§222. Registration, regulation, supervision and examination of holding company systems,
agents, promoters and others








1. Examination. 











[
2013, c. 238, Pt. A, §34 (AFF);
2013, c. 238, Pt. A, §2 (RP)
.]








1-A. Examination. 
For purposes of ascertaining compliance with law, or relationships and transactions
between any person as defined hereafter and any insurer or proposed insurer subject
to this section, the superintendent may as often as the superintendent determines
to be advisable examine the accounts, records, documents and transactions pertaining
to or affecting the insurance affairs or proposed insurance affairs, or transactions
of the insurer or proposed insurer as may be in the possession of any holding company,
its subsidiaries or affiliates as is necessary to ascertain the financial condition,
including the enterprise risk to the insurer by the ultimate controlling party, or
legality of conduct of the insurer or proposed insurer or the insurance holding company
system as a whole or any combination of entities within the insurance holding company
system and to verify the accuracy of any information provided or required to be provided
to the superintendent pursuant to this section.





A. The superintendent's investigatory and examination authority under this subsection
extends to the examination of:



(1) Any business entity structured to hold the stock of an insurance company, or
person holding the shares of voting stock or policyholder proxies of an insurer as
voting trustee or otherwise, for the purpose of controlling the management thereof;




(2) Any insurance producer, adjuster or consultant or other insurance or reinsurance
representative or intermediary or any person acting as or purporting to be any of
the foregoing;




(3) Any person having a contract giving that person by its terms or in fact the exclusive
or dominant right to manage or control the insurer; and




(4) Any person in this State engaged in or proposing to be engaged in or acting as
or purporting to be so engaged or proposing to be engaged in the business of insurance
or in this State assisting in the promotion, formation or financing of an insurer
or insurance holding corporation or corporation or other group financing an insurer
or the production of its business. [2013, c. 238, Pt. A, §3 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]












B. Subject to the limitations contained in this subsection and in addition to the powers
that the superintendent has under section 221 and sections 223 to 228 relating to
the examination of insurers, the superintendent may order an insurer registered under
subsection 8 to produce records, books or papers in the possession of the insurer
or affiliates as may be necessary to verify the accuracy of the information required
to be provided to the superintendent under this section and any additional information
pertinent to transactions between the insurer and affiliates. The books, records,
papers and information are subject to examination in the same manner as prescribed
in this chapter for an examination conducted under section 221, except that expenses
incurred by the superintendent in examining an affiliate that is not an insurer must
be borne by the registered insurer subject to the limitations of section 228, subsection
1. The superintendent may issue subpoenas, administer oaths and examine any person
under oath for purposes of determining compliance with this subsection. [2013, c. 238, Pt. A, §3 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]











C. A member of an insurer's insurance holding company system shall comply fully and accurately
with a request by the insurer to provide it with information necessary to respond
to an examination request by the superintendent pursuant to this section. [2013, c. 238, Pt. A, §3 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]











D. The superintendent may order an insurer registered under subsection 8 to produce information
not in the possession of the insurer if the insurer can obtain access to the information
pursuant to contractual relationships, statutory obligations or any other lawful method.
If the insurer cannot obtain the information requested by the superintendent, the
insurer shall provide the superintendent a written objection with a detailed explanation
of the reason that the insurer cannot obtain the information and the identity of the
holder of the information. It is a violation of this section to submit an objection
to production of information without a reasonable basis or to fail to produce information
on the basis of an objection that the superintendent has denied after notice and opportunity
for hearing. [2013, c. 238, Pt. A, §3 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]








[
2013, c. 238, Pt. A, §3 (NEW);
2013, c. 238, Pt. A, §34 (AFF)
.]








2. Definitions. 
As used in this section, unless the context otherwise requires, the following words
shall have the following meanings.





A. Affiliate. "Affiliate" of, or a person "affiliated" with, a specific person means
a person who directly or indirectly controls, or is controlled by, or is under common
control with the person specified. [1975, c. 356, §1 (RPR).]










A-1. Beneficial owner. "Beneficial owner" of a voting security, voting insurance policy
or guaranty capital share means any person or group of persons acting in concert who,
directly or indirectly, through any contract, arrangement, proxy appointment, understanding,
relationship or otherwise, has or shares:



(1) Voting power over the security, policy or guaranty capital share, including
the power to vote or to direct the voting of the security, policy or share; or






(2) Investment power over the security, policy or share, including the power to
dispose or to direct the disposition of the security, policy or share.





The superintendent may determine that persons are acting in concert, either on the
superintendent's own initiative or upon application of an interested person, based
upon evidence that actions taken by those persons, if consummated, may permit the
exercise of common control, directly or indirectly, over the domestic insurer. The
absence of a determination by the superintendent that persons are acting in concert
shall not be construed to exempt those persons from compliance with the requirements
of this section. [1989, c. 385, §1 (NEW).]










A-2. "Continuing director" means:



(1) Any member of a domestic insurer's board of directors, while that person is
a member of the board of directors, who was a member of that board of directors prior
to the time that any person acquires control of the domestic insurer or any person
controlling the insurer; and






(2) Any successor of a continuing director, while the successor is a member of the
board of directors, who is recommended or elected to succeed a continuing director
by a number of continuing directors equal to a majority of continuing directors in
office immediately preceding the acquisition of control. [1991, c. 37, §1 (NEW).]













B. Control.



(1) "Control," including "controlling," "controlled by" and "under common control with," means the possession, direct or indirect, of the power to direct or cause the direction
of the management and policies of a person, whether through the ownership of voting
securities, by contract other than a commercial contract for goods or nonmanagement
services, or otherwise, unless the power is solely the result of an official position
with or a corporate office held by the person. Control is presumed to exist if any
person is the beneficial owner of 10% or more of the voting securities or guaranty capital shares, if applicable, or has the right to cast 10% or more of the votes in the election of directors or other
governing body of any other person. A beneficial owner may rely in determining the amount of voting
securities of any person outstanding upon information set forth in that person's most
recent quarterly or annual report filed with the Securities and Exchange Commission
pursuant to the Exchange Act unless the beneficial owner knows or has reason to believe
that the information contained in the quarterly or annual report is inaccurate. Two
or more domestic mutual insurance companies that have restricted their licensed territories
to the State are not considered subject to this section merely because those insurance
companies commonly share facilities, incurred expenses or personnel services or otherwise utilize cost allocations based on generally accepted accounting principles
including pro rata sharing of assumed risks. A person may have more than one controlling person, even if those controlling persons
are not acting in concert.




(2) Notwithstanding the presumption of control contained in subparagraph (1), the
superintendent, upon application of the insurance company, may determine that the
insurer is not controlled by the person presumed to control it. In addition, the
superintendent, after notice and an opportunity to be heard, may determine, notwithstanding
the absence of the presumption in subparagraph (1), that a person does control an
insurance company or companies.




(3) The presumption of control contained in subparagraph (1) does not apply to a
securities broker-dealer holding, in the usual and customary broker's function, less
than 20% of the voting securities of another person. [2013, c. 238, Pt. A, §4 (AMD); 2013, c. 238, Pt. A, §34 (AFF).]












B-1. Exchange Act. "Exchange Act" means the federal Securities Act of 1933, 15 United
States Code, Chapter 2-A, Subchapter 1 and the federal Securities Exchange Act of
1934, 15 United States Code, Chapter 2-B. [2013, c. 238, Pt. A, §34 (AFF); 2013, c. 238, Pt. A, §5 (RPR).]











B-2. Enterprise risk. "Enterprise risk" means an activity, circumstance, event or series
of events involving one or more affiliates of an insurer that, if not remedied promptly,
is likely to have a material adverse effect upon the financial condition or liquidity
of the insurer, or of its insurance holding company system as a whole, including,
but not limited to, anything that would cause or exacerbate a risk-based capital event
as described in sections 6453 to 6456 or would cause the insurer to be in unsound
or hazardous financial condition as determined by the superintendent. [2013, c. 238, Pt. A, §6 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]











C. Insurance holding company system. "Insurance holding company system" shall consist
of 2 or more affiliated persons, one or more of whom is an insurer. [1975, c. 356, §1 (RPR).]










