2010 Wyoming Statutes
Title 26 - Insurance Code
Chapter 3 - Authorization Of Insurers And General Requirements

CHAPTER 3 - AUTHORIZATION OF INSURERS AND GENERAL REQUIREMENTS

 

ARTICLE 1 - IN GENERAL

 

26-3-101. Certificate of authority required.

 

 

(a) No person shall act as an insurer and no insurer shall transact insurance in this state unless authorized by a subsisting certificate of authority granted by the commissioner, except as to transactions expressly otherwise provided in this code.

 

(b) No insurer shall solicit insurance applications or otherwise transact insurance in another state or country, from offices or by personnel located in this state, unless it holds a subsisting certificate of authority granted by the commissioner authorizing it to transact the same kinds of insurance in this state.

 

26-3-102. When certificate not required.

 

 

(a) A certificate of authority is not required of an insurer for:

 

(i) Investigation, settlement or litigation of claims under its policies lawfully written in this state, or liquidation of its assets and liabilities, other than collection of new premiums, all resulting from its authorized operations in this state;

 

(ii) Transactions thereunder subsequent to issuance of a policy covering only subjects of insurance not resident, located or expressly to be performed in this state at time of issuance and lawfully solicited, written and delivered outside this state;

 

(iii) Transactions pursuant to surplus lines coverages lawfully written under chapter 11 of this code;

 

(iv) Reinsurance, except as to domestic reinsurers.

 

(b) An insurer not transacting new insurance business in Wyoming but continuing collection of premiums on and servicing policies remaining in force as to residents of or risks located in Wyoming is transacting insurance in Wyoming for the purpose of premium tax requirements only and is not required to have a certificate of authority. This subsection does not apply to insurers which withdrew from Wyoming prior to May 21, 1955.

 

26-3-103. General qualifications for authority to transact business.

 

 

(a) To transact insurance in this state an insurer shall be in compliance with this code, and its charter powers and shall be an incorporated stock insurer, an incorporated mutual insurer or a reciprocal insurer of the same general type as may be formed as a domestic insurer under this code.

 

(b) No foreign insurer shall be authorized to transact insurance or business on the mutual assessment plan, stipulated premium plan or any similar plan in this state if that insurer does not maintain reserves as required by chapter 6 of this code as applicable to the kinds of insurance or business transacted, wherever transacted in the United States. This prohibition does not apply to mutual or reciprocal insurers doing business on the cash premium plan but providing for contingent liability of policyholders or subscribers.

 

26-3-104. Insurers not qualified to transact business in state; credit and investigation reports.

 

 

(a) No foreign insurer owned or controlled in any manner or degree by any government or governmental agency shall be authorized to transact insurance in Wyoming. Membership in a mutual insurer, or subscribership in a reciprocal insurer, or ownership of stock of an insurer by the alien property custodian or similar official of the United States, or ownership of stock or other security which does not have voting rights with respect to the insurer's management, or supervision of an insurer by public authority, is not ownership or control of the insurer for the purposes of this subsection.

 

(b) The commissioner shall not grant or continue authority to transact insurance in this state as to any insurer the management of which, after investigation or upon reliable information, he finds:

 

(i) Is incompetent or untrustworthy;

 

(ii) So lacking in insurance company managerial experience as to make a proposed operation hazardous to the insurance-buying public; or

 

(iii) Is affiliated through ownership, control reinsurance or other insurance or business relations with any person whose business operations are or have been marked by manipulation of assets, accounts or reinsurance, or by bad faith.

 

(c) Before granting a certificate of authority to a new domestic insurer, the commissioner shall secure a credit and investigation report as to the insurer's management personnel and directors from a recognized and established independent investigation and reporting agency. The commissioner may secure a similar report relative to the management of any other insurer at any time he deems advisable.

 

26-3-105. Qualification of new foreign insurers.

 

 

(a) No foreign insurer is authorized to transact insurance in Wyoming if that insurer has not been issuing its own policies as an authorized insurer for at least two (2) years in its state or country of domicile, unless the insurer is otherwise qualified for a certificate of authority under this code and is:

 

(i) The wholly owned subsidiary of an insurer which is already an authorized insurer in Wyoming;

 

(ii) The successor in interest through statutory merger or statutory consolidation, or through bulk reinsurance of substantially all of the insurance risks in this state, of an authorized insurer; or

 

(iii) An insurer organized solely for the purpose of insuring against earthquake, flood, nuclear radiation, war or other special hazards to property or liability for which, in the commissioner's opinion, adequate provision is not made by insurers already authorized in this state.

 

(b) No foreign insurer shall continue to hold a certificate of authority under W.S. 26-3-114 if the insurer has reinsured substantially all of its insurance risks either prior to, contemporaneously with or after being acquired by another insurer not holding a subsisting certificate of authority in this state.

 

26-3-106. Conflict of names prohibited.

 

 

(a) No insurer shall be formed or authorized to transact insurance in this state if that insurer has or uses a name which:

 

(i) Is the same as or deceptively similar to that of another insurer already authorized;

 

(ii) In the case of a life insurer is deceptively similar to that of another insurer authorized to transact insurance in this state within the immediately preceding ten (10) years, if life insurance policies originally issued by the other insurer are still outstanding in this state;

 

(iii) Is the same as or deceptively similar to the name of any foreign insurer not so authorized if the foreign insurer has within the immediately preceding twelve (12) months signified its intention to secure an incorporation in this state under that name or to do business as a foreign insurer in this state under that name by filing notice of intention with the commissioner, unless the foreign insurer gives written consent to the use of the name or deceptively similar name; or

 

(iv) Tends to deceive or mislead as to the insurer's type of organization.

 

(b) In case of conflict of names between two (2) insurers, or a conflict otherwise prohibited under this section, the commissioner may permit, or shall require as a condition to the issuance of an original certificate of authority to an applicant insurer, the insurer to use in this state a modified name as may reasonably be necessary to avoid the conflict.

 

26-3-107. Insurer may be authorized to transact combination of kinds of insurance; exceptions.

 

 

(a) A qualified insurer may be authorized to transact one (1) or more kinds of insurance as defined in chapter 5 of this code, except:

 

(i) A life insurer may grant annuities and may be authorized to transact disability insurance, except that the commissioner may continue to authorize any qualified life insurer which immediately prior to January 1, 1968 was lawfully authorized to transact in this state any kinds of insurance in addition to life and disability insurances and annuity business;

 

(ii) A reciprocal insurer shall not transact life insurance;

 

(iii) A title insurer shall be a stock insurer and shall not transact any other kind of insurance.

 

26-3-108. Capital and surplus requirements.

 

 

(a) To qualify for authority to transact any kind of insurance as defined in chapter 5 or combination of kinds of insurance as specified in this subsection, a foreign insurer, or a domestic stock insurer applying for its original certificate of authority, shall possess and thereafter maintain unimpaired basic paid-in capital stock and surplus, if a stock insurer, or unimpaired basic surplus, if a foreign mutual insurer or foreign reciprocal insurer, in an amount not less than as follows:

 

Foreign Foreign

 

Kind or Mutual Reciprocal

 

kinds of Stock Insurers Insurers Insurers

 

insurance Capital Stock Surplus Surplus Surplus

 

Life $1,000,000. $500,000. $1,500,000.

 

Disability 1,000,000. 500,000. 1,500,000. 1,500,000.

 

Life &

 

disability 1,000,000. 1,000,000. 2,000,000.

 

Property 1,000,000. 1,000,000. 2,000,000. 2,000,000.

 

Casualty

 

Excluding

 

surety 1,000,000. 1,000,000. 2,000,000. 2,000,000.

 

Including

 

surety 1,000,000. 1,500,000. 2,500,000. 2,500,000.

 

Marine &

 

Transport-

 

ation 1,000,000. 1,000,000. 2,000,000. 2,000,000.

 

Multiple

 

line

 

(Property

 

and

 

any

 

additional

 

kind) 2,000,000. 2,000,000. 4,000,000. 4,000,000.

 

Title 500,000. 250,000.

 

(b) Capital and surplus requirements are based upon all the kinds of insurance the insurer transacts in any areas in which it operates or proposes to operate, whether or not only a portion of the kinds are to be transacted in Wyoming.

 

(c) As to surplus required for qualification to transact one (1) or more kinds of insurance and thereafter to be maintained, domestic mutual insurers are governed by chapter 24 of this code and domestic reciprocal insurers are governed by chapter 27 of this code.

 

(d) The commissioner may require additional capital and surplus above the minimum capital and surplus requirements set forth in this section, or any other section of this code based upon the type, volume and nature of the insurance business transacted.

 

26-3-109. Delayed compliance with capital and surplus requirements.

 

 

(a) A domestic or foreign insurer holding a valid certificate of authority to transact insurance in this state as of April 1, 1985, may continue to transact the kinds of insurance permitted by the certificate of authority by complying with this code and by maintaining unimpaired not less than the same amount of paid-in capital stock or paid-in capital stock and surplus, if a stock insurer, or not less than the same amount of surplus, if a mutual insurer, as required under the laws of this state for that authority immediately prior to that date, and as if the laws had continued in force.

 

(b) An insurer specified in subsection (a) of this section shall not be granted authority to transact any other or additional kinds of insurance unless it then fully complies with the capital and surplus requirements applied to all the kinds of insurance it then proposes to transact, as provided under W.S. 26-3-108 as to new domestic insurers.

 

26-3-110. Additional kinds of insurance authorized for certain insurers.

 

 

(a) Without additional capital or additional surplus, an authorized insurer is also authorized:

 

(i) If a life insurer, to grant annuities;

 

(ii) If a disability insurer, to insure against congenital defects as defined in W.S. 26-5-106(a)(xii);

 

(iii) If a casualty insurer, to transact also disability insurance;

 

(iv) If a property insurer, to include an amount and kind of insurance against legal liability for injury, damage or loss to the person or property of others, and for medical, hospital and surgical expense related to that injury, as the commissioner deems to be reasonably incidental to insurance of real property against fire and other perils under policies covering farm properties, or residential properties designed for occupancy by not more than four (4) families, with or without incidental office, professional, private school or studio occupancy by an insured, whether or not the premium or rate charged for certain perils so covered is specified in the policy.

