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D.C. Municipal Regulations (Last Updated: September 13, 2017) |
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Title 26. INSURANCE, SECURITIES, AND BANKING |
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SubTilte 26-A. INSURANCE |
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Chapter 26-A16. INSURANCE HOLDING COMPANY SYSTEM REGULATIONS |
Section 26-A1699. DEFINITIONS
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1699.1The following words and phrases shall have the meaning ascribed in this section. Unless the context otherwise requires, other terms found in these regulations and in Section 2 of the Act are used as defined in the said Section 2. Other nomenclature or terminology is according to the Insurance Code, or industry usage if not defined by Code.
"Executive officer" means chief executive officer, chief operating officer, chief financial officer, treasurer, secretary, controller, and any other individual performing functions corresponding to those performed by the foregoing officers under whatever title.
"Foreign insurer" shall include an alien insurer except where clearly noted otherwise.
"Material Transaction" means all sales, purchases, exchanges, loans, extensions of credit, investments, retirement of indebtedness, pledging of assets as security, transactions not in the ordinary course of business, guarantees or undertakings for the benefit of a subsidiary of affiliate, management contracts, service contracts, cost-sharing arrangements, and all reinsurance agreements that are in the amount of $25,000 or more; provided, however, that any series of transactions of similar nature which, in the aggregate, total $25,000 or in any 12-month period, shall be considered as one transaction for the purpose of this subsection.
"Ultimate controlling person" means that person which is not controlled by any other person.
APPENDIX 16-1
[To be used pursuant to the provision of Sec. 1602, 1603 and 1608.]
FORM A
STATEMENT REGARDING THE ACQUISITION OF CONTROL OF OR MERGER WITH A DOMESTIC INSURER
___
Name of Domestic Insurer
BY
___
Name of Acquiring Person (Applicant)
Filed with the Insurance Department of
___ (jurisdiction of Domicile of insurer being acquired)
Date: ___, 19 ___
Name, Title, address and telephone number of Individual to Whom Notices and Correspondence Concerning this Statement Should be Addressed: ___
ITEM 1. INSURER AND METHOD OF ACQUISITION
State the name and address of the domestic insurer to which this application relates and a brief description of how control is to be acquired.
ITEM 2. IDENTITY AND BACKGROUND OF THE APPLICANT
(a)State the name and address of the applicant seeking to acquire control over the insurer.
(b)If the applicant is not an individual, state the nature of its business operations for the past five years or for such lesser period as such person and any predecessors thereof shall have been in existence. Briefly describe the business intended to be done by the applicant and the applicant's subsidiaries.
(c)Furnish a chart or listing clearly presenting the identities of the inter-relationships among the applicant and all affiliates of the applicant. Indicate in such chart or listing the percentage of voting securities of each such person is maintained other than by the ownership or control voting securities, indicate the basis of such control. As to each person specified in such chart or listing indicate the type of organization (e.g. corporation, trust, partnership) and the state or other jurisdiction of domicile. If court proceedings involving a reorganization or liquidation are pending with respect to any such person, indicate which person, set forth the title of the court, nature of proceedings and the date when commenced.
ITEM 3. IDENTITY AND BACKGROUND OF INDIVIDUALS ASSOCIATED WITH THE APPLICANT
On the biographical affidavit, include a third party background check, and state the following with respect to (1) the applicant if (s)he is an individual or (2) all persons who are directors, executive officers or owners of 10% or more of the voting securities of the applicant if the applicant is not an individual.
(a)Name and business address;
(b)Present principal business activity, occupation or employment including position and office held and the name, principal business and address of any corporation or other organization in which such employment is carried on;
(c)Material occupations, positions, offices or employment during the last five years, giving the starting and ending dates of each and the name, principal business and address of any business corporation or other organization in which each such occupation, position, office or employment was carried on; if any such occupation, position, office or employment required by licensing or registration with any federal, state or municipal governmental agency, indicate such fact, the current status of such licensing or registration, and an explanation of any surrender, revocation, suspension or disciplinary proceedings in connection therewith.
(d)Whether or not such person has ever been convicted in a criminal proceeding (excluding minor traffic violations) during the last ten years and, if so, give the date, nature of conviction, name and location of court, and penalty imposed or other disposition of the case.