D. Insurer. "Insurer" has the same meaning as in section 4 and includes a fraternal benefit society required to be licensed under section 4124
or 4125. [2013, c. 238, Pt. A, §7 (AMD); 2013, c. 238, Pt. A, §34 (AFF).]











D-1.
[1993, c. 313, §7 (RP).]










D-2. "Net gains from operations" means:



(1) For life insurers, the net income or loss after dividends to policyholders and
federal income taxes but before the inclusion of net realized capital gains or losses;
and






(2) For nonlife insurers, the net income or loss after dividends to policyholders
and federal income taxes and net realized capital gains or losses. [1993, c. 313, §8 (NEW).]













D-3. Own risk and solvency assessment or ORSA. "Own risk and solvency assessment" or "ORSA"
means a confidential internal assessment that is conducted by an insurer or insurance
holding company system of the material and relevant risks associated with its current
business plan and the sufficiency of its capital resources to support those risks
and that is appropriate to the nature, scale and complexity of the operations of the
insurer or insurance holding company system. [2013, c. 238, Pt. A, §8 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]











D-4. ORSA guidance manual. "ORSA guidance manual" means the NAIC Own Risk and Solvency
Assessment (ORSA) Guidance Manual, as amended from time to time. A change in the
ORSA guidance manual is effective with regard to this State on January 1st following
the calendar year in which the change has been adopted by the National Association
of Insurance Commissioners. [2013, c. 238, Pt. A, §8 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]











D-5. ORSA summary report. "ORSA summary report" means a confidential high-level summary
of an insurer's or insurance holding company system's own risk and solvency assessment
and includes a combination of separate reports that collectively meet the requirements
of the ORSA guidance manual. [2013, c. 238, Pt. A, §8 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]











E. Person. "Person" shall mean an individual, a corporation, a corporation which, pursuant
to Title 24, chapter 19, maintains and operates nonprofit hospital service plans,
nonprofit medical service plans or nonprofit health care plans or any combination
thereof, a partnership, an association, a joint stock company, a business trust, an
unincorporated organization or any similar entity, or any combination of the foregoing
acting in concert. [1975, c. 356, §1 (RPR).]










F. "Subsidiary" of a specified person means an affiliate controlled by that person directly
or through one or more intermediaries. [2001, c. 72, §4 (AMD).]










G. "Surplus regarding policyholders" means admitted assets less all liabilities. [1993, c. 313, §9 (NEW).]










H. "Unassigned funds" means the undistributed and unappropriated amount of surplus remaining
on the balance sheet date as the result of all operations of an insurance company
from its commencement of business. [1993, c. 313, §9 (NEW).]










I. "Voting security" means any security with voting rights or any security convertible
into or evidencing a right to acquire a security with voting rights. [1999, c. 113, §10 (NEW).]







[
2013, c. 238, Pt. A, §§4-8 (AMD);
2013, c. 238, Pt. A, §34 (AFF)
.]








3. Subsidiaries of insurers; investments to acquire interest. 
This subsection pertains to insurers and their subsidiaries and affiliates.





A. Any domestic insurer may invest in or otherwise acquire one or more subsidiaries as
authorized in section 1115 or section 1157. [1987, c. 399, §1 (AMD).]










A-1. A domestic insurer shall notify the superintendent in writing within 30 days after
any investment by the insurer or any of its affiliates in any one corporation if the
insurer has invested in that corporation and the total investment in that corporation
by the insurance holding company system exceeds 10% of the corporation's voting securities. [1991, c. 828, §4 (AMD).]










B. If an insurer ceases to control a subsidiary, it shall dispose of any investment therein
made pursuant to this section within 3 years from the time of the cessation of control
or within such further time as the superintendent may prescribe, unless at any time
after the investment was made, the investment met the requirements for investment
under any other section of this Title and the insurer has notified the superintendent
thereof. [1991, c. 828, §4 (AMD).]







[
1991, c. 828, §4 (AMD)
.]








4. Tender offers. 




[
1989, c. 385, §4 (RP)
.]








4-A. Tender offers. 











[
2013, c. 238, Pt. A, §34 (AFF);
2013, c. 238, Pt. A, §9 (RP)
.]








4-B. Application for approval. 










[
2013, c. 238, Pt. A, §34 (AFF);
2013, c. 238, Pt. A, §10 (RP)
.]








4-C. Acquisitions; tender offers; divestitures. 
The following provisions apply to a transaction or proposed transaction that results
or might result in the change of direct or indirect control of a domestic insurer.





A. Except as provided in paragraph B, a person other than the issuer may not make a tender
offer for, or a request or invitation for tenders of, or an agreement to exchange
securities for, or otherwise acquire any voting security, or any security convertible
into a voting security, of a domestic insurer or of any person controlling a domestic
insurer if, as a result of the consummation thereof, the person making the tender
offer, request or agreement would, directly or indirectly, acquire actual or presumptive
control of the insurer or controlling person, and a person may not enter into an agreement
to merge with or otherwise acquire actual or presumptive control of a domestic insurer
or its controlling person, unless:



(1) The person has filed with the superintendent and has sent the domestic insurer
an application containing the information required by paragraph C;




(2) The offer, request, invitation, agreement or acquisition has been approved by
the superintendent in the manner prescribed in subsection 7; and




(3) Ten days has elapsed from the date of approval by the superintendent and no injunction
or other court order precludes consummation of the offer, request, invitation, agreement
or acquisition. [2013, c. 238, Pt. A, §11 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]












B. A controlling person of a domestic insurer seeking to divest its controlling interest
in the domestic insurer in any manner, including any partial divestiture that would
cause that person to cease to be a controlling person, shall file with the superintendent,
with a copy to the insurer, confidential notice of its proposed divestiture at least
30 days before the cessation of control, unless the divestiture transaction consists
of the transfer of the divesting person's interest to one or more acquiring persons,
all of whom have reported their respective acquisitions pursuant to paragraph A.
Unless the superintendent grants an exemption under paragraph D, the divesting person
shall file an application substantially similar to the application required under
paragraph C, with such modifications as the superintendent determines to be appropriate
based on the nature of the transaction. The superintendent shall decide whether to
approve the application using the criteria in subsection 7, paragraph A and may hold
a public hearing if the superintendent determines that a hearing is in the interests
of policyholders or the public. If 20 days has elapsed after the superintendent's
receipt of a notice filed under this paragraph and the superintendent has not disapproved
the proposed divestiture or postponed its effective date pending further review, the
superintendent is deemed to have granted an exemption under paragraph D, subparagraph
(2). [2013, c. 238, Pt. A, §11 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]











C. An application required by paragraph A must contain the following information as applicable,
made under oath or affirmation, except that if the proposed transaction is subject
to regulation under the Exchange Act or Title 32, chapter 135, the superintendent
may accept the relevant documents filed with the United States Securities and Exchange
Commission or the Department of Professional and Financial Regulation, Office of Securities
in lieu of some or all of the documents required by this paragraph:



(1) The name and address of each person by whom or on whose behalf the merger or
other acquisition of control is to be effected and:



(a) If the person acquiring control is an individual, the person's principal occupation
and all offices and positions held during the past 5 years and any convictions for
crimes other than minor traffic violations during the past 10 years; and





(b) If the person acquiring control is not an individual, a report of the nature
of its business operations during the past 5 years or for a lesser period the person
and any predecessors have been in existence; an informative description of the business
intended to be done by the person and the person's subsidiaries; and a list of all
individuals who are or who have been selected to become directors or executive officers
of the person or who perform or will perform functions appropriate to such positions.
The list must include the information required by division (a) for each individual
listed;






(2) The source, nature and amount of the consideration used or to be used in effecting
the merger or other acquisition of control, a description of any transaction through
which funds were or are to be obtained for any such purpose, including any pledge
of the insurer's stock or the stock of any of its subsidiaries or controlling affiliates,
and the identity of persons furnishing consideration. If a source of consideration
is a loan made in the lender's ordinary course of business, the identity of the lender
is confidential if the person filing the application so requests;




