HOUSE BILL 24-1321
BY REPRESENTATIVE(S) Brown and Taggart, Amabile, Bird, Clifford,
Jodeh, Marshall, Ortiz, Titone, Velasco, McCluskie;
also SENATOR(S) Roberts and Hinrichsen, Kolker, Priola.
C
ONCERNING ALIGNING THE COLORADO STATUTES WITH THE NATIONAL
ASSOCIATION OF INSURANCE COMMISSIONERS' FINANCIAL MODEL
LAWS
.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. In Colorado Revised Statutes, 10-3-801, add (4.3),
(7.5), and (8.5) as follows:
10-3-801. Definitions. As used in this part 8, unless the context
otherwise requires:
(4.3) "G
ROUP CAPITAL CALCULATION INSTRUCTIONS " MEANS THE
GROUP CAPITAL CALCULATION INSTRUCTIONS ADOPTED AND AMENDED BY
THE
NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS.
(7.5) "NAIC
LIQUIDITY STRESS TEST FRAMEWORK " OR
"FRAMEWORK" MEANS THE NAIC PUBLICATION THAT INCLUDES A HISTORY
NOTE: This bill has been prepared for the signatures of the appropriate legislative
officers and the Governor. To determine whether the Governor has signed the bill
or taken other action on it, please consult the legislative status sheet, the legislative
history, or the Session Laws.
________
Capital letters or bold & italic numbers indicate new material added to existing law; dashes
through words or numbers indicate deletions from existing law and such material is not part of
the act. OF THE NAIC'S DEVELOPMENT OF REGULATORY LIQUIDITY STRESS TESTING ,
THE SCOPE CRITERIA APPLICABLE FOR A SPECIFIC DATA YEAR , AND THE
LIQUIDITY STRESS TEST INSTRUCTIONS AND REPORTING TEMPLATES FOR A
SPECIFIC DATA YEAR
, AS ADOPTED BY THE NAIC, AND AS AMENDED FROM
TIME TO TIME BY THE
NAIC, IN ACCORDANCE WITH THE PROCEDURES
ADOPTED BY THE
NAIC.
(8.5) "S
COPE CRITERIA" MEANS THE DESIGNATED EXPOSURE BASES ,
ALONG WITH MINIMUM MAGNITUDES OF EXPOSURE BASES FOR THE SPECIFIED
DATA YEAR
, USED TO ESTABLISH A PRELIMINARY LIST OF INSURERS
CONSIDERED SCOPED INTO THE
NAIC LIQUIDITY STRESS TEST FRAMEWORK
FOR THAT DATA YEAR
.
SECTION 2. In Colorado Revised Statutes, 10-3-804, amend (12)
as follows:
10-3-804. Registration of insurers. (12) (a) The ultimate
controlling person of every insurer subject to registration shall also file an
annual enterprise risk report. The report must, to the best of the ultimate
controlling person's knowledge and belief, identify the material risks within
the insurance holding company system that could pose enterprise risk to the
insurer. The controlling person shall file the report with the lead state
commissioner of the insurance holding company system as determined by
the procedures within the financial analysis handbook adopted by the NAIC.
(b) E
XCEPT AS PROVIDED IN SUBSECTIONS (12)(b)(I) TO (12)(b)(IV)
AND (12)(c) TO (12)(e) OF THIS SECTION, THE ULTIMATE CONTROLLING
PERSON OF EACH INSURER SUBJECT TO REGISTRATION SHALL CONCURRENTLY
FILE WITH THE REGISTRATION AN ANNUAL GROUP CAPITAL CALCULATION AS
DIRECTED BY THE LEAD STATE COMMISSIONER
. THE REPORT MUST BE
COMPLETED IN ACCORDANCE WITH THE
NAIC GROUP CAPITAL CALCULATION
INSTRUCTIONS
, WHICH MAY PERMIT THE LEAD STATE COMMISSIONER TO
ALLOW A CONTROLLING PERSON THAT IS NOT THE ULTIMATE CONTROLLING
PERSON TO FILE THE GROUP CAPITAL CALCULATION
. THE REPORT MUST BE
FILED WITH THE LEAD STATE COMMISSIONER OF THE INSURANCE HOLDING
COMPANY SYSTEM AS DIRECTED BY THE LEAD STATE COMMISSIONER IN
ACCORDANCE WITH THE PROCEDURES WITHIN THE FINANCIAL ANALYSIS
HANDBOOK ADOPTED BY THE
NAIC. THE FOLLOWING INSURANCE HOLDING
COMPANY SYSTEMS ARE EXEMPT FROM FILING THE GROUP CAPITAL
CALCULATION
:
PAGE 2-HOUSE BILL 24-1321 (I) AN INSURANCE HOLDING COMPANY SYSTEM THAT HAS ONLY ONE
INSURER WITHIN ITS HOLDING COMPANY STRUCTURE
, THAT ONLY WRITES
BUSINESS
, AND IS ONLY LICENSED IN ITS DOMESTIC STATE AND ASSUMES NO
BUSINESS FROM ANY OTHER INSURER
;
(II) A
N INSURANCE HOLDING COMPANY SYSTEM THAT IS REQUIRED
TO PERFORM A GROUP CAPITAL CALCULATION SPECIFIED BY THE
UNITED
STATES FEDERAL RESERVE BOARD . THE LEAD STATE COMMISSIONER SHALL
REQUEST THE CALCULATION FROM THE FEDERAL RESERVE BOARD UNDER THE
TERMS OF INFORMATION SHARING AGREEMENTS IN EFFECT
. IF THE FEDERAL
RESERVE BOARD CANNOT SHARE THE CALCULATION WITH THE LEAD STATE
COMMISSIONER
, THE INSURANCE HOLDING COMPANY SYSTEM IS NOT EXEMPT
FROM THE GROUP CAPITAL CALCULATION FILING
.
