promoters and others 1. Examination. [PL 2013, c. 238, Pt. A, §2 (RP); PL 2013, c. 238, Pt. A, §34 (AFF).] 1-A. Examination. For purposes of ascertaining compliance with law, or relationships and transactions between any person as defined hereafter and any insurer or proposed insurer subject to this section, the superintendent may as often as the superintendent determines to be advisable examine the accounts, records, documents and transactions pertaining to or affecting the insurance affairs or proposed insurance affairs, or transactions of the insurer or proposed insurer as may be in the possession of any holding company, its subsidiaries or affiliates as is necessary to ascertain the financial condition, including the enterprise risk to the insurer by the ultimate controlling party, or legality of conduct of the insurer or proposed insurer or the insurance holding company system as a whole or any combination of entities within the insurance holding company system and to verify the accuracy of any information provided or required to be provided to the superintendent pursuant to this section. A. The superintendent's investigatory and examination authority under this subsection extends to the examination of: (1) Any business entity structured to hold the stock of an insurance company, or person holding the shares of voting stock or policyholder proxies of an insurer as voting trustee or otherwise, for the purpose of controlling the management thereof; (2) Any insurance producer, adjuster or consultant or other insurance or reinsurance representative or intermediary or any person acting as or purporting to be any of the foregoing; (3) Any person having a contract giving that person by its terms or in fact the exclusive or dominant right to manage or control the insurer; and (4) Any person in this State engaged in or proposing to be engaged in or acting as or purporting to be so engaged or proposing to be engaged in the business of insurance or in this State assisting in the promotion, formation or financing of an insurer or insurance holding corporation or corporation or other group financing an insurer or the production of its business. [PL 2013, c. 238, Pt. A, §3 (NEW); PL 2013, c. 238, Pt. A, §34 (AFF).] B. Subject to the limitations contained in this subsection and in addition to the powers that the superintendent has under section 221 and sections 223 to 228 relating to the examination of insurers, the superintendent may order an insurer registered under subsection 8 to produce records, books or papers in the possession of the insurer or affiliates as may be necessary to verify the accuracy of the information required to be provided to the superintendent under this section and any additional information pertinent to transactions between the insurer and affiliates. The books, records, papers and information are subject to examination in the same manner as prescribed in this chapter for an examination conducted under section 221, except that expenses incurred by the superintendent in examining an affiliate that is not an insurer must be borne by the registered insurer subject to the limitations of section 228, subsection 1. The superintendent may issue subpoenas, administer oaths and examine any person under oath for purposes of determining compliance with this subsection. [PL 2013, c. 238, Pt. A, §3 (NEW); PL 2013, c. 238, Pt. A, §34 (AFF).] C. A member of an insurer's insurance holding company system shall comply fully and accurately with a request by the insurer to provide it with information necessary to respond to an examination request by the superintendent pursuant to this section. [PL 2013, c. 238, Pt. A, §3 (NEW); PL 2013, c. 238, Pt. A, §34 (AFF).] D. The superintendent may order an insurer registered under subsection 8 to produce information not in the possession of the insurer if the insurer can obtain access to the information pursuant to contractual relationships, statutory obligations or any other lawful method. If the insurer cannot obtain the information requested by the superintendent, the insurer shall provide the superintendent a written objection with a detailed explanation of the reason that the insurer cannot obtain the information and the identity of the holder of the information. It is a violation of this section to submit an objection to production of information without a reasonable basis or to fail to produce information on the basis of an objection that the superintendent has denied after notice and opportunity for hearing. [PL 2013, c. 238, Pt. A, §3 (NEW); PL 2013, c. 238, Pt. A, §34 (AFF).] [PL 2013, c. 238, Pt. A, §3 (NEW); PL 2013, c. 238, Pt. A, §34 (AFF).] 2. Definitions. As used in this section, unless the context otherwise requires, the following words shall have the following meanings. A. Affiliate. "Affiliate" of, or a person "affiliated" with, a specific person means a person who directly or indirectly controls, or is controlled by, or is under common control with the person specified. [PL 1975, c. 356, §1 (RPR).] A-1. Beneficial owner. "Beneficial owner" of a voting security, voting insurance policy or guaranty capital share means any person or group of persons acting in concert who, directly or indirectly, through any contract, arrangement, proxy appointment, understanding, relationship or otherwise, has or shares: (1) Voting power over the security, policy or guaranty capital share, including the power to vote or to direct the voting of the security, policy or share; or (2) Investment power over the security, policy or share, including the power to dispose or to direct the disposition of the security, policy or share. The superintendent may determine that persons are acting in concert, either on the superintendent's own initiative or upon application of an interested person, based upon evidence that actions taken by those persons, if consummated, may permit the exercise of common control, directly or indirectly, over the domestic insurer. The absence of a determination by the superintendent that persons are acting in concert shall not be construed to exempt those persons from compliance with the requirements of this section. [PL 1989, c. 385, §1 (NEW).] A-2. "Continuing director" means: (1) Any member of a domestic insurer's board of directors, while that person is a member of the board of directors, who was a member of that board of directors prior to the time that any person acquires control of the domestic insurer or any person controlling the insurer; and (2) Any successor of a continuing director, while the successor is a member of the board of directors, who is recommended or elected to succeed a continuing director by a number of continuing directors equal to a majority of continuing directors in office immediately preceding the acquisition of control. [PL 1991, c. 37, §1 (NEW).] B. Control. (1) "Control," including "controlling," "controlled by" and "under common control with," means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is solely the result of an official position with or a corporate office held by the person. Control is presumed to exist if any person is the beneficial owner of 10% or more of the voting securities or guaranty capital shares, if applicable, or has the right to cast 10% or more of the votes in the election of directors or other governing body of any