ITEM 4. NATURE, SOURCE AND AMOUNT OF CONSIDERATION
(a)Describe the nature, source and amount of funds or other considerations used or to be used in effecting the merger or other acquisition of control. If any part of the same is represented or is to be represented by funds or other consideration borrowed or otherwise obtained for the purpose of acquiring, holding or trading securities, furnish a description of the transaction, the names of the parties thereto, the relationship, if any, between the borrower and the lender, the amounts borrowed or to be borrowed, and copies of all agreements, promissory notes and security arrangements relating thereto.
(b)Explain the criteria used in determining the nature and amount of such consideration.
(c)If the source of the consideration is a loan made in the lender's ordinary course of business and if the applicant wishes the identity of the lender to remain confidential, he must specifically request that the identity be kept confidential.
ITEM 5. FUTURE PLANS OF INSURER
Describe any plans or proposals which the applicant may have to declare an extraordinary dividend, to liquidate such insurer, to sell its assets to or merged it with any person or persons or to make any other material change in its business operations, corporate structure or management.
ITEM 6. VOTING SECURITIES TO BE ACQUIRED
State the number of shares of the insurer's voting securities which the applicant, its affiliates and any person listed in Item 3 plan to acquire, and the terms of the offer, request, invitation, agreement or acquisition, and a statement as to the method by which the fairness of the proposal was arrived at.
ITEM 7. OWNERSHIP OF VOTING SECURITIES
State the amount of each class of any voting security of the insurer which is beneficially owned or concerning which there is a right to acquire beneficial ownership by the applicant, its affiliates or any person listed in Item 3.
ITEM 8. CONTRACTS, ARRANGEMENTS, OR UNDERSTANDINGS WITH RESPECT TO VOTING SECURITIES OF THE INSURER
Give a full description of any contracts, arrangement or understandings with respect to any voting security of the insurer in which the applicant, its affiliates or any person listed in Item 3 is involved, including but not limited to transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits division of losses or profits, or the giving or withholding of Proxies. Such description shall identify the persons with who such contracts, arrangements or understanding have been entered into.
ITEM 9. RECENT PURCHASE OF VOTING SECURITIES
Describe any purchase of any voting securities of the insurer by the applicant, its affiliates or any person listed in Item 3 during the 12 calendar months preceding the filing of this Statement. Include in such description the dates of purchase, the names of the purchasers, and the consideration paid or agreed to be paid therefor. State whether any such shares so purchased are hypothecated.
ITEM 10. RECENT RECOMMENDATIONS TO PURCHASE
Describe any recommendations to purchase any voting security of the insurer made by the applicant, its affiliates or any person listed in Item 3, or by anyone based upon interviews or at the suggestion of the applicant, its affiliates or any person listed in Item 3 during the 12 calendar months preceding the filing of this statement.
ITEM 11. AGREEMENTS WITH BROKER-DEALERS
Describe the terms of any agreement, contract or understanding made with any broker-dealer as to solicitation of voting securities of the insurer for tender and the amount of any fees, commissions or other compensation to be paid to broker-dealers with regard thereto.
ITEM 12. FINANCIAL STATEMENTS AND EXHIBITS
(a)Financial statements and exhibits and three-year financial projections of the insurer(s) shall be attached to this statement as an appendix, but list under this item the financial statements and exhibits so attached.
(b)The financial statements shall include the annual financial statements of the persons identified in Item 2(c) for the preceding five fiscal years (or for such lesser period as such applicant and its affiliates and any predecessors thereof shall have been in existence), and similar information covering the period from the end of such person's last fiscal year, if such information is available. Such statements may be prepared on either an individual basis, or, unless the Commissioner otherwise requires, on a consolidated basis if such consolidated statements are prepared in the usual course of business.
The annual financial statements of the applicant shall be accompanied by the certificate of an independent public accountant to the effect that such statements present fairly the financial position of the applicant and the results of its operations for the year the ended, in conformity with generally accepted accounting principles or with requirements of insurance or other accounting principles prescribed or permitted under law. If the applicant is an insurer which is actively engaged in the business of insurance, the financial statements need not be certified, provided they are based on the Annual Statement of such person filed with the insurance department of the person's domiciliary jurisdiction and are in accordance with the requirements of insurance or other accounting principles prescribed or permitted under the law and regulations of such jurisdiction.