(3) Fully audited financial information as to the earnings and financial condition
of each acquiring person for the preceding 5 fiscal years, or for a lesser period
if the acquiring person and any predecessors have been in existence for less than
5 years, and similar unaudited information as of a date not earlier than 90 days before
the filing of the application;




(4) Any plans or proposals that each acquiring person may have to liquidate the insurer,
to sell its assets or merge or consolidate it with any person or to make any other
material change in its business or corporate structure or management;




(5) The number of shares of any security referred to in paragraph A that each acquiring
person proposes to acquire, the terms of the offer, request, invitation, agreement
or acquisition referred to in paragraph A and a statement as to the method by which
the fairness of the proposal was arrived at;




(6) The amount of each class of any security referred to in paragraph A that is beneficially
owned or concerning which there is a right to acquire beneficial ownership by each
acquiring person;




(7) A full description of any contracts, arrangements or understandings with respect
to any security referred to in paragraph A in which any acquiring person is involved,
including but not limited to transfer of any of the securities, joint ventures, loan
or option arrangements, puts or calls, guarantees of loans, guarantees against loss
or guarantees of profits, division of losses or profits or the giving or withholding
of proxies. The description must identify the persons with whom the contracts, arrangements
or understandings have been entered into;




(8) A description of the purchase by any acquiring person of any security referred
to in paragraph A during the 12 calendar months preceding the filing of the application,
including the dates of purchase, names of the purchasers and consideration paid or
agreed to be paid;




(9) A description of any recommendations to purchase any security referred to in
paragraph A made during the 12 calendar months preceding the filing of the application
by any acquiring person or by anyone based upon interviews with or at the suggestion
of the acquiring person;




(10) Copies of all tender offers for, requests or invitations for tenders of, exchange
offers for and agreements to acquire or exchange any securities referred to in paragraph
A and copies of any additional related soliciting material that has been distributed;




(11) The terms of any agreement, contract or understanding made or proposed to be
made with any broker-dealer as to solicitation of securities referred to in paragraph
A for tender and the amount of any fees, commissions or other compensation to be paid
to broker-dealers with regard to the solicitation of securities referred to in paragraph
A;




(12) An agreement by the person required to file the application to provide the annual
enterprise risk report required by subsection 8, paragraph B-1 for as long as control
by the person exists;




(13) An acknowledgement by the person required to file the application that the person
and all subsidiaries within its control in the insurance holding company system will
provide information to the superintendent upon request as necessary to evaluate enterprise
risk to the insurer;




(14) A statement as to whether or not the proposed transaction will result in an
increase in market share in this State in any line of insurance as specified in the
annual statement required to be filed under section 423 for one or more insurers with
combined market share greater than 5% and, if so, such further information on the
competitive impact of the proposed transaction as the superintendent requires by rule
or order; and




(15) Such additional information as the superintendent may prescribe by rule or order. [2013, c. 238, Pt. A, §11 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]












D. The superintendent may exempt a person otherwise subject to the requirements of this
subsection and subsection 7 from some or all of those requirements if the person demonstrates
to the satisfaction of the superintendent that an exemption will not be detrimental
to the interests of policyholders in the State or the public and that the transaction
satisfies at least one of the following criteria:



(1) The interests of the State in regulating the transaction are minimal relative
to the interests of other jurisdictions or are minimal relative to the impact of the
transaction as a whole;




(2) The person proposes a divestiture of control under paragraph B and the superintendent
determines that the prior approval process is not necessary in the circumstances of
the transaction;




(3) A party proposing to acquire presumed control submits a disclaimer fully disclosing
all material relationships and bases for affiliation with the insurer and demonstrating
to the satisfaction of the superintendent that the person will not be acquiring actual
control. As a condition of granting an exemption under this subparagraph, the superintendent
may require the person to agree to reasonable restrictions on the exercise of rights
or powers that might otherwise tend to result in control;




(4) The superintendent elects to participate in a consolidated approval proceeding
conducted under the laws of one or more other states pursuant to subsection 7-A, paragraph
E; and




(5) The transaction involves the control of a person that is not primarily engaged
in the business of insurance, directly or through its affiliates, and there will be
no material impact on the management or operations of a domestic insurer.



A person requesting an exemption under this paragraph must agree to provide additional
information if needed by the superintendent and to postpone the effective date of
the transaction if ordered by the superintendent while the request for exemption is
pending. [2013, c. 238, Pt. A, §11 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]











E. A broker-dealer that is exempt from the requirements of this section pursuant to subsection
2, paragraph B, subparagraph (3) shall disclose to the superintendent the identity
of any person, or group of persons the broker-dealer knows or reasonably believes
to be acting in concert, on whose behalf the broker-dealer knows or reasonably believes
that the broker-dealer holds 5% or more of the voting securities of a domestic insurer
or of any entity the broker-dealer knows or reasonably believes to be a controlling
person of a domestic insurer. A broker-dealer shall disclose to the superintendent
on request the beneficial owners of any securities held by the broker-dealer of any
entity that is, or that the superintendent believes might be or might become, a member
of the insurance holding company system of an insurer subject to registration under
subsection 8. [2013, c. 238, Pt. A, §11 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]








[
2013, c. 238, Pt. A, §11 (NEW);
2013, c. 238, Pt. A, §34 (AFF)
.]








5. Tender offer material. 
All requests or invitations for tenders or advertisements making a tender offer
or requesting or inviting tenders of such voting securities for control of a domestic
insurer or its controlling person made by or on behalf of any such person must contain any information specified in subsection 4-C as the superintendent may prescribe and must be filed with the superintendent at the time that material is first published or
sent or given to security holders. Copies of any additional material soliciting or
requesting such tender offers subsequent to the initial solicitation or request must contain the information that the superintendent may prescribe as necessary or appropriate
in the public interest or for the protection of policyholders and must be filed with the superintendent at the time copies of that material are first published
or sent or given to security holders.


[
2013, c. 238, Pt. A, §12 (AMD);
2013, c. 238, Pt. A, §34 (AFF)
.]








6. Information as to applicant. 
If a person required to file an application under subsection 4-C is a partnership, limited partnership, syndicate or other group, the superintendent
may require that the information called for by subsection 4-C must be given with respect to each partner of the partnership or limited partnership, each member of the syndicate or group and each person who controls any such partner or member. If a person required to file an application under subsection 4-C is a corporation, the superintendent may require that the information called for by subsection 4-C must be given with respect to the corporation and each officer and director thereof and each person who is directly
or indirectly the beneficial owner of more than 10% of the outstanding securities
of the corporation.


[
2013, c. 238, Pt. A, §13 (AMD);
2013, c. 238, Pt. A, §34 (AFF)
.]








7. Approval, disapproval of proposed change of control. 






A. The superintendent shall hold a hearing in accordance with the procedures set forth
in the Maine Administrative Procedure Act, Title 5, chapter 375, subchapter 4, within 30 days after the application required by subsection 4-C has been filed with the superintendent. The superintendent shall make a determination
within 30 days after the conclusion of that hearing. The superintendent shall approve
any purchase, exchange, merger or other change of control referred to in subsection 4-C unless the superintendent finds that:



(1) After the change of control, the domestic insurer could not satisfy the requirements
for the issuance of a certificate of authority according to requirements in force
at the time of the issuance or last renewal or continuation of its certificate of authority to do the insurance
business that it intends to transact in this State;




(2) The effect of the purchases, exchanges, merger of a controlling person of the
insurer or other changes of control may be substantially to lessen competition in insurance in this State
or tend to create a monopoly in this State or would violate the laws of this State or of the United States relating to monopolies
or restraints of trade;




(3) The financial condition of an acquiring person would jeopardize the financial stability of the insurer or prejudice the interest
of its policyholders;




(4) The plans or proposals that the acquiring or divesting person has to liquidate the insurer, to sell its assets or to merge it with any person,
or to make any other major change in its business or corporate structure or management,
are unfair or prejudicial to policyholders;




(5) The competence, experience and integrity of those persons who would control the
operation of the insurer indicate that it would not be in the interest of policyholders
or the public to permit them to do so;




(6) Any merger of a domestic insurer does not comply with section 3474; or



(7) The change of control would tend to affect adversely the contractual obligations of the domestic
insurer or its ability and tendency to render service in the future to its policyholders
and the public. [2013, c. 238, Pt. A, §14 (AMD); 2013, c. 238, Pt. A, §34 (AFF).]