other person. A beneficial owner may rely in determining the amount of voting securities of any person outstanding upon information set forth in that person's most recent quarterly or annual report filed with the Securities and Exchange Commission pursuant to the Exchange Act unless the beneficial owner knows or has reason to believe that the information contained in the quarterly or annual report is inaccurate. Two or more domestic mutual insurance companies that have restricted their licensed territories to the State are not considered subject to this section merely because those insurance companies commonly share facilities, incurred expenses or personnel services or otherwise utilize cost allocations based on generally accepted accounting principles including pro rata sharing of assumed risks. A person may have more than one controlling person, even if those controlling persons are not acting in concert. (2) Notwithstanding the presumption of control contained in subparagraph (1), the superintendent, upon application of the insurance company, may determine that the insurer is not controlled by the person presumed to control it. In addition, the superintendent, after notice and an opportunity to be heard, may determine, notwithstanding the absence of the presumption in subparagraph (1), that a person does control an insurance company or companies. (3) The presumption of control contained in subparagraph (1) does not apply to a securities broker-dealer holding, in the usual and customary broker's function, less than 20% of the voting securities of another person. [PL 2013, c. 238, Pt. A, §4 (AMD); PL 2013, c. 238, Pt. A, §34 (AFF).] B-1. Exchange Act. "Exchange Act" means the federal Securities Act of 1933, 15 United States Code, Chapter 2-A, Subchapter 1 and the federal Securities Exchange Act of 1934, 15 United States Code, Chapter 2-B. [PL 2013, c. 238, Pt. A, §5 (RPR); PL 2013, c. 238, Pt. A, §34 (AFF).] B-2. Enterprise risk. "Enterprise risk" means an activity, circumstance, event or series of events involving one or more affiliates of an insurer that, if not remedied promptly, is likely to have a material adverse effect upon the financial condition or liquidity of the insurer, or of its insurance holding company system as a whole, including, but not limited to, anything that would cause or exacerbate a risk-based capital event as described in sections 6453 to 6456 or would cause the insurer to be in unsound or hazardous financial condition as determined by the superintendent. [PL 2013, c. 238, Pt. A, §6 (NEW); PL 2013, c. 238, Pt. A, §34 (AFF).] B-3. "Groupwide supervisor" means the regulatory official who is determined or acknowledged by the superintendent under subsection 7-C to have the authority to engage in conducting and coordinating groupwide supervision activities over an internationally active insurance group or other insurance group that has requested groupwide supervision. [PL 2017, c. 169, Pt. B, §2 (NEW).] B-4. “Group capital calculation” means a method for insurance groups to assess the financial condition of the group, including noninsurance entities within the group, in order to identify and quantify potential risks. [PL 2021, c. 521, §5 (NEW).] B-5. “Group capital calculation instructions” means the group capital calculation instructions as adopted by the NAIC and as amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC. [PL 2021, c. 521, §6 (NEW).] C. Insurance holding company system. "Insurance holding company system" shall consist of 2 or more affiliated persons, one or more of whom is an insurer. [PL 1975, c. 356, §1 (RPR).] D. Insurer. "Insurer" has the same meaning as in section 4 and includes a fraternal benefit society required to be licensed under section 4124 or 4125. [PL 2013, c. 238, Pt. A, §7 (AMD); PL 2013, c. 238, Pt. A, §34 (AFF).] D-1. [PL 1993, c. 313, §7 (RP).] D-2. "Net gain from operations" means: (1) For life insurers, the net income or loss after dividends to policyholders and federal income taxes but before the inclusion of net realized capital gains or losses; and (2) For nonlife insurers, the net income or loss after dividends to policyholders and federal income taxes and net realized capital gains or losses. [PL 2017, c. 169, Pt. B, §3 (AMD).] D-3. Own risk and solvency assessment or ORSA. "Own risk and solvency assessment" or "ORSA" means a confidential internal assessment that is conducted by an insurer or insurance holding company system of the material and relevant risks associated with its current business plan and the sufficiency of its capital resources to support those risks and that is appropriate to the nature, scale and complexity of the operations of the insurer or insurance holding company system. [PL 2013, c. 238, Pt. A, §8 (NEW); PL 2013, c. 238, Pt. A, §34 (AFF).] D-4. ORSA guidance manual. "ORSA guidance manual" means the NAIC Own Risk and Solvency Assessment (ORSA) Guidance Manual, as amended from time to time. A change in the ORSA guidance manual is effective with regard to this State on January 1st following the calendar year in which the change has been adopted by the National Association of Insurance Commissioners. [PL 2013, c. 238, Pt. A, §8 (NEW); PL 2013, c. 238, Pt. A, §34 (AFF).] D-5. ORSA summary report. "ORSA summary report" means a confidential high-level summary of an insurer's or insurance holding company system's own risk and solvency assessment and includes a combination of separate reports that collectively meet the requirements of the ORSA guidance manual. [PL 2013, c. 238, Pt. A, §8 (NEW); PL 2013, c. 238, Pt. A, §34 (AFF).] D-6. "Internationally active insurance group" means an insurance holding company system that meets the following criteria: (1) The group has premiums written in at least 3 countries; (2) The percentage of gross premiums written outside the United States is at least 10% of the insurance holding company system's total gross written premiums; and (3) Based on a 3-year rolling average, the total assets of the insurance holding company system are at least $50,000,000,000 or the total gross written premiums of the insurance holding company system are at least $10,000,000,000. [PL 2017, c. 169, Pt. B, §4 (NEW).] D-7. "Liquidity stress test" means a method for insurance groups to assess the potential effects of liquidity risk to the insurer and to the financial markets. [PL 2021, c. 521, §7 (NEW).] D-8. “NAIC Liquidity Stress Test Framework” means the NAIC publication that includes the applicable scope criteria and liquidity stress test instructions and reporting templates, as adopted by the NAIC and amended from time to time in accordance with the procedures adopted by the NAIC. [PL 2021, c. 521, §8 (NEW).] E. Person. "Person" shall mean an individual, a corporation, a corporation which, pursuant to Title 24, chapter 19, maintains and operates nonprofit hospital service plans, nonprofit medical service plans or nonprofit health care plans or any combination thereof, a partnership, an association, a joint stock company, a business trust, an unincorporated organization or any similar entity, or any combination of the foregoing acting in concert. [PL 1975, c. 356, §1 (RPR).] E-1. “Scope criteria” means the designated exposure bases and minimum magnitudes, as detailed in the NAIC Liquidity Stress Test Framework, used to establish a preliminary list of insurers that are presumptively within the scope of the NAIC Liquidity Stress Test Framework. [PL 2021, c. 521, §9 (NEW).] F. "Subsidiary" of a specified person means an affiliate controlled by that person directly or through one or more intermediaries. [PL 2001, c. 72, §4 (AMD).] G. "Surplus regarding policyholders" means admitted assets less all liabilities. [PL 1993, c. 313, §9 (NEW).] H. "Unassigned funds" means the undistributed and unappropriated amount of surplus remaining on the balance sheet date as the result of all operations of an insurance company from its commencement of business. [PL 1993, c. 313, §9 (NEW).] I. "Voting security" means any security with voting rights or any security convertible into or evidencing a right to acquire a security with voting rights. [PL 1999, c. 113, §10 (NEW).] [PL 2021, c. 521, §§5-9 (AMD).] 