58-5A-56. Notification to director of certain transactions required.
A domestic insurer and any person in its insurance holding company system may not enter into transactions, including any amendment or modification of an affiliate agreement previously filed pursuant to this chapter, that is subject to any materiality standard provided in this section, unless the director has received a written notification from the insurer of the transaction at least thirty days prior to its effective date. The director has thirty days from receipt to approve or disapprove the transaction. If the director takes no action within the thirty days, the transaction is deemed approved. The director may allow less than thirty days notification if the insurer can show cause why a lesser time is necessary. Transactions of which the insurer needs to notify the director are:
(1)Sales, purchases, exchanges, loans, or extensions of credit, guarantees, or investments provided the transactions are equal to or exceed as of December thirty-first next preceding:
(a)With respect to nonlife insurers, the lesser of three percent of the insurer's admitted assets or twenty-five percent of surplus as regards policyholders; or
(b)With respect to life insurers, three percent of the insurer's admitted assets;
(2)Loans or extensions of credit by the insurer to any person that is not an affiliate, with the agreement or that the proceeds of the transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of, or to make investments in any affiliate of the insurer provided the transactions are equal to or exceed as of December thirty-first next preceding:
(a)With respect to nonlife insurers, the lesser of three percent of the insurer's admitted assets or twenty-five percent of surplus as regards policyholders; or
(b)With respect to life insurers, three percent of the insurer's admitted assets;
(3)Reinsurance agreements or modifications to the agreements, including:
(a)Any reinsurance pooling agreement; and
(b)Any agreement in which the reinsurance premium or a change in the insurer's liabilities, or the projected reinsurance premium or a change in the insurer's liabilities in any of the next three years, equal or exceeds five percent of the insurer's surplus as regards policyholders as of December thirty-first next preceding, including any agreement that requires 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, service contracts, tax allocation agreements, and all cost-sharing arrangements; and
(5)Any transactions which the director determines may adversely affect the interests of the insurer's policyholders.
Source: SL 1992, ch 341, §21; SL 2015, ch 246, §18.