(III) A
N INSURANCE HOLDING COMPANY SYSTEM WHOSE
NON
-UNITED STATES GROUP-WIDE SUPERVISOR IS LOCATED WITHIN A
RECIPROCAL JURISDICTION AS DESCRIBED IN SECTION
10-3-702 THAT
RECOGNIZES THE
UNITED STATES' STATE REGULATORY APPROACH TO GROUP
SUPERVISION AND GROUP CAPITAL
;
(IV) A
N INSURANCE HOLDING COMPANY SYSTEM :
(A) T
HAT PROVIDES INFORMATION TO THE LEAD STATE
COMMISSIONER THAT MEETS THE RE QUIREMENTS FOR ACCREDITATION
UNDER THE
NAIC FINANCIAL STANDARDS AND ACCREDITATION PROGRAM ,
EITHER DIRECTLY OR INDIRECTLY THROUGH THE GROUP -WIDE SUPERVISOR,
WHO HAS DETERMINED SUCH INFORMATION IS SATISFACTORY TO ALLOW THE
LEAD STATE COMMISSIONER TO COMPLY WITH THE
NAIC GROUP
SUPERVISION APPROACH
, AS DETAILED IN THE NAIC FINANCIAL ANALYSIS
HANDBOOK
; AND
(B) WHOSE NON-UNITED STATES GROUP-WIDE SUPERVISOR THAT IS
NOT IN A RECIPROCAL JURISDICTION RECOGNIZES AND ACCEPTS
, AS SPECIFIED
BY THE LEAD STATE COMMISSIONER IN REGULATION
, THE GROUP CAPITAL
CALCULATION AS THE WORLD
-WIDE GROUP CAPITAL ASSESSMENT FOR
UNITED STATES INSURANCE GROUPS THAT OPERATE IN THAT JURISDICTION .
(c) N
OTWITHSTANDING SUBSECTIONS (12)(b)(III) AND (12)(b)(IV)
OF THIS SECTION AND THIS SUBSECTION (12)(c), THE LEAD STATE
COMMISSIONER SHALL REQUIRE THE GROUP CAPITAL CALCULATION FOR
PAGE 3-HOUSE BILL 24-1321 UNITED STATES OPERATIONS OF ANY NON -UNITED-STATES-BASED
INSURANCE HOLDING COMPANY SYSTEM WHERE
, AFTER ANY NECESSARY
CONSULTATION WITH OTHER SUPERVISORS OR OFFICIALS
, IT IS DEEMED
APPROPRIATE BY THE LEAD STATE COMMISSIONER FOR PRUDENTIAL
OVERSIGHT AND SOLVENCY MONITORING PURPOSES OR FOR ENSURING THE
COMPETITIVENESS OF THE INSURANCE MARKETPLACE
.
(d) N
OTWITHSTANDING THE EXEMPTIONS FROM FILING THE GROUP
CAPITAL CALCULATION STATED IN SUBSECTIONS
(12)(b)(I) TO (12)(b)(IV)
OF THIS SECTION, THE LEAD STATE COMMISSIONER MAY EXEMPT THE
ULTIMATE CONTROLLING PERSON FROM FILING THE ANNUAL GROUP CAPITAL
CALCULATION OR TO ACCEPT A LIMITED GROUP CAPITAL FILING OR REPORT
IN ACCORDANCE WITH CRITERIA AS SPECIFIED BY THE REGULATIONS
PROMULGATED BY THE LEAD STATE COMMISSIONER
.
(e) I
F THE LEAD STATE COMMISSIONER DETERMINES THAT AN
INSURANCE HOLDING COMPANY SYSTEM NO LONGER MEETS ONE OR MORE OF
THE REQUIREMENTS FOR AN EXEMPTION FROM FILING THE GROUP CAPITAL
CALCULATION UNDER THIS SECTION
, THE INSURANCE HOLDING COMPANY
SYSTEM MUST FILE THE GROUP CAPITAL CALCULATION AT THE NEXT ANNUAL
FILING DATE UNLESS GIVEN AN EXTENSION BY THE LEAD STATE
COMMISSIONER BASED ON REASONABLE GROUNDS SHOWN
.
