§ 38.2-1331. Commission approval required for certain transactions.
A. Prior written approval of the Commission shall be required for:
1. Any material transaction between a domestic insurer and any of itsaffiliates involving (i) more than either three percent of the insurer'sadmitted assets or twenty-five percent of the insurer's surplus topolicyholders, whichever is less, as of the immediately preceding December 31and/or (ii) any reinsurance treaty or risk-sharing arrangement, ormodifications thereto, in which the reinsurance premium or anticipated changein the insurer's liabilities equals or exceeds five percent of the insurer'ssurplus to policyholders reported on the immediately preceding December 31;and/or
2. Any investment in affiliated companies if on the date of investment, thesum of the insurer's investments in affiliated companies exceeds or willexceed one or more of the following: fifty percent of the surplus topolicyholders reported on the immediately preceding December 31, ten percentof admitted assets reported on the immediately preceding December 31, orfifty percent of the surplus to policyholders at the time application is madeto the Commission for approval of the transaction.
For the purpose of this section, an insurer's investment in affiliatedcompanies is the sum of (i) the assets held by the insurer that representsecurities issued by or, if not in security form, equity or debt interests incompanies of the affiliate system; (ii) loans or extensions of credit to anyperson who is not an affiliate, where the insurer makes such loans orextensions of credit with the agreement or understanding that the proceeds ofsuch transactions, in whole or substantial part, are to be used to make loansor extensions of credit to, to purchase assets of, or to make investments in,any affiliate of the insurer making such loans or such extensions of credit;(iii) the assets of the insurer that are pledged on behalf of companies inthe holding company system; and (iv) the aggregate guarantees for loans orextensions of credit made to affiliates which result in an actual contingentexposure of the insurer's assets to liability. To the extent not alreadyprovided in this paragraph, the sum shall include for all affiliatedcompanies other than domestic and foreign insurance company subsidiaries andhealth maintenance organization subsidiaries (i) total net moneys or otherconsiderations expended and obligations assumed in the acquisition orformation of a subsidiary, including all organizational expenses andcontributions to capital and surplus of such subsidiary whether or notrepresented by the purchase of capital stock or issuance of other securitiesand (ii) all amounts expended in acquiring additional common stock, preferredstock, debt obligations, and other securities and all contributions to thecapital or surplus of a subsidiary subsequent to its acquisition or formation.
For the purposes of this section, a "transaction between a domestic insurerand any of its affiliates" includes any transaction between a domesticinsurer and a nonaffiliate if such transaction involves (i) any loan orextension of credit where the insurer makes such loan or extension of creditwith the agreement or understanding that the proceeds of such transaction, inwhole or substantial part, are to be used to make any loan or extension ofcredit to, to purchase assets of, or to make investments in any affiliate ofthe insurer or (ii) a reinsurance agreement or risk-sharing arrangement, ormodifications thereto, which requires as consideration the transfer of assetsfrom an insurer to a nonaffiliate, if an agreement or understanding existsbetween the insurer and the nonaffiliate that any portion of such assets willbe transferred to one or more affiliates of the insurer.
Failure of the Commission to act within sixty days after notification by theinsurer shall constitute approval of the transaction.
B. Nothing contained in this section shall authorize or permit anytransaction that would be otherwise contrary to law.
C. The Commission, in reviewing any material transaction under this section,shall consider whether the material transaction complies with the standardsset forth in § 38.2-1330 and whether it may adversely affect the interest ofpolicyholders. The Commission shall set forth the specific reasons for thedisapproval of any material transactions.
D. The approval of any material transaction under this section shall bedeemed an amendment under subsection E of § 38.2-1329 to an insurer'sregistration statement without further filing.
E. This section shall not apply to a material transaction that is a dividendor distribution.
(1977, c. 414, § 38.1-178.3:1; 1986, c. 562; 1989, c. 606; 1992, c. 588;1993, c. 158; 1994, c. 308; 2000, c. 187.)
