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COMPENDIUM OF REINSURANCE LAWS AND REGULATIONS
We are pleased to announce that the RAA’s Compendium of Reinsurance Laws and Regulations is nowonline for easier access and more timely updates. Subscribers have access 24/7 to the Compendium
online and may download any of the charts in pdf format as needed. Updates will now be automaticallymade throughout the year as new information becomes available, instead of the previous schedule ofSpring and Fall updates.
The Compendium of Reinsurance Laws and Regulations provides a comprehensive state-by-statesummary of a wide range of reinsurance law and regulation. Available only from the RAA, and compiledby the most knowledgeable reinsurance experts in the field, the Compendium contains charts summarizing
the laws and regulations of all fifty states for key reinsurance topics.
The Compendium includes the following charts:
Actuarial Opinion Summary
Allowance/Estimation of Claims
Arbitration Laws
Bulk Reinsurance Laws
Campaign Finance Laws
Capital/Surplus Requirements
Captive Statutes
Contract Clause Requirements
Credit for Reinsurance Laws
Credit for Reinsurance Regulations (
Cut-Throughs
Extraordinary Dividends Laws
Filing Requirements
Fraud
Fronting
Holding Company Act
Holocaust
Intermediary Model Act
Lobbyist Registration and Reporting
Mirror Image
Pre-Answer Security
Record Retention Requirements
Setoffs
Standard Fire Policy Laws
Title Reinsurance
These updated charts replace entirely the charts currently contained in the print version of the
Compendium.
Each of the charts is tailored to its topic, and the research, while consistently presented on a state bystate basis, is designed to best provide specific information pertaining to that area of law or regulation.You’ll find individual descriptions of the Compendium charts in the following pages of this brochure.
Search for terms and key phrases onscreen by using
the Adobe Acrobat Reader search function.
1
Actuarial Opinion SummaryProvides information about each state’s statutory (or other) authority for requiring filing of the AOS, and
details about confidentiality provisions, if any, in place to protect the filing.
Allowance/Estimation of ClaimsDetails whether contingent claims are allowed in each state, including information on third-party contingent
claims, the effect of judgments on claim allowances, whether immature claims are allowed, the required
content of a claim, and whether the court must approve the liquidator’s recommendation
.
CHARTS
2
Actuarial Opinion Summary Requirements and Possible Confidentiality Protections by State
State Possible Statutory or Other
Authority for Actuarial Opinion
Summary (AOS) Filing Requirement
Adoption of
the
Confiden-
tiality
Language of
the P/C
Actuarial
Opinion
Model Law
Other Potentially Applicable Confidentiality Language Application
of AOS
Filing
Require-
ment to
Domestic
and/or
Foreign
Companies
Alabama
There is no statute or regulation explicitly requiring an AOS. The Property & Casualty Insurers Required Filings in the State of Alabama checklist includes an AOS requirement for domestic insurers. Checklist instructions for AOS: “Domestic companies should mail Annual and Quarterly Financial Statements, MDA, Supplements and Audited Financial Statements to the Annual Statements to the Alabama Dept. of Insurance, 201 Monroe St., Suite 1700, Montgomery, AL 36104”.
No Department advised RAA in November 2007 that it relies on Regulation 482-1-104-.03 and Stone v. Consolidated Publishing, 404 So. 2d 678 (1981), to protect the confidentiality of an AOS. Regulation 482-1-104-.03 provides: “(1) Any work papers, recorded information, documents or copies thereof produced by, obtained by or disclosed to the Commissioner or any other person in the course of any examination conducted pursuant to Section 27-2-23, Code of Alabama 1972, may be withheld from public inspection if necessary, in the opinion of the Commissioner, to protect the person examined from unwarranted injury or to be in the public interest. (2) Any such information shall be clearly marked ‘confidential’ and shall be maintained by the department separate and distinct from all other records which are available for public inspection.”
Domestic
Allowance/Estimation of Claims (For a description of column headings see pages 15 and 16.)
NOTES: Unless otherwise indicated, the language referred to in each column is found in the statute listed in the STATE column. Also, the information provided on this chart refers primarily to property/casualty receiverships.
STATE
Column 1
Contingent/
Unliquidated
Claims
Generally
Allowed/Not
Allowed
Column 2
Contingent
Third Party
Claims
Column 3
Effect of
Judgment
on Claim
Allowance
Column 4
Immature
Claims
Recognized
Column 5
Contents of
Claim
Column 6
Requirement
of Court
Approval
Notes /
Comments
ALABAMA
Code of Ala. §27-32-30
Not Allowed
Expanded Yes No Yes
§27-32-19(a) Yes
§27-32-19(c)
ALASKA
Alaska Stat. §21.78.280
Allowed(c)1/ Not Allowed
(a)(1-2)*
Shortened
s(b) No Yes (d) Yes
§21.78.292(a) Yes
§21.78.293(a) *Contains both types of language
ARIZONA
A.R.S. §20-639
Not Allowed
A(1)
Expanded
B(1-3) Yes (C)
No Yes §20-628(A),(B)
Yes §20-628(C)
Arbitration LawsProvides information on how arbitration provisions in contracts are treated in each state, including
enforceability, prohibitions and arbitration in insolvency.
Bulk Reinsurance LawsCompares state bulk reinsurance laws to common statutory language; differences from the common statutory
language are indentified and additional provisions are noted.
