Insurer required to notify Commissioner of intent to enter into certain transactions with affiliate
- approval of transactions
1.Except as otherwise provided in subsection 2, a domestic insurer shall not enter into any of the following transactions with an affiliate unless the insurer has notified the Commissioner in writing of its intention to enter into the transaction at least 30 days previously, or such shorter period as the Commissioner may permit, and the Commissioner has not disapproved it within that period:
(a)A sale, purchase, exchange, loan or extension of credit, guaranty or investment if the transaction equals at least:
(1)With respect to an insurer other than a life insurer, the lesser of 3 percent of the insurer’s admitted assets or 25 percent of surplus as regards policyholders; or
(2)With respect to a life insurer, 3 percent of the insurer’s admitted assets,
(b)A loan or extension of credit to any person who is not an affiliate, if the insurer makes the loan or extension of credit with the agreement or understanding that the proceeds of the transaction, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of, or to make investments in, any affiliate of the insurer if the transaction equals at least:
(1)With respect to insurers other than life insurers, the lesser of 3 percent of the insurer’s admitted assets or 25 percent of surplus as regards policyholders; or
(2)With respect to life insurers, 3 percent of the insurer’s admitted assets,
(c)A pooling agreement or other agreement for reinsurance or a modification thereto in which the premium for reinsurance or a change in the insurer’s liabilities equals at least 5 percent of the insurer’s surplus as regards policyholders as of December 31 next preceding the transaction, including an agreement which requires as consideration the transfer of assets from an insurer to a nonaffiliate, if an agreement or understanding exists between the insurer and nonaffiliate that any portion of those assets will be transferred to an affiliate of the insurer.
(d)An agreement for management, agreement to allocate taxes, contract for service, guarantee or arrangement to share costs.
(e)A guaranty made by a domestic insurer, regardless of whether the guaranty is quantifiable as to amount, except that a guaranty that is quantifiable as to amount is not subject to the provisions of this subsection unless the guaranty exceeds the lesser of one-half of 1 percent of the admitted assets of the domestic insurer or 10 percent of its surplus as regards policyholders as of December 31 next preceding the guaranty.
(f)Except as otherwise provided in subsection 4, a direct or indirect acquisition of or investment in a person who controls the domestic insurer or an affiliate of the domestic insurer in an amount that, when added to its present holdings, exceeds 2.5 percent of the domestic insurer’s surplus to policyholders.
(g)A material transaction, specified by regulation, which the Commissioner determines may adversely affect the interest of the insurer’s policyholders.
2.A domestic insurer shall not amend or modify any agreement with an affiliate to enter into a transaction subject to the provisions of subsection 1 unless the insurer notifies the Commissioner. The notice must be given not less than 30 days before the effective date of the amendment or modification and must include, without limitation, the reasons for the amendment or modification and the financial impact, if any, of the amendment or modification on the domestic insurer. Upon receipt of a notice pursuant to this subsection, the Commissioner shall determine whether the amendment or modification is subject to the provisions of subsection 1 and notify the domestic insurer of the Commissioner’s determination within 30 days. If the Commissioner does not give such notice within 30 days after receiving the notice from the domestic insurer, the amendment or modification shall be deemed to be approved.
3.This section does not authorize or permit any transaction which, in the case of an insurer not an affiliate, would be contrary to law.
4.The provisions of paragraph (f) of subsection 1 do not apply to a direct or indirect acquisition of or investment in:
(a)A subsidiary acquired in accordance with this section or NRS 692C.140; or
(b)A nonsubsidiary insurance affiliate that is subject to the provisions of this chapter.
Section 692C.363 — Insurer required to notify Commissioner of intent to enter into certain transactions with affiliate; approval of transactions; exceptions.,