58-5A-43. Acquisition of subsidiaries--Limitations.

Any domestic insurer, either by itself or in cooperation with one or more persons, may organize or acquire one or more subsidiaries with the approval of the director and within those acquisitions allowed by this title as long as the aggregate investment by the insurer and its subsidiaries acquired or organized do not exceed the limitations applicable to the investment.

Source: SL 1992, ch 341, § 2.

58-5A-44. Disposition of investment in subsidiary upon cessation of control--Waiver.

If an insurer ceases to control a subsidiary, it shall dispose of the investment in the subsidiary within three years from the time of the cessation of control or within further time as the director may prescribe upon written request by the insurer. If the investment qualifies for investment under any other section of this chapter, and the insurer has notified the director in writing of that qualification, the disposition requirement may be waived by the director.

Source: SL 1992, ch 341, § 3.

58-5A-45. Pre-acquisition notification--Person defined.

Any person acquiring assets pursuant to § 58-5A-3 shall file a pre-acquisition notification with the director containing the information set forth in § 58-5A-48 thirty days prior to the proposed effective date of the acquisition. Any person failing to file is subject to § 58-5A-53. For the purposes of this section, "person" does not include any securities broker holding, in the usual and customary brokers function, less than twenty percent of the voting securities of an insurance company or of any person which controls an insurance company.

Source: SL 1992, ch 341, § 4.

58-5A-46. Acquisition and involved insurer defined.

The following definitions shall only apply to §§ 58-5A-47 to 58-5A-53, inclusive:

(1)    "Acquisition," any agreement, arrangement, or activity the consummation of which results in a person acquiring directly or indirectly the control of another person, and includes the acquisition of voting securities, assets, bulk reinsurance, and mergers; and

(2)    "Involved insurer," an insurer which either acquires or is acquired, is affiliated with an acquirer or acquired or is the result of a merger.

Source: SL 1992, ch 341, § 8.

58-5A-47. Application of §§ 58-5A-46 to 58-5A-53--Exceptions.

The provisions of §§ 58-5A-46 to 58-5A-53, inclusive, apply to any acquisition in which there is a change in control of an insurer authorized to do business in this state except the following:

(1)    A purchase of securities solely for investment purposes as long as the securities are not used by voting or otherwise to lessen the competition in any insurance market in this state to the detriment of policyholders or consumers. If a purchase of securities results in a presumption of control pursuant to subdivision 58-5A-1(2), it is not solely for investment purposes unless the director or commissioner of the insurer's state of domicile accepts a disclaimer of control or affirmatively finds that control does not exist and the disclaimer or affirmative finding is communicated by the domiciliary director or commissioner to the director of this state;

(2)    The acquisition of any person by another person if both persons are neither directly nor through affiliates primarily engaged in the business of insurance, if pre-acquisition notification is filed with the director in accordance with the provisions of § 58-5A-48 thirty days prior to the proposed effective date of the acquisition. Pre-acquisition notification is not required for exclusion from this subdivision if the acquisition would otherwise be excluded from this subdivision by any other subdivision of this section;

(3)    The acquisition of already affiliated persons;

(4)    An acquisition if, as an immediate result of the acquisition,

(a)    In no market would the combined market share of the involved insurers exceed five percent of the total market;

(b)    There would be no increase in any market share; or

(c)    In no market would the combined market share of the involved insurers exceed twelve percent of the total market, and the market share increase by more than two percent of the total market.

For the purpose of this subdivision, a market means direct written insurance premium in this state for a line of business as contained in the annual statement required to be filed by insurers licensed to do business in this state;

(5)    An acquisition for which a pre-acquisition notification would be required pursuant to this section due solely to the resulting effect on the ocean marine insurance line of business; and

(6)    An acquisition of an insurer whose domiciliary director or commissioner affirmatively finds that the insurer is in failing condition; there is a lack of feasible alternatives to improving the condition; the public benefits of improving the insurer's condition through the acquisition exceed the public benefits that would arise from not lessening competition; and the findings are communicated by the domiciliary director or commissioner to the director of this state.

Source: SL 1992, ch 341, § 9; SL 2015, ch 246, § 23.

58-5A-48. Pre-acquisition notification--Contents--Waiting period.

An acquisition covered pursuant to the provisions of § 58-5A-47 may be subject to an order pursuant to § 58-5A-69 unless the acquiring or acquired person files a pre-acquisition notification and the waiting period has expired. The director shall give confidential treatment to information submitted under this section in the same manner as provided in § 58-5A-41.

The notification shall be as follows:

(1)    The pre-acquisition notification of this chapter shall be in a form and contain information as prescribed by the National Association of Insurance Commissioners relating to those markets which, under subdivision 58-5A-47(4), cause the acquisition not to be exempted from the provisions of this section. The director may require additional material and information to determine whether the proposed acquisition, if consummated, would violate the competitive standard of §§ 58-5A-49 and 58-5A-50. The required information may include an opinion of an economist as to the competitive impact of the acquisition in this state accompanied by a summary of the education and experience of the person indicating his ability to render an informed opinion;

(2)    The waiting period required shall begin on the date of receipt of the director of a pre-acquisition notification and shall end on the earlier of the thirtieth day after the date of the receipt, or termination of the waiting period by the director. Prior to the end of the waiting period, the director on a one-time basis may require the submission of additional needed information relevant to the proposed acquisition, in which event the waiting period shall end on the earlier of the thirtieth day after receipt of the additional information by the director or termination of the waiting period by the director.

Source: SL 1992, ch 341, § 10; SL 2015, ch 246, § 24.

58-5A-49. Action by director when acquisition lessens competition--Promulgation of rules establishing competitive standards.

The director may enter an order under § 58-5A-67 or 58-5A-69 with respect to an acquisition if there is substantial evidence that the effect of the acquisition lessens competition in any line of insurance in this state to the detriment of consumers or tends to create a monopoly or if the insurer fails to file adequate information in compliance with § 58-5A-48. The director may promulgate rules pursuant to chapter 1-26 to establish criteria and factors for competitive standards. The director may disapprove the acquisition or act to prevent the acquisition by invoking the laws of this state.

Source: SL 1992, ch 341, § 11.

58-5A-50. Acquisitions subject to order under § 58-5A-69.

An order may not be entered under § 58-5A-69 if:

(1)    The acquisition will yield substantial economies of scale or economies in resource utilization that cannot be feasibly achieved in any other way, and the public benefits which would arise from the economies would exceed the public benefits which would arise from not lessening competition; or

(2)    The acquisition will substantially increase the availability of insurance, and the public benefits of the increase would exceed the public benefits which would arise from not lessening competition.

