Maine Revised Statutes Title 24-A Sec. 423-C – Reports of material transactions
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1. Report required. Every domestic insurer must file a report with the superintendent, on or before the 15th day of each month, if it has engaged in a material investment or reinsurance transaction during the preceding month that has not already been separately reported to the superintendent or submitted to the superintendent for prior review.
[PL 1995, c. 375, Pt. A, §1 (NEW).]
Terms Used In Maine Revised Statutes Title 24-A Sec. 423-C
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Month: means a calendar month. See Maine Revised Statutes Title 1 Sec. 72
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- National Association of Insurance Commissioners: means the National Association of Insurance Commissioners or its successor organization of insurance regulators. See Maine Revised Statutes Title 24-A Sec. 15
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Subpoena: A command to a witness to appear and give testimony.
- Year: means a calendar year, unless otherwise expressed. See Maine Revised Statutes Title 1 Sec. 72
2. Material transactions defined. As used in this section, unless the context otherwise indicates, the following terms have the following meanings.
A. “Material investment transaction” means an acquisition or disposition of an asset or the aggregate of a series of related acquisitions or related dispositions during a 30-day period that is nonrecurring, not in the ordinary course of business and involving more than 5% of the reporting insurer’s total admitted assets as reported in its most recent statutory statement filed with the superintendent. Asset acquisitions and dispositions include without limitation a purchase, sale, lease, exchange, merger, consolidation, succession, mortgage, hypothecation, assignment, whether for the benefit of creditors or otherwise, abandonment or destruction. Asset acquisition does not include the construction or development of real property for the use of the reporting insurer or the acquisition of materials for such construction or development. [PL 1995, c. 375, Pt. A, §1 (NEW).]
B. “Material reinsurance transaction” means:
(1) A transaction involving property and casualty business, including accident and health business written by a property and casualty insurer, that involves more than 50% of either the insurer’s total ceded written premium or the insurer’s total ceded indemnity and loss adjustment reserves;
(2) A transaction involving life, annuity or accident and health business that causes a change, either positive or negative, in the current total reserve credit taken for all life, annuity and accident and health business of more than 50% from the total reserve credit taken for such business in the insurer’s most recent annual statement. “Total reserve credit” includes reserve credit taken for unearned premiums, reserve credit taken other than for unearned premiums and amounts recoverable on paid and unpaid losses for all reinsurance ceded;
(3) Any transaction in which either:
(a) An authorized reinsurer representing more than 10% of the insurer’s total reserve credit for business ceded is replaced by one or more unauthorized reinsurers; or
(b) Previously established collateral requirements have been reduced or waived for one or more unauthorized reinsurers representing collectively more than 10% of the insurer’s total reserve credit for business ceded; or
(4) Transactions otherwise falling within the scope of this paragraph do not need to be reported if:
(a) In the case of a property and casualty insurer, the insurer’s total ceded written premium represents, on an annualized basis, less than 10% of its total written premium for direct and assumed business;
(b) In the case of a life, annuity and accident and health insurer, the total reserve credit taken for business ceded represents, on an annualized basis, less than 10% of the statutory reserve requirement before any cession; or
(c) The transaction falls within the scope of a previously reported reinsurance agreement. [RR 1995, c. 2, §51 (COR).]
[RR 1995, c. 2, §51 (COR).]
3. Reporting procedures. Reports for material investment transactions and material reinsurance transactions must follow the following procedures.
A. A report of a material investment transaction must include the following information:
(1) Date of the transaction;
(2) Manner of acquisition or disposition;
(3) Description of the assets involved;
(4) Nature and amount of the consideration given or received;
(5) Purpose of or reason for the transaction;
(6) Manner by which the amount of consideration was determined;
(7) Gain or loss recognized or realized as a result of the transaction; and
(8) Name of the person from whom the assets were acquired or to whom they were disposed. [PL 1995, c. 375, Pt. A, §1 (NEW).]
B. A report of a material reinsurance transaction must include the following information:
(1) Effective date of the nonrenewal, cancellation or revision of the reinsurance agreement affected by the transaction;
(2) The description of the transaction with an identification of the initiator of the transaction;
(3) Purpose of or reason for the transaction; and
(4) If applicable, the identity of the replacement reinsurers. [PL 1995, c. 375, Pt. A, §1 (NEW).]
C. Material transactions must be reported on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers that uses a pooling arrangement of 100% reinsurance agreement that affects the solvency and integrity of the insurer’s reserves, and the insurer has ceded substantially all of its direct and assumed business to the pool. An insurer is considered to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than $1,000,000 total direct and assumed written premiums during a calendar year that are not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than 5% of the insurer’s capital and surplus. [PL 1995, c. 375, Pt. A, §1 (NEW).]
[PL 1995, c. 375, Pt. A, §1 (NEW).]
4. Confidentiality. All reports obtained by or disclosed to the superintendent pursuant to this section are confidential, are not subject to subpoena and may not be made public by the superintendent, the National Association of Insurance Commissioners or any other person, except to insurance departments of other states, without the prior written consent of the insurer to which it pertains. If the superintendent, after giving the insurer that would be affected notice and an opportunity for hearing, determines that publication is in the interest of policyholders, shareholders or the public, the superintendent may publish all or any part of a report in the manner the superintendent determines to be appropriate.
[PL 1995, c. 375, Pt. A, §1 (NEW).]
SECTION HISTORY
RR 1995, c. 2, §51 (COR). PL 1995, c. 375, §A1 (NEW).