§ 27-11-8-6 — Noncompliance with limitations on transaction of business; injunction; hearing; liquidation of society; receivership; voluntary determination to discontinue business

Indiana § 27-11-8-6

• Jurisdiction: Indiana
• Title 27: INSURANCE
• Art. 11: FRATERNAL BENEFIT SOCIETIES
• Ch. 8: Regulation

Text

(a) When the commissioner upon investigation
finds that a domestic society:
(1) has exceeded its powers;
(2) has failed to comply with this chapter;
(3) is not fulfilling its contracts in good faith;
(4) has a membership of less than four hundred (400) after an
existence of one (1) year or more; or
(5) is conducting business fraudulently or in a manner hazardous
to its members, creditors, the public, or the business;
the commissioner shall in writing notify the society of the deficiency
or deficiencies, state the reasons for the commissioner's dissatisfaction,
and require that the deficiency or deficiencies that exist be corrected.
After notice, the society shall have thirty (30) days in which to comply
with the commissioner's request for correction, and, if the society fails
to comply, the commissioner shall notify the society of the findings of
noncompliance and require the society to show cause on a date named
why it should not be enjoined from carrying on any business until the
violation complained of shall have been corrected, or why an action in
quo warranto should not be commenced against the society.
(b) If on that date the society does not present good and sufficient
reasons why it should not be enjoined or why action should not be
commenced, the commissioner may present the facts relating thereto
to the attorney general who shall, if the attorney general considers the
circumstances warrant, commence an action to enjoin the society from
transacting business or in quo warranto.
(c) The court shall notify the officers of the society of a hearing. If
after a full hearing it appears that the society should be enjoined or
liquidated or a receiver appointed, the court shall enter the necessary
order. No society so enjoined shall have the authority to do business
until:
(1) the commissioner finds that the violation complained of has
been corrected;
(2) the costs of the action have been paid by the society if the
court finds that the society was in default as charged;
(3) the court has dissolved its injunction; and
(4) the commissioner has reinstated the certificate of authority.
(d) If the court orders the society liquidated, it shall be enjoined
from carrying on any further business, whereupon the receiver of the
society shall proceed at once to take possession of the books, papers,
money, and other assets of the society and, under the direction of the
court, proceed to close the affairs of the society and to distribute its
funds to those entitled to the funds.
(e) No action under this section shall be recognized in any court of
this state unless brought by the attorney general upon request of the
commissioner. Whenever a receiver is to be appointed for a domestic
society, the court shall appoint the commissioner as the receiver.
(f) The provisions of this section relating to hearing by the
commissioner, action by the attorney general at the request of the
commissioner, hearing by the court, injunction, and receivership shall
be applicable to a society that shall voluntarily determine to
discontinue business.

Legislative History

As added by P.L.262-1985, SEC.1.