3. Subsidiaries of insurers; investments to acquire interest. This subsection pertains to insurers and their subsidiaries and affiliates. A. Any domestic insurer may invest in or otherwise acquire one or more subsidiaries as authorized in section 1115 or section 1157. [PL 1987, c. 399, §1 (AMD).] A-1. A domestic insurer shall notify the superintendent in writing within 30 days after any investment by the insurer or any of its affiliates in any one corporation if the insurer has invested in that corporation and the total investment in that corporation by the insurance holding company system exceeds 10% of the corporation's voting securities. [PL 1991, c. 828, §4 (AMD).] B. If an insurer ceases to control a subsidiary, it shall dispose of any investment therein made pursuant to this section within 3 years from the time of the cessation of control or within such further time as the superintendent may prescribe, unless at any time after the investment was made, the investment met the requirements for investment under any other section of this Title and the insurer has notified the superintendent thereof. [PL 1991, c. 828, §4 (AMD).] [PL 1991, c. 828, §4 (AMD).] 4. Tender offers. [PL 1989, c. 385, §4 (RP).] 4-A. Tender offers. [PL 2013, c. 238, Pt. A, §9 (RP); PL 2013, c. 238, Pt. A, §34 (AFF).] 4-B. Application for approval. [PL 2013, c. 238, Pt. A, §10 (RP); PL 2013, c. 238, Pt. A, §34 (AFF).] 4-C. Acquisitions; tender offers; divestitures. The following provisions apply to a transaction or proposed transaction that results or might result in the change of direct or indirect control of a domestic insurer. A. Except as provided in paragraph B, a person other than the issuer may not make a tender offer for, or a request or invitation for tenders of, or an agreement to exchange securities for, or otherwise acquire any voting security, or any security convertible into a voting security, of a domestic insurer or of any person controlling a domestic insurer if, as a result of the consummation thereof, the person making the tender offer, request or agreement would, directly or indirectly, acquire actual or presumptive control of the insurer or controlling person, and a person may not enter into an agreement to merge with or otherwise acquire actual or presumptive control of a domestic insurer or its controlling person, unless: (1) The person has filed with the superintendent and has sent the domestic insurer an application containing the information required by paragraph C; (2) The offer, request, invitation, agreement or acquisition has been approved by the superintendent in the manner prescribed in subsection 7; and (3) Ten days has elapsed from the date of approval by the superintendent and no injunction or other court order precludes consummation of the offer, request, invitation, agreement or acquisition. [PL 2013, c. 238, Pt. A, §11 (NEW); PL 2013, c. 238, Pt. A, §34 (AFF).] B. A controlling person of a domestic insurer seeking to divest its controlling interest in the domestic insurer in any manner, including any partial divestiture that would cause that person to cease to be a controlling person, shall file with the superintendent, with a copy to the insurer, confidential notice of its proposed divestiture at least 30 days before the cessation of control, unless the divestiture transaction consists of the transfer of the divesting person's interest to one or more acquiring persons, all of whom have reported their respective acquisitions pursuant to paragraph A. Unless the superintendent grants an exemption under paragraph D, the divesting person shall file an application substantially similar to the application required under paragraph C, with such modifications as the superintendent determines to be appropriate based on the nature of the transaction. The superintendent shall decide whether to approve the application using the criteria in subsection 7, paragraph A and may hold a public hearing if the superintendent determines that a hearing is in the interests of policyholders or the public. If 20 days has elapsed after the superintendent's receipt of a notice filed under this paragraph and the superintendent has not disapproved the proposed divestiture or postponed its effective date pending further review, the superintendent is deemed to have granted an exemption under paragraph D, subparagraph (2). [PL 2013, c. 238, Pt. A, §11 (NEW); PL 2013, c. 238, Pt. A, §34 (AFF).] C. An application required by paragraph A must contain the following information as applicable, made under oath or affirmation, except that if the proposed transaction is subject to regulation under the Exchange Act or Title 32, chapter 135, the superintendent may accept the relevant documents filed with the United States Securities and Exchange Commission or the Department of Professional and Financial Regulation, Office of Securities in lieu of some or all of the documents required by this paragraph: (1) The name and address of each person by whom or on whose behalf the merger or other acquisition of control is to be effected and: (a) If the person acquiring control is an individual, the person's principal occupation and all offices and positions held during the past 5 years and any convictions for crimes other than minor traffic violations; and (b) If the person acquiring control is not an individual, a report of the nature of its business operations during the past 5 years or for a lesser period the person and any predecessors have been in existence; an informative description of the business intended to be done by the person and the person's subsidiaries; and a list of all individuals who are or who have been selected to become directors or executive officers of the person or who perform or will perform functions appropriate to such positions. The list must include the information required by division (a) for each individual listed; (2) The source, nature and amount of the consideration used or to be used in effecting the merger or other acquisition of control, a description of any transaction through which funds were or are to be obtained for any such purpose, including any pledge of the insurer's stock or the stock of any of its subsidiaries or controlling affiliates, and the identity of persons furnishing consideration. If a source of consideration is a loan made in the lender's ordinary course of business, the identity of the lender is confidential if the person filing the application so requests; (3) Fully