Current through Reg. 50, No. 13; March 28, 2025
(a) Statement
regarding the acquisition or change of control of a domestic insurer. Submit
information concerning the acquisition or change of control of a domestic
insurer as specified in subsections (b) - (n) and (p) of this section. Provide
the information required in subsections (o) and (p) of this section for a
divestiture of control. Separately submit supplemental information, necessary
to evaluate the enterprise risk to the insurer under Insurance Code §
823.201(e),
as specified in subsections (r) - (z) of this section. An applicant may submit
its application and supplemental information on a form made available by the
department.
(b) Insurers and method
of acquisition.
(1) State the name of the
acquiring person (applicant), the date the application is filed, and the name,
title, address, and telephone number of the individual to whom notices and
correspondence concerning this statement should be addressed.
(2) State the name and address of the
domestic insurer to which this application relates and a brief description of
how control is to be acquired.
(c) Identity and background of the applicant.
(1) State the name and address of the
applicant seeking to acquire control over the insurer.
(2) If the applicant is not an individual,
state the nature of its business operations for the past five years or for such
lesser period as the person and any predecessors have been in existence and
fully describe any business the person intends to commence.
(d) Identity and background of
individuals associated with the applicant.
Furnish only the information requested under Insurance Code
§
823.201(b)
for the applicant if the person is an individual, or for all persons who are
directors, executive officers, or direct or indirect owners of 10 percent or
more of the voting securities of the applicant if the applicant is not an
individual.
(e) Nature,
source, and amount of funds or other consideration.
(1) Describe the nature, source, and amount
of funds or other consideration used or to be used in effecting the merger or
other acquisition of control. If any part is represented or is to be
represented by funds or other consideration borrowed or otherwise obtained for
the purpose of acquiring, holding, or trading securities, furnish a description
of the transaction, the names of the parties, the relationship, if any, between
the borrower and the lender, and the amounts borrowed or to be
borrowed.
(2) If the source of the
consideration is a loan made in the lender's ordinary course of business and if
the applicant wishes the identity of the lender to remain confidential, the
applicant must specifically request that the identity of the lender be kept
confidential and not include the identity of the lender with the information
required by this section.
(f) Future plans for insurer.
(1) Describe any plans or proposals which the
applicant may have or may contemplate making to cause the insurer to pay
dividends or make other distributions, liquidate the insurer, sell any of its
assets, merge or consolidate it with any person or persons, make any other
material change in its business operations or corporate structure or
management, or cause the insurer to enter into material agreements,
arrangements, or transactions of any kind with any party.
(2) Describe any other arrangement or
agreement, oral or written, entered into by any acquiring party or any of its
affiliates and the domestic insurer during the immediately preceding 12
months.
(g) Voting
securities to be acquired. State the number of shares of the insurer's voting
securities and the amount or number of shares convertible into voting
securities which the applicant, its affiliates, and any person listed in
subsection (d) of this section plan to acquire, and the terms of the offer,
request, invitation, agreement, or acquisition.
(h) Ownership of voting securities. State the
amount of each class of any voting security of the insurer which is
beneficially owned or concerning which there is a right to acquire beneficial
ownership by the applicant, its affiliates, or any person listed in subsection
(d) of this section.
(i) Contracts,
arrangements, or understandings with respect to voting securities of the
insurer. Give a full description of any contracts, arrangements, or
understandings with respect to any voting security of the insurer in which the
applicant, its affiliates, or any persons listed in subsection (d) of this
section is involved, including, but not limited to, transfer of any of the
securities, joint ventures, loan or option arrangements, puts or calls,
guarantees of loans, guarantees against loss, guarantees of profits, division
of losses or profits, or the giving or withholding of proxies.
(j) Recent purchases of voting securities.
Describe any purchases of any voting securities of the insurer by the
applicant, any of its affiliates, or any person listed in subsection (d) of
this section during the 12 calendar months preceding the filing of this
statement. Include in the description the dates of purchase, names of the
purchasers, and consideration paid or agreed to be paid. State whether any
shares so purchased are hypothecated.
(k) Recent recommendations to purchase.
Provide a copy of any written, or a confirmed description of any oral,
recommendations to purchase any voting security of the insurer made by the
applicant, any of its affiliates, or any person listed in subsection (d) of
this section, or by anyone based on interviews with or at the suggestion of the
applicant, any of its affiliates, or any person listed in subsection (d) of
this section during the 12 calendar months preceding the filing of this
statement.
