§27-35-5.5  Group Supervision. –


Published: 2015

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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.)

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