(f) (I) T
HE ULTIMATE CONTROLLING PERSON OF AN INSURER SUBJECT
TO REGISTRATION AND ALSO SCOPED INTO THE
NAIC LIQUIDITY STRESS TEST
FRAMEWORK SHALL FILE THE RESULTS OF A SPECIFIC YEAR
'S LIQUIDITY
STRESS TEST
. THE FILING MUST BE MADE TO THE LEAD STATE COMMISSIONER
OF THE INSURANCE HOLDING COMPANY SYSTEM AS DETERMINED BY THE
PROCEDURES WITHIN THE FINANCIAL ANALYSIS HANDBOOK ADOPTED BY THE
NAIC.
(II) (A) T
HE NAIC LIQUIDITY STRESS TEST FRAMEWORK INCLUDES
SCOPE CRITERIA APPLICABLE TO A SPECIFIC DATA YEAR
. AT LEAST
ANNUALLY
, THE FINANCIAL STABILITY TASK FORCE OR ITS SUCCESSOR SHALL
REVIEW THE SCOPE CRITERIA
. ANY CHANGE TO THE NAIC LIQUIDITY STRESS
TEST FRAMEWORK OR TO THE DATA YEAR FOR WHICH THE SCOPE CRITERIA
ARE TO BE MEASURED TAKES EFFECT ON
JANUARY 1 OF THE YEAR
FOLLOWING THE CALENDAR YEAR WHEN SUCH CHANGES ARE ADOPTED
.
I
NSURERS MEETING AT LEAST ONE THRESHOLD OF THE SCOPE CRITERIA ARE
CONSIDERED SCOPED INTO THE
NAIC LIQUIDITY STRESS TEST FRAMEWORK
PAGE 4-HOUSE BILL 24-1321 FOR THE SPECIFIED DATA YEAR UNLESS THE LEAD STATE COMMISSIONER , IN
CONSULTATION WITH THE
NAIC FINANCIAL STABILITY TASK FORCE OR ITS
SUCCESSOR
, DETERMINES THE INSURER SHOULD NOT BE SCOPED INTO THE
NAIC LIQUIDITY STRESS TEST FRAMEWORK FOR THAT DATA YEAR .
S
IMILARLY, INSURERS THAT DO NOT TRIGGER AT LEAST ONE THRESHOLD OF
THE SCOPE CRITERIA ARE CONSIDERED SCOPED OUT OF THE
NAIC LIQUIDITY
STRESS TEST FRAMEWORK FOR THE SPECIFIED DATA YEAR
, UNLESS THE LEAD
STATE COMMISSIONER
, IN CONSULTATION WITH THE NAIC FINANCIAL
STABILITY TASK FORCE OR ITS SUCCESSOR
, DETERMINES THE INSURER
SHOULD BE SCOPED INTO THE FRAMEWORK FOR THAT DATA YEAR
.
(B) A
S PART OF THE DETERMINATION FOR AN INSURER , THE LEAD
STATE INSURANCE COMMISSIONER
, IN CONSULTATION WITH THE FINANCIAL
STABILITY TASK FORCE OR ITS SUCCESSOR
, SHALL ASSESS A REGULATOR'S
DESIRE TO AVOID HAVING INSURERS SCOPED IN AND OUT OF THE
NAIC
LIQUIDITY STRESS TEST FRAMEWORK ON A FREQUENT BASIS .
(III) T
HE PERFORMANCE OF, AND FILING OF THE RESULTS FROM, A
SPECIFIC YEAR
'S LIQUIDITY STRESS TEST MUST COMPLY WITH THE NAIC
LIQUIDITY STRESS TEST FRAMEWORK 'S INSTRUCTIONS AND REPORTING
TEMPLATES FOR THAT YEAR AND ANY LEAD STATE INSURANCE
COMMISSIONER DETERMINATIONS
, IN CONJUNCTION WITH THE NAIC
FINANCIAL STABILITY TASK FORCE OR ITS SUCCESSOR, PROVIDED WITHIN THE
FRAMEWORK
.