(l) Agreements with
broker-dealers. Provide a copy of any written, or a confirmed description of
any oral, agreement, arrangement, or understanding made with any broker-dealer
as to the solicitation of voting securities of the insurer for tender, and the
amount of any fees, commissions, or other compensation to be paid to
broker-dealers.
(m) Financial
statements and exhibits.
(1) Under this
subsection provide only a list of the financial statements, financial
projections, and exhibits submitted under subsection (w) of this
section.
(2) The financial
statements must include the annual financial statements of the applicant for
the preceding three fiscal years (or for such lesser period as the applicant
and any predecessors have been in existence), and similar unaudited financial
information as of a date not earlier than 120 days prior to the filing of the
statement, accompanied by affidavit or certification of the chief financial
officer of the applicant that the unaudited financial statement is true and
correct, as of its date, and that there has been no material change in
financial condition, as defined by the Act, from the date of the financial
statement to the date of the affidavit or certification. The statements may be
prepared on either an individual basis, or, unless the commissioner otherwise
requires, on a consolidated basis if the consolidated statements are prepared
in the usual course of business. A link to where the information is located can
be provided as an alternative to hard copy or electronic attachments with the
Form A. This only pertains to files that already have been filed with the
department, the National Association of Insurance Commissioners, or another
regulatory agency that easily can be accessed electronically.
(3) Unless exempted by the commissioner, the
annual financial statements of the applicant must be made in accord with
generally accepted auditing standards and accompanied by the certificate of an
independent certified public accountant that the statements present fairly the
financial position of the applicant 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. If the certificate is not available, then the financial
statement must be sworn to by the applicant as correctly reflecting its
financial condition, and in that case, the commissioner at the commissioner's
discretion may require the financial statement to be certified by an
independent public accountant.
(4)
If the applicant is an insurer which is actively engaged in the business of
insurance and licensed to do business in this state, it may provide financial
statements which conform to the annual statements of the insurer filed with the
insurance department of the insurer's domiciliary state and which are in accord
with the requirements of insurance or other accounting principles prescribed or
permitted under the law and regulations of the domiciliary state.
(5) File as exhibits copies of all tender
offers for, requests or invitations for, tenders of, exchange offers for, and
agreements to acquire or exchange any voting securities of the insurer and (if
distributed) of additional soliciting material.
(n) Enterprise risk management. Applicant
agrees to provide, to the best of its knowledge and belief, the information
required by Form F under Insurance Code §
823.0595, as
applicable, within 15 days after the end of the month in which the acquisition
of control occurs.
(o) Notice
regarding divestiture of control under Insurance Code §
823.154.
(1) Provide the name of the domestic insurer
and divesting person (applicant), the date the application is filed, and the
name, title, address, and telephone number of the individual to whom notices
and correspondence concerning this statement should be addressed.
(2) Provide notice that applicant is
divesting control of the above named insurance companies and describe how
control is being divested and include the percentage of control being
divested.
(3) Describe and state
the name of the person in control of the insurer before and after the
divestiture of control.
(4)
Supplemental information required under Insurance Code §
823.201(e)
to evaluate the enterprise risk to the insurer must be submitted separately
under subsection (y) of this section.
(p) Signature and certification. Signature
and certification of the Form A in the following form, except for alien
applicants, which must submit a certification acceptable in their jurisdiction:
Attached Graphic
(q)
Supplemental
information to evaluate enterprise risk. Separately submit
supplemental information, necessary to evaluate the enterprise risk to the
insurer under Insurance Code §
823.201(e),
as specified in subsections (r) - (z) of this section, which is confidential
under Insurance Code §
823.011.
(r) Identity and background of the applicant
to evaluate enterprise risk.
(1) Fully
describe any business that affiliates of the applicant intend to
commence.
(2) Furnish a chart or
listing clearly identifying the interrelationships between the ultimate
controlling party, applicant, and all other affiliates of the applicant.
Indicate in the chart or listing the percentage of voting securities of each
person controlled by the applicant or by any other person. If control of any
person is maintained other than by the ownership or control of voting
securities, indicate the basis of control. As to each person specified in the
chart or listing, indicate the type of organization (e.g., corporation, trust,
partnership) and the state or other jurisdiction of domicile. If court
proceedings looking toward a reorganization or liquidation are pending with
respect to any person, indicate which person, and set forth the title of the
court, nature of proceedings, and the date when commenced.
(s) Identity and background of individuals
associated with the applicant to evaluate enterprise risk.