CHARTS
3
State
Arbitration Provisions
in Contracts are
Enforceable
(In General
Administrative Code)
General Code Contains
Exceptions to
Enforceability of
Arbitration Provisions
BUT Exceptions are not
Applicable to Reinsurers
Arbitration
Prohibition
Found in
Insolvency
Code
Arbitration
Injunction Provision
Found in Insolvency
Code
(Old NAIC Model)1
Comments
Alaska
Alaska Stat. § 09.43.010 (Agreements before
1/1/2005) Alaska Stat. § 09.43.300
– 09.43.545 (Agreements after
1/1/2005)
Arizona
A.R.S. § 12-1501 A.R.S. § 20-261.01(c) (Credit for Reinsurance) states that the statute will not override the obligation of the parties to a reinsurance agreement to arbitrate if the agreement contains an arbitration clause.
Arkansas
A.C.A. § 16-108-201
California
Cal. Code Civ. Proc. § 1281
Colorado
C.R.S. § 13-22-206 C.R.S. § 10-3-523
Connecticut
Conn. Gen. Stat. § 52-408
Delaware
10 Del. C. § 5701
State
Domestic Stock Insurers
Domestic Mutual Insurers
Other
Alabama
Code of Ala. § 27-27-47
Code of Ala. § 27-27-48
Alaska
Alaska Stat. § 21.69.610
–Differentiates between reinsurance agreements and assumption reinsurance; assumption reinsurance not effective until approved by commissioner – There is no deadline by which the commissioner must approve the agreement
Alaska Stat. § 21.69.620
–Differentiates between reinsurance agreements and assumption reinsurance –There is no deadline by which the commissioner must approve the agreement
Arizona
A.R.S. § 20-732
– Also applies to a “limited stock insurer” – Commissioner may impose extension of 30-day post-approval request period –Hearing may be requested
A.R.S. § 20-734
– There is no provision for a hearing by the commissioner
Campaign Finance LawsProvides information on, and citations to, each state’s statutes dealing with contribution limits, reporting
and prohibitions, as well as telephone numbers and website addresses for the responsible state agency.
Capital/Surplus RequirementsLists the capital and surplus requirements for the establishment and maintenance of several types of insurers.
CHARTS
4
Campaign Finance Laws NOTE: This chart is intended only as a general reference tool. No decision regarding campaign finance matters should be made on the basis of this information alone. Such decisions should be made only after a review of the appropriate laws and consultation with the appropriate agency that enforces campaign finance laws.
Any questions regarding Federal campaign finance law should be directed to the Federal Election Commission (FEC) by calling 1-800-424-9530.
State
Contribution Limits Reporting Prohibitions Notes
AL
Individuals: Unlimited Corporations: Limited to $500 to any candidate, political committee, or political party per election. PACs: Unlimited
Ala. Code §§ 17-5-1 – 17-5-19
Ala. Code §§ 10-2A-70.1 – 10-2A-70.2
Report Required From: Principal campaign committees and political action committees Report Contents: Information on all contributions and expenditures, with detailed information required on expenditure recipients or contributors of more than $100 in the aggregate per year. Loans of greater than $100 are also subject to detailed reporting requirements, as are debts and obligations owed by or to the committee or the elected official, and circumstances surrounding the extinguishment of those debts. Report Due Date: Between 45 days and 50 days before and between 10 and 5 days before an election; annually on or before January 31 of the succeeding year
Cash: No rule Anonymous Contributions: No rule
Legislative Sessions: Solicitations by or contributions to state office candidates are prohibited during legislative sessions (except loans by candidates to their principal campaign committee) Other Restrictions: Contributions may be solicited only to influence the outcome of an election; PAC expenditures over $100 must be by check; Contributions to a PAC may be earmarked for a specific candidate but the PAC is under no obligation to distribute to that candidate Questions? Call the Secretary of State at 334/242-7210 www.sos.state.al.us
Capital/Surplus Requirements KEY TO ABBREVIATIONS: P = Property; C= Casualty; P/C = Property/Casualty; M/C = Multiple or Combination Lines; F/M – Fire and Marine; L = Life UNLESS OTHERWISE NOTED THE STATUTES APPLY TO: STOCK, MUTUAL, DOMESTIC AND FOREIGN INSURERS.
State
Citation
Minimum
Capital / Surplus (in thousands
unless indicated otherwise)
Additional
Capital / Surplus
When First
Authorized
(in thousands unless indicated otherwise)
Additional
Maintained
Capital / Surplus
(in thousands unless indicated otherwise)
Reinsurance1
(in thousands unless indicated otherwise)
Other Comments
Alabama
Code of Ala. §§ 27-3-7 to 27-3-9
P - $300 C - $400 M/C - $500 L - $800
P - $300 C - $400 M/C - $500 (a.)
L - $1 M
N/A Not mentioned in statute.
·M/C = “Multiple Lines” - any two or more lines other than title and life ·Requirements are based on all kinds of insurance actually transacted by insurer in “any and all areas in which it operates, whether or not only a portion of such kinds are to be transacted” in Alabama. Code of Ala. § 27-3-7(c). · (a.) Additional 50% surplus required if actively transacted insurance in domicile for less than 5 years.
