Revision: May 11, 2017, 1:46 p.m.
HB 310 - VERSION ADOPTED BY BOTH BODIES
8Mar2017... 0032h
2017 SESSION
17-0367
01/03
HOUSE BILL 310
AN ACT relative to insurance group-wide supervision and relative to supervisory college confidentiality.
SPONSORS: Rep. Butler, Carr. 7
COMMITTEE: Commerce and Consumer Affairs
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This bill establishes group-wide supervision of internationally active insurance groups. This bill also ensures the confidentiality of information received during a supervisory college.
This bill is a request of the insurance department.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
8Mar2017... 0032h 17-0367
01/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Seventeen
AN ACT relative to insurance group-wide supervision and relative to supervisory college confidentiality.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Section; Insurance Holding Companies; Group-wide Supervision of Internationally Active Insurance Groups. Amend RSA 401-B by inserting after section 7 the following new section:
401-B:7-a Group-wide Supervision of Internationally Active Insurance Groups.
I. The commissioner is authorized to act as the group-wide supervisor for any internationally active insurance group in accordance with the provisions of this section. However, the commissioner may otherwise acknowledge another regulatory official as the group-wide supervisor where the internationally active insurance group:
(a) Does not have substantial insurance operations in the United States;
(b) Has substantial insurance operations in the United States, but not in this state; or
(c) Has substantial insurance operations in the United States and this state, but the commissioner has determined pursuant to the factors set forth in paragraphs III and VIII that the other regulatory official is the appropriate group-wide supervisor.
II. An insurance holding company system that does not otherwise qualify as an internationally active insurance group may request that the commissioner make a determination or acknowledgment as to a group-wide supervisor pursuant to this section.
III. In cooperation with other state, federal, and international regulatory agencies, the commissioner shall identify a single group-wide supervisor for an internationally active insurance group. The commissioner may determine that the commissioner is the appropriate group-wide supervisor for an internationally active insurance group that conducts substantial insurance operations concentrated in this state. However, the commissioner may acknowledge that a regulatory official from another jurisdiction is the appropriate group-wide supervisor for the internationally active insurance group. The commissioner shall consider the following factors when making a determination or acknowledgment under this paragraph:
(a) The place of domicile of the insurers within the internationally active insurance group that hold the largest share of the group’s written premiums, assets, or liabilities;
(b) The place of domicile of the top-tiered insurer or insurers in the insurance holding company system of the internationally active insurance group;
(c) The location of the executive offices or largest operational offices of the internationally active insurance group;
(d) Whether another regulatory official is acting or is seeking to act as the group-wide supervisor under a regulatory system that the commissioner determines to be:
(1) Substantially similar to the system of regulation provided under the laws of this state, or
(2) Otherwise sufficient in terms of providing for group-wide supervision, enterprise risk analysis, and cooperation with other regulatory officials; and
(e) Whether another regulatory official acting or seeking to act as the group-wide supervisor provides the commissioner with reasonably reciprocal recognition and cooperation.
IV. However, the person identified under paragraph III as the group-wide supervisor may determine that it is appropriate to acknowledge another supervisor to serve as the group-wide supervisor. The acknowledgment of the group-wide supervisor shall be made after consideration of the factors listed in subparagraphs III(a) through (e), and shall be made in cooperation with and subject to the acknowledgment of other regulatory officials involved with supervision of members of the internationally active insurance group, and in consultation with the internationally active insurance group.
V. Notwithstanding any other provision of law, when another regulatory official is acting as the group-wide supervisor of an internationally active insurance group, the commissioner shall acknowledge that regulatory official as the group-wide supervisor. However, in the event of a material change in the internationally active insurance group that results in the internationally active insurance group’s insurers domiciled in this state holding the largest share of the group’s premiums, assets, or liabilities; or this state being the place of domicile of the top-tiered insurer or insurers in the insurance holding company system of the internationally active insurance group, the commissioner shall make a determination or acknowledgment as to the appropriate group-wide supervisor for such an internationally active insurance group pursuant to paragraph III.
VI. Pursuant to RSA 401-B:6, the commissioner is authorized to collect from any insurer registered pursuant to RSA 401-B:4 all information necessary to determine whether the commissioner may act as the group-wide supervisor of an internationally active insurance group or if the commissioner may acknowledge another regulatory official to act as the group-wide supervisor. Prior to issuing a determination that an internationally active insurance group is subject to group-wide supervision by the commissioner, the commissioner shall notify the insurer registered pursuant to RSA 401-B:4 and the ultimate controlling person within the internationally active insurance group. The internationally active insurance group shall have not less than 30 days to provide the commissioner with additional information pertinent to the pending determination. The commissioner shall publish on the department’s Internet website the identity of internationally active insurance groups that the commissioner has determined are subject to group-wide supervision by the commissioner.
