Connecticut 2022 Regular Session

Connecticut House Bill HB05382 Compare Versions

Version 1 (Old)

Version 2 (New)

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7		-	General Assembly Substitute Bill No. 5382
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	6	+	LCO No. 2192 1 of 29
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	8	+	General Assembly Raised Bill No. 5382
8	9		February Session, 2022
	10	+	LCO No. 2192
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	13	+	Referred to Committee on INSURANCE AND REAL ESTATE
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	15	+
	16	+	Introduced by:
	17	+	(INS)
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14	22		AN ACT CONCERNING THE INSURANCE HOLDING COMPANY ACT.
15	23		Be it enacted by the Senate and House of Representatives in General
16	24		Assembly convened:
17	25
18	26		Section 1. Section 38a-129 of the general statutes is repealed and the 1
19	27		following is substituted in lieu thereof (Effective July 1, 2022): 2
20	28		(a) It shall be the purpose of sections 38a-129 to 38a-140, inclusive, to 3
21	29		safeguard the financial security of Connecticut domestic insurance 4
22	30		companies by empowering the Insurance Commissioner to supervise 5
23	31		the activities of insurance companies doing business within this state 6
24	32		which are affiliated with an insurance holding company system, to 7
25	33		review the acquisition of control over the management of domestic 8
26	34		insurance companies, however effectuated, and to provide standards 9
27	35		for such supervision and review. 10
28	36		(b) As used in sections 38a-129 to 38a-140, inclusive, the following 11
29	37		terms shall have the respective meanings hereinafter set forth, unless the 12
30	38		context shall otherwise require: 13
31	39		(1) "Affiliate" or "affiliated" has the same meaning as provided in 14
32		-	section 38a-1; 15
33		-	(2) "Commissioner" means the Insurance Commissioner and any 16
34		-	assistant to the Insurance Commissioner designated and authorized by 17 Substitute Bill No. 5382
	40	+	section 38a-1; 15 Raised Bill No. 5382
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	44	+	LCO No. 2192 2 of 29
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	46	+	(2) "Commissioner" means the Insurance Commissioner and any 16
	47	+	assistant to the Insurance Commissioner designated and authorized by 17
41	48		the commissioner while acting under such designation; 18
42	49		(3) "Control", "controlled by" or "under common control with" has the 19
43	50		same meaning as provided in section 38a-1; 20
44	51		(4) "Enterprise risk" means any activity, circumstance, event or series 21
45	52		of events involving one or more affiliates of an insurer that, if not 22
46	53		remedied promptly, is likely to have a material adverse effect upon the 23
47	54		financial condition or liquidity of the insurer or the insurer's insurance 24
48	55		holding company system as a whole, including, but not limited to, any 25
49	56		activity, circumstance, event or series of events that would cause an 26
50	57		insurer's risk-based capital to fall below minimum threshold levels, as 27
51	58		described in subsection (d) of section 38a-72 or, for a health care center, 28
52	59		in subdivision (2) of subsection (a) of section 38a-193, or would cause 29
53	60		the insurer to be in a hazardous financial condition; 30
54	61		(5) "Group capital calculation instructions" means the group capital 31
55		-	Calculation Instructions ~~and Reporting Template~~ as adopted by the 32
56		-	~~NAIC and as amended by the~~ NAIC from time to time in accordance 33
57		-	~~with the procedures adopted by~~ the NAIC; 34
	62	+	calculation instructions as adopted by the NAIC and as amended by the 32
	63	+	NAIC from time to time in accordance with the procedures adopted by 33
	64	+	the NAIC; 34
58	65		[(5)] (6) "Insurance holding company system" means two or more 35
59	66		affiliated persons, one or more of which is an insurance company; 36
60	67		[(6)] (7) "Insurance company" or "insurer" has the same meaning as 37
61	68		provided in section 38a-1, except that it does not include agencies, 38
62	69		authorities or instrumentalities of the United States, its possessions and 39
63	70		territories, the Commonwealth of Puerto Rico, the District of Columbia, 40
64	71		or a state or political subdivision of a state; 41
65	72		[(7)] (8) "NAIC" means the National Association of Insurance 42
66	73		Commissioners; 43
67		-	(9) "NAIC liquidity stress test framework" means the NAIC Liquidity 44
68		-	Stress Test Framework publication which includes a history of the 45
69		-	NAIC's development of regulatory liquidity stress testing, the scope 46
70		-	criteria applicable for a specific data year, and the liquidity stress test 47 Substitute Bill No. 5382
	74	+	(9) "NAIC liquidity stress test framework" means the NAIC 44