SECTION 3. In Colorado Revised Statutes, 10-3-805, amend
(1)(a)(V); and add (1)(a)(VII), (1)(a)(VIII), (1)(a)(IX), (1)(h), and (4) as
follows:
10-3-805. Standards and management of an insurer within an
insurance holding company system - rules. (1) Transactions within an
insurance holding company system. (a) Transactions within an insurance
holding company system to which an insurer subject to registration is a
party are subject to the following standards:
(V) The books, accounts, and records of each party to all such
transactions shall be so maintained as to clearly and accurately disclose the
nature and details of the transactions, including such accounting
information as is necessary to support the reasonableness of the charges or
fees to the respective parties; and
PAGE 5-HOUSE BILL 24-1321 (VII) (A) IF AN INSURER SUBJECT TO THIS ARTICLE 3 IS DEEMED BY
THE COMMISSIONER TO BE IN A HAZARDOUS FINANCIAL CONDITION
, AS
DEFINED BY RULE OF THE COMMISSIONER
, OR A CONDITION THAT WOULD BE
GROUNDS FOR SUPERVISION
, CONSERVATION, OR A DELINQUENCY
PROCEEDING
, THEN THE COMMISSIONER MAY REQUIRE THE INSURER TO
SECURE AND MAINTAIN EITHER A DEPOSIT
, HELD BY THE COMMISSIONER, OR
A BOND
, AS DETERMINED BY THE INSURER AT THE INSURER 'S DISCRETION,
FOR THE PROTECTION OF THE INSURER FOR THE DURATION OF THE CONTRACT
OR AGREEMENT
, OR THE EXISTENCE OF THE CONDITION FOR WHICH THE
COMMISSIONER REQUIRED THE DEPOSIT OR THE BOND
.
(B) I
N DETERMINING WHETHER A DEPOSIT OR A BOND IS REQUIRED ,
THE COMMISSIONER SHALL CONSIDER WHETHER CONCERNS EXIST WITH
RESPECT TO THE AFFILIATED PERSON
'S ABILITY TO FULFILL A CONTRACT OR
AGREEMENT IF THE INSURER WERE TO BE PUT INTO LIQUIDATION
. ONCE THE
INSURER IS DEEMED TO BE IN A HAZARDOUS FINANCIAL CONDITION OR A
CONDITION THAT WOULD BE GROUNDS FOR SUPERVISION
, CONSERVATION, OR
A DELINQUENCY PROCEEDING
, AND A DEPOSIT OR BOND IS NECESSARY, THE
COMMISSIONER MAY DETERMINE THE AMOUNT OF THE DEPOSIT OR BOND
,
NOT TO EXCEED THE VALUE OF A CONTRACT OR AGREEMENT IN ANY ONE
YEAR
, AND WHETHER SUCH DEPOSIT OR BOND SHOULD BE REQUIRED FOR A
SINGLE CONTRACT
, MULTIPLE CONTRACTS, OR A CONTRACT ONLY WITH A
SPECIFIC PERSON
.
(VIII) T
HE RECORDS AND DATA OF THE INSURER HELD BY AN
AFFILIATE ARE AND REMAIN THE PROPERTY OF THE INSURER AND ARE
SUBJECT TO CONTROL OF THE INSURER
. THE AFFILIATE SHALL ENSURE THAT
THE RECORDS AND DATA ARE IDENTIFIABLE AND ARE SEGREGATED OR
READILY CAPABLE OF SEGREGATION
, AT NO ADDITIONAL COST TO THE
INSURER
, FROM ALL OTHER PERSONS' RECORDS AND DATA. THIS INCLUDES
ALL RECORDS AND DATA THAT ARE OTHERWISE THE PROPERTY OF THE
INSURER
, IN WHATEVER FORM MAINTAINED , INCLUDING CLAIMS AND CLAIM
FILES
, POLICYHOLDER LISTS, APPLICATION FILES, LITIGATION FILES, PREMIUM
RECORDS
, RATE BOOKS, UNDERWRITING MANUALS , PERSONNEL RECORDS,
FINANCIAL RECORDS, OR SIMILAR RECORDS WITHIN THE POSSESSION ,
CUSTODY, OR CONTROL OF THE AFFILIATE. AT THE REQUEST OF THE INSURER,
THE AFFILIATE SHALL PERMIT THE RECEIVER TO OBTAIN A COMPLETE SET OF
ALL RECORDS OF ANY TYPE THAT PERTAIN TO THE INSURER
'S BUSINESS,
OBTAIN ACCESS TO THE OPERATING SYSTEMS ON WHICH THE DATA IS
MAINTAINED
, OBTAIN THE SOFTWARE THAT RUNS THE OPERATING SYSTEMS
PAGE 6-HOUSE BILL 24-1321 EITHER THROUGH ASSUMPTION OF LICENSING AGREEMENTS OR OTHERWISE ,
AND RESTRICT THE USE OF THE DATA BY THE AFFILIATE IF THE RECEIVER OR
THE AFFILIATE IS NOT OPERATING THE INSURER
'S BUSINESS. THE AFFILIATE
SHALL PROVIDE A WAIVER OF ANY LANDLORD LIEN OR OTHER ENCUMBRANCE
TO GIVE THE INSURER ACCESS TO ALL RECORDS AND DATA IN THE EVENT OF
THE AFFILIATE
'S DEFAULT UNDER A LEASE OR OTHER AGREEMENT .
