Current through Register 2024 Notice Reg. No. 38, September 20, 2024
For purposes of section
2690.94, the following terms shall have
the respective meanings hereinafter set forth:
(a) "Investment Consultant" shall refer, as
appropriate, to either a natural person or a company engaged in the evaluation and
assessment of derivative transactions, assigned by the Commissioner to perform the
work authorized under section 1211.
(b)
"Affiliate" or "affiliation" is defined as follows:
(1) Parent subsidiary. A parent subsidiary
relationship exists when one corporation directly or indirectly owns shares
possessing more than 10 percent of the voting power of another
corporation.
(2) Otherwise related
business entity. Business entities, including corporations, partnerships, joint
ventures and any other organizations and enterprises operated for profit, which do
not have a parent subsidiary relationship are otherwise related if any one of the
following three tests is met:
(A) One business
entity has a controlling ownership interest in the other business entity.
(B) There is shared management and control between
the entities. In determining whether there is shared management and control,
consideration shall be given to the following factors:
1. The same person or substantially the same
person owns and manages the two entities;
2. There are common or commingled funds or
assets;
3. The business entities share
the use of the same offices or employees, or otherwise share activities, resources
or personnel on a regular basis;
4.
There is otherwise a regular and close working relationship between the
entities;
(C) A controlling
owner (50% or greater interest as a shareholder or as a general partner) in one
entity also is a controlling owner in the other
entity.
(c)
"Conflict of interest" -- an Investment Consultant has reportable conflicts of
interest with regard to a particular company if the Investment Consultant has one or
more economic interests in that company.
(1)
"Economic interests" -- there are three types of economic interests.
(A) Investment in the Company -- The Investment
Consultant has a direct or indirect investment worth two thousand dollars ($2,000)
or more in the Company.
(B) Sources of
Income --
1. The Investment Consultant has
received income from the Company, or affiliated company, within the last 12 months
or during the period of time for which the examination will apply.
2. The Investment Consultant holds or held a
position in the Company, or affiliated company, within the last 12 months or during
the period of time for which the examination will apply. Such position includes, but
is not limited to, director, officer, partner, trustee, employee, or any position of
management.
(C) Sources of
Gifts -- The Investment Consultant has received from the Company, or affiliated
company, gifts with a fair market value of three hundred sixty dollars
($360)1 or more within the last 12 months or during the
period of time for which the examination will apply.
(d) "Company" is a domestic insurance company, or
a group of insurance companies that includes a domestic insurance company, being
examined and also includes those entities contracted by insurance company (ies) to
perform investment management, provide investment advice, and any other related
investment services.
__________
1 This threshold amount is linked to
the threshold established by the Fair Political Practices Commission in California
Code of Regulations, Title 2, Division 6, Section 18703.4. The terms of section
18703.4 and any amendments to it duly adopted by the FPPC are hereby incorporated by
reference.
1. New section
filed 12-19-2006; operative 1-18-2007 (Register 2006, No.
51).
Note: Authority cited: Section
1211(l),
Insurance Code. Reference: Section
1211, Insurance
Code; and California Code of Regulations, Title 2, Chapter 7, Sections 18703.1 and
18703.4.