audited financial information as to the earnings and financial condition of each acquiring person for the preceding 5 fiscal years, or for a lesser period if the acquiring person and any predecessors have been in existence for less than 5 years, and similar unaudited information as of a date not earlier than 90 days before the filing of the application; (4) Any plans or proposals that each acquiring person may have to liquidate the insurer, to sell its assets or merge or consolidate it with any person or to make any other material change in its business or corporate structure or management; (5) The number of shares of any security referred to in paragraph A that each acquiring person proposes to acquire, the terms of the offer, request, invitation, agreement or acquisition referred to in paragraph A and a statement as to the method by which the fairness of the proposal was arrived at; (6) The amount of each class of any security referred to in paragraph A that is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring person; (7) A full description of any contracts, arrangements or understandings with respect to any security referred to in paragraph A in which any acquiring person is involved, including but not limited to transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits or the giving or withholding of proxies. The description must identify the persons with whom the contracts, arrangements or understandings have been entered into; (8) A description of the purchase by any acquiring person of any security referred to in paragraph A during the 12 calendar months preceding the filing of the application, including the dates of purchase, names of the purchasers and consideration paid or agreed to be paid; (9) A description of any recommendations to purchase any security referred to in paragraph A made during the 12 calendar months preceding the filing of the application by any acquiring person or by anyone based upon interviews with or at the suggestion of the acquiring person; (10) Copies of all tender offers for, requests or invitations for tenders of, exchange offers for and agreements to acquire or exchange any securities referred to in paragraph A and copies of any additional related soliciting material that has been distributed; (11) The terms of any agreement, contract or understanding made or proposed to be made with any broker-dealer as to solicitation of securities referred to in paragraph A for tender and the amount of any fees, commissions or other compensation to be paid to broker-dealers with regard to the solicitation of securities referred to in paragraph A; (12) An agreement by the person required to file the application to provide the annual enterprise risk report required by subsection 8, paragraph B-1, subparagraph (1)for as long as control by the person exists; (13) An acknowledgement by the person required to file the application that the person and all subsidiaries within its control in the insurance holding company system will provide information to the superintendent upon request as necessary to evaluate enterprise risk to the insurer; (14) A statement as to whether or not the proposed transaction will result in an increase in market share in this State in any line of insurance as specified in the annual statement required to be filed under section 423 for one or more insurers with combined market share greater than 5% and, if so, such further information on the competitive impact of the proposed transaction as the superintendent requires by rule or order; and (15) Such additional information as the superintendent may prescribe by rule or order. [PL 2021, c. 521, §10 (AMD).] D. The superintendent may exempt a person otherwise subject to the requirements of this subsection and subsection 7 from some or all of those requirements if the person demonstrates to the satisfaction of the superintendent that an exemption will not be detrimental to the interests of policyholders in the State or the public and that the transaction satisfies at least one of the following criteria: (1) The interests of the State in regulating the transaction are minimal relative to the interests of other jurisdictions or are minimal relative to the impact of the transaction as a whole; (2) The person proposes a divestiture of control under paragraph B and the superintendent determines that the prior approval process is not necessary in the circumstances of the transaction; (3) A party proposing to acquire presumed control submits a disclaimer fully disclosing all material relationships and bases for affiliation with the insurer and demonstrating to the satisfaction of the superintendent that the person will not be acquiring actual control. As a condition of granting an exemption under this subparagraph, the superintendent may require the person to agree to reasonable restrictions on the exercise of rights or powers that might otherwise tend to result in control; (4) The superintendent elects to participate in a consolidated approval proceeding conducted under the laws of one or more other states pursuant to subsection 7-A, paragraph E; and (5) The transaction involves the control of a person that is not primarily engaged in the business of insurance, directly or through its affiliates, and there will be no material impact on the management or operations of a domestic insurer. A person requesting an exemption under this paragraph must agree to provide additional information if needed by the superintendent and to postpone the effective date of the transaction if ordered by the superintendent while the request for exemption is pending. [PL 2013, c. 238, Pt. A, §11 (NEW); PL 2013, c. 238, Pt. A, §34 (AFF).] E. A broker-dealer that is exempt from the requirements of this section pursuant to subsection 2, paragraph B, subparagraph (3) shall disclose to the superintendent the identity of any person, or group of persons the broker-dealer knows or reasonably believes to be acting in concert, on whose behalf the broker-dealer knows or reasonably believes that the broker-dealer holds 5% or more of the voting securities of a domestic insurer or of any entity the broker-dealer knows or reasonably believes to be a controlling person of a domestic insurer. A broker-dealer shall disclose to the superintendent on request the beneficial owners of any securities held by the broker-dealer of any entity that is, or that the superintendent believes might be or might become, a member of the insurance holding company system of an insurer subject to registration under subsection 8. [PL 2013, c. 238, Pt. A, §11 (NEW); PL 2013, c. 238, Pt. A, §34 (AFF).] [PL 2021, c. 521, §10 (AMD).] 5. Tender offer material. All requests or invitations for tenders or advertisements making a tender offer or requesting or inviting tenders of such voting securities for control of a domestic insurer or its controlling person made by or on behalf of any such person must contain any information specified in subsection 4-C as the superintendent may prescribe and must be filed with the superintendent at the time that material is first published or sent or given to security holders. Copies of any additional material soliciting or requesting such tender offers subsequent to the initial solicitation or request must contain the information that the superintendent may prescribe as necessary or appropriate in the public interest or for the protection of policyholders and must be filed with the superintendent at the time copies of that material are first published or sent or given to security holders. [PL 2013, c. 238, Pt. A, §12 (AMD); PL 2013, c. 238, Pt. A, §34 (AFF).] 