(IX) A
PREMIUM OR OTHER MONEY BELONGING TO THE INSURER
THAT IS COLLECTED BY OR HELD BY AN AFFILIATE IS THE EXCLUSIVE
PROPERTY OF THE INSURER AND IS SUBJECT TO THE CONTROL OF THE
INSURER
. ANY RIGHT OF OFFSET IN THE EVENT AN INSURER IS PLACED INTO
RECEIVERSHIP IS SUBJECT TO PART
5 OF THIS ARTICLE 3.
(h) (I) A
N AFFILIATE THAT IS PARTY TO AN AGREEMENT OR
CONTRACT WITH A DOMESTIC INSURER THAT IS SUBJECT TO SUBSECTION
(1)(b)(IV) OF THIS SECTION IS SUBJECT TO THE JURISDICTION OF ANY
SUPERVISION
, SEIZURE, CONSERVATORSHIP, OR RECEIVERSHIP PROCEEDINGS
AGAINST THE INSURER AND TO THE AUTHORITY OF ANY SUPERVISOR
,
CONSERVATOR, REHABILITATOR, OR LIQUIDATOR FOR THE INSURER
APPOINTED PURSUANT TO SUPERVISION AND RECEIVERSHIP ACTS FOR THE
PURPOSE OF INTERPRETING
, ENFORCING, AND OVERSEEING THE AFFILIATE'S
OBLIGATIONS UNDER THE AGREEMENT OR CONTRACT TO PERFORM SERVICES
FOR THE INSURER THAT
:
(A) A
RE AN INTEGRAL PART OF THE INSURER 'S OPERATIONS,
INCLUDING MANAGEMENT , ADMINISTRATION, ACCOUNTING, DATA
PROCESSING
, MARKETING, UNDERWRITING, CLAIMS HANDLING, INVESTMENT,
OR ANY OTHER SIMILAR FUNCTIONS ; OR
(B) ARE ESSENTIAL TO THE INSURER 'S ABILITY TO FULFILL ITS
OBLIGATIONS UNDER ITS INSURANCE POLICIES
.
(II) T
HE COMMISSIONER MAY REQUIRE THAT AN AGREEMENT OR
CONTRACT PURSUANT TO SUBSECTION
(1)(b)(IV) OF THIS SECTION FOR THE
PROVISION OF SERVICES DESCRIBED IN SUBSECTION
(1)(h)(I) OF THIS SECTION
SPECIFY THAT THE AFFILIATE CONSENTS TO THE JURISDICTION AS SET FORTH
IN THIS SUBSECTION
(1)(h).
(4) T
HE COMMISSIONER MAY PROMULGATE RULES TO IMPLEMENT
THIS SECTION
.
PAGE 7-HOUSE BILL 24-1321 SECTION 4. In Colorado Revised Statutes, 10-3-808, amend (1),
(3)(a), (3)(c), (3)(d), and (6); and add (7) as follows:
10-3-808. Confidential treatment. (1) (a) Documents, materials,
or other information in the possession or control of the division that are
obtained by or disclosed to the commissioner or any other person in the
course of an examination or investigation made pursuant to section
10-3-806 and all information reported pursuant to section 10-3-803 (2)(l)
and (2)(m), 10-3-804, or 10-3-805
ARE PROPRIETARY AND CONTAIN TRADE
SECRETS AND
are confidential by law and privileged; are not subject to the
"Colorado Open Records Act", part 2 of article 72 of title 24; C.R.S.,
are
not subject to subpoena; and are not subject to discovery or admissible in
evidence in any private civil action. However, the commissioner is
authorized to use the documents, materials, or other information in the
furtherance of any regulatory or legal action brought as a part of the
commissioner's official duties. The commissioner shall not otherwise make
the documents, materials, or other information public without the prior
written consent of the insurer to which they pertain unless the
commissioner, after giving the insurer and its affiliates who would be
affected notice and opportunity to be heard, determines that the interest of
policyholders, shareholders, or the public will be served by the publication,
in which event the commissioner may publish all or any part
OF THE
DOCUMENTS
, MATERIALS, OR OTHER INFORMATION in such manner as the
commissioner deems appropriate.
(b) F
OR PURPOSES OF THE INFORMATION REPORTED AND PROVIDED
TO THE DIVISION PURSUANT TO SECTION
10-3-804 (12)(b), THE
COMMISSIONER SHALL MAINTAIN THE CONFIDENTIALITY OF THE GROUP
CAPITAL CALCULATION AND GROUP CAPITAL RATIO PRODUCED WITHIN THE
CALCULATION AND ANY GROUP CAPITAL INFORMATION RECEIVED FROM AN
INSURANCE HOLDING COMPANY SUPERVISED BY THE FEDERAL RESERVE
BOARD OR ANY
UNITED STATES GROUP-WIDE SUPERVISOR.