(1) Provide biographical data of the
applicant if the person is an individual, or for all persons who are directors,
executive officers, or direct or indirect owners of 10 percent or more of the
voting securities of the ultimate controlling person and applicant if the
ultimate controlling person or applicant is not an individual, in the form of
the latest version of the biographical affidavit form published by and
available from the National Association of Insurance Commissioners and adopted
by reference under §
7.201(a)(1) of
this title.
(2) The applicant, if
the person is an individual, or for persons who are the chair of the board,
chief executive officer, president, chief financial officer, treasurer, and
controller of the ultimate controlling person and applicant if the ultimate
controlling person and applicant are not individuals, must comply with the
fingerprint requirements of Chapter 1, Subchapter D of this title, and provide
an independent third party background investigation report from a list of
vendors furnished by the National Association of Insurance Commissioners or as
acceptable to the commissioner.
(t) Nature, source, and amount of funds or
other consideration to evaluate enterprise risk.
(1) Provide copies of all agreements,
promissory notes, and security arrangements as described in subsection (e)(1)
of this section.
(2) Explain the
criteria used in determining the nature and amount of the
consideration.
(u)
Future plans for insurer to evaluate enterprise risk.
(1) Describe any financial or employment
guarantees given to present and contemplated management as part of the plans or
proposals submitted under subsection (f)(1) of this section.
(2) Describe applicant's business plans for
the domestic insurer and the ultimate controlling person's business plans for
the holding company system covering the period equal to the greater of three
years or the length of time of debt service required by applicant in its
acquisition of control including, but not limited to, change of location,
change of name, change in capital or surplus, reinsurance activity, type of
business to be written, and anticipated premium volume. Applicant may provide
the business plan on the National Association of Insurance Commissioners
Uniform Certificate of Authority Application.
(3) For the domestic insurer, provide the
full name of each individual proposed to be an executive officer or director of
the domestic insurer and the full name of each individual who will be
responsible for major areas of operations of the domestic insurer, including,
but not limited to, supervision of agents, underwriting, advertising,
production of business through agents and through reinsurance, policyholder
services, premium accounting, claims processing and litigation, reinsurance
cessions, investments, and financial accounting and reporting. For each
position, evidence of the individual's ability and experience to perform same
by providing biographical data in the form of the latest version of the
biographical affidavit form published by and available from the National
Association of Insurance Commissioners and adopted by reference under §
7.201(a)(1) of
this title.
(v) Voting
securities to be acquired. Provide a statement of the method by which the
fairness of the proposal to acquire the voting securities was determined under
subsection (g) of this section to evaluate enterprise risk.
(w) Financial statements and exhibits to
evaluate enterprise risk.
(1) Provide the
financial projections for the ultimate controlling person, applicant, and
domestic insurer for a period equal to the greater of three years or the length
of time of debt service required by the applicant in its acquisition of control
and any additional document or papers required by regulation, except that
financial projections are not required for individuals and the commissioner may
provide for a lesser period for publicly-traded companies.
(2) Provide the financial statements of the
ultimate controlling person if the ultimate controlling person is not a
publicly-traded company. The financial statements of the ultimate controlling
person of the applicant as described in subsection (m)(2) and (3) of this
section must include their annual financial statements.
(3) Unless exempted by the commissioner, if
the applicant is an individual person, the applicant must provide a reviewed
financial statement accompanied by the certificate of an independent public
accountant that the accountant is not aware of any material modifications that
should be made to the accompanying financial statement for it to be in
conformity with generally accepted accounting principles. Applicant must
provide a balance sheet as of a date not earlier than 120 days prior to the
filing of the statement and balance sheets for the second and third fiscal
years preceding the filing of the statement accompanied by affidavit or
certification that each balance sheet is true and correct as of its
date.
(4) File as exhibits copies
of all proposed employment, consultation, advisory, or management contracts
concerning the insurer.
(5) In
addition to the other material required to be filed by this section, a person
described in §
7.205(a) of this
title must file, as an exhibit, annual reports to the stockholders of the
insurer and the applicant for the last two fiscal years.
(x) Cybersecurity information to evaluate
enterprise risk. Describe the cybersecurity plan, including systems, policies
and procedures, reviews, incident responses, trainings, and strategies of the
ultimate controlling person and applicant, and future cybersecurity plans for
the insurer.
(y) Notice regarding
divestiture of control to evaluate enterprise risk.
(1) State the name and address of the
recipient(s) of the divestiture of control.
(2) Provide copies of any sales contracts and
an organizational chart before and after the divestiture of control.
(z) Signature and certification.
Signature and certification of the supplemental information in the following
form, except for alien applicants, which must submit a certification acceptable
in their jurisdiction:
Attached
Graphic