VII. If the commissioner is the group-wide supervisor for an internationally active insurance group, the commissioner is authorized to engage in any of the following group-wide supervision activities:
(a) Assess the enterprise risks within the internationally active insurance group to ensure that:
(1) The material financial condition and liquidity risks to the members of the internationally active insurance group that are engaged in the business of insurance are identified by management, and
(2) Reasonable and effective mitigation measures are in place.
(b) Request, from any member of an internationally active insurance group subject to the commissioner’s supervision, information necessary and appropriate to assess enterprise risk, including, but not limited to, information about the members of the internationally active insurance group regarding:
(1) Governance, risk assessment, and management;
(2) Capital adequacy; and
(3) Material intercompany transactions.
(c) Coordinate and, through the authority of the regulatory officials of the jurisdictions where members of the internationally active insurance group are domiciled, compel development and implementation of reasonable measures designed to ensure that the internationally active insurance group is able to timely recognize and mitigate enterprise risks to members of such internationally active insurance group that are engaged in the business of insurance.
(d) Communicate with other state, federal, and international regulatory agencies for members within the internationally active insurance group and share relevant information subject to the confidentiality provisions of RSA 401-B:8, through supervisory colleges as set forth in RSA 401-B:7 or otherwise.
(e) Enter into agreements with or obtain documentation from any insurer registered under RSA 401-B:4, any member of the internationally active insurance group, and any other state, federal, and international regulatory agencies for members of the internationally active insurance group, providing the basis for or otherwise clarifying the commissioner's role as group-wide supervisor, including provisions for resolving disputes with other regulatory officials. Such agreements or documentation shall not serve as evidence in any proceeding that any insurer or person within an insurance holding company system not domiciled or incorporated in this state is doing business in this state or is otherwise subject to jurisdiction in this state.
(f) Other group-wide supervision activities, consistent with the authorities and purposes under this paragraph, as considered necessary by the commissioner.
VIII. If the commissioner acknowledges that another regulatory official from a jurisdiction that is not accredited by the NAIC is the group-wide supervisor, the commissioner is authorized to reasonably cooperate, through supervisory colleges or otherwise, with group-wide supervision undertaken by the group-wide supervisor, provided that:
(a) The commissioner's cooperation is in compliance with the laws of this state; and
(b) The regulatory official acknowledged as the group-wide supervisor also recognizes and cooperates with the commissioner's activities as a group-wide supervisor for other internationally active insurance groups where applicable. Where such recognition and cooperation is not reasonably reciprocal, the commissioner is authorized to refuse recognition and cooperation.
IX. The commissioner is authorized to enter into agreements with or obtain documentation from any insurer registered under RSA 401-B:4, any affiliate of the insurer, and other state, federal, and international regulatory agencies for members of the internationally active insurance group, that provide the basis for or otherwise clarify a regulatory official's role as group-wide supervisor.
X. The commissioner may adopt rules under RSA 541-A as necessary for the administration of this section.
XI. A registered insurer subject to this section shall be liable for and shall pay the reasonable expenses of the commissioner's participation in the administration of this section, including the engagement of attorneys, actuaries, and any other professionals and all reasonable travel expenses.
2 Insurance Holding Companies; Confidential Treatment. Amend RSA 401-B:8, I to read as follows:
I. Documents, materials, or other information in the possession or control of the insurance department that are obtained by or disclosed to the commissioner or any other person in the course of an examination or investigation made pursuant to RSA 401-B:6 and all information reported pursuant to RSA 401-B:3, II(l) and (m), RSA 401-B:4, [and] RSA 401-B:5, RSA 401-B:7, and RSA 401-B:7-a shall be confidential by law and privileged, shall not be subject to RSA 91-A, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. However, the commissioner is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as part of the commissioner's official duties. The commissioner shall not otherwise make the documents, materials or other information public without the prior written consent of the insurer to which it pertains unless the commissioner, after giving the insurer and its affiliates who would be affected thereby notice and opportunity to be heard, determines that the interests of policyholders, shareholders, or the public will be served by the publication thereof, in which event the commissioner may publish all or any part in such manner as may be deemed appropriate.
3 Effective Date. This act shall take effect upon its passage.