AN
ACT Relating to control of domestic insurance companies; and amending RCW
48.31B.025.
BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
48.31B.025 and 1993 c 462 s 6 are each amended to read as follows:
(1)
Every insurer authorized to do business in this state that is a member of an
insurance holding company system shall register with the commissioner, except a
foreign insurer subject to registration requirements and standards adopted by
statute or regulation in the jurisdiction of its domicile that are
substantially similar to those contained in:
(a)
This section;
(b)
RCW 48.31B.030 (1)(a), (2), and (3); and
(c)
Either RCW 48.31B.030(1)(b) or a provision such as the following: Each
registered insurer shall keep current the information required to be disclosed
in its registration statement by reporting all material changes or additions
within fifteen days after the end of the month in which it learns of each
change or addition.
An
insurer subject to registration under this section shall register within
fifteen days after it becomes subject to registration, and annually thereafter
by May 15th of each year for the previous calendar year, unless the
commissioner for good cause shown extends the time for registration, and then
within the extended time. The commissioner may require an insurer authorized
to do business in the state that is a member of a holding company system, but
that is not subject to registration under this section, to furnish a copy of the
registration statement, the summary specified in subsection (3) of this
section, or other information filed by the insurance company with the insurance
regulatory authority of its domiciliary jurisdiction.
(2)
An insurer subject to registration shall file the registration statement on a
form prescribed by the commissioner, containing the following current
information:
(a)
The capital structure, general financial condition, ownership, and management
of the insurer and any person controlling the insurer;
(b)
The identity and relationship of every member of the insurance holding company
system;
(c)
The following agreements in force, and transactions currently outstanding or
that have occurred during the last calendar year between the insurer and its affiliates:
(i)
Loans, other investments, or purchases, sales, or exchanges of securities of
the affiliates by the insurer or of the insurer by its affiliates;
(ii)
Purchases, sales, or exchange of assets;
(iii)
Transactions not in the ordinary course of business;
(iv)
Guarantees or undertakings for the benefit of an affiliate that result in an
actual contingent exposure of the insurer's assets to liability, other than
insurance contracts entered into in the ordinary course of the insurer's
business;
(v)
All management agreements, service contracts, and cost-sharing arrangements;
(vi)
Reinsurance agreements;
(vii)
Dividends and other distributions to shareholders; and
(viii)
Consolidated tax allocation agreements;
(d)
Any pledge of the insurer's stock, including stock of subsidiary or controlling
affiliate, for a loan made to a member of the insurance holding company system;
(e)
Other matters concerning transactions between registered insurers and
affiliates as may be included from time to time in registration forms adopted
or approved by the commissioner.
(3)
Registration statements must contain a summary outlining all items in the
current registration statement representing changes from the prior registration
statement.
(4)
No information need be disclosed on the registration statement filed under
subsection (2) of this section if the information is not material for the
purposes of this section. Unless the commissioner by rule or order provides
otherwise, sales, purchases, exchanges, loans or extensions of credit,
investments, or guarantees involving one-half of one percent or less of an
insurer's admitted assets as of the 31st day of the previous December are not
material for purposes of this section.
(5)(a)
Subject to RCW 48.31B.030(2), each registered insurer shall report to the
commissioner all dividends and other distributions to shareholders within five
business days after their declaration and at least fifteen business days before
payment, and shall provide the commissioner such other information as may be
required by rule.
(b)
If the commissioner determines that a registered insurer's surplus as regards
policyholders is not reasonable in relation to the insurer's outstanding
liabilities and adequate to its financial needs, the commissioner may order the
registered insurance company to limit or discontinue the payment of stockholder
dividends until such time as the surplus is adequate.
(6)
A person within an insurance holding company system subject to registration
shall provide complete and accurate information to an insurer, where the
information is reasonably necessary to enable the insurer to comply with this
chapter.
(7)
The commissioner shall terminate the registration of an insurer that
demonstrates that it no longer is a member of an insurance holding company
system.
(8)
The commissioner may require or allow two or more affiliated insurers subject
to registration under this section to file a consolidated registration
statement.
(9)
The commissioner may allow an insurer authorized to do business in this state
and part of an insurance holding company system to register on behalf of an
affiliated insurer that is required to register under subsection (1) of this
section and to file all information and material required to be filed under
this section.
(10)
This section does not apply to an insurer, information, or transaction if and
to the extent that the commissioner by rule or order exempts the insurer,
information, or transaction from this section.
(11)
A person may file with the commissioner a disclaimer of affiliation with an
authorized insurer, or an insurer or a member of an insurance holding company
system may file the disclaimer. The person making such a filing with the
commissioner shall at the same time deliver a complete copy of the filing to
each domestic insurer which is the subject of such filing. The disclaimer
must fully disclose all material relationships and bases for affiliation
between the person and the insurer as well as the basis for disclaiming the
affiliation. After a disclaimer has been filed, the insurer is relieved of any
duty to register or report under this section that may arise out of the
insurer's relationship with the person unless and until the commissioner
disallows the disclaimer. The commissioner shall disallow the ((a [the]))
disclaimer only after furnishing all parties in interest with notice and
opportunity to be heard and after making specific findings of fact to support
the disallowance.
(12) Failure to file a registration statement or a summary of the
registration statement required by this section within the time specified for
the filing is a violation of this section.