6. Information as to applicant. If a person required to file an application under subsection 4-C is a partnership, limited partnership, syndicate or other group, the superintendent may require that the information called for by subsection 4-C must be given with respect to each partner of the partnership or limited partnership, each member of the syndicate or group and each person who controls any such partner or member. If a person required to file an application under subsection 4-C is a corporation, the superintendent may require that the information called for by subsection 4-C must be given with respect to the corporation and each officer and director thereof and each person who is directly or indirectly the beneficial owner of more than 10% of the outstanding securities of the corporation. [PL 2013, c. 238, Pt. A, §13 (AMD); PL 2013, c. 238, Pt. A, §34 (AFF).] 7. Approval, disapproval of proposed change of control. A. The superintendent shall hold a hearing in accordance with the procedures set forth in section 231 and Title 5, chapter 375, subchapter 4, within 30 days after the application required by subsection 4-C has been filed with the superintendent. The superintendent shall make a determination within 30 days after the conclusion of that hearing. The superintendent shall approve any purchase, exchange, merger or other change of control referred to in subsection 4-C unless the superintendent finds that: (1) After the change of control, the domestic insurer could not satisfy the requirements for the issuance of a certificate of authority according to requirements in force at the time of the issuance or last renewal or continuation of its certificate of authority to do the insurance business that it intends to transact in this State; (2) The effect of the purchases, exchanges, merger of a controlling person of the insurer or other changes of control may be substantially to lessen competition in insurance in this State or tend to create a monopoly in this State or would violate the laws of this State or of the United States relating to monopolies or restraints of trade; (3) The financial condition of an acquiring person would jeopardize the financial stability of the insurer or prejudice the interest of its policyholders; (4) The plans or proposals that the acquiring or divesting person has to liquidate the insurer, to sell its assets or to merge it with any person, or to make any other major change in its business or corporate structure or management, are unfair or prejudicial to policyholders; (5) The competence, experience and integrity of those persons who would control the operation of the insurer indicate that it would not be in the interest of policyholders or the public to permit them to do so; (6) Any merger of a domestic insurer does not comply with section 3474; or (7) The change of control would tend to affect adversely the contractual obligations of the domestic insurer or its ability and tendency to render service in the future to its policyholders and the public. [PL 2021, c. 16, §3 (AMD).] B. Paragraph A, subparagraphs (3) to (7) do not apply to any change of control if and to the extent that the superintendent, by rule or by order, exempts the change of control from the provisions of those subparagraphs as not included within the purpose of this subsection. [PL 2013, c. 238, Pt. A, §14 (AMD); PL 2013, c. 238, Pt. A, §34 (AFF).] C. Merger, consolidation or bulk reinsurance as to a domestic insurer may be effectuated only pursuant to the applicable provisions of chapter 47, subchapter 4 and sections 3875, 4108 and 4109, as related to organization and powers of insurers. [PL 2013, c. 238, Pt. A, §14 (AMD); PL 2013, c. 238, Pt. A, §34 (AFF).] D. Violation. (1) Failure to file the application required under subsection 4-C constitutes a violation of this section. (2) Effectuation of or any attempt to effectuate an acquisition of control of, divestiture of control of or merger with a domestic insurer earlier than 30 days after the filing of the application required by subsection 4-C, before the superintendent's decision if a hearing is held or after disapproval by the superintendent of the acquisition, divestiture or merger, constitutes a violation of this section. [PL 2013, c. 238, Pt. A, §14 (AMD); PL 2013, c. 238, Pt. A, §34 (AFF).] [PL 2021, c. 16, §3 (AMD).] 7-A. Consolidated proceedings. If a proposed change of control requires, or is part of a series of related transactions that require, the approval of the insurance regulators of more than one state, a person filing an application under subsection 4-C with respect to the change of control may file a request for a consolidated approval proceeding with the National Association of Insurance Commissioners. A. The applicant shall file a copy of the application made under subsection 4-C with the National Association of Insurance Commissioners within 5 days after making the request for a consolidated approval proceeding. [PL 2013, c. 238, Pt. A, §15 (NEW); PL 2013, c. 238, Pt. A, §34 (AFF).] B. Within 10 days after receiving notice from the National Association of Insurance Commissioners of a request for a consolidated approval proceeding, the superintendent shall issue an order, with notice to the applicant and to the National Association of Insurance Commissioners, specifying whether the superintendent elects to participate in the consolidated proceeding or to opt out of the consolidated proceeding. [PL 2013, c. 238, Pt. A, §15 (NEW); PL 2013, c. 238, Pt. A, §34 (AFF).] C. If the superintendent opts out of the consolidated approval proceeding pursuant to paragraph B, the superintendent shall hold a public hearing under subsection 7 unless the superintendent grants an exemption under subsection 4-C, paragraph D. Opting out of the consolidated proceeding does not preclude or limit the superintendent’s authority to coordinate a proceeding conducted under subsection 7 with the consolidated proceeding or with other parallel proceedings in other states. [PL 2013, c. 238, Pt. A, §15 (NEW); PL 2013, c. 238, Pt. A, §34 (AFF).] D. With the agreement of the other participating insurance regulators, the superintendent may initiate a consolidated approval proceeding under this paragraph to render decisions on all applications within the scope of the order of consolidation issued by the superintendent. A consolidated approval proceeding convened under this paragraph is a public adjudicatory proceeding. Except as provided in this paragraph, the proceeding must be conducted in the same manner as a proceeding under subsection 7. (1) A person who would have the right to participate in a proceeding on any of the consolidated applications held under subsection 7 or substantially similar laws of other states has the right to participate in the proceeding. (2) The chief insurance regulator of a participating state has the right to participate in making the decision or in designating a decision-making panel. (3) The proceeding is public to the same extent as a proceeding conducted under subsection 