Bill Text: IN HB1015 | 2011 | Regular Session | Enrolled
Bill Title: Insurance matters.
Spectrum: Partisan Bill (Republican 4-0)
Status: (Passed) 2011-05-16 - SECTIONS 7 through 11 effective 07/01/2011 [HB1015 Detail]
Download: Indiana-2011-HB1015-Enrolled.html
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AN ACT to amend the Indiana Code concerning insurance.
(1) Comply with IC 27-1-6.
(2) File with the commissioner an affidavit, signed by the limited purpose subsidiary's president, vice president, treasurer, or chief financial officer, including all of the following to the best of the individual's knowledge after reasonable inquiry:
(A) That the proposed organization and operation of the limited purpose subsidiary complies with this chapter.
(B) That the limited purpose subsidiary's investment policy reflects and considers the liquidity of assets and the reasonable preservation, administration, and management of the assets with respect to the risks associated with reinsurance contracts
issued by the limited purpose subsidiary.
(C) That the reinsurance contract and any arrangement
intended to secure the limited purpose subsidiary's obligations
under the reinsurance contract (including an agreement to
implement the arrangement) comply with this chapter.
(3) File with the commissioner the opinion of a qualified
independent actuary approved by the commissioner that the
methodology and assumptions (including significant stress tests
of key assumptions) used to establish and discount reserves held
by the limited purpose subsidiary are sufficient to provide for the
risk assumed by the limited purpose subsidiary.
(4) File with the commissioner the limited purpose subsidiary's
plan of operation, including the following:
(A) A statement that the limited purpose subsidiary will,
before each an offer and sale of securities of or by the limited
purpose subsidiary, file with the commissioner, in a form
acceptable to the commissioner, a legal opinion that the
offering and sale of securities:
(i) of the limited purpose subsidiary complies with all
federal securities laws; and
(ii) by the limited purpose subsidiary complies with all
Indiana securities laws.
For purposes of this clause, the issuance of stock by the
limited purpose subsidiary to the organizing domestic life
insurance company is not the offer and sale of securities
requiring a legal opinion.
(B) A complete description of the material terms of all
proposed reinsurance transactions, reinsurance security
arrangements, securitizations, and any other material
transactions or arrangements of the limited purpose subsidiary.
(C) A description of the source and form of the limited
purpose subsidiary's capital and surplus.
(D) The investment policy of the limited purpose subsidiary.
(E) Pro forma balance sheets and income statements that
illustrate at least one (1) adverse case scenario, as determined
using criteria required by the commissioner, for the
performance of the limited purpose subsidiary under all
reinsurance contracts.
(F) Risk-based capital requirements, including a requirement
that the limited purpose subsidiary must maintain risk-based
capital equal to the product of two and one half (2 1/2) and the
number determined under the life risk-based capital formula
in accordance with the National Association of Insurance
Commissioners' risk-based capital instructions.
(G) Notice and reporting of material transactions.
(H) (F) Policies for payment of dividends and other
distributions to the organizing domestic life insurance
company.
(I) (G) Copies of all contracts between the limited purpose
subsidiary and affiliates.
(J) (H) Other documentation or information required by the
commissioner.
(5) Obtain from the commissioner a certificate of authority to
engage in the business of reinsurance in Indiana.
(A) organizing domestic life insurance company; and
(B) affiliates of the organizing domestic life insurance company;
are authorized;
(A) the organizing domestic life insurance company; and
(B) affiliates of the organizing domestic life insurance company; and
(1) Proceeds from a securitization, premiums, and other amounts payable by an affiliate to the limited purpose
subsidiary.
(2) Letters of credit.
(3) Guarantees of the parent.
(4) Other assets.
(b) If the commissioner determines that the value of admitted
assets that:
(1) were previously approved by the commissioner under
subsection (a); and
(2) are not assets that are addressed by the Accounting
Practices and Procedures Manual of the National Association
of Insurance Commissioners;
has decreased, the commissioner may require the limited purpose
subsidiary to provide additional security or collateral.
