Current through Reg. 50, No. 13; March 28, 2025
(a) Prior notice of
a transaction. Prior notice of a transaction is required as follows.
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(b)
Identity of parties to transaction. Furnish the following information for each
of the parties to the transaction:
(3) principal executive
office address;
(4) the
organizational structure, i.e. corporation, partnership, individual, trust,
etc.;
(5) a description of the
nature of the parties' business operations;
(6) relationship, if any, of other parties to
the transaction to the insurer filing the notice, including any ownership or
debtor/creditor interest by any other parties to the transaction in the insurer
seeking approval, or by the insurer filing the notice in the affiliated
parties;
(7) where the transaction
is with a non-affiliate, the name(s) of the affiliate(s) which will receive, in
whole or in substantial part, the proceeds of the transaction.
(c) Description of the
transaction. Furnish the following information for each transaction for which
notice is given:
(1) a statement identifying
the statute under which the transaction is filed;
(2) a statement of the nature of the
transaction and the reasons for entering into or changing the
transaction;
(3) a statement of how
the transaction complies with Insurance Code §
823.101;
(4) the proposed effective date of the
transaction; and
(5) the financial
impact of the transaction on the domestic insurer.
(d) Sales, purchases, exchanges, loans,
extensions of credit, guarantees or investments.
(1) Furnish a brief description of the amount
and source of funds, securities, property, or other consideration for the sale,
purchase, exchange, loan, extension of credit, guarantee, or investment,
whether any provision exists for purchase by the insurer filing notice, by any
party to the transaction, or by any affiliate of the insurer filing notice, a
description of the terms of any securities being received, if any, and a
description of any other agreements relating to the transaction such as
contracts or agreements for services, consulting agreements, and the like. If
the transaction involves other than cash, furnish a description of the
consideration, its cost, and its fair market value, together with an
explanation of the basis for evaluation.
(2) If the transaction involves a loan,
extension of credit or a guarantee, furnish a description of the maximum amount
the insurer will be obligated to make available under the loan, extension of
credit, or guarantee, the date on which the credit or guarantee will terminate,
and any provisions for the accrual of or deferral of interest.
(3) If the transaction involves an
investment, guarantee, or other arrangement, state the period during which the
investment, guarantee, or other arrangement will remain in effect, together
with any provisions for extensions or renewals of the investments, guarantees,
or arrangements. Furnish a brief statement as to the effect of the transaction
upon the insurer's surplus.
(e) Loans or extensions of credit to a
non-affiliate. If the transaction involves a loan or extension of credit to any
person who is not an affiliate, furnish a brief description of the agreement or
understanding through which the proceeds of the proposed transaction, in whole
or in substantial part, are to be used to make loans or extensions of credit
to, purchase the assets of, or make investments in, any affiliate of the
insurer making loans or extensions of credit, and specify in what manner the
proceeds are to be used to loan to, extend credit to, purchase assets of, or
make investments in any affiliate. Describe the amount and source of funds,
securities, property, or other consideration for the loan or extension of
credit and, if the transaction is one involving consideration other than cash,
a description of its cost and its fair market value together with an
explanation of the basis for evaluation. Furnish a brief statement as to the
effect of the transaction on the insurer's surplus.
(f) Reinsurance. If the transaction is a
reinsurance agreement or modification or a reinsurance pooling agreement or
modification described in Insurance Code §
823.103(a)(2),
furnish a description of the known or estimated amount of liability to be ceded
or assumed in each calendar year, the period the agreement will be in effect,
and a statement whether an agreement or understanding exists between the
insurer and non-affiliate that any portion of the assets constituting the
consideration for the agreement will be transferred to one or more of the
insurer's affiliates. Furnish a brief description of the consideration involved
in the transaction, and a brief statement as to the effect of the transaction
upon the insurer's surplus.
(g)
Management agreements, service agreements, and cost sharing arrangements.
(1) For management and service agreements,
furnish:
(A) a brief description of the
managerial responsibilities or services to be performed;
(B) a brief description of the agreement,
including a statement of its duration, together with brief descriptions of the
basis for compensation and the terms under which payment or compensation is to
be made.
(2) For
cost-sharing arrangements, furnish:
(A) a
brief description of the purpose of the agreement;
(B) a description of the period of time
during which the agreement is to be in effect;
(C) a brief description of each party's
expenses or costs covered by the agreement;
(D) a brief description of the accounting
basis to be used in calculating each party's costs under the
agreement;
(E) a brief statement as
to the effect of the transaction upon the insurer's policyholder
surplus;
(F) a statement regarding
the cost allocation methods specifying whether proposed charges are cost or
market based. If market based, include the rationale for using market instead
of cost, including justification for the company's determination that amounts
are fair and reasonable; and
(G) a
statement regarding compliance with the NAIC Accounting Practices and Procedure
Manual regarding expense allocation.
(h) Signature and certification. Signature
and certification are required as follows.
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