New Jersey Administrative Code
Title 11 - INSURANCE
Chapter 1 - ADMINISTRATION
Subchapter 35 - INSURANCE HOLDING COMPANY SYSTEMS
Section 11:1-35.10 - Transactions subject to prior notice
Universal Citation: NJ Admin Code 11:1-35.10
Current through Register Vol. 56, No. 18, September 16, 2024
(a) An insurer required to give notice of a proposed transaction pursuant to 17:27A-4 shall furnish the required information as set forth in Exhibit D within the applicable time frames set forth in 17:27A-4.
(b) Agreements for cost sharing services and management services shall at a minimum and as applicable:
1. Identify the person providing services and
the nature of such services;
2. Set
forth the methods to allocate costs;
3. Require timely settlement, not less
frequently than on a quarterly basis, and compliance with the requirements in
the Accounting Practices and Procedures Manual adopted by the NAIC, with which
insurers shall comply pursuant to
17:23-1,
17:46B-55, and
17B:21-1;
4. Prohibit advancement of funds by the
insurer to the affiliate except to pay for services defined in the
agreement;
5. State that the
insurer will maintain oversight for functions provided to the insurer by the
affiliate and that the insurer will monitor services annually for quality
assurance;
6. Define the books and
records of the insurer to include all books and records developed or maintained
under or related to the agreement;
7. Specify that all books and records of the
insurer are and remain the property of the insurer and are subject to control
of the insurer;
8. State that all
funds and invested assets of the insurer are the exclusive property of the
insurer, held for the benefit of the insurer, and are subject to the control of
the insurer;
9. Include standards
for termination of the agreement with and without cause;
10. Include provisions for indemnification of
the insurer in the event of gross negligence or willful misconduct on the part
of the affiliate providing the services;
11. Specify that, if the insurer is placed in
receivership or control is seized by the Commissioner pursuant to
17:30C-1 et seq. or 17B:32-31 et
seq.:
i. All of the rights of the insurer
under the agreement extend to the receiver or Commissioner; and
ii. All books and records will immediately be
made available to the receiver or the Commissioner, and shall be turned over to
the receiver or Commissioner immediately upon the receiver's or the
Commissioner's request;
12. Specify that the affiliate has no
automatic right to terminate the agreement if the insurer is placed in
receivership pursuant to
17:30C-1 et seq. or 17B:32-31 et
seq.; and
13. Specify that the
affiliate shall continue to maintain any systems, programs, or other
infrastructure notwithstanding a seizure by the Commissioner pursuant to
17:30C-1 et seq. or 17B:32-31 et
seq., and will make them available to the receiver, for so long as the
affiliate continues to receive timely payment for services rendered.
(c) Notification of extraordinary dividends and any other ordinary dividend distribution to shareholders shall include the following information:
1. The
amount of the proposed dividend;
2.
The date established for payment of the dividend;
3. A statement as to whether the dividend is
to be in cash or other property. If the dividend is in property, a description
thereof shall be provided, as well as a description of its cost, fair market
value, and an explanation of the basis for valuation;
4. A copy of the work paper calculations
determining whether the proposed dividend is an extraordinary dividend as
defined in N.J.S.A. 17:27A-4c(2)(b). The work paper shall include the following
information:
i. The amounts, dates and form
of payment of all dividends or distributions (including regular dividends but
excluding distributions of the insurer's own securities) paid within the period
of 12 consecutive months ending on the date fixed for payment of the proposed
dividend for which approval is sought and commencing on the day after the same
day of the same month in the last preceding year;
ii. The insurer's surplus as regards
policyholders (total capital and surplus) as of the 31st of December next
preceding;
iii. If the insurer is a
life insurer, the net gain from operations less realized capital gains for the
12-month period ending the 31st day of December next preceding; and
iv. If the insurer is not a life insurer, the
net income less realized capital gains for the 12-month period ending the 31st
day of December next preceding;
5. A balance sheet and statement of income
for the period intervening from the last annual statement filed with the
Commissioner and the end of the month preceding the month in which the request
for dividend approval is submitted;
6. A brief statement as to the effect of the
proposed dividend upon the insurer's surplus and the reasonableness of surplus
in relation to the insurer's outstanding liabilities and the adequacy of
surplus relative to the insurer's financial needs; and
7. The non-refundable filing fee as set forth
at 11:1-32.4(b)
14.
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