(1)
Effect of Filing. An applicant's full compliance with
the procedures set forth in
211 CMR 54.00 shall not
preclude the Commissioner from initiating a proceeding pursuant to M.G.L. c.
175, § 22H against the applicant if necessary.
(2)
Timing. An
applicant intending to surrender or non-renew any or all of its licenses shall
submit all documents required in 211 CMR 54.04(3) no less than seven months
before the intended effective date of the withdrawal. The Division shall review
and approve or disapprove forms of notices submitted pursuant to 211 CMR
54.04(3)(f) 1. and 5.a. through f. within 30 days of receiving an applicant's
complete withdrawal plan.
(3)
Material to be Submitted. The applicant shall submit
to the Commissioner five copies of the following set of documents:
(a) An application to surrender or non-renew
any of the applicant's licenses, describing and documenting the applicant's
financial condition for the last three years, explaining the applicant's
reasons for seeking to withdraw from Massachusetts, including accounting,
actuarial and other materials relied upon in deciding to seek withdrawal, and
indicating the proposed effective date of such withdrawal.
(b) For a CAR assigned risk company or
servicing carrier, a copy of its petition to withdraw as an assigned risk
company or servicing carrier to be submitted to CAR pursuant to CAR Rule 38 or
Rule 16, as applicable.
(c) A
description of all licenses currently held by the applicant, indicating the
date on which such licenses were originally issued;
(d) An organizational chart and a narrative
description of the relationships, if any, among the applicant and its
affiliates, indicating at least:
1. the lines
of insurance which each entity is licensed to write;
2. the management relationships;
3. the financial relationships
(e.g., reinsurance agreements, pooling arrangements, common
investments);
4. the marketing
relationships;
5. the agency
relationships; and
6. the claims
handling relationships.
(e) A description, by line of insurance
written in Massachusetts, of the lines of insurance written by the applicant,
the premium written by the applicant for the last three years; estimated market
share, if known; the number of current policyholders; the number of current
producers; and the number of Massachusetts employees;
(f) A detailed narrative withdrawal plan,
with relevant supporting materials, which must include, but is not limited to:
1. copies of the forms of non-renewal notices
the applicant intends to send pursuant to M.G.L. c. 175, §§ 113F,
163, 187B, 187C, 187D, 193P, and any other notices of non-renewal or
cancellation, the intended date of the notice and a description of the
identities of the recipients of each such notice. All such notices shall
include the following statement:
"[Name of applicant] has submitted a withdrawal plan for
approval by the Commissioner of Insurance. Should the withdrawal plan be
revised or the effective date changed, you shall be notified."
2. a list of all of the
applicant's producers, including producers placing business with the applicant
through an assigned risk plan, as of the date of application. Include the name
and address of each producer, as well as the number of policies and the premium
volume handled by each producer, by line;
3. a copy of each sample form of contract
between the applicant and its producers, including any subsequent modifications
to those contracts;
4. copies of
all correspondence intended to be sent to the applicant's producers and
policyholders concerning the applicant's withdrawal;
5. copies of all correspondence and notices
to be sent to the following entities, as well as a description of all
agreements, which need not be in final form, reached with such entities as to
the applicant's financial obligations to such entities, as applicable:
a. CAR;
b. the Massachusetts Life and Health
Insurance Guaranty Fund, established by M.G.L. c. 175, § 146B;
c. the Massachusetts Medical Malpractice
Reinsurance Plan established by St. 1994, c. 330, § 10;
d. the Urban Area Insurance Placement
Facility (FAIR Plan), established by M.G.L. c. 175C;
e. the Massachusetts Insurers Insolvency
Fund, established by M.G.L. c. 175D; and
f. the assigned risk plan for workers'
compensation insurance established by M.G.L. c. 152, § 65A; and
6. the address of each of the
applicant's offices in Massachusetts, the total number of its Massachusetts
employees as of the application date, and in accordance with M.G.L. c. 175,
§ HOD, a description of the applicant's plan with regard to the
termination of its Massachusetts employees. Include a description of the
employee benefits to be provided upon termination due to the applicant's
withdrawal;
(g) A
detailed description of the applicant's financial and other obligations to the
entities referred to above in 211 CMR 54.04(3)(f)5.a. through f. for the most
recently completed fiscal year or other accounting period, an estimate of such
obligations for the current year and an estimate of such obligations for one
year following the year in which the applicant files its withdrawal
plan;
(h) A statement, by line of
insurance written in Massachusetts, of all the applicant's current incurred
liabilities, including those incurred but not reported, as developed and
certified by an actuary, all as of a date not earlier than 30 days prior to
filing;
(i) A description of the
manner in which the applicant intends to handle claims arising from policies
issued to Massachusetts residents remaining in force after the applicant has
otherwise withdrawn from doing business in the Commonwealth. Provide a
description of the applicant's staff and adjusters to be used, including their
location and the procedures for consumer contact;
(j) A list of all the applicant's deposits
currently held by the Treasurer of the Commonwealth, if any;
(k) Written certification from a duly
authorized officer of the applicant, signed under the pains and penalties of
perjury, that, for as long as there exist any potential claims arising from any
policy written by the applicant and covering a Massachusetts resident:
1. the applicant shall fully honor its
obligations arising from any such policy;
2. the applicant shall fully service all
outstanding policies, bonds and surety lines of credit, which includes
processing all usual and customary endorsements requested by insureds during
the term of such policies, subject to the applicant's normal underwriting
standards;
3. in those cases in
which policies remaining in force provide for dividends to be paid, the insurer
shall not unfairly discriminate against Massachusetts policyholders in its
dividend practices;
4. the
applicant shall continue to submit annual statements to the Division and shall
continue to submit information to the entities identified in 211 CMR
54.04(3)(f)5.a. through f. upon request, for as long as the applicant has any
earned premium or has any paid or incurred losses. In addition, the applicant
shall remain subject to examination by the Division as deemed necessary by the
Commissioner and shall continue to operate in accordance with and submit to the
Commissioner's jurisdiction under M.G.L. c. 176D;
5. the applicant shall not accept surplus
lines placements for any type of business encompassed by the withdrawal plan to
avoid the regulatory requirements attendant to business operations pursuant to
a license, unless specifically permitted by the Commissioner;
6. the applicant shall maintain designation
of the Commissioner as its agent for service of process.