Current through 2024-38, September 18, 2024
Any foreign insurer, or alien insurer entered in another
United States jurisdiction, that desires to obtain a Certificate of Authority
shall submit an application on the most current Uniform Certificate of
Authority Expansion Application form, or its successor form, published by the
National Association of Insurance Commissioners or its successor organization,
and shall provide all information requested therein and such additional
information as the Superintendent may request in the course of reviewing the
application, sufficient to demonstrate compliance with the following
requirements, except to the extent that particular requirements may be waived
or modified by the Superintendent upon a finding that they are not applicable
to the circumstances of the application.
A.
Domiciliary Licensure
The Applicant must hold a valid Certificate of Authority from
its jurisdiction of domicile which authorizes it to transact those kinds of
insurance it proposes to transact in this State. If the Applicant does not
write a significant volume of business in its own jurisdiction of domicile, or
operates from a home office outside its jurisdiction of domicile, it must
explain the reasons to the satisfaction of the Superintendent.
B.
Business Name
The Applicant shall not use a business name deceptively
similar to that of any insurer currently holding a valid Certificate of
Authority. No application will be entertained that proposes to use a name that
has been reserved by another business entity with the Superintendent or the
Maine Secretary of State, until the period of reservation has expired or the
reserved name has been withdrawn.
C.
Deposit Requirements
(1) If the Applicant is domiciled within the
United States, it shall provide certification by the insurance regulator or
other qualified official of its jurisdiction of domicile that qualifying
securities or other asset deposits are held there with a minimum fair market
value of $100,000, or such greater amount as that jurisdiction of domicile
requires of insurers domiciled in this State, as security for all its
policyholders.
(2) If the Applicant
is not domiciled within the United States, it shall provide certification by
the insurance supervisory official in its United States port of entry
jurisdiction, and in any other United State jurisdiction(s) where assets might
be held for the purposes of complying with the requirements of this Subsection,
that qualifying assets or securities are held there in full compliance with
laws substantially similar to the relevant provisions of
24-AM.R.S.A.
§413-A and Bureau of Insurance Rule 860
or to comparable model laws of the National Association of Insurance
Commissioners. The total amount must be at least the sum of all of the
Applicant's liabilities under insurance contracts in force in the United
States, the capital and/or surplus required pursuant to Subsection D, and any
additional liabilities that must be secured by the trust(s) and/or deposit(s)
used to satisfy this requirement pursuant to the laws of the port of entry
jurisdiction or pursuant to the terms of the governing trust or deposit
documents. The Applicant must be currently listed on the Quarterly Listing of
Alien Insurers published by the National Association of Insurance
Commissioners, or its successor publication, or provide documentation
satisfactory to the Superintendent explaining why it is not listed and why that
does not reflect adversely on the soundness of the insurer. In reviewing the
adequacy of the Applicant's United States trust assets, the Superintendent
shall consider any reviews conducted by the National Association of Insurance
Commissioners.
(3) If the assets
held in the jurisdiction of domicile or United States port of entry are
insufficient to meet the requirements of this Subsection, the Applicant may not
be issued a Certificate of Authority, until it deposits with the Maine State
Treasurer a supplemental deposit sufficient to remedy the deficiency, to be
held for the benefit of the Applicant's policyholders in compliance with the
requirements of 24-AM.R.S.A. Chapter 15 (§§ 1251et
seq.).
(4) In determining
whether the Applicant is financially qualified to do business in Maine, the
Superintendent has the discretion to consider a supplemental security deposit
posted by or on behalf of the Applicant with the Treasurer of State as security
for all its policyholders.
D.
Capital and Surplus
The Applicant must demonstrate that it possesses capital
and/or surplus funds, determined in accordance with statutory accounting
principles pursuant to
24-AM.R.S.A.
§901-A, in an amount at least equal to
the greater of the applicable authorized control level risk-based capital or
the minimum amount prescribed in
24-AM.R.S.A.
§410(1) for all lines
of insurance the Applicant is authorized to transact or seeks authorization to
transact in Maine or elsewhere. For purposes of this Subsection, an insurer's
free surplus means unencumbered assets which are part of the insurer's
statutory surplus in excess of the amount necessary to comply with minimum
paid-in capital or basic surplus requirements in this State or any other
jurisdiction, after any adjustment for non-qualifying assets or understated
reserves. Special deposits not held in an account for the benefit of all
policyholders are not considered unencumbered assets.
E.
Historic Business
Experience
(1) Except as otherwise
provided in Paragraphs (2) through (4) of this Subsection, the Applicant must
satisfy the following criteria in order to qualify for a Maine Certificate of
Authority:
(a) Licensure as an insurer in its
jurisdiction of domicile for the three years immediately preceding the
application.