§ 38.2-1331. Commission approval required for certain transactions.
A. Prior written approval of the Commission shall be required for:
1. Any material transaction between a domestic insurer and any of itsaffiliates involving (i) more than either three percent of the insurer'sadmitted assets or twenty-five percent of the insurer's surplus topolicyholders, whichever is less, as of the immediately preceding December 31and/or (ii) any reinsurance treaty or risk-sharing arrangement, ormodifications thereto, in which the reinsurance premium or anticipated changein the insurer's liabilities equals or exceeds five percent of the insurer'ssurplus to policyholders reported on the immediately preceding December 31;and/or
2. Any investment in affiliated companies if on the date of investment, thesum of the insurer's investments in affiliated companies exceeds or willexceed one or more of the following: fifty percent of the surplus topolicyholders reported on the immediately preceding December 31, ten percentof admitted assets reported on the immediately preceding December 31, orfifty percent of the surplus to policyholders at the time application is madeto the Commission for approval of the transaction.
For the purpose of this section, an insurer's investment in affiliatedcompanies is the sum of (i) the assets held by the insurer that representsecurities issued by or, if not in security form, equity or debt interests incompanies of the affiliate system; (ii) loans or extensions of credit to anyperson who is not an affiliate, where the insurer makes such loans orextensions of credit with the agreement or understanding that the proceeds ofsuch transactions, in whole or substantial part, are to be used to make loansor extensions of credit to, to purchase assets of, or to make investments in,any affiliate of the insurer making such loans or such extensions of credit;(iii) the assets of the insurer that are pledged on behalf of companies inthe holding company system; and (iv) the aggregate guarantees for loans orextensions of credit made to affiliates which result in an actual contingentexposure of the insurer's assets to liability. To the extent not alreadyprovided in this paragraph, the sum shall include for all affiliatedcompanies other than domestic and foreign insurance company subsidiaries andhealth maintenance organization subsidiaries (i) total net moneys or otherconsiderations expended and obligations assumed in the acquisition orformation of a subsidiary, including all organizational expenses andcontributions to capital and surplus of such subsidiary whether or notrepresented by the purchase of capital stock or issuance of other securitiesand (ii) all amounts expended in acquiring additional common stock, preferredstock, debt obligations, and other securities and all contributions to thecapital or surplus of a subsidiary subsequent to its acquisition or formation.
For the purposes of this section, a "transaction between a domestic insurerand any of its affiliates" includes any transaction between a domesticinsurer and a nonaffiliate if such transaction involves (i) any loan orextension of credit where the insurer makes such loan or extension of creditwith the agreement or understanding that the proceeds of such transaction, inwhole or substantial part, are to be used to make any loan or extension ofcredit to, to purchase assets of, or to make investments in any affiliate ofthe insurer or (ii) a reinsurance agreement or risk-sharing arrangement, ormodifications thereto, which requires as consideration the transfer of assetsfrom an insurer to a nonaffiliate, if an agreement or understanding existsbetween the insurer and the nonaffiliate that any portion of such assets willbe transferred to one or more affiliates of the insurer.
Failure of the Commission to act within sixty days after notification by theinsurer shall constitute approval of the transaction.
B. Nothing contained in this section shall authorize or permit anytransaction that would be otherwise contrary to law.
C. The Commission, in reviewing any material transaction under this section,shall consider whether the material transaction complies with the standardsset forth in § 38.2-1330 and whether it may adversely affect the interest ofpolicyholders. The Commission shall set forth the specific reasons for thedisapproval of any material transactions.
D. The approval of any material transaction under this section shall bedeemed an amendment under subsection E of § 38.2-1329 to an insurer'sregistration statement without further filing.
E. This section shall not apply to a material transaction that is a dividendor distribution.
(1977, c. 414, § 38.1-178.3:1; 1986, c. 562; 1989, c. 606; 1992, c. 588;1993, c. 158; 1994, c. 308; 2000, c. 187.)