B. Paragraph A, subparagraphs (3) to (7) do not apply to any change of control if and to the extent that the superintendent,
by rule or by order, exempts the change of control from the provisions of those subparagraphs as not included within the purpose of this subsection. [2013, c. 238, Pt. A, §14 (AMD); 2013, c. 238, Pt. A, §34 (AFF).]











C. Merger, consolidation or bulk reinsurance as to a domestic insurer may be effectuated only pursuant to the applicable provisions of chapter 47, subchapter 4 and sections 3875, 4108 and 4109, as related to organization and powers of insurers. [2013, c. 238, Pt. A, §14 (AMD); 2013, c. 238, Pt. A, §34 (AFF).]











D. Violation.



(1) Failure to file the application required under subsection 4-C constitutes a violation of this section.



(2) Effectuation of or any attempt to effectuate an acquisition of control of, divestiture of control of or merger with a domestic insurer earlier than 30 days after the filing of the application required by subsection 4-C, before the superintendent's decision if a hearing is held or after disapproval by the superintendent of the acquisition, divestiture or merger, constitutes a violation of this section. [2013, c. 238, Pt. A, §14 (AMD); 2013, c. 238, Pt. A, §34 (AFF).]









[
2013, c. 238, Pt. A, §14 (AMD);
2013, c. 238, Pt. A, §34 (AFF)
.]








7-A. Consolidated proceedings. 
If a proposed change of control requires, or is part of a series of related transactions
that require, the approval of the insurance regulators of more than one state, a person
filing an application under subsection 4-C with respect to the change of control may
file a request for a consolidated approval proceeding with the National Association
of Insurance Commissioners.





A. The applicant shall file a copy of the application made under subsection 4-C with
the National Association of Insurance Commissioners within 5 days after making the
request for a consolidated approval proceeding. [2013, c. 238, Pt. A, §15 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]











B. Within 10 days after receiving notice from the National Association of Insurance Commissioners
of a request for a consolidated approval proceeding, the superintendent shall issue
an order, with notice to the applicant and to the National Association of Insurance
Commissioners, specifying whether the superintendent elects to participate in the
consolidated proceeding or to opt out of the consolidated proceeding. [2013, c. 238, Pt. A, §15 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]











C. If the superintendent opts out of the consolidated approval proceeding pursuant to
paragraph B, the superintendent shall hold a public hearing under subsection 7 unless
the superintendent grants an exemption under subsection 4-C, paragraph D. Opting
out of the consolidated proceeding does not preclude or limit the superintendent’s
authority to coordinate a proceeding conducted under subsection 7 with the consolidated
proceeding or with other parallel proceedings in other states. [2013, c. 238, Pt. A, §15 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]











D. With the agreement of the other participating insurance regulators, the superintendent
may initiate a consolidated approval proceeding under this paragraph to render decisions
on all applications within the scope of the order of consolidation issued by the superintendent.
A consolidated approval proceeding convened under this paragraph is a public adjudicatory
proceeding. Except as provided in this paragraph, the proceeding must be conducted
in the same manner as a proceeding under subsection 7.



(1) A person who would have the right to participate in a proceeding on any of the
consolidated applications held under subsection 7 or substantially similar laws of
other states has the right to participate in the proceeding.




(2) The chief insurance regulator of a participating state has the right to participate
in making the decision or in designating a decision-making panel.




(3) The proceeding is public, except that deliberations of a decision-making panel
are not public proceedings and communications in the course of those deliberations
among panel members and their advisers, other than the decision itself, are not public
records.




(4) The proceeding may be held in any state with a significant connection to the
subject transactions or in a nearby location in an adjacent state. Sessions may be
held in different states. Provision must be made for parties, witnesses, insurance
regulators and members of the public to attend and participate in the proceeding by
telecommunication.




(5) The superintendent, decision-making panel or presiding officer may vary the applicable
procedural requirements under this Title and Title 5 to the extent the superintendent,
panel or presiding officer determines to be reasonably necessary for the fair and
effective administration of a consolidated multistate proceeding.




(6) The decision is subject to judicial review in the same manner as a final agency
action of the superintendent. [2013, c. 238, Pt. A, §15 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]












E. The superintendent may participate, including serving as a decision maker or member
of a decision-making panel, in a consolidated approval proceeding conducted under
the laws of one or more other states if the consolidated proceeding provides for a
public hearing with substantially similar rights of participation and judicial review
as a proceeding conducted pursuant to paragraph D. If the superintendent elects under
this paragraph to participate in a consolidated proceeding that is conducted under
the laws of one or more other states, the application is exempt from further review
under this section pursuant to subsection 4-C, paragraph D, subparagraph (4) and the
consolidated proceeding, notwithstanding the superintendent's participation, is not
subject to any provisions of the law of this State governing adjudicatory proceedings,
judicial review, public records or public meetings. [2013, c. 238, Pt. A, §15 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]








[
2013, c. 238, Pt. A, §15 (NEW);
2013, c. 238, Pt. A, §34 (AFF)
.]








7-B. Supervisory colleges. 
In order to assess the business strategy, financial position, legal and regulatory
position, risk exposure including enterprise risk, risk management and governance
processes of a domestic insurer that is part of an insurance holding company system
with international operations, the superintendent may participate in a supervisory
college with other regulators charged with supervision of the insurer or its affiliates,
including other state, federal and international regulatory agencies. A supervisory
college may be convened as either a temporary or permanent forum for communication
and cooperation among the regulators charged with the supervision of the insurer or
its affiliates.





A. The superintendent's powers with respect to supervisory colleges include, but are
not limited to:



(1) Initiating the establishment of a supervisory college or participating in a supervisory
college initiated by one or more other regulators;




(2) Entering into agreements providing the basis for cooperation between the superintendent
and the other participating regulators and for the activities of the supervisory college,
including but not limited to agreements for sharing confidential information under
section 216, subsection 5;




(3) Obtaining and providing assistance in examinations conducted under subsection
1-A or under the examination authority of other participating jurisdictions;




(4) Clarifying the membership and participation of other regulators in the supervisory
college;




(5) Clarifying the functions of the supervisory college and the role of other regulators,
including the designation of the superintendent or another member of the supervisory
college as a group-wide supervisor;




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




(7) Establishing a crisis management plan. [2013, c. 238, Pt. A, §15 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]












B. A domestic insurer whose activities are subject to this subsection is liable for and
shall pay the reasonable expenses of the superintendent's participation in a supervisory
college, including reasonable travel expenses. The superintendent may establish a
regular assessment to the insurer for the payment of these expenses. [2013, c. 238, Pt. A, §15 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]











C. This section may not be construed to delegate to a supervisory college the authority
of the superintendent to regulate or supervise an insurer or its affiliates within
this State. [2013, c. 238, Pt. A, §15 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]








[
2013, c. 238, Pt. A, §15 (NEW);
2013, c. 238, Pt. A, §34 (AFF)
.]








8. Registration of holding company system insurers. 







A. An insurer that is authorized to do business in this State and that is a member of an
insurance holding company system shall register with the superintendent, except that
these requirements do not apply to a foreign insurer domiciled in a jurisdiction that
in the opinion of the superintendent has adopted by statute or regulation disclosure
statements and standards substantially similar to those contained in this section. An insurer domiciled in a jurisdiction that has not adopted by statute or regulation
disclosure requirements and standards substantially similar to those contained in
this section may be treated as a domestic insurer for purposes of this section. Each
insurer that is subject to registration under this subsection shall register within
15 days after it becomes subject to registration, and annually thereafter by May 1st,
unless the superintendent, for good cause shown, extends the time for registration
and then an insurer shall register within that extended time. This section does not prohibit the superintendent from requesting any authorized insurer that is a member
of an insurance holding company system and not subject to registration under this section to provide a copy of the registration statement or other information filed by such insurer with
the insurance regulatory authority of its state of domicile. Upon request of the insurer
or of the insurance regulatory authority of another jurisdiction in which the insurer
is authorized to transact insurance, the superintendent at the insurer's expense shall
furnish a copy of the registration statement or other information filed by a domestic
insurer with the superintendent pursuant to this section; [2013, c. 238, Pt. A, §16 (AMD); 2013, c. 238, Pt. A, §34 (AFF).]