Captive StatutesOffers essential information on captive laws and regulations, including details about sponsored captive or
protected cell funding, capital and surplus requirements, credit for reinsurance and discounting of loss
reserves.
Contract Clause RequirementsProvides information on statutory and regulatory contract requirements of interest to reinsurers, including
service of suit provisions, insolvency clauses, broker agreements and trusts.
CHARTS
5
Captive Statutes
State
Sponsored Captive or
Protected Cell Funding
Capital and Surplus Requirements
Credit for Reinsurance
Discounting of
Loss Reserves
Alabama
Code of Ala. §§ 27-31B-1 through 27-31B-24 Sponsored captives and /or protected cells: Code of Ala. §§ 27-31B-22 through 27-31B-24
Code of Ala. §§ 27-31B-22: The business written by a sponsored captive with respect to each protected cell shall be one of the following: -fronted by an insurance company licensed in any state -reinsured by an authorized or approved insurance company -secured by a U.S. trust fund funded by an irrevocable LOC or other arrangement acceptable to the commissioner -The amount of security provided by the trust fund may not be less than the reserves associated with the liabilities including loss reserves, allocated LAE, IBNR, and unearned premiums for business written through the protected cell
Minimum unimpaired paid-in capital and surplus: -pure captives: $250,000 -association captives: $750,000 -industrial insured captives: $500,000 -sponsored captive insurers: $1,000,000 -reciprocal captive: $1,000,000
Branch captive insurance companies must maintain a U.S. trust fund; amount of security must be statutory amounts plus the reserves for losses and unearned premiums with regard to business written through branch operations
A captive may take credit for reserves on risks ceded to reinsurers complying with Code of Ala. § 27-5-12 (b)(2) a-d (“Kinds of Insurance; Limits of Risk; Reinsurance”); no credit if reinsurer is non-compliant
Contract Clause Requirements Chart is intended to indicate statutory and/or regulatory contract requirements of interest to reinsurers.
NOTE: For a detailed definition of the terms used in this chart, please see the “Explanation of Terms” immediately following the chart.
STATE
TYPE OF CLAUSE
CITATION
NOTES
Service of Suit Insolvency
Intermediary
Broker
Agreement
Manager
Agreement
Multiple
Beneficiary
Trusts (§2)
Single
Beneficiary
Trusts (§3)
AL
Code of Ala.
§ 27-5-
12(c)(5)
Ala. Admin. Code r. 482-1-105-.13(b)
Code of Ala.
§ 27-5-12(f)
Ala. Admin. Code r. 482-1-105-.13(a)
Code of Ala.
§ 27-5A-4
Code of Ala.
§ 27-5A-7
Ala. Admin. Code r. 482-
1-105-.07
Ala. Admin. Code r. 482-
1-105-.09
See also bulletin dated July 12, 1990 which clarifies that certain language contained in reinsurance agreements in reference to the payment of proceeds to a liquidator is not recognized by the Insurance Department as an exception to the contract requirements pertaining to insolvency clauses.
Credit for Reinsurance LawsCompares state laws on credit for reinsurance with the NAIC Model Law, referencing specific features of
the Model Law and explaining significant aspects of the state law, such as differences from the Model Law.
Credit for Reinsurance RegulationsCompares state regulations on credit for reinsurance with the NAIC Model Regulation, referencing specific
features of the Model Regulation and explaining significant aspects of the state law, such as differences
from the Model Regulation.
CHARTS
6
Credit for Reinsurance Laws [NOTE: For complete coverage, see also Credit for Reinsurance Regulations, infra.]
State &
Section
NAIC Model Law on Credit for Reinsurance: [SEE ATTACHED SUMMARY]
Ceding insurer allowed credit when ceding to
reinsurer which: A. Is Licensed in [state] B. Is Accredited in [state] C. Is Licensed/domiciled in state w/ "substantially
similar" credit law D. Maintains trust fund E. Asset or reduction for funds withheld
A. B. C. D. E.
TO USE: THIS CHART COMPARES STATE LAWS ON CREDIT FOR REINSURANCE WITH THE NAIC
MODEL LAW ON CREDIT FOR REINSURANCE. A CHECK MARK ( ) IN THE COLUMNS INDICATES THAT
THE STATE'S LAW IS THE SAME AS, OR SUBSTANTIALLY SIMILAR TO, THE NAIC MODEL LAW. THE
ABSENCE OF A CHECK MARK MEANS THAT THE STATE LAW HAS NO SUCH PROVISION. THE COMMENTS
SECTION USES CODES TO REFERENCE SPECIFIC FEATURES OF THE MODEL LAW, AND EXPLAINS OTHER
SIGNIFICANT ASPECTS OF THE STATE LAW, INCLUDING DIFFERENCES FROM THE MODEL LAW.
------------------------------------------------------------------------------------------------------------- COMMENTS:
DOM = applies to domestic ceding companies only ILU = no ILU trust provision INS = insolvency clause required for credit LLOYD'S = corporate membership acknowledged POOLS = no provision re: reinsurance required by law
§304 = provision re: alien trust funds
Alabama Ala. Code §27-5-12
DOM ILU
INS LLOYD'S
§ 304
INS: Recognizes existence of cut through in event of insolvency.
Credit for Reinsurance Regulations [NOTE: For complete coverage of states§ regulation of credit for reinsurance, see also Credit for Reinsurance Statutes, supra.]
