Sen. William R. Haine

Filed: 3/22/2012

 

 


 

 


 
09700SB2877sam006LRB097 16448 RPM 67739 a

1
AMENDMENT TO SENATE BILL 2877

2    AMENDMENT NO. ______. Amend Senate Bill 2877, AS AMENDED,
3as follows:
 
4in Section 5, Sec. 131.20a, by replacing paragraph (1)(a) with
5the following:
6    "(1) (a) The following transactions involving between a
7domestic company and any person in its insurance holding
8company system, including amendments or modifications of
9affiliate agreements previously filed pursuant to this
10Section, which are subject to any materiality standards
11contained in this Section, may not be entered into unless the
12company has notified the Director in writing of its intention
13to enter into such transaction at least 30 days prior thereto,
14or such shorter period as the Director may permit, and the
15Director has not disapproved it within such period. The notice
16for amendments or modifications shall include the reasons for
17the change and the financial impact on the domestic company.

 

 

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1Informal notice shall be reported, within 30 days after a
2termination of a previously filed agreement, to the Director
3for determination of the type of filing required, if any:
4        (i) Sales, purchases, exchanges of assets, loans or
5    extensions of credit, guarantees, investments, or any
6    other transaction, except dividends, (A) that involves the
7    transfer of assets from or liabilities to a company (A)
8    equal to or exceeding the lesser of 3% of the company's
9    admitted assets or 25% of its surplus as regards
10    policyholders as of the 31st day of December next preceding
11    or (B) that is proposed when the domestic company is not
12    eligible to declare and pay a dividend or other
13    distribution pursuant to the provisions of Section 27.
14        (ii) Loans or extensions of credit to any person that
15    is not an affiliate (A) that involve the lesser of 3% of
16    the company's admitted assets or 25% of the company's
17    surplus, each as of the 31st day of December next
18    preceding, made with the agreement or understanding that
19    the proceeds of such transactions, in whole or in
20    substantial part, are to be used to make loans or
21    extensions of credit to, to purchase assets of, or to make
22    investments in, any affiliate of the company making such
23    loans or extensions of credit or (B) that are proposed when
24    the domestic company is not eligible to declare and pay a
25    dividend or other distribution pursuant to the provisions
26    of Section 27.

 

 

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1        (iii) Reinsurance agreements or modifications thereto,
2    including all reinsurance pooling agreements, reinsurance
3    agreements in which the reinsurance premium or a change in
4    the company's liabilities, or the projected reinsurance
5    premium or a change in the company's liabilities in any of
6    the next 3 years, equals or exceeds 5% of the company's
7    surplus as regards policyholders, as of the 31st day of
8    December next preceding, including those agreements that
9    may require as consideration the transfer of assets from a
10    company an insurer to a nonaffiliate, if an agreement or
11    understanding exists between the company insurer and
12    nonaffiliate that any portion of those assets will be
13    transferred to one or more affiliates of the company
14    insurer.
15        (iv) All management agreements, service contracts,
16    other than agency contracts, tax allocation agreements,
17    all reinsurance allocation agreements related to
18    reinsurance agreements required to be filed under this
19    Section, and all cost-sharing arrangements, and any other
20    contracts providing for the rendering of services on a
21    regular systematic basis.
22        (v) Direct or indirect acquisitions or investments in a
23    person that controls the company, or in an affiliate of the
24    company, in an amount which, together with its present
25    holdings in such investments, exceeds 2.5% of the company's
26    surplus as regards policyholders. Direct or indirect

 

 

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1    acquisitions or investments in subsidiaries acquired
2    pursuant to Section 131.2 of this Article (or authorized
3    under any other Section of this Code), or in non-subsidiary
4    insurance affiliates that are subject to the provisions of
5    this Article, are exempt from this requirement.
6        (vi) Any series of the previously described
7    transactions that are substantially similar to each other,
8    that take place within any 180 day period, and that in
9    total are equal to or exceed the lesser of 3% of the
10    domestic company's insurer's admitted assets or 25% of its
11    policyholders surplus, as of the 31st day of the December
12    next preceding.
13        (vii) (vi) Any other material transaction that the
14    Director by rule determines might render the company's
15    surplus as regards policyholders unreasonable in relation
16    to the company's outstanding liabilities and inadequate to
17    its financial needs or may otherwise adversely affect the
18    interests of the company's policyholders or shareholders.
19    Nothing herein contained shall be deemed to authorize or
20permit any transactions that, in the case of a company an
21insurer not a member of the same holding company system, would
22be otherwise contrary to law.".