Source: SL 1992, ch 341, § 12.

58-5A-51. Plan for limiting anticompetitive impact of acquisition--Time limit.

An order entered pursuant to §§ 58-5A-49, 58-5A-50, and 58-5A-69 may not become final earlier than thirty days after it is issued, during which time the insurer may submit a plan or notification of submission of a plan to remedy the anticompetitive impact of the acquisition. The director may allow the insurer up to ninety days to complete the submission of the plan. Based upon the plan or other information, the director shall specify the conditions, if any, under the time period during which the aspects of the acquisition causing a violation of the standards of this section would be remedied and the order vacated or modified.

An order pursuant to this section does not apply if the acquisition is not consummated.

Source: SL 1992, ch 341, § 13.

58-5A-52. Fine, suspension, or revocation for violation of cease and desist order.

Any person who violates a cease and desist order of the director may, after notice and hearing, be subject to one or more of the following:

(1)    An administrative fine of not more than ten thousand dollars for every day of violation; and

(2)    Suspension or revocation of the person's license.

Source: SL 1992, ch 341, § 14.

58-5A-53. Failure to comply with filing requirements--Fine.

Any insurer or other person that fails to make any filing required by §§ 58-5A-46 to 58-5A-52, inclusive, and that fails to demonstrate a good faith effort to comply with any filing requirement is subject to an administrative fine of not less than two thousand five hundred dollars and not more than fifty thousand dollars.

Source: SL 1992, ch 341, § 15.

58-5A-54. Report of dividends and distributions to shareholders--Time limit.

In addition to the filing requirements of §§ 58-5A-23 and 58-5A-35, each registered insurer shall file with the director a report of all dividends and other distributions to shareholders within fifteen business days following the declaration thereof. However, payment may not be made until ten days after the division receives the report. However, payment of an ordinary dividend may be made on the day that it is declared if an intention to declare the dividend is received by the division ten days before the date of payment. The division shall hold the notice of intention to declare a dividend confidential until the dividend has been declared.

Source: SL 1992, ch 341, § 17; SL 1993, ch 359, § 2; SL 1994, ch 373.

58-5A-55. Persons subject to registration to provide complete and accurate information to insurer.

Any person within an insurance holding company system subject to registration shall be required to provide to an insurer complete and accurate information reasonably necessary to enable the insurer to comply with the provisions of this chapter.

Source: SL 1992, ch 341, § 18.

58-5A-56. Notification to director of certain transactions required.

A domestic insurer and any person in its insurance holding company system may not enter into transactions, including any amendment or modification of an affiliate agreement previously filed pursuant to this chapter, that is subject to any materiality standard provided in this section, unless the director has received a written notification from the insurer of the transaction at least thirty days prior to its effective date. The director has thirty days from receipt to approve or disapprove the transaction. If the director takes no action within the thirty days, the transaction is deemed approved. The director may allow less than thirty days notification if the insurer can show cause why a lesser time is necessary. Transactions of which the insurer needs to notify the director are:

(1)    Sales, purchases, exchanges, loans, or extensions of credit, guarantees, or investments provided the transactions are equal to or exceed as of December thirty-first next preceding:

(a)    With respect to nonlife insurers, the lesser of three percent of the insurer's admitted assets or twenty-five percent of surplus as regards policyholders; or

(b)    With respect to life insurers, three percent of the insurer's admitted assets;

(2)    Loans or extensions of credit by the insurer to any person that is not an affiliate, with the agreement or that the proceeds of the transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of, or to make investments in any affiliate of the insurer provided the transactions are equal to or exceed as of December thirty-first next preceding:

(a)    With respect to nonlife insurers, the lesser of three percent of the insurer's admitted assets or twenty-five percent of surplus as regards policyholders; or

(b)    With respect to life insurers, three percent of the insurer's admitted assets;

(3)    Reinsurance agreements or modifications to the agreements, including:

(a)    Any reinsurance pooling agreement; and

(b)    Any agreement in which the reinsurance premium or a change in the insurer's liabilities, or the projected reinsurance premium or a change in the insurer's liabilities in any of the next three years, equal or exceeds five percent of the insurer's surplus as regards policyholders as of December thirty-first next preceding, including any agreement that requires as consideration the transfer of assets from an insurer to a nonaffiliate, if an agreement or understanding exists between the insurer and nonaffiliate that any portion of the assets will be transferred to one or more affiliates of the insurer;

(4)    All management agreements, service contracts, tax allocation agreements, and all cost-sharing arrangements; and

(5)    Any transactions which the director determines may adversely affect the interests of the insurer's policyholders.

Source: SL 1992, ch 341, § 21; SL 2015, ch 246, § 18.

58-5A-57. Transactions entered into to avoid director's review prohibited.

A domestic insurer may not enter into transactions which are part of a plan or series of like transactions with persons within the holding company system if the purpose of those separate transactions is to avoid the statutory amounts in § 58-5A-56 and thus the review. If the director determines that transactions were entered into over any twelve-month period to avoid § 58-5A-56, the director may exercise his authority under §§ 58-5A-62 to 58-5A-67, inclusive.

Source: SL 1992, ch 341, § 22.

58-5A-58. Considerations in decision to approve or disapprove transactions.

The director in making the decision to approve or disapprove the transactions in §§ 58-5A-56 and 58-5A-57 shall consider whether the transactions comply with the standards set forth in § 58-5A-32 and whether they may adversely affect the interests of policyholders or of the insurer.

Source: SL 1992, ch 341, § 23.

58-5A-59. Notification to director of certain investments into one corporation.

The director shall be notified within thirty days of any investment of the domestic insurer in any one corporation if the total investment in the corporation by the insurance holding company system exceeds ten percent of the corporation's voting securities.

Source: SL 1992, ch 341, § 24.

58-5A-60. Certain securities not to be voted at shareholder's meeting--Application for injunction.

No security, which is the subject of any acquisition, agreement, or arrangement, or which is acquired or to be acquired, in contravention of the provisions of this chapter or order issued by the director, may be voted at any shareholder's meeting, or may be counted for quorum purposes. Any action of shareholders requiring the affirmative vote of a percentage of shares may be taken as though those securities were not issued and outstanding; but no action taken at any meeting may be invalidated by the voting of those securities, unless the action would materially affect control of the insurer or unless the circuit court of Hughes County has so ordered. If an insurer or the director has reason to believe that any security of the insurer has been or is about to be acquired in contravention of the provisions of this chapter, an order issued by the director, the insurer or the director may apply to the circuit court in Hughes County to enjoin any offer, request, invitation, agreement, or acquisition made in contravention of this chapter or order issued by the director, to enjoin the voting of any security so acquired, or to void any vote of a security already cast at any meeting of shareholders.

