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

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

(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.