(c) The commissioner shall, at least thirty (30) days before
taking action under subsection (b):
(1) notify the limited purpose subsidiary of the action; and
(2) provide to the limited purpose subsidiary an opportunity
to remedy the issues identified by the commissioner.
(1) Provide to the commissioner, not later than forty-five (45) days after the closing date of the transactions of an insurance securitization, a copy of a complete set of executed documentation of the insurance securitization.
(2) Notify the commissioner, not later than two (2) business days after any material change in the financial condition or management of the limited purpose subsidiary, written notice of the material change.
(3) Annually file with the commissioner the actuarial opinion of the limited purpose subsidiary's internal actuary concerning reserves held by the limited purpose subsidiary for all risks assumed by the limited purpose subsidiary under the limited purpose subsidiary's reinsurance contracts.
(4) Biennially file with the commissioner the actuarial opinion
purpose subsidiary's risk-based capital level as of the end of the
immediately preceding calendar year, including the information
required by the risk-based capital instructions of the National
Association of Insurance Commissioners.
(6) (5) Immediately notify the commissioner concerning any
action by a ceding insurer or other person to foreclose on or
otherwise take possession of collateral provided by the limited
purpose subsidiary to secure an obligation of the limited purpose
subsidiary.
(6) Comply with IC 27-1-23 and IC 27-1-36.
(b) A limited purpose subsidiary may, after approval of the
commissioner, discount the reserves held by the limited purpose
subsidiary in accordance with an actuarial opinion filed under
subsection (a)(3).
(c) (b) Unless otherwise required by the commissioner, a limited
purpose subsidiary is not required to file a report, notice, or other
document with the National Association of Insurance Commissioners.
(b) The rules adopted under subsection (a)
(1) Requirements for reserves, including actuarial certification.
(2) Requirements for securities.
(3) Authorized investments.
(4) Requirements with respect to reinsurance ceded or assumed by the limited purpose subsidiary.
(5) Requirements for dividends and distributions.
(6) Requirements for operations.
(7) Conditions of, forms for, and approval of the financing of a limited purpose subsidiary.
(c) The commissioner may adopt emergency rules under IC 4-22-2-37.1 to implement this section if the commissioner determines that:
(1) the need for a rule is so immediate and substantial that rulemaking procedures under IC 4-22-2-23 through IC 4-22-2-36 are inadequate to address the need; and
(2) an emergency rule is likely to address the need.
JULY 1, 2011]: Sec. 7. (a) Unless denied licensure under section 12 of
this chapter, a person who has met the requirements of sections 5 and
6 of this chapter shall be issued an insurance producer license. An
insurance producer may receive qualification for a license in one (1) or
more of the following lines of authority:
(1) Life _ insurance coverage on human lives, including benefits
of endowment and annuities, that may include benefits in the
event of death or dismemberment by accident and benefits for
disability income.
(2) Accident and health or sickness _ insurance coverage for
sickness, bodily injury, or accidental death that may include
benefits for disability income.
(3) Property _ insurance coverage for the direct or consequential
loss of or damage to property of every kind.
(4) Casualty _ insurance coverage against legal liability,
including liability for death, injury, or disability, or for damage to
real or personal property.
(5) Variable life and variable annuity products _ insurance
coverage provided under variable life insurance contracts and
variable annuities.
(6) Personal lines _ property and casualty insurance coverage
sold to individuals and families for primarily noncommercial
purposes.
(7) Credit _ limited line credit insurance.
(8) Title _ insurance coverage against loss or damage on account
of encumbrances on or defects in the title to real estate.
(9) Any other line of insurance permitted under Indiana laws or
administrative rules.