(c)File as exhibits copies of all tender offers for, requests or invitations for, tenders of, exchange offers for, the agreements to acquire or change any voting securities of the insurer and (if distributed) of additional soliciting material relating thereto, any proposed employment, consultation, advisory or management contracts concerning the insurer, annual reports to the stockholders of the insurer and the applicant for the last two fiscal years, and any additional documents or papers required by Form A or District Regulations.
ITEM 13. SIGNATURE AND CERTIFICATION
Signature and certification required as follows:
SIGNATURE
Pursuant to the requirements of Section 4 of the Act ___ has caused this applicant to be duly signed on it behalf in the City of ___ and State of ___ on the ___ day of ___. 19 ___.
(SEAL) ___
Name of Applicant
BY ___
(Name) (Title)
Attest:
___
(Signature of Officer)
___
(Title)
CERTIFICATION
The undersigned deposes and says that (s)he duly executed the attached application dated ___, 19 ___, for and on behalf of ___ (Name of Applicant); that (s)he is the ___ (Title of Officer) of such company and that (s)he is authorized to executed and file such instrument. Deponent further says that (s)he is familiar with such instrument and the contents thereof, and that the facts therein set forth are true to the best of his/her knowledge, information and belief.
(Signature) ___
(Type or print name Beneath) ___
ITEM 13a. AGREEMENT REQUIREMENTS FOR ENTERPRISE RISK MANAGEMENT
Applicant agrees to provide, to the best of its knowledge and belief, the information required by Form F within fifteen (15) days after the end of the month in which the acquisition of control occurs.
APPENDIX 16-2
[To be used pursuant to the provision of Sec. 1602 and 1603.]
FORM B
INSURANCE HOLDING COMPANY SYSTEM ANNUAL REGISTRATION STATEMENT
Filed with the Insurance Department of the State of ___
By
___
Name of Registrant
On behalf of Following Insurance Companies
Name Address
___
Date: ___, 19 ___
Name, Title, Address and telephone number of Individual to Whom Notices and Correspondence Concerning This Statement Should Be Addressed: ___
ITEM 1. IDENTITY AND CONTROL OR REGISTRANT
Furnish the exact name of each insurer registering or being registered (hereinafter called "the Registrant"), the home office address and principal executive offices of each: the date on which each Registrant became part of the insurance holding company system and the method(s) by which control of each Registrant was acquired and is maintained.
ITEM 2. ORGANIZATIONAL CHART
Furnish a chart or listing clearly presenting the identities of any interrelationships among all affiliated persons within the insurance holding company system. The chart or listing should show the percentage of each class of voting securities of each affiliate which is owned, directly or indirectly, by another affiliate. If control of any person within the system is maintained other than by the ownership or control of voting securities, indicate the basis of such control. As to each person specified in such chart or listing indicate the type of organization (e.g., - corporation, trust, partnership) and the state or other jurisdiction of domicile.
ITEM 3. THE ULTIMATE CONTROLLING PERSON
As to the ultimate controlling person in the insurance holding company system furnish the following information:
(a)Name.
(b)Home office address.
(c)Principal executive office address.
(d)The organizational structure of the person, i.e., corporation, partnership, individual, trust, etc.
(e)The principal business of the person.
(f)The name and address of any person who holds or owns 10% or more of any class of voting security, the class of such security, the number of shares held of record or known to be beneficially owned, and the percentage of class so held or owned.
(g)If court proceedings involving a reorganization or liquidation are pending, indicate the title and location of the court, the nature of proceedings and the date when commenced.
ITEM 4. BIOGRAPHICAL INFORMATION
If the ultimate controlling person is a corporation, an organization, a limited liability company, or other legal entity, furnish the following information for the directors and executive officers of the ultimate controlling person: the individual’s name and address, his or her principal occupation and all offices and positions held during the past five (5) years, and any conviction of crimes other than minor traffic violations. If the ultimate controlling person is an individual, furnish the individual's name and address, his or her principal occupation and all offices and positions held during the past five (5) years, and any conviction of crimes other than minor traffic violations.
