Current through Register 1531, September 27, 2024
(1) Where
an insurance holding company system has previously filed the annual group
capital calculation at least once, the lead state commissioner has the
discretion to exempt the ultimate controlling person from filing the annual
group capital calculation if the lead state commissioner makes a determination
based upon that filing that the insurance holding company system meets all of
the following criteria:
(a) 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;
(b) Has no insurers
within its holding company structure that are domiciled outside of the United
States or one of its territories;
(c) Has no banking, depository or other
financial entity that is subject to an identified regulatory capital framework
within its holding company structure;
(d) 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 last filing of the
annual group capital; and
(e) The
non-insurers within the holding company system do not pose a material financial
risk to the insurer's ability to honor policyholder obligations.
(2) Where an insurance holding
company system has previously filed the annual group capital calculation at
least once, the lead state commissioner has the discretion to accept in
lieu of the group capital calculation a limited group capital
filing if:
(a) The insurance holding company
system 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; and all of the following additional criteria are met:
1. Has no insurers within its holding company
structure that are domiciled outside of the United States or ones of its
territories;
2. Does not include a
banking, depository or other financial entity that is subject to an identified
regulatory capital framework; and
3. The holding company system attests that
there are no material changes in transactions between insurers and non-insurers
in the group that have occurred since the last filing of the report to the lead
state commissioner and the non-insurers within the holding company system do
not post a material financial risk to the insurers ability to honor
policyholder obligations.
(3) For an insurance holding company that has
previously met an exemption with respect to the group capital calculation
pursuant
211
CMR 7.11(1) or (2), the lead
state commissioner may require at any time the ultimate controlling person to
file an annual group capital calculation, completed in accordance with the NAIC
Group Capital Calculation Instructions, if any of the following criteria are
met:
(a) Any insurer within the insurance
holding company system is in a Risk-Based Capital action level event as set
forth in
211 CMR
20.00 or a similar standard for a non-U.S. insurer;
or
(b) Any insurer within the
insurance holding company system meets one or more of the standards of an
insurer deemed to be in hazardous financial condition as defined in
211 CMR
150.00: Standards and Commissioner's Authority
for Placing Companies Deemed to Be in a Hazardous Financial Condition under
Administrative Supervision; or
(c) Any insurer within the insurance holding
company system otherwise exhibits qualities of a troubled insurer as determined
by the lead state commissioner based on unique circumstances including, but not
limited to, the type and volume of business written, ownership and organization
structure, federal agency requests, and international supervisor
requests.
(4) A non-U.S.
jurisdiction is considered to "recognize and accept" the group capital
calculation if it satisfies the following criteria:
(a) With respect to the M.G.L. c. 175, §
206C(z)(2)(iv):
1. The non-U.S. jurisdiction
recognizes the U.S. state regulatory approach to group supervision and group
capital, by providing confirmation by a competent regulatory authority, in such
jurisdiction, 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, including worldwide group
governance, solvency and capital, and reporting, as applicable, by the lead
state and will not be subject to group supervision, including worldwide group
governance, solvency and capital, and reporting, at the level of the worldwide
parent undertaking of the insurance or reinsurance group by the non-U.S.
jurisdiction; or
2. Where no U.S.
insurance groups operate in the non-U.S. jurisdiction, that non-U.S.
jurisdiction indicates formally in writing 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. This will service
as the documentation otherwise required in
211
CMR 7.11(4)(a)1.
(b) The non-U.S. jurisdiction
provides confirmation by a competent regulatory authority in such jurisdiction
that information regarding insurers and their parent, subsidiary, or affiliated
entities, if applicable, shall be provided to the lead state commissioner in
accordance with a memorandum of understanding or similar document between the
Commissioner and such 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 Commissioner shall determine, in consultation with the NAIC
Committee Process, if the requirements of the information sharing agreements
are in force.
(5) A list
of non-U.S.jurisdictions that "recognize and accept" the group capital
calculation will be published through the NAIC Committee Process:
(a) A list ofjurisdictions that "recognize
and accept" the group capital calculation pursuant to M.G.L. c. 175, §
206C(z)(2)(iv), is published through the NAIC Committee Process to assist the
lead state commissioner in determining which insurers shall file an annual
group capital calculation. The list will clarify those situations in which a
jurisdiction is exempted from filing under M.G.L. c. 175, §
206C(z)(2)(iv). To assist with a determination under M.G.L. c. 175, §
206C(z)(3)(i), the list will also identify whether a jurisdiction that is
exempted under either M.G.L. c. 175, § 206C(z)(2)(iii) and M.G.L. c. 175,
§ 206C(z)(2)(iv) requires a group capital filing for any U.S. based
insurance group's operations in that non-U.S. jurisdiction.
(b) For a non-U.S. jurisdiction where no U.S.
insurance groups operate, the confirmation provided to meet the requirement
of211 CMR
7.11(4)(a)2. will serve as
support for recommendation to be published as a jurisdiction that "recognizes
and accepts" the group capital calculation through the NAIC Committee
Process.
(c) If the lead state
commissioner makes a determination pursuant to M.G.L. c. 175,
§206C(z)(2)(iv) that differs from the NAIC List, the lead state
commissioner shall provide thoroughly documented justification to the NAIC and
other states.
(d) Upon
determination by the lead state commissioner that a non-U.S. jurisdiction no
longer meets one or more of the requirements to "recognize and accept" the
group capital calculation, the lead state commissioner may provide a
recommendation to the NAIC that the non-U.S. jurisdiction be removed from the
list of jurisdictions that "recognize and accepts' the group capital
calculation.