	75	+	publication which includes a history of the NAIC's development of 45 Raised Bill No. 5382
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77		-	instructions and reporting templates for a specific data year, such scope 48
78		-	criteria, instructions, and reporting template being as adopted by the 49
79		-	NAIC and as amended by the NAIC from time to time in accordance 50
80		-	with the procedures adopted by the NAIC; 51
	79	+	LCO No. 2192 3 of 29
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	81	+	regulatory liquidity stress testing, the scope criteria applicable for a 46
	82	+	specific data year, and the liquidity stress test instructions and reporting 47
	83	+	templates for a specific data year, such scope criteria, instructions, and 48
	84	+	reporting template being as adopted by the NAIC and as amended by 49
	85	+	the NAIC from time to time in accordance with the procedures adopted 50
	86	+	by the NAIC; 51
81	87		[(8)] (10) "Person" has the same meaning as provided in section 38a-52
82	88		1, or any combination of persons so defined acting in concert; 53
83	89		(11) "Scope criteria" means the designated exposure bases along with 54
84	90		minimum magnitudes thereof for the specified data year used to 55
85	91		establish a preliminary list of insurers considered scoped into the NAIC 56
86	92		liquidity stress test framework for that data year; 57
87	93		[(9)] (12) A "securityholder" of a specified person means one who 58
88	94		owns any security of such person, including common stock, preferred 59
89	95		stock, debt obligations and any other security convertible into or 60
90	96		evidencing the right to acquire any of the foregoing; 61
91	97		[(10)] (13) "Subsidiary" has the same meaning as provided in section 62
92		-	38a-1; ~~and~~ 63
	98	+	38a-1; 63
93	99		[(11)] (14) "Voting security" includes any security convertible into or 64
94	100		evidencing a right to acquire a voting security. 65
95	101		(c) The provisions of sections 38a-129 to 38a-140, inclusive, shall 66
96	102		apply to captive insurance companies, as defined in section 38a-91aa, as 67
97	103		specified in section 38a-91oo. 68
98	104		Sec. 2. Subsections (g) to (o), inclusive, of section 38a-135 of the 69
99	105		general statutes are repealed and the following is substituted in lieu 70
100	106		thereof (Effective July 1, 2022): 71
101	107		(g) (1) Except as provided in subdivision (2) of this subsection, the 72
102	108		ultimate controlling person of every insurer subject to registration shall 73
103		-	concurrently file with such registration an annual group capital 74
104		-	calculation not later than June first of each year, with the lead state 75
105		-	commissioner. The report shall be completed in accordance with the 76 Substitute Bill No. 5382
	109	+	concurrently file with the registration an annual group capital 74
	110	+	calculation as directed by the lead state commissioner of the insurance 75 Raised Bill No. 5382
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112		-	NAIC group capital calculation instructions, which may permit the lead 77
113		-	state commissioner to allow a controlling person that is not the ultimate 78
114		-	controlling person to file the group capital calculation. The report shall 79
115		-	be filed with the lead state commissioner of the insurance holding 80
116		-	company system as determined by the lead state commissioner in 81
117		-	accordance with the procedures contained in the Financial Analysis 82
	114	+	LCO No. 2192 4 of 29
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	116	+	holding company system. The report shall be completed in accordance 76
	117	+	with the NAIC group capital calculation instructions, which may permit 77
	118	+	the lead state commissioner to allow a controlling person that is not the 78
	119	+	ultimate controlling person to file the group capital calculation. The 79
	120	+	report shall be filed with the lead state commissioner of the insurance 80
	121	+	holding company system as determined by the lead state commissioner 81
	122	+	in accordance with the procedures within the Financial Analysis 82
118	123		Handbook adopted by the NAIC. 83
119	124		(2) An insurance holding company system shall be exempt from filing 84
120	125		the group capital calculation if it is: 85
121	126		(A) An insurance holding company system that has only one insurer 86
122	127		within its holding company structure, that only writes business and is 87
123	128		only licensed in its domestic state and assumes no business from any 88
124	129		other insurer; 89
125		-	(B) An insurance holding company system that is subject to the group 90
126		-	capital requirements applicable to an insurance group that owns a 91
127		-	depository institution or institutions by the United States Federal 92
128		-	Reserve Board. The lead state commissioner shall request such group 93
129		-	capital requirements applicable to the insurance group from the United 94
