TITLE 27
Insurance
CHAPTER 27-35
Insurance Holding Company Systems
SECTION 27-35-5.5
§ 27-35-5.5 Group supervision.
(a) Power of the Commissioner. With respect to any insurer registered
under § 27-35-3, and in accordance with subsection (c) below, the
commissioner shall also have the power to participate in a supervisory college
for any domestic insurer that is part of an insurance holding company system
with international operations in order to determine compliance by the insurer
with this chapter. The powers of the commissioner with respect to supervisory
colleges include, but are not limited to, the following:
(1) Initiating the establishment of a supervisory college;
(2) Clarifying the membership and participation of other
supervisors in the supervisory college;
(3) Clarifying the functions of the supervisory college and
the role of other regulators, including the establishment of a group wide
supervisor;
(4) Coordinating the ongoing activities of the supervisory
college, including planning meetings, supervisory activities, and processes for
information sharing; and
(5) Establishing a crisis management plan.
(b) Expenses. Each registered insurer subject to this
section shall be liable for and shall pay the reasonable expenses of the
commissioner's participation in a supervisory college in accordance with
subsection (c) below, including reasonable travel expenses. For purposes of
this section, a supervisory college may be convened as either a temporary or
permanent forum for communication and cooperation between the regulators
charged with the supervision of the insurer or its affiliates, and the
commissioner may establish a regular assessment to the insurer for the payment
of these expenses.
(c) Supervisory College. In order to assess the
business strategy, financial position, legal and regulatory position, risk
exposure, risk management, and governance processes, and as part of the
examination of individual insurers in accordance with § 27-35-5, the
commissioner 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. The commissioner may
enter into agreements in accordance with § 27-35-6(c) providing the basis
for cooperation between the commissioner and the other regulatory agencies, and
the activities of the supervisory college. Nothing in this section shall
delegate to the supervisory college the authority of the commissioner to
regulate or supervise the insurer or its affiliates within its jurisdiction.
(d) The commissioner is authorized to act as the group wide
supervisor for any internationally active insurance group in accordance with
the provisions of this section. However, the commissioner may otherwise
acknowledge another regulatory official as the group wide supervisor where the
internationally active insurance group:
(1) Does not have substantial insurance operations in the
United States;
(2) Has substantial insurance operations in the United
States, but not in this state; or
(3) Has substantial insurance operations in the United States
and this state, but the commissioner has determined pursuant to the factors set
forth in subsections (e) and (i) of this section that the other regulatory
official is the appropriate group wide supervisor.
An insurance holding company system that does not otherwise
qualify as an internationally active insurance group may request that the
commissioner make a determination or acknowledgment as to a group wide
supervisor pursuant to this section.
(e) In cooperation with other state, federal, and
international regulatory agencies, the commissioner will identify a single
group wide supervisor for an internationally active insurance group. The
commissioner may determine that the commissioner is the appropriate group wide
supervisor for an internationally active insurance group that conducts
substantial insurance operations concentrated in this state. However, the
commissioner may acknowledge that a regulatory official from another
jurisdiction is the appropriate group wide supervisor for the internationally
active insurance group. The commissioner shall consider the following factors
when making a determination or acknowledgment under this subsection:
(1) The place of domicile of the insurers within the
internationally active insurance group that hold the largest share of the
group's written premiums, assets, or liabilities;
(2) The place of domicile of the top-tiered insurer(s) in the
insurance holding company system of the internationally active insurance group;
(3) The location of the executive offices or largest
operational offices of the internationally active insurance group;
(4) Whether another regulatory official is acting, or is
seeking to act, as the group wide supervisor under a regulatory system that the
commissioner determines to be:
(i) Substantially similar to the system of regulation
provided under the laws of this state; or
(ii) Otherwise sufficient in terms of providing for group
wide supervision, enterprise risk analysis, and cooperation with other
regulatory officials; and
(5) Whether another regulatory official acting or seeking to
act as the group wide supervisor provides the commissioner with reasonably
reciprocal recognition and cooperation.
However, a commissioner identified under this section as the
group wide supervisor may determine that it is appropriate to acknowledge
another supervisor to serve as the group wide supervisor. The acknowledgment of
the group wide supervisor shall be made after consideration of the factors
listed in this subsection and shall be made in cooperation with, and subject
to, the acknowledgment of other regulatory officials involved with supervision
of members of the internationally active insurance group, and in consultation
with the internationally active insurance group.