Source: SL 1992, ch 341, § 27.

58-5A-61. Petition to seize or sequester voting securities acquired in violation of chapter.

An insurer or the director may petition the court in Hughes County for an order to seize or sequester any voting securities of the insurer owned directly or indirectly by a person if that person has acquired or is proposed to acquire any voting securities in violation of this chapter.

Source: SL 1992, ch 341, § 28.

58-5A-62. Violations by officers subject to fine--Determining amount of fine.

Every director or officer of an insurance holding company system who knowingly violates, participates in, or assents to, or who knowingly permits any of the officers or agents of the insurer to engage in transactions or make investments which have not been properly reported or submitted pursuant to this chapter shall pay, in their individual capacity, an administrative fine of not more than five thousand dollars per violation. In determining the amount of the fine, the director shall take into account the gravity of the violation, previous violations, and other matters.

Source: SL 1992, ch 341, § 29.

58-5A-63. Transactions or contracts entered into without approval--Cease and desist order by director.

If any insurer subject to this chapter or any director, officer, employee, or agent has engaged in any transaction or entered into a contract which is subject to §§ 58-5A-32, 58-5A-34, 58-5A-35, 58-5A-56, 58-5A-58, and 58-5A-59 and which would not have been approved had approval been requested, the director may order the insurer to cease and desist immediately any further activity under that transaction or contract. After notice and hearing, the director may also order the insurer to void any contracts and restore the status quo if the action is in the best interest of the policyholders, creditors, or the public.

Source: SL 1992, ch 341, § 30.

58-5A-64. Criminal proceedings for violation committed knowingly--Fine.

If it appears to the director that any insurer or any director, officer, employee, or agent thereof has knowingly committed a violation of this chapter, the director may request of the attorney general that criminal proceedings be instituted in the circuit court of Hughes County.

Any insurer which knowingly violates this chapter may be fined not more than twenty-five thousand dollars per violation. Any individual who knowingly violates this chapter may be fined in his individual capacity not more than two thousand dollars per violation.

Source: SL 1992, ch 341, § 31.

58-5A-65. False statements, reports, or filings as felony.

Any officer, director, or employee of an insurance holding company system who knowingly subscribes to or makes or causes to be made any false statements or false reports or false filings with the director is guilty of a Class 6 felony.

Source: SL 1992, ch 341, § 32.

58-5A-66. Order for conservation, liquidation, or rehabilitation--Distribution and recovery--Liability.

If an order for conservation, liquidation, or rehabilitation of a domestic insurer has been entered, the receiver may recover on behalf of the insurer:

(1)    From any parent corporation or holding company or person or affiliate who otherwise controlled the insurer, the amount of distributions (other than distributions of shares of the same class of stock) paid by the insurer on its capital stock; or

(2)    Any payment in the form of a bonus, termination settlement, or extraordinary lump sum salary adjustment made by the insurer or its subsidiary to a director, officer, or employee;

where the distribution or payment pursuant to subdivision (1) or (2) of this section is made at any time during the one year preceding the petition for liquidation, conservation or rehabilitation subject to the limitations of this section.

No such distribution is recoverable if the parent or affiliate shows that when paid the distribution was lawful and reasonable and that the insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the insurer to fulfill its contractual obligations.

Any person that was a parent corporation or holding company or any person that otherwise controlled the insurer or affiliate at the time distributions were paid is liable up to the amount of distributions or payments the person received. Any person that otherwise controlled the insurer at the time the distributions were declared is liable up to the amount of distributions he would have received if they had been paid immediately. If two or more persons are liable with respect to the same distributions, they are jointly and severally liable.

The maximum amount recoverable shall be the amount needed in excess of all other available assets of the impaired or insolvent insurer to pay the contractual obligations of the impaired or insolvent insurer and to reimburse any guaranty funds.

To the extent that any person liable under this section is insolvent or otherwise fails to pay claims due from it, its parent corporation or holding company or person that otherwise controlled it at the time the distribution was paid is jointly and severally liable for any resulting deficiency in the amount recovered from the parent corporation or holding company or person that otherwise controlled it.

Source: SL 1992, ch 341, § 33.

58-5A-67. Suspension, revocation, or refusal to renew license for violation.

If any person has committed a violation of this chapter which makes the continued operation of an insurer contrary to the interests of policyholders or the public, the director may, suspend, revoke, or refuse to renew the insurer's license or authority to do business in this state.

Source: SL 1992, ch 341, § 34.

58-5A-68. Stay of director's action upon appeal to circuit court.

The filing of an appeal to the circuit court for any administrative act shall stay the application of any rule, order, or other action of the director to the appealing party unless the court, after giving the party notice and an opportunity to be heard, determines that a stay would be detrimental to the interest of policyholders, shareholders, creditors, or the public.

Source: SL 1992, ch 341, § 35.

58-5A-69. Order by director upon violation of standards--Cease and desist--Denial of license.

If an acquisition violates the standards of this chapter, the director may enter an order:

(1)    Requiring an involved insurer to cease and desist from doing business in this state with respect to the line or lines of insurance involved in the violation; or

(2)    Denying the application of an acquired or acquiring insurer for a license to do business in this state.

Source: SL 1992, ch 341, § 36.

58-5A-70. Promulgation of rules by director.

The director may promulgate rules pursuant to chapter 1-26 covering requirements, standards, criteria, and limitations on acquisitions, mergers, and divestitures; notification of acquisitions or divestitures and the format for notification; competitive impact and the plans to remedy anticompetitive impact; the registration statement, information needed for compliance with the chapter, and material transactions; loans, extensions of credit; reinsurance agreements; extraordinary dividends; admittance or disallowance of assets and transactions of which the director needs notification; and standards and criteria for determining transactions which may adversely affect policyholders or the insurer.

Source: SL 1992, ch 341, § 37.

58-5A-71. Application of §§ 58-5A-60 and 58-5A-61.

Sections 58-5A-60 and 58-5A-61 do not apply to § 58-5A-47.

Source: SL 1992, ch 341, § 38.

58-5A-72. Ownership situs of voting securities.

For the purposes of this chapter, the situs of the ownership of the voting securities of a domestic insurer in a holding company system shall be construed to be in this state.

Source: SL 1992, ch 341, § 39.

58-5A-73. Additional investments by domestic insurer.