ITEM 5. TRANSACTIONS AND AGREEMENTS
Briefly describe the following agreements in force, and transactions currently outstanding or which have occurred during the last calendar year between the Registrant and its affiliates:
(1)Loans, other investments, or purchases, sales or exchanges of securities of the affiliates by the Registrant or of the Registrant by its affiliates:
(2)Purchases, sales or exchanges of assets;
(3)Transactions not in the ordinary course of business;
(4)Guarantees or undertakings for the benefit of an affiliate which result in an actual contingent exposure of the Registrant's assets to liability, other than insurance contracts entered into in the ordinary course of the Registrant's business;
(5)All management agreements, service contracts and all cost-sharing arrangements;
(6)Reinsurance agreements;
(7)Dividends and other distributions to shareholders;
(8)Consolidated tax allocation agreements; and
(9)Any pledge of the Registrant's stock and/or of the stock of any subsidiary or controlling affiliate, for a loan made to any member of the insurance holding company system.
No information need be disclosed if such information is not material for purposes of Section 6 of the Act.
Sales, purchases, exchanges, loan or extensions of credit, investments or guarantees involving one-half of 1% or less of the Registrant's admitted assets as of the 31st day of December next preceding shall not be deemed material. (Note: Commissioner may rule, regulation or order provide otherwise).
The description shall be in a manner as to permit the proper evaluation thereof by the Commissioner, and shall include at least the following: the nature purpose of the transaction, the nature and amounts of any payments or transfer of assets between the parties, the identity of all parties to such transaction, and relationship of the affiliated parties to the Registrant.
ITEM 6. LITIGATION OR ADMINISTRATIVE PROCEEDINGS
A brief description of any litigation or administrative proceedings of the following types, either then pending or concluded within the preceding fiscal year, to which the ultimate controlling person or any of its directors or executive officers was a party or of which the property of any such person is or was the subject; give the names of the parties and the court or agency in which such litigation or proceeding is or was pending:
(a)Criminal prosecutions or administrative proceedings by any government agency or authority which may be relevant to the trustworthiness of any party thereto; and
(b)Proceedings which may have a material effect upon the solvency or capital structure of the ultimate holding company including, but not necessarily limited to bankruptcy, receivership or other corporate reorganizations.
ITEM 7. STATEMENT REGARDING PLAN OR SERIES OF TRANSACTIONS
The insurer shall furnish a statement that transactions entered into since the filing of the prior year's annual registration statement are not part of a plan or series of like transactions, the purpose of which is to avoid statutory threshold amounts and the review that might otherwise occur.
ITEM 8. FINANCIAL STATEMENTS AND EXHIBITS
(a)Financial statements and exhibits should be attached to this statement as an appendix, but list under this item the financial statements and exhibits so attached.
(b)If the ultimate controlling person is a corporation, an organization, a limited liability company, or other legal entity, the financial statements shall include the annual financial statements of the ultimate controlling person in the insurance holding company system as of the end of the person’s latest fiscal year.
If at the time of the initial registration, the annual financial statements for the latest fiscal year are not available, annual statements for the previous fiscal year may be filed and similar financial information shall be filed for any subsequent period to the extent such information is available. Such financial statements may be prepared on either an individual basis; or, unless the Commissioner otherwise requires, on a consolidated basis if consolidated statements are prepared in the usual course of business.
Other than with respect to the foregoing, such financial statement shall be filed in a standard form and format adopted by the National Association of Insurance Commissioners, unless an alternative form is accepted by the Commissioner. Documentation and financial statements filed with the Securities and Exchange Commission or audited GAAP financial statements shall be deemed to be an appropriate form and format.
Unless the Commissioner otherwise permits, the annual financial statements shall be accompanied by the certificate of an independent public accountant to the effect that the statements present fairly the financial position of the ultimate controlling person and the results of its operations for the year then ended, in conformity with generally accepted accounting principles or with requirements of insurance or other accounting principles prescribed or permitted under law. If the ultimate controlling person is an insurer which is actively engaged in the business of insurance, the annual financial statements need not be certified, provided they are based on the Annual Statement of the insurer’s domiciliary state and are in accordance with requirements of insurance or other accounting principles prescribed or permitted under the law and regulations of that state.
