the
principal office of the proposed company is to be located, and at least
once in a newspaper of general circulation, printed and published in
the English language, in the city of Indianapolis, Marion County,
Indiana, a notice of intention to organize such a corporation, which
publication shall contain the following:
(a) The name of the proposed company.
(b) A statement that the proposed company is to be organized
under the provisions of this article.
(c) The general character and class or classes of insurance to be
transacted by the proposed company.
(d) The time when the articles of incorporation will be
presented to the department.
(e) The names, occupations, and addresses of the incorporators.
(Formerly: Acts 1935, c.162, s.65.) As amended by P.L.252-1985,
SEC.18.
IC 27-1-6-6
Articles of incorporation; form; execution
Sec. 6. The form of the articles of incorporation shall be
prescribed and furnished by the department. The articles of
incorporation shall be:
(1) prepared and signed in triplicate originals by all of the
incorporators, or, in the case of a redomestication under
IC 27-1-6.5, by the corporate officers if the original
incorporators are no longer available;
(2) acknowledged by at least three (3) of the incorporators or
corporate officers before a notary public; and
(3) presented in triplicate originals to the department at the
office of the department.
(Formerly: Acts 1935, c.162, s.66.) As amended by P.L.116-1994,
SEC.18.
IC 27-1-6-7
Articles of incorporation; submission to department; proof of
publication
Sec. 7. At the time of presenting the articles of incorporation for
approval, the incorporators shall file with the department the proof
of publication required by section 5 of this chapter. The department
shall determine whether the proof of publication conforms with the
provisions of section 5 of this chapter and is hereby authorized to
approve or disapprove the same. If the department shall disapprove
the proof of publication, it shall endorse its disapproval thereon and
return the proof of publication and the articles of incorporation to the
incorporators. If the department approves the proof of publication, it
shall then consider the articles of incorporation.
(Formerly: Acts 1935, c.162, s.67.) As amended by P.L.252-1985,
SEC.19.
IC 27-1-6-8
Articles of incorporation; approval or disapproval by department
Sec. 8. The department is hereby authorized, in its discretion, to
approve or disapprove the articles of incorporation of the proposed
company. If the department shall approve the articles of
incorporation of the proposed company, it shall write or stamp, in an
appropriate place on each of said triplicate copies of such articles of
incorporation, the words "Approved by the department of insurance
of the state of Indiana"; and the date of such approval, beneath which
shall appear the impression of the seal of the department and the
signature of the commissioner.
(Formerly: Acts 1935, c.162, s.68.)
IC 27-1-6-9
Articles of incorporation; submission to attorney general
Sec. 9. In the event the department approves the articles of
incorporation of the proposed company, it shall then submit the
proposed articles of incorporation to the attorney general for the state
of Indiana, who shall examine said articles. If the attorney general
finds that the articles of incorporation conform to the provisions of
this article and are not inconsistent with the constitution of this state,
and of the United States, he shall so certify and shall thereupon
return the articles of incorporation to the department with his
approval endorsed thereon.
(Formerly: Acts 1935, c.162, s.69.) As amended by P.L.252-1985,
SEC.20.
IC 27-1-6-10
Articles of incorporation; submission to secretary of state; filing
Sec. 10. When the articles of incorporation have been approved
by the attorney-general and returned to the department, then the
department shall present the same to the secretary of state for the
state of Indiana. If the secretary of state finds that the articles of
incorporation conform to law, he shall indorse his approval upon
each of the triplicate copies of the articles, and when all fees have
been paid as required by law, he shall file one (1) copy in his office
and return the other two (2) copies to the incorporators or their
representatives.
(Formerly: Acts 1935, c.162, s.70.)
IC 27-1-6-11
Articles of incorporation; filing certified copy with department;
surety bond; permit for completion of organization; procedure
Sec. 11. (a) When the articles of incorporation are returned to the
incorporators or their representatives bearing the endorsement of the
approval of the secretary of state, as provided in section 10 of this
chapter, the incorporators or their representatives shall obtain a
certified copy of the articles of incorporation from the secretary of
state and file such certified copy with the department.