State & Section
NAIC Credit for Reinsurance Model
Regulation: [SEE ATTACHED SUMMARY] Ceding insurer allowed credit when
ceding to reinsurer which: A. Is Licensed in [state] B. Is Accredited in [state] C. Is Licensed/domiciled in state w/ “substantially similar” credit law D. Maintains trust fund E. Assets or reduction for funds withheld A. B. C. D. E.
THIS CHART COMPARES STATE REGULATIONS ON CREDIT FOR REINSURANCE WITH THE NAIC CREDIT FOR
REINSURANCE MODEL REGULATION. A CHECK MARK ( ) IN THE COLUMNS INDICATES THAT THE STATE REGULATION IS
THE SAME AS, OR SUBSTANTIALLY SIMILAR TO, THE MODEL. THE ABSENCE OF A CHECK MARK MEANS THAT THE STATE
LAW HAS NO SUCH PROVISION. THE COMMENTS SECTION OF THIS CHART EMPLOYS CODES TO REFERENCE SPECIFIC
FEATURES OF THE MODEL REGULATION, AND EXPLAINS OTHER SIGNIFICANT ASPECTS OF THE STATE LAW, INCLUDING
DIFFERENCES FROM THE MODEL REGULATION. --------------------------------------------------------------------------------------------------------------------------- COMMENTS:
DOM = applies to domestic ceding companies only INS = insolvency clause required for credit AR-1 = Form AR-1 (or equivalent) required LLOYD’S = corporate membership acknowledged Ch. 15 = provision re alien trust funds
Alabama
Ala. Admin. Code r. 482-1-105-.01 through -.15
a.
DOM
INS LLOYD’S
Ch. 15
AR-1: Substantially Similar. (Applies to new and renewal reinsurance agreements entered into after 12/31/95.) a. Reg. 105 revised to delete “accredited” provision.
Statutes/Regulations Relating to Cut-ThroughsCompiles state laws which may impact an insurer’s ability to execute a “cut-through” endorsement, or
include a cut-through clause in a reinsurance contract.
Extraordinary Dividends LawsProvides information on important features of each state’s extraordinary dividends statutes and regulations,
with reference to the NAIC Model Law.
CHARTS
7
---
Statutes/Regulations Relating to Cut-Throughs
This Chart compiles state laws which may impact on insurers’ ability to execute a “cut-through” endorsement, or include a cut-through clause in a reinsurance contract. To use the Chart, see the Key at the end of this document.
Credit for Reinsurance Statute
Insolvency Statute
STATE
RULE.
“INSOLVENCY CLAUSE”
REQUIRED FOR REINSURANCE
CREDIT
1. LAW
PERMITS ANOTHER
PAYEE
2. LAW PERMITS
ANOTHER PAYEE OR AN ASSUMPTION
3. LAW PERMITS ANOTHER
PAYEE AND AN ASSUMPTION
4. LAW PERMITS
ASSUMPTIONS ONLY
5. OTHER TYPES
OF LAWS
1. NAIC MODEL
LANGUAGE --UNCLEAR
2. LAW PERMITS
ANOTHER PAYEE OR AN ASSUMPTION
3. LAW PERMITS
ANOTHER PAYEE AND AN
ASSUMPTION
4. LAW PERMITS
ASSUMPTION ONLY
5. OTHER TYPES
OF LAWS
AL
Law § 27-5-12(f); Reg. No. 105 § 13(A)
§ 27-5-12(f) (1), (2) Law §27-5-
12(f) also provides that reinsurance is payable on the basis of claims allowed by the receivership court.
Bulletin 4-6-04 repeals earlier Department Bulletin that prohibited cut-through
§ 27-32-39
AK
Reg. 3AAC 21.635(a)(1)
Law § 21.78.272
---
Extraordinary Dividend Laws (From Holding Company Laws and Regulations)
STATE Law: Regulation: (ED provisions)
NAIC MODEL: Extraordinary dividend exceeds lesser of: - 10% surplus, or - net income (not incl. realized capital gain)
COMMENTS: [ED = extraordinary dividend; PHS = policyholders surplus] APPROVE - ED deemed approved 30 days after notice of declaration to Commissioner CARRY - 2 year "carry forward" allowed for net income not already paid as dividends IMPACT - statement required re: effect of proposed dividend on surplus, adequacy of surplus PRO RATA - ED does not include pro rata distributions of insurer's own securities REPORT - required for all dividends/distributions within 15 business days following declaration
ALABAMA Code of Ala. §§ 27-29-5(g) and 27-31B-7 Ala. Admin. Code r. 482-1-055-.19
Code of Ala. § 27-29-5(g)(1) Exceeds the greater of 10% PHS, or net income
APPROVE PRO RATA IMPACT
Report: Ala. Admin. Code r. 482-1-055-.19(2) & Code of Ala. § 27-29-5(g)(2) Within 5 business days after declaration, not less than 10 days prior to payment Approve: Code of Ala. § 27-29-5(g)(1) Code of Ala. § 27-31B-7 Captives must have prior approval to pay dividends
Filing RequirementsIndicates state laws and regulations, if a state has relevant laws, requiring that ceding companies file copies
of reinsurance agreements under specific circumstances. (Does not cover requirements that apply to
unauthorized reinsurers for credit for reinsurance purposes, assumption and bulk reinsurance transactions,
HMOs, fraternal benefit societies and material transactions.)