7, except that deliberations of a decision-making panel are not public proceedings and communications in the course of those deliberations among panel members and their advisers, other than the decision itself, are not public records. (4) The proceeding may be held in any state with a significant connection to the subject transactions or in a nearby location in an adjacent state. Sessions may be held in different states. Provision must be made for parties, witnesses, insurance regulators and members of the public to attend and participate in the proceeding by telecommunication. (5) The superintendent, decision-making panel or presiding officer may vary the applicable procedural requirements under this Title and Title 5 to the extent the superintendent, panel or presiding officer determines to be reasonably necessary for the fair and effective administration of a consolidated multistate proceeding. (6) The decision is subject to judicial review in the same manner as a final agency action of the superintendent. [PL 2021, c. 16, §4 (AMD).] E. The superintendent may participate, including serving as a decision maker or member of a decision-making panel, in a consolidated approval proceeding conducted under the laws of one or more other states if the consolidated proceeding provides for a public hearing with substantially similar rights of participation and judicial review as a proceeding conducted pursuant to paragraph D. If the superintendent elects under this paragraph to participate in a consolidated proceeding that is conducted under the laws of one or more other states, the application is exempt from further review under this section pursuant to subsection 4-C, paragraph D, subparagraph (4) and the consolidated proceeding, notwithstanding the superintendent's participation, is not subject to any provisions of the law of this State governing adjudicatory proceedings, judicial review, public records or public meetings. [PL 2013, c. 238, Pt. A, §15 (NEW); PL 2013, c. 238, Pt. A, §34 (AFF).] [PL 2021, c. 16, §4 (AMD).] 7-B. Supervisory colleges. In order to assess the business strategy, financial position, legal and regulatory position, risk exposure including enterprise risk, risk management and governance processes of a domestic insurer that is part of an insurance holding company system with international operations, the superintendent 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. A supervisory college may be convened as either a temporary or permanent forum for communication and cooperation among the regulators charged with the supervision of the insurer or its affiliates. A. The superintendent's powers with respect to supervisory colleges include, but are not limited to: (1) Initiating the establishment of a supervisory college or participating in a supervisory college initiated by one or more other regulators; (2) Entering into agreements providing the basis for cooperation between the superintendent and the other participating regulators and for the activities of the supervisory college, including but not limited to agreements for sharing confidential information under section 216, subsection 5; (3) Obtaining and providing assistance in examinations conducted under subsection 1-A or under the examination authority of other participating jurisdictions; (4) Clarifying the membership and participation of other regulators in the supervisory college; (5) Clarifying the functions of the supervisory college and the role of other regulators, including the designation of the superintendent or another member of the supervisory college as a group-wide supervisor; (6) Coordinating the ongoing activities of the supervisory college, including planning meetings, supervisory activities and processes for information sharing; and (7) Establishing a crisis management plan. [PL 2013, c. 238, Pt. A, §15 (NEW); PL 2013, c. 238, Pt. A, §34 (AFF).] B. A domestic insurer whose activities are subject to this subsection is liable for and shall pay the reasonable expenses of the superintendent's participation in a supervisory college, including reasonable travel expenses. The superintendent may establish a regular assessment to the insurer for the payment of these expenses. [PL 2013, c. 238, Pt. A, §15 (NEW); PL 2013, c. 238, Pt. A, §34 (AFF).] C. This section may not be construed to delegate to a supervisory college the authority of the superintendent to regulate or supervise an insurer or its affiliates within this State. [PL 2013, c. 238, Pt. A, §15 (NEW); PL 2013, c. 238, Pt. A, §34 (AFF).] [PL 2013, c. 238, Pt. A, §15 (NEW); PL 2013, c. 238, Pt. A, §34 (AFF).] 7-C. Groupwide supervision. This subsection governs groupwide supervision. A. The superintendent is authorized to act as the groupwide supervisor in accordance with the provisions of this subsection for any internationally active insurance group, or any other insurance holding company system that has requested the identification of a groupwide supervisor pursuant to this subsection, or to acknowledge another regulatory official as the groupwide supervisor if the 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 superintendent has determined pursuant to the factors set forth in paragraphs B and G that the other regulatory official is the appropriate groupwide supervisor. [PL 2017, c. 169, Pt. B, §6 (NEW).] B. In cooperation with other state, federal and international regulatory agencies, and in consultation with the insurance group, the superintendent shall identify a single groupwide supervisor for each internationally active insurance group that includes an insurer registered under subsection 8 and has the discretion to identify a single groupwide supervisor for any other insurance holding company system that has requested that the superintendent identify a groupwide supervisor. The superintendent may determine that the superintendent is the appropriate groupwide supervisor for an insurance group that conducts substantial insurance operations concentrated in this State or may acknowledge that a regulatory official from another jurisdiction is the appropriate groupwide supervisor for the insurance group. The superintendent shall consider the following factors when making a determination or acknowledgment under this paragraph and shall reconsider that determination or acknowledgment if the superintendent finds that there has been a material change in the following factors: (1) The place of domicile of the insurers within the 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 or insurers in the insurance holding company system of the insurance group; (3) The location of the executive offices or largest operational offices of the insurance group; (4) The recommendation made by a regulatory official who is a candidate for designation under the criteria in this paragraph but has notified the superintendent that a different regulatory official would be a more appropriate groupwide supervisor; (5) Whether another regulatory official is acting or is seeking to act as the groupwide supervisor under a regulatory system that the superintendent determines to be: (a) Substantially similar to the system of regulation provided under the laws of this State; or (b) Otherwise sufficient in terms of providing for groupwide supervision, enterprise risk analysis and cooperation with other regulatory