 

(b) Paragraphs (a)(iii) and (iv) of this section do not apply to domestic insurers authorized pursuant to W.S. 26-3-109(a).

 

26-3-111. Deposit required of insurers.

 

 

(a) The commissioner shall not authorize an insurer to transact insurance in this state unless it makes and thereafter continuously maintains in trust in this state through the commissioner, or in another state as provided in subsection (b) of this section, for the protection of all its policyholders and creditors a deposit of cash or securities eligible for deposit under W.S. 26-8-103 of a value not less than the amount applicable to the kinds of insurance the insurer transacts as follows:

 

Minimum

 

Kind(s) of insurance Amount of deposit

 

Life---------------------------------------- $200,000.00

 

Disability---------------------------------- 100,000.00

 

Life & disability--------------------------- 200,000.00

 

Property------------------------------------ 100,000.00

 

Casualty

 

Excluding surety-------------------------- 100,000.00

 

Including surety-------------------------- 150,000.00

 

Multiple line------------------------------- 200,000.00

 

Hail-crop----------------------------------- 100,000.00

 

Title

 

Domestic insurers------------------------- 50,000.00

 

Foreign insurers-------------------------- 100,000.00

 

(b) As to foreign insurers, instead of the deposit or part thereof in this state, the commissioner shall accept the certificate in proper form of the public official having supervision over insurers in any other state to the effect that a like deposit or part thereof by the insurer is being maintained in public custody or control pursuant to law in the other state in trust for the protection of all its policyholders wherever located, or of all its policyholders in the United States, or all of its policyholders and creditors in the United States. All such deposits shall be in cash or securities, or both, of a quality not less than those eligible for deposit in this state under W.S. 26-8-103.

 

(c) A property insurer also writing hail-crop coverages is required to have only the deposit applicable to property insurance. Instead of the hail-crop deposit, a domestic mutual hail-crop insurer, upon the commissioner's approval, may file with the commissioner and maintain reinsurance of all risk under all of the insurer's hail-crop policies. The reinsurer shall be qualified for a certificate of authority as a stock property insurer under this code, and the reinsurance agreement shall provide for payment by the reinsurer of one hundred percent (100%) of all losses under hail-crop policies issued by the ceding insurer without assessment of policyholders of the ceding insurer.

 

(d) All deposits in this state are subject to the applicable provisions of chapter 8 of this code.

 

(e) In addition to deposits required or maintained by foreign insurers, the commissioner may require any foreign insurer to make and maintain in trust in this state, through the commissioner, a deposit of cash or securities eligible for deposit under W.S. 26-8-103, of a value not less than an amount which the commissioner specifies, for the sole protection of an insurer's policyholders located in this state. All additional deposits are subject to the applicable provisions of chapter 8 of this code.

 

26-3-112. Certificate of authority; application; contents of application.

 

(a) An insurer shall apply to the commissioner for an original certificate of authority, stating under oath of the president, or vice-president or other chief officer and the secretary of the insurer, or of the attorney-in-fact if the insurer is a reciprocal insurer, the insurer's name, location of its home office, or principal office in the United States if an alien insurer, the kinds of insurance to be transacted, date of organization or incorporation, form of organization, state or country of domicile and any additional information the commissioner reasonably requires. The application shall be accompanied by the applicable fees as provided in W.S. 26-4-101 together with the following documents, as applicable:

 

(i) If a corporation, a current, complete copy of its charter or articles of incorporation currently certified by the public official with whom the originals are on file;

 

(ii) If a domestic incorporated insurer or a mutual insurer, a current, complete copy of its bylaws, certified by the insurer's corporate secretary;

 

(iii) If a reciprocal insurer, a current, complete copy of the power of attorney of its attorney-in-fact, certified by the attorney-in-fact;

 

(iv) If a domestic reciprocal insurer, the declaration provided for in W.S. 26-27-107(b);

 

(v) A complete copy of its financial statement as of not earlier than the December 31 immediately preceding in "convention" form, sworn to by at least two (2) executive officers of the insurer or certified by the public insurance supervisory official of the insurer's state of domicile or of entry into the United States if an alien insurer;

 

(vi) A copy of the report of last examination made of the insurer as of a date within not more than the thirty-six (36) months immediately preceding, certified by the Wyoming insurance department or by the public insurance supervisory official of the insurer's state of domicile or state of entry into the United States if an alien insurer;

 

(vii) Acceptance of the constitution of the state of Wyoming, upon a form the commissioner furnishes for that purpose;

 

(viii) Appointment of the commissioner pursuant to W.S. 26-3-121 as its attorney to receive service of legal process;

 

(ix) If a foreign insurer a certificate:

 

(A) Of the public insurance supervisory official of its state or country of domicile showing that it is authorized to transact in that state or country the kinds of insurance proposed to be transacted in this state;

 

(B) As to deposit if to be tendered pursuant to W.S. 26-3-111(b).

 

(x) If an alien insurer, a copy of the appointment and authority of its United States manager, certified by its officer having custody of its records;

 

(xi) If a life or disability insurer, a copy of the insurer's rate book and of each form of policy currently proposed to be issued in this state;

 

(xii) Designation by the insurer of its officer or representative authorized to appoint and remove its agents in this state.

 

26-3-113. Certificate of authority; issuance; contents; delivery; return.

 

 

(a) If the commissioner finds that the insurer meets the certificate requirements under this code, he shall issue to the insurer a proper certificate of authority. If he finds the insurer does not meet the certificate requirements, the commissioner shall issue his order refusing the certificate. The commissioner shall act upon an application for certificate of authority within a reasonable period after its completion.

 

(b) The certificate, if issued, shall specify the kinds of insurance the insurer is authorized to transact in Wyoming. At the insurer's request the commissioner may issue a certificate of authority limited to particular types of insurance or coverages within the scope of a kind of insurance as defined in chapter 5 of this code.

 

(c) Although issued and delivered to the insurer, the certificate of authority at all times is the property of this state. Upon expiration, suspension or termination of the certificate, the insurer shall promptly deliver the certificate to the commissioner.

 

26-3-114. Certificate of authority; continuation; expiration; reinstatement.

 

(a) A certificate of authority issued under this code continues in force until suspended or revoked by the commissioner or terminated at the insurer's request, subject to continuance by the insurer each year by:

 

(i) Payment prior to March 1 of the continuation fee provided in W.S. 26-4-101;

 

(ii) Filing by the insurer of its annual statement for the immediately preceding calendar year as required by W.S. 26-3-123; and

 

(iii) Payment by the insurer of premium taxes for the immediately preceding calendar year as required by W.S. 26-4-103.

 

(b) If not continued, an insurer's certificate of authority expires at midnight on May 31 immediately following the insurer's failure to continue it in force, unless earlier revoked for failure to pay taxes as provided in W.S. 26-4-105(b). The commissioner shall promptly notify the insurer of any impending expiration of its certificate of authority.

 

(c) The commissioner, upon the insurer's request made within three (3) months after expiration, may reinstate a certificate of authority which the insurer has permitted to expire, after the insurer has:

 

(i) Cured all failures which resulted in the expiration; and

 

(ii) Paid the reinstatement fee specified in W.S. 26-4-101.

 

(d) If an insurer fails to renew its certificate of authority within the time specified in subsection (c) of this section, another certificate shall be issued only after all requirements for an original certificate of authority in this state are fulfilled.

 

26-3-115. Suspension, revocation of certificate of authority; mandatory grounds; hearing required.

 

 

(a) The commissioner shall refuse to continue or shall suspend or revoke an insurer's certificate of authority if:

 

(i) That action is required by any provision of this code;

 

(ii) A foreign insurer and it no longer meets the capital and surplus requirements specified in W.S. 26-3-108, or is otherwise unqualified;

 

(iii) A domestic insurer and it has failed to cure a capital or surplus impairment within the time the commissioner allows under this code, or is otherwise unqualified; or

 

(iv) The insurer's certificate of authority to transact insurance is suspended or revoked by its state of domicile, or state of entry into the United States if an alien insurer.

 

(b) Notwithstanding W.S. 16-3-113, in case of insolvency or impairment of required capital or surplus, or suspension or revocation by another state, the commissioner shall refuse, suspend or revoke the certificate of authority without a prior hearing. In all other cases the commissioner shall refuse, suspend or revoke the certificate of authority only after a hearing, unless the insurer waives the hearing in writing.

 

26-3-116. Suspension and revocation of certificate of authority; discretionary and special grounds.

 

 

(a) The commissioner may refuse to continue or may suspend or revoke an insurer's certificate of authority if he finds after a hearing that the insurer has:

 

(i) Violated or failed to comply with any lawful order of the commissioner;

 

(ii) Willfully violated or failed to comply with any lawful regulation of the commissioner; or

 

(iii) Violated any provision of this code other than those for violation of which suspension or revocation is mandatory.

 

(b) The commissioner shall suspend or revoke an insurer's certificate of authority on any of the following grounds if he finds after a hearing that the insurer:

 

(i) Is in unsound condition, or in such condition or using any methods and practices in the conduct of its business as to render its further transaction of insurance in this state injurious to policyholders or to the public;

 

(ii) With such frequency as to indicate its general business practice in this state has without just cause:

 

(A) Failed to pay claims arising under its policies, whether the claim is in favor of an insurer or is in favor of a third person with respect to the liability of an insured to that third person;

 

(B) Delayed payment of claims; or

 

(C) Compelled insureds or claimants to accept less than the amount due them, or to employ attorneys or to bring suit against the insurer or an insured to secure full payment or settlement of claims.

 

(iii) Is affiliated with and under the same general management, or interlocking directorate, or ownership as another insurer which transacts direct insurance in this state without having a certificate of authority therefor, except as permitted under this code;

 

(iv) Refuses to be examined, or if its directors, officers, employees or representatives refuse to:

 

(A) Submit to examination relative to its affairs;

 

(B) Produce its accounts, records and files for the commissioner's examination when required; or

 

(C) Perform any legal obligation relative to the examination.

 

(v) Failed to pay any final judgment rendered against it in this state upon any policy, bond, recognizance or undertaking issued or guaranteed by it, within thirty (30) days after the judgment became final, or within thirty (30) days after dismissal of an appeal before final determination, whichever date is later.