(c) F
OR THE PURPOSES OF THE INFORMATION REPORTED AND
PROVIDED TO THE DIVISION PURSUANT TO SECTION
10-3-804 (12)(f), THE
COMMISSIONER SHALL MAINTAIN THE CONFIDENTIALITY OF THE LIQUIDITY
STRESS TEST RESULTS AND SUPPORTING DISCLOSURES AND ANY LIQUIDITY
STRESS TEST INFORMATION RECEIVED FROM AN INSURANCE HOLDING
COMPANY SUPERVISED BY THE FEDERAL RESERVE BOARD AND NON
-UNITED
STATES GROUP-WIDE SUPERVISORS.
PAGE 8-HOUSE BILL 24-1321 (3) In order to assist in the performance of the commissioner's
duties, the commissioner:
(a) May share documents, materials, or other information, including
the confidential and privileged documents, materials, or information subject
to subsection (1) of this section
AND PROPRIETARY AND TRADE SECRET
DOCUMENTS AND MATERIALS
, with other state, federal, and international
regulatory agencies, with the NAIC, and its affiliates and subsidiaries
WITH
ANY THIRD
-PARTY CONSULTANTS DESIGNATED BY THE COMMISSIONER , and
with state, federal, and international law enforcement authorities, including
members of any
A supervisory college described in section 10-3-807, if the
recipient agrees in writing to maintain the confidentiality and privileged
status of the document, material, or other information
OR PROPRIETARY AND
TRADE SECRET DOCUMENT AND MATERIAL
and has verified in writing the
legal authority to maintain confidentiality;
(c) May receive documents, materials, or information, including
otherwise confidential and privileged documents, materials, or information
AND PROPRIETARY AND TRADE SECRET INFORMATION , from the NAIC and
its affiliates and subsidiaries and from regulatory and law enforcement
officials of other foreign or domestic jurisdictions, and shall maintain as
confidential or privileged any document, material, or information
OR
PROPRIETARY AND TRADE SECRET DOCUMENTS AND MATERIALS
received
with notice or the understanding that it is confidential or privileged under
the laws of the jurisdiction that is the source of the document, material, or
information
OR PROPRIETARY AND TRADE SECRET DOCUMENT AND
MATERIAL
; and
(d) Shall enter into written agreements with the NAIC
AND ANY
THIRD
-PARTY CONSULTANT DESIGNATED BY THE COMMISSIONER governing
the sharing and use of information provided pursuant to this part 8
consistent with this subsection (3) that must:
(I) Specify procedures and protocols regarding the confidentiality
and security of information shared with the NAIC and its affiliates and
subsidiaries OR A THIRD-PARTY CONSULTANT DESIGNATED BY THE
COMMISSIONER
pursuant to this part 8, including procedures and protocols
for sharing by the NAIC with other state, federal, or international
regulators. T
HE AGREEMENT MUST STATE THAT THE RECIPIENT AGREES TO
MAINTAIN THE CONFIDENTIALITY AND PRIVILEGED STATUS OF THE
PAGE 9-HOUSE BILL 24-1321 DOCUMENTS, MATERIALS, OR OTHER INFORMATION OR PROPRIETARY AND
TRADE SECRET DOCUMENTS AND MATERIALS AND HAS VERIFIED IN WRITING
THE LEGAL AUTHORITY TO MAINTAIN SUCH CONFIDENTIALITY
.
(II) Specify that ownership of information shared with the NAIC
and its affiliates and subsidiaries OR A THIRD-PARTY CONSULTANT pursuant
to this part 8 remains with the commissioner and that the NAIC's use of the
information USE OF THE INFORMATION BY THE NAIC OR THE THIRD-PARTY
CONSULTANT AS DESIGNATED BY THE COMMISSIONER
is subject to the
direction of the commissioner;
(II.5) E
XCLUDING DOCUMENTS , MATERIAL, OR INFORMATION
REPORTED PURSUANT TO SECTION
10-3-804 (12)(f), PROHIBIT THE NAIC OR
A THIRD
-PARTY CONSULTANT DESIGNATED BY THE COMMISSIONER FROM
STORING THE INFORMATION SHARED PURSUANT TO THIS SECTION IN A
PERMANENT DATABASE AFTER THE UNDERLYING ANALYSIS IS COMPLETED
.
(III) Require prompt notice to be given to an insurer whose
confidential information in the possession of the NAIC
OR THIRD-PARTY
CONSULTANT DESIGNATED BY THE COMMISSIONER
pursuant to this part 8 is
subject to a request or subpoena to the NAIC
OR THIRD-PARTY CONSULTANT
DESIGNATED BY THE COMMISSIONER
for disclosure or production; and
(IV) Require the NAIC and its affiliates and subsidiaries OR A
THIRD
-PARTY CONSULTANT DESIGNATED BY THE COMMISSIONER to consent
to intervention by an insurer in any judicial or administrative action in
which the NAIC and its affiliates and subsidiaries
OR A THIRD-PARTY
CONSULTANT DESIGNATED BY THE COMMISSIONER
may be required to
disclose confidential information about the insurer shared with the NAIC
and its affiliates and subsidiaries
OR A THIRD-PARTY CONSULTANT
DESIGNATED BY THE COMMISSIONER
pursuant to this part 8; AND
(V) FOR DOCUMENTS, MATERIAL, OR INFORMATION REPORTED
PURSUANT TO SECTION
10-3-804 (12)(f), WHERE THERE IS AN AGREEMENT
INVOLVING A THIRD
-PARTY CONSULTANT, PROVIDE FOR NOTIFICATION OF
THE IDENTITY OF THE CONSULTANT TO THE APPLICABLE INSURERS
.
