HOUSE BILL NO. 473
AN ACT TO AMEND TITLE 18, DELAWARE CODE, RELATING TO THE REGISTRATION OF INSURANCE HOLDING COMPANIES AND MEMBERS OF INSURANCE HOLDING COMPANY SYSTEMS WITHIN THE STATE OF DELAWARE.
Be it enacted by the General Assembly of the State of Delaware:
Section 1. Amend Title 18, Delaware Code, by adding a new chapter to be designated as Chapter 50 to read as follows:
CHAPTER 50 REGISTRATION BY INSURANCE
§ 5001. Short title
This act may be cited as "The Registration of Insurance Holding Companies Act."
§ 5002. Definitions
As used in this Chapter:
(a) "Insurance Holding Company" is one owning or proposing to own a controlling stock interest in a stock insurer. Shares owned directly or indirectly by the corporation, by its subsidiary or affiliate corporations, firms or organizations, or by its officers, directors or principal stockholders shall be deemed to be owned by the corporation for purposes of this Chapter.
(b) "Insurance Holding Company System" consists of two or more affiliated persons, one or more of which is an insurer.
§ 5003. Registration
(a) Every insurer which is authorized to do business in this State and which is either an insurance holding company or a member of an insurance holding company system shall register with the Commissioner by filing the registration information provided for hereinafter except that a foreign insurer subject to disclosure requirements and standards adopted by statute or regulation in the jurisdiction of its domicile which are substantially similar to those contained in this section shall not be required to so register.
(b) Any insurer which is subject to registration under this section shall register within 60 days after the effective date of this statute or 15 days after it becomes subject to registration, whichever is later, unless the Commissioner for good cause shown extends the time for registration and then within such extended time.
(c) The Commissioner may require any authorized insurer which is either an insurance holding company or a member of an insurance holding company system and which is not subject to registration under this section to furnish a copy of the registration statement or any other information filed by such insurer with the insurance regulatory authority of its domicilary jurisdiction.
(d) Every insurer subject to registration shall file a registration statement on a form provided by the Commissioner, which shall contain current information relating to:
(1) the capital structure, general financial condition, ownership and management of the insurer and any person controlling the insurer;
(2) the identity of every member of the insurance holding company system;
(3) the following agreements in force, relationships subsisting, and transactions currently outstanding between such insurer and its affiliates:
(i) loans, other investments, or purchases, sales or exchanges or securities of the affiliates by the insurer or by its affiliates ;
(ii) purchases, sales or exchanges of assets;
() transactions not in the ordinary course of business;
(i) guarantees or undertakings for the benefit of an affiliate which 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 and service contracts and all cost-sharing arrangements, other than cost allocation arrangements based upon generally accepted accounting principles; and
(vi) reinsurance agreements covering all or substantially all of one or more lines of insurance of the ceding company.
(4) other matters concerning transactions between registered insurers and any affiliates as may be included from time to time in any registration forms adopted or approved by the Commissioner.
(e) No information need be disclosed on a registration statement filed pursuant to this section if such information is not material for the purposes of this section. Unless the Commissioner by rule, regulation or order provides otherwise, sales, purchases, exchanges, loans or extensions of credit or investments, involving one-half of 1 per cent or less of insurer's admitted assets of the 31st day of December next preceding, shall not be deemed material for purposes of this section.
() Each registered insurer shall keep current the information required to be disclosed in its registration statement by reporting all material changes or additions in that information on amendment forms provided by the Commissioner within 15 days after the end of the month in which it learns of such change or addition; provided, however, that each registered insurer shall report all dividends or other distributions to shareholders within two business days following the declaration thereof.
() The Commissioner shall terminate the registration of any insurer which demonstrates that it is no longer either an insurance holding company or a member of an insurance holding company system.
() The Commissioner may require or permit two or more affiliated insurers subject to registration hereunder to file a consolidated registration statement or consolidated reports amending their consolidated registration statement or their individual registration statements.
(i) The Commissioner may permit an authorized insurer which is part of an insurance holding company system to register on behalf of any affiliated insurer which is required to register pursuant to this section and to file all information and material required to be filed under this section on behalf of it.
(j) The provisions of this section shall not apply to any insurer, information or transaction if, and to the extent that, the Commissioner, by rule, regulation or order, shall exempt the same from the provisions of this section.
(k) Any person may file with the Commissioner a disclaimer or affiliation with any authorized insurer of such disclaimer may be filed by such insurer or by any member of an insurance holding company system. The disclaimer shall fully disclose all material relationships and basis for affiliation between such person and such insurer as well as the basis for disclaiming such affiliation. After a disclaimer has been filed, the insurer shall be relieved of any duty to register or report under this section which may arise out of the insurer's relationship with such person unless and until the Commissioner disallows such a disclaimer. The Commissioner shall disallow such a disclaimer only after furnishing all parties in interest with notice and opportunity to be heard after making specific findings of fact to support such disallowance.
Section 2. Amend §701 of Chapter 7, Title 18, Delaware Code, by inserting a new subsection (17) to read as follows:
(17) Registration Statement of Insurance Holding Company or member of Insurance Holding Company System, filing.
(i) Annual registration statement $25.00
(ii) Each amendment thereof 5.00
Section 3. If any provision of this act is held invalid, the invalidity thereof shall not affect other provisions of the act which can be given effect without the invalid provision and to this end the provisions of this act are severable.
Section 4. This act shall take effect on July 1, 1973.
Approved July 12, 1973.