 

(c) In determining whether the continued operation of any insurer transacting insurance business in this state is hazardous or injurious to policyholders or the public the commissioner may consider any of the following:

 

(i) Adverse findings reported in financial condition and market conduct examination reports;

 

(ii) The National Association of Insurance Commissioners' Insurance Regulatory Information System and its related reports;

 

(iii) The ratios of commission expense, general insurance expense, policy benefits and reserve increases as to annual premium and net investment income which could lead to an impairment of capital and surplus;

 

(iv) The value, liquidity and diversity of the insurer's asset portfolio under the current economic conditions to assure the company's ability to meet its outstanding obligations as they mature;

 

(v) The ability of any assuming reinsurer of the insurer to perform and whether the insurer's reinsurance program provides sufficient protection for the insurer's remaining surplus after taking into account the insurer's cash flow and the classes of business written and the financial condition of the assuming reinsurer;

 

(vi) Whether the insurer's operating loss in the last twelve (12) month period or any shorter period of time is greater than fifty percent (50%) of the insurer's remaining surplus as regards policyholders in excess of the minimum required. For purposes of this paragraph, "operating loss" shall include, but not be limited to net capital gain or loss, change in nonadmitted assets and cash dividends paid to shareholders;

 

(vii) Any affiliate's, subsidiary's or reinsurer's insolvency, threatened insolvency or delinquency in payment of its monetary or other obligations;

 

(viii) Contingent liabilities, pledges or guaranties which either individually or collectively involve a total amount which in the opinion of the commissioner may affect the solvency of the insurer;

 

(ix) The delinquency of any "controlling person" of an insurer in transmitting or paying net premiums to the insurer. For purposes of this paragraph, "controlling person" means any person who directly or indirectly has the power to direct the management, control or activities of the insurer;

 

(x) The age of receivables and the ability to collect receivables;

 

(xi) The failure of an insurer's management, including officers, directors, or any other person who directly or indirectly controls the operation of the insurer, to possess and demonstrate the competence, fitness and reputation necessary to serve the insurer in such position;

 

(xii) An insurer's management's failure to respond to inquiries relative to the condition of the insurer or an insurer's management's furnishing false and misleading information concerning an inquiry;

 

(xiii) An insurer's management's:

 

(A) Filing of any false or misleading sworn financial statement;

 

(B) Release of false or misleading financial statements to lending institutions or to the general public; or

 

(C) Making of a false or misleading entry, or omitting an entry of material amount in the books of the insurer.

 

(xiv) An insurer's rapid growth to such an extent that it lacks adequate financial and administrative capacity to meet its obligations in a timely manner;

 

(xv) An insurer's past or foreseeable future experience of cash flow or liquidity problems.

 

(d) The standards set forth in subsection (c) of this section are in addition to those set forth in other laws or regulations of this state and shall not be construed to limit any other standards.

 

(e) The commissioner, without advance notice or hearing, may immediately suspend the certificate of authority of any insurer as to which proceedings for receivership, conservatorship, rehabilitation or other delinquency proceedings have been commenced in any state by the public insurance supervisory official of that state.

 

26-3-117. Suspension and revocation of certificate of authority; order and notice of suspension.

 

 

(a) All suspensions or revocations of or refusals to continue an insurer's certificate of authority shall be by the commissioner's order given to the insurer.

 

(b) Upon issuance of an order, the commissioner shall immediately give notice thereof to the insurer's agents in this state of record in the department and shall suspend or revoke the authority of those agents to represent the insurer.

 

(c) The commissioner shall publish notice of any suspension, revocation or refusal to continue in a newspaper in general circulation.

 

26-3-118. Suspension, revocation of certification of authority; duration of suspension; reinstatement.

 

 

(a) Suspension of an insurer's certificate of authority shall be for the period the commissioner specifies in the order of suspension, but not to exceed one (1) year. During the suspension period the commissioner may rescind or shorten the suspension by further order.

 

(b) During the suspension period the insurer shall not solicit or write any new business in this state but shall file its annual statement, pay fees, licenses and taxes as required under this code and may service its business already in force in this state as if the certificate of authority had continued in full force.

 

(c) Upon expiration of the suspension period, if within that period the certificate of authority has not terminated, the insurer's certificate of authority is automatically reinstated unless the commissioner finds that the causes of the suspension, other than a discontinued violation, have not terminated, or that the insurer is otherwise not in compliance with the requirements of this code, and of which the commissioner shall give the insurer notice not less than thirty (30) days in advance of expiration of the suspension period. If not automatically reinstated, the certificate of authority terminates at the end of the suspension period.

 

(d) Upon reinstatement of the insurer's certificate of authority, the authority of its agents in this state to represent the insurer also reinstate. The commissioner shall promptly notify the insurer and its agents in this state, of record in the department, of reinstatement. If pursuant to W.S. 26-3-117(c) the commissioner has published notice of suspension of the insurer's certificate of authority, he shall also publish notice of reinstatement.

 

26-3-119. General corporation laws not applicable to authorized foreign insurers.

 

The general corporation laws of this state do not apply to foreign insurers holding certificates of authority to transact insurance in this state.

 

26-3-120. Property insurance under 1 additional title authorized.

 

 

(a) A property insurer or multiple line insurer authorized to transact insurance in Wyoming may issue property insurance policies under its own name or under one (1) additional "title" registered with the commissioner.

 

(b) Upon request the commissioner shall furnish to the insurer the form required for registration, and the insurer shall pay the registration fee specified in W.S. 26-4-101. The registered title shall be shown on the insurer's certificate of authority and shall remain in effect as long as the insurer's certificate of authority is in effect, subject to earlier termination at the insurer's request.

 

(c) The insurer may separately appoint agents in this state under the registered title in the same manner and on payment of the same fees as apply to appointment and continuation of agents by property insurers in general.

 

(d) All business transacted by the insurer under the title shall be included in business and transactions of the insurer to be shown by its annual statement and for all purposes under this code.

 

26-3-121. Service of process; commissioner as agent for service.

 

 

(a) Before the commissioner issues a certificate of authority to any foreign, alien or domestic reciprocal insurer, each insurer shall appoint the commissioner, and his successors in office, as its attorney to receive service of legal process issued against the insurer in this state. The appointment shall be made on a form as designated and furnished by the commissioner and shall be accompanied by a copy of a resolution of the insurer's governing body, if an incorporated insurer, showing that the officers who executed the appointment were authorized to do so on the insurer's behalf.

 

(b) The appointment is irrevocable, binds the insurer and any successor in interest as to the insurer's assets or liabilities and remains in effect as long as there is in force any contract of the insurer in this state or any obligation of the insurer arising out of its transactions in this state.

 

(c) Service of process against a foreign or alien insurer shall be made only by service thereof upon the commissioner.

 

(d) At time of application for a certificate of authority the insurer shall file the appointment with the commissioner, together with a designation of the person to whom process against it served upon the commissioner is to be forwarded. The insurer may change that designation by a new filing.

 

26-3-122. Service of process; service generally.

 

(a) Service of process against an insurer for whom the commissioner is attorney shall be made by delivering to and leaving with the commissioner, his deputy or a person in apparent charge of his office during the commissioner's absence, two (2) copies of the process together with a fee as provided in W.S. 26-4-101, taxable as costs in the action.

 

(b) In case the process is issued by a justice of the peace or other inferior court, it may be directed to and served in duplicate by an officer authorized to serve process in the city or county of the commissioner's office, at least fifteen (15) days before the return day thereof, and that service confers jurisdiction.

 

(c) Upon service the commissioner shall immediately mail by registered mail one (1) of the copies of the process to the person currently designated by the insurer to receive the process as provided in W.S. 26-3-121(d).

 

(d) Service of process is sufficient if:

 

(i) Notice of that service and a copy of the process are sent within ten (10) days from the date of service by registered mail by plaintiff or his attorney to the defendant insurer at its last known principal place of business in the United States;

 

(ii) The defendant receives or the post office with which the letter is registered issues a receipt, showing the name of the sender of the letter and the name and address of the person to whom the letter is addressed; and

 

(iii) The affidavit of the plaintiff or his attorney showing compliance with this section are filed with the clerk of the court in which the action is pending, on or before the date the defendant is required to appear, or within such further time as the court allows.

 

(e) The commissioner shall keep a record of the day of service upon him of all legal process.

 

(f) Process served upon the commissioner with a copy forwarded as in this section provided constitutes valid and binding personal service upon the insurer.

 

26-3-123. Annual and quarterly statement; required; form; verification; failure to file.

 

(a) Each authorized insurer, annually, on or before March 1, or within any extended time the commissioner grants, not to exceed thirty (30) days, shall file with the commissioner a full and true statement of its financial condition, transactions and affairs as of December 31 immediately preceding. The statement shall be in the general form and context of, and require information as called for by, the form of annual statement as currently in general and customary use in the United States for the type of insurer and kinds of insurance to be reported upon, with any modification the commissioner requires. The statement shall be verified by the oath of the insurer's president or vice-president and secretary or actuary as applicable, or if a reciprocal insurer by the oath of the attorney-in-fact, or its like officers if a corporation.

 

(b) Each authorized insurer shall file with the commissioner on a quarterly basis a statement of its financial condition for the preceding quarter. The statement shall be in the form of a quarterly statement as currently in general and customary use in the United States for the type of insurer and kinds of insurance to be reported upon, with any modification the commissioner requires. Each quarterly statement shall be filed with the commissioner on or before forty-five (45) days from the end of the quarter being reported.

 

(c) The statement of an alien insurer shall be verified by its United States manager or other authorized officer and shall relate only to the insurer's transactions and affairs in the United States unless the commissioner requires otherwise. If the commissioner requires a statement as to an alien insurer's affairs throughout the world, the insurer shall file the statement with the commissioner as soon as reasonably possible.

 

(d) All annual and quarterly statements filed pursuant to this section shall be completed pursuant to the most recent National Association of Insurance Commissioners' accounting practices and procedures manual and accompanied by an electronic version containing the same information as the statement. The commissioner may specify the format of the electronic version. The commissioner may accept, for any foreign insurer required to file any statement under this section, an electronic filing with the National Association of Insurance Commissioners meeting the requirements of this section as a filing with the commissioner. The commissioner may refuse to continue or may suspend or revoke the certificate of authority of any insurer failing to file its annual or quarterly statement when due.