(b) The incorporators shall also file with the department a surety
bond payable to the state of Indiana in the sum of ten thousand
dollars ($10,000), with surety to be approved by the commissioner
or collateral in the sum of ten thousand dollars ($10,000), as
approved by the commissioner, and conditioned upon the faithful
accounting to the department on completion of organization and
receipt of its certificate of authority from the department, or to its
shareholders, members, applicants for policies and creditors, or the
trustee, receiver, or assignee of the proposed company duly
appointed in any proceedings in any court of competent jurisdiction
in the state in accordance with their respective rights in case the
organization of the proposed company should not be completed and
a certificate of authority should not be procured from the department.
(c) Whenever the incorporators have filed their certified copy of
the articles of incorporation and bond as provided in this section,
then the department may issue a permit for completion of
organization. The company shall have authority under such permit to
solicit subscriptions and payments for capital stock, if a stock
company, and applications and advance premiums for insurance, if
a mutual company, and to exercise such powers, subject to the
limitations in this article prescribed, as may be necessary and proper
in completing its organization and qualifying itself for a certificate
of authority from the department to make the kind or kinds of
insurance proposed in its articles of incorporation, provided that such
company shall not issue policies or enter into contracts of insurance
until it shall have received the certificate of the department
authorizing it so to do.
(Formerly: Acts 1935, c.162, s.71.) As amended by P.L.252-1985,
SEC.21.
IC 27-1-6-12
Commencement of corporate existence; powers
Sec. 12. Upon the issuance of the permit for completion of
organization by the department, the corporate existence shall begin,
and thereupon such incorporators and their associates shall become
a body corporate with power to sue and be sued, contract and be
contracted with, adopt a seal, and do such other acts, subject to the
provisions and to the restrictions of this article, as shall be needful to
accomplish the purpose of completing its organization, provided, that
such company shall not issue policies or enter into contracts of
insurance until it shall have received the certificate of the department
authorizing it so to do.
(Formerly: Acts 1935, c.162, s.72.) As amended by P.L.252-1985,
SEC.22.
IC 27-1-6-13
Requirements for commencing business or incurring indebtedness;
liability for violations
Sec. 13. Any company organized under this article shall not
transact any business or incur any indebtedness until:
(a) one (1) of the triplicate copies of the articles of
incorporation, bearing the approval of the department and the
attorney general and the endorsement of the approval of the
secretary of state, as provided in section 10 of this chapter has
been filed for record with the county recorder of the county in
which the principal office is located; and
(b) a certified copy of the permit for completion of
organization, issued pursuant to section 11 of this chapter, shall
be filed for record with the county recorder of the county in
which the principal office is located, which certified copy shall
be evidence only that the company has been authorized to
proceed in the completion of its organization.
If a company transacts any business or incurs any indebtedness in
violation of this section, the officers who participated therein and the
directors, except those who dissented therefrom and caused their
dissent to be filed at the time in the principal office of the company
or who, being absent, filed their dissent upon learning of the action,
shall be severally liable for the debts or liabilities of the company so
incurred or arising therefrom.
(Formerly: Acts 1935, c.162, s.73.) As amended by P.L.252-1985,
SEC.23.
IC 27-1-6-14
Stock companies; capital stock and surplus requirements
Sec. 14. (a) A domestic capital stock company that organized
before March 7, 1967, must maintain a paid-in capital stock of not
less than:
(1) two hundred thousand dollars ($200,000), if it markets one
(1) or more kinds of insurance under Class I;
(2) two hundred thousand dollars ($200,000), if it markets one
(1) kind of insurance under Class II, other than Class II(k)
insurance;
(3) three hundred thousand dollars ($300,000), if it markets two
(2) kinds of insurance under Class II, other than Class II(k)
insurance;
(4) four hundred thousand dollars ($400,000), if it markets three
(3) or more kinds of insurance under Class II, other than Class
II(k) insurance;
(5) four hundred thousand dollars ($400,000), if it markets one
(1) or more kinds of insurance under Class III;
(6) seven hundred fifty thousand dollars ($750,000), if it
markets one (1) or more kinds of insurance under both Class II
and Class III; or
(7) seven hundred fifty thousand dollars ($750,000), if it
markets one (1) or more kinds of insurance under Class II,
including Class II(k) insurance.