130		-	States Federal Reserve Board under the terms of information sharing 95
131		-	agreements in effect. If the United States Federal Reserve Board cannot 96
132		-	share the calculation with the lead state commissioner, the insurance 97
133		-	holding company system shall not be exempt from the group capital 98
134		-	calculation filing; 99
135		-	(C) An insurance holding company system whose non-United States 100
136		-	group-wide supervisor is located within a reciprocal jurisdiction as 101
137		-	described in section 38a-85 that recognizes the United States regulatory 102
138		-	approach to group supervision and group capital; or 103
139		-	(D) An insurance holding company system: 104
140		-	(i) That provides information to the lead state commissioner that 105
141		-	meets the requirements for accreditation under the NAIC financial 106
142		-	standards and accreditation program, either directly or indirectly 107 Substitute Bill No. 5382
	130	+	(B) An insurance holding company system that is required to perform 90
	131	+	a group capital calculation specified by the United States Federal 91
	132	+	Reserve Board. The lead state commissioner shall request such group 92
	133	+	capital calculation from the United States Federal Reserve Board under 93
	134	+	the terms of information sharing agreements in effect. If the United 94
	135	+	States Federal Reserve Board cannot share the calculation with the lead 95
	136	+	state commissioner, the insurance holding company system shall not be 96
	137	+	exempt from the group capital calculation filing; 97
	138	+	(C) An insurance holding company system whose non-United States 98
	139	+	group-wide supervisor is located within a reciprocal jurisdiction as 99
	140	+	described in section 38a-85 that recognizes the United States regulatory 100
	141	+	approach to group supervision and group capital; or 101
	142	+	(D) An insurance holding company system: 102
	143	+	(i) That provides information to the lead state commissioner that 103
	144	+	meets the requirements for accreditation under the NAIC financial 104
	145	+	standards and accreditation program, either directly or indirectly 105
	146	+	through the group-wide supervisor, who has determined such 106 Raised Bill No. 5382
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149		-	through the group-wide supervisor, who has determined such 108
150		-	information is satisfactory to allow the lead state commissioner to 109
151		-	comply with the NAIC group supervision approach, as detailed in the 110
152		-	NAIC Financial Analysis Handbook; and 111
153		-	(ii) Whose non-United States group-wide supervisor that is not in a 112
154		-	reciprocal jurisdiction recognizes and accepts, as specified by the lead 113
155		-	state commissioner in regulation, the group capital calculation as the 114
156		-	world-wide group capital assessment for United States insurance 115
157		-	groups who operate in that jurisdiction. 116
158		-	(3) Notwithstanding subparagraphs (C) and (D) of subdivision (2) of 117
159		-	this subsection, a lead state commissioner shall require the group capital 118
160		-	calculation for the United States operations of any non-United States 119
161		-	based insurance holding company system where, after any necessary 120
162		-	consultation with other supervisors or officials, it is determined 121
163		-	appropriate by the lead state commissioner for prudential oversight and 122
164		-	solvency monitoring purposes or for ensuring competitiveness of the 123
165		-	insurance marketplace. 124
166		-	(4) Notwithstanding subparagraphs (A) and (D) of subdivision (2) of 125
167		-	this subsection, the lead state commissioner shall have the discretion to 126
168		-	exempt the ultimate controlling person from filing the annual group 127
169		-	capital calculation or to accept a limited group capital filing or report in 128
170		-	accordance with criteria as specified by the lead state commissioner in 129
171		-	regulation. 130
172		-	(5) If the lead state commissioner determines that an insurance 131
173		-	holding company system no longer meets one or more of the 132
174		-	requirements for an exemption for filing the group capital calculation 133
175		-	under subdivision (2) of this subsection, the insurance holding company 134
176		-	system shall file the group capital calculation at the next annual filing 135
177		-	date unless given an extension by the lead state commissioner based on 136
178		-	reasonable grounds shown. 137
179		-	(6) The information reported and provided to the lead state 138 Substitute Bill No. 5382
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	151	+
	152	+	information is satisfactory to allow the lead state commissioner to 107
	153	+	comply with the NAIC group supervision approach, as detailed in the 108
	154	+	NAIC Financial Analysis Handbook; and 109
