Sec. 11. (a) Except as provided in section 14 of this chapter, a service contract may not be offered, sold, or issued in Indiana unless the provider complies with one (1) of the following subdivisions:
(1) All of the following conditions are met:
(A) The provider is insured under a service contract reimbursement policy issued by an insurer authorized to do business in Indiana.
(B) True and correct copies of the service contract reimbursement policy have been filed with the commissioner.
(C) The service contract conspicuously:
(i) states that the obligations of the provider to the holder are covered under the service contract reimbursement policy; and
(ii) sets forth the name and address of the insurer that issued the service contract reimbursement policy.
(2) The provider maintains a funded reserve account for its obligations under each service contract issued by the provider in Indiana and outstanding, subject to the following:
(A) The reserves are calculated at not less than forty percent (40%) of the gross consideration received, then minus the amount of claims paid under the service contracts.
(B) The service contract conspicuously states that the obligations of the provider under the service contract are backed by the full faith and credit of the provider.
A reserve account maintained under subdivision (2) is subject to examination and review by the commissioner under section 15 of this chapter.
(b) A filing described in subsection (a)(1)(B) is for informational purposes only and is not subject to approval by the commissioner.
As added by P.L.129-2014, SEC.10.