Current through 2024-38, September 18, 2024
A. If a domestic
insurer is a member of an insurance holding company system for which this State
is not the lead state, procedures for filing the group capital calculation or
for full or partial exemptions from filing shall be as specified in the lead
state's regulation that is substantially similar to this rule, or as otherwise
approved by the Superintendent if the lead state has not adopted a
substantially similar regulation.
B. If this State is the lead state for an
insurance holding company system that has previously filed the annual group
capital calculation at least once, the Superintendent has the discretion to
exempt the ultimate controlling person from filing the annual group capital
calculation, or to accept a limited group capital filing in lieu of the group
capital calculation, if the Superintendent makes a determination based upon the
most recent annual group capital filing that the insurance holding company
system meets all of the following criteria:
(1) Has annual direct written and
unaffiliated assumed premium (including international direct and assumed
premium but excluding premiums reinsured with the Federal Crop Insurance
Corporation and Federal Flood Program), of less than $1,000,000,000;
(2) Has no insurers within its holding
company structure that are domiciled outside of the United States or one of its
territories;
(3) Has no banking,
depository, or other financial entity that is subject to an identified
regulatory capital framework within its holding company structure;
(4) The holding company system attests that
there are no material changes in the transactions between insurers and
non-insurers in the group that have occurred since the most recent filing of
the annual group capital calculation; and
(5) The non-insurers within the holding
company system do not pose a material financial risk to the insurer's ability
to honor policyholder obligations.
C. If this State is the lead state for an
insurance holding company system that has previously been granted a full or
limited exemption pursuant to Subsection B, the Superintendent may require the
ultimate controlling person to file an annual group capital calculation at any
time, completed in accordance with the NAIC Group Capital Calculation
Instructions, if any of the following criteria is met:
(1) Any insurer within the insurance holding
company system is in a Risk-Based Capital action level event as set forth in
Sections 6453 through 6456 of the Insurance Code or a similar
standard established by the insurer's state or country of domicile;
or
(2) Any insurer within the
insurance holding company system meets one or more of the criteria for
hazardous financial condition as set forth in Bureau of Insurance Rule 710,
Standards for Determining Whether an Insurance Carrier is in Hazardous
Financial Condition, or a similar standard established by the insurer's state
or country of domicile; or
(3) Any
insurer within the insurance holding company system otherwise exhibits
qualities of a troubled insurer as determined by the Superintendent based on
unique circumstances including, but not limited to, the type and volume of
business written, ownership and organizational structure, federal agency
requests, and international supervisor requests.
D. For purposes of Subdivision
8(B-1)(2)(d)(ii) of the Act, a non-U.S. jurisdiction that is not a reciprocal
jurisdiction recognizes and accepts the group capital calculation if a
competent regulatory authority in the jurisdiction provides confirmation that
the jurisdictionsatisfies both of the following criteria:
(1) The jurisdiction recognizes the U.S.
state regulatory approach to group supervision and group capital, as
demonstrated by either:
(a) Confirmation that
insurers and insurance groups whose lead state is accredited by the NAIC under
the NAIC Accreditation Program shall be subject only to worldwide prudential
insurance group supervision by the lead state and will not be subject to group
supervision by the non-U.S. jurisdiction, including worldwide group governance,
solvency and capital, and reporting, at the level of the group's worldwide
parent undertaking; or
(b) If no
U.S. insurance groups operate in the jurisdiction, a formal written
confirmation to the lead state, with a copy to the International Association of
Insurance Supervisors, that the group capital calculation is an acceptable
international capital standard.
(2) Information regarding insurers and their
parent, subsidiary, or affiliated entities, if applicable, shall be provided to
the lead state regulator in accordance with a memorandum of understanding or
similar document between the lead state regulator and the jurisdiction,
including but not limited to the International Association of Insurance
Supervisors Multilateral Memorandum of Understanding or other multilateral
memoranda of understanding coordinated by the NAIC. The Superintendent shall
determine, in consultation with the NAIC Committee Process, whether the
requirements of the information sharing agreements are in force.
E. In making determinations under
this section, the Superintendent shall consider any list of non-U.S.
jurisdictions that recognize and accept the group capital calculation that is
published through the NAIC Committee Process.
(1) If this State is the lead state for the
U.S. operations of a group headquartered outside the U.S.:
(a) In determining whether the group shall be
required to file an annual group capital calculation for its worldwide
operations, the Superintendent shall consider whether the NAIC has listed its
groupwide supervisor as a jurisdiction that recognizes and accepts the group
capital calculation.
(b) In
determining whether the group shall be required to file an annual group capital
calculation limited to its U.S. operations, the Superintendent shall consider
whether the NAIC has identified its groupwide supervisor as a jurisdiction that
requires a group capital filing for any U.S. based insurance group's operations
in that jurisdiction.
(2)
If the Superintendent makes a determination that is contrary to the NAIC's
published recommendations, the Superintendent shall provide thoroughly
documented justification to the NAIC and other states.
(3) Upon determining that a non-U.S.
jurisdiction no longer recognizes and accepts the group capital calculation,
the Superintendent may recommend to the NAIC that the non-U.S. jurisdiction be
removed from the list of jurisdictions that recognize and accept the group
capital calculation.
