§ 27-1-13-8 — Estimating condition; classification of items as assets or liabilities; reserves

In estimating the condition of any company
which makes insurance comprised within class 2 or class 3 of IC 27-1-5-1, the department shall allow only such investments as assets as
are authorized by the laws of this state at the date of the investigation,
but unpaid premiums on policies or renewals written within three (3)
months shall be admitted as available resources. It shall charge as
liabilities in addition to all other outstanding indebtedness of the
company the capital stock, if any, and the following:
(a) The premium reserve on policies in force equal to fifty percent
(50%) of the gross premiums charged for covering risks, less the
reserve computed by the same method, on reinsurance in force.
However, the department may, in its discretion, charge a premium
reserve equal to the unearned portions of the gross premium charged
by computing on each respective risk from the date of the issuance of
the policy, less the reserve, computed by the same method, on
reinsurance in force.
(b) In the case of policies of marine or inland navigation or
transportation insurance it shall charge as a liability fifty percent (50%)
of the amount of the premiums written in such policies upon yearly
risks and upon risks covering not more than one (1) passage not
terminated and the full amount of premiums written in policies upon all
other such risks not terminated.
(c) The reserve for outstanding losses at least equal to the aggregate
estimated amounts due or to become due on account of all losses or
claims of which the company has received notice. However, the loss
reserve shall also include the estimated liability on any notices received
by the company of the occurrence of any event which may result in a
loss and the estimated liability for all losses which have occurred but
on which no notice has been received. For the purpose of such reserves,
the company shall keep a complete and itemized record showing all
losses and claims on which it has received notice, including all notices
received by it of the occurrence of any event which may result in a loss.
(d) Any other reserves as are required by or provided for in the
applicable Annual Statement Blanks furnished to companies under IC 27-1-3-13.
(e) Whenever, in the judgment of the department, the loss reserves
calculated in accordance with subsections (a), (b), (c), and (d) are
inadequate, it may in its discretion require a company to maintain
additional reserves.
Formerly: Acts 1935, c.162, s.179. As amended by
P.L.260-1983, SEC.7; P.L.124-2018, SEC.32.