officials; and (6) Whether another regulatory official acting or seeking to act as the groupwide supervisor provides the superintendent with reasonably reciprocal recognition and cooperation. [PL 2017, c. 169, Pt. B, §6 (NEW).] C. If another regulatory official is acting as the groupwide supervisor of an insurance group subject to groupwide supervision under this subsection, the superintendent shall acknowledge that regulatory official as the groupwide supervisor and may not consider designating the superintendent as the groupwide supervisor under paragraph B unless there is a material change in the insurance group that results in: (1) The 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 or insurers in the insurance holding company system of the insurance group. [PL 2017, c. 169, Pt. B, §6 (NEW).] D. If more than one regulatory official is acting as the groupwide supervisor of an insurance group, the superintendent is authorized to cooperate with any of them under paragraph G. [PL 2017, c. 169, Pt. B, §6 (NEW).] E. Pursuant to subsection 1-A, the superintendent is authorized to collect from any insurer registered pursuant to subsection 8 all information necessary to determine whether the superintendent should act as the groupwide supervisor of an insurance group or whether the superintendent should acknowledge another regulatory official to act as the groupwide supervisor. Before issuing a determination that an insurance group is subject to groupwide supervision by the superintendent, the superintendent shall notify the insurer registered pursuant to subsection 8 and the ultimate controlling person within the insurance group. The insurance group has no less than 30 days to provide the superintendent with additional information pertinent to the pending determination. The superintendent shall publish on the bureau's publicly accessible website the identity of all insurance groups that the superintendent has determined are subject to groupwide supervision by the superintendent. [PL 2017, c. 169, Pt. B, §6 (NEW).] F. If the superintendent is the groupwide supervisor for an insurance group, the superintendent is authorized to engage in any of the following groupwide supervision activities: (1) Assess the enterprise risks within the insurance group to ensure that: (a) The material financial condition and liquidity risks to the members of the insurance group that are engaged in the business of insurance are identified by management; and (b) Reasonable and effective mitigation measures are in place; (2) Request, from any member of the insurance group, information necessary and appropriate to assess enterprise risk, including, but not limited to, information about the members of the insurance group regarding: (a) Governance, risk assessment and management; (b) Capital adequacy; and (c) Material intercompany transactions; (3) Coordinate and, through the authority of the regulatory officials of the jurisdictions where members of the insurance group are domiciled, compel development and implementation of reasonable measures designed to ensure that the insurance group is able to promptly recognize and mitigate enterprise risks to members of the insurance group that are engaged in the business of insurance; (4) Communicate with other state, federal and international agencies that regulate members of the insurance group and share relevant information subject to the confidentiality provisions of subsection 13-A, through supervisory colleges as set forth in subsection 7-B or otherwise; (5) Enter into agreements with or obtain documentation from any insurer registered under subsection 8, any member of the insurance group and any other state, federal and international regulatory agencies for members of the insurance group, providing the basis for or otherwise clarifying the superintendent's role as groupwide supervisor, including provisions for resolving disputes with other regulatory officials. Such agreements or documentation may 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 groupwide supervision activities, consistent with the authorities and purposes set out in subparagraphs (1) to (5), as considered necessary by the superintendent. [PL 2017, c. 169, Pt. B, §6 (NEW).] G. If the superintendent acknowledges that another regulatory official from a jurisdiction that is not accredited by the National Association of Insurance Commissioners is the groupwide supervisor, the superintendent is authorized to cooperate reasonably, through supervisory colleges or otherwise, with groupwide supervision undertaken by the groupwide supervisor, as long as: (1) The superintendent's cooperation is in compliance with the laws of this State; and (2) The regulatory official acknowledged as the groupwide supervisor also recognizes and cooperates with the superintendent's activities as a groupwide supervisor for other insurance groups as applicable. When such recognition and cooperation is not reasonably reciprocal, the superintendent is authorized to refuse recognition and cooperation. [PL 2017, c. 169, Pt. B, §6 (NEW).] H. The superintendent is authorized to enter into agreements with or obtain documentation from any insurer registered under subsection 8, any affiliate of the insurer and other state, federal and international regulatory agencies for members of the insurance group in order to provide the basis for or otherwise clarify a regulatory official's role as groupwide supervisor. [PL 2017, c. 169, Pt. B, §6 (NEW).] I. The superintendent may adopt rules necessary for the administration of this subsection. Rules adopted pursuant to this paragraph are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A. [PL 2017, c. 169, Pt. B, §6 (NEW).] J. A registered insurer subject to this subsection is liable for and shall pay the reasonable expenses of the superintendent's participation in the administration of this subsection, including the engagement of attorneys, actuaries and any other professionals and all reasonable travel expenses. [PL 2017, c. 169, Pt. B, §6 (NEW).] [PL 2017, c. 169, Pt. B, §6 (NEW).] 8. Registration of holding company system insurers. A. An insurer that is authorized to do business in this State and that is a member of an insurance holding company system shall register with the superintendent, except that these requirements do not apply to a foreign insurer domiciled in a jurisdiction that in the opinion of the superintendent has adopted by statute or regulation disclosure statements and standards substantially similar to those contained in this section. An insurer domiciled in a jurisdiction that has not adopted by statute or regulation disclosure requirements and standards substantially similar to those contained in this section may be treated as a domestic insurer for purposes of this section. Each insurer that is subject to registration under this subsection shall register within 15 days after it becomes subject to registration, and annually thereafter by May 1st, unless the superintendent, for good cause shown, extends the time for registration and then an insurer shall register within that extended time. This section does not prohibit the superintendent from requesting any authorized insurer that is a member of an insurance holding company system and not subject to registration under this section to provide a copy of the registration