CHAPTER 8. PROPERTY AND CASUALTY INSURANCE AND GUARANTY ASSOCIATION LAW
IC 27-6-8
Chapter 8. Property and Casualty Insurance and Guaranty
Association Law
IC 27-6-8-1
Short title
Sec. 1. (Short Title) This chapter may be cited as the "Indiana
Insurance Guaranty Association Law of 1971."
(Formerly: Acts 1971, P.L.390, SEC.1.)
IC 27-6-8-2
Purpose
Sec. 2. (Purpose) The purpose of this chapter is to provide a
mechanism for the payment of claims under certain insurance
policies to avoid excessive delay in payment and to avoid excessive
financial loss to claimants or policyholders because of the insolvency
of an insurer, to assist in the detection and prevention of insurer
insolvencies, and to provide an association to assess the cost of this
protection among insurers.
(Formerly: Acts 1971, P.L.390, SEC.1.)
IC 27-6-8-3
Scope
Sec. 3. This chapter applies to all kinds of direct insurance except:
(1) life, annuity, health, or disability insurance;
(2) mortgage guaranty, financial guaranty, or other forms of
insurance offering protection against investment risks;
(3) fidelity or surety bonds, or any other bonding obligations;
(4) credit insurance, vendors' single interest insurance, or
collateral protection insurance or similar insurance with the
primary purpose of protecting the interests of a creditor arising
out of a creditor-debtor transaction;
(5) warranty or service contract insurance;
(6) title insurance;
(7) ocean marine insurance;
(8) a transaction between a person or an affiliate of a person and
an insurer or an affiliate of an insurer that involves the transfer
of investment or credit risk without a transfer of insurance risk;
(9) insurance provided by or guaranteed by a government entity;
and
(10) insurance written on a retroactive basis to cover known
losses for which a claim has already been made and the claim
is known to the insurer at the time the insurance is bound.
(Formerly: Acts 1971, P.L.390, SEC.1.) As amended by
P.L.163-1988, SEC.1; P.L.31-1988, SEC.20.
IC 27-6-8-4
Definitions
Sec. 4. As used in this chapter, unless otherwise provided:
(1) The term "account" means any one (1) of the three (3)
accounts created by section 5 of this chapter.
(2) The term "association" means the Indiana Insurance
Guaranty Association created by section 5 of this chapter.
(3) The term "commissioner" means the commissioner of
insurance of this state.
(4) The term "covered claim" means an unpaid claim which
arises out of and is within the coverage and not in excess of the
applicable limits of an insurance policy to which this chapter
applies issued by an insurer, if the insurer becomes an insolvent
insurer after the effective date (January 1, 1972) of this chapter
and (a) the claimant or insured is a resident of this state at the
time of the insured event or (b) the property from which the
claim arises is permanently located in this state. "Covered
claim" shall be limited as provided in section 7 of this chapter,
and shall not include (1) any amount due any reinsurer, insurer,
insurance pool, or underwriting association, as subrogation
recoveries or otherwise. However, a claim for any such amount,
asserted against a person insured under a policy issued by an
insurer which has become an insolvent insurer, which if it were
not a claim by or for the benefit of a reinsurer, insurer,
insurance pool or underwriting association, would be a
"covered claim" may be filed directly with the receiver or
liquidator of the insolvent insurer, but in no event may any such
claim be asserted in any legal action against the insured of such
insolvent insurer; nor (2) any supplementary obligation
including but not limited to adjustment fees and expenses,
attorney fees and expenses, court costs, interest and bond
premiums, whether arising as a policy benefit or otherwise,
prior to the appointment of a liquidator; nor (3) any unpaid
claim that is not both filed within one (1) year after an order of
liquidation and permitted to share in liquidation distributions
under IC 27-9-3-33 if the insolvent insurer is a domestic insurer
or in accordance with the applicable provisions of the law of the
state of domicile if the insolvent insurer is not a domestic
insurer; nor (4) any claim by a person whose net worth at the
time an insured event occurred was more than five million
dollars ($5,000,000); nor (5) a claim against a person insured by
an insolvent insurer if the person's net worth at the time an
insured event occurred was more than fifty million dollars
($50,000,000); nor (6) any claim by a person who directly or
indirectly controls, is controlled, or is under common control
with an insolvent insurer on December 31 of the year before the
order of liquidation. All covered claims filed in the liquidation
proceedings shall be referred immediately to the association by
the liquidator for processing as provided in this chapter.