(b) A person who requests qualification under subsection (a)(5) for
variable life and annuity products must:
(1) is considered to have requested; and be licensed as an
insurance producer with a life qualification under subsection
(a)(1);
(2) shall receive; be registered with FINRA; and
(3) meet the broker-dealer registration requirements of:
(A) FINRA for a Series 6 limited representative license; or
(B) FINRA for a Series 7 general securities registered
representative license.
a life qualification under subsection (a)(1) until the person completes
the educational requirement specified in section 19.5 of this chapter
and changes the person's life qualification status to a variable life and
variable annuity products qualification status under section 19.5 of this
chapter.
(c) A resident insurance producer may not request separate
qualifications for property insurance and casualty insurance under
subsection (a).
(d) An insurance producer license remains in effect unless revoked
or suspended, as long as the renewal fee set forth in section 32 of this
chapter is paid and the educational requirements for resident individual
producers are met by the due date.
(e) An individual insurance producer who:
(1) allows the individual insurance producer's license to lapse;
and
(2) completed all required continuing education before the license
expired;
may, not more than twelve (12) months after the expiration date of the
license, reinstate the same license without the necessity of passing a
written examination. A penalty in the amount of three (3) times the
unpaid renewal fee shall be required for any renewal fee received after
the expiration date of the license. However, the department of
insurance may waive the penalty if the renewal fee is received not more
than thirty (30) days after the expiration date of the license.
(f) A licensed insurance producer who is unable to comply with
license renewal procedures due to military service or some other
extenuating circumstance may request a waiver of the license renewal
procedures. The producer may also request a waiver of any
examination requirement or any other fine or sanction imposed for
failure to comply with the license renewal procedures.
(g) An insurance producer license shall contain the licensee's name,
address, personal identification number, date of issuance, lines of
authority, expiration date, and any other information the commissioner
considers necessary.
(h) A licensee shall inform the commissioner of a change of address
not more than thirty (30) days after the change by any means
acceptable to the commissioner. The failure of a licensee to timely
inform the commissioner of a change in legal name or address shall
result in a penalty under section 12 of this chapter.
(i) To assist in the performance of the commissioner's duties, the
commissioner may contract with nongovernmental entities, including
the National Association of Insurance Commissioners (NAIC), or any
affiliates or subsidiaries that the NAIC oversees, to perform ministerial
functions, including the collection of fees related to producer licensing,
that the commissioner and the nongovernmental entity consider
appropriate.
(j) The commissioner may participate, in whole or in part, with the NAIC or any affiliate or subsidiary of the NAIC in a centralized insurance producer license registry through which insurance producer licenses are centrally or simultaneously effected for states that require an insurance producer license and participate in the centralized insurance producer license registry. If the commissioner determines that participation in the centralized insurance producer license registry is in the public interest, the commissioner may adopt rules under IC 4-22-2 specifying uniform standards and procedures that are necessary for participation in the registry, including standards and procedures for centralized license fee collection.
(1) an insurance product under Indiana law; and
(2) solicited individually, regardless of whether the insurance product is classified as an individual annuity or a group annuity.
(b) A person
(1) The person is licensed as:
(A) an insurance producer with a life qualification under section 7(a)(1) of this chapter; or
(B) in the case of a variable annuity, an insurance producer with
(2) The person has adequate knowledge of an annuity product to recommend the annuity product.
(3) The person complies with the insurer's training standards for
(4) The person
(1) Be conducted or developed by an:
(A) insurance trade association;
(B) accredited college or university;
(C) educational organization certified by the insurance producer education and continuing education advisory council; or
(D) insurance company licensed to do business in Indiana.
(2) Provide for self-study or instruction provided by an approved instructor in a structured setting, as follows:
(A) For life insurance producers, not less than twenty (20) hours of instruction in a structured setting or comparable self-study on:
(i) ethical practices in the marketing and selling of insurance;
(ii) requirements of the insurance laws and administrative rules of Indiana; and
(iii) principles of life insurance.
(B) For health insurance producers, not less than twenty (20) hours of instruction in a structured setting or comparable self-study on:
(i) ethical practices in the marketing and selling of insurance;
(ii) requirements of the insurance laws and administrative rules of Indiana; and
(iii) principles of health insurance.