 

26-3-124. Annual statement; mandatory reporting of claims against health care providers; confidentiality; abstract of statistics.

 

(a) Any insurer writing coverage for health care malpractice in this state, by March 1 of each year, shall file with the commissioner a report of all claims against a health care provider and a report of all awards or settlements given in cases against health care providers. The report shall contain the following information only for the preceding calendar year:

 

(i) The number and categories of all health care providers the company insures for professional liability;

 

(ii) The number of claims for which a reserve has been established made against covered health care providers, including those claims in which no suit was filed;

 

(iii) The awards and settlements on health care professional liability claims, including the costs of defense;

 

(iv) For each claim:

 

(A) Specialty coverage of the insured;

 

(B) Nature and substance of the claim;

 

(C) Age of the claimant or plaintiff;

 

(D) After final disposition of the claim, the date and manner of disposition, whether by judgment, settlement, arbitration or otherwise, and an itemization of the amounts paid, if any, if reported separately or can be reasonably segregated or identified for:

 

(I) Medical and prescription costs;

 

(II) Economic damages;

 

(III) Noneconomic damages;

 

(IV) Defense attorneys fees, costs and expenses.

 

(E) Any additional information required by the commissioner.

 

(b) Any information provided the commissioner pursuant to this section shall be confidential including the names of health care providers and any records pertaining thereto. The commissioner shall prepare a summary of such information, in the aggregate if necessary to protect the identity of the health care provider or claimant, for inclusion in his annual report to the governor pursuant to W.S. 9-2-1014.

 

(c) The commissioner may adopt rules, regulations and reporting forms necessary to carry out the provisions of this section.

 

26-3-125. Annual statement; mandatory reporting of claims against governmental entity.

 

 

(a) On or before March 15 of each year, each insurer providing insurance to a governmental entity, as defined in W.S. 1-39-103(a)(i), shall file with the commissioner of insurance a report of the claims made against its insureds which have been closed during the immediately preceding calendar year. The report shall contain, but is not limited to, the following information:

 

(i) The total number of claims filed, broken down by category or type of claim;

 

(ii) The total amount paid in settlement or discharge of the claims for each type or category of claims;

 

(iii) The total amount of premiums received from insureds under this act;

 

(iv) The total number of insureds under this act whose liability insurance the insurer cancelled or refused to renew and the reasons therefor.

 

26-3-126. Annual statement; correction and publication of statements.

 

 

(a) As soon as reasonably possible after the insurer files its annual statement with the commissioner, the commissioner shall review the statement and require correction of any errors or omissions.

 

(b) After any corrections noted are made, the commissioner shall:

 

(i) Cause each statement filed to be condensed and summarized showing briefly but intelligibly the capital, assets, liabilities, income, expenditures and business each insurer does within this state;

 

(ii) Include in the summary his certificate, if true, that to the best of his knowledge and belief the insurer is in all respects in compliance with the insurance laws of this state;

 

(iii) Cause each summary and certificate to be published for six (6) successive days in a daily newspaper of general circulation within the state, or for six (6) successive weeks in a weekly newspaper of general circulation, and the insurer shall pay the cost of publication upon receipt of a statement from the newspaper.

 

(c) Insofar as is possible the commissioner shall distribute the publications equally among the newspapers located in this state.

 

26-3-127. Repealed by Laws 2000, Ch. 19, 2.

 

 

26-3-128. Repealed by Laws 2000, Ch. 19, 2.

 

26-3-129. Repealed by Laws 2000, Ch. 19, 2.

 

26-3-130. Retaliatory provisions against other states and countries.

 

 

(a) The commissioner shall impose upon any insurer, or upon the agent or representative of that insurer of any other state or any foreign country doing business in Wyoming the same taxes, licenses and other fees, in the aggregate, and the same fines, penalties, deposit requirements or other material requirements, obligations, prohibitions or restrictions as are imposed upon Wyoming insurers, or upon their agents or representatives, by the laws of any other state or any political subdivision thereof, or any country or any province or other political subdivision thereof.

 

(b) This section does not apply to:

 

(i) Application fees, examination fees, license fees, appointment fees and continuation fees for agents, adjusters, service representatives or consultants; or

 

(ii) Personal income taxes, ad valorem taxes on real or personal property nor to special purpose obligations or assessments imposed by another state in connection with particular kinds of insurance other than property insurance, except that the commissioner shall consider deductions, from premium taxes or other taxes otherwise payable, allowed because of real estate or personal property taxes paid in determining the propriety and extent of retaliatory action under this section.

 

(c) For the purposes of this section:

 

(i) The domicile of an alien insurer, other than insurers formed under the laws of Canada, or a province thereof, is that state the insurer designates in writing and files with the commissioner at time of admission to this state and may be that state in which:

 

(A) The insurer is first authorized to transact insurance;

 

(B) Is located the insurer's principal place of business in the United States; or

 

(C) Is held the insurer's largest deposit of trusteed assets for the protection of its policyholders in the United States.

 

(ii) The domicile of an insurer formed under the laws of Canada or a province thereof is that province in which its head office is located.

 

(d) If the insurer does not make a designation as provided in subsection (c) of this section, its domicile is that state in which is located its principal place of business in the United States.

 

26-3-131. Disclosure of loss information; penalties.

 

 

(a) Any insurer writing property or casualty insurance in this state as defined in W.S. 26-5-104 and 26-5-106, shall provide the following information to the named insured within thirty (30) days of receipt of the insured's written request, but in no event more frequently than once in any twelve (12) month period:

 

(i) Information on claims involving the insured closed within the preceding two (2) years limited to the date and description of occurrence and amount of payments, if any;

 

(ii) Information on open claims involving the insured limited to the date and description of occurrence, amount of claim and amount of payment, if any;

 

(iii) Information on notices of occurrence involving the insured limited to the date and description of occurrence and amount of claim; and

 

(iv) The total amount of reserve on open claims provided no insurer shall be required to provide information on any reserve specifically applicable to or identifying any claim which is or may become subject to proceedings before state or federal courts.

 

(b) An insurer which elects to cancel or nonrenew any policy of insurance subject to this section, for any reason other than nonpayment of premium, shall cause to be delivered to the insured, at the time such notice of cancellation or nonrenewal is given, a brief statement advising the insured of his right to request the information required to be given under this section.

 

(c) Any insurer who violates this section is subject to monetary penalties or license revocation or suspension as provided by W.S. 26-1-107 and 26-3-116.

 

(d) Repealed By Laws 2004, Chapter 57, 3.

 

26-3-132. Commissioner's authority.

 

 

(a) For the purposes of making a determination of an insurer's financial condition under this code, the commissioner may:

 

(i) Disregard any credit or amount receivable resulting from transactions with a reinsurer which is insolvent, impaired or otherwise subject to a delinquency proceeding;

 

(ii) Make appropriate adjustments to asset values attributable to investments in or transactions with an insurer's parent company, subsidiaries or affiliates;

 

(iii) Refuse to recognize the stated value of accounts receivable if the ability to collect receivables is highly speculative in view of the age of the account or the financial condition of the debtor;

 

(iv) Increase the insurer's liability in an amount equal to any contingent liability, pledge or guarantee not otherwise included if there is a substantial risk that the insurer will be called upon to meet the obligation undertaken within the next twelve (12) month period.

 

(b) If the commissioner determines that the continued operation of the insurer licensed to transact business in this state may be hazardous or injurious to the policyholders or the general public, then the commissioner may, in addition to any other action permitted by this code, issue an order requiring the insurer to:

 

(i) Reduce the total amount of present and potential liability for policy benefits by purchasing reinsurance;

 

(ii) Reduce, suspend or limit the volume of business being accepted or renewed;

 

(iii) Reduce general insurance expenses and commission expenses by specified methods;

 

(iv) Increase the insurer's capital and surplus;

 

(v) Suspend or limit the declaration and payment of dividends by an insurer to its stockholders or to its policyholders;

 

(vi) File reports in a form acceptable to the commissioner concerning the market value of an insurer's assets;

 

(vii) Limit or withdraw from specified investments or discontinue specified investment practices to the extent the commissioner deems necessary;

 

(viii) Document the adequacy of premium rates in relation to the risks insured;

 

(ix) File, in addition to regular annual statements, interim financial reports in the form adopted by the National Association of Insurance Commissioners or in a format promulgated by the commissioner.

 

(c) Any insurer subject to an order under subsection (b) of this section may request a hearing to review that order as provided in W.S. 26-2-125. Notwithstanding any other provision of law, the commissioner shall hold all hearings under this subsection privately, unless the insurer requests a public hearing, in which case the hearing shall be public.

 

(d) This section shall not be construed to limit the powers granted the commissioner by any other laws of this state.

 

ARTICLE 2 - INSURANCE REGULATORY INFORMATION SYSTEM

 

26-3-201. Short title.

 

This article is known and may be cited as the "Insurance Regulatory Information System Act".

 

26-3-202. Immunity.

 

Members of the National Association of Insurance Commissioners, their duly authorized committees, subcommittees, and task forces, their delegates, National Association of Insurance Commissioners employees, and all others charged with the responsibility of collecting, reviewing, analyzing and disseminating the information developed by the National Association of Insurance Commissioners' Insurance Regulatory Information System from annual statements filed with the National Association of Insurance Commissioners convention blanks shall be acting as agents of the commissioner under the authority of this article and in the absence of actual malice shall not be subject to civil liability for libel, slander or any other cause of action by virtue of their collection, review and analysis or dissemination of the data and information collected from the filings.

 

26-3-203. Confidentiality.

 

All financial analysis ratios and examination synopsis concerning insurance companies that are submitted to the department by the National Association of Insurance Commissioners' Insurance Regulatory Information System are confidential and shall not be disclosed by the department except as authorized by and in accordance with the provisions of W.S. 26-2-113(d).

 

26-3-204. Filing requirements; penalty.

 

(a) Each domestic, foreign or alien insurer authorized to transact insurance in this state shall annually on or before March 1, file with the National Association of Insurance Commissioners a copy of its annual statement convention blank along with such additional filings prescribed by the commissioner for the preceding year. The information filed with the National Association of Insurance Commissioners shall be in the same format and scope as that required by the commissioner and shall include the signed jurat page and the actuarial certification. Any amendments and addenda to the annual statement filing subsequently filed with the commissioner shall also be filed with the National Association of Insurance Commissioners. Each insurer shall concurrently provide the National Association of Insurance Commissioners with a copy of the electronic filing containing its annual statement as required by W.S. 26-3-123.

