58-5A-32. Standards for material transactions by registered insurers with affiliates--Nonconformity.
Any material transaction by a registered insurer with an affiliate is subject to the following standards:
(1)The terms shall be fair and reasonable;
(2)The books, accounts, and records of each party shall be maintained to clearly and accurately disclose the precise nature and details of the transaction including information necessary to support the reasonableness of the charges or fees to the respective parties;
(3)The insurer's surplus to policyholders following any dividends or distributions to shareholders or affiliates shall be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs;
(4)Charges or fees for services performed shall be reasonable;
(5)Expenses incurred and payment received shall be allocated to the insurer in conformity with customary insurance accounting practices consistently applied; and
(6)Any agreement for cost sharing services and management shall include provisions as required by law or rule.
Any transaction which is not in conformity with this section is subject to the provisions of §§58-5A-64, 58-5A-65, and 58-5A-67.
Source: SL 1972, ch 267, §26; SL 1990, ch 158, §25; SL 1992, ch 341, §20; SL 2015, ch 246, §11.