Code of Maine Rules
02 - DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION
031 - BUREAU OF INSURANCE
Chapter 180 - INSURANCE HOLDING COMPANY SYSTEM MODEL RULE WITH REPORTING FORMS AND INSTRUCTIONS
Form 031-180-D - PRIOR NOTICE OF A TRANSACTION INVOLVING AN AFFILIATE

Universal Citation: 02 ME Code Rules ยง 031-180-D

Current through 2024-38, September 18, 2024

Filed with the Bureau of Insurance of the State of Maine

BY

____________________________________

Name of Registrant

On Behalf of the Following Insurance Companies:

Name/Address _____________________________________________________________

_________________________________________________________________

_________________________________________________________________

_________________________________________________________________

Dated: ___________, 20___

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, e.g., corporation, partnership, individual, trust.

(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 held by any other parties to the transaction in the insurer seeking approval, or interest held 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 Subparagraph (1) (sales, purchases, exchanges, loans or extensions of credit, guarantees, or investments), (2) (financing for third-party transactions with insurer's affiliates), (3) (reinsurance), (4) (management, cost-sharing, and service agreements), (5) (plans or series of transactions), or (6) (other material transactions) of 24-A M.R.S.A. § 222(9)(E).

(b) A statement of the nature of the transaction.

(c) A statement explaining how the transaction meets the "fair and reasonable" standard of 24-A M.R.S.A. § 222(9)(A).

(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 this notice, by any party to the transaction, or by any affiliate of the insurer filing notice; a description of the terms of any securities being received, if any; and a description of any other agreements relating to the transaction such as contracts or agreements for services, consulting agreements, and the like. If 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, an extension of credit, or a guarantee, furnish a description of the maximum amount which the insurer will be obligated to make available under the 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 similar 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 of such investment 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 insurers, the lesser of 3 percent of the insurer's admitted assets or 25 percent of surplus as regards policyholders;

(b) in the case of life insurers, 3 percent of the insurer's admitted assets; or,

(c) in the case of nonprofit hospital and medical service organizations and their 100 per cent controlled affiliates that operate as monoline health insurers or health maintenance organizations, the lesser of 5 percent of the entity's admitted assets or 25 per cent of surplus to policyholders. For purposes of these materiality thresholds, assets and surplus shall be measured as of December 31st of the preceding year unless otherwise ordered by the Superintendent, and any plan or series of like transactions shall be aggregated and evaluated as a single transaction.

ITEM 4. LOANS OR EXTENSIONS OF CREDIT TO A NON-AFFILIATE

If the transaction involves a loan or extension of credit to any person that 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 loans or extensions of credit to, to purchase the assets of, or to make investments 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 lend 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 falls below the materiality thresholds specified above in Item 3.

ITEM 5. REINSURANCE

If the transaction is a reinsurance or reinsurance pooling agreement or modification thereto, as described by 24-A M.R.S.A. § 222(9)(E)(3), 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.

Notice shall be given for all reinsurance pooling agreements and modifications thereto. No notice need be given for other reinsurance agreements or modifications thereto if the reinsurance premium or a change in the insurer's liabilities in connection with the reinsurance agreement or modification thereto, and the projected reinsurance premium or change in the insurer's liabilities in each of the next three years, are all less than 5 percent of the insurer's surplus as regards policyholders, as of the 31st day of December of the preceding year.

ITEM 6. MANAGEMENT AGREEMENTS, SERVICE AGREEMENTS, AND 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 specifying whether the amounts to be allocated are based on cost or market. For market-based allocation, include the rationale for using market instead of cost and a justification for the company's determination that the amounts are fair and reasonable.

(g) A statement describing how the insurer has verified compliance with the requirements in the NAIC Accounting Practices and Procedures Manual.

ITEM 7. SIGNATURE AND CERTIFICATION

Signature and certification required as follows:

SIGNATURE:

Pursuant to the requirements of 24-A M.R.S.A. § 222(9), the applicant has caused this notice to be duly signed on its behalf in the City of ___________ and State of _____________________ on the ___________________ day of ____________________, 20___.

(SEAL) _________________________________________

Name of Applicant

BY ____________________________________________

(Name) and (Title)

ATTEST:

___________________________________

(Signature of Officer)

_____________________________________

(Title)

CERTIFICATION:

The undersigned deposes and says that (s)he has duly executed the attached notice dated _________________, 20_____, for and on behalf of ________________________ (Name of Applicant); that (s)he is the ________________________ (Title of Officer) of the Applicant; and that (s)he is authorized to execute and file this instrument.

Deponent further says that (s)he is familiar with this instrument and the contents hereof, and that the facts herein set forth are true to the best of his/her knowledge, information, and belief.

________________________________________________

Signature

________________________________________________

(Name and Title)

Disclaimer: These regulations may not be the most recent version. Maine may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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