 

(b) Foreign insurers that are domiciled in a state which has a law substantially similar to subsection (a) of this section shall be deemed in compliance with this section.

 

(c) Each domestic, foreign or alien insurer authorized to transact insurance in this state shall quarterly on or before forty-five (45) days after the end of the quarter being reported, file with the National Association of Insurance Commissioners a copy of its quarterly statement blank. The information filed with the National Association of Insurance Commissioners shall be in the same format and scope as that required by the commissioner and shall include the signed jurat page. Any amendments and addenda to the quarterly statement filing subsequently filed with the commissioner shall also be filed with the National Association of Insurance Commissioners. Each insurer shall concurrently provide the National Association of Insurance Commissioners with a copy of the electronic filing containing its quarterly statement as required by W.S. 26-3-123.

 

(d) The commissioner may impose a civil penalty pursuant to W.S. 26-1-107 and may suspend, revoke or refuse to renew the certificate of authority of any insurer failing to file its quarterly or annual statement when due or within any extension of time which the commissioner, for good cause, may have granted.

 

ARTICLE 3 - ANNUAL AUDITED FINANCIAL REPORTS LAW

 

26-3-301. Scope of article.

 

(a) Every insurer as defined by W.S. 26-1-102(a)(xvi) shall be subject to this article. Insurers having direct premiums written in this state of less than one million dollars ($1,000,000.00) in any calendar year and less than one thousand (1,000) policyholders or certificate holders of direct written policies nationwide at the end of a calendar year shall be exempt from this article for that year except an insurer shall not be exempt if:

 

(i) The commissioner makes a specific finding that compliance is necessary for the commissioner to carry out statutory responsibilities; or

 

(ii) The insurer has assumed premiums pursuant to contracts or treaties of reinsurance of one million dollars ($1,000,000.00) or more.

 

(b) Foreign or alien insurers filing the audited financial report in another state, pursuant to that state's requirement for filing of audited financial reports which has been found by the commissioner to be substantially similar to the requirements of this article, are exempt from W.S. 26-3-303 through 26-3-312 if:

 

(i) A copy of the audited financial report, communication of internal control related matters noted in an audit and the accountant's letter of qualifications which are filed with the other state are filed with the commissioner and a copy of the audited financial report which is on file with the other state is filed with the National Association of Insurance Commissioners in accordance with the filing dates specified in W.S. 26-3-303, 26-3-310 and 26-3-311, respectively. Canadian insurers may submit accountants' reports as filed with the office of the superintendent of financial institutions, Canada; and

 

(ii) A copy of any notification of adverse financial condition report filed with the other state is filed with the commissioner within the time specified in W.S. 26-3-309.

 

(c) This article shall not prohibit, preclude or in any way limit the commissioner from ordering or conducting or performing examinations of insurers under this code or regulations and the practices and procedures of the department.

 

(d) Foreign or alien insurers required to file management's report of internal control over financial reporting in another state are exempt from filing the report in this state provided the other state has substantially similar reporting requirements and the report is filed with the commissioner of the other state within the time specified.

 

26-3-302. Definitions.

 

(a) As used in this article:

 

(i) "Accountant" or "independent certified public accountant" means an independent certified public accountant or accounting firm in good standing with the American Institute of Certified Public Accountants and in all states in which they are licensed to practice. For Canadian and British companies, the terms mean a Canadian-chartered or British-chartered accountant;

 

(ii) "Audited financial report" means and includes those items specified in W.S. 26-3-304;

 

(iii) "Indemnification" means an agreement of indemnity or a release from liability where the intent or effect is to shift or limit in any manner the potential liability of the person or firm for failure to adhere to applicable auditing or professional standards, whether or not resulting in part from knowing or other misrepresentations made by the insurer or its representatives;

 

(iv) "Insurer" means as defined in W.S. 26-1-102(a)(xvi);

 

(v) "Affiliate of" or "affiliated with" a specific person means a person that directly, or indirectly through one (1) or more intermediaries, controls or is controlled by or is under common control with the person specified;

 

(vi) "Audit committee" means a committee established by the board of directors of an entity for the purpose of overseeing the accounting and financial reporting processes of an insurer or group of insurers and audits of financial statements of the insurer or group of insurers. The audit committee of any entity that controls a group of insurers may be deemed to be the audit committee for one (1) or more of these controlled insurers solely for the purposes of this regulation at the election of the controlling person. If an audit committee is not designated by the insurer, the insurer's entire board of directors shall constitute the audit committee;

 

(vii) "Independent board member" means as defined in W.S. 26-3-315(c);

 

(viii) "Internal control over financial reporting" means a process effected by an entity's board of directors, management and other personnel designed to provide reasonable assurance regarding the reliability of the financial statements and includes those policies and procedures that:

 

(A) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets;

 

(B) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements and that receipts and expenditures are being made only in accordance with authorizations of management and directors; and

 

(C) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material affect on the financial statements.

 

(ix) "Group of insurers" means those licensed insurers included in the reporting requirements of W.S. 26-44-101 through 26-44-117 or a set of insurers as identified by management, for the purpose of assessing the effectiveness of internal control over financial reporting;

 

(x) "SEC" means the United States Securities and Exchange Commission;

 

(xi) "Section 404" means section 404 of the Sarbanes-Oxley Act of 2002 or subsequently enacted similar federal law and the SEC's rules and regulations promulgated thereunder;

 

(xii) "Section 404 report" means management's report on internal control over financial reporting as defined by the SEC and the related attestation report of the independent certified public accountant;

 

(xiii) "SOX compliant entity" means an entity that either is required to be compliant with or voluntarily is compliant with all of the following provisions of the Sarbanes-Oxley Act of 2002 or similar provisions of subsequently enacted similar federal law:

 

(A) The preapproval requirements of Section 201;

 

(B) The audit committee independence requirements of Section 301; and

 

(C) The internal control over financial reporting requirements of Section 404.

 

26-3-303. General requirements related to filing and extensions for filing of annual audited financial reports; audit committee appointment.

 

(a) All insurers shall have an annual audit by an independent certified public accountant and shall file an audited financial report with the commissioner on or before June 1 for the immediately preceding calendar year. The commissioner may require an insurer to file an audited financial report earlier than June 1 with ninety (90) days advance notice to the insurer.

 

(b) Extensions of the June 1 filing date may be granted by the commissioner for thirty (30) day periods upon a showing by the insurer and its independent certified public accountant of the reasons for requesting the extension and a determination by the commissioner there is good cause for an extension. The request for extension shall be submitted in writing not less than ten (10) days prior to the due date in sufficient detail to permit the commissioner to make an informed decision with respect to the requested extension.

 

(c) If an extension is granted in accordance with subsection (b) of this section, a similar extension of thirty (30) days is granted to the filing of the management's report of internal control over financial reporting.

 

(d) Every insurer required to file an annual audited financial report pursuant to this section shall designate a group of individuals as constituting its audit committee. The audit committee of an entity that controls an insurer may be deemed to be the insurer's audit committee for purposes of this article at the election of the controlling person.

 

26-3-304. Contents of annual audited financial report.

 

(a) The annual audited financial report shall report the financial position of the insurer as of the end of the most recent calendar year and the results of its operations, cash flows and changes in capital and surplus for that year in conformity with statutory accounting practices prescribed or permitted by the department of insurance of the state of domicile.

 

(b) The annual audited financial report shall include the following:

 

(i) Report of an independent certified public accountant;

 

(ii) Balance sheet reporting admitted assets, liabilities, capital and surplus;

 

(iii) Statement of operations;

 

(iv) Statement of cash flows;

 

(v) Statement of changes in capital and surplus;

 

(vi) Notes to financial statements. The notes shall be those required by the appropriate National Association of Insurance Commissioners' annual statement instructions and the most recent National Association of Insurance Commissioners' accounting practices and procedures manual. The notes shall include:

 

(A) A reconciliation of differences, if any, between the audited statutory financial statements and the annual statement filed pursuant to W.S. 26-3-123 with a written description of the nature of these differences;

 

(B) Repealed By Laws 2001, Ch. 9, 2.

 

(vii) The financial statements included in the audited financial report shall be prepared in a form and using language and groupings substantially the same as the relevant sections of the annual statement of the insurer filed with the commissioner. The financial statement shall be comparative, presenting the amounts as of December 31 of the current year and the amounts as of the immediately preceding December 31.

 

26-3-305. Designation of independent certified public accountant.

 

(a) Each insurer required by this article to file an annual audited financial report shall within sixty (60) days after becoming subject to the requirement, register with the commissioner in writing the name and address of the independent certified public accountant or accounting firm retained to conduct the annual audit. Insurers not retaining an independent certified public accountant on or before April 1, 1994 shall register the name and address of their retained independent certified public accountant not less than six (6) months before the date when the first audited financial report is to be filed.

 

(b) The insurer shall obtain a letter from the accountant, and file a copy with the commissioner stating that the accountant is aware of the provisions of the insurance code and the rules and regulations of the insurance department of the state of domicile that relate to accounting and financial matters and affirming that he will express his opinion on the financial statements in terms of their conformity to the statutory accounting practices prescribed or otherwise permitted by that department, specifying the exceptions he believes appropriate.

 

(c) If an accountant who was the accountant for the immediately preceding filed audited financial report is dismissed or resigns, the insurer shall within five (5) business days notify the department of this event. The insurer shall also furnish the commissioner with a separate letter within ten (10) business days of the above notification stating whether in the twenty-four (24) months preceding the dismissal or resignation there were any disagreements with the former accountant on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the satisfaction of the former accountant would have caused him to make reference to the subject matter of the disagreement in connection with his opinion. The disagreements required to be reported under this subsection include both those resolved to the former accountant's satisfaction and those not resolved to the former accountant's satisfaction. Disagreements required to be reported under this subsection are those which occur at the decision-making level, between personnel of the insurer responsible for presentation of its financial statements and personnel of the accounting firm responsible for rendering its report. The insurer shall also in writing request and the former accountant shall furnish a letter addressed to the department with a copy to the insurer stating whether the accountant agrees with the statements contained in the insurer's letter and, if not, stating the reasons for which he does not agree.

