26.1-10-04. Registration of insurers

26.1-10-04. Registration of insurers

1. Every insurer that is authorized to do business in this state and which is a member of

an insurance holding company system shall register with the commissioner, except a

foreign insurer subject to registration requirements and standards adopted by statute

or rule in the jurisdiction of its domicile which are substantially similar to those

contained in this section and section 26.1-10-05. Any insurer subject to registration

under this section shall register within fifteen days after it becomes subject to

registration, and annually thereafter by March first of each year for the previous

calendar year unless the commissioner for good cause shown extends the time for

registration, and then within the extended time. The commissioner may require any

insurer authorized to do business in the state which is a member of an insurance

holding company system not subject to registration under this section to furnish a copy

of the registration statement, the summary specified in subsection 10 of section

26.1-10-04, or other information filed by the insurer with the insurance regulatory

authority of the domiciliary jurisdiction.

2. Every insurer subject to registration shall file a registration statement with the

commissioner on a form approved by the commissioner, which must contain current

information about:

a. The capital structure, general financial condition, ownership, and management of

the insurer and any person in control of the insurer.

b. The identity and relationship of every member of the insurance holding company

system.

c. The following agreements in force and transactions currently outstanding or

which have occurred during the last calendar year between the insurer and its

affiliates:

(1) Loans, other investments, or purchases, sales, or exchanges of securities of

the affiliates by the insurer or of the insurer by its affiliates.

(2) Purchases, sales, or exchange of assets.

(3) Transactions not in the ordinary course of business.

(4) Guarantees or undertakings for the benefit of an affiliate which 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.

(5) All management agreements, service contracts, and all cost-sharing

arrangements.

(6) Reinsurance agreements.

(7) Dividends and other distributions to shareholders.

(8) Consolidated tax allocation agreements.

d. 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.

e. If requested by the commissioner, the insurer shall include financial statements of

or within an insurance holding company system, including all affiliates. A financial

statement may include an annual audited financial statement filed with the United

States securities and exchange commission pursuant to the federal Securities Act

of 1933, as amended, [15 U.S.C. 77a et seq.] or the federal Securities Exchange

Act of 1934, as amended, [15 U.S.C. 78a et seq.] or the financial statement

pursuant to this subdivision may satisfy the request by providing the

commissioner with the most recently filed parent corporation financial statements

that have been filed with the United Sates securities and exchange commission.

f. Other matters concerning transactions between registered insurers and any

affiliates as may be included from time to time in any registration forms adopted

or approved by the commissioner.

g. Statements that the insurer's board of directors is responsible for and supervises,

relating to corporate governance and internal controls that the insurer's officers or

senior management have approved, implemented, and continue to maintain and

monitor.

h. Any other information required by the commissioner by rule.

to time in any registration forms adopted

or approved by the commissioner.

g. Statements that the insurer's board of directors is responsible for and supervises,

relating to corporate governance and internal controls that the insurer's officers or

senior management have approved, implemented, and continue to maintain and

monitor.

h. Any other information required by the commissioner by rule.

3. No information need be disclosed on the registration statement filed pursuant to

subsection 2 if the information is not material for the purposes of this section. Unless

the commissioner by rule or order provides otherwise, sales, purchases, exchanges,

loans or extensions of credit, or investments, or guarantees involving one-half of one

percent or less of an insurer's admitted assets as of December thirty-first next

preceding are not material for purposes of this section. The definition of materiality

provided in this subsection does not apply for purposes of the group capital calculation

or the liquidity stress test framework.

4. In addition to the annual filing requirement under subsection 1, each registered insurer

shall keep current the information required to be disclosed in its registration statement

by reporting all material changes or additions on amendment forms approved by the

commissioner within fifteen days after the end of the month in which it learns of each

change or addition; provided, however, that subject to subsections 7, 8, and 9 of

section 26.1-10-05, each registered insurer shall report all dividends and other

distributions to shareholders within five business days following the declaration and no

less than ten business days prior to payment thereof.

5. The commissioner shall terminate the registration of any insurer that demonstrates it

no longer is a member of an insurance holding company system.

6. The commissioner may require or allow two or more affiliated insurers subject to

registration to file a consolidated registration statement.

7. The commissioner may allow an insurer which is authorized to do business in this

state and which is part of an insurance holding company system to register on behalf

of any affiliated insurer which is required to register under subsection 1 to file all

information and material required to be filed under this section.

8. This section does not apply to any insurer, information, or transaction if and to the

extent excepted by the commissioner by rule or order.

9. Any person may file with the commissioner a disclaimer of affiliation with any

authorized insurer or a disclaimer may be filed by the insurer or any member of an

insurance holding company system. The disclaimer must fully disclose all material

relationships and bases for affiliation between the person and the insurer as well as

the basis for disclaiming the affiliation. A disclaimer of affiliation is deemed to have

been granted unless the commissioner, within thirty days following receipt of a

complete disclaimer, notifies the filing party the disclaimer is disallowed. In the event of

disallowance, the disclaiming party may request an administrative hearing, which must

be granted. The disclaiming party is relieved of its duty to register under this section if

approval of the disclaimer has been granted by the commissioner or if the disclaimer is

deemed to have been approved.

10. All registration statements must contain a summary outlining all items in the current

registration statement representing changes from the prior registration statement.

11. Any person within an insurance holding company system subject to registration must

provide complete and accurate information to an insurer, when the information is

reasonably necessary to enable the insurer to comply with the provisions of this

chapter.

12. The ultimate controlling person of every insurer subject to registration shall file an

changes from the prior registration statement.

11. Any person within an insurance holding company system subject to registration must

provide complete and accurate information to an insurer, when the information is

reasonably necessary to enable the insurer to comply with the provisions of this

chapter.