	155	+	(ii) Whose non-United States group-wide supervisor that is not in a 110
	156	+	reciprocal jurisdiction recognizes and accepts, as specified by the 111
	157	+	commissioner in regulations adopted in accordance with the provisions 112
	158	+	of chapter 54, the group capital calculation as the world-wide group 113
	159	+	capital assessment for United States insurance groups who operate in 114
	160	+	that jurisdiction. 115
	161	+	(3) Notwithstanding subparagraphs (C) and (D) of subdivision (2) of 116
	162	+	this subsection, a lead state commissioner shall require the group capital 117
	163	+	calculation for the United States operations of any non-United States 118
	164	+	based insurance holding company system where, after any necessary 119
	165	+	consultation with other supervisors or officials, it is determined 120
	166	+	appropriate by the lead state commissioner for prudential oversight and 121
	167	+	solvency monitoring purposes or for ensuring competitiveness of the 122
	168	+	insurance marketplace. 123
	169	+	(4) Notwithstanding subparagraphs (A) and (D) of subdivision (2) of 124
	170	+	this subsection, the lead state commissioner shall have the discretion to 125
	171	+	exempt the ultimate controlling person from filing the annual group 126
	172	+	capital calculation or to accept a limited group capital filing or report in 127
	173	+	accordance with criteria as specified by the commissioner in regulations 128
	174	+	adopted in accordance with the provisions of chapter 54. 129
	175	+	(5) If the lead state commissioner determines that an insurance 130
	176	+	holding company system no longer meets one or more of the 131
	177	+	requirements for an exemption for filing the group capital calculation 132
	178	+	under subdivision (2) of this subsection, the insurance holding company 133
	179	+	system shall file the group capital calculation at the next annual filing 134
	180	+	date unless given an extension by the lead state commissioner based on 135
	181	+	reasonable grounds shown. 136
	182	+	(6) The information reported and provided to the lead state 137
	183	+	commissioner by an insurance holding company supervised by the 138 Raised Bill No. 5382
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186		-	commissioner by an insurance holding company, including an 139
187		-	insurance holding company supervised by the United States Federal 140
188		-	Reserve Board pursuant to this subsection, shall: 141
189		-	(A) Be confidential by law and privileged; 142
190		-	(B) Not be subject to disclosure under section 1-210; 143
191		-	(C) Not be subject to subpoena; and 144
192		-	(D) Not be subject to discovery or admissible in any civil action. 145
193		-	(7) The group capital calculation and resulting group capital ratio 146
194		-	required pursuant to this subsection are regulatory tools for assessing 147
195		-	group risks and capital adequacy and are not intended as a means to 148
196		-	rank insurers or insurance holding company systems generally. 149
197		-	(h) The ultimate controlling person of every insurer subject to 150
198		-	registration and also scoped into the NAIC liquidity stress test 151
199		-	framework shall file the results of a specific year's liquidity stress test to 152
200		-	the lead state insurance commissioner of the insurance holding 153
201		-	company system as determined by procedures within the Financial 154
202		-	Analysis Handbook adopted by the NAIC. 155
203		-	(1) The NAIC liquidity stress test framework includes scope criteria 156
204		-	applicable to a specific data year. These scope criteria are reviewed at 157
205		-	least annually by the NAIC Financial Stability Task Force or its 158
206		-	successor. Any change to the NAIC liquidity stress test framework or to 159
207		-	the data year for which the scope criteria are to be measured shall be 160
208		-	effective on January first of the year following the calendar year when 161
209		-	such changes are adopted. Insurers meeting at least one threshold of the 162
210		-	scope criteria shall be considered scoped into the NAIC liquidity stress 163
211		-	test framework for the specified data year unless the lead state 164
212		-	commissioner, in consultation with the NAIC Financial Stability Task 165
213		-	Force or its successor, determines the insurer should not be scoped into 166
214		-	the NAIC liquidity stress test framework for that data year. Insurers that 167
215		-	do not trigger at least one threshold of the scope criteria shall be 168 Substitute Bill No. 5382
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	188	+
	189	+	United States Federal Reserve Board or any United States group-wide 139
	190	+	supervisor pursuant to this subsection, shall: 140
	191	+	(A) Be confidential by law and privileged; 141
	192	+	(B) Not be subject to disclosure under section 1-210; 142
	193	+	(C) Not be subject to subpoena; and 143
	194	+	(D) Not be subject to discovery or admissible in any civil action. 144