(f) Notwithstanding any other provision of law, when another
regulatory official is acting as the group wide supervisor of an
internationally active insurance group, the commissioner shall acknowledge that
regulatory official as the group wide supervisor. However, in the event of a
material change in the internationally active insurance group that results in:
(1) The internationally active insurance group's insurers
domiciled in this state holding the largest share of the group's premiums,
assets, or liabilities; or
(2) This state being the place of domicile of the top-tiered
insurer(s) in the insurance holding company system of the internationally
active insurance group, the commissioner shall make a determination or
acknowledgment as to the appropriate group wide supervisor for such an
internationally active insurance group pursuant to subsection (e) of this
section.
(g) Pursuant to § 27-35-5, the commissioner is
authorized to collect from any insurer registered pursuant to § 27-35-3
all information necessary to determine whether the commissioner may act as the
group wide supervisor of an internationally active insurance group or if the
commissioner may acknowledge another regulatory official to act as the group
wide supervisor. Prior to issuing a determination that an internationally
active insurance group is subject to group wide supervision by the
commissioner, the commissioner shall notify the insurer registered pursuant to
§ 27-35-3 and the ultimate controlling person within the internationally
active insurance group. The internationally active insurance group shall have
not less than thirty (30) days to provide the commissioner with additional
information pertinent to the pending determination. The commissioner shall
publish on its internet website the identity of internationally active
insurance groups that the commissioner has determined are subject to group wide
supervision by the commissioner.
(h) If the commissioner is the group wide supervisor for an
internationally active insurance group, the commissioner is authorized to
engage in any of the following group wide supervision activities:
(1) Assess the enterprise risks within the internationally
active insurance group to ensure that:
(i) The material financial condition and liquidity risks to
the members of the internationally active insurance group who or that are
engaged in the business of insurance are identified by management; and
(ii) Reasonable and effective mitigation measures are in
place;
(2) Request, from any member of an internationally active
insurance group subject to the commissioner's supervision, information
necessary and appropriate to assess enterprise risk, including, but not limited
to, information about the members of the internationally active insurance group
regarding:
(i) Governance, risk assessment, and management;
(ii) Capital adequacy; and
(iii) Material intercompany transactions;
(3) Coordinate and, through the authority of the regulatory
officials of the jurisdictions where members of the internationally active
insurance group are domiciled, compel development and implementation of
reasonable measures designed to ensure that the internationally active
insurance group is able to timely recognize and mitigate enterprise risks to
members of such internationally active insurance group who or that are engaged
in the business of insurance;
(4) Communicate with other state, federal, and international
regulatory agencies for members within the internationally active insurance
group and share relevant information subject to the confidentiality provisions
of § 27-35-6, through supervisory colleges as set forth in subsection (c)
of this section or otherwise;
(5) Enter into agreements with, or obtain documentation from,
any insurer registered under § 27-35-3, any member of the internationally
active insurance group, and any other state, federal, and international
regulatory agencies for members of the internationally active insurance group,
providing the basis for, or otherwise clarifying, the commissioner's role as
group wide supervisor, including provisions for resolving disputes with other
regulatory officials. Such agreements or documentation shall not serve as
evidence in any proceeding that any insurer or person within an insurance
holding company system not domiciled or incorporated in this state is doing
business in this state or is otherwise subject to jurisdiction in this state;
and
(6) Other group wide supervision activities, consistent with
the authorities and purposes enumerated above, as considered necessary by the
commissioner.
(i) If the commissioner acknowledges that another regulatory
official from a jurisdiction that is not accredited by the NAIC is the group
wide supervisor, the commissioner is authorized to reasonably cooperate,
through supervisory colleges or otherwise, with group wide supervision
undertaken by the group wide supervisor, provided that:
(1) The commissioner's cooperation is in compliance with the
laws of this state; and
(2) The regulatory official acknowledged as the group wide
supervisor also recognizes and cooperates with the commissioner's activities as
a group wide supervisor for other internationally active insurance groups where
applicable. Where such recognition and cooperation is not reasonably
reciprocal, the commissioner is authorized to refuse recognition and
cooperation.
(j) The commissioner is authorized to enter into agreements
with, or obtain documentation from, any insurer registered under §
27-35-3, any affiliate of the insurer, and other state, federal, and
international regulatory agencies for members of the internationally active
insurance group, that provide the basis, for or otherwise clarify, a regulatory
official's role as group wide supervisor.
(k) The commissioner may promulgate regulations necessary for
the administration of this section.
(l) A registered insurer subject to this section shall be
liable for and shall pay the reasonable expenses of the commissioner's
participation in the administration of this section, including the engagement
of attorneys, actuaries and any other professionals and all reasonable travel
expenses.
History of Section.
(P.L. 2011, ch. 15, § 1; P.L. 2011, ch. 26, § 1; P.L. 2015, ch. 82,
§ 13; P.L. 2015, ch. 105, § 13.)