Any ultimate controlling person who is an individual may file personal financial statements that are reviewed rather than audited by an independent public accountant. The review shall be conducted in accordance with standards for review of personal financial statements published in the Personal Financial Statements Guide by the American Institute of Certified Public Accountants. Personal financial statements shall be accompanied by the independent public accountants’ Standard Review Report stating that the accountant is not aware of any material modifications that should be made to the financial statements in order for the statements to be in conformity with generally accepted accounting principles.
If at the time of the initial registration, the annual financial statements for the latest fiscal year are not available, annual statements for the previous fiscal year may be filed and similar financial information shall be filed for any subsequent period to the extent such information is available. Such financial statements may be prepared on either an individual basis, or unless the Commissioner otherwise requires, on a consolidated basis, or unless the Commissioner otherwise requires, on a consolidated basis if such consolidated statements are prepared in the usual course of business.
Unless the Commissioner otherwise permits, the annual financial statements shall be accompanied by the certificate of an independent public accountant to the effect that such statements present fairly the financial position of the ultimate controlling person and the results of its or with requirements of insurance or other accounting principles prescribed or permitted under law. If the ultimate controlling person is an insurer which is actively engaged in the business of insurance, the annual financial statements need not be certified, provided they are based on the Annual Statement of such insurer filed with requirements of insurance or other accounting principles prescribed or permitted under the law and regulation of such jurisdiction.
(c)Exhibits shall include copies of the latest annual reports to shareholders of the ultimate controlling person and proxy material used by the ultimate controlling person; and any additional documents or papers required by Form B or District Regulations.
ITEM 9. FORM C REQUIRED
A FORM C, Summary of Changes to Registration Statement, must be prepared and filed with this Form B.
ITEM 10. SIGNATURE AND CERTIFICATION
Signature and certification required as follows:
SIGNATURE
Pursuant to the requirements of Section 6 of the Act, the Registrant has caused this annual registrant statement to be duly signed on its behalf in the City of ___ and State of ___ on the ___ day of ___, 19 ___.
(SEAL) ___
Name of Registrant
BY ___
(Name) (Title)
Attest: ___
(Signature of Officer)
___
(Title)
CERTIFICATION
The undersigned deposes and says that (s)he has duly executed the attached annual registration statement dated ___, 19 ___, for and on be half of ___ (Name of Company); that (s)he is the ___ (Title of Officer) of such company and that (s)he is authorized to execute and file such instrument. Deponent further says that (s)he is familiar with such instrument and the contents thereof, and that the facts therein set forth are true to the best of his/her knowledge, information and belief.
(Signature) ___
(Type or print name Beneath) ___
APPENDIX 16-3
[To be used pursuant to the provisions of Sec. 1602]
FORM C
SUMMARY OF CHANGES TO REGISTRATION STATEMENT
Filed with the Insurance Department of the District of ___
By
___
Name of Registrant
On Behalf of Following Insurance Companies
Name Address
___
Date: ___, 19 ___
Name, Title, Address and telephone number of Individual to Whom Notices and Correspondence Concerning This Statement Should Be Addressed: ___
Furnish a brief description of all items in the current annual registration statement which represent changes from the prior year's annual registration statement. The description shall be in a manner as to permit the proper evaluation thereof by the Commissioner, and shall include specific references to Item numbers in the annual registration statement and to the terms contained therein.
Changes occurring under Item 2 of Form B insofar as changes in the percentage of each class of voting securities held by each affiliate is concerned, need only be included where such changes are ones which result in ownership or holdings of 10 percent or more of voting securities, loss or transfer of control, or acquisition or loss of partnership interest.
Changes occurring under Item 4 of Form B need only be included where: an individual is, for the first time, made a director or executive officer of the ultimate controlling person; a director or executive officer terminates his or her responsibilities with the ultimate controlling person; or in the event an individual is named president of the ultimate controlling person.
If a transaction disclosed on the prior year's annual registration statement has been changed, the nature of such change shall be included. If a transaction disclosed on the prior year's annual registration statement has been effectuated, furnish the mode of completion and any flow of funds between affiliates resulting from the transaction.
The insurer shall furnish a statement that transactions entered into since the filing of the prior year's annual registration statement are not part of a plan or series of like transactions whose purpose it is to avoid statutory threshold amounts and the review that might otherwise occur.