	195	+	(7) The group capital calculation and resulting group capital ratio 145
	196	+	required pursuant to this subsection are regulatory tools for assessing 146
	197	+	group risks and capital adequacy and are not intended as a means to 147
	198	+	rank insurers or insurance holding company systems generally. 148
	199	+	(h) The ultimate controlling person of every insurer subject to 149
	200	+	registration and also scoped into the NAIC liquidity stress test 150
	201	+	framework shall file the results of a specific year's liquidity stress test to 151
	202	+	the lead state insurance commissioner of the insurance holding 152
	203	+	company system as determined by procedures within the Financial 153
	204	+	Analysis Handbook adopted by the NAIC. 154
	205	+	(1) The NAIC liquidity stress test framework includes scope criteria 155
	206	+	applicable to a specific data year. These scope criteria are reviewed at 156
	207	+	least annually by the NAIC Financial Stability Task Force or its 157
	208	+	successor. Any change to the NAIC liquidity stress test framework or to 158
	209	+	the data year for which the scope criteria are to be measured shall be 159
	210	+	effective on January first of the year following the calendar year when 160
	211	+	such changes are adopted. Insurers meeting at least one threshold of the 161
	212	+	scope criteria shall be considered scoped into the NAIC liquidity stress 162
	213	+	test framework for the specified data year unless the lead state 163
	214	+	commissioner, in consultation with the NAIC Financial Stability Task 164
	215	+	Force or its successor, determines the insurer should not be scoped into 165
	216	+	the NAIC liquidity stress test framework for that data year. Insurers that 166
	217	+	do not trigger at least one threshold of the scope criteria shall be 167
	218	+	considered scoped out of the NAIC liquidity stress test framework for 168 Raised Bill No. 5382
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222		-	considered scoped out of the NAIC liquidity stress test framework for 169
223		-	the specified data year, unless the lead state insurance commissioner, in 170
224		-	consultation with the NAIC Financial Stability Task Force or its 171
225		-	successor, determines the insurer should be scoped into the NAIC 172
226		-	liquidity stress test framework for that data year. 173
227		-	(2) The performance of, and filing of the results from, a specific year's 174
228		-	liquidity stress test shall comply with the NAIC liquidity stress test 175
229		-	framework's instructions and reporting templates for that year and any 176
230		-	lead state insurance commissioner determinations, in conjunction with 177
231		-	the NAIC Financial Stability Task Force or its successor, provided 178
232		-	within the NAIC liquidity stress test framework. 179
233		-	(3) The information reported and provided to the lead state 180
234		-	commissioner by an insurance holding company, including an 181
235		-	insurance holding company supervised by the United States Federal 182
236		-	Reserve Board pursuant to this subsection, shall: 183
237		-	(A) Be confidential by law and privileged; 184
238		-	(B) Not be subject to disclosure under section 1-210; 185
239		-	(C) Not be subject to subpoena; and 186
240		-	(D) Not be subject to discovery or admissible in any civil action. 187
241		-	(4) The liquidity stress test along with its results and supporting 188
242		-	disclosures required pursuant to this subsection are regulatory tools for 189
243		-	assessing group liquidity risks and are not intended as a means to rank 190
244		-	insurers or insurance holding company systems generally. 191
245		-	[(g)] (i) The commissioner shall terminate the registration of any 192
246		-	insurance company that demonstrates that it no longer is a member of 193
247		-	an insurance holding company system. 194
248		-	[(h)] (j) The commissioner may require or allow two or more affiliated 195
249		-	insurance companies subject to registration hereunder to file a 196 Substitute Bill No. 5382
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	224	+	the specified data year, unless the lead state insurance commissioner, in 169
	225	+	consultation with the NAIC Financial Stability Task Force or its 170
	226	+	successor, determines the insurer should be scoped into the NAIC 171
	227	+	liquidity stress test framework for that data year. 172
	228	+	(2) The performance of, and filing of the results from, a specific year's 173
	229	+	liquidity stress test shall comply with the NAIC liquidity stress test 174
	230	+	framework's instructions and reporting templates for that year and any 175
	231	+	lead state insurance commissioner determinations, in conjunction with 176
	232	+	the NAIC Financial Stability Task Force or its successor, provided 177
	233	+	within the NAIC liquidity stress test framework. 178
