IDOI had jurisdiction to regulate activities where practical function was the provision of insurance

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Employee Benefit Managers, Inc. of America and its President, Charles Belch (“Belch”), (collectively, “EBM”) appeal a decision of the Allen Superior Court affirming an order of the Indiana Department of Insurance (“the Department”) that, in relevant part, revoked insurance licenses held by EBM. EBM has presented the following issues for review:
(1) Whether the Department’s order is ultra vires because the Department lacked subject matter jurisdiction over EBM;
(2) Whether there is substantial evidentiary support for:
    (a) the finding that EBM was dishonest and financially irresponsible,
    (b) the finding that EBM failed to arrange for the payment of unfunded claims,
    (c) the finding that EBM violated paragraph 5(e) of the Agreed Entry; and
(3) Whether EBM was denied due process because the Department failed to conduct sufficient compliance hearings.

Conclusion (slip op. at 12):  The Department had jurisdiction over EBM to regulate activities where the practical function was the provision of insurance, and to oversee compliance with the Agreed Entry. The Department’s findings of fact with regard to non-compliance rested upon substantial evidence. Finally, EBM was not denied due process.  Affirmed.
Key Analysis (slip op. at 9, 11-12):  For all practical purposes, EBM was involved in health insurance as it used a common fund to indemnify persons against contingent events . . . the Department did not lack authority to oversee compliance with the agreement or revoke insurance licenses in the event of non-compliance . . . EBM claims that its substantial efforts to comply should be accepted in lieu of full compliance. However . . . the substantial evidence standard is met and we may not disturb the challenged decision . . . EBM’s position is that the Commissioner was required to set another hearing even if it was apparent to both parties that the hearing would be a mere formality. We disagree . . . EBM has demonstrated no deprivation of due process.

About Bose McKinney & Evans LLP

Bose McKinney & Evans LLP is a business law firm, headquartered in Indianapolis, Indiana, serving both publicly held and privately held businesses, governmental entities and high-growth industries. Our clients include Fortune 100 companies, international manufacturers, national and regional financial institutions, agribusinesses, sports teams, university-incubated start-ups, media, utilities, cities and schools, to name a few. We strive to build strong relationships with our clients as key business advisors, to exceed expectations in the quality of our work, to be knowledgeable about our clients’ businesses and sectors, to be responsive to service needs and to continually seek to improve the delivery of client services. Our ultimate focus is on our clients.
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