(5) The term "insolvent insurer" means (a) a member insurer
holding a valid certificate of authority to transact insurance in
this state either at the time the policy was issued or when the
insured event occurred and (b) against whom a final order of
liquidation, with a finding of insolvency, to which there is no
further right of appeal, has been entered by a court of competent
jurisdiction in the company's state of domicile. "Insolvent
insurer" shall not be construed to mean an insurer with respect
to which an order, decree, judgment or finding of insolvency
whether preliminary or temporary in nature or order to
rehabilitation or conservation has been issued by any court of
competent jurisdiction prior to January 1, 1972 or which is
adjudicated to have been insolvent prior to that date.
(6) The term "member insurer" means any person who is
licensed or holds a certificate of authority under IC 27-1-6-18
or IC 27-1-17-1 to transact in Indiana any kind of insurance for
which coverage is provided under section 3 of this chapter,
including the exchange of reciprocal or inter-insurance
contracts. The term includes any insurer whose license or
certificate of authority to transact such insurance in Indiana may
have been suspended, revoked, not renewed, or voluntarily
surrendered. A "member insurer" does not include farm mutual
insurance companies organized and operating pursuant to
IC 27-5.1 other than a company to which IC 27-5.1-2-6 applies.
(7) The term "net direct written premiums" means direct gross
premiums written in this state on insurance policies to which
this chapter applies, less return premiums thereon and dividends
paid or credited to policyholders on such direct business. "Net
direct premiums written" does not include premiums on
contracts between insurers or reinsurers.
(8) The term "person" means an individual, corporation, limited
liability company, partnership, reciprocal or inter-insurance
exchange, association, or voluntary organization.
(Formerly: Acts 1971, P.L.390, SEC.1; Acts 1973, P.L.279, SEC.1.)
As amended by Acts 1977, P.L.281, SEC.5; P.L.163-1988, SEC.2;
P.L.8-1993, SEC.422; P.L.255-1995, SEC.7; P.L.129-2003, SEC.12.
IC 27-6-8-5
Creation of the association
Sec. 5. There is created a nonprofit unincorporated legal entity to
be known as the Indiana Insurance Guaranty Association (referred to
in this chapter as the "association"). All insurers defined as member
insurers in section 4(6) of this chapter shall be and remain members
of the association as a condition of their authority to transact
insurance in this state. The association shall perform its functions
under a plan of operation established and approved under section 8
of this chapter and shall exercise its powers through a board of
directors established under section 6 of this chapter. For purposes of
administration and assessment, the association shall be divided into
three (3) separate accounts:
(1) The worker's compensation insurance account.
(2) The automobile insurance account.
(3) The account for all other insurance to which this chapter
applies.
(Formerly: Acts 1971, P.L.390, SEC.1.) As amended by
P.L.252-1985, SEC.221; P.L.28-1988, SEC.83.
IC 27-6-8-6
Board of directors
Sec. 6. (a) The board of directors of the association shall consist
of nine (9) member insurers one (1) of whom shall be selected by or
from among each of the following groups representative of member
insurers, such selection to be subject to the approval of the
commissioner:
(1) One (1) person representing the American Insurance
Association.
(2) One (1) person representing the Alliance of American
Insurers.
(3) One (1) person representing the National Association of
Independent Insurers.
(4) One (1) person representing the National Association of
Mutual Insurance Companies.
(5) One (1) person representing the Insurance Institute of
Indiana.
(6) Three (3) persons representing the:
(A) domestic stock companies;
(B) domestic mutual companies; or
(C) domestic reciprocal insurers;
with not more than two (2) persons representing any category.