(b) A domestic capital stock company that organized after March
6, 1967, and before July 1, 1977, must maintain a paid-in capital
stock of not less than:
(1) four hundred thousand dollars ($400,000), if it markets one
(1) or more kinds of insurance under Class I;
(2) four hundred thousand dollars ($400,000), if it markets one
(1) or more kinds of insurance under Class II, other than Class
II(k) insurance;
(3) four hundred thousand dollars ($400,000), if it markets one
(1) or more kinds of insurance under Class III;
(4) seven hundred fifty thousand dollars ($750,000), if it
markets one (1) or more kinds of insurance under both Class II
and Class III; or
(5) seven hundred fifty thousand dollars ($750,000), if it
markets one (1) or more kinds of insurance under Class II,
including Class II(k) insurance.
(c) A domestic capital stock company that organized after June
30, 1977, must maintain a paid-in capital stock of not less than one
million dollars ($1,000,000).
(d) A domestic capital stock company must deposit with the
department the following percentage of its paid-in capital stock
requirement under this section in cash or in obligations of the United
States:
(1) Twenty-five percent (25%), if it organized before July 1,
1977.
(2) Ten percent (10%), if it organized after June 30, 1977.
(e) A domestic capital stock company must maintain a surplus of
not less than two hundred fifty thousand dollars ($250,000).
However, when it organizes, it must have a surplus of not less than
one million dollars ($1,000,000).
(f) If the commissioner determines that the continued operation of
a domestic capital stock company may be hazardous to the
policyholders or the general public, the commissioner may, upon the
commissioner's determination, issue an order requiring the insurer to
increase the insurer's capital and surplus based on the type, volume,
and nature of the business transacted.
(Formerly: Acts 1935, c.162, s.74; Acts 1955, c.316, s.1; Acts 1959,
c.13, s.1; Acts 1967, c.127, s.2.) As amended by Acts 1977, P.L.282,
SEC.1; Acts 1980, P.L.169, SEC.1; P.L.130-1994, SEC.14;
P.L.116-1994, SEC.19.
IC 27-1-6-15
Mutual companies; initial subscriptions and premiums; deposits;
surplus
Sec. 15. (a) Except as provided in subsection (b), a domestic
mutual company that organized before July 1, 1977, must maintain
a surplus of not less than two hundred fifty thousand dollars
($250,000). This subsection does not apply to a standard farm mutual
insurance company that is organized under IC 27-5 (before its repeal)
or IC 27-5.1.
(b) A domestic mutual company that organized before July 1,
1977, must maintain a surplus of not less than:
(1) seven hundred fifty thousand dollars ($750,000), if it
markets one (1) or more kinds of insurance under both Class II
and Class III, other than Class II(k) insurance;
(2) one million dollars ($1,000,000), if it markets one (1) or
more kinds of insurance under Class II, including Class II(k)
insurance; or
(3) one million dollars ($1,000,000), if it markets one (1) or
more kinds of insurance under both Class II and Class III,
including Class II(k) insurance.
(c) A domestic mutual company that organized after June 30,
1977, must maintain a surplus of not less than one million two
hundred fifty thousand dollars ($1,250,000). However, when it
organizes, it must:
(1) have a surplus of not less than two million dollars
($2,000,000);
(2) for the one (1) or more kinds of insurance under Class I that
it intends to market, have received applications for insurance
from not less than four hundred (400) persons, each application
for an amount not less than one thousand dollars ($1,000), and
have received the first year's premium due on a policy to be
issued on each such application; and
(3) for the one (1) or more kinds of insurance under Class II or
Class III that it intends to market, have received applications for
insurance covering not less than eight hundred (800) separate
risks in not less than forty (40) policies to be issued to not less
than forty (40) members, and have received premiums
amounting to not less than one hundred thousand dollars
($100,000) for those policies.