SIGNATURE AND CERTIFICATION
Signature and certification required as follows:
SIGNATURE
Pursuant to the requirements of Section 6 of the Act, the Registrant has caused this summary of registration statement to be duly signed on its behalf in the City of ___ and State of ___ on the ___ day of ___, 19 ___.
(SEAL) ___
Name of Registrant
By ___
(Name) (Title)
Attest:
___
(Signature of Officer)
___
(Title)
CERTIFICATION
The undersigned deposes and says that (s)he has duly executed the attached summary of registration statement dated ___, 19 ___, for and on behalf of ___ (Name of Company); that (s)he is the ___ (Title of Officer) of such company and that (s)he is authorized to execute and file such instrument. Deponent further says that (s)he is familiar with such instrument and the contents thereof, and that the facts therein set forth are true to the best of his/her knowledge, information and belief.
(Signature) ___
(Type or print name beneath) ___
APPENDIX 16-4
[To be used pursuant to the provisions of Sec. 1602 and 1603.]
FORM D
PRIOR NOTICE OF A TRANSACTION
Filed with the Insurance Department of the State of ___
By
___
Name of Registrant
On Behalf of Following Insurance Companies
Name Address
___
Date: ___, 19 ___
Name, Title, Address and telephone number of Individual to Whom Notices and Correspondence Concerning This Statement Should Be Addressed: ___
ITEM 1. IDENTITY OF PARTIES TO TRANSACTION
Furnish the following information for each of the parties to the transaction:
(a)Name.
(b)Home office address,
(c)Principal executive office address.
(d)The organizational structure, i.e. corporation, partnership, individual, trust, etc.
(e)A description of the nature of the parties' business operations.
(f)Relationship, if any, of other parties to the transaction to the insurer filing the notice, including any ownership or debtor/creditor interest by any other parties to the transaction in the insurer seeking approval, or by the insurer filing the notice in the affiliated parties.
(g)Where the transaction is with a non-affiliate, the name(s) of the affiliate(s) which will receive, in whole or in substantial part, the proceeds of the transaction.
ITEM 2. DESCRIPTION OF THE TRANSACTION
Furnish the following information for each transaction for which notice is being given:
(a)A statement as to whether notice is being given under Section 7(a)2(A), (B), (C), (D), or (E) of the Act.
(b)A statement of the nature of the transaction.
(c)A statement of how the transaction meets the ‘fair and reasonable’ standard in § 7(a)(1)(a) of the Act; and
(d)The proposed effective date of the transaction.
ITEM 3. SALES, PURCHASES, EXCHANGES, LOANS, EXTENSIONS OF CREDIT, GUARANTEES OR INVESTMENTS
Furnish a brief description of the amount and source of funds, securities, property or other consideration for the sale, purchase, exchange, loan, extension of credit, guarantee, or investment, whether any provision exists for purchase by the insurer filing notice, by any party to the transaction, or by any affiliate of the insurer filing notice, by any party to the securities being received, if any, and a description of any other agreements relating to the transaction involves other than cash, furnish a description of the consideration, its cost and its fair market value, together with an explanation of the basis for evaluation.
If the transaction involves a loan, extension of credit or a guarantee, furnish a description of the maximum amount which the insurer will be obligated to make available under such loan, extension of credit or guarantee, the date on which the credit or guarantee will terminate, and any provisions for the accrual of or deferral of interest.
If the transaction involves an investment, guarantee or other arrangement, state the time period during which the investment, guarantee or other arrangement will remain in effect, together with any provisions for extensions or renewals such investments, guarantees or arrangements. Furnish a brief statement as to the effect of the transaction upon the insurer's surplus.
No notice need be given if the maximum amount which can at any time be outstanding or for which the insurer can be legally obligated under the loan, extension of credit or guarantee is less than, (a) in the case of non-life insurer's, the lesser of 3% of the insurer's admitted assets or 25% of surplus as regards policyholders or, (b) in case of life insurers, 3% of the insurer's admitted assets, each as of the 31st day of December next preceding.