FraudProvides information on the application of anti-fraud statutes and regulations, including requirements for
reporting, the establishment of special investigative units, warning statements on policies and penalties for
committing fraud.
CHARTS
8
Filing Requirements
This chart indicates state laws and regulations requiring that ceding companies file copies of reinsurance agreements under specific
circumstances. Not covered in this chart are filing requirements that apply to unauthorized reinsurers for Credit for Reinsurance purposes (see Charts for Credit for Reinsurance Laws/Regulations); assumption and bulk reinsurance transactions; HMOs; fraternal benefit societies; and, material transactions. Note that many states have no listing in this chart; this is because those jurisdictions have no laws relevant for this chart.
State
Comments
Alabama
Code of Ala. § 27-2A-2 — Every insurer domiciled in this state shall file a report with the commissioner disclosing material acquisitions and dispositions of assets or material nonrenewals, cancellations, or revisions of ceded reinsurance agreements unless the acquisitions and dispositions of assets or material nonrenewals, cancellations, or revisions of ceded reinsurance agreements have been submitted to the commissioner for review, approval, or information purposes pursuant to other provisions of the insurance code, laws, regulations, or other requirements.
Alaska
Alaska Stat. § 21.12.020 — Upon request, ceding company required to notify Commissioner in writing of cancellation/material changes in reinsurance treaties/arrangements. 3 AAC 21.630 — [Re: domestic insurers and others licensed to write life and disability insurance, and not subject to substantially similar laws in state of domicile] Existing agreements: An agreement entered into after December 31, 1994 that involves the reinsurance of insurance business written before the effective date of the agreement, along with any subsequent amendments, must be filed by the ceding company with the director within 30 days of the date of execution. A filing must include data detailing the financial impact of the transaction.
Fraud
State
Anti-Fraud
Programs/Fund
Assessments
Reporting/Immunity Departments/Bureaus/
Special Investigative
Units
Warning
Statements
Penalties Comments
AL
Code of Ala. § 36-19-41: Insurer required to release relevant information to Fire Marshall or other law enforcement investigating fire loss. Code of Ala. § 36-19-42: Insurer required to report fire loss suspected to have been caused by other than accidental means. Code of Ala. § 36-19-43: Insurer not liable for civil damages for information provided.
Code of Ala. § 36-19-
44: Insurers failing to supply information subject to fines of not less than $100 and not more than $500.
Provisions apply to arson and are located in Alabama Title 36 - Public Officers and Employees, Chapter 19 - Fire Marshal, Article 2. Investigatory Information Supplied Fire Marshals
FrontingReferencing the NAIC Fronting Disclosure and Regulation Model Act, details provisions for a state that
provides guidance on the subject.
Holding Company ActReferencing the NAIC Model Act, provides information about holding company registration requirements,
the need for written notice for certain transactions, and comments on forms, exemptions, and related subjects.
CHARTS
9
Fronting Laws and Regulations Relating to Fronting
State and
Legal Provision
Terms of Provision
NAIC Fronting Disclosure and Regulation Model Act (Highlights) (Continued)
(Continued from previous page) Responsibilities of Insurer – Prior to the inception of the reinsurance transaction, the insurer shall determine the reinsurer’s technical expertise; obtain an opinion from an actuary that premium rates make reasonable provision for expected losses and LAE; other provisions. Required Provisions in Reinsurance Agreement – The agreement must be executed in 120 days of its inception; include a funding clause; a reports and remittances clause; an insolvency clause; a service of suit clause; an arbitration clause; a cancellation clause; an intermediary clause (where applicable).
California
Cal Ins Code § 717
Before granting a certificate of authority or amended certificate of authority to any applicant, the commissioner shall consider the qualifications of said applicant in respect to the following subjects: (a) capital and surplus; (b) lawfulness and quality of investments; (c) financial stability; (d) reinsurance arrangements; (e) competency, character, and integrity of management; (f) ownership and control of issued and outstanding shares in the case of a capital stock insurer; (g) whether claims under policies are promptly and fairly adjusted and are promptly and fully paid in accordance with law and the terms of policies; (h) fairness and honesty of methods of doing business; (i) method by which said applicant was promoted if any of its promoters remain as stockholders or in management; and (j) hazard to policyholders or creditors. Upon consideration of all relevant qualifications the commissioner shall issue a certificate of authority to such applicant, unless the commissioner shall have made a finding, or findings, that the applicant is materially deficient in respect to one or more of the items as outlined in (a) through (j), above.