§ 38.2-1331. Commission approval required for certain transactions.
A. Prior written approval of the Commission shall be required for:
1. Any material transaction between a domestic insurer and any of itsaffiliates involving (i) more than either three percent of the insurer'sadmitted assets or twenty-five percent of the insurer's surplus topolicyholders, whichever is less, as of the immediately preceding December 31and/or (ii) any reinsurance treaty or risk-sharing arrangement, ormodifications thereto, in which the reinsurance premium or anticipated changein the insurer's liabilities equals or exceeds five percent of the insurer'ssurplus to policyholders reported on the immediately preceding December 31;and/or
2. Any investment in affiliated companies if on the date of investment, thesum of the insurer's investments in affiliated companies exceeds or willexceed one or more of the following: fifty percent of the surplus topolicyholders reported on the immediately preceding December 31, ten percentof admitted assets reported on the immediately preceding December 31, orfifty percent of the surplus to policyholders at the time application is madeto the Commission for approval of the transaction.
For the purpose of this section, an insurer's investment in affiliatedcompanies is the sum of (i) the assets held by the insurer that representsecurities issued by or, if not in security form, equity or debt interests incompanies of the affiliate system; (ii) loans or extensions of credit to anyperson who is not an affiliate, where the insurer makes such loans orextensions of credit with the agreement or understanding that the proceeds ofsuch transactions, in whole or substantial part, are to be used to make loansor extensions of credit to, to purchase assets of, or to make investments in,any affiliate of the insurer making such loans or such extensions of credit;(iii) the assets of the insurer that are pledged on behalf of companies inthe holding company system; and (iv) the aggregate guarantees for loans orextensions of credit made to affiliates which result in an actual contingentexposure of the insurer's assets to liability. To the extent not alreadyprovided in this paragraph, the sum shall include for all affiliatedcompanies other than domestic and foreign insurance company subsidiaries andhealth maintenance organization subsidiaries (i) total net moneys or otherconsiderations expended and obligations assumed in the acquisition orformation of a subsidiary, including all organizational expenses andcontributions to capital and surplus of such subsidiary whether or notrepresented by the purchase of capital stock or issuance of other securitiesand (ii) all amounts expended in acquiring additional common stock, preferredstock, debt obligations, and other securities and all contributions to thecapital or surplus of a subsidiary subsequent to its acquisition or formation.
For the purposes of this section, a "transaction between a domestic insurerand any of its affiliates" includes any transaction between a domesticinsurer and a nonaffiliate if such transaction involves (i) any loan orextension of credit where the insurer makes such loan or extension of creditwith the agreement or understanding that the proceeds of such transaction, inwhole or substantial part, are to be used to make any loan or extension ofcredit to, to purchase assets of, or to make investments in any affiliate ofthe insurer or (ii) a reinsurance agreement or risk-sharing arrangement, ormodifications thereto, which requires as consideration the transfer of assetsfrom an insurer to a nonaffiliate, if an agreement or understanding existsbetween the insurer and the nonaffiliate that any portion of such assets willbe transferred to one or more affiliates of the insurer.
Failure of the Commission to act within sixty days after notification by theinsurer shall constitute approval of the transaction.
B. Nothing contained in this section shall authorize or permit anytransaction that would be otherwise contrary to law.
C. The Commission, in reviewing any material transaction under this section,shall consider whether the material transaction complies with the standardsset forth in § 38.2-1330 and whether it may adversely affect the interest ofpolicyholders. The Commission shall set forth the specific reasons for thedisapproval of any material transactions.
D. The approval of any material transaction under this section shall bedeemed an amendment under subsection E of § 38.2-1329 to an insurer'sregistration statement without further filing.
E. This section shall not apply to a material transaction that is a dividendor distribution.
(1977, c. 414, § 38.1-178.3:1; 1986, c. 562; 1989, c. 606; 1992, c. 588;1993, c. 158; 1994, c. 308; 2000, c. 187.)