(7) One (1) person representing independent unaffiliated stock,
fire, and casualty companies to be appointed by the
commissioner.
(b) Not more than one (1) member insurer in a group of insurers
under the same management or ownership shall serve as a director at
the same time.
(c) Directors shall serve such terms as shall be established in the
plan of operation.
(d) Vacancies on the board shall be filled for the remaining period
of the term in the same manner as the initial selection.
(e) If no directors are selected by March 1, 1972, the
commissioner may appoint the initial members of the board of
directors.
(f) In approving selections to the board, the commissioner shall
consider among other things whether all member insurers are fairly
represented.
(g) Directors may be reimbursed from the assets of the association
for expenses incurred by them as members of the board of directors.
(Formerly: Acts 1971, P.L.390, SEC.1.) As amended by
P.L.252-1985, SEC.222; P.L.233-1999, SEC.6 and P.L.268-1999,
SEC.16.
IC 27-6-8-7
Powers and duties of the association
Sec. 7. (a) The association shall:
(i) Be obligated to the extent of the covered claims as defined
herein existing at the time of the order of liquidation or arising
within thirty (30) days after the order of liquidation, or before the
policy expiration date if less than thirty (30) days after the
determination, or before the insured replaces the policy or causes its
cancellation, if he does so within thirty (30) days of the
determination. This obligation shall include only that amount of each
covered claim which is less than one hundred thousand dollars
($100,000). In no event shall the association be obligated to a
policyholder or claimant in an amount in excess of the applicable
limits provided in the policy from which the claim arises, nor shall
the association be obligated in an amount in excess of three hundred
thousand dollars ($300,000) per policy for all claims arising out of
one (1) occurrence. The return of unearned premium is limited to the
lesser of: eighty percent (80%) of the paid but unearned premium; or
six hundred fifty dollars ($650) multiplied by the number of months
or partial months remaining in the policy term, not to exceed twelve
(12) months.
(1) In the case of claims arising from bodily injury, sickness, or
disease, including death resulting therefrom, except claims under
IC 22-3 or similar state or federal laws providing benefits for
occupational injury or disease, the amount for which the association
shall be obligated shall not exceed the claimant's reasonable
expenses incurred for necessary medical, surgical, x-ray, and dental
services, including prosthetic devices and necessary ambulance,
hospital, professional nursing, and funeral services, and any amounts
actually lost by reason of the claimant's inability to work and earn
wages or salary or their equivalent that would otherwise have been
earned in the normal course of such injured claimant's employment,
to which may be added at the discretion of the association a sum not
to exceed one thousand dollars ($1,000) for all other costs and
expenses incurred by the claimant prior to the insolvency. In the case
of a claim for wrongful death, the foregoing obligation of the
association shall, in addition to the limits set forth above, be subject
to the limitations provided by the wrongful death statutes of the state.
Such amounts which are legally payable because of the death of a
claimant shall be paid to the claimant's estate, to the claimant's father
or mother or guardian, to the surviving spouse or children, or to the
next of kin as set out in IC 34-23-1 and IC 34-23-2.
The amount for which the association shall be obligated may also
include payments in fact made to others, not members of claimant's
household, which were reasonably incurred to obtain from such other
persons ordinary and necessary services for the production of income
in lieu of those services the claimant would have performed for
himself had he not been injured.
In the case of claims arising from bodily injury, sickness, or
disease, including those in which death results, under IC 22-3 or
similar state or federal laws providing benefits for occupational
injury or disease, the association is obligated only to the extent
provided under IC 22-3.
(2) A third party having a covered claim against any insured of an
insolvent member insurer may file such claim in the liquidation
proceeding under IC 27-9-3 if such insolvent member insurer is a
domestic insurer and pursuant to the applicable provisions of law of
the state of domicile if such insolvent member insurer is not a
domestic insurer. The liquidator shall immediately refer said claim
to the association to process as provided in this chapter unless the
claimant shall within thirty (30) days from the date of filing said
claim in the liquidation proceeding, file with the commissioner as
liquidator a written demand that said claim be processed in
liquidation proceedings as a claim not covered by this chapter.
