Ind. Code § 27-8-8-6 – Assessments

(a) For the purpose of providing funds necessary to carry out the powers and duties of the association and necessary to pay administrative costs and expenses incurred by the commissioner in supervising the association and discharging the commissioner's obligations under this chapter, the board shall assess the member insurers, separately for each account, at a time and for amounts as the board finds necessary. Assessments are due not less than thirty (30) days after prior written notice to the member insurers and accrue interest at six percent (6%) per annum on and after the due date.
(b) There are two (2) classes of assessments as follows:
1. (1) Class A assessments are assessments that are authorized and called by the board for the purpose of meeting administrative and legal costs and other expenses. Class A assessments may be authorized and called whether or not related to a particular impaired insurer or insolvent insurer.
2. (2) Class B assessments are assessments that are authorized and called by the board to the extent necessary to carry out the powers and duties of the association under this chapter with regard to an impaired insurer or insolvent insurer.
(c) The amount of a Class A assessment must be determined by the board and may be authorized and called on a pro rata or non-pro rata basis. If pro rata, the board may provide that the assessment be credited against future Class B assessments.
(d) The amount of a Class B assessment, except for assessments related to long term care insurance, must be allocated for assessment purposes:
1. (1) between the accounts; and
2. (2) among the subaccounts of the life insurance and annuity account;
  under an allocation formula that may be based on the premiums or reserves of the impaired insurer or insolvent insurer or another standard considered by the board in the board's sole discretion as fair and reasonable under the circumstances.
(e) The amount of a Class B assessment related to long term care insurance must be allocated for assessment purposes according to the following:
1. (1) The allocation to:
  1. (A) accident and health insurance member insurers is fifty percent (50%) of the assessment; and
  2. (B) life insurance and annuity member insurers is fifty percent (50%) of the assessment.
2. (2) The share of the assessment that must be allocated to the life insurance and annuity account must be determined as follows:
  1. (i) The health account.
  2. (ii) The life insurance and annuity account.
    STEP TWO: Determine the remainder of:
  3. (i) fifty-hundredths (0.50); minus
  4. (ii) the life insurance and annuity member insurers' share of the health account.
    STEP THREE: Determine the remainder of:
  5. (i) the life insurance and annuity member insurers' share of the life insurance and annuity account; minus
  6. (ii) the life insurance and annuity member insurers' share of the health account.
    STEP FOUR: Divide the remainder determined under STEP TWO by the remainder determined under STEP THREE.
    For purposes of this subsection, "life insurance and annuity member insurer" means a member insurer for which the sum of the member insurer's assessable life insurance premiums and annuity premiums is equal to or greater than the member insurer's total assessable health insurance premiums, including assessable health maintenance organization premiums and excluding assessable premiums written for disability insurance and long term care insurance. For purposes of this subsection, "accident and health insurance member insurer" means a member insurer that is not a life insurance and annuity member insurer. For purposes of this subsection, assessable premiums must be measured within Indiana.
  STEP ONE: Determine the life insurance and annuity member insurers' share of the following:
(f) Class B assessments against member insurers for each account and subaccount with respect to an impaired insurer or insolvent insurer must be allocated among the assessed member insurers in the proportion that the premiums received in Indiana by each assessed member insurer on policies and contracts covered by the account or subaccount during the assessment base year for the impaired insurer or insolvent insurer bears to premiums received in Indiana by all assessed members on policies and contracts covered by the same account or subaccount during the same assessment base year.
(g) Assessments for funds to meet the requirements of the association with respect to an impaired insurer or insolvent insurer must not be authorized or called until necessary to implement the purposes of this chapter. Classification of assessments under subsection
(b) and computation of assessments under subsections (c), (d), (e), and
(f) must be made with a reasonable degree of accuracy, recognizing that exact determinations are not always possible. The association shall notify each member insurer of the member insurer's anticipated share of an assessment that has been authorized but not yet called not more than one hundred eighty (180) days after the assessment is authorized.
(h) The association may abate or defer, in whole or in part, the assessment of a member insurer if, in the opinion of the board, payment of the assessment would endanger the ability of the member insurer to fulfill its policy and contract obligations. In the event an assessment against a member insurer is abated or deferred in whole or in part, the amount by which the assessment is abated or deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in this section. Once the conditions that caused a deferral have been removed or rectified, the member insurer shall pay assessments that were deferred under a repayment plan approved by the association.
(i) Subject to subsection (j), the total of all assessments authorized by the association in one (1) calendar year against a member insurer for a given subaccount of the life insurance and annuity account or for the health account with respect to any single assessment base year must not exceed two percent (2%) of the member insurer's premiums received in Indiana on the policies and contracts covered by the subaccount or account during the applicable assessment base year.
(j) If two (2) or more assessments are authorized in one (1) calendar year with respect to impaired insurers or insolvent insurers having different assessment base years, the annual premium used for purposes of determining the aggregate assessment percentage limitation referenced in subsection (i) must be equal to the higher of the annual premiums for the applicable subaccount or account as calculated under this section.
(k) If the maximum assessment, together with other assets of the association in an account, does not provide in one (1) year in the account an amount sufficient to carry out the responsibilities of the association, additional funds must be assessed as soon as permitted by this chapter.
(l) The board may provide in the plan of operation a method of or procedure for allocating funds among claims relating to one (1) or more impaired insurers or insolvent insurers when the maximum assessment is insufficient to cover anticipated claims.
(m) If the maximum assessment for a subaccount of the life insurance and annuity account in one (1) year does not provide an amount sufficient to carry out the responsibilities of the association, the board shall, under subsection (f), access the other subaccounts of the life insurance and annuity account for the necessary additional amount, subject to the maximum stated in subsections (i) and (j).
(n) The board may, by an equitable method or procedure as established in the plan of operation, refund to member insurers, in proportion to the contribution of each member insurer to the account, the amount by which the assets of the account exceed the amount the board determines is necessary to carry out the obligations of the association with regard to the account, including assets accruing from assignment, subrogation, net realized gains, and income from investments. A reasonable amount may be retained in an account to provide funds for the continuing expenses of the association and for the future discharge of the association's obligations.
(o) It is proper for a member insurer, in determining its premium rates and policyowner dividends as to any type of insurance within the scope of this chapter, to consider the amount reasonably necessary to meet its assessment obligations under this chapter.
(p) The association shall issue to each member insurer paying an assessment under this chapter, other than a Class A assessment, a certificate of contribution, in a form prescribed by the commissioner, for the amount of the assessment paid. All outstanding certificates are of equal dignity and priority without reference to amounts or dates of issue. A certificate of contribution may be shown by the member insurer in its financial statement as an asset in the form and for the amount and period of time as the commissioner may approve.
As added by Acts 1978, P.L.129, SEC.3. Amended by P.L.16-1984, SEC.17; P.L.166-1986, SEC.2; P.L.130-1994, SEC.45; P.L.116-1994, SEC.63; P.L.193-2006, SEC.18; P.L.208-2018, SEC.19.