(6) Documents, materials, or other information
OR PROPRIETARY
AND TRADE SECRET DOCUMENTS AND MATERIALS
in the possession or
control of the NAIC
OR A THIRD-PARTY CONSULTANT DESIGNATED BY THE
PAGE 10-HOUSE BILL 24-1321 COMMISSIONER pursuant to this part 8 are confidential by law and
privileged; are not subject to the "Colorado Open Records Act", part 2 of
article 72 of title 24; C.R.S.,
are not subject to subpoena; and are not subject
to discovery or admissible in evidence in any private civil action.
(7) (a) T
HE GROUP CAPITAL CALCULATION AND RESULTING GROUP
CAPITAL RATIO REQUIRED BY SECTION
10-3-804 (12)(b) AND THE LIQUIDITY
STRESS TEST ALONG WITH ITS RESULTS AND SUPPORTING DISCLOSURES
REQUIRED BY SECTION
10-3-804 (12)(f) ARE REGULATORY TOOLS FOR
ASSESSING GROUP RISKS AND CAPITAL ADEQUACY AND GROUP LIQUIDITY
RISKS
, RESPECTIVELY, AND ARE NOT INTENDED AS A MEANS TO RANK
INSURERS OR INSURANCE HOLDING COMPANY SYSTEMS GENERALLY
.
(b) (I) E
XCEPT AS PROVIDED IN SUBSECTION (7)(b)(II) OF THIS
SECTION
, ANY INSURER, BROKER, OR OTHER PERSON ENGAGED IN ANY
MANNER IN THE INSURANCE BUSINESS SHALL NOT ADVERTISE
, ANNOUNCE,
OR STATE A REPRESENTATION REGARDING THE GROUP CAPITAL
CALCULATION
, GROUP CAPITAL RATIO, LIQUIDITY STRESS TEST RESULTS, OR
SUPPORTING DISCLOSURES FOR THE LIQUIDITY STRESS TEST OF ANY INSURER
OR ANY INSURER GROUP
, OR OF ANY COMPONENT DERIVED IN THE
CALCULATION BY DIRECTLY OR INDIRECTLY MAKING
, PUBLISHING,
DISSEMINATING, CIRCULATING, OR PLACING THE REPRESENTATION BEFORE
THE PUBLIC
:
(A) I
N A NEWSPAPER, MAGAZINE, OR OTHER PUBLICATION; OR
(B) IN THE FORM OF A NOTICE, CIRCULAR, PAMPHLET, LETTER, OR
POSTER
; OR
(C) OVER ANY RADIO OR TELEVISION STATION OR ANY ELECTRONIC
MEANS OF COMMUNICATION AVAILABLE TO THE PUBLIC
; OR
(D) IN ANY OTHER WAY AS AN ADVERTISEMENT .
(II) A
N INSURER MAY PUBLISH AN ANNOUNCEMENT ,
ADVERTISEMENT, OR STATEMENT DESCRIBED IN SUBSECTION (7)(b)(I) OF
THIS SECTION IN A WRITTEN PUBLICATION IF THE SOLE PURPOSE OF THE
ANNOUNCEMENT IS TO REBUT THE MATERIALLY FALSE STATEMENT WHEN
THE ANNOUNCEMENT
, ADVERTISEMENT, OR STATEMENT WAS PUBLISHED IN
A WRITTEN PUBLICATION AND THE INSURER IS ABLE TO DEMONSTRATE TO
PAGE 11-HOUSE BILL 24-1321 THE COMMISSIONER WITH SUBSTANTIAL PROOF THE FALSITY OR
INAPPROPRIATENESS OF SUCH ANNOUNCEMENT
, ADVERTISEMENT, OR
STATEMENT
.
SECTION 5. In Colorado Revised Statutes, amend 10-3-705 as
follows:
10-3-705. Rules. (1) The commissioner may adopt rules
implementing this part 7.
(2) (a) T
HE COMMISSIONER MAY ADOPT RULES APPLICABLE TO
REINSURANCE ARRANGEMENTS DESCRIBED IN THIS SUBSECTION
(2)(a).