(ii) Be deemed the insurer to the extent of its obligation on the
covered claims as limited by this chapter and to this extent shall have
all rights, duties, and obligations of the insolvent insurer as if the
insurer had not become insolvent, including those relating to
reinsurance contracts and treaties entered into by the insolvent
insurer. However, the association's obligation to defend any insured
of the insolvent insurer or to indemnity against the costs of such
defense terminates as soon as the claimant or claimants have been
paid all benefits that they are entitled to under this chapter.
(iii) Allocate claims paid and expenses incurred among the three
(3) accounts separately, and assess member insurers separately for
each account amounts necessary to pay the obligation of the
association under paragraph (i) of this subsection subsequent to an
insolvency, the expenses of handling covered claims subsequent to
an insolvency, the cost of examination under IC 27-6-8-12 and other
expenses authorized by this chapter. The assessments of each
member insurer shall be on a uniform percentage basis in the
proportion that the net direct written premiums in this state of the
member insurer for the preceding calendar year on the kinds of
insurance in the account bears to the net direct written premiums of
all member insurers for the preceding calendar year on the kinds of
insurance in the account. However, in addition to the pro rata
assessments already described, an assessment may be made against
each member insurer in a stated amount up to fifty dollars ($50) per
year for the purpose of paying the administrative expenses of the
association. There shall be no assessment for any account so long as
assets held in such account are sufficient to cover all estimated
payments for liquidation in process under such account. Each
member insurer shall be notified of the assessment not later than
thirty (30) days before it is due. No member insurer may be assessed
in any year on any account an amount greater than one percent (1%)
of that member insurer's net direct written premiums in this state for
the preceding calendar year on the kinds of insurance in the account.
If the maximum assessment, together with the other assets of the
association in any account, does not provide in any one (1) year in
any account an amount sufficient to make all necessary payments
from that account, the funds available shall be prorated and the
unpaid portion shall be paid as soon thereafter as funds become
available. The association may exempt or defer, in whole or in part,
the assessment of any member insurer, if the assessment would cause
the member insurer's financial statement to reflect amounts of capital
or surplus less than the minimum amounts required for a certificate
of authority by any jurisdiction in which the member insurer is
authorized to transact insurance. However, during the period of
deferment no dividends shall be paid to shareholders or
policyholders by a company whose assessment has been deferred. A
deferred assessment shall be paid when such payment will not reduce
capital or surplus below required minimums. Such payments shall be
refunded to those companies whose assessments were increased as
the result of such deferment, or at the option of any such company,
shall be credited to future assessments against such company.
(iv) Investigate, adjust, compromise, settle, and pay covered
claims to the extent of the association's obligation and deny all other
claims and may review settlements, releases, and judgments to which
the insolvent insurer or its insured were parties to determine the
extent to which such settlements, releases, and judgments may be
properly contested, and as appropriate to contest them.
(v) Notify such persons as the commissioner directs under
IC 27-6-8-9(b)(i).
(vi) Handle claims through its employees or through one (1) or
more insurers or other persons designated as servicing facilities.
Designation of a servicing facility is subject to the approval of the
commissioner, but such designation may be declined by a member
insurer.
(vii) Reimburse each servicing facility for obligations of the
association paid by the facility and for expenses incurred by the
facility while handling claims on behalf of the association and shall
pay the other expenses of the association authorized by this chapter.
Any unreimbursed obligation of the association to a member insurer
designated a servicing facility shall constitute an admitted asset of
such member insurer.
(viii) Be entitled to and permitted to examine all claims, files, and
records of an insolvent insurer at such times and to such extent as
necessary or appropriate to obtain information regarding covered
claims individually and in the aggregate, and to establish such
procedures as appropriate to obtain prompt notice of all covered
claims and information pertaining thereto during the course of
liquidation.
(b) The association may:
(i) Appear in, defend, and appeal any action on a covered claim
but it shall have no obligation to pay any amount in excess of the
provisions of IC 27-6-8-7.
(ii) Employ or retain such persons as are necessary to handle
claims and perform other duties of the association.
