2023 Indiana Code › Title 27. Insurance › Article 1. Department of Insurance › Chapter 40. Entry of Unauthorized Alien Companies › 27-1-40-4. Trust Account; Requirements; Trust Agreement

Sec. 4. (a) A trust account established under section 3(2) of this chapter must contain, at all times, an amount equal to the United States branch's reserves and other liabilities, plus the:
(1) minimum capital and surplus requirement; or
(2) authorized control level risk based capital requirement;
whichever is greater, that applies to a domestic company granted a certificate of authority under this title to transact the same kind of insurance business as the United States branch transacts.
(b) One (1) or more trustees must be appointed to administer the trust.
(c) A trust agreement for a trust account established under section 3(2) of this chapter, and amendments to the trust agreement:
(1) must be authenticated in a manner prescribed by the commissioner; and
(2) are effective only when approved by the commissioner after the commissioner finds all of the following:
(A) The trust agreement and amendments are sufficient in form and in conformity with law.
(B) All trustees appointed under subsection (b) are eligible to serve as trustees.
(C) The trust agreement is adequate to protect the interests of the beneficiaries of the trust.
(d) The commissioner may withdraw an approval granted under subsection (c)(2) if, after notice and hearing, the commissioner determines that one (1) or more of the conditions required under subsection (c)(2) for approval no longer exist.
(e) The commissioner may approve modifications of, or variations in, a trust agreement under subsection (c) if the modifications or variations are not prejudicial to the interests of Indiana residents, United States policyholders, and creditors of the United States branch.
(f) A trust agreement for a trust account established under section 3(2) of this chapter must contain provisions that:
(1) vest legal title to trust assets in the trustees and lawfully appointed successors of the trustees;
(2) require that all assets deposited in the trust account be continuously kept in the United States;
(3) provide for appointment of a new trustee in case of a vacancy, subject to the approval of the commissioner;
(4) require that the trustees continuously maintain a record sufficient to identify the assets of the trust account;
(5) require that the trust assets consist of:
(A) cash;
(B) investments of the same kind as the investments in which funds of a domestic company may be invested; and
(C) interest accrued on the cash and investments specified in clauses (A) and (B), if collectible by the trustees;
(6) establish that the trust:
(A) is for the exclusive benefit, security, and protection of:
(i) United States policyholders of the United States branch; and
(ii) United States creditors of the United States branch after all obligations to policyholders are paid; and
(B) shall be maintained as long as any liability of the United States branch arising out of the United States branch's insurance transactions in the United States is outstanding; and
(7) establish that trust assets, other than income as specified in subsection (g), may not be withdrawn or permitted by the trustees to be withdrawn without the approval of the commissioner, except for any of the following purposes:
(A) To make deposits required by the law of any state for the security or benefit of all policyholders of the United States branch in the United States.
(B) To substitute other assets permitted by law and at least equal in value and quality to the assets withdrawn, upon the specific written direction of the United States manager of the United States branch when the United States manager is empowered and acting under general or specific written authority previously granted or delegated by the alien company's board of directors.
(C) To transfer the assets to an official liquidator or rehabilitator under a court order.
(g) A trust agreement for a trust account established under section 3(2) of this chapter may provide that income, earnings, dividends, or interest accumulations of the trust assets may be paid over to the United States manager of the United States branch upon request of the United States manager if the total amount of trust assets following the payment to the United States manager is not less than the amount required under subsection (a).
(h) A trust agreement for a trust account established under section 3(2) of this chapter may provide that written approval of the insurance supervising official of another state in which:
(1) trust assets are deposited; and
(2) the United States branch is authorized to transact insurance business;
is sufficient, and approval of the commissioner is not required, for withdrawal of the trust assets in the other state if the amount of total trust assets after the withdrawal will not be less than the amount required under subsection (a). However, the United States branch shall provide written notice to the commissioner of the nature and extent of the withdrawal.
(i) The commissioner may at any time:
(1) make examinations of the trust assets of a United States branch that holds a certificate of authority under this chapter, at the expense of the United States branch; and
(2) require the trustees to file a statement, on a form prescribed by the commissioner, certifying the assets of the trust account and the amounts of the assets.
(j) Refusal or neglect of a trustee to comply with this section is grounds for:
(1) the revocation of the United States branch's certificate of authority; or
(2) the liquidation of the United States branch.
As added by P.L.173-2007, SEC.20.