(d) A domestic mutual company must deposit with the department
in cash or in obligations of the United States:
(1) twenty-five thousand dollars ($25,000), if it organized
before June 30, 1955;
(2) fifty thousand dollars ($50,000), if it organized after June
29, 1955, and before March 7, 1967; or
(3) one hundred thousand dollars ($100,000), if it organized
after March 6, 1967.
This subsection does not apply to a standard farm mutual insurance
company that is organized under IC 27-5 (before its repeal) or
IC 27-5.1.
(e) If the commissioner determines that the continued operation
of a domestic mutual company may be hazardous to the
policyholders or the general public, the commissioner may, upon the
commissioner's determination, issue an order requiring the insurer to
increase the insurer's capital and surplus based on the type, volume,
and nature of the business transacted.
(Formerly: Acts 1935, c.162, s.75; Acts 1955, c.316, s.2; Acts 1967,
c.127, s.3.) As amended by Acts 1977, P.L.282, SEC.2;
P.L.130-1994, SEC.15; P.L.116-1994, SEC.20; P.L.129-2003,
SEC.1.
IC 27-1-6-16
Extension of charter powers and licenses; limitation of actions
Sec. 16. (a) The charter powers and licenses of any domestic
insurers authorized to market one or more kinds of insurance or
reinsurance under Class II or Class III and meeting the requirements
set out in section 14 or 15 of this chapter may be broadened and
extended hereunder to include the right, power and authority to make
any one or more of the kinds of insurance and reinsurance specified
in both Class II and Class III of IC 27-1-5-1.
(b) Any domestic company authorized to insure against loss or
damage by fire, which has been actively engaged in the fire insurance
business continuously for ten (10) years or more, or whose
predecessor or predecessors, if any prior to merger or consolidation,
shall have been so engaged for such period, may, if it complies with
the provisions of this subsection and without complying with the
capitalization and surplus requirements of section 14 or section 15 of
this chapter, insure against loss or damage to dwellings and
appurtenant structures and to the contents thereof and any other
personal property of a similar nature of the insured or of the
members of his household, resulting from any peril, and may, in
connection with making such insurance, also make insurance against
the legal liability of the insured or of the members of his household,
and for any medical, surgical and hospital expenses of any person
other than the insured or such members, arising out of nonbusiness
pursuits of the insured or such members or out of the condition of, or
acts performed by the insured or such members on such dwellings
and appurtenant structures and the real estate on which each is
located. Where a company is entitled to make such additional
insurance solely by virtue of this subsection, it shall not make such
insurance unless it has made reinsurance arrangements satisfactory
to the commissioner whereby all of such additional insurance is
reinsured with a company which is qualified under IC 27-1 to make
reinsurance of such additional kind of insurance. The charter powers
and licenses of any domestic insurer meeting the requirements set out
in this subsection may be broadened and extended hereunder to
include the right, power and authority to make any one or more of the
kinds of insurance permitted by this subsection.
(c) No policy issued by a mutual company including a farm
mutual insurance company, shall be required to contain a provision
limiting the time within which suit against the insurer on such policy
must be filed.
(Formerly: Acts 1935, c.162, s.75 1/2; Acts 1947, c.50, s.1; Acts
1957, c.265, s.2; Acts 1967, c.233, s.2.) As amended by Acts 1977,
P.L.282, SEC.3; P.L.129-2003, SEC.2.
IC 27-1-6-17
Examination of proposed companies; revocation and renewal of
permit and insurance producer's authority
Sec. 17. The commissioner may, personally or through the
commissioner's deputies and assistants, examine into the affairs of
any such proposed company and inspect its books and papers, and
may summon and examine under oath any officer or insurance
producer or any person who is or has been connected with such
company, and if the commissioner finds the company is violating the
law, or if the company shall not be qualified for a certificate of
authority within one (1) year from date of its permit, the
commissioner may revoke its permit; and if the commissioner finds
an insurance producer of such company has violated the law, the
commissioner may revoke the insurance producer's authority, and the
commissioner may for the insurance producer's violation revoke the
company's permit. Any revocation shall be after notice and hearing.