(iii) Borrow funds necessary to effect the purposes of this chapter
in accord with the plan of operation.
(iv) Sue or be sued.
(v) Negotiate and become a party to any contracts as are necessary
to carry out the purpose of this chapter.
(vi) Perform such other acts as are necessary or proper to
effectuate the purpose of this chapter.
(vii) Refund to the then member insurers in proportion to the
contribution of each such member insurer to that account that amount
by which the assets of the account exceed the liabilities if, at the end
of the calendar year, the board of directors finds that the assets of the
association in any account exceed the liabilities of that account as
estimated by the board of directors for the coming year, provided that
the association may retain as a reserve fund from the excess of the
assets over liabilities at the end of any calendar year an amount not
to exceed ten percent (10%) of such excess assets of such account.
Any such reserve fund or earnings from its investment shall be used
only for the payment of covered claims and authorized association
expenses. Upon appropriate action by the board of directors such
reserve fund shall be refunded to the then member insurers in
proportion to the total contribution of each such member insurer to
such account.
(Formerly: Acts 1971, P.L.390, SEC.1; Acts 1975, P.L.280, SEC.2.)
As amended by Acts 1977, P.L.281, SEC.6; P.L.163-1988, SEC.3;
P.L.3-1990, SEC.95; P.L.1-1998, SEC.150.
IC 27-6-8-8
Plan of operation
Sec. 8. (a)(i) The association shall submit to the commissioner a
plan of operation and any amendments thereto necessary or suitable
to assure the fair, reasonable, and equitable administration of the
association. The plan of operation and amendments thereto shall
become effective upon approval in writing by the commissioner.
(ii) If the association fails to submit a suitable plan of operation
by March 31, 1972, or if at any time thereafter the association fails
to submit suitable amendments to the plan, the commissioner shall,
after notice and hearing, adopt and promulgate reasonable rules as
are necessary or advisable to effectuate the provisions of this chapter.
Such rules shall continue in force until modified by the
commissioner or superseded by a plan submitted by the association
and approved by the commissioner.
(b) All member insurers shall comply with the plan of operation.
(c) The plan of operation shall:
(i) Establish the procedures whereby all the powers and duties
of the association under section 7 of this chapter will be
performed.
(ii) Establish procedures for handling assets of the association.
(iii) Establish the amount and method of reimbursing members
of the board of directors under section 6 of this chapter.
(iv) Establish procedures by which claims may be filed with the
association by the liquidator and establish acceptable forms of
proof of covered claims. Notice of claims to the receiver or
liquidator of the insolvent insurer shall be deemed notice to the
association or its agent and a list of these claims shall be
periodically submitted to the association or similar organization
in another state by the receiver or liquidator.
(v) Establish regular places and times for meetings of the board
of directors.
(vi) Establish procedures for records to be kept of financial
transactions of the association, its agents, and the board of
directors.
(vii) Provide that any member insurer aggrieved by any final
action or decision of the association may appeal to the
commissioner within thirty (30) days after the action or
decision.
(viii) Establish the procedures whereby selections for the board
of directors will be submitted to the commissioner.
(ix) Contain additional provisions necessary or proper for the
execution of the powers and duties of the association.
(d) The plan of operation may provide that any or all powers and
duties of the association, except those under section 7(a)(iii) and
7(b)(iii) of this chapter, are delegated to a corporation, association,
or other organization which performs or will perform functions
similar to those of this association, or its equivalent, in two (2) or
more states. Such a corporation, association, or organization shall be
reimbursed as a servicing facility would be reimbursed and shall be
paid for its performance of any other functions of the association. A
delegation under this subsection shall take effect only with the
approval of both the board of directors and the commissioner, and
may be made only to a corporation, association, or organization
which extends protection not substantially less favorable and
effective than that provided by this chapter.
(Formerly: Acts 1971, P.L.390, SEC.1.) As amended by
P.L.252-1985, SEC.223.
IC 27-6-8-9
Powers and duties of commissioner
Sec. 9. (a) The commissioner shall:
(i) Notify the association of the existence of an insolvent insurer
not later than three (3) working days after the commissioner
receives an order of liquidation.