B. An insurer subject to registration shall file a registration statement with the superintendent on a form and in a format prescribed by the National Association of Insurance Commissioners.
The registration statement must contain current information about:



(1) The capital structure, general financial condition, ownership and management
of the insurer and of any person controlling the insurer;




(1-A) The identity and relationship of every member of the insurance holding company
system;




(2) The following transactions currently outstanding between the insurer and its
affiliates:



(a) Loans and other investments, and purchases, sales or exchanges of securities
of the affiliate by the insurer or of the insurer by its affiliates;





(b) Purchases, sales or exchanges of assets;




(c) Transactions not in the ordinary course of business;




(d) Guarantees or undertakings for the benefit of an affiliate that result in an
actual contingent exposure of the insurer's assets to liability, other than insurance
contracts entered into in the ordinary course of the insurer's business;





(e) All management and service contracts and all cost-sharing arrangements, other
than cost allocation arrangements based upon generally accepted accounting principles;





(f) Reinsurance agreements;




(g) Dividends and other distributions to shareholders; and




(h) Consolidated tax allocation agreements;





(2-A) Any pledge of the insurer's stock, including stock of any subsidiary or controlling
affiliate, for a loan made to any member of the insurance holding company system;




(2-B) If requested by the superintendent, financial statements of or within the insurance
holding company system, including all affiliates. The required financial statements
may include but are not limited to annual audited financial statements filed with
the United States Securities and Exchange Commission pursuant to the Exchange Act.
An insurer required to file financial statements pursuant to this subparagraph may
satisfy the request by providing the superintendent with the most recently filed parent
corporation financial statements that have been filed with the United States Securities
and Exchange Commission;




(3) Other matters concerning transactions between the insurer and any affiliate as
may be required by the superintendent; and




(4) Any other information required by the superintendent by rule; [2013, c. 238, Pt. A, §17 (AMD); 2013, c. 238, Pt. A, §34 (AFF).]












B-1. The controlling person with ultimate control of an insurer subject to registration
shall also file an annual enterprise risk report. The report must be appropriate
to the nature, scale and complexity of the operations of the insurance holding company
system and must, to the best of the controlling person's knowledge and belief, identify
the material risks within the insurance holding company system, if any, that could
pose enterprise risk to the insurer. The report must be filed with the lead state
regulator of the insurance holding company system as determined by the procedures
within the financial analysis handbook adopted by the National Association of Insurance
Commissioners; [2013, c. 238, Pt. A, §18 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]











B-2. An insurer subject to registration shall file statements confirming that the insurer's
board of directors oversees corporate governance and internal controls and that the
insurer's officers or senior management have approved and implemented and continue
to maintain and monitor corporate governance and internal control procedures; [2013, c. 238, Pt. A, §18 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]











B-3. A domestic insurer that is subject to registration, and has annual premium of $500,000,000
or more or is a member of an insurance holding company system with annual premium
of $1,000,000,000 or more, shall conduct an own risk and solvency assessment in accordance
with the requirements of this paragraph at least annually, and also at any time when
there are significant changes to the risk profile of the insurer or its insurance
holding company system, except as otherwise provided in subparagraph (1). For purposes
of this paragraph, "premium" means direct written and unaffiliated assumed premium,
including international direct and assumed premium but excluding premiums reinsured
with the Federal Crop Insurance Corporation within the United States Department of
Agriculture, Risk Management Agency and with the National Flood Insurance Program
within the United States Department of Homeland Security, Federal Emergency Management
Agency.



(1) This paragraph does not apply if:


(a) The insurer is an agency, authority or instrumentality of the United States, its
possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia
or a state or political subdivision of a state;





(b) The insurer and its insurance holding company system did not meet either of the
minimum premium criteria of this paragraph in the financial statements immediately
preceding their most recent financial statements and the superintendent has not required
compliance with this paragraph under subparagraph (2); or





(c) The superintendent has granted a waiver from the requirements of this paragraph
based upon unique circumstances. In deciding whether to grant a waiver, the superintendent
may consider the type and volume of business written by the insurer, the ownership
and organizational structure of the insurer and its insurance holding company system
and any other factor the superintendent considers relevant to the insurer or the insurer's
insurance holding company system. If the insurer's insurance holding company system
includes insurers domiciled in more than one state, the superintendent shall coordinate
with the lead regulator and with other domiciliary regulators in considering whether
to grant the insurer's request for a waiver.






(2) The superintendent may require an insurer that does not meet either of the minimum
premium criteria of this paragraph to comply with the requirements of this paragraph
if:



(a) The superintendent determines that the insurer should be subject to this paragraph
due to unique circumstances, including, but not limited to, the type and volume of
business written by the insurer, the ownership and organizational structure of the
insurer and its insurance holding company system, federal agency requests and international
supervisor requests;





(b) The insurer is subject to a corrective order or required to adopt a risk-based
capital plan under sections 6453 to 6456;





(c) The superintendent has determined in accordance with rules adopted by the superintendent
that the insurer is in hazardous financial condition; or





(d) The superintendent has determined that the insurer otherwise exhibits qualities
of a troubled insurer.






(3) If an insurer's insurance holding company system has annual premium of $1,000,000,000
or more, the assessment and reporting required by this paragraph must be conducted
for each insurer within the insurance holding company system, either on a systemwide
basis or separately for insurers or combinations of insurers within the insurance
holding company system.




(4) An insurer subject to this paragraph shall maintain a risk management framework
to assist the insurer with identifying, assessing, monitoring, managing and reporting
on its material and relevant risks. An insurer may satisfy this requirement by participating
in an applicable risk management framework maintained by the insurance holding company
system of which the insurer is a member.




(5) An insurer subject to this paragraph shall prepare and submit regular ORSA summary
reports that satisfy the requirements of this subparagraph and shall provide additional
information to the superintendent upon request.



(a) Beginning no later than 2015, the ORSA summary report must be prepared at least
annually, on a timetable consistent with the insurer's internal strategic planning
processes, and submitted to the lead regulator of the insurer's insurance holding
company system, as determined by the procedures within a financial analysis handbook
adopted by the National Association of Insurance Commissioners. If the superintendent
is not the lead regulator, the insurer shall submit the insurer's or insurance holding
company system's most recent ORSA summary report to the superintendent on request.





(b) The ORSA summary report must be prepared consistent with the ORSA guidance manual.
Documentation and supporting information must be maintained and made available upon
examination by or upon request of the superintendent.





(c) The insurer's or insurance holding company system's chief risk officer, or other
executive having responsibility for the oversight of the insurer's enterprise risk
management process, shall sign the ORSA summary report attesting to the best of the
signer's 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 of the board.





(d) An insurer may comply with this paragraph by providing the most recent ORSA summary
report and a report or reports that are substantially similar to the ORSA summary
report that are provided by the insurer or another member of its insurance holding
company system to the insurance commissioner of another state or to an insurance 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 report in
a language other than English must be accompanied by an English translation.






(6) The superintendent's review of the ORSA summary report, and any additional requests
for information, must be consistent with accepted regulatory procedures for the analysis
and examination of multistate or global insurers and insurance groups. [2013, c. 238, Pt. A, §18 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]












C. An insurer does not need to disclose on the registration statement filed pursuant to this subsection information that is not material to the purposes of this section. Unless the superintendent by rule or order provides otherwise, sales, purchases, exchanges, loans or extensions of
credit or investments involving 1/2 of 1% or less of an insurer's admitted assets as of December 31st immediately
preceding are not material for purposes of this section; [2013, c. 238, Pt. A, §19 (AMD); 2013, c. 238, Pt. A, §34 (AFF).]











