Sec. 39. (a) As used in this section, “direct response solicitation” means a solicitation through a sponsoring or endorsing entity through the mails, telephone, or other mass communications media.

     (b) As used in this section, “sponsoring or endorsing entity” means an organization that has arranged for the offering of a program of insurance in a manner that communicates that:

Terms Used In Indiana Code 27-1-12-39

  • Contract: A legal written agreement that becomes binding when signed.
  • Dependent: A person dependent for support upon another.
  • Insurance: means a contract of insurance or an agreement by which one (1) party, for a consideration, promises to pay money or its equivalent or to do an act valuable to the insured upon the destruction, loss or injury of something in which the other party has a pecuniary interest, or in consideration of a price paid, adequate to the risk, becomes security to the other against loss by certain specified risks; to grant indemnity or security against loss for a consideration. See Indiana Code 27-1-2-3
  • insurer: means a company, firm, partnership, association, order, society or system making any kind or kinds of insurance and shall include associations operating as Lloyds, reciprocal or inter-insurers, or individual underwriters. See Indiana Code 27-1-2-3
  • policyholder: means one who is a holder of a contract of insurance in an insurance company. See Indiana Code 27-1-2-3
(1) eligibility for participation in the program is dependent upon affiliation with the organization; or

(2) the organization encourages participation in the program.

     (c) This section applies to any program of insurance that, if issued on a group basis, would not conform to one (1) of the descriptions in section 37 of this chapter.

     (d) If compensation of any kind will or may be paid, under a program of insurance described in subsection (c), to:

(1) a policyholder or sponsoring or endorsing entity in the case of a group policy; or

(2) a sponsoring or endorsing entity in the case of individual, blanket, or franchise policies marketed by means of direct response solicitation;

the insurer shall cause to be distributed to prospective insureds under the program a written notice that compensation will or may be paid under the program as indicated in subdivision (1) or (2).

     (e) The notice required under subsection (d) shall be given:

(1) whether the compensation that will or may be paid is direct or indirect; and

(2) whether the compensation is to be paid to or retained by:

(A) the policyholder or sponsoring or endorsing entity; or

(B) a third party, at the direction of the policyholder or sponsoring or endorsing entity, or any entity affiliated with the sponsoring or endorsing entity by way of ownership, contract, or employment.

     (f) The notice required under subsection (d) shall be placed on or accompany any application or enrollment form provided prospective insureds.

As added by P.L.254-1985, SEC.3.

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