(ii) Upon request of the board of directors, provide the
association with a statement of the net direct written premiums
of each member insurer.
(b) The commissioner may:
(i) Require that the association notify the insureds of the
insolvent insurer and any other interested parties of the order of
liquidation and of their rights under this chapter. This
notification shall be by mail at their last known address, where
available, but if sufficient information for notification by mail
is not available, notice by publication in a newspaper of general
circulation in all counties in which the insolvent insurer
transacted insurance business shall be sufficient.
(ii) Require each insurance producer of the insolvent insurer to
give prompt written notice by first class mail of such insolvency
and the rights of the insured under this chapter to each insured
of the insolvent insurer for whom the insurance producer is
insurance producer of record, at such insured's last known
address.
(iii) Suspend or revoke, after notice and hearing, the certificate
of authority to transact insurance in this state of any member
insurer which fails to pay an assessment when due or fails to
comply with the plan of operation. As an alternative, the
commissioner may levy a fine on any member insurer which
fails to pay an assessment when due. The fine shall not exceed
five percent (5%) of the unpaid assessment per month, except
that no fine shall be less than one hundred dollars ($100) per
month.
(iv) Revoke the designation of any servicing facility if the
commissioner finds claims are being handled unsatisfactorily.
(v) Any final action or order of the commissioner under this
chapter shall be subject to judicial review in a court of
competent jurisdiction.
(Formerly: Acts 1971, P.L.390, SEC.1.) As amended by
P.L.163-1988, SEC.4; P.L.178-2003, SEC.41.
IC 27-6-8-10
Effect of paid claims
Sec. 10. (Effect of Paid Claims) (a) Any person recovering under
this chapter shall be deemed to have assigned the person's rights
under the policy to the association to the extent of the person's
recovery from the association. Every insured or claimant seeking the
protection of this chapter shall cooperate with the association to the
same extent as the person would have been required to cooperate
with the insolvent insurer. The association shall have no cause of
action against the insured of the insolvent insurer for any sums it has
paid out except such causes of action as the insolvent insurer would
have had if such sums had been paid by the insolvent insurer. In the
case of an insolvent insurer operating on a plan with assessment
liability, payments of claims of the association shall not operate to
reduce the liability of insureds to the receiver, liquidator, or statutory
successor for unpaid assessments previously made and no assessment
shall be thereafter made for the purpose of reimbursing the
association.
(b) The receiver, liquidator, or statutory successor of an insolvent
insurer shall be bound by settlements of covered claims by the
association or a similar organization in another state functioning
pursuant to IC 27-6-8-8(d). The court having jurisdiction shall grant
such claims priority equal to that which the claimant would have
been entitled in the absence of this chapter against the assets of the
insolvent insurer. The expenses of the association or similar
organization in handling claims shall be accorded the same priority
as the liquidator's expenses.
(c) The association shall periodically file with the receiver or
liquidator of the insolvent insurer statements of the covered claims
paid by the association and estimates of anticipated claims on the
association which shall preserve the rights of the association against
the assets of the insolvent insurer.
(d) The association shall have a right to recover from the
insurance producer of record any part of the paid claim for unearned
premium that represents unearned commission to the insurance
producer.
(Formerly: Acts 1971, P.L.390, SEC.1.) As amended by Acts 1977,
P.L.281, SEC.7; P.L.178-2003, SEC.42.
IC 27-6-8-11
Nonduplication of recovery
Sec. 11. (a) Any person having a claim against an insurer under
any provision in an insurance policy other than a policy of an
insolvent insurer which is also a covered claim, shall be required to
exhaust first the person's right under the policy. Any amount payable
on a covered claim under this chapter shall be reduced by the amount
of recovery under the insurance policy.
(b) Any person having a claim which may be recovered under
more than one (1) insurance guaranty association or its equivalent
shall seek recovery first from the association of the place of
residence of the insured except that if it is a first party claim for
damage to property with a permanent location, the person shall seek
recovery first from the association of the location of the property,
and if it is a worker's compensation claim, the person shall seek
recovery first from the association of the residence of the claimant.
