Indiana Administrative Code › Title 760 - DEPARTMENT OF INSURANCE › Article 1 - GENERAL PROVISIONS › Rule 41 - Insurance Administrators › Section 41-4 - Bond or cash deposit

Current through July 10, 2024
Authority: IC 27-1-25-14
Affected: IC 27-1
Sec. 4.
(a) Every
				administrator shall file and maintain with the commissioner, as obligee, a
				surety bond, issued by a surety company authorized to transact business in this
				state. The amount of the bond shall be not less than ten percent (10%) of the
				amount of total funds handled involving Indiana residents or twenty-five
				thousand dollars ($25,000), whichever is greater, but the amount of the bond
				shall not exceed two hundred thousand dollars ($200,000). For purposes of
				fixing the amount of the bond, the amount of total funds handled is determined
				by the amount of premium collected or the amount in dollars of administered
				claims handled during the preceding calendar year, whichever is greater,
				involving Indiana residents, as shown by the financial statement filed with the
				commissioner. If no funds were handled during the preceding year, the amount of
				the bond is twenty-five thousand dollars ($25,000). The bond must be on a form
				approved by the commissioner.
(b)
				An administrator may furnish a cash deposit to meet the requirements of this
				section. Said cash deposit shall be in the form of a certificate of deposit and
				must be held jointly in the name of the administrator and the commissioner. The
				amount of any such cash deposit shall be fixed in the same manner as the amount
				of a surety bond, as described in subsection (a). When an administrator is
				affiliated with an authorized insurer, such insurer may satisfy the
				administrator's cash deposit requirement by adding to the insurer's required
				deposits pursuant to IC 27-1-6-14, IC 27-1-6-15, and IC 27-1-12-11, the amount
				required to satisfy the requirements of this section. All income from a deposit
				required by this section belongs to the depositing administrator or insurer and
				may be paid to it as it becomes available.
(c) If an administrator is covered by a bond
				required by the Employee Retirement Income Security Act of 1974 (ERISA),
				29
				U.S.C. 1112, because the administrator is
				providing services to or for the benefit of an employee benefit plan, as that
				term is defined in
				29
				U.S.C. 1002(1), the
				administrator's bond coverage will be deemed to meet the requirements of this
				section, but only to the extent that the administrator is providing services to
				or for the benefit of such employee benefit plans. To the extent that an
				administrator's activities are not subject to ERISA, the requirements of
				subsection (a) will apply.
(d) Any
				administrator seeking to have bond coverage under ERISA deemed to meet the
				requirements of this section, pursuant to subsection (c), shall provide
				verification to the commissioner, annually at the time of submission of the
				administrator's application, on a form prescribed by the commissioner, an
				affidavit that sets forth the following:
(1)
				The amount of funds handled in the preceding calendar year.
(2) The percentage of funds handled directly
				attributable to ERISA plans.
A copy of the bond or bonds providing coverage to the
				  administrator shall be attached to the affidavit. The burden of establishing
				  proof of coverage under a bond or bonds required by ERISA pursuant to
				  subsections (c) through (d)
[this subsection]
is that of the
				  administrator.