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304.24-415 Report disclosing material acquisitions and dispositions of
assets, nonrenewals, cancellations, or revisions of ceded reinsurance
agreements -- Exceptions.
(1)
(2)
(a)
Every insurer domiciled in this state 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 this
chapter.
(b) The report required in paragraph (a) of this subsection is due within
fifteen (15) days after the end of the calendar month in which any of the
foregoing transactions occur.
(c) One (1) complete copy of the report, including any exhibits or other
attachments, shall be filed with:
1.
The insurance department of the insurer's state of domicile; and
2.
The National Association of Insurance Commissioners.
(d) All reports obtained by or disclosed to the commissioner pursuant to this
section shall be given confidential treatment and shall not be subject to
subpoena and shall not be made public by the commissioner, the National
Association of Insurance Commissioners, or any other person, except to
insurance departments of other states, without the prior written consent of
the insurer to which it pertains unless the commissioner, after giving the
insurer who would be affected notice and opportunity to be heard,
determines that the interest of policyholders, shareholders, or the public
will be served by publication, in which event the commissioner may
publish all or any part in the manner the commissioner may deem
appropriate.
(a) No acquisitions or dispositions of assets need be reported pursuant to
subsection (1) of this section if the acquisitions or dispositions are not
material. For purposes of this section, a material acquisition, or the
aggregate of any series of related acquisitions during any thirty (30) day
period, is one that is nonrecurring and not in the ordinary course of
business and 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.
(b) 1.
Asset acquisitions subject to this section 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.
2.
Asset dispositions subject to this section include every sale, lease,
exchange, merger, consolidation, mortgage, hypothecation,
assignment (whether for the benefit of creditors or otherwise),
(c)
(3)
(a)
abandonment, destruction, or other disposition.
1.
The following information is required to be disclosed in any report of
a material acquisition or disposition of assets:
a.
Date of the transaction;
b.
Manner of acquisition or disposition;
c.
Description of the assets involved;
d.
Nature and amount of the consideration given or received;
e.
Purpose of, or reason for, the transaction;
f.
Manner by which the amount of consideration was determined;
g.
Gain or loss recognized or realized as a result of the
transaction; and
h.
Names of the persons from which the assets were acquired or
to whom they were disposed.
2.
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 the insurer has less than
one million dollars ($1,000,000) total direct plus assumed written
premiums during a calendar year that are not subject to a pooling
arrangement and the net income of the business not subject to the
pooling arrangement represents less than five percent (5%) of the
insurer's capital and surplus.
No nonrenewals, cancellations, or revisions of ceded reinsurance
agreements need be reported pursuant to subsection (1) of this section if
the nonrenewals, cancellations or revisions are not material. For purposes
of this section, a material nonrenewal, cancellation, or revision is one that
affects:
1.
As respects property and casualty business, including accident and
health business written by a property and casualty insurer:
a.
More than fifty percent (50%) of the insurer's total ceded
written premium; or
b.
More than fifty percent (50%) of the insurer's total ceded
indemnity and loss adjustment reserves.
2.
As respects 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
recent annual statement.
3.
As respects either property and casualty or life, annuity, and
accident and health business, either of the following events shall
constitute a material revision which must be reported:
a.
An authorized reinsurer representing more than ten percent
(b)
(c)
(d)
(10%) of a total cession is replaced by one (1) or more
unauthorized reinsurers; or
b.
Previously established collateral requirements have been
reduced or waived as respects one (1) or more unauthorized
reinsurers representing collectively more than ten percent
(10%) of a total cession.
No filing shall be required if:
1.
As respects property and casualty business, including accident and
health business written by a property and casualty insurer, the
insurer's total ceded written premium represents, on an annualized
basis, less than ten percent (10%) of its total written premium for
direct and assumed business; or
2.
As respects life, annuity, and accident and health business, the total
reserve credit taken for business ceded represents, on an
annualized basis, less than ten percent (10%) of the statutory
reserve requirements prior to any cession.
The following information is required to be disclosed in any report of a
material nonrenewal, cancellation, or revision of ceded reinsurance
agreements:
1.
Effective date of the nonrenewal, cancellation, or revision;
2.
The description of the transaction with an identification of the
initiator thereof;
3.
Purpose of, or reason for, the transaction; and
4.
If applicable, the identity of the replacement reinsurers.
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 a pool if the insurer has less than one million dollars ($1,000,000) total
direct plus assumed written premiums during a calendar year that are not
subject to a pooling arrangement and the net income of the business not
subject to the pooling arrangement represents less than five percent (5%)
of the insurer's capital and surplus.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1345, effective July 15, 2010. -Created 1996 Ky. Acts ch. 289, sec. 5, effective July 15, 1996.
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