In addition to investments in common stock, preferred stock, debt obligations, and other securities permitted, a domestic insurer under this chapter may also:

(1)    Invest, in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries, amounts which do not exceed the lesser of ten percent of the insurer's assets or fifty percent of the insurer's surplus as regards policyholders, provided that after investing, the insurer's surplus as regards policyholders will be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs. In calculating the amount of the investments, investments in domestic or foreign insurance subsidiaries shall be excluded, and there shall be included:

(a)    Total net moneys or other consideration expended and obligations assumed in the acquisition or formation of a subsidiary, including all organizational expenses and contributions to capital and surplus of the subsidiary whether or not represented by the purchase of capital stock or issuance of other securities; and

(b)    All amounts expended in acquiring additional common stock, preferred stock, debt obligations, and other securities and all contributions to the capital or surplus, of a subsidiary subsequent to its acquisition or formation;

(2)    Invest any amount in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer provided that each subsidiary agrees to limit its investments in any asset so that the investments will not cause the amount of the total investment of the insurer to exceed any of the investment limitations specified. For the purpose of this clause, the term, the total investment of the insurer, includes:

(a)    Any direct investment by the insurer in an asset; and

(b)    The insurer's proportionate share of any investment in an asset by any subsidiary of the insurer, which shall be calculated by multiplying the amount of the subsidiary's investment by the percentage of the ownership of the subsidiary;

(3)    With the approval of the director, invest any greater amount in common stock, preferred stock, debt obligations, or other securities of one or more subsidiaries, provided that after the investment the insurer's surplus as regards policyholders will be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs.

Source: SL 1992, ch 341, § 40.

58-5A-74. Determining whether investments meet applicable requirements.

Whether any investment pursuant to § 58-5A-73 meets the applicable requirements of that section is to be determined before the investment is made, by calculating the applicable investment limitations as though the investment had already been made, taking into account the then outstanding principal balance on all previous investments in debt obligations, and the value of all previous investments in equity securities as of the day they were made, net of any return of capital invested, not including dividends.

Source: SL 1992, ch 341, § 25.

58-5A-75. Investments subject to chapter 58-27.

Investments in common stock, preferred stock, debt obligations, or other securities of subsidiaries made pursuant to § 58-5A-73 are subject to chapter 58-27.

Source: SL 1992, ch 341, § 41.

58-5A-76. Application to insurer not a member of same holding company.

Nothing contained in this chapter authorizes or permits any transactions which, in the case of an insurer not a member of the same holding company system, would be otherwise contrary to law.

Source: SL 1992, ch 341, § 44.

58-5A-77. Dividends paid from earned surplus--Exclusions--Promulgation of rules for ordinary dividends.

Insurers subject to this chapter may only pay dividends from earned surplus excluding surplus arising from unrealized capital gains or revaluation of assets. The director may promulgate rules pursuant to chapter 1-26 covering requirements for ordinary dividends including those for approval or disapproval of ordinary dividends.

Source: SL 1993, ch 359, § 3.

58-5A-78. Director's participation in supervisory college to determine insurer compliance.

Pursuant to the provisions of §§ 58-5A-78 to 58-5A-80, inclusive, the director may participate in a supervisory college for any domestic insurer registered pursuant to this chapter that is part of an insurance holding company system with international operations to determine compliance by the insurer with this chapter. The director, with respect to a supervisory college, may perform any of the following activities:

(1)    Initiate the establishment of a supervisory college;

(2)    Clarify the membership and participation of any other supervisor in the supervisory college;

(3)    Clarify the functions of the supervisory college and the role of any other regulator, including the establishment of a group-wide supervisor;

(4)    Coordinate the ongoing activities of the supervisory college, including planning meetings, supervisory activities, and processes for information sharing; and

(5)    Establish a crisis management plan.

Source: SL 2015, ch 246, § 19.

58-5A-79. Expenses of director's participation in supervisory college.

Each registered insurer subject to §§ 58-5A-78 to 58-5A-80, inclusive, is liable for and shall pay the reasonable expenses of the director's participation in a supervisory college, including reasonable travel expenses. A supervisory college may be convened as either a temporary or permanent forum for communication and cooperation between the regulators charged with the supervision of the insurer or its affiliates, and the director may establish a regular assessment to the insurer for the payment of these expenses.

Source: SL 2015, ch 246, § 20.

58-5A-80. Director's participation in supervisory college with other regulators.

The director may participate in a supervisory college with other regulators charged with supervision of the insurer or its affiliates, including any state, federal, and international regulatory agency to assess the business strategy, financial position, legal and regulatory position, risk exposure, risk management, and governance processes of individual insurers. The director may enter into agreements pursuant to §§ 58-5A-41.2 and 58-5A-41.3 providing for the basis for cooperation between the director and any other regulatory agency, and the activities of the supervisory college. Nothing in this section delegates to the supervisory college the authority of the director to regulate or supervise the insurer or its affiliates within its jurisdiction.

Source: SL 2015, ch 246, § 21.

58-5A-80.1 . Internationally active insurance group--Supervision.

The director may act as the group-wide supervisor for any internationally active insurance group in accordance with the provisions of this section. The director may also acknowledge another regulatory official as the group-wide supervisor if the internationally active insurance group:

(1) Does not have substantial insurance operations in the United States;

(2) Has substantial insurance operations in the United States, but not in this state; or

(3) Has substantial insurance operations in the United States and this state, but the director has determined pursuant to the factors set forth in § 58-5A-80.2 that another regulatory official is the appropriate group-wide supervisor.

An insurance holding company system that does not qualify as an internationally active insurance group may request that the director make a determination or acknowledgment as to a group-wide supervisor pursuant to §§ 58-5A-80.2 and 58-5A-80.6.

Source: SL 2020, ch 213, § 2.

58-5A-80.2 . International active insurance group--Group-wide supervisor determination.

In cooperation with other state, federal, and international regulatory agencies, the director shall identify a single group-wide supervisor for an internationally active insurance group. The director may determine that the director is the appropriate group-wide supervisor for an internationally active insurance group that conducts substantial insurance operations concentrated in this state. The director may acknowledge that an insurance regulatory official from another jurisdiction is the appropriate group-wide supervisor for the internationally active insurance group. When making a determination or acknowledgment under this section, the director shall consider the following factors:

(1) The place of domicile of the insurers within the internationally active insurance group that hold the largest share of the group’s written premiums, assets, or liabilities;

(2) The place of domicile of the top-tiered insurer or insurers in the insurance holding company system of the internationally active insurance group;

(3) The location of the executive offices or largest operational offices of the internationally active insurance group;

(4) Whether another regulatory official is acting or is seeking to act as the group-wide supervisor under a regulatory system that the director determines is:

(a) Substantially similar to the system of regulation provided under the laws of this state; or

(b) Otherwise sufficient in terms of providing for group-wide supervision, enterprise risk analysis, and cooperation with other regulatory officials; and

(5) Whether another regulatory official acting or seeking to act as the group-wide supervisor provides the director with reasonably reciprocal recognition and cooperation.