Any recovery under this chapter shall be reduced by the amount of
recovery from any other insurance guaranty association or its
equivalent.
(Formerly: Acts 1971, P.L.390, SEC.1.) As amended by P.L.28-1988,
SEC.84.
IC 27-6-8-12
Prevention of insolvencies
Sec. 12. To aid in the detection and prevention of insurer
insolvencies:
(1) Every member insurer shall file with the National
Association of Insurance Commissioners for use in their Early
Warning System on or before March 1, of each year a financial
statement of the same type and content as required by
IC 27-1-20-21.
(2) It shall be the duty of the commissioner:
(A) To notify the commissioners of all of the other states,
territories of the United States, and the District of Columbia
in which a member insurer is licensed to do business when
he takes any of the following actions against a member
insurer:
(i) revocation of license;
(ii) suspension of license;
(iii) makes any formal order that such company restrict its
premium writing, obtain additional contributions to
surplus, withdraw from the state, reinsure all or any part of
its business, or an increase in capital, surplus, or any other
account for the security of policyholders or creditors. Such
notice shall be mailed to all commissioners within thirty
(30) days following the action taken or the date on which
such action occurs.
(B) To report to the board of directors when he has taken
any of the actions set forth in (A) of this paragraph or has
received a report from any other commissioner indicating
that any such action has been taken in another state. Such
report to the board of directors shall contain all significant
details of the action taken or the report received from
another commissioner.
(C) To report to the board of directors when he has
reasonable cause to believe from any examination, whether
completed or in process, of any member company, that such
company may be insolvent or in a financial condition
hazardous to the policyholders or the public.
(3) The commissioner may seek the advice and
recommendations of the board of directors concerning any
matter affecting his duties and responsibilities regarding the
financial condition of member companies and companies
seeking admission to transact insurance business in this state.
(4) The board of directors may, upon majority vote, make
reports and recommendations to the commissioner upon any
matter germane to the solvency, liquidation, rehabilitation, or
conservation of any member insurer or germane to the solvency
of any company seeking to do an insurance business in this
state. Such reports and recommendations shall not be
considered public documents.
(5) The board of directors may, upon majority vote, request that
the commissioner order an examination of any member insurer
which the board in good faith believes may be in a financial
condition hazardous to the policyholders or the public. Within
thirty (30) days of the receipt of such request, the commissioner
shall begin such examination. The examination may be
conducted as a National Association of Insurance
Commissioners examination or may be conducted by such
persons as the commissioner designates provided such persons
are qualified insurance accountants or actuaries. The cost of
such examination shall be paid by the association and the
examination report shall be treated as are other examination
reports. In no event shall such examination report be released to
the board of directors prior to its release to the public, but this
shall not preclude the commissioner from complying with
subsection (1). The commissioner shall notify the board of
directors when the examination is completed. The request for an
examination shall be kept on file by the commissioner but it
shall not be open to public inspection prior to the release of the
examination report to the public.
(6) The board of directors may, upon majority vote, make
recommendations to the commissioner for the detection and
prevention of insurer insolvencies.
(Formerly: Acts 1971, P.L.390, SEC.1.) As amended by Acts 1977,
P.L.281, SEC.8; P.L.163-1988, SEC.5.
IC 27-6-8-13
Examination of the association
Sec. 13. (Examination of the Association) The Association shall
be subject to examination and regulation by the commissioner. The
board of directors shall submit, not later than March 30th of each
year, a financial report for the preceding calendar year in a form
approved by the commissioner.
(Formerly: Acts 1971, P.L.390, SEC.1.)
IC 27-6-8-14
Tax exemption
Sec. 14. (Tax Exemption) The association shall be exempt from
payment of all fees and all taxes levied by this state or any of its
subdivisions except taxes levied on real or personal property.
(Formerly: Acts 1971, P.L.390, SEC.1.)
