Current through Register Vol. 41, No. 3, September 23, 2024
A. Where an
insurance holding company system has previously filed the annual group capital
calculation at least once, the commissioner, if the lead state commissioner,
has the discretion to exempt the ultimate controlling person from filing the
annual group capital calculation if the commissioner makes a determination
based upon that filing that the insurance holding company system meets all of
the following criteria:
1. 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
billion;
2. Has no insurers within
its holding company structure that are domiciled outside of the United States
or one of its territories;
3. Has
no banking, depository, or other financial entity that is subject to an
identified regulatory capital framework within its holding company
structure;
4. 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
5.
The non-insurers within the holding company system do not pose a material
financial risk to the insurer's ability to honor policyholder
obligations.
B. Where an
insurance holding company system has previously filed the annual group capital
calculation at least once, the commissioner, if the lead state commissioner,
has the discretion to accept in lieu of the group capital calculation a limited
group capital filing if 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 billion, 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 one 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
commissioner, and the non-insurers within the holding company system do not
pose a material financial risk to the insurers' ability to honor policyholder
obligations.
C. For an
insurance holding company that has previously met an exemption with respect to
the group capital calculation pursuant to subsection A or B of this section,
the commissioner, if 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:
1.
Any insurer within the insurance holding company system is in a Risk-Based
Capital action level event as set forth in § 38.2-5503 of the Code of
Virginia or a similar standard for a non-U.S. insurer;
2. 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
14VAC5-290-30;
or
3. Any insurer within the
insurance holding company system otherwise exhibits qualities of a troubled
insurer as determined by the commissioner based on unique circumstances
including the type and volume of business written, ownership and organizational
structure, federal agency requests, and international supervisor
requests.
D. A non-U.S.
jurisdiction is considered to recognize and accept the group capital
calculation if the jurisdiction satisfies the following criteria.
1. 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 commissioner, if the lead
state commissioner, in accordance with a memorandum of understanding or similar
document between the commission and such jurisdiction. Such memorandum of
understanding or similar document may include the International Association of
Insurance Supervisors Multilateral Memorandum of Understanding or other
multilateral memoranda of understanding coordinated by the NAIC. The commission
shall determine, in consultation with the NAIC, if the requirements of the
information sharing agreements are in force.
2. In addition to the requirements in
subdivision 1 of this subsection, one of the following provisions applies:
a. 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
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
b. 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 serve as the documentation otherwise
required in subdivision 2 a of this subsection.
E.
1. A
list of jurisdictions that recognize and accept the group capital calculation
is published by the NAIC 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 an insurance company holding system may be
exempted from filing a group capital calculation. The list will also identify
whether a jurisdiction for an insurance company holding system that is exempted
requires a group capital calculation filing for any U.S. based insurance
group's operations in that non-U.S. jurisdiction.
2. For a non-U.S. jurisdiction where no U.S.
insurance groups operate, the confirmation provided to meet the requirement of
subdivisions D 2 b of this section will serve as support for recommendation to
be published by the NAIC as a jurisdiction that recognizes and accepts the
group capital calculation.
3. If
the commissioner, if the lead state commissioner, makes a determination that
differs from the NAIC list, the commissioner shall provide thoroughly
documented justification to the NAIC and other states.
4. Upon determination by the commissioner, if
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 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.
Statutory Authority: §§ 12.1-13 and 38.2-223 of
the Code of Virginia.