The insurance regulatory official identified under this section as the group-wide supervisor may determine that it is appropriate to acknowledge another supervisor to serve as the group-wide supervisor. The acknowledgment of the group-wide supervisor shall be made after consideration of the factors listed above and made in cooperation with and subject to the acknowledgment of other regulatory officials involved with supervision of members of the internationally active insurance group, and in consultation with the internationally active insurance group.

Source: SL 2020, ch 213, § 3.

58-5A-80.3 . Internationally active insurance group--Group-wide supervisor acknowledgment.

Notwithstanding any other provision in §§  58-5A-80.1 to 58-5A-80.9, inclusive, if another regulatory official is acting as the group-wide supervisor of an internationally active insurance group, the director shall acknowledge that regulatory official as the group-wide supervisor. The director shall make a determination or acknowledgment as to the appropriate group-wide supervisor pursuant to §  58-5A-80.2 if a material change in the internationally active insurance group results in any of the following:

(1) The internationally active insurance group's insurers domiciled in this state hold the largest share of the group's premiums, assets or liabilities; or

(2) This state becomes the place of domicile of the top-tiered insurer or insurers in the insurance holding company system of the internationally active insurance group.

Source: SL 2020, ch 213, § 4.

58-5A-80.4 . Group-wide supervisor--Information for determination.

The director, as provided in §  58-5A-37 , may collect any information necessary to determine if the director may act as the group-wide supervisor of an internationally active insurance group or if the director may acknowledge another regulatory official to act as the group-wide supervisor. Prior to issuing a determination that an internationally active insurance group is subject to group-wide supervision by the director, the director shall notify the insurer registered under this chapter and the ultimate controlling person within the internationally active insurance group. The internationally active insurance group shall have at least thirty days to provide the director with additional information pertinent to the pending determination. The director shall publish the identity of any internationally active insurance group that the director has determined is subject to group-wide supervision by the director on the division's website.

Source: SL 2020, ch 213, § 5.

58-5A-80.5 . Group-wide supervisor--Director supervision--Permitted activities.

If the director is the group-wide supervisor for an internationally active insurance group, the director may engage in any of the following group-wide supervision activities:

(1) Assess the enterprise risks within the internationally active insurance group to ensure that:

(a) The material financial condition and liquidity risks to the members of the internationally active insurance group that are engaged in the business of insurance are identified by management; and

(b) Reasonable and effective mitigation measures are in place;

(2) Request, from any member of an internationally active insurance group subject to the director's supervision, information necessary and appropriate to assess enterprise risk, including information about the members of the internationally active insurance group regarding:

(a) Governance, risk assessment and management;

(b) Capital adequacy; and

(c) Material intercompany transactions;

(3) Coordinate and, through the authority of the regulatory officials of the jurisdictions where members of the internationally active insurance group are domiciled, compel development and implementation of reasonable measures designed to ensure that the internationally active insurance group is able to timely recognize and mitigate enterprise risks to members of the internationally active insurance group that are engaged in the business of insurance;

(4) Communicate with other state, federal, and international regulatory agencies for members within the internationally active insurance group and share relevant information subject to the confidentiality provisions of §  58-5A-41 , through supervisory colleges as set forth in §  58-5A-78 ;

(5) Enter into an agreement with or obtain documentation from any insurer registered under this chapter, any member of the internationally active insurance group, and any other state, federal and international regulatory agency for members of the internationally active insurance group, providing the basis for or otherwise clarifying the director's role as group-wide supervisor, including provisions for resolving disputes with other regulatory officials. The agreement or documentation may not serve as evidence in any proceeding that any insurer or person within an insurance holding company system not domiciled or incorporated in this state is doing business in this state or is otherwise subject to jurisdiction in this state; and

(6) Other group-wide supervision activities, consistent with the authorities and purposes enumerated above, as considered necessary by the director.

Source: SL 2020, ch 213, § 6.

58-5A-80.6 . Group-wide supervisor--Director cooperation.

If the director acknowledges that another regulatory official from a jurisdiction that is not accredited by the NAIC is the group-wide supervisor, the director may reasonably cooperate, through supervisory colleges, with group-wide supervision undertaken by the group-wide supervisor, if:

(1) The director's cooperation is in compliance with the laws of this state; and

(2) The regulatory official acknowledged as the group-wide supervisor also recognizes and cooperates with the director's activities as a group-wide supervisor for other internationally active insurance groups, where applicable. If the recognition and cooperation is not reasonably reciprocal, the director may refuse recognition and cooperation.

Source: SL 2020, ch 213, § 7.

58-5A-80.7 . Information sharing.

The director may enter into any agreement with or obtain documentation from any insurer registered under this chapter, any affiliate of the insurer, and any other state, federal, and international regulatory agency for members of the internationally active insurance group, that provide the basis for or otherwise clarify a regulatory official's role as group-wide supervisor.

Source: SL 2020, ch 213, § 8.

58-5A-80.8 . Promulgation of rules.

The director may promulgate rules, pursuant to chapter 1-26 , establishing requirements, standards, criteria, and limitations for group-wide supervisors.

Source: SL 2020, ch 213, § 9.

58-5A-80.9 . Reasonable expenses.

A registered insurer subject to the provisions of §§  58-5A-80.1 to 58-5A-80.8 , inclusive, is liable for and shall pay the reasonable expenses of the director's participation in the administration of §§  58-5A-80.1 to 58-5A-80.8 , inclusive, including the engagement of attorneys, actuaries, and any other professionals and all reasonable travel expenses.

Source: SL 2020, ch 213, § 10.

58-5A-81. Maintenance of risk management framework.

An insurer shall maintain a risk management framework to assist the insurer with identifying, assessing, monitoring, managing, and reporting on its material and relevant risks. This requirement may be satisfied if the insurance group, of which the insurer is a member, maintains a risk management framework applicable to the operations of the insurer.

Source: SL 2017, ch 210, § 2.

58-5A-82. Regular conduct of ORSA.

Subject to the provisions of §§ 58-5A-85 to 58-5A-88, inclusive, an insurer, or the insurance group of which the insurer is a member, shall regularly conduct an ORSA consistent with a process comparable to the ORSA guidance manual. The ORSA shall be conducted at least annually but also at any time when there are significant changes to the risk profile of the insurer or the insurance group of which the insurer is a member.

Source: SL 2017, ch 210, § 3.

58-5A-83. Submission of ORSA summary report or comparable reports to division.