R
ULES ADOPTED PURSUANT TO THIS SUBSECTION (2) MUST APPLY ONLY TO
REINSURANCE RELATING TO
:
(I) L
IFE INSURANCE POLICIES WITH GUARANTEED NONLEVEL GROSS
PREMIUMS OR GUARANTEED NONLEVEL BENEFITS
;
(II) U
NIVERSAL LIFE INSURANCE POLICIES WITH PROVISIONS
RESULTING IN THE ABILITY OF A POLICYHOLDER TO KEEP A POLICY IN FORCE
OVER A SECONDARY GUARANTEE PERIOD
;
(III) V
ARIABLE ANNUITIES WITH GUARAN TEED DEATH OR LIVING
BENEFITS
;
(IV) L
ONG-TERM CARE INSURANCE POLICIES; OR
(V) OTHER LIFE AND HEALTH INSURANCE AND ANNUITY PRODUCTS
AS TO WHICH THE
NAIC ADOPTS MODEL REGULATORY REQUIREMENTS WITH
RESPECT TO CREDIT FOR REINSURANCE
.
(b) A
RULE ADOPTED PURSUANT TO SUBSECTION (2)(a)(I) OR
(2)(a)(II) OF THIS SECTION MUST APPLY TO ANY TREATY CONTAINING :
(I) P
OLICIES ISSUED ON OR AFTER JANUARY 1, 2015; OR
(II) POLICIES ISSUED PRIOR TO JANUARY 1, 2015, IF RISK PERTAINING
TO PRE
-2015 POLICIES IS CEDED IN CONNECTION WITH THE TREATY , IN
WHOLE OR IN PART
, ON OR AFTER JANUARY 1, 2015.
PAGE 12-HOUSE BILL 24-1321 (c) A RULE ADOPTED PURSUANT THIS SUBSECTION (2) MAY REQUIRE
THE CEDING INSURER
, IN CALCULATING THE AMOUNTS OR FORMS OF
SECURITY REQUIRED TO BE HELD UNDER RULES PROMULGATED UNDER THIS
SUBSECTION
(2), TO USE THE VALUATION MANUAL ADOPTED BY THE NAIC
UNDER THE NAIC STANDARD VALUATION LAW , INCLUDING ALL
AMENDMENTS ADOPTED BY THE
NAIC AND IN EFFECT ON THE DATE ON
WHICH THE CALCULATION IS MADE
, TO THE EXTENT APPLICABLE.
(d) A
RULE ADOPTED PURSUANT TO THIS SUBSECTION (2) DOES NOT
APPLY TO CESSIONS TO AN ASSUMING INSURER THAT
:
(I) (A) M
EETS THE CONDITIONS SET FORTH IN SECTION 10-3-702
(6.5);
(B) I
S CERTIFIED IN THIS STATE; OR
(C) MAINTAINS AT LEAST TWO HUNDRED FIFTY MILLION DOLLARS IN
CAPITAL AND SURPLUS WHEN CALCULATED IN ACCORDANCE WITH THE MOST
RECENT
NAIC ACCOUNTING PRACTICES AND PROCEDURES MANUAL , AS
AMENDED BY THE
NAIC, EXCLUDING THE IMPACT OF ANY PERMITTED OR
PRESCRIBED PRACTICES
; AND
(II) IS LICENSED:
(A) I
N AT LEAST TWENTY-SIX STATES; OR
(B) IN AT LEAST TEN STATES AND LICENSED OR ACCREDITED IN A
TOTAL OF AT LEAST THIRTY
-FIVE STATES.
(e) T
HE AUTHORITY TO ADOPT RULES PURSUANT TO THIS SUBSECTION
(2) DOES NOT LIMIT THE COMMISSIONER'S GENERAL AUTHORITY TO ADOPT
RULES PURSUANT TO SUBSECTION
(1) OF THIS SECTION.
(f) A
S USED IN THIS SUBSECTION (2), "NAIC" MEANS THE NATIONAL
ASSOCIATION OF INSURANCE COMMISSIONERS.
SECTION 6. Act subject to petition - effective date. This act
takes effect January 1, 2025; except that, if a referendum petition is filed
pursuant to section 1 (3) of article V of the state constitution against this act
or an item, section, or part of this act within the ninety-day period after final
PAGE 13-HOUSE BILL 24-1321 adjournment of the general assembly, then the act, item, section, or part will
not take effect unless approved by the people at the general election to be
held in November 2024 and, in such case, will take effect January 1, 2025,
or on the date of the official declaration of the vote thereon by the governor,
whichever is later.
____________________________ ____________________________
Julie McCluskie Steve Fenberg
SPEAKER OF THE HOUSE PRESIDENT OF
OF REPRESENTATIVES THE SENATE
____________________________ ____________________________
Robin Jones Cindi L. Markwell
CHIEF CLERK OF THE HOUSE SECRETARY OF
OF REPRESENTATIVES THE SENATE
APPROVED________________________________________
(Date and Time)
_________________________________________
Jared S. Polis
GOVERNOR OF THE STATE OF COLORADO
PAGE 14-HOUSE BILL 24-1321