New York Amends Holding Company Regulations
Last month, the New York Department of Financial Services (“DFS”) published notice in the New York State Register that it would be adopting several amendments to its holding company regulations. The DFS stated that the purpose of the amendments is to bring New York regulation in conformance with the National Association of Insurance Commissioners (“NAIC”) 2010 model Insurance Holding Company System Regulatory Act in order to ensure that New York maintains its NAIC accreditation status. The Proposed Third Amendment to 11 NYCRR 80-1 (Insurance Regulation 52) (the “Amendments”) will, among other things, require that:
- The board of directors to certify in the annual registration statement (Form HC 1) that it oversees corporate governance and internal controls, and that the regulated insurer’s officers or senior management have approved, implemented and continue to maintain and monitor corporate governance and internal control procedures.
- Every regulated insurer submit a list that identifies each unauthorized insurer in the holding company system and to file a copy of the unauthorized insurer’s most recent annual statement if the annual statement is not available electronically from the NAIC.
- Reinsurance agreements involving the regulated insurer be filed for prior approval only when the premium or change in liabilities equals or exceeds 5% of surplus to policyholders, unless other specified circumstances are not met.
- Any management agreements, service contracts, tax allocation agreements, guarantees or cost-sharing arrangements involving the regulated insurer be filed for prior approval.
- A holding company seeking to divest its controlling interest in a regulated insurer must file prior notice with the DFS unless an application for approval of the acquisition (Form A) is being filed.
Click here to view a complete copy of the Amendments, which will be effective 60 days after Notice of Adoption is published in the New York State Register. The comment period closes on February 9, 2013.