(b) Maintenance of
surplus in excess of the risk-based capital company action level for each of
the three years immediately preceding the application.
(c) Demonstration that during three of the
five years immediately preceding the application, including the two most recent
years, a net profit has been realized without regard to any extraordinary,
non-recurring items that have the effect of increasing net income.
(d) Demonstration that the Applicant has
written the requested lines of business in sufficient volume as to demonstrate
an expertise in marketing and servicing those lines. The Superintendent may
consider business written both on a direct and an assumed basis. The
Superintendent may consider the expertise of affiliated entities that have
entered into service agreements with the Applicant covering lines of business
for which the Applicant has not yet fully developed its own expertise or that
have guaranteed the performance of the Applicant's obligations.
(e) Demonstration of a history of responsible
market conduct, including the full and timely settlement of claims, of an
orderly pattern of growth in the Applicant's marketing territories, and of the
availability of equity resources adequate to support the company's business
expansion, all sufficient to indicate that the Applicant will successfully
perform its policy obligations contracted within this State. To facilitate the
Superintendent's evaluation, the Applicant shall provide, when requested by the
Superintendent, information itemizing premiums and associated business costs
between first-year and renewal business. The Superintendent shall assess the
Applicant's rate of growth, business persistency ratios, supporting surplus
resources, business acquisition costs, claims experience, reinsurance program,
and investment policies, together with a review of policyholder service
arrangements relating to Maine residents.
(f) No material change in operations,
management, or ownership that may reduce or inhibit the Superintendent's
ability to rely on the historical information supplied in evaluating the
Applicant's qualification for a Certificate of Authority.
(2) If the Applicant is the successor to
another insurer or insurers as the result of a merger, redomestication, asset
sale with bulk reinsurance, or other restructuring, the Superintendent has the
discretion to treat the experience of the predecessor or predecessors as
experience of the Applicant.
(3) If
the Applicant has been licensed in its state of domicile for less than three
years, has undergone a material change of control within three years prior to
the application, or other special circumstances exist which warrant the review
of historical experience on a consolidated basis, the Superintendent has the
discretion to consider relevant experience of the parent insurer and other
affiliates, in determining whether the Applicant meets the requirements of this
SubsectionE, provided that the Applicant obtains a written unconditional
financial guaranty in accordance with Subsection F.
(4) The Superintendent may waive the
provisions of this Subsection E if the Applicant is a highly capitalized
company seeking to commence startup operations on a multi-state basis and
provides satisfactory alternative proof that it will be able to fulfill its
obligations in this State in a sound and responsible manner. Factors to be
considered by the Superintendent shall include, without limitation:
(a) The soundness of the Applicant's business
plan.
(b) The adequacy of the
resources that have been committed for both expected and stress scenarios,
including capital, reinsurance, personnel, and infrastructure.
(c) The existence of any financial guaranties
or other mechanisms for access to additional capital in the event that it is
needed.
(d) The experience and
fitness of the Applicant's managers and owners.
(e) The Applicant's compliance with any
criteria that may be developed by the National Association of Insurance
Commissioners for evaluating such ventures.
F.
Financial Guaranty
In determining whether the Applicant is financially qualified
to do business in Maine, the Superintendent has the discretion to consider an
unconditional guaranty issued by the Applicant's highly capitalized Maine
licensed parent company or affiliate pursuant to corporate resolution, on a
form acceptable to the Superintendent, ensuring that minimum capital and/or
surplus funds in at least the greater of the amount required by
24-AM.R.S.A.
§410 or regulatory action level
risk-based capital are at all times maintained by the Applicant once licensed.
If the Applicant does not have a highly capitalized parent or affiliate that is
licensed in Maine, the Superintendent may consider accepting an unconditional
financial guaranty from a non-Maine licensed, highly capitalized parent insurer
or a very closely related affiliate, but only after completing a thorough
financial review of the potential guarantor and after receiving evidence that
the domiciliary regulator of the potential guarantor has approved the guaranty
for execution.
The guaranty may be released only at the request of the
Applicant and upon a demonstration by the Applicant that it would qualify for
unconditional licensure on a free-standing basis for all lines of insurance it
is then licensed to transact or has been licensed to transact in this State.
The guarantor shall be subject to ongoing financial review by the
Superintendent to determine if it is able to fulfill its obligations as
guarantor.
G.
Guaranty Associations and Residual Markets
To the extent required for the lines of business for which
the Applicant has been approved, the Applicant shall acknowledge its membership
in the Maine Insurance Guaranty Association, the Maine Life and Health
Insurance Guaranty Association, or both of them, and in any applicable residual
markets, assigned risk pools, joint underwriting associations, or other
mandatory risk-sharing mechanisms. The Applicant shall agree in writing to
comply with the requirements of those guaranty associations and risk-sharing
mechanisms in which it will participate.