ITEM 4. LOANS OR EXTENSIONS OF CREDIT TO A NON-AFFILIATE
If the transaction involves a loan or extension of credit any person who is not an affiliate, furnish a brief description of the agreement or understanding whereby the proceeds of the proposed transaction, in whole or in substantial part, are to be used to make loan or extensions of credit to, to purchase the assets of, or to make investment in, any affiliate of the insurer making such loans or extensions of credit, and specify in what manner the proceeds are to be used to loan to, extend credit to, purchase assets of or make investments in any affiliate. Describe the amount and source of funds, securities, property or other consideration for the loan or extension of credit and, if the transaction is one involving consideration other than cash, a description of its cost and its fair market value together with an explanation of the basis for evaluation. Furnish a brief statement as to the effect of the transaction upon the insurer's surplus.
No notice need be given if the loan or extension of credit is one which equals less than, in the case of non-life insurer's, the lesser of 3% of the insurer's admitted assets or 25% of surplus as regards policyholders or, with respect to life insurers, 3% of the insurer's admitted assets, each as of the 31st day of December next preceding.
ITEM 5. REINSURANCE
If the transaction is a reinsurance agreement or modification thereto, as described by Section 7(a)(2)(c)(ii) of the Act, or a reinsurance pooling agreement or modification thereto as described by Section 7(a)(2)(c)(i) of the Act, furnish a description of the known and/or estimated amount of liability to be ceded and/or assumed in each calendar year, the period of time during which the agreement will be in effect, and a statement whether an agreement or understanding exists between the insurer and non-affiliate to the effect that any portion of the assets constituting the consideration for the agreement will be transferred to one or more of the insurer’s affiliates. Furnish a brief description of the consideration involved in the transaction, and a brief statement as to the effect of the transaction upon the insurer’s surplus.
No notice need be given for reinsurance agreements or modifications thereto if the reinsurance premium or a change in the insurer’s liabilities, or the projected reinsurance premium or change in the insurer’s liabilities in any of the next three years, in connection with the reinsurance agreement or modification thereto is less than five percent (5%) of the insurer’s surplus as regards policyholders, as of the 31st day of December next preceding. Notice shall be given for all reinsurance pooling agreements including modifications thereto.
ITEM 6. MANAGEMENT AGREEMENTS, SERVICE AGREEMENTS COST-SHARING ARRANGEMENTS
For management and service agreements, furnish:
(a)A brief description of the managerial responsibilities, or services to be performed.
(b)A brief description of the agreement, including a statement of its duration, together with brief descriptions of the basis for compensation and the terms under which payment or compensation is to be made.
For cost-sharing arrangements, furnish:
(a)A brief description of the purpose of the agreement;
(b)A description of the period of time during which the agreement is to be in effect;
(c)A brief description of each party's expenses or costs covered by the agreement;
(d)A brief description of the accounting basis to be used in calculating each party's costs under the agreement;
(e) A brief statement as to the effect of the transaction upon the insurer’s policyholder surplus;
(f) A statement regarding the cost allocation methods that specifies whether proposed charges are based on “cost or market.” If market based, rationale for using market instead of cost, including justification for the company’s determination that amounts are fair and reasonable; and
(g) A statement regarding compliance with the NAIC Accounting Practices and Procedure Manual regarding expense allocation.
ITEM 7. SIGNATURE AND CERTIFICATION
Signature and certification required as follows:
SIGNATURE
Pursuant to the requirements of Section 7 of the Act, ___ has caused this notice to be duly signed on its behalf in the City of ___ and State of ___ on the ___ day of ___, 19 ___.
(SEAL) ___
Name of Applicant
By ___
(Name) (Title)
Attest:
___
(Signature of Office)
___
(Title)
CERTIFICATION
The undersigned deposes and says that (s)he has duly executed the attached notice dated ___, 19 ___, for and on behalf of ___ (Name of Applicant); that (s)he is the ___ (Title of Officer) of such company and that (s)he is authorized to execute and file such instrument. Deponent further says that (s)he is familiar with such instrument and the contents thereof, and that the facts therein set forth are true to the best of his/her knowledge, information and belief.
(Signature) ___
(Type or print name beneath) ___
APPENDIX 16-5
[To be used pursuant to the provision of Sec. 1609a.]
