§ 26-44-105 — Transactions within a holding company system

(a) Transactions within an insurance holding company
system to which an insurer subject to registration is a party
shall be subject to the following standards:
(i) The terms shall be fair and reasonable;
(ii) Charges or fees for services performed shall be
reasonable;
(iii) Expenses incurred and payment received shall be
allocated to the insurer in conformity with customary insurance
accounting practices consistently applied;
(iv) The books, accounts and records of each party to
all the transactions shall be so maintained as to clearly and
accurately disclose the nature and details of the transactions
including any accounting information necessary to support the
reasonableness of the charges or fees to the respective parties;
(v) The insurer's surplus as regards policy holders
following any dividends or distributions to shareholder
affiliates shall be reasonable in relation to the insurer's
outstanding liabilities and adequate to its financial needs as
set forth in W.S. 26-44-108; and
(vi) Agreements for cost sharing services and
management shall include provisions as required by regulation
issued by the commissioner.
(b) The following transactions involving a domestic
insurer and any person in its insurance holding company system,
including amendments or modifications of affiliate agreements
previously filed pursuant to this section, which are subject to
any materiality standards contained in subsection (b) of this
section, shall not be entered into unless the insurer has
notified the commissioner in writing of its intention to enter
into the transaction at least thirty (30) days prior to the
transaction or a shorter period as the commissioner may permit
and the commissioner has not disapproved it within that period.
The notice for amendments or modifications shall include the
reasons for the change and the financial impact on the domestic
insurer. Informal notice shall be reported, within thirty (30)
days after a termination of a previously filed agreement, to the
commissioner for determination of the type of filing required,
if any. In assessing transactions under this subsection, the
commissioner shall consider whether the transactions comply with
subsection (a) of this section and whether they may adversely
affect the interests of policyholders. The transactions to be
considered are:
(i) Sales, purchases, exchanges, loans or extensions
of credit, guarantees or investments if on December 31 of the
year immediately preceding the transactions are equal to or
exceed:
(A) With respect to nonlife insurers, the lesser
of three percent (3%) of the insurer's admitted assets or
twenty-five percent (25%) of surplus as regards policyholders;
(B) With respect to life insurers, three percent
(3%) of the insurer's admitted assets.
(ii) Loans or extensions of credit to any person who
is not an affiliate, where the insurer makes the loans or
extensions of credit with the agreement or understanding that
the proceeds of the transactions, in whole or in substantial
part, are to be used to make loans or extensions of credit to
purchase assets of, or to make investments in, any affiliate of
the insurer making the loans or extensions of credit if on
December 31 of the year immediately preceding the transactions
are equal to or exceed:
(A) With respect to nonlife insurers, the lesser
of three percent (3%) of the insurer's admitted assets or
twenty-five percent (25%) of surplus as regards policyholders;
(B) With respect to life insurers, three percent
(3%) of the insurer's admitted assets.
(iii) Reinsurance agreements or modifications
thereto, including all reinsurance pooling agreements,
agreements in which the reinsurance premium or a change in the
insurer's liabilities, or the projected reinsurance premium or a
change in the insurer's liabilities in any of the next three (3)
years, equals or exceeds five percent (5%) of the insurer's
surplus as regards policyholders, as of December 31 of the year
immediately preceding, including those agreements which may
require 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 the
assets will be transferred to one (1) or more affiliates of the
insurer;
(iv) All management agreements, service contracts,
tax allocation agreements and all cost-sharing arrangements; and
(v) Any material transactions, specified by
regulation, which the commissioner determines may adversely
affect the interests of the insurer's policyholders.
(c) Nothing in this section shall be deemed to authorize
or permit any transaction which, in the case of an insurer not a
member of the same insurance holding company system, would be
otherwise contrary to law.
(d) A domestic insurer shall not enter into transactions
which are part of a plan or series of like transactions with
persons within the insurance holding company system if the
purpose of those separate transactions is to avoid the
notification requirement set forth in subsection (b) of this
section and thus the review that would otherwise occur. If the
commissioner determines that separate transactions were entered
into over any twelve (12) month period for that purpose, the
commissioner may exercise his authority under W.S. 26-44-113.
(e) The commissioner shall be notified within thirty (30)
days of any investment of the domestic insurer in any one (1)
corporation if the total investment in the corporation by the
insurance holding company system exceeds ten percent (10%) of
the corporation's voting securities.