Authority: IC 34-18-3-7; IC 34-18-5-2; IC 34-18-5-4; IC 34-18-6-6

Affected: IC 27-1; IC 27-4-5-2; IC 34-18-2-14; IC 34-18-3; IC 34-18-4; IC 34-18-15-4; IC 34-18-17

Sec. 2.5. (a) A health care provider may use a policy of insurance issued by any of the following types of insurer as proof of financial responsibility:

1. (1) An insurance company holding a certificate of authority from the department under IC 27-1-6 or IC 27-1-17.
2. (2) A risk retention group domiciled in Indiana or a foreign risk retention group registered with the department.

3. (3) An insurer that does not hold a certificate of authority from the department through one (1) of the following:

   1. (A) A surplus lines transaction under IC 27-1-15.8.
   2. (B) An industrial insured transaction under IC 27-4-5-2(a)(8).
4. (4) A captive insurer registered with the department under IC 27-1-2-2.3.

(b) The commissioner has the right to review the financial condition of any insurer used as proof of financial responsibility as follows:

1. (1) An insurer shall have adequate assets to cover the reserves associated with all potential liabilities that are neither fronted by, nor reinsured with, an insurer. The commissioner may require an insurer to increase the funding if it is determined that the insurer's financial condition poses a financial risk to the PCF.
2. (2) The commissioner may disapprove the use of an insurer as proof of financial responsibility if the commissioner determines, after notice and an opportunity to be heard, the insurer's financial condition poses a financial risk to the PCF. A disapproval must be in writing and served upon the insurer. If the insurer uses an agent to file proof of financial responsibility, service on that agent shall be considered service on the insurer.

(c) Upon request of the commissioner, an insurer shall provide a copy of the policy form and premium rates used as proof of financial responsibility.

(d) Claims made coverage or occurrence coverage may be used as proof of financial responsibility. No other policy type of coverage may be used as proof of financial responsibility until the policy form is:

1. (1) submitted to the medical malpractice division of the department; and
2. (2) approved by the commissioner, in writing, specifically for use as proof of financial responsibility under IC 34-18-3 and IC 34-18-4.

(e) The health care provider's coverage with the PCF is of the same coverage type and scope as the policy used for proof of financial responsibility. However, the PCF will not allow retroactive coverage that begins before the date of issue of the first policy of insurance from any insurer used as proof of financial responsibility for the PCF.

(f) A health care provider who fails to purchase a reporting endorsement policy will not be allowed PCF coverage for any claim made after the termination date of the final claims made coverage used as proof of financial responsibility for the PCF, unless the underlying insurer considers the claim to be covered under its policy language because it was previously reported.

(g) In the event a policy of insurance is rescinded, the health care provider's status as a qualified health care provider is similarly rescinded. The department will refund any surcharge that was received for the period that was subject to the rescission. The insurer shall notify the department within ten (10) days of any policy that is rescinded.

(h) If an insurer is placed into insolvency or receivership and the department has not previously disapproved the insurer as acceptable for establishing financial responsibility under subsection (b), the following apply:

1. (1) The health care provider remains a qualified health care provider.
2. (2) The PCF is not responsible for any amounts due by the health care provider except as provided in IC 34-18-15-4.
3. (3) The PCF does not assume the insurer's obligation to pay costs to defend a claim.

(Department of Insurance; 760 IAC 1-21-2.5; filed Feb 2, 2007, 3:08 p.m.: 20070228-IR-760060032FRA; filed Apr 18, 2011, 11:34 a.m.: 20110518-IR-760100245FRA; readopted filed Nov 26, 2013, 3:43 p.m.: 20131225-IR-760130479RFA; filed May 18, 2018, 2:25 p.m.: 20180613-IR-760180069FRA; readopted filed Nov 19, 2019, 9:18 a.m.: 20191218-IR-760190497RFA; readopted filed Oct 22, 2025, 3:17 p.m.: 20251119-IR-760240637RFA)