The ORSA summary report, or any combination of reports that together contain the information described in the ORSA guidance manual, shall be submitted to the division upon the director's request. The director may request the ORSA summary report no more than annually. If the insurer is a member of an insurance group, then the insurer shall submit the report or reports required by §§ 58-5A-81 to 58-5A-93, inclusive, if the director is the lead state director of the insurance group.

An insurer may comply with this section by providing the most recent and substantially similar reports provided by the insurer or another member of an insurance group of which the insurer is a member to the commissioner of another state or to a supervisor or regulator of a foreign jurisdiction, if that report provides information that is comparable to the information described in the ORSA guidance manual. Any such report in a language other than English must be accompanied by a translation of that report into the English language.

Source: SL 2017, ch 210, § 4.

58-5A-84. ORSA summary report requirements.

ORSA summary reports shall:

(1)    Include a signature of the insurer or insurance group's chief risk officer or other executive having responsibility for the oversight of the insurer's enterprise risk management process attesting to the best of their belief and knowledge that the insurer applies the enterprise risk management process described in the ORSA summary report and that a copy of the report has been provided to the insurer's board of directors or the appropriate committee thereof;

(2)    Be prepared consistent with the ORSA guidance manual. Documentation and supporting information shall be maintained and made available upon examination or upon request of the director; and

(3)    Be reviewed by the division, and any additional requests for information shall be made using similar procedures currently used in the analysis and examination of multi-state or global insurers and insurance groups.

Source: SL 2017, ch 210, § 5.

58-5A-85. Exemption from requirements.

An insurer shall be exempt from the requirements of §§ 58-5A-81 to 58-5A-93, inclusive, if:

(1)    The insurer 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 National Flood Insurance Program, less than five hundred million dollars; and

(2)    The insurance group of which the insurer is a member 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 National Flood Insurance Program, less than one billion dollars.

Source: SL 2017, ch 210, § 6.

58-5A-86. Requirements where insurer or insurer's group does not qualify for exemption.

If an insurer qualifies for exemption pursuant to subdivision 58-5A-85(1), but the insurance group of which the insurer is a member does not qualify for exemption pursuant to subdivision 58-5A-85(2), the ORSA summary report that may be required shall include every insurer within the insurance group. This requirement may be satisfied by the submission of more than one ORSA summary report for any combination of insurers provided any combination of reports includes every insurer within the insurance group.

If an insurer does not qualify for exemption pursuant to subdivision 58-5A-85(1), but the insurance group of which it is a member qualifies for exemption pursuant to subdivision 58-5A-85(2), the only ORSA summary report that may be required shall be the report applicable to that insurer.

Source: SL 2017, ch 210, § 7.

58-5A-87. Insurer's application for waiver.

An insurer that does not qualify for exemption may apply to the director for a waiver from the requirements of §§ 58-5A-81 to 58-5A-93, inclusive, based upon unique circumstances. In deciding whether to grant the insurer's request for waiver, the director may consider the type and volume of business written, ownership and organizational structure, and any other factor the director considers relevant to the insurer or insurance group of which the insurer is a member. If the insurer is part of an insurance group with insurers domiciled in more than one state, the director shall coordinate with the lead state commissioner and with the other domiciliary commissioners in considering whether to grant the insurer's request for a waiver.

Source: SL 2017, ch 210, § 8.

58-5A-88. One year period to comply with requirements following loss of qualification for exemption.

If an insurer that qualifies for an exemption subsequently no longer qualifies for that exemption due to changes in premium as reflected in the insurer's most recent annual statement or in the most recent annual statements of the insurers within the insurance group of which the insurer is a member, the insurer shall have one year following the year the threshold is exceeded to comply with the requirements of §§ 58-5A-81 to 58-5A-93, inclusive.

Source: SL 2017, ch 210, § 9.

58-5A-89. Conditions under which director may require maintenance of risk management framework, conduct of ORSA, and filing of ORSA summary report.

Notwithstanding the exemptions from the requirements of §§ 58-5A-81 to 58-5A-93, inclusive, the director may require that an insurer maintain a risk management framework, conduct an ORSA, and file an ORSA summary report:

(1)    Based on unique circumstances including the type and volume of business written, ownership and organizational structure, federal agency requests, and international supervisor requests; or

(2)    If the insurer has risk-based capital levels requiring company action, meets one or more of the standards of an insurer deemed to be in hazardous financial condition, or otherwise exhibits qualities of a troubled insurer as determined by the director.

Source: SL 2017, ch 210, § 10.

58-5A-90. Confidentiality of information submitted to division.

Documents, materials, or other information, including the ORSA summary report, in the possession of or control of the division that are obtained by, created by, or disclosed to the director or any other person under §§ 58-5A-81 to 58-5A-93, inclusive, are recognized by this state as being proprietary and containing trade secrets. All such documents, materials, or other information are confidential by law and privileged, are not subject to chapter 1-27, are not subject to subpoena, and are not subject to discovery or admissible in evidence in any private civil action. However, the director is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the director's official duties. The director may not make the documents, materials, or other information public without the prior written consent of the insurer.

Neither the director nor any person who received documents, materials, or other ORSA-related information, through examination or otherwise, while acting under the authority of the director or with whom such documents, materials, or other information are shared pursuant to §§ 58-5A-81 to 58-5A-93, inclusive, may be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information except in regulatory or legal actions brought as a part of the director's official duties.

Source: SL 2017, ch 210, § 11.

58-5A-91. Powers and duties of director regarding ORSA.

In order to assist in the performance of the director's regulatory duties regarding ORSA, the director:

(1)    May, upon request, share documents, materials, or other ORSA-related information, including the confidential and privileged documents, materials, or information subject to § 58-5A-90, including proprietary and trade secret documents and other materials with state, federal, and international financial regulatory agencies, including members of any supervisory college, with the NAIC or any third-party consultants designated by the director, if the recipient agrees in writing to maintain the confidentiality and privileged status of the ORSA-related documents, materials, or other information and has verified in writing the legal authority to maintain confidentiality;

(2)    May receive documents, materials, or other ORSA-related information, including otherwise confidential and privileged documents, materials, or information, including proprietary and trade secret information or documents, from regulatory officials of other foreign or domestic jurisdictions, including members of any supervisory college, or from the NAIC and shall maintain as confidential or privileged any documents, materials, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information; and

(3)    Shall enter into a written agreement with the NAIC or a third-party consultant governing sharing and use of information provided pursuant to §§ 58-5A-81 to 58-5A-93, inclusive, consistent with this subdivision that shall:

(a)    Specify procedures and protocols regarding the confidentiality and security of information shared with the NAIC or a third-party consultant pursuant to §§ 58-5A-81 to 58-5A-93, inclusive, including procedures and protocols for sharing by the NAIC with other state regulators from states in which the insurance group has domiciled insurers. The agreement shall provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the ORSA-related documents, materials, or other information and has verified in writing the legal authority to maintain confidentiality;

(b)    Specify that ownership of information shared with the NAIC or a third-party consultant pursuant to §§ 58-5A-81 to 58-5A-93, inclusive, remains with the director and the use of the information by the NAIC or a third-party consultant is subject to the direction of the director;

(c)    Prohibit the NAIC or third-party consultant from storing the information shared pursuant to §§ 58-5A-81 to 58-5A-93, inclusive, in a permanent database after the underlying analysis is completed;

(d)    Require prompt notice to be given to an insurer whose confidential information in the possession of the NAIC or a third-party consultant pursuant to §§ 58-5A-81 to 58-5A-93, inclusive, when subject to a request or subpoena to the NAIC or a third-party consultant for disclosure or production;

(e)    Require the NAIC or a third-party consultant to consent to intervention by an insurer in any judicial or administrative action in which the NAIC or a third-party consultant may be required to disclose confidential information about the insurer shared with the NAIC or a third-party consultant pursuant to §§ 58-5A-81 to 58-5A-93, inclusive; and

(f)    In the case of an agreement involving a third-party consultant, provide for the insurer's written consent.

Source: SL 2017, ch 210, § 12.

58-5A-92. Sharing of information and documents by director--Confidentiality.

The sharing of information and documents by the director pursuant to §§ 58-5A-81 to 58-5A-93, inclusive, does not constitute a delegation of regulatory authority or rule making. The director is solely responsible for the administration, execution, and enforcement of the provisions of §§ 58-5A-81 to 58-5A-93, inclusive. No waiver of any applicable privilege or claim of confidentiality in the documents, proprietary and trade-secret materials, or other ORSA-related information may occur as a result of disclosure of such ORSA-related information or documents to the director under this section or as a result of sharing as authorized in §§ 58-5A-81 to 58-5A-93, inclusive. Documents, materials, or other information in the possession or control of the NAIC or a third-party consultant pursuant to §§ 58-5A-81 to 58-5A-93, inclusive, are confidential by law and privileged, are not subject to chapter 1-27, are not subject to subpoena, and are not subject to discovery or admissible in evidence in any private civil action.

Source: SL 2017, ch 210, § 13.

58-5A-93. Promulgation of rules regarding ORSA.

The director shall promulgate rules, pursuant to chapter 1-26, to carry out ORSA including:

(1)    Adoption of the NAIC ORSA guidance manual;

(2)    Definition of terms;

(3)    Fees; and

(4)    Timing, form, and content of reports.

Source: SL 2017, ch 210, § 14.

58-5A-94. Group capital calculation--Annual filing required--Promulgation of rules.

Except as provided in this section and in § 58-5A-95, the ultimate controlling person of every insurer subject to registration must concurrently file with the registration an annual group capital calculation as directed by the lead state director or commissioner. The report must be completed in accordance with the NAIC group capital calculation instructions as posted on the website of the division. The instructions may permit the lead state director or commissioner to allow a controlling person that is not the ultimate controlling person to file the group capital calculation. The report must be filed with the lead state director or commissioner of the insurance holding company system as determined by the director in accordance with the procedures within the financial analysis handbook as adopted by the director pursuant to rules promulgated under chapter 1-26. The director may promulgate rules pursuant to chapter 1-26 to establish requirements, standards, criteria, exemptions, instructions, and limitations for the group capital calculation and related filings.

Source: SL 2024, ch 201, § 7.

58-5A-95. Group capital calculation--Annual filing exemptions.

Insurance holding company systems described in this section are exempt from filing the group capital calculation provided in § 58-5A-94:

(1)    An insurance holding company system that:

(a)    Has only one insurer within its holding company structure;

(b)    Only writes business in its domestic state;

(c)    Is only licensed in its domestic state; and

(d)    Assumes no business from any other insurer;

(2)    An insurance holding company system that is required to perform a group capital calculation specified by the United States Federal Reserve Board. The lead state director or commissioner must request the calculation from the Federal Reserve Board under the terms of information sharing agreements in effect. If the Federal Reserve Board cannot share the calculation with the lead state director or commissioner, the insurance holding company system is not exempt from the group capital calculation filing;

(3)    An insurance holding company system whose non-U.S. group-wide supervisor is located within a reciprocal jurisdiction, as described in § 58-14-16.23, that recognizes the U.S. state regulatory approach to group supervision and group capital; or

(4)    An insurance holding company system that provides information to the lead state that meets the requirements for accreditation under the NAIC financial standards and accreditation program, either directly or indirectly through the group-wide supervisor, who has determined the information is satisfactory to allow the lead state to comply with the NAIC group supervision approach, as detailed in the NAIC financial analysis handbook, and whose non-U.S. group-wide supervisor that is not in a reciprocal jurisdiction recognizes and accepts, as specified by the director in regulation, the group capital calculation as the world-wide group capital assessment for U.S. insurance groups who operate in that jurisdiction.

If the lead state director or commissioner determines that an insurance holding company system no longer meets one or more of the requirements for an exemption from filing the group capital calculation under this section, the insurance holding company system must file the group capital calculation at the next annual filing date unless given an extension by the lead state director or commissioner based on reasonable grounds shown.

The lead state director or commissioner has the discretion to exempt the ultimate controlling person from filing the annual group capital calculation or to accept a limited group capital filing or report in accordance with criteria as specified by the director in rules promulgated pursuant to chapter 1-26.

Source: SL 2024, ch 201, § 8.

58-5A-96. Group capital calculation required.

Notwithstanding the provisions of subdivisions 58-5A-95(3) and (4), if this state is considered the lead state, the director must require the filing of the group capital calculation for U.S. operations for any non-U.S. based insurance holding company system where, after any necessary consultation with other supervisors or officials, it is deemed appropriate by the director for prudential oversight and solvency monitoring purposes or for ensuring the competitiveness of the insurance marketplace.

Source: SL 2024, ch 201, § 9.

58-5A-97. Liquidity stress test framework--Scope criteria--Promulgation of rules.

The ultimate controlling person of every insurer subject to registration and scoped into the NAIC liquidity stress test framework must file the results of a specific year’s liquidity stress test. The filing must be made to the lead state insurance director or commissioner of the insurance holding company system as determined by the procedures within the financial analysis handbook adopted by the director pursuant to rules promulgated under chapter 1-26.