 

26-3-306. Qualifications of independent certified public accountant.

 

(a) The commissioner shall not recognize any person or firm as a qualified independent certified public accountant if that person or firm:

 

(i) Is not in good standing with the American Institute of Certified Public Accountants and in all states in which the accountant is licensed to practice, or, for a Canadian or British company, that is not a chartered accountant; or

 

(ii) Has either directly or indirectly entered into an agreement of indemnification with respect to the audit of the insurer.

 

(b) Except as otherwise provided in this section, the commissioner shall recognize an independent certified public accountant as qualified as long as he conforms to the standards of his profession, as contained in the code of professional ethics of the American Institute of Certified Public Accountants and rules and regulations and code of ethics and rules of professional conduct of the Wyoming board of certified public accountants, or similar code.

 

(c) After January 1, 2010, the lead or coordinating audit partner having primary responsibility for the audit shall not act in that capacity for more than five (5) consecutive years. The person shall be disqualified from acting in that or a similar capacity for the same company or its insurance subsidiaries or affiliates for a period of five (5) consecutive years. An insurer may make application to the commissioner for relief from the rotation requirement on the basis of unusual circumstances. This application shall be made at least thirty (30) days before the end of the calendar year. The insurer shall file with its annual statement, the approval for relief pursuant to this subsection with the states in which it is licensed or doing business and with the NAIC. If the nondomestic state accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic format acceptable to the NAIC. The commissioner may consider the following factors in determining whether the relief should be granted:

 

(i) Number of partners, expertise of the partners or the number of insurance clients in the currently registered firm;

 

(ii) Premium volume of the insurer; or

 

(iii) Number of jurisdictions in which the insurer transacts business.

 

(d) The commissioner shall neither recognize as a qualified independent certified public accountant, nor accept any annual audited financial report, prepared in whole or in part by, any natural person who:

 

(i) Has been convicted of fraud, bribery, a violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. Sections 1961 through 1968, or any dishonest conduct or practices under federal or state law;

 

(ii) Has been found to have violated the insurance laws of this state with respect to any previous reports submitted under this article; or

 

(iii) Has demonstrated a pattern or practice of failing to detect or disclose material information in previous reports filed under the provisions of this article.

 

(e) The commissioner may hold a hearing to determine whether an independent certified public accountant is qualified and, considering the evidence presented, may rule that the accountant is not qualified for purposes of expressing his opinion on the financial statements in the annual audited financial report made pursuant to this article and require the insurer to replace the accountant with another whose relationship with the insurer is qualified within the meaning of this article.

 

(f) A qualified independent certified public accountant may enter into an agreement with an insurer to have disputes relating to an audit resolved by mediation or arbitration. However, in the event of a delinquency proceeding commenced against the insurer under chapter 28 of this code, the mediation or arbitration provisions shall operate at the option of the statutory successor.

 

(g) The commissioner shall neither recognize as a qualified independent certified public accountant, nor accept an annual audited financial report, prepared in whole or in part by an accountant who provides to an insurer, contemporaneously with the audit, the following nonaudit services:

 

(i) Bookkeeping or other services related to the accounting records or financial statements of the insurer;

 

(ii) Financial information systems design and implementation;

 

(iii) Appraisal or valuation services, fairness opinion or contribution-in-kind reports;

 

(iv) Actuarially-oriented advisory services involving the determination of amounts recorded in the financial statements. The accountant may assist an insurer in understanding the methods, assumptions and inputs used in the determination of amounts recorded in the financial statement only if it is reasonable to conclude that the services provided will not be subject to audit procedures during an audit of the insurer's financial statements. An accountant's actuary may also issue an actuarial opinion or certification on an insurer's reserves if the following conditions have been met:

 

(A) Neither the accountant nor the accountant's actuary has performed any management functions or made any management decisions;

 

(B) The insurer has competent personnel or engages a third party actuary to estimate the reserves for which management takes responsibility; and

 

(C) The accountant's actuary tests the reasonableness of the reserves after insurer's management has determined the amount of the reserves.

 

(v) Internal audit outsourcing services;

 

(vi) Management functions or human resources;

 

(vii) Broker or dealer, investment adviser or investment banking services;

 

(viii) Legal services or expert services unrelated to the audit; or

 

(ix) Any other services that the commissioner determines by regulation to be impermissible. In determining whether other services are impermissible, the commissioner shall consider the principle that the accountant may not function in the role of management, may not audit his own work and may not serve in an advocacy role for the insurer.

 

(h) Insurers having direct written and assumed premiums of less than one hundred million dollars ($100,000,000.00) in any calendar year may request an exemption from subsection (g) of this section. The insurer shall file with the commissioner a written statement discussing the reasons why the insurer should be exempt from subsection (g) of this section. If the commissioner finds, upon review of the statement, that compliance with subsection (g) of this section would constitute a financial or organizational hardship on the insurer, an exemption may be granted.

 

(j) A qualified independent certified public accountant who performs the audit may engage in other nonaudit services, including tax services, that are not described in subsection (g) of this section or that do not conflict with paragraph (g)(ix) of this section only if the activity is approved in advance by the audit committee in accordance with subsection (k) of this section.

 

(k) All auditing services and nonaudit services provided to an insurer by the qualified independent certified public accountant of the insurer shall be preapproved by the audit committee. The preapproval requirement shall be waived with respect to nonaudit services if the insurer is a SOX compliant entity or a direct or indirect wholly-owned subsidiary of a SOX compliant entity or if:

 

(i) The aggregate amount of all nonaudit services provided to the insurer constitutes not more than five percent (5%) of the total amount of fees paid by the insurer to its qualified independent certified public accountant during the fiscal year in which the nonaudit services are provided;

 

(ii) The services were not recognized by the insurer at the time of the engagement to be nonaudit services; and

 

(iii) The services are promptly brought to the attention of the audit committee and approved prior to the completion of the audit by the audit committee or by one (1) or more members of the audit committee who are the members of the board of directors to whom authority to grant such approvals has been delegated by the audit committee.

 

(m) The audit committee may delegate to one (1) or more designated members of the audit committee the authority to grant the preapprovals required under subsection (k) of this section. The decisions of any member to whom this authority is delegated shall be presented to the full audit committee at each of its scheduled meetings.

 

(n) The commissioner shall not recognize an independent certified public accountant as qualified for a particular insurer if a member of the board, president, chief executive officer, controller, chief financial officer, chief accounting officer or any person serving in an equivalent position for that insurer was employed by the independent certified public accountant and participated in the audit of that insurer during the one (1) year period preceding the date that the most current statutory opinion is due. This subsection shall only apply to partners and senior managers involved in the audit. An insurer may make application to the commissioner for relief from this subsection on the basis of unusual circumstances. The insurer shall file with its annual statement filing the approval for relief under this subsection with the states that it is licensed in or doing business in and with the NAIC. If the nondomestic state accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic format acceptable to the NAIC.

 

26-3-307. Consolidated or combined audits.

 

 

(a) An insurer may make written application to the commissioner for approval to file audited consolidated or combined financial statements in lieu of separate annual audited financial statements if the insurer is part of a group of insurance companies which utilizes a pooling or one hundred percent (100%) reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer cedes all of its direct and assumed business to the pool. In those cases, a columnar consolidating or combining supplemental schedules shall be filed with the report, as follows:

 

(i) Amounts shown on the consolidated or combined audited financial report shall be shown on the supplemental schedules;

 

(ii) Amounts for each insurer subject to this section shall be stated separately;

 

(iii) Noninsurance operations may be shown on the supplemental schedules on a combined or individual basis;

 

(iv) Explanations of consolidating and eliminating entries shall be included;

 

(v) A reconciliation shall be included of any differences between the amounts shown in the individual insurer columns of the supplemental schedules and comparable amounts shown on the annual statements of the insurers.

 

26-3-308. Scope of audit and report of independent certified public accountant.

 

Financial statements furnished pursuant to W.S. 26-3-304 shall be examined by the independent certified public accountant. The audit of the insurer's financial statements shall be conducted in accordance with generally accepted auditing standards. In accordance with Accumulation of Audit Standards (AU) Section 319 of the professional standards of the American Institute of Certified Public Accountants, Consideration of Internal Control in a Financial Statement Audit, the independent certified public accountant shall obtain an understanding of internal control sufficient to plan the audit. To the extent required by AU 319, for those insurers required to file a management's report of internal control over financial reporting pursuant to W.S. 26-3-317, the independent certified public accountant shall consider the most recently available report in planning and performing the audit of the statutory financial statements. Consideration shall be given to the procedures illustrated in the financial condition examiner's handbook promulgated by the National Association of Insurance Commissioners as the independent certified public accountant deems necessary.

 

26-3-309. Notification of adverse financial condition.

 

(a) An insurer required to furnish an annual audited financial report shall require the independent certified public accountant to report, in writing, within five (5) business days to the board of directors or its audit committee any determination supported by adequate research conducted by the independent certified public accountant:

 

(i) That the insurer has materially misstated its financial condition reported to the commissioner as of the balance sheet date currently under audit; or

 

(ii) That the insurer does not meet the minimum capital and surplus requirement of this code as of that date.

 

(b) An insurer which has received a report pursuant to subsection (a) of this section shall forward a copy of the report to the commissioner within five (5) business days of receipt of the report and shall provide the independent certified public accountant making the report with evidence of the report being furnished to the commissioner.

 

(c) Upon receiving the report from the insurer the commissioner shall notify the independent certified public accountant of his receipt of the report. The independent certified public accountant shall furnish the commissioner with a copy of the report within five (5) business days after the insurer is required to forward the report to the commissioner, unless the commissioner has previously acknowledged receipt of the report from the insurer.

 

(d) Except for any act constituting negligence or malpractice in the preparation of the annual audited financial report specified in W.S. 26-3-304, no independent certified public accountant shall be liable in any manner to any person for any statement made in connection with subsection (a) of this section if the statement is made in good faith in compliance with subsection (a) of this section.

