Full Text of SB2877 97th General Assembly
SB2877sam006 97TH GENERAL ASSEMBLY | Sen. William R. Haine Filed: 3/22/2012
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| 1 | | AMENDMENT TO SENATE BILL 2877
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 2877, AS AMENDED, | 3 | | as follows: | 4 | | in Section 5, Sec. 131.20a, by replacing paragraph (1)(a) with | 5 | | the following:
| 6 | | "(1) (a) The following transactions involving between a | 7 | | domestic
company and any person in its insurance holding | 8 | | company system , including amendments or modifications of | 9 | | affiliate agreements previously filed pursuant to this | 10 | | Section, which are subject to any materiality standards | 11 | | contained in this Section, may not be entered
into unless the | 12 | | company has notified the Director in writing of its
intention | 13 | | to enter into such transaction at least 30 days prior thereto, | 14 | | or
such shorter period as the Director may permit, and the | 15 | | Director has not
disapproved it within such period . The notice | 16 | | for amendments or modifications shall include the reasons for | 17 | | the change and the financial impact on the domestic company. |
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| 1 | | Informal notice shall be reported, within 30 days after a | 2 | | termination of a previously filed agreement, to the Director | 3 | | for 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 | 20 | | permit any
transactions that, in the case of a company an | 21 | | insurer not a member of the same holding
company system, would | 22 | | be otherwise contrary to law.".
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