CHAPTER 2. SUMMARY PROCEEDINGS
IC 27-9-2
Chapter 2. Summary Proceedings
IC 27-9-2-1
Practices or condition of domestic insurers requiring control or
supervision
Sec. 1. (a) Whenever the commissioner has reasonable cause to
believe, and determines, after a hearing held under IC 4-21.5-3, that
any domestic insurer has committed or engaged in, or is about to
commit or engage in, any act, practice, or transaction that would
subject it to a delinquency proceeding under IC 27-9-3-1 or
IC 27-9-3-6, the commissioner may make and serve upon the insurer
and any other persons involved, any orders reasonably necessary to
correct, eliminate, or remedy that conduct, condition, or ground.
(b) If the commissioner has reasonable cause to believe that any
domestic insurer is in such condition as to render the continuance of
its business hazardous to the public or to holders of its policies or
certificates of insurance, or if that domestic insurer gives its consent,
the commissioner shall upon his determination issue an order:
(1) notifying the insurer of his determination; and
(2) providing the insurer with a written list of the
commissioner's requirements to correct its business practices.
(c) If the commissioner makes a determination to supervise an
insurer subject to an order under subsection (a) or (b), the
commissioner shall notify the insurer that it is under the supervision
of the commissioner. If the insurer is a reorganized insurer under
IC 27-14, the commissioner may also determine to supervise the
mutual insurance holding company that is affiliated with the
reorganized insurer, regardless of whether another basis exists for
supervising the mutual insurance holding company. If the
commissioner makes a determination to supervise a mutual insurance
holding company, the commissioner shall notify the mutual insurance
holding company that it is under the supervision of the
commissioner.
(d) During the period of supervision, the commissioner may
appoint a supervisor to supervise the insurer. The order appointing
a supervisor must direct the supervisor to enforce orders issued under
subsection (a) or (b). The order may also provide that the insurer may
not do any of the following things, during the period of supervision,
without the prior approval of the commissioner or his supervisor:
(1) Dispose of, convey, or encumber any of its assets or its
business in force.
(2) Withdraw funds from any of its bank accounts.
(3) Lend any of its funds.
(4) Invest any of its funds.
(5) Transfer any of its property.
(6) Incur any debt, obligation, or liability.
(7) Merge or consolidate with another company.
(8) Enter into any new reinsurance contract or agreement.
(9) Restrict the writing of new business on the renewal of
existing business.
(e) Any insurer subject to an order under this section must comply
with the lawful requirements of the commissioner and, if placed
under supervision, has sixty (60) days from the date the supervision
order is served within which to comply with the requirements of the
commissioner. In the event of the insurer's failure to comply within
those time requirements, the commissioner may institute proceedings
under IC 27-9-3-1 or IC 27-9-3-6 to have a rehabilitator or liquidator
appointed, or extend the period of supervision.
(f) During the period of supervision, the insurer may request the
commissioner to review any action taken or proposed to be taken by
the supervisor, specifying the reason the action complained of is
believed not to be in the best interest of the insurer.
(g) If a person violates a supervision order issued under this
section, he is civilly liable up to ten thousand dollars ($10,000).
(h) The commissioner may apply for and the Marion County
circuit court may grant, under IC 4-21.5-6, orders as are necessary
and proper to enforce a supervision order.
(i) In the event that a person subject to this article knowingly
violates any valid order of the commissioner issued under this
section and, as a result of that violation, the net worth of the insurer
is reduced or the insurer suffers loss it would not otherwise have
suffered, that person is personally liable to the insurer for the amount
of that reduction or loss. The commissioner or supervisor is
authorized to bring an action on behalf of the insurer in the Marion
County circuit court to recover the amount of the reduction or loss
together with any costs.
As added by Acts 1979, P.L.255, SEC.1. Amended by P.L.7-1987,
SEC.155; P.L.5-2000, SEC.2.
IC 27-9-2-2
Petition; orders
Sec. 2. (a) The commissioner may file in the Marion County
circuit court a petition alleging, with respect to a domestic insurer:
(1) that there exist grounds that justify a court order for a formal
delinquency proceeding against the insurer under IC 27-9;
(2) that the interests of policyholders, creditors, or the public
will be endangered by delay; and
(3) other matters the commissioner considers necessary.
(b) Upon a filing under subsection (a), the Marion County circuit
court may issue, ex parte, and without a hearing, the requested order
that must:
(1) Direct the commissioner to take possession and control any
part of the property, books, accounts, documents, and other
records of an insurer.
(2) Direct the commissioner to take possession of the premises
occupied by the insurer for transaction of its business.
(3) Until further order of the Marion County circuit court,
enjoin the insurer and its officers, managers, agents, and
employees from disposition of its property and from transaction
of its business except with the written consent of the
commissioner.
(c) The Marion County circuit court shall specify the order's
duration, which shall be such time as the court considers necessary
for the commissioner to determine the condition of the insurer. On
motion of either party or on its own motion, the Marion County
circuit court may hold hearings as it considers desirable after giving
notice as it considers appropriate, and may extend, shorten, or
modify the terms of the seizure order. The Marion County circuit
court shall vacate the seizure order if the commissioner fails to
commence a formal proceeding under IC 27-9 after having had a
reasonable opportunity to do so. An order of the Marion County
circuit court under a formal proceeding under IC 27-9 shall ipso facto
vacate the seizure order.
(d) Entry of a seizure order under this section does not constitute
an anticipatory breach of any contract of the insurer.
(e) An insurer subject to an ex parte order under this section may
petition the Marion County circuit court at any time after the
issuance of the order for a hearing and review of the order. The
Marion County circuit court shall hold a hearing and review not more
than fifteen (15) days after the request. A hearing under this
subsection may be held privately in chambers, and the hearing must
be held in chambers if the petitioning insurer requests it.
(f) If, at any time after the issuance of an order, it appears to the
Marion County circuit court that any person whose interest is or will
be substantially affected by the order did not appear at the hearing
and has not been served, the Marion County circuit court may order
notice to be given to that person. An order that notice be given does
not stay the effect of any order previously issued by the court.
As added by Acts 1979, P.L.255, SEC.1.
IC 27-9-2-3
Confidential nature of records and documents
Sec. 3. In all proceedings and judicial reviews of those
proceedings under sections 1 and 2 of this chapter, all records of the
insurer, other documents, and all insurance department files, and
court records and papers, so far as they concern or are a part of the
record of the proceedings, shall remain confidential except as is
necessary to obtain compliance with those proceedings or judicial
reviews, unless and until the Marion County circuit court, after
hearing arguments from the parties in chambers, shall order
otherwise, or unless the insurer requests that the matter be made
public. Until the Marion County circuit court issues an order, all
papers filed with the clerk of the Marion County circuit court must
be held by him in a confidential file.
As added by Acts 1979, P.L.255, SEC.1.