FORM E
PRE-ACQUISITION NOTIFICATION FORM REGARDING THE POTENTIAL COMPETITIVE IMPACT OF A PROPOSED MERGER OR ACQUISITION BY A
NON-DOMICILIARY INSURER DOING BUSINESS IN THIS STATE OR BY A DOMESTIC INSURER
___________________________________
Name of Applicant
___________________________________
Name of Other Person
Involved in Merger or
Acquisition
Filed with the Insurance Department of
______________________________________________________________________________
Dated:__________________________, 20 _______________
Name, title, address and telephone number of person completing this statement:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
ITEM 1. NAME AND ADDRESS
State the names and addresses of the persons who hereby provide notice of their involvement in a pending acquisition or change in corporate control.
ITEM 2. NAME AND ADDRESSES OF AFFILIATED COMPANIES
State the names and addresses of the persons affiliated with those listed in Item 1. Describe their affiliations.
ITEM 3. NATURE AND PURPOSE OF THE PROPOSED MERGER OR ACQUISITION
State the nature and purpose of the proposed merger or acquisition.
ITEM 4. NATURE OF BUSINESS
State the nature of the business performed by each of the persons identified in response to Item 1 and Item 2.
ITEM 5. MARKET AND MARKET SHARE
State specifically what market and market share in each relevant insurance market the persons identified in Item 1 and Item 2 currently enjoy in this state. Provide historical market and market share data for each person identified in Item 1 and Item 2 for the past five years and identify the source of such data. Provide a determination as to whether the proposed acquisition or merger, if consummated, would violate the competitive standards of the state as stated in Section 3.1D of the Act. If the proposed acquisition or merger would violate competitive standards, provide justification of why the acquisition or merger would not substantially lessen competition or create a monopoly in the state.
For purposes of this question, market means direct written insurance premium in this state for a line of business as contained in the annual statement required to be filed by insurers licensed to do business in this state.
APPENDIX 16-6
[To be used pursuant to the provision of Sec. 1615a.]
FORM F
ENTERPRISE RISK REPORT
Filed with the Insurance Department of the State of______________________
By
____________________________________
Name of Registrant/Applicant
On Behalf of/Related to Following Insurance Companies
NameAddress
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Date:____________________, 20_____
Name, Title, Address and telephone number of Individual to Whom Notices and Correspondence Concerning This Statement Should Be Addressed:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
ITEM 1. ENTERPRISE RISK
The Registrant/Applicant, to the best of its knowledge and belief, shall provide information regarding the following areas that could produce enterprise risk as defined in Section 2 of the Act, provided such information is not disclosed in the Insurance Holding Company System Annual Registration Statement filed on behalf of itself or another insurer for which it is the ultimate controlling person:
- Any material developments regarding strategy, internal audit findings, compliance or risk management affecting the insurance holding company system;
- Acquisition or disposal of insurance entities and reallocating of existing financial or insurance entities within the insurance holding company system;
- Any changes of shareholders of the insurance holding company system exceeding ten percent (10%) or more of voting securities;
- Developments in various investigations, regulatory activities or litigation that may have a significant bearing or impact on the insurance holding company system;
- Business plan of the insurance holding company system and summarized strategies for next 12 months;
- Identification of material concerns of the insurance holding company system raised by supervisory college, if any, in last year;
- Identification of insurance holding company system capital resources and material distribution patterns;
- Identification of any negative movement, or discussions with rating agencies which may have caused, or may cause, potential negative movement in the credit ratings and individual insurer financial strength ratings assessment of the insurance holding company system (including both the rating score and outlook);
- Information on corporate or parental guarantees throughout the holding company and the expected source of liquidity should such guarantees be called upon; and
- Identification of any material activity or development of the insurance holding company system that, in the opinion of senior management, could adversely affect the insurance holding company system.
The Registrant/Applicant may attach the appropriate form most recently filed with the U.S. Securities and Exchange Commission, provided the Registrant/Applicant includes specific references to those areas listed in Item 1 for which the form provides responsive information. If the Registrant/Applicant is not domiciled in the U.S., it may attach its most recent public audited financial statement filed in its country of domicile, provided the Registrant/Applicant includes specific references to those areas listed in Item 1 for which the financial statement provides responsive information.
ITEM 2. OBLIGATION TO REPORT
If the Registrant/Applicant has not disclosed any information pursuant to Item 1, the Registrant/Applicant shall include a statement affirming that, to the best of its knowledge and belief, it has not identified enterprise risk subject to disclosure pursuant to Item 1.