The NAIC liquidity stress test framework includes scope criteria applicable to a specific data year. The scope criteria are reviewed at least annually by the financial stability task force or its successor. Any change to the NAIC liquidity stress test framework or to the data year for which the scope criteria are to be measured is effective on January first of the year following the calendar year when such changes are adopted. Insurers meeting at least one threshold of the scope criteria are scoped into the NAIC liquidity stress test framework for the specified data year unless the lead state insurance director or commissioner, in consultation with insurance commissioners at the NAIC financial stability task force or its successor, determines the insurer may not be scoped into the framework for that data year. Insurers that do not trigger at least one threshold of the scope criteria are considered scoped out of the NAIC liquidity stress test framework for the specified data year, unless the lead state insurance director or commissioner, in consultation with the NAIC financial stability task force or its successor, determines the insurer should be scoped into the framework for that data year.

The performance of, and filing of the results from, a specific year’s liquidity stress test must comply with the NAIC liquidity stress test framework’s instructions and reporting templates for that year and any lead state insurance director or commissioner determinations, in consultation with the NAIC financial stability task force or its successor, provided within the framework.

The director may promulgate rules pursuant to chapter 1-26 to establish requirements, standards, criteria, exemptions, and limitations for the liquidity stress test and related filings.

Source: SL 2024, ch 201, § 10.

58-5A-98. Confidentiality of group capital calculation and liquidity stress test.

The group capital calculation and resulting group capital ratio required under § 58-5A-94 and the liquidity stress test, along with its results and supporting disclosures, required under § 58-5A-97, are regulatory tools for assessing group risks and capital adequacy and group liquidity risks and may not be used as a means to rank insurers or insurance holding company systems generally. Except as otherwise required under the provisions of this chapter, a licensee under this title is prohibited from releasing information with regard to the group capital calculation, group capital ratio, the liquidity stress test results, or supporting disclosures for the liquidity stress test of any insurer or any insurer group or of any component derived in the calculation by any insurer, broker, or other person engaged in any manner in the insurance business by making, publishing, disseminating, circulating, or placing before the public the information, or causing the information to be directly or indirectly made, published, disseminated, circulated, or placed before the public:

(1)    In a newspaper, magazine, or other publication;

(2)    In the form of a notice, circular, pamphlet, letter, or poster;

(3)    Over any radio or television station;

(4)    Any electronic means of communication available to the public; or

(5)    In any other way as an advertisement, announcement, or statement.

Source: SL 2024, ch 201, § 11.

58-5A-99. Insurer disclosure of certain confidential information permitted--Response to false or inappropriate statements.

If information is released in contradiction of § 58-5A-98, an insurer may publish an announcement in a written publication if the sole purpose of the announcement is to rebut any materially false statement with respect to the group capital calculation or any resulting group capital ratio, an inappropriate comparison of any amount to an insurer’s or insurance group’s group capital calculation or resulting group capital ratio, liquidity stress test result, supporting disclosures for the liquidity stress test, or an inappropriate comparison of any amount to an insurer’s or insurance group’s liquidity stress test result or supporting disclosures is published in any written publication and the insurer is able to demonstrate to the director with substantial proof the falsity of such statement or the inappropriateness, as the case may be.

Source: SL 2024, ch 201, § 12.

58-5A-100. Deposit or bond required for insurer in hazardous financial condition.

If an insurer subject to this chapter is deemed by the director to be in a hazardous financial condition, as defined by chapters 58-4 and 58-29B, or a condition that would be grounds for supervision, conservation, or a delinquency proceeding, then the director may require the insurer to secure and maintain either a deposit held by the director, or a bond, for the protection of the insurer for the duration of contracts or agreements or the existence of the condition for which the director required the deposit or the bond. In determining whether a deposit or a bond is required, the director may consider whether concerns exist with respect to the affiliated person’s ability to fulfill the contracts or agreements if the insurer were to be put into liquidation. Once the insurer is deemed to be in a hazardous financial condition or a condition that would be grounds for supervision, conservation, or a delinquency proceeding and a deposit or bond is necessary, the director has discretion to determine the amount of the deposit or bond, not to exceed the value of the contracts or agreements in any one year, and whether the deposit or bond is required for a single contract, multiple contracts, or a contract only with a specific person or persons.

Source: SL 2024, ch 201, § 13.

58-5A-101. Insurer records and data held by affiliate--Property of insurer.

All records and data of the insurer held by an affiliate are and remain the property of the insurer, are subject to control of the insurer, must be identifiable, and must be segregated or readily capable of segregation, at no additional cost to the insurer, from all other persons’ records and data. This includes all records and data that are otherwise the property of the insurer, in any form maintained, including claims and claim files, policyholder lists, application files, litigation files, premium records, rate books, underwriting manuals, personnel records, and financial records or similar records within the possession, custody, or control of the affiliate. At the request of the insurer, the affiliate must provide the receiver a complete set of all records of any type that pertain to the insurer’s business, obtain access to the operating systems on which the data is maintained, obtain the software that runs those systems either through assumption of licensing agreements or otherwise, and restrict the use of the data by the affiliate if it is not operating the insurer’s business. The affiliate must provide a waiver of any landlord lien or other encumbrance to give the insurer access to all records and data in the event of the affiliate’s default under a lease or other agreement.

Source: SL 2024, ch 201, § 14.

58-5A-102. Premiums--Property of insurer.

Premiums and other funds belonging to the insurer that are collected by or held by an affiliate are the exclusive property of the insurer and are subject to the control of the insurer. Any right of offset in the event an insurer is placed into receivership is subject to chapter 58-29B.

Source: SL 2024, ch 201, § 15.

58-5A-103. Affiliate of certain domestic insurers--Jurisdiction of insurer's appointees.

Any affiliate that is party to an agreement or contract with a domestic insurer that is referenced in subdivision 58-5A-56(4) is subject to the jurisdiction of any supervision, seizure, conservatorship or receivership proceedings against the insurer and to the authority of any supervisor, conservator, rehabilitator, or liquidator for the insurer appointed pursuant to chapter 58-29B for the purpose of interpreting, enforcing, and overseeing the affiliate’s obligations under the agreement or contract to perform services for the insurer that:

(1)    Are an integral part of the insurer’s operations, including management, administrative, accounting, data processing, marketing, underwriting, claims handling, investment, or any other similar functions; or

(2)    Are essential to the insurer’s ability to fulfill its obligations under insurance policies.

The director may require that an agreement or contract referenced in subsection 58-5A-21(2)(e), for the provision of services described in subdivisions (1) and (2) of this section, specify that the affiliate consents to the jurisdiction as set forth in this section.

Source: SL 2024, ch 201, § 16.