Holding Company Act (Including Registration Requirements)
NAIC
Model §§ 1-17 Reg. § 1 to 21 Forms A-E
REGISTRATION STATEMENT: applies to all authorized insurers in a holding company system (HCS): A. 0.5% or less of insurer's admitted assets as of 12/31 next preceding (§ 4D)
B. Any insurer which is authorized and a member of an insurance HCS shall register within 15 days after it becomes subject to registration; and annually thereafter by [insert date]. (§ 4A)
C. Any authorized insurer may file a registration statement on behalf of any affiliated insurer(s) which is required to register (Reg. § 17)
D. Amendment to Form B shall be filed within 15 days after the end of any month in which there is a material change to the information provided in the annual registration statement (Reg. § 16)
WRITTEN NOTICE: The following transactions involving a domestic insurer and any person in its HCS may not be entered into unless the insurer has notified the Commissioner in writing at least 30 days prior, and the Commissioner has not disapproved. A. Reinsurance agreements or modifications in which the reinsurance premium or a change in the insurer's liabilities equals or exceeds 5% of insurer's PHS as of 12/31 next preceding. B. Sales, purchases, exchanges, loans, or extensions of credit, guarantees, or investments if the transactions equal or exceed the lesser of 3% of the insurer's admitted assets or 25% of PHS as of 12/31 next preceding; same threshold re: loans or extensions of credit to any non-affiliate, where an agreement that the proceeds, in whole or in part, are to be used to make loans, extend credit, make investments in or purchase assets of any affiliate of the insurer making the loans or extensions of credit. (§ 5(A)(2)).
COMMENTS: CONTROL - presumed if any person, directly or indirectly, owns, controls, holds with power to vote, or holds proxies representing 10% or more of voting securities of any other person; may be rebutted. (§ 1(C)). FORM C - copy must be filed in each state in which insurer is authorized to do business, if Comm'r of that state notifies insurer in writing; insurer has [insert number] from receipt of notice to file such form. (Reg. § 4B) FORMS: Form A - Acquisition of Control/Merger. Form B - Annual Registration Statement. Form C -Registration Summary. Form D - Prior Notice of Transaction. Form E - Pre-Acquisition Notification. IN LIEU: In lieu of filing a registration statement on Form B, an authorized insurer may file a copy of the registration statement or similar report which it is required to file in its state of domicile, provided: (1) the statement contains substantially similar information required on Form B; and (2) the filing insurer is the principal insurer in the HCS. Whether the filing insurer is the "principal" must be substantiated in a brief statement of facts. With prior approval, an unauthorized insurer may follow these procedures. (Reg. § 17) INVEST: Commissioner shall be notified within 30 days of any investment of the domestic insurer in any one corporation if the total investment exceeds 10% of the corporation's voting securities. (§ 5(A) (5)). EXEMPT: Foreign insurer is exempt from regulation if the registration requirements and standards set forth in statutes/regulations in its domicile are substantially similar to requirements re: registration (§ 4); inter-affiliate transactions (§ 5A(1)); dividends (including extraordinary) and other distributions (§ 5B); adequacy of surplus (§ 5D); and, either prior approval/notice requirements for inter-affiliate transactions or a provision that each registered insurer shall keep current the registration statement, reporting all material changes/additions within 15 days after the end of the month in which it learns of each change/addition. (§ 4).
United States Holocaust LawsSummarizes the Holocaust laws adopted by the states.
Intermediary Model ActConcerns provisions pertaining to reinsurance brokers, including licensing, contract requirements, record
retention, penalties and liabilities, related regulations; references the NAIC Reinsurance Intermediary Act
Model.
10
CHARTS
United States Holocaust Laws
This chart summarizes the Holocaust laws adopted by the states. Note that many states have no listing in this chart; this is because those jurisdictions have no laws relevant for this chart.
California Florida Maryland Minnesota New York Washington Arizona Texas
Source
Cal. Ins. Code §§ 13800 to
13807
Cal. Ins. Code § 790.15
Cal. Code Civ. Pro. § 354.5
Law requiring disclosure of
insurance policies sold in
Europe interferes with federal
foreign relations; as a result, the
state statute is preempted: Am.
Ins. Ass'n v. Garamendi (2003)
539 US 396, 156 L Ed 2, 123 S
Ct 2374, 2003 US LEXIS 4797,
rehearing denied (2003) 539 US
982, 156 L Ed 2d 694, 124 S Ct
35, 2003 US LEXIS 5358.
Fla. Stat.§ 626.9543
690-137.010, F.A.C.
Unconstitutional as
Applied by:
1. Gerling Global
Reinsurance Corp. of
America v. Gallagher,
267 F.3d 1228 (11th Cir.
2001)
2. Gerling Global
Reinsurance Corp. of
America v. Nelson, 123
F. Supp. 2d 1298 (N.D.
Fla. 2000)
Md. Ins.Code Ann.
§§ 28-101 to 110
Minn. Stat.§
60A.053
Section expires
12/31/2010
N.Y. CLS Ins. §§
2701 to 2711
Regulation 160
(11 NYCRR 220.1 to
220.8)
Rev. Code Wash.
(ARCW) §§
48.104.010 to
48.104.903
Section expires
12/31/2010
A.R.S. §§ 20-490 –
490.02
Tex. Ins. Code §
553.001 - 004
Intermediary Model Act Note: The following chart primarily concerns provisions pertaining to reinsurance brokers. States have separate provisions with separate and distinct requirements for intermediaries with underwriting authority (as defined by the act), generally referred to as “reinsurance managers”.
State
Licensing Contract Requirements
Record Retention Penalties & Liabilities
Related Legis./Regs.
NAIC Reinsurance Intermediary Act Model
Section 3: Licensure A. No one shall act as a reinsurance
broker (RB): 1. unless he is licensed in state 2. unless he is licensed in a state
with substantially similar laws. B. No one shall act as reinsurance
manager (RM): 1. for a resident reinsurer unless he
is a licensed producer in the state;
2. unless an office in the state is maintained;
C. Commissioner may require RM to: 1. file a bond; and 2. maintain an errors & omissions
policy D. 1. Authority to issue license to
parties in compliance with the act.
