Sec. 15. (a) If any health spa fails, or is alleged to have failed, to meet its obligations prior to the commencement of health spa services, the secretary of state shall hold a hearing and determine whether there has been such a failure, determine those persons who, as buyers, have sustained financial losses recoverable under the bond and, if appropriate, distribute the bond proceeds to the persons sustaining losses, to the extent of their losses.

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Terms Used In Indiana Code 24-5-7-15

  • Health spa: means any business entity, other than an entity that is exempt from taxation under Section 501 of the Internal Revenue Code, offering health spa services to the public. See Indiana Code 24-5-7-1
  • Health spa services: means instruction, training, or assistance in physical culture, bodybuilding, exercising, reducing, figure development, or any other health spa service, for the use of the facilities of a health spa, figure salon, weight loss clinic, gymnasium, or other facility used for the delivery of health spa services, or for membership in any group, club, association, or organization formed to deliver health spa services. See Indiana Code 24-5-7-1
  • Seller: means a seller of services under a contract for health spa services. See Indiana Code 24-5-7-1
     (b) Actions upon the bond and the right to payment under the bond extend solely to the secretary of state. However, if the secretary of state has not initiated an action upon the bond by scheduling and holding a hearing within thirty (30) days of a written request to do so, any claimant may initiate an action in the circuit court of Marion County, Indiana, to require the secretary of state to take action.

     (c) If, upon a hearing, the secretary of state determines that the claims of persons who have sustained financial losses recoverable under the seller‘s bond exceed the amount of the bond proceeds, the proceeds shall be prorated among those persons according to the ratio that each person’s loss bears to the total amount of all proven losses.

     (d) The determination of the secretary of state as to liability under the bond and the amount distributed under the bond is binding upon the principal and surety of the bond.

     (e) All hearings held under this section shall be held in accordance with IC 4-21.5-3.

     (f) The existence of the bond and the bond recovery procedure in no way affect or alter any other right or remedy which a person may have under applicable law.

As added by P.L.249-1983, SEC.1. Amended by P.L.7-1987, SEC.109.

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