12. The ultimate controlling person of every insurer subject to registration shall file an

annual enterprise risk report. To the best of the ultimate controlling person's knowledge

and belief, the report must identify the material risks within the insurance holding

company system which could pose enterprise risk to the insurer. The report must be

filed with the lead state commissioner of the insurance holding company system as

determined by the procedures within the financial analysis handbook adopted by the

national association of insurance commissioners.

13. Except as provided in subsection 14, the ultimate controlling person of each insurer

subject to registration shall concurrently file with the registration an annual group

capital calculation as directed by the lead state commissioner. The report must be

completed in accordance with the national association of insurance commissioners

group capital calculation instructions, which may permit the lead state commissioner to

allow a controlling person that is not the ultimate controlling person to file the group

capital calculation. The report must be filed with the lead state commissioner of the

insurance holding company system as determined by the commissioner in accordance

with the financial analysis handbook procedures adopted by the national association of

insurance commissioners.

14. An insurance holding company system is exempt from filing the group capital

calculation if the insurance holding company system meets any of the criteria

described below.

a. An insurance holding company system that has only one insurer within its holding

company structure, only writes business, is only licensed in its domestic state,

and assumes no business from any other insurer.

b. If a system is required to perform a group capital calculation specified by the

United States federal reserve board, the lead state commissioner shall request

the calculation from the federal reserve board under the terms of information

sharing agreements in effect. If the federal reserve board cannot share the

calculation with the lead state commissioner, the insurance holding company

system is not exempt from the group capital calculation filing.

c. An insurance holding company system that has a non-United States groupwide

supervisor located within a reciprocal jurisdiction as set forth in subsection 7 of

section 26.1-31.2-01 which recognizes the United States state regulatory

approach to group supervision and group capital.

d. An insurance holding company system that:

(1) Provides information to the lead state that meets the requirements for

accreditation under the national association of insurance commissioners

financial standards and accreditation program, either directly or indirectly

through the groupwide supervisor, who has determined the information is

satisfactory to allow the lead state to comply with the national association of

insurance commissioners group supervision approach, as detailed in the

national association of insurance commissioners financial analysis

handbook; and

commissioners

financial standards and accreditation program, either directly or indirectly

through the groupwide supervisor, who has determined the information is

satisfactory to allow the lead state to comply with the national association of

insurance commissioners group supervision approach, as detailed in the

national association of insurance commissioners financial analysis

handbook; and

(2) Has a non-United States groupwide supervisor that is not in a reciprocal

jurisdiction which recognizes and accepts, as specified by the commissioner

by rule, the group capital calculation as the worldwide group capital

assessment for United States insurance groups that operate in that

jurisdiction.

e. Notwithstanding subdivisions c and d, a lead state commissioner shall require the

group capital calculation for United States operations of any non-United States

based insurance holding company system where, after any necessary

consultation with other supervisors or officials, it is deemed appropriate by the

lead state commissioner for prudential oversight and solvency monitoring

purposes or for ensuring the competitiveness of the insurance marketplace.

f. Notwithstanding subdivisions a through d, the lead state commissioner may

exempt the ultimate controlling person from filing the annual group capital

calculation or accept a limited group capital filing or report in accordance with

criteria as specified by the commissioner by rule.

g. If the lead state commissioner determines an insurance holding company system

no longer meets one or more of the requirements for an exemption from filing the

group capital calculation under this section, the insurance holding company

system shall file the group capital calculation at the next annual filing date, unless

an extension is provided by the lead state commissioner based on reasonable

grounds shown.

15. The ultimate controlling person of every insurer subject to registration and scoped into

the national association of insurance commissioners liquidity stress test framework

shall file the results of a specific year's liquidity stress test. The results must be filed

with the lead state insurance commissioner of the insurance holding company system

as determined by the financial analysis handbook procedures adopted by the national

association of insurance commissioners.

a. The national association of insurance commissioners liquidity stress test

framework includes scope criteria applicable to a specific data year. The scope

criteria are reviewed at least annually by the financial stability task force or its

successor. A change to the national association of insurance commissioners

liquidity stress test framework or to the data year for which the scope criteria are

to be measured is effective on January first of the year following the calendar

year when the change is adopted. An insurer that meets at least one threshold of

the scope criteria is considered scoped into the national association of insurance

commissioners liquidity stress test framework for the specified data year unless

the lead state insurance commissioner, in consultation with the national

association of insurance commissioners financial stability task force or its

successor, determines the insurer should not be scoped into the framework for

that data year. An insurer that does not trigger at least one threshold of the scope

criteria is considered scoped out of the liquidity stress test framework for the

specified data year, unless the lead state insurance commissioner, in consultation

with the national association of insurance commissioners financial stability task

force or its successor, determines the insurer should be scoped into the

framework for that data year.

b. To avoid having insurers scoped in and out of the national association of

insurance commissioners liquidity stress test framework on a frequent basis, the

e lead state insurance commissioner, in consultation

with the national association of insurance commissioners financial stability task

force or its successor, determines the insurer should be scoped into the

framework for that data year.

b. To avoid having insurers scoped in and out of the national association of

insurance commissioners liquidity stress test framework on a frequent basis, the

lead state insurance commissioner, in consultation with the financial stability task

force or its successor, shall assess this concern as part of the determination for

an insurer.

c. The performance of, and filing of the results from, a specific year's liquidity stress

test must comply with the national association of insurance commissioners

liquidity stress test framework's instructions and reporting templates for that year

and any lead state insurance commissioner determinations, in consultation with

the financial stability task force or its successor, provided within the framework.

16. The failure to file a registration statement or any summary of the registration statement

or enterprise risk filing required by this section within the time specified for the filing is

a violation of this section.