D. Each registered insurer shall keep current the information required to be disclosed
in its registration statement by reporting on forms provided by the superintendent
all material changes or additions on or before the 15th day of the month following
that in which it learns of each such change or addition; [1975, c. 356, §1 (NEW).]










E. The superintendent shall terminate the registration of any insurer which demonstrates
that it is no longer a member of an insurance holding company system; [1975, c. 356, §1 (NEW).]










F. Two or more affiliated insurers subject to registration hereunder may file a consolidated
registration statement or consolidated reports amending their respective consolidated
statements or their individual registration statements so long as such consolidated
filings correctly reflect the condition of and transactions between such persons; [1975, c. 356, §1 (NEW).]










G. The superintendent may allow or require any insurer, which is authorized to do business
in this State and which is part of an insurance holding company system, to register
on behalf of any affiliated insurer which is required to register under paragraph
A and to file all information and material required to be filed under this section; [1975, c. 356, §1 (NEW).]










H. This section shall not apply to any insurer, information or transaction if and to
the extent that the superintendent by rule, regulation or order shall exempt the same
from the provisions of this section as not comprehended within the purposes thereof; [1975, c. 356, §1 (NEW).]










I. Any person may file with the superintendent a disclaimer of affiliation with any authorized
insurer. A disclaimer of affiliation may be filed by the insurer or any member of an insurance holding company system.
The disclaimer must fully disclose all material relationships and bases for affiliation between the disclaiming person and the insurer as well as the bases for disclaiming affiliation.



(1) An approved disclaimer relieves the disclaiming person of the duty to register
under this section.




(2) A disclaimer is deemed approved unless the superintendent, within 30 days after
receipt of a complete disclaimer, including any additional information required by
the superintendent, either disallows the disclaimer or notifies the disclaiming person
that a hearing will be held on the disclaimer.




(3) The superintendent may condition the approval of a disclaimer on terms and conditions
reasonably designed to ensure that the disclaiming person will not exercise actual
control or acquire the right to actual control over the insurer without triggering
the prior approval process under subsections 4-C and 7.




(4) If the superintendent takes action on a disclaimer without hearing, including
the imposition of conditions not agreed to by the disclaiming person, an aggrieved
person has the right to a hearing.




(5) The superintendent may rescind the approval of a disclaimer, after notice and
opportunity for hearing, on the basis of new information or changed circumstances
demonstrating the existence of control over the insurer. [2013, c. 238, Pt. A, §20 (AMD); 2013, c. 238, Pt. A, §34 (AFF).]









[
2013, c. 238, Pt. A, §§16-20 (AMD);
2013, c. 238, Pt. A, §34 (AFF)
.]








9. Transactions with affiliates; standards. 
Transactions by insurers subject to registration with their affiliates are subject to the following standards.





A. The terms, including any charges or fees for services performed, must be fair and
reasonable. [1991, c. 828, §5 (AMD).]










A-1. Agreements for cost-sharing services and management must include any provisions required
by the superintendent by rule. [2013, c. 238, Pt. A, §21 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]











B. The books, accounts and records of each party must be so maintained as to disclose
clearly and accurately the nature and details of the transaction, including all accounting
information necessary to support the reasonableness of any charges or fees. [1991, c. 828, §5 (AMD).]










C. The insurer's surplus to policyholders following any dividends or distributions to
stockholder affiliates must be reasonable in relation to the insurer's outstanding
liabilities and adequate to its financial needs. [1991, c. 548, Pt. B, §3 (AMD).]










D. Expenses incurred and payment received must be allocated to the insurer in conformity
with customary insurance accounting practices consistently applied. [1991, c. 828, §5 (NEW).]










E. A domestic insurer shall notify the superintendent in writing at least 30 days in advance, unless the superintendent
authorizes a shorter period, before entering into or materially amending or modifying any of the following kinds of transactions with any member of its holding company
system:



(1) Sales, purchases, exchanges, loans or extensions of credit, guarantees or investments
that are equal to or exceed:



(a) With respect to nonlife insurers, the lesser of 3% of the insurer's admitted assets
as of December 31st of the preceding year and 25% of surplus to policyholders;





(b) With respect to life insurers, 3% of the insurer's admitted assets as of December
31st of the preceding year; or





(c) With respect to nonprofit hospital and medical service organizations and their
100% controlled affiliates that operate as monoline health insurers or health maintenance
organizations, the lesser of 5% of the entity's admitted assets as of December 31st
of the preceding year and 25% of surplus to policyholders;






(2) Loans or extensions of credit to any person who is not an affiliate, if the insurer
makes the loan or extension of credit with the agreement or understanding that the
proceeds in whole or in substantial part are to be used to make loans or extensions of credit to, purchase assets of or make
investments in any affiliate of the insurer if the loan, extension of credit, purchase
or investment is equal to or exceeds:



(a) With respect to nonlife insurers, the lesser of 3% of the insurer's admitted
assets as of December 31st of the preceding year and 25% of surplus to policyholders;





(b) With respect to life insurers, 3% of the insurer's admitted assets as of December
31st of the preceding year; or





(c) With respect to nonprofit hospital and medical service organizations and their
100% controlled affiliates that operate as monoline health insurers or health maintenance
organizations, the lesser of 5% of the entity's admitted assets as of December 31st
of the preceding year and 25% of surplus to policyholders;






(3) All reinsurance pooling agreements, and all reinsurance agreements in which the reinsurance premium or a change in the insurer's liabilities, or the projected reinsurance premium or a projected change in the insurer's liabilities
in any of the next 3 years, equals or exceeds 5% of the insurer's surplus to policyholders, as of December 31st
of the preceding year, including those agreements that may require 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, cost-sharing arrangements, tax allocation agreements, service contracts and guaranties, with the exception of guaranties that are quantifiable in amount and
do not exceed, in the aggregate, the lesser of 0.5% of admitted assets and 10% of
surplus as regards policyholders as of December 31st of the preceding year;
























(5) Any transactions that 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 threshold amount and thus avoid the review that would occur
otherwise. If the superintendent determines that those separate transactions were
entered into over any 12-month period for such a purpose, the superintendent may exercise
authority under this subsection; and




(6) Any other material transactions specified by rule that the superintendent has
determined may adversely affect the interests of the insurer's policyholders.



A notice of amendment or modification of a transaction must include the reasons for
the change and the financial impact on the domestic insurer. The insurer shall notify
the superintendent within 30 days after terminating an agreement previously reported
under this paragraph.


The superintendent shall disapprove a transaction that is subject to this paragraph if the transaction violates the standards of this section or other applicable law or adversely affects
the interests of policyholders. The superintendent's failure to make a determination
on a proposed transaction within 30 days after it has been submitted for review has
the effect of an approval, unless the superintendent has issued a notice of adjudicatory
hearing on the proposal in accordance with section 230. [2013, c. 238, Pt. A, §21 (AMD); 2013, c. 238, Pt. A, §34 (AFF).]








Any violation of this subsection, in addition to the penalties contained in subsection
14, renders the transactions voidable at the initiative of the superintendent or otherwise
under applicable law. The superintendent's approval of a transaction in accordance
with this section, whether actual or by acquiescence, may not override any applicable
law and does not operate to authorize any transaction that would be contrary to law
if it involved an insurer not a member of the same holding company system.


[
2013, c. 238, Pt. A, §21 (AMD);
2013, c. 238, Pt. A, §34 (AFF)
.]








10. Insurer's surplus; adequacy factors. 
For the purposes of this section, in determining whether an insurer's surplus to policyholders is reasonable in relation
to the insurer's outstanding liabilities and adequate to its financial needs, the
following factors, among others, may be considered:





A. The size of the insurer as measured by its assets, capital and surplus, reserves,
premium writings, insurance in force and other appropriate criteria; [1975, c. 356, §1 (NEW).]










B. The extent to which the insurer's business is diversified among the several lines
of insurance; [1975, c. 356, §1 (NEW).]










