Section 760 IAC 1-41-4 - Bond or cash deposit 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.
Department of Insurance; 760 IAC 1-41-4; filed Sep 9, 1988, 2:10 p.m.: 12 IR 24; filed Feb 8, 1990, 5:00 p.m.: 13 IR 1176, eff Mar 1, 1990 [IC 4-22-2-36 suspends the effectiveness of a rule document for thirty (30) days after filing with the secretary of state. LSA Document #89-139 was filed Feb 8, 1990.]; readopted filed Sep 14, 2001, 12:22 p.m.: 25 IR 531; readopted filed Nov 27, 2007, 4:01 p.m.: 20071226-IR-760070717RFA