IC 27-6-8-15
Recoupment of assessments; tax credits
Sec. 15. (a) Member insurers, which during any preceding
calendar year shall have paid one (1) or more assessments levied
pursuant to section 7 of this chapter, shall be allowed a credit against
premium taxes, adjusted gross income taxes, or any combination
thereof upon revenue or income of member insurers which may be
imposed by the state, up to twenty percent (20%) of the assessment
described in section 7 of this chapter for each calendar year
following the year the assessment was paid until the aggregate of all
assessments paid to the guaranty association shall have been offset
by either credits against such taxes or refunds from the association.
The provisions herein are applicable to all assessments levied after
the passage of this article.
(b) To the extent a member insurer elects not to utilize the tax
credits authorized by subsection (a), the member insurer may utilize
the provisions of subsection (c) as a secondary method of
recoupment.
(c) The rates and premiums charged for insurance policies to
which this chapter applies shall include amounts sufficient to recoup
a sum equal to the amounts paid to the association by the member
insurer less any amounts returned to the member insurer by the
association and the rates shall not be deemed excessive because they
contain an amount reasonably calculated to recoup assessments paid
by the member insurer.
(Formerly: Acts 1971, P.L.390, SEC.1.) As amended by Acts 1977,
P.L.281, SEC.9; P.L.163-1986, SEC.1; P.L.192-2002(ss), SEC.167.
IC 27-6-8-16
Immunity
Sec. 16. (Immunity) There shall be no liability on the part of and
no cause of action of any nature shall arise against any member
insurer, the association or its agents or employees, the board of
directors, or the commissioner or his representatives for any action
taken by them in the performance of their powers and duties under
this chapter.
(Formerly: Acts 1971, P.L.390, SEC.1.)
IC 27-6-8-17
Stay of proceedings; reopening of default judgments
Sec. 17. (Stay of Proceedings; Reopening of Default Judgments)
All proceedings in which the insolvent insurer is a party or is
obligated to defend a party in court in this state shall be stayed for up
to six (6) months and such additional time thereafter as may be
determined by the court from the date the insolvency is determined
or an ancillary proceeding is instituted in the state whichever is later
to permit proper defense by the association of all pending causes of
action. As to any covered claims arising from a judgment under any
decision, verdict or finding based on the default of the insolvent
insurer or its failure to defend an insured, the association either on its
own behalf or on behalf of such insured may apply to have the
judgment, order, decision, verdict or finding set aside by the same
court or administrator that made the judgment, order, decision,
verdict or findings and shall be permitted to defend against the claim
on the merits.
(Formerly: Acts 1971, P.L.390, SEC.1; Acts 1973, P.L.279, SEC.2.)
IC 27-6-8-18
Records of insolvent insurers; access; copies
Sec. 18. The liquidator, receiver, or statutory successor of an
insolvent insurer covered by this chapter shall permit access by the
board or its authorized representative to such of the insolvent
insurers records which are necessary for the board in carrying out its
functions under this chapter with regard to covered claims. In
addition, the liquidator, receiver, or statutory successor shall provide
the board or its representative with copies of such records upon the
request by the board and at the expense of the board.
(Formerly: Acts 1971, P.L.390, SEC.1; Acts 1973, P.L.279, SEC.3.)
IC 27-6-8-19
Advertising
Sec. 19. No person, including an insurer, insurance producer, or
affiliate of an insurer, shall make, publish, disseminate, circulate, or
place before the public, or cause, directly or indirectly, to be made,
published, disseminated, circulated or placed before the public, in
any newspaper, magazine or other publication, or in the form of a
notice, circular, pamphlet, letter or poster, or over any radio station
or television station, or in any other way, any advertisement,
announcement or statement which uses the existence of the insurance
guaranty association of this state for the purpose of sales,
solicitation, or inducement to purchase any form of insurance
covered by the Indiana insurance guaranty association law. However,
this section does not apply to Indiana insurance guaranty association
or to any other entity which does not sell or solicit insurance.
(Formerly: Acts 1973, P.L.279, SEC.4.) As amended by Acts 1977,
P.L.281, SEC.10; P.L.178-2003, SEC.43.