Indiana Insurance Code & Regulations

Legal Framework

Title 27: Indiana Insurance Code

Title 27 of the Indiana Code is the primary statutory source for insurance regulation:

Title 760: Administrative Code

Title 760 contains regulations adopted by IDOI:

• Chapter 1: Administrative procedures
• Chapter 5: Producer licensing rules
• Chapter 6: Continuing education regulations
• Chapter 7: Market conduct standards

Exam Tip: Title 27 = Statutes (laws passed by legislature). Title 760 = Regulations (rules created by IDOI).

Prohibited Practices

Unfair Discrimination

Indiana prohibits unfair discrimination in P&C insurance:

Prohibited Factors for Property Insurance:

• Race, color, religion
• National origin
• Sex, gender identity
• Sexual orientation
• Disability (unless actuarially justified)
• Source of income (e.g., public assistance)

Allowed Rating Factors:

• Loss history
• Credit-based insurance scores (with restrictions)
• Geographic location
• Property characteristics
• Deductible selection

Rebating

Rebating is strictly prohibited in Indiana.

Rebating Defined: Offering any inducement not specified in the policy as an incentive to purchase insurance.

Prohibited Examples:

• Cash payments or gifts to the applicant
• Premium discounts not approved by the insurer
• Sharing the commission with the insured
• Services not specified in the policy

Allowed:

• Discounts approved by the insurer and filed with IDOI
• Educational materials
• Normal business courtesies (meals, reasonable entertainment)

Penalty: Violation can result in license suspension or revocation plus fines up to $5,000 per violation.

Misrepresentation

Producers must not misrepresent the terms, benefits, or conditions of any policy.

Common Misrepresentation Violations:

• Stating coverage exists when it doesn't
• Exaggerating policy benefits
• Minimizing exclusions or limitations
• Making false comparisons to other policies
• Representing that dividends are guaranteed

Penalty: License suspension/revocation and civil penalties.

Twisting

Twisting means misrepresenting an existing policy to induce a policyholder to cancel and replace it with a new policy to the insured's detriment.

Elements:

1. Misrepresentation of material facts
2. Regarding existing or proposed coverage
3. To induce replacement
4. Resulting in harm to the policyholder

Producer Responsibilities

Errors & Omissions Insurance

Indiana requires producers to maintain professional liability coverage:

Options:

• Errors & Omissions (E&O) Insurance policy
• Surety bond
• Other approved financial security

Minimum Coverage:

• Determined by producer's book of business
• Must be maintained continuously
• Proof required at license renewal

Record Keeping

Producers must maintain records for 5 years:

• Applications and policy documents
• Premium payment records
• Commission statements
• Customer correspondence
• Complaint records
• Training/CE certificates

Reporting Requirements

Administrative Actions (30 days):

• License actions in other states
• Criminal charges or convictions
• Regulatory investigations

Change of Address (30 days):

• Business address changes
• Residence address changes
• Email address changes

Change of Name (30 days):

• Legal name changes
• Doing business as (DBA) names

Replacement Policies

When replacing an existing policy, producers must:

1. Provide Notice to Applicant: Written notice comparing existing and proposed coverage
2. Obtain Signed Statement: Applicant acknowledges replacement
3. Submit to Insurer: Copy of replacement notice and statement
4. Maintain Records: Keep all replacement documents for 5 years

Cancellation & Non-Renewal

Property Insurance Cancellation

First 60 Days (New Policy):

• Insurer may cancel for any reason with 10 days' notice
• Except: Cannot cancel after insured reports a claim

After 60 Days:

• Limited grounds for cancellation:
  • Non-payment of premium
  • Material misrepresentation
  • Substantial increase in hazard
  • Loss of reinsurance
  • IDOI determination that continued coverage would be illegal

Notice Requirements

Homeowners Specific Rules

Homeowners policies cannot be non-renewed if:

• Policy has been in force 3+ years
• Insured is 60+ years old
• Unless: property has deteriorated substantially or insured has filed fraudulent claims

Consumer Protections

Free Look Period

Indiana provides a free look period for certain policies:

• Homeowners: 10-day free look (new purchases)
• Renters: 10-day free look
• Flood Insurance: 30-day free look (new purchases)

During Free Look:

• Insured may cancel for full refund
• Coverage is in force during this period
• No underwriting questions asked

Fair Claims Practices

Insurers must:

• Acknowledge Claims within 10 days
• Begin Investigation immediately
• Request Statements within 15 days if needed
• Approve or Deny within 30 days of receiving required proof of loss
• Pay Claims within 30 days of settlement agreement

Unfair Claim Practices:

• Failing to acknowledge claims promptly
• Denying claims without investigation
• Unreasonably delaying payment
• Making unreasonably low settlement offers
• Failing to provide written explanations for denials

Right to Appeal

Policyholders have the right to:

• File complaints with IDOI Consumer Services
• Request review of claim denials
• Pursue legal action in Indiana courts
• Seek arbitration if policy provides for it