 

(e) If the accountant, subsequent to the date of the audited financial report filed pursuant to this article, becomes aware of facts which might have affected his report, the accountant shall take the action prescribed in Volume 1, Section AU 561 of the Professional Standards of the American Institute of Certified Public Accountants, and other action as prescribed by the commissioner by rule.

 

26-3-310. Communication of internal control related matters noted in an audit.

 

In addition to the annual audited financial report, each insurer shall furnish the commissioner with a written communication as to any unremediated material weakness, as defined in statement on auditing standard 60 or its replacement, in its internal control over financial reporting noted by the accountant during the audit. Such communication shall be prepared by the accountant within sixty (60) days after the filing of the annual audited financial report and shall contain a description of any unremediated material weakness as of December 31 immediately preceding in the insurer's internal control over financial reporting noted by the accountant during the course of the audit of the financial statements. If no unremediated material weaknesses were noted, the communication shall so state. The insurer shall provide a description of remedial actions taken or proposed to correct unremediated material weaknesses, if the actions are not described in the accountant's communication.

 

26-3-311. Accountant's letter of qualifications.

 

 

(a) An accountant shall furnish the insurer in connection with, and for inclusion in, the filing of the annual audited financial report, a letter stating:

 

(i) That the accountant is independent with respect to the insurer and conforms to the standards of his profession as contained in the code of professional ethics and pronouncements of the American Institute of Certified Public Accountants and the rules of professional conduct of the Wyoming board of certified public accountants, or similar code;

 

(ii) The background and experience in general, and the experience in audits of insurers of the staff assigned to the engagement and whether each is an independent certified public accountant. Nothing within this article shall be construed as prohibiting the accountant from utilizing staff as he deems appropriate where use is consistent with the standards prescribed by generally accepted auditing standards;

 

(iii) That the accountant understands the annual audited financial report and his opinion on the report will be filed in compliance with this article, and that the commissioner will be relying on this information in the monitoring and regulation of the financial position of insurers;

 

(iv) That the accountant consents to the requirements of W.S. 26-3-312, and that the accountant consents and agrees to make available for review by the commissioner, his designee or his appointed agent, the workpapers, as defined in W.S. 26-3-312;

 

(v) A representation that the accountant is properly licensed by an appropriate state licensing authority and is a member in good standing in the American Institute of Certified Public Accountants;

 

(vi) A representation that the accountant is in compliance with the requirements of W.S. 26-3-306.

 

26-3-312. Definition, availability and maintenance of independent certified public accountants' workpapers.

 

(a) Workpapers are the records kept by the independent certified public accountant of the procedures followed, the tests performed, the information obtained, and the conclusions reached pertinent to his audit of the financial statements of an insurer. Workpapers may include audit planning documentation, work programs, analyses, memoranda, letters of confirmation and representation, abstracts of company documents and schedules or commentaries prepared or obtained by the independent certified public accountant in the course of his audit of the financial statements of an insurer and which support his opinion of those financial statements.

 

(b) Every insurer required to file an audited financial report pursuant to this article shall require the accountant to make available for review by department examiners, all workpapers prepared in the conduct of his audit and any communications related to the audit between the accountant and the insurer, at the offices of the insurer, the department or at any other reasonable place designated by the commissioner. The insurer shall require that the accountant retain the audit workpapers and communications until the department has filed a report on examination covering the period of the audit but no longer than seven (7) years from the date of the audit report.

 

(c) In the conduct of the periodic review by the department examiners under this section, it shall be agreed that photocopies of pertinent audit workpapers may be made and retained by the department. Such reviews by the department examiners shall be considered investigations and all workpapers and communications obtained during the course of the investigations shall be afforded the same confidentiality as other examination workpapers generated by the department.

 

26-3-313. Exemptions and effective dates.

 

(a) Upon written application of any insurer, the commissioner may grant an exemption from compliance with any or all provisions of this article if the commissioner finds, upon review of the application, that compliance with this article would constitute a financial or organizational hardship upon the insurer. Exemptions may be granted at any time for a specified period. Within ten (10) days from a denial of an insurer's written request for an exemption from this article, the insurer may request in writing a hearing on its application for an exemption. The hearing shall be held in accordance with the rules and regulations of the department pertaining to administrative hearing procedures.

 

(b) Repealed by Laws 2009, Ch. 94, 3.

 

(c) Repealed by Laws 2009, Ch. 94, 3.

 

26-3-314. Canadian and British companies.

 

In the case of Canadian and British insurers, the annual audited financial report shall be defined as the annual statement of total business on the form filed by such companies with their supervision authority duly audited by an independent chartered accountant. For Canadian and British insurers, the letter required in W.S. 26-3-305(b) shall state that the accountant is aware of the requirements relating to the annual audited financial report filed with the commissioner pursuant to W.S. 26-3-303 and shall affirm that the opinion expressed is in conformity with those requirements.

 

26-3-315. Requirements for audit committees.

 

(a) An audit committee shall be directly responsible for the appointment, compensation and oversight of the work of any accountant, including resolution of disagreements between management and the accountant regarding financial reporting, employed for the purpose of preparing or issuing the audited financial report or related work pursuant to this article and each accountant shall report directly to the audit committee.

 

(b) Each member of the audit committee shall be a member of the board of directors of the insurer or a member of the board of directors of an entity elected pursuant to W.S. 26-3-302(a)(vi) and 26-3-315(e).

 

(c) In order to be considered independent for purposes of this section, a member of the audit committee shall not, other than in his capacity as a member of the audit committee, the board of directors or any other board committee, accept any consulting, advisory or other compensatory fee from the entity or be an affiliated person of the entity or any subsidiary thereof. If any other provision of law requires board participation by otherwise nonindependent members, that law shall prevail and those members may participate in the audit committee and be designated as independent for audit committee purposes unless they are an officer or employee of the insurer or one (1) of its affiliates.

 

(d) If a member of the audit committee ceases to be independent for reasons outside the member's reasonable control, that person, with notice by the responsible entity to the state, may remain an audit committee member of the responsible entity until the earlier of the next annual meeting of the responsible entity or one (1) year from the occurrence of the event that caused the member to be no longer independent.

 

(e) To exercise the election of the controlling person to designate the audit committee for purposes of this article, the ultimate controlling person shall provide written notice to the commissioners of the affected insurers. Notification shall be made timely prior to the issuance of the statutory audit report and include a description of the basis for the election. The election may be changed through notice to the commissioner by the insurer which shall include a description of the basis for the change. The election shall remain in effect for perpetuity, until rescinded.

 

(f) The audit committee shall require the accountant that performs for an insurer any audit required by this article to timely report to the audit committee in accordance with the requirements of Statement on Auditing Standards 61, Communication with Audit Committees, or its replacement, including:

 

(i) All significant accounting policies and material permitted practices;

 

(ii) All material alternative treatments of financial information within statutory accounting principles that have been discussed with management officials of the insurer, ramifications of the use of the alternative disclosures and treatments and the treatment preferred by the accountant; and

 

(iii) Other material written communications between the accountant and the management of the insurer, such as any management letter or schedule of unadjusted differences.

 

(g) If an insurer is a member of an insurance holding company system, the reports required under subsection (f) of this section may be provided to the audit committee on an aggregate basis for insurers in the holding company system, provided that any substantial differences among insurers in the system are identified to the audit committee.

 

(h) The proportion of independent audit committee members shall meet or exceed the following criteria, except that the commissioner has authority afforded by state law to require the entity's board to enact improvements to the independence of the audit committee membership if the insurer is in any RBC action level event, meets one (1) or more of the standards of an insurer deemed to be in hazardous financial condition or otherwise exhibits qualities of a troubled insurer:

 

(i) For insurers with prior calendar year direct written and assumed premiums of five hundred million dollars ($500,000,000.00) or less the audit committee shall have a majority of members that are independent and the insurers are encouraged to structure their audit committees with at least seventy-five percent (75%) of the audit committee members being independent;

 

(ii) For insurers with prior calendar year direct written and assumed premiums of more than five hundred million dollars ($500,000,000.00) at least seventy-five percent (75%) of the members of the audit committee shall be independent;

 

(iii) For purposes of this subsection, prior calendar year direct written and assumed premiums shall be the combined total of direct premiums and assumed premiums from nonaffiliates for the reporting entities.

 

(j) An insurer with direct written and assumed premiums, excluding premiums reinsured with the federal crop insurance corporation and federal flood program, less than five hundred million dollars ($500,000,000.00) may make application to the commissioner for a waiver from the requirements of this section based on hardship. The insurer shall file, with its annual statement filing, the approval for relief from this section with the states that it is licensed in or doing business in and the National Association of Insurance Commissioners. If the nondomestic state accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic format acceptable to the NAIC.

 

(k) This section shall not apply to foreign or alien insurers licensed in this state or an insurer that is a SOX compliant entity or a direct or indirect wholly-owned subsidiary of a SOX compliant entity, as defined in W.S. 26-3-302(a)(xiii).

 

(m) An insurer or group of insurers that is not required to have independent audit committee members or only a majority of independent audit committee members because the total written and assumed premium is below the threshold and subsequently becomes subject to any of the independence requirements due to changes in premiums shall have one (1) year following the year the threshold is exceeded to comply with the independence requirements. An insurer that becomes subject to any of the independence requirements as a result of a business combination shall have one (1) calendar year following the date of acquisition or combination to comply with the independence requirements.

 

26-3-316. Conduct of insurer in connection with preparation of required reports and documents.

 

(a) No director or officer of an insurer shall, directly or indirectly:

 

(i) Make or cause to be made a materially false or misleading statement to an accountant in connection with any audit, review or communication required under this article; or

 

(ii) Omit to state or cause another person to omit to state any material fact necessary in order to make statements made, in light of the circumstances under which the statements were made, not misleading to an accountant in connection with any audit, review or communication required under this article.

 

(b) No officer or director of an insurer or any other person acting under the direction thereof shall directly or indirectly take any action to coerce, manipulate, mislead or fraudulently influence any accountant engaged in the performance of an audit pursuant to this article if that person knew or should have known that the action, if successful, could result in rendering the insurer's financial statements materially misleading. For purposes of this subsection, actions that, if successful, could result in rendering the insurer's financial statements materially misleading include, but are not limited to, actions taken at any time with respect to the professional engagement period to coerce, manipulate, mislead or fraudulently influence an accountant to:

 

(i) Issue or reissue a report on an insurer's financial statements that is not warranted in the circumstances due to material violations of statutory accounting principles prescribed by the commissioner, generally accepted auditing standards or other professional or regulatory standards;

 

(ii) Not perform any audit, review or other procedures required by generally accepted auditing standards or other professional standards;

 

(iii) Not withdraw an issued report; or

 

(iv) Not communicate matters to an insurer's audit committee.