2. Non-resident license will be issued if (a) licensed and in good standing in home state
(b) request and fees submitted (c) license application from home
state submitted (d) home state awards nonresident
licenses on same basis E. Reasons for refusal of license F. Exemption for attorneys.
Section 4: Required Contract Provisions - For RB written authorization must provide that: A. insurer may terminate at any
time B. RB must detail all material
transactions and remit funds in 30 days
C. funds must be held in a fiduciary capacity in a qualified U.S. financial institution
D. RB must comply with record retention requirements
E. RB must comply with written standards of insurer for cession/retrocession of risks
F. RB must disclose relationships with any reinsurer to which business will be ceded or retroceded.
Section 5: Books and Records – Reinsurance Intermediary Brokers RB must keep the following for 10 years after contract expires: 1. type of contract, limits,
underwriting restrictions, classes or risks and territory
2. period of coverage, cancellation provisions
3. reporting and settlement requirements of balances
4. rate used to compute premium 5. name, addresses of assuming
reinsurers 6. rates of all commissions 7. related correspondence 8. proof of placement 9. retrocession details such as
identity of retrocessionaires and percentage of contact assumed or ceded
10. financial records, premium and loss accounts
11. (a) when procured directly, written evidence of assuming reinsurer
(b) when procured through another representative, written proof of authority to bind.
Section 11: Penalties & Liabilities A. If Commissioner
determines non-compliance with Act, he may order:
1. a fine not exceeding $5,000 per violation;
2. revocation of the license; 3. institution of civil action. B. Provision that in the event
of an insolvency the receiver may maintain a civil action.
C. Nothing in this section prevents other penalties in the insurance law.
D. Nothing in Act limits or restrains policyholders.
11
Lobbyist Registration and ReportingProvides information on, and citations to, each state’s statutes dealing with the definition of lobbying,
registration and reporting requirements and certain notable elements of the law, as well as telephone numbers
and website addresses for the responsible state agency.
Mirror Image ReservingA survey of state laws and regulations relating to mirror image reserving for those states that offer guidance
on the subject.
CHARTS
Lobbyist Registration and Reporting NOTE: this document is intended only as a general reference tool; no decision regarding lobbying laws should be made on the basis of this document alone. Such decisions should be made only after a careful review of the laws themselves or in consultation with the appropriate state enforcement agency.
State &
Section
Definition of
Lobbying
Definition of
Lobbyist
Registration Requirements: L = Lobbyist ER = Employer $ = Fee AN = Annually BI = Biennially LEG = Legisl. Session IND = Indefinitely
Reporting Requirements:
Notable Elements of the Law
Alabama
Code of Ala. §§ 36-25-1 to 36-25-30
Promoting, opposing, or influencing the introduction, defeat or enactment of legislation before the legislature, legislative committees; influencing the executive approval or defeat of legislation, or approval, modification or defeat of any regulation by any regulatory body.
A person who receives compensation or reimbursement to lobby from any source, or a person who lobbies as a regular and usual part of employment, or a person who spends $100 or more for a thing of value to lobby (with exceptions), or a person who is on the staff of a lobbyist or who a lobbyist pays to influence legislation or regulation, or a consultant employed to influence local government.
L AN $100
Both lobbyist and employer must file quarterly reports. Reports: must include, generally, amounts received or expended, directly or indirectly, or lobbying activities; expenditures of more than $250 per day on a public official (with recipient names and dates), financial transactions with such official of more than $500 per quarter, business associations between the lobbyist and the public official, and the exact amount of any loan given or promised.
Registration is due before Jan. 31 of each year, or within 10 days after undertaking lobbying activities. Employer must certify lobbyist's registration. The exceptions to the registration and reporting requirements are generally for individuals whose contact with legislators or administrators is unpaid and generate no or minimal expenditures; or, are for reasons other than to influence governmental action. Consult the statute for specifics. Public officials may not accept seasonal gifts valued over $100 per gift, with an annual aggregate value of not more than $250 per donor. Questions? Call the State Ethics Commission at 334-242-2997or check the web at http://ethics.alabama.gov/default2.aspx
Mirror Image Reserving
The following chart is a summary of research compiled from a survey of state laws and regulations relating to mirror image reserving. States
with no laws or regulations on the topic are omitted from the chart.
State and Citation Language Comments
Colorado 3 CCR 702-3, Reg. 3-3-4
Section 5 B. The following situations require the establishment of additional liabilities or limitations to reserve credits taken by the ceding insurer. 1. Credit for reinsurance shall be allowed only to the degree of the risk transferred. 2. The ceding insurer shall not take any credit for reinsurance in excess of the gross reserve it has established for the portion of the business or risks being reinsured; 3. If commissions or other similar allowances received or credited to the ceding insurers are required to be repaid to the reinsurer, other than from emerging profits of the portion of the business reinsured, based on contract provisions or on future experience of the reinsured business, a liability shall be established or the credit for reinsurance reduced by the maximum amount of such future tentative repayment. 4. If the reinsurance agreement provides for financial
Applies only to Life and Health Reinsurance
Pre-Answer SecurityCompares state pre-answer security laws to common statutory language; differences from the common
statutory language are indentified and additional provisions are noted.
