| (a) Prior notice of a transaction. Prior notice of
a transaction is required as follows.
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(b) Identity of parties to transaction. Furnish the
following information for each of the parties to the transaction:
(1) name;
(2) home office address;
(3) principal executive office address;
(4) the organizational structure, i.e. corporation,
partnership, individual, trust, etc.;
(5) a description of the nature of the parties' business
operations;
(6) relationship, if any, of other parties to the transaction
to the insurer filing the notice, including any ownership or debtor/creditor
interest by any other parties to the transaction in the insurer seeking
approval, or by the insurer filing the notice in the affiliated parties;
(7) where the transaction is with a non-affiliate,
the name(s) of the affiliate(s) which will receive, in whole or in
substantial part, the proceeds of the transaction.
(c) Description of the transaction. Furnish the following
information for each transaction for which notice is given:
(1) a statement identifying the statute under which
the transaction is filed;
(2) a statement of the nature of the transaction and
the reasons for entering into or changing the transaction;
(3) a statement of how the transaction complies with
Insurance Code §823.101;
(4) the proposed effective date of the transaction;
and
(5) the financial impact of the transaction on the
domestic insurer.
(d) Sales, purchases, exchanges, loans, extensions
of credit, guarantees or investments.
(1) Furnish a brief description of the amount and source
of funds, securities, property, or other consideration for the sale,
purchase, exchange, loan, extension of credit, guarantee, or investment,
whether any provision exists for purchase by the insurer filing notice,
by any party to the transaction, or by any affiliate of the insurer
filing notice, a description of the terms of any securities being
received, if any, and a description of any other agreements relating
to the transaction such as contracts or agreements for services, consulting
agreements, and the like. If the transaction involves other than cash,
furnish a description of the consideration, its cost, and its fair
market value, together with an explanation of the basis for evaluation.
(2) If the transaction involves a loan, extension of
credit or a guarantee, furnish a description of the maximum amount
the insurer will be obligated to make available under the loan, extension
of credit, or guarantee, the date on which the credit or guarantee
will terminate, and any provisions for the accrual of or deferral
of interest.
(3) If the transaction involves an investment, guarantee,
or other arrangement, state the period during which the investment,
guarantee, or other arrangement will remain in effect, together with
any provisions for extensions or renewals of the investments, guarantees,
or arrangements. Furnish a brief statement as to the effect of the
transaction upon the insurer's surplus.
(e) Loans or extensions of credit to a non-affiliate.
If the transaction involves a loan or extension of credit to any person
who is not an affiliate, furnish a brief description of the agreement
or understanding through which the proceeds of the proposed transaction,
in whole or in substantial part, are to be used to make loans or extensions
of credit to, purchase the assets of, or make investments in, any
affiliate of the insurer making loans or extensions of credit, and
specify in what manner the proceeds are to be used to loan to, extend
credit to, purchase assets of, or make investments in any affiliate.
Describe the amount and source of funds, securities, property, or
other consideration for the loan or extension of credit and, if the
transaction is one involving consideration other than cash, a description
of its cost and its fair market value together with an explanation
of the basis for evaluation. Furnish a brief statement as to the effect
of the transaction on the insurer's surplus.
(f) Reinsurance. If the transaction is a reinsurance
agreement or modification or a reinsurance pooling agreement or modification
described in Insurance Code §823.103(a)(2), furnish a description
of the known or estimated amount of liability to be ceded or assumed
in each calendar year, the period the agreement will be in effect,
and a statement whether an agreement or understanding exists between
the insurer and non-affiliate that any portion of the assets constituting
the consideration for the agreement will be transferred to one or
more of the insurer's affiliates. Furnish a brief description of the
consideration involved in the transaction, and a brief statement as
to the effect of the transaction upon the insurer's surplus.
(g) Management agreements, service agreements, and
cost sharing arrangements.
(1) For management and service agreements, furnish:
(A) a brief description of the managerial responsibilities
or services to be performed;
(B) a brief description of the agreement, including
a statement of its duration, together with brief descriptions of the
basis for compensation and the terms under which payment or compensation
is to be made.
(2) For cost-sharing arrangements, furnish:
(A) a brief description of the purpose of the agreement;
(B) a description of the period of time during which
the agreement is to be in effect;
(C) a brief description of each party's expenses or
costs covered by the agreement;
(D) a brief description of the accounting basis to
be used in calculating each party's costs under the agreement;
(E) a brief statement as to the effect of the transaction
upon the insurer's policyholder surplus;
(F) a statement regarding the cost allocation methods
specifying whether proposed charges are cost or market based. If market
based, include the rationale for using market instead of cost, including
justification for the company's determination that amounts are fair
and reasonable; and
(G) a statement regarding compliance with the NAIC
Accounting Practices and Procedure Manual regarding expense allocation.
(h) Signature and certification. Signature and certification
are required as follows.
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