 

(c) Violation of this section shall be punishable as provided in W.S. 26-1-107.

 

26-3-317. Management's report of internal control over financial reporting.

 

(a) Every insurer required to file an audited financial report pursuant to this article that has annual direct written and assumed premiums, excluding premiums reinsured with the federal crop insurance corporation and federal flood program, of five hundred million dollars ($500,000,000.00) or more shall prepare a report of the insurer's or group of insurers' internal control over financial reporting. The report shall be filed with the commissioner along with the communication of internal control related matters noted in an audit described in W.S. 26-3-310. Management's report of internal control over financial reporting shall be as of the immediately preceding December 31.

 

(b) Notwithstanding the premium threshold in subsection (a) of this section, the commissioner may require an insurer to file management's report of internal control over financial reporting if the insurer is in any RBC level event or meets any one (1) or more of the standards of an insurer deemed to be in hazardous financial condition as defined in W.S. 26-3-116.

 

(c) An insurer or group of insurers that is directly subject to section 404, part of a holding company system whose parent is directly subject to section 404, not directly subject to section 404 but is a SOX compliant entity or a member of a holding company system whose parent is not directly subject to section 404 but is a SOX compliant entity, may file its or its parent's section 404 report and an addendum in satisfaction of this section provided that those internal controls of the insurer or group of insurers having material impact on the preparation of the insurer's or group of insurers' audited statutory financial statements were included in the scope of the section 404 report. The addendum shall be a positive statement by management that there are no material processes with respect to the preparation of the insurer's or group of insurers' audited financial statements excluded from the section 404 report. If there are internal controls of the insurer or group of insurers that have a material impact on the preparation of the insurer's or group of insurers' audited statutory financial statements and those internal controls were not included in the scope of the section 404 report, the insurer or group of insurers may either file a report under this section or the section 404 report and a report under this section for those internal controls that have a material impact on the preparation of the insurer's or group of insurers' audited statutory financial statements not covered by the section 404 report.

 

(d) A management's report of internal control over financial reporting shall include:

 

(i) A statement that management is responsible for establishing and maintaining adequate internal control over financial reporting;

 

(ii) A statement that management has established internal control over financial reporting and an assertion to the best of management's knowledge and belief, after diligent inquiry, as to whether its internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles;

 

(iii) A statement that briefly describes the approach or processes by which management evaluated the effectiveness of its internal control over financial reporting;

 

(iv) A statement that briefly describes the scope of work that is included and whether any internal controls were excluded;

 

(v) Disclosure of any unremediated material weaknesses in the internal control over financial reporting identified by management as of the immediately preceding December 31. Management shall not conclude that the internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles if there is one (1) or more unremediated material weakness in its internal controls over financial reporting;

 

(vi) A statement regarding the inherent limitations of internal control systems; and

 

(vii) Signatures of the chief executive officer and the chief financial officer or the equivalent position.

 

(e) Management shall document and make available upon financial condition examination the basis upon which its assertions required in subsection (d) of this section are made. Management may base its assertions, in part, upon its review, monitoring and testing of internal controls undertaken in the normal course of its activities. Management shall have discretion as to the nature of the internal control framework used and the nature and extent of documentation in order to make its assertions in a cost effective manner and may include assembly of or reference to existing documentation. Management's report on internal control over financial reporting and any documentation provided in support thereof during the course of a financial conditions examination shall be kept confidential by the department.

 

(f) The requirements of this section are effective beginning with the reporting period ending December 31, 2010 and each year thereafter. An insurer or group of insurers that is not required to file a report because the total written premium is below the threshold and subsequently becomes subject to the reporting requirements shall have two (2) years following the year the threshold is exceeded to file a report. An insurer that becomes subject to any of the reporting requirements as a result of a business combination shall have two (2) calendar years following the date of acquisition or combination to comply with the reporting requirements.

 

ARTICLE 4 - DISCLOSURE OF MATERIAL TRANSACTIONS

 

26-3-401. Report of material transactions.

 

(a) Every insurer domiciled in this state, and effective July 1, 1996, every authorized foreign insurer not subject to a substantially similar provision in its domicile, shall file a report with the commissioner disclosing material acquisitions and dispositions of assets or material nonrenewals, cancellations or revisions of ceded reinsurance agreements unless the acquisitions and dispositions of assets or material nonrenewals, cancellations or revisions of ceded reinsurance agreements have been submitted to the commissioner for review, approval or information purposes pursuant to other provisions of the insurance code, department regulations or other requirements.

 

(b) The report required in subsection (a) of this section is due within fifteen (15) days after the end of the calendar month in which any of the transactions occur.

 

(c) One (1) complete copy of the report, including any exhibits or other attachments filed as part of the report, shall be filed with:

 

(i) The department; and

 

(ii) The National Association of Insurance Commissioners.

 

(d) All reports obtained by or disclosed to the commissioner pursuant to this article shall be given confidential treatment, and shall not be made public by the commissioner, the National Association of Insurance Commissioners, or any other person, except:

 

(i) To persons as authorized by and in accordance with the provisions of W.S. 26-2-113(d);

 

(ii) Upon the prior written consent of the insurer to which it pertains; or

 

(iii) If the commissioner, after giving the insurer who would be affected, notice and an opportunity to be heard, determines the interest of policyholders, shareholders or the public will be served by publication of the report, the commissioner may publish all or any part of the report he deems appropriate.

 

26-3-402. Acquisitions and dispositions of assets.

 

 

(a) Subject to subsection (c) of this section, asset acquisitions subject to this article include every purchase, lease, exchange, merger, consolidation, succession or other acquisition other than the construction or development of real property by or for the reporting insurer or the acquisition of materials for such purpose.

 

(b) Subject to subsection (c) of this section, asset dispositions subject to this article include every sale, lease, exchange, merger, consolidation, mortgage, assignment for the benefit of creditors or otherwise, abandonment, destruction or other disposition.

 

(c) No acquisition or disposition of assets shall be reported pursuant to W.S. 26-3-401 if the acquisition or disposition is not material. A material acquisition, disposition or the aggregate of any series of related acquisitions or dispositions during any thirty (30) day period, is one which is:

 

(i) Nonrecurring;

 

(ii) Not in the ordinary course of business; and

 

(iii) Involves more than five percent (5%) of the reporting insurer's total admitted assets as reported in its most recent statutory statement filed with the insurance department of the insurer's state of domicile.

 

(d) The following information is required to be disclosed in any report of a material acquisition or disposition of assets:

 

(i) Date of the transaction;

 

(ii) Manner of acquisition or disposition;

 

(iii) Description of the assets involved;

 

(iv) Nature and amount of the consideration given or received;

 

(v) Purpose of, or reason for, the transaction;

 

(vi) Manner by which the amount of consideration was determined;

 

(vii) Gain or loss recognized or realized as a result of the transaction; and

 

(viii) Name of the person from whom the assets were acquired or to whom they were disposed.

 

(e) Insurers are required to report material acquisitions and dispositions on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers which utilizes a pooling arrangement or one hundred percent (100%) reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if:

 

(i) The insurer has less than one million dollars ($1,000,000.00) total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement; and

 

(ii) The net income of the business not subject to the pooling arrangement represents less than five percent (5%) of the insurer's capital and surplus.

 

26-3-403. Nonrenewals, cancellations or revisions of ceded reinsurance agreements.

 

 

(a) No nonrenewal, cancellation or revision of ceded reinsurance agreements need be reported pursuant to W.S. 26-3-401 if the nonrenewal, cancellation or revision is not material. For purposes of this article, a material nonrenewal, cancellation or revision is one that affects for property and casualty business, including accident and health business when written as such, more than fifty percent (50%) of an insurer's ceded written premium, or for life, annuity and accident and health business, more than fifty percent (50%) of the total reserve credit taken for business ceded, on an annualized basis as indicated in the insurer's most recently filed statutory statement. No filing is required if the insurer's ceded written premium or the total reserve credit taken for business ceded represents, on an annualized basis, less than ten percent (10%) of direct plus assumed written premium or ten percent (10%) of the statutory reserve requirement prior to any cession, respectively.

 

(b) Subject to subsection (a) of this section, a report shall be filed without regard to which party has initiated the nonrenewal, cancellation or revision of ceded reinsurance whenever one (1) or more of the following conditions exist:

 

(i) The entire cession has been canceled, nonrenewed or revised and ceded indemnity and loss adjustment expense reserves after any nonrenewal, cancellation or revision represent less than fifty percent (50%) of the comparable reserves that would have been ceded had the nonrenewal, cancellation or revision not occurred;

 

(ii) An authorized or accredited reinsurer has been replaced on an existing cession by an unauthorized reinsurer; or

 

(iii) Collateral requirements previously established for unauthorized reinsurers have been reduced, including, but not limited to, the requirement to collateralize incurred but not reported claim reserves being waived with respect to one (1) or more unauthorized reinsurers newly participating in an existing cession.

 

(c) Subject to subsection (a) of this section, for purposes of paragraphs (b)(ii) and (iii) of this section, a report shall be filed if the result of the revision affects more than ten percent (10%) of the cession.

 

(d) The following information is required to be disclosed in any report of a material nonrenewal, cancellation or revision of ceded reinsurance agreements:

 

(i) Effective date of the nonrenewal, cancellation or revision;

 

(ii) The description of the transaction with an identification of the initiator;

 

(iii) Purpose of, or reason for, the transaction; and

 

(iv) If applicable, the identity of the replacement reinsurers.

 

(e) Insurers are required to report all material nonrenewals, cancellations or revisions of ceded reinsurance agreements on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers which utilizes a pooling arrangement or one hundred percent (100%) reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than one million dollars ($1,000,000.00) total direct plus assumed written premiums during a calendar year which are not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than five percent (5%) of the insurer's capital and surplus.