New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter IV - Financial Condition Of Insurer and Reports to Superintendent
Subchapter A - Rules of General Application
Part 81 - Subsidiaries Of Insurance Companies
Subpart 81-1 - Subsidiaries Of Insurance Companies Subject To The Provisions Of Section 1403(c) Of The Insurance Law
Section 81-1.1 - Organization and acquisition of subsidiaries

Universal Citation: 11 NY Comp Codes Rules and Regs § 81-1.1

Current through Register Vol. 46, No. 39, September 25, 2024

An insurer shall notify the superintendent of its intention to organize or acquire a subsidiary pursuant to section 1603 of the Insurance Law. At least 90 days prior to such organization or acquisition, a statement containing the following information (to the extent such items are applicable to the proposed subsidiary acquisition or organization) shall be filed with the superintendent:

(a) Name, state of incorporation and principal business address of proposed subsidiary.

(b) Identities of, and biographical data concerning, the executive officers and directors of proposed subsidiary, and the identity of any person who is known to own or control, or who it is proposed will own or control, five percent or more of the voting securities of proposed subsidiary.

(c) Description of proposed subsidiary's business activities and any plans to materially change those activities or to dispose of any significant assets of the proposed subsidiary.

(d) Chart (pro forma) showing the insurer, the proposed subsidiary and any company, a majority of whose voting securities are or will be owned by the subsidiary. Indicate the percentage of voting securities owned by the immediate parent or parents of each company listed. If an exemption from the minimum ownership requirements of section 1602 of the Insurance Law is claimed, include the basis for such exemption.

(e) Financial statements of the proposed subsidiary for the most recent three fiscal years. Such financial statements shall be accompanied by the certificate of an independent public accountant to the effect that such financials present fairly the proposed subsidiary's financial position and the results of its operations for the year then ended, in conformity with generally accepted accounting principles or with requirements of insurance or other accounting principles prescribed or permitted under law.

(f) Specific details concerning the source of assets to be used by the insurer in effectuating the acquisition, including:

(1) current statements of assets, liabilities, surplus and other funds if not then on file with the Insurance Department;

(2) statements of anticipated cash flow for each quarter from the time of the notice to the end of the second quarter after the proposed date of acquisition;

(3) if assets of the insurer are to be liquidated, the extent of and necessity for such liquidation; the book, investment and current market value of such assets;

(4) if acquisition is to be made from borrowed funds, the source of such funds, nature of the indebtedness and security therefor, cost of use of such funds, reason for the borrowing, and copies of all agreements relating thereto; and

(5) if funds are provided by a subsidiary or affiliate, or a member of the insurer's holding company system (if any), information similar to the above should be furnished with a full explanation of all related agreements and arrangements.

(g) An explanation and supporting data as to the methods used by the acquiring insurer in determining the consideration to be paid in acquiring the proposed subsidiary.

(h) Copies of all other agreements or memoranda of understanding relating to the acquisition of the subsidiary.

(i) The identities of any officers or directors of either the insurer or of any person controlling, controlled by or under common control with the insurer, from whom the subsidiary or shares of the subsidiary are to be acquired.

(j) A general statement of the purpose of the proposed acquisition, including projections as to the impact of the acquisition on the insurer's operations and portfolio, for a three-year period, on various combinations of reasonable assumptions as to operating and related factors. Projections of financial results should also be made for operations of the subsidiary. A statement setting forth the identities and qualifications of the actuarial and investment staff making the projections should be provided, indicating whether such persons are employees of the insurer or outside consultants; if outside consultants, indicate the terms of their retainer.

(k) Detailed information regarding proposed management and staffing of the subsidiary.

(l) Such information as may be deemed necessary by the superintendent to determine the impact of the acquisition on competition in any line or lines of commerce in insurance.

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