C. The number and size of the risks insured in each line of business; [1975, c. 356, §1 (NEW).]










D. The extent of the geographical dispersion of the insurer's insured risks; [1975, c. 356, §1 (NEW).]










E. The nature and extent of the insurer's reinsurance program; [1975, c. 356, §1 (NEW).]










F. The quality, diversification and liquidity of the insurer's investment portfolio; [1975, c. 356, §1 (NEW).]










G. The recent past and projected future trend in the size of the insurer's surplus
as regards policyholders; [1993, c. 313, §10 (AMD).]










H. The quality and liquidity of investments in subsidiaries or affiliates. The department
may discount any such investment or treat any investment as a nonadmitted asset for
purposes of determining the adequacy of surplus as regards policyholders whenever
the investment so warrants; [1993, c. 313, §10 (AMD).]










I. The adequacy of the insurer's reserves; [1993, c. 313, §10 (AMD).]










J. The surplus as regards policyholders maintained by other comparable insurers in
respect of the factors set out in this subsection; and [1993, c. 313, §10 (AMD).]










K. The quality of the company's earnings and the extent to which the reported earnings
include extraordinary items. [1993, c. 313, §10 (NEW).]







[
2013, c. 238, Pt. A, §22 (AMD);
2013, c. 238, Pt. A, §34 (AFF)
.]








11. Dividends and distributions. 




[
1993, c. 313, §11 (RP)
.]








11-A. Extraordinary dividends. 









[
2009, c. 511, Pt. A, §3 (RP)
.]








11-B. All other dividends and distributions. 



[
2009, c. 511, Pt. A, §4 (RP)
.]








11-C. Dividends and distributions. 
The superintendent shall review all dividends and distributions declared or paid
by any insurer registered under subsection 8 at least annually.





A. An insurer shall notify the superintendent within 5 days after the declaration of
any dividend or distribution. If the dividend or distribution is not disapproved
pursuant to paragraph B and is not an extraordinary dividend as defined in paragraph
C, the insurer may pay the dividend or distribution once the superintendent has approved
the payment or 10 days have elapsed after the superintendent’s receipt of notice. [2009, c. 511, Pt. A, §5 (NEW).]










B. The superintendent shall issue an order restricting or disallowing the payment of
dividends and distributions if the superintendent determines that the insurer's surplus
would not be reasonable in relation to the insurance company's outstanding liabilities,
that the insurer's surplus would be inadequate to that company's financial needs, that the insurer's financial condition would constitute a condition hazardous to
policyholders, claimants or the public or that a violation of subsection 4-C prevents the superintendent from sufficiently
understanding the enterprise risk to the insurer posed by its affiliates or by its
insurance holding company system. [2013, c. 238, Pt. A, §23 (AMD); 2013, c. 238, Pt. A, §34 (AFF).]











C. An extraordinary dividend may not be paid until affirmatively approved by the superintendent
or until at least 60 days after the superintendent has received a request to pay an
extraordinary dividend.



(1) For purposes of this subsection, "extraordinary dividend" means any dividend
or distribution, other than a pro rata distribution of a class of the insurer’s own
securities, that:



(a) Exceeds 10% of the insurer's surplus to policyholders as of December 31st of
the preceding year or the net gain from operations for the preceding calendar year,
whichever is greater;





(b) Is declared within 5 years after any acquisition of control of a domestic insurer
or of any person controlling that insurer, unless it has been approved by a number
of continuing directors equal to a majority of the directors in office immediately
preceding that acquisition of control; or





(c) Is not paid entirely from unassigned funds. For purposes of this division, 50%
of the net of unrealized capital gains and unrealized capital losses, reduced, but
not to less than zero, by that portion of the asset valuation reserve attributable
to equity investments, must be excluded from the calculation of unassigned funds.






(2) An insurer may declare an extraordinary dividend on a conditional basis, subject
to the superintendent’s approval. A declaration pursuant to this subparagraph does
not confer any rights upon stockholders until the superintendent has approved the
payment or the 60-day review period has elapsed. [2009, c. 511, Pt. A, §5 (NEW).]








[
2013, c. 238, Pt. A, §23 (AMD);
2013, c. 238, Pt. A, §34 (AFF)
.]








12. Verification of information. 






[
2013, c. 238, Pt. A, §34 (AFF);
2013, c. 238, Pt. A, §24 (RP)
.]








13. Confidential communications. 



[
2013, c. 238, Pt. A, §34 (AFF);
2013, c. 238, Pt. A, §25 (RP)
.]








13-A. Confidential information. 
This section applies to holding company information that is in the possession or
control of the superintendent or that is in the possession or control of the National
Association of Insurance Commissioners as a result of a filing under this section
or as a result of information sharing by the superintendent as authorized by this
section.





A. For purposes of this subsection, "holding company information" means any of the following
documents, materials and other information if the document, material or other information
has not specifically and expressly been designated as a public record by other applicable
law:



(1) Information obtained by the superintendent pursuant to an examination or investigation
pursuant to subsection 1-A to the same extent as the information would have been confidential
if obtained in an examination or investigation conducted under section 220 or 221;




(2) A registration statement or report filed under subsection 8, including all supporting
information;




(3) A report filed under subsection 9, including all supporting information;



(4) A notice of proposed divestiture filed under subsection 4-C, paragraph B, until
the divestiture transaction has occurred;




(5) A disclosure of the beneficial owner of securities made by a broker-dealer pursuant
to subsection 4-C, paragraph E;




(6) The identity of a lender that is to finance a proposed transaction if declared
confidential under subsection 4-C, paragraph C, subparagraph (2);




(7) Information filed in support of any required attestation of risk management or
internal controls under subsection 4-C, paragraph C, subparagraph (12) or (13);




(8) A competitive impact statement filed under subsection 4-C, paragraph C, subparagraph
(14), including all supporting information;




(9) Information obtained under an information-sharing agreement entered into pursuant
to this section to the extent that it is protected by the confidentiality provisions
of the agreement;




(10) Information obtained pursuant to this section from a jurisdiction other than
this State to the extent that it is confidential under the laws of the jurisdiction
in which it is normally maintained; and




(11) Information obtained under this section to the extent that it is confidential
under other applicable law, including, but not limited to, section 216, section 225
and Title 1, section 402, subsection 3. [2013, c. 238, Pt. A, §26 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]












B. Except as otherwise provided by paragraphs D and E or specifically and expressly provided
by other applicable law, holding company information is confidential, is not a public
record, is not subject to a subpoena, is not subject to discovery or admissible as
evidence in any private civil action and may not be made public by the superintendent
without prior written consent of the relevant insurer. The privilege provided under
this paragraph does not supersede any other applicable privilege or confidentiality
protection, nor does disclosure of confidential holding company information to the
superintendent constitute a waiver of any such privilege or protection. Neither the
superintendent nor any person who received holding company information from or under
the authority of the superintendent under this section may be permitted or required
to testify in any private civil action concerning holding company information that
is confidential under this subsection. [2013, c. 238, Pt. A, §26 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]











C. The superintendent may share holding company information that is confidential under
this subsection only in accordance with the requirements of section 216, subsection
5 and the following additional requirements.



(1) The recipient of the information must agree in writing to maintain the same level
of confidentiality as is available under Maine law. This requirement may be satisfied
through a multilateral confidentiality agreement to which both the superintendent
and the recipient are parties.




(2) The superintendent may not share confidential holding company information with
or through the National Association of Insurance Commissioners except in accordance
with an information-sharing agreement entered into in accordance with section 216,
subsection 5, paragraph C.




(3) If the recipient of the information is in the United States, the recipient's
state must have statutes or rules that expressly protect holding company information
at a level at least equivalent to the protections provided by this subsection and
section 216, subsection 5.