statement or other information filed by such insurer with the insurance regulatory authority of its state of domicile. Upon request of the insurer or of the insurance regulatory authority of another jurisdiction in which the insurer is authorized to transact insurance, the superintendent at the insurer's expense shall furnish a copy of the registration statement or other information filed by a domestic insurer with the superintendent pursuant to this section; [PL 2013, c. 238, Pt. A, §16 (AMD); PL 2013, c. 238, Pt. A, §34 (AFF).] B. An insurer subject to registration shall file a registration statement with the superintendent on a form and in a format prescribed by the National Association of Insurance Commissioners. The registration statement must contain current information about: (1) The capital structure, general financial condition, ownership and management of the insurer and of any person controlling the insurer; (1-A) The identity and relationship of every member of the insurance holding company system; (2) The following transactions currently outstanding between the insurer and its affiliates: (a) Loans and other investments, and purchases, sales or exchanges of securities of the affiliate by the insurer or of the insurer by its affiliates; (b) Purchases, sales or exchanges of assets; (c) Transactions not in the ordinary course of business; (d) Guarantees or undertakings for the benefit of an affiliate that result in an actual contingent exposure of the insurer's assets to liability, other than insurance contracts entered into in the ordinary course of the insurer's business; (e) All management and service contracts and all cost-sharing arrangements, other than cost allocation arrangements based upon generally accepted accounting principles; (f) Reinsurance agreements; (g) Dividends and other distributions to shareholders; and (h) Consolidated tax allocation agreements; (2-A) Any pledge of the insurer's stock, including stock of any subsidiary or controlling affiliate, for a loan made to any member of the insurance holding company system; (2-B) If requested by the superintendent, financial statements of or within the insurance holding company system, including all affiliates. The required financial statements may include but are not limited to annual audited financial statements filed with the United States Securities and Exchange Commission pursuant to the Exchange Act. An insurer required to file financial statements pursuant to this subparagraph may satisfy the request by providing the superintendent with the most recently filed parent corporation financial statements that have been filed with the United States Securities and Exchange Commission; (3) Other matters concerning transactions between the insurer and any affiliate as may be required by the superintendent; and (4) Any other information required by the superintendent by rule; [PL 2013, c. 238, Pt. A, §17 (AMD); PL 2013, c. 238, Pt. A, §34 (AFF).] B-1. The controlling person with ultimate control of an insurer subject to registration shall file an annual enterprise risk report in accordance with subparagraph (1) and, if applicable, shall file any additional reports required by this paragraph. The reports must be filed with the lead state regulator of the insurance holding company system as determined by the procedures within the NAIC Financial Analysis Handbook or successor publication. (1) The enterprise risk report must be appropriate to the nature, scale and complexity of the operations of the insurance holding company system and must, to the best of the controlling person’s knowledge and belief, identify the material risks within the insurance holding company system, if any, that could pose enterprise risk to the insurer. (2) Except as otherwise provided in this subparagraph, the ultimate controlling person of an insurer subject to registration shall file an annual group capital calculation concurrently with the registration required by paragraph A. The report must be completed as directed by the lead state regulator in accordance with the group capital calculation instructions, which may permit the lead state regulator to allow a controlling person that is not the ultimate controlling person to file the group capital calculation. (a) An insurance holding company is exempt from filing the group capital calculation if it has only one insurer within its holding company structure and that insurer is not licensed outside this State to transact insurance, does not write business outside this State and does not assume reinsurance from any other insurer. (b) An insurance holding company is exempt from filing the group capital calculation if it is required to perform a group capital calculation specified by the Board of Governors of the Federal Reserve System and the lead state regulator has obtained the current group capital calculation from the board of governors. If this State is the insurance holding company system’s lead state, the superintendent shall request the calculation from the board of governors under the terms of information sharing agreements in effect. (c) An insurance holding company is exempt from filing the group capital calculation if its groupwide supervisor is located within a non-United States jurisdiction that the superintendent has designated as a reciprocal jurisdiction pursuant to section 731-B, subsection 1, paragraph B-3, subparagraph (1), division (b) and that recognizes the United States system of group supervision and group capital regulation. (d) An insurance holding company is exempt from filing the group capital calculation if its groupwide supervisor is located in a non-United States jurisdiction and: (i) The lead state regulator meets the requirements for accreditation under the NAIC financial standards and accreditation program and the insurance holding company system provides information to the lead state regulator, either directly or indirectly through the groupwide supervisor, that the lead state regulator has determined to be satisfactory to allow the lead state to comply with the NAIC group supervision approach, as detailed in the NAIC Financial Analysis Handbook or successor publication; and (ii) The groupwide supervisor recognizes and accepts the group capital calculation as the worldwide group capital assessment for United States insurance groups that operate in that non-United States jurisdiction, consistent with criteria specified by the superintendent by rule. (e) Notwithstanding divisions (c) and (d), a non-United States-based insurance holding company system shall file a group capital calculation limited to its United States operations if its lead state regulator determines, after any necessary consultation with other supervisors or officials, that requiring a United States group capital calculation is appropriate for prudential oversight and solvency monitoring purposes or for ensuring the competitiveness of the insurance marketplace. (f) If this State is an insurance holding company system’s lead state, the superintendent may exempt the ultimate controll
‹ Prev All Maine sections Next ›
Lexace provides legal information, not legal advice, and no attorney–client relationship is created. Statute text is provided for general information and may not reflect the most recent amendments; verify against the official state code.