§ 1505 — Transactions within a holding company system affecting controlled insurers

New York § 1505

• Jurisdiction: New York
• Law ISC: Insurance
• Art. 15: Holding Companies

Text

§ 1505. Transactions within a holding company system affecting\ncontrolled insurers. (a) Transactions within a holding company system to\nwhich a controlled insurer is a party shall be subject to the following:\n (1) the terms shall be fair and equitable;\n (2) charges or fees for services performed shall be reasonable; and\n (3) expenses incurred and payments received shall be allocated to the\ninsurer on an equitable basis in conformity with customary insurance\naccounting practices consistently applied.\n (b) The books, accounts and records of each party to all such\ntransactions shall be so maintained as to clearly and accurately\ndisclose the nature and details of the transactions including such\naccounting information as is necessary to support the reasonableness of\nthe charges or fees to the respective parties.\n (c) The superintendent's prior approval shall be required for the\nfollowing transactions between a domestic controlled insurer and any\nperson in its holding company system: sales, purchases, exchanges, loans\nor extensions of credit, or investments, involving five percent or more\nof the insurer's admitted assets at last year-end.\n (d) The following transactions between a domestic controlled insurer\nand any person in its holding company system may not be entered into\nunless the insurer has notified the superintendent in writing of its\nintention to enter into any such transaction at least thirty days prior\nthereto, or with regard to reinsurance treaties or agreements at least\nforty-five days prior thereto, or such shorter period as the\nsuperintendent may permit, and the superintendent has not disapproved it\nwithin such period:\n (1) sales, purchases, exchanges, loans or extensions of credit, or\ninvestments involving less than five percent of the insurer's admitted\nassets at last year-end, provided the transactions are equal to or\nexceed:\n (A) the lesser of three percent of the insurer's admitted assets or\ntwenty-five percent of capital and surplus at last year-end, with regard\nto an accident and health insurance company or a corporation subject to\narticle forty-three of this chapter;\n (B) three percent of the insurer's admitted assets at last year-end,\nwith regard to a life insurance company; or\n (C) the lesser of three percent of the insurer's admitted assets or\ntwenty-five percent of surplus to policyholders at last year-end, with\nregard to an insurer other than as specified in subparagraphs (A) and\n(B) of this paragraph;\n (2) reinsurance treaties or agreements;\n (3) rendering of services on a regular or systematic basis; or\n (4) any material transaction, specified by regulation, that the\nsuperintendent determines may adversely affect the interests of the\ninsurer's policyholders or shareholders.\n Nothing herein contained shall be deemed to authorize or permit any\ntransaction that, in the case of a non-controlled insurer, would be\notherwise contrary to law.\n (e) The superintendent, in reviewing transactions pursuant to\nsubsections (c) and (d) hereof, shall consider whether they comply with\nthe standards set forth in subsections (a) and (b) hereof and whether\nthey may adversely affect the interests of policyholders.\n (f) This section shall not apply to transactions subject to article\nsixteen or article seventeen or section one thousand four hundred eight\nor any sections of this chapter which impose notice or approval\nrequirements greater than those in this section.\n