(4) ORSA-related information subject to subsection 8, paragraph B-3 may, with the
written consent of the insurer, be shared with a 3rd-party consultant under an agreement
containing the conditions specified in section 216, subsection 5, paragraph C. In
addition, any agreement for sharing ORSA-related information with the National Association
of Insurance Commissioners or a 3rd-party consultant must further provide that:



(a) The recipient of the information agrees in writing to maintain the confidentiality
and privileged status of the ORSA-related information and has verified in writing
the legal authority to maintain confidentiality;





(b) Any preauthorization granted under the agreement for further sharing of information
provided by the superintendent must be limited to only the domiciliary regulators
of other insurers in the same insurance holding company system; and





(c) The National Association of Insurance Commissioners or a 3rd-party consultant
may not store ORSA-related information shared pursuant to this subparagraph in a permanent
database after the underlying analysis is completed. [2013, c. 238, Pt. A, §26 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]














D. This subsection does not prohibit the superintendent from using holding company information
in the furtherance of any regulatory or legal action brought as a part of the superintendent's
official duties. [2013, c. 238, Pt. A, §26 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]











E. Unless otherwise provided by applicable law, the superintendent may, after giving
notice and opportunity for hearing to the insurer and any affiliates, controlling
person or other persons that would be affected, order one or more items of holding
company information, other than ORSA-related information, to be made a public record
in its entirety or in redacted form if the superintendent determines that public disclosure
will be in the interest of policyholders, shareholders or the public. [2013, c. 238, Pt. A, §26 (NEW); 2013, c. 238, Pt. A, §34 (AFF).]








[
2013, c. 238, Pt. A, §26 (NEW);
2013, c. 238, Pt. A, §34 (AFF)
.]








14. Penalties. 






A. Any person who willfully violates any of the provisions of this section, or the rules
and regulations promulgated by the superintendent under authority thereof, or any
person who willfully, in a filing pursuant to subsection 4-C or a registration pursuant to subsection 8, paragraph B, makes any untrue statement
of a material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, must upon conviction be
fined not more than $1,000 or imprisoned not more than 3 years, or both; [2013, c. 238, Pt. A, §27 (AMD); 2013, c. 238, Pt. A, §34 (AFF).]











B. Any person who is found, after notice and opportunity to be heard, to have willfully
violated any of the provisions of this section or any rule or regulations promulgated
by the superintendent under the authority thereof, shall, in addition to any other
penalty provided by law, forfeit to this State the sum of $50 for a first violation
and an additional sum of $25 for each day such violation shall continue; [1975, c. 356, §1 (NEW).]










C. In addition to other remedies and penalties provided in this section or otherwise
available under the laws of this State, any violation of this section is hereby declared
to be an unfair method of competition or an unfair or deceptive act and practice in
the business of insurance subject to the provisions of chapter 23 and in addition,
the superintendent may, after notice and hearing:



(1) Refuse to issue, refuse to renew or reissue, revoke or suspend for a period not
exceeding one year any license or certificate of authority issued or to be issued
to any person found to have violated any of the provisions of this section;






(2) After notice and hearing impose by order and administrative forfeiture upon such
person, enforceable by such revocation, suspension or refusal to issue, renew or reissue
of any such license or licenses or otherwise pursuant to the law of this State, in
an amount not to exceed $100 for each such violation and for each day's continuance
thereof;






(3) Proceed in a court of competent jurisdiction within or without this State against
such person, if an insurer, upon the applicable grounds provided for the rehabilitation,
conservatorship or liquidation of an insurer or for an injunction to prevent a violation
of this section or to reverse or hold invalid any transaction made in violation of
this section;






(4) Issue such administrative orders to require compliance with this section, including
the filing of evidence of compliance and periodic reporting as to such compliance,
enforceable by such revocation, suspension or refusal to issue, renew or reissue of
any such license or licenses or otherwise pursuant to the laws of this State; or






(5) Any or all of the foregoing. [1975, c. 356, §1 (NEW).]










[
2013, c. 238, Pt. A, §27 (AMD);
2013, c. 238, Pt. A, §34 (AFF)
.]








14-A. Recovery. 







A. If an order for liquidation or rehabilitation of a domestic insurer has been entered,
the receiver appointed under that order has the right to 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 any 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 by any subsidiary of that insurer
to a director, officer or employee when the distribution or payment pursuant to this
subparagraph or subparagraph (1) is made at any time during the one year preceding
the petition for liquidation, conservation or rehabilitation, subject to the limitations
of paragraphs B, C and D. [1993, c. 313, §13 (NEW).]













B. Such a distribution is not recoverable if the parent corporation 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 could adversely
affect the ability of the insurer to fulfill its contractual obligations. [1993, c. 313, §13 (NEW).]










C. Any person who was a parent corporation or holding company or a person who otherwise
controlled the insurer or affiliate at the time distributions were paid is liable
up to the amount of distributions or payments under paragraph A that the person received.
Any person who otherwise controlled the insurer at the time the distributions were
declared is liable up to the amount of the distributions the person would have received
if that person had been paid immediately. If 2 or more persons are liable for the
same distributions, those persons are jointly and severally liable. [1993, c. 313, §13 (NEW).]










D. The maximum amount recoverable under this subsection is 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. [1993, c. 313, §13 (NEW).]










E. To the extent that any person liable under paragraph C is insolvent or fails to
pay claims due pursuant to paragraph C, its parent corporation or holding company
or person who 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 who otherwise controlled it. [1993, c. 313, §13 (NEW).]







[
1993, c. 313, §13 (NEW)
.]








15. Additional powers. 
The powers, remedies, procedures and penalties provided in this section shall be
in addition to, and not in limitation of, any other powers, remedies, procedures and
penalties otherwise provided by law.


[
1975, c. 356, §1 (NEW)
.]








16. Separability of provisions. 
If any provision of this section or the application thereof to any person or circumstance
is held invalid, the invalidity shall not affect other provisions or applications
of this section which can be given effect without the invalid provision or application,
and for this purpose the provisions of this section are separable.


[
1975, c. 356, §1 (NEW)
.]








17. Jurisdiction of courts; service of process. 
Any person obtaining or attempting to obtain control of a domestic insurer is subject
to the jurisdiction of the courts of this State and to service of process in the manner
provided in this Title. Unless a valid appointment of an agent for service of process
is on file with the superintendent pursuant to another provision of this Title, the
person is deemed to have appointed the superintendent as agent for service of process,
and service may be made in the same manner as provided in section 2105.


[
1999, c. 113, §14 (AMD)
.]








18. Rules. 
The superintendent may adopt reasonable rules to carry out provisions of this section. Rules adopted pursuant to this subsection are routine technical rules as defined in
Title 5, chapter 375, subchapter 2-A.


[
2013, c. 238, Pt. A, §28 (AMD);
2013, c. 238, Pt. A, §34 (AFF)
.]








19. Supplemental to existing provisions. 
This section, as to insurance holding company systems, supplements in particular those provisions contained in
sections 407, subsection 2; 410, subsection 1, paragraph B; 413; 423-C; 425; 1115; 1136; 3414; 3474; 3475; 3476; 3483; 3875 and 4407; and the provisions
of this section are deemed to supersede or modify any such provisions or any other provisions of this Title to the extent inconsistent therewith.


[
2013, c. 238, Pt. A, §29 (AMD);
2013, c. 238, Pt. A, §34 (AFF)
.]





SECTION HISTORY

1969, c. 132, §1 (NEW).
1973, c. 585, §12 (AMD).
1975, c. 356, §1 (RPR).
1977, c. 694, §388 (AMD).
1983, c. 394, §§1, 2 (AMD).
1987, c. 399, §1 (AMD).
1989, c. 385, §§1-9 (AMD).
1989, c. 611, §§1, 4 (AMD).
1991, c. 37, §§1, 2 (AMD).
1991, c. 548, Pt. B, §3 (AMD).
1991, c. 828, §§3-6 (AMD).
1993, c. 313, §§7-13 (AMD).
1999, c. 113, §§8-14 (AMD).
2001, c. 72, §§4, 5 (AMD).
2007, c. 466, Pt. D, §§1-3 (AMD).
2009, c. 511, Pt. A, §§3-5 (AMD).
2013, c. 238, Pt. A, §§2-29 (AMD).
2013, c. 238, Pt. A, §34 (AFF).