(C) For life and health insurance producers, not less than forty (40) hours of instruction in a structured setting or comparable self-study on:
(i) ethical practices in the marketing and selling of insurance;
(ii) requirements of the insurance laws and administrative rules of Indiana;
(iii) principles of life insurance; and
(iv) principles of health insurance.
(D) For property and casualty insurance producers, not less than forty (40) hours of instruction in a structured setting or comparable self-study on:
(i) ethical practices in the marketing and selling of insurance;
(ii) requirements of the insurance laws and administrative rules of Indiana;
(iii) principles of property insurance; and
(iv) principles of liability insurance.
(E) For personal lines producers, a minimum of twenty (20) hours of instruction in a structured setting or comparable self-study on:
(i) ethical practices in the marketing and selling of insurance;
(ii) requirements of the insurance laws and administrative rules of Indiana; and
(iii) principles of property and liability insurance applicable to coverages sold to individuals and families for primarily noncommercial purposes.
(F) For title insurance producers, not less than ten (10) hours of instruction in a structured setting or comparable self-study on:
(i) ethical practices in the marketing and selling of title insurance;
(ii) requirements of the insurance laws and administrative rules of Indiana;
(iii) principles of title insurance, including underwriting and escrow issues; and
(iv) principles of the federal Real Estate Settlement Procedures Act (12 U.S.C. 2608).
(G) For
(i) types and classifications of annuities;
(ii) identification of the parties to an annuity;
(iii) the manner in which fixed, variable, and indexed annuity contract provisions affect consumers;
(iv) income taxation of qualified and non-qualified annuities;
(v) primary uses of annuities; and
(vi) appropriate sales practices, replacement, and disclosure requirements.
(3) Instruction provided in a structured setting must be provided only by individuals who meet the qualifications established by the commissioner under subsection (b).
(b) The commissioner, after consulting with the insurance producer education and continuing education advisory council, shall adopt rules under IC 4-22-2 prescribing the criteria that a person must meet to render instruction in a certified prelicensing course of study.
(c) The commissioner shall adopt rules under IC 4-22-2 prescribing the subject matter that an insurance producer program of study must cover to qualify for certification as a certified prelicensing course of study under this section.
(d) The commissioner may make recommendations that the commissioner considers necessary for improvements in course materials.
(e) The commissioner shall designate a program of study that meets the requirements of this section as a certified prelicensing course of study for purposes of IC 27-1-15.6-6.
(f) The commissioner may, after notice and opportunity for a hearing, withdraw the certification of a course of study that does not maintain reasonable standards, as determined by the commissioner for the protection of the public.
(g) Current course materials for a prelicensing course of study that is certified under this section must be submitted to the commissioner upon request, but not less frequently than once every three (3) years.
sale of a long term care insurance policy may not violate the following
conditions:
(1) The amount of the first year insurer or other entity shall, for
at least six (6) years, pay to the insurance producer or other
representative an annual commission for selling or servicing the
policy. may not exceed two hundred percent (200%) of the
amount of the commission paid in the second year.
(2) The amount of commission provided in years after the second
first year must be equal to the amount provided in the second
determined based on the premium charged for the long term
care insurance policy during the first year.
(3) A commission must be provided each year for at least five (5)
years after the first year.
(b) If an existing long term care policy or certificate is replaced, the
insurer or other entity that issues the replacement policy may not
provide, and its insurance producer may not accept, a commission in
an amount greater than the renewal commission payable by the
replacing insurer on renewal policies, unless the benefits of the
replacement policy or certificate are clearly and substantially greater
than the benefits under the replaced policy or certificate.
(c) This section does not apply to the following:
(1) Life insurance policies and certificates.
(2) A policy or certificate that is sponsored by an employer for the
benefit of:
(A) the employer's employees; or
(B) the employer's employees and their dependents.
(b) This SECTION expires December 31, 2013.
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