The commissioner may renew any company's permit or agent's
authority which the commissioner has revoked.
(Formerly: Acts 1935, c.162, s.76.) As amended by P.L.178-2003,
SEC.14.
IC 27-1-6-18
Certificate of authority; issuance; recording
Sec. 18. When the provisions of sections 2 through 17 of this
chapter have been complied with, and the department has made an
investigation and examination as required in section 17, then the
commissioner may issue a certificate of authority under
IC 27-1-3-20, which shall license the company to transact only the
kind or kinds of insurance specified in its articles of incorporation.
The company shall file a certified copy of such certificate of
authority for record with the county recorder of the county wherein
the principal office is located, which certified copy shall be evidence
only that the company is authorized and licensed to transact the class
or classes of insurance set out therein.
(Formerly: Acts 1935, c.162, s.77.) As amended by Acts 1977,
P.L.283, SEC.1.
IC 27-1-6-19
Bylaws; procedure for adoption
Sec. 19. (a) If the articles of incorporation provide for the
adoption of the bylaws by the shareholders, members, or
policyholders, the incorporators or a majority of them after the
issuance of the certificate of authority, shall call a meeting of the
shareholders, members, or policyholders for the purpose of adopting
the bylaws, giving at least ten (10) days' notice by mail to each
shareholder, member, or policyholder entitled to vote at the time and
place of such meeting, unless the giving of such notice be waived in
writing by any or all of such shareholders, members, or
policyholders, in which case notice shall be given only to such
shareholders, members, or policyholders who have not so waived
such notice. Such shareholders, members, or policyholders shall meet
at the time and place designated and shall adopt the bylaws. After the
adoption of such bylaws, the directors named in the articles of
incorporation as the first board of directors shall meet at the call of
a majority thereof and shall elect officers and transact such other
business as may properly come before such board.
(b) If the articles of incorporation do not provide for the adoption
of the bylaws by the shareholders, members, or policyholders, then,
after the issuance of the certificate of authority, the directors named
in the articles as the first board of directors shall meet at the call of
a majority thereof, adopt the bylaws, elect officers, and transact such
other business as may properly come before such board.
(Formerly: Acts 1935, c.162, s.78.) As amended by P.L.252-1985,
SEC.24.
IC 27-1-6-20
Repealed
(Repealed by P.L.108-1985, SEC.1.)
IC 27-1-6-21
Company domiciled in Indiana; requirements
Sec. 21. (a) A company that is approved by the department after
June 30, 2000, to be domiciled in Indiana, must have and maintain in
Indiana the following:
(1) A physical presence that provides economic benefit to the
state.
(2) Complete records of the company's assets, transactions, and
affairs in accordance with methods and systems that are
customary or suitable to the kind or kinds of insurance
transacted by the company, including all records required under
IC 27-1-7-16. Records may be maintained in a form that is
physically or electronically available to the department within
Indiana.
(b) The commissioner shall determine whether the requirements
of subsection (a) are met. In making a determination under
subsection (a)(1), the commissioner shall compare and consider the
following:
(1) The economic benefit to Indiana and Indiana communities
offered by the domestication of the company.
(2) The costs that may be incurred by the state in regulating the
company as a domestic company versus a foreign company.
(c) If a domestic company subject to this section fails to comply
with the provisions of subsection (a), the commissioner may:
(1) require the company to transfer its domicile under
IC 27-1-6.5-2; or
(2) annually impose an additional administrative fee on the
company in an amount equal to the difference between the cost
of regulating the company as a domestic company and the cost
of regulating the company as a foreign company. The fee shall
be deposited in the department of insurance fund established by
IC 27-1-3-28.
(d) In the case of a company that is part of an insurance holding
company system (as defined in IC 27-1-23-1) whose presence
provides an economic benefit to the state, the commissioner shall
consider the insurance holding company system and any domestic
company in the aggregate when making the determination required
under subsection (b).
As added by P.L.144-2000, SEC.1.