§ 27-1-3-20 — Certificate of authority; issuance; necessity; removal of unqualified officers or directors; violations; civil penalties

(a) The commissioner may issue a certificate
of authority to any company when it shall have complied with the
requirements of the laws of this state so as to entitle it to do business
in Indiana. The certificate shall be issued under the seal of the
department authorizing and empowering the company to make the kind
or kinds of insurance specified in the certificate. No certificate of
authority shall be issued until the commissioner has found that:
(1) the company has submitted a sound plan of operation; and
(2) the general character and experience of the incorporators,
directors, and proposed officers is such as to assure reasonable
promise of a successful operation, based on the fact that such
persons are of known good character and that there is no good
reason to believe that they are affiliated, directly or indirectly,
through ownership, control, management, reinsurance
transactions, or other insurance or business relations with any
person or persons known to have been involved in the improper
manipulation of assets, accounts, or reinsurance.
No certificate of authority shall be denied, however, under subdivision
(1) or (2) until notice, hearing, and right of appeal has been given as
provided in IC 4-21.5.
(b) Every company possessing a certificate of authority shall notify
the commissioner of the election or appointment of every new director
or principal officer, within thirty (30) days thereafter. If in the
commissioner's opinion such a new principal officer or director does
not meet the standards set forth in this section, the commissioner shall
request that the company effect the removal of such persons from
office. If such removal is not accomplished as promptly as under the
circumstances and in the opinion of the commissioner is possible, then
upon notice to both the company and such principal officer or director
and after notice, hearing, and right of appeal pursuant to IC 4-21.5, and
after a finding that such person is incompetent or untrustworthy or of
known bad character, the commissioner may order the removal of such
person from office and may, unless such removal is promptly
accomplished, suspend the company's certificate of authority until there
is compliance with such order.
(c) No company shall transact any business of insurance or hold
itself out as a company in the business of insurance in Indiana until it
shall have received a certificate of authority as prescribed in this
section.
(d) No company shall make, issue, deliver, sell, or advertise any
kind or kinds of insurance not specified in the company's certificate of
authority.
(e) Notwithstanding IC 27-1-2-4, a director or officer of a company
who knowingly, intentionally, or recklessly violates subsection (c) or
(d) commits a Level 6 felony.
(f) The commissioner shall impose a civil penalty of not more than
twenty-five thousand dollars ($25,000) on a director or officer of a
company that violates subsection (c) or (d). The amount imposed must
be proportionate to the costs incurred by the department of insurance,
other governmental entities, and the courts in regulating the activity of
the director, officer, or company who violates subsection (c) or (d). A
civil penalty imposed under this subsection may be enforced in the
same manner as a civil judgment.
Formerly: Acts 1935, c.162, s.27; Acts 1967, c.127, s.1; Acts
1975, P.L.278, SEC.1. As amended by P.L.7-1987, SEC.135;
P.L.67-1998, SEC.1; P.L.158-2013, SEC.296; P.L.136-2018,
SEC.145.