Record Retention RequirementsSummarizes statutory and regulatory record retention requirements that apply to reinsurers, recognizing
that because there are few if any statutes on record retention that apply to reinsurers specifically, the bulk
of the information applies to insurers and reinsurers generally.
SetoffsProvide information on state setoff statutes with reference to the relevant provisions of the 1993 NAIC
Model Act on the subject, the NCOIL/IRMA Circular Assumed/Ceded Restriction and the NCOIL Alternative
Accounting Provision.
CHARTS
State
General Language
(insurer shall have, and maintain in its principal place of business in this state records of assets, transactions and affairs in accordance with methods customary and suitable to the types of insurance transacted)
Other
California
Cal. Ins. Code § 1857
Colorado
C.R.S. § 10-4-413 3 CCR 702-1, Reg. 1-1-7
· Licensed insurers must maintain books, records, documents so that claims, rating, underwriting, marketing, complaint and producer licensing records as readily available to the Commissioner.
State
Statute Cite State Statute is Similar to
Common Language
State Statute is Slight Variation
of Common Language
Comments
Alabama
Code of Ala. § 27-10-53
X
Alaska
Alaska Stat. § 21.33.031
X
Statute applies to “unauthorized person or non-admitted” insurer and the insurer can either post bond or “obtain admission” to do business in Alaska
Arizona
A.R.S. § 20-405
X
State & Citation
1993 Model Act Assumed/ Ceded Restriction
1993 Model Act Accounting Provision
1993 Model Act Purchase or Transfer Provision
Premium Restriction
(NAIC Model prior to 1993)
NCOIL/ IRMA Circular Assumed/ Ceded Restriction
NCOIL Alternative Accounting Provision
Comments
Alabama
Code of Ala. §27-32-29
No
No Yes No No
No
Alaska
Alaska Stat. § 21.78.270
No
No Yes Yes No
No
12
State
and Citation
Language Type
(Identical or
substantially similar)
Other Provisions
Florida
Fla. Stat. § 627.778
A title insurer may not issue any contract of title insurance, either as a primary insurer or as a coinsurer or reinsurer, upon an estate, lien, or interest in property located in this state unless: 1. The contract shows on its face the dollar amount of the risk assumed; and 2. The dollar amount of the risk assumed does not exceed one-half of its surplus as to policyholders, unless the
excess is simultaneously reinsured in one or more approved insurers.
Hawaii
HRS § 431:20-115
Type B Written approval of the commissioner required to use reinsurance reserve.
Hawaii
HRS § 431:20-117
Type C
Illinois
215 ILCS 155/6
A title insurance company may obtain reinsurance for all or any part of its liability under one or more of its title
insurance policies or reinsurance agreements and may also reinsure title insurance policies issued by other title insurance companies on risks located in this State or elsewhere.
A title insurance company licensed in this state shall retain at least $100,000 of primary liability for policies it issues, unless a lesser sum is authorized by the Secretary. A lesser sum may be retained at the request of an insured for a particular policy. (Applies to policies issued after June 20, 2006)
Standard Fire Policy Laws
State and
Citation
Adopted by
Statute or
Regulation?
Adopted by
reference to
another state’s
laws or complete
text?
Applies to
Reinsurance?
Applies to Surplus Lines?
Exceptions / Exclusions
ARIZONA
A.R.S. §20-1503
Statute Reference to the NY Standard Fire Policy, 1943
No. See A.R.S. §20-1501
Yes. The AZ DOI has taken the position that surplus lines insurers are required to adhere to the SFP.
War Exclusion – included in text of SFP form
Nuclear Exclusion – A.R.S. §20-1509
Terrorism Exclusion – HB 2192 enacted 4/25/05; effective on or about 7/30/05
CALIFORNIA
Cal. Ins. Code §2071
Statute Complete Text No. See Cal. Ins. Code §2072
Yes. See Title 10 CCR § 2142
War Exclusion – included in text of SFP form
Nuclear Exclusion – Cal. Ins. Code §2079
CONN.
Conn. Gen. Stat. §38a-307
Statute Complete Text No.
See Conn. Gen. Stat. §38a-308
Yes. The CT DOI has taken the position that surplus lines insurers are required to adhere to the SFP.
War Exclusion – included in text of SFP form
Nuclear Exclusion - Conn. Gen. Stat. §38a-308
Terrorism Exclusion – Conn. Gen. Stat. § 38a-307a U(UP.L. 107-297 effective 7/1/04):
- Commercial policies only
- Expires when TRIA expires
- Pub. Act No. 09-164, effective Oct. 1, 2009, specifies that until the expiration of TRIA, any master policy required to be
13
Standard Fire Policy LawsProvides information on these laws and their application to surplus lines and reinsurance, as well as exceptions
and exclusions allowed.
Title ReinsuranceSummarizes state statutes and regulations that address reinsurance of title insurance companies and risks.
CHARTS
You’ll find the Compendium at www.ReinsuranceLaw.org.
Reinsurance Association of America
1445 New York Avenue, NW, 7th Floor
Washington, DC 20005
202-638-3690
www.reinsurance.org
Compendium of Reinsurance
Laws and Regulations
www.reinsurancelaw.org