	234	+	(3) The information reported and provided to the lead state 179
	235	+	commissioner by an insurance holding company supervised by the 180
	236	+	United States Federal Reserve Board and non-United States group-wide 181
	237	+	supervisor pursuant to this subsection, shall: 182
	238	+	(A) Be confidential by law and privileged; 183
	239	+	(B) Not be subject to disclosure under section 1-210; 184
	240	+	(C) Not be subject to subpoena; and 185
	241	+	(D) Not be subject to discovery or admissible in any civil action. 186
	242	+	(4) The liquidity stress test along with its results and supporting 187
	243	+	disclosures required pursuant to this subsection are regulatory tools for 188
	244	+	assessing group liquidity risks and are not intended as a means to rank 189
	245	+	insurers or insurance holding company systems generally. 190
	246	+	[(g)] (i) The commissioner shall terminate the registration of any 191
	247	+	insurance company that demonstrates that it no longer is a member of 192
	248	+	an insurance holding company system. 193
	249	+	[(h)] (j) The commissioner may require or allow two or more affiliated 194
	250	+	insurance companies subject to registration hereunder to file a 195
	251	+	consolidated registration statement. 196 Raised Bill No. 5382
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256		-	consolidated registration statement. 197
257		-	[(i)] (k) The commissioner may allow an insurance company that is 198
258		-	authorized to do business in this state and is part of an insurance 199
259		-	holding company system to register on behalf of any affiliated insurer 200
260		-	that is required to register under subsection (a) of this section and to file 201
261		-	all information and materials required to be filed under this section. 202
262		-	[(j)] (l) Any person may file with the commissioner a disclaimer of 203
263		-	affiliation with any insurance company and any insurance company 204
264		-	may file a disclaimer of affiliation with any other person. The disclaimer 205
265		-	shall fully disclose all material relationships and bases for affiliation 206
266		-	between such person and such insurance company as well as the basis 207
267		-	for disclaiming such affiliation. After a disclaimer has been filed, the 208
268		-	insurance company shall be relieved of any duty to register or report 209
269		-	under this section that may arise out of the insurance company's 210
270		-	relationship with such person unless the commissioner disallows such 211
271		-	disclaimer. The commissioner shall disallow such disclaimer only after 212
272		-	furnishing all parties in interest with notice and an opportunity to be 213
273		-	heard, and after making specific findings of fact to support such 214
274		-	disallowance. 215
275		-	[(k)] (m) The failure to file a registration statement or any 216
276		-	amendment, addition thereto or summary or an enterprise risk report 217
277		-	required by this section within the time specified for such filing shall be 218
278		-	a violation of sections 38a-129 to 38a-140, inclusive, as amended by this 219
279		-	act. 220
280		-	[(l)] (n) The commissioner may by regulation or order exempt any 221
281		-	insurance company or class of insurance companies from registration 222
282		-	under this section if, in the commissioner's judgment, registration by 223
283		-	such company or class of companies is not necessary to effectuate the 224
284		-	purposes of said sections. 225
285		-	[(m)] (o) A foreign or alien insurer shall not be required to register 226
286		-	pursuant to this section if it is (1) subject to disclosure requirements and 227 Substitute Bill No. 5382
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	256	+
	257	+	[(i)] (k) The commissioner may allow an insurance company that is 197
	258	+	authorized to do business in this state and is part of an insurance 198
	259	+	holding company system to register on behalf of any affiliated insurer 199
	260	+	that is required to register under subsection (a) of this section and to file 200
	261	+	all information and materials required to be filed under this section. 201
	262	+	[(j)] (l) Any person may file with the commissioner a disclaimer of 202
	263	+	affiliation with any insurance company and any insurance company 203
	264	+	may file a disclaimer of affiliation with any other person. The disclaimer 204
	265	+	shall fully disclose all material relationships and bases for affiliation 205
	266	+	between such person and such insurance company as well as the basis 206
	267	+	for disclaiming such affiliation. After a disclaimer has been filed, the 207
	268	+	insurance company shall be relieved of any duty to register or report 208
	269	+	under this section that may arise out of the insurance company's 209
	270	+	relationship with such person unless the commissioner disallows such 210
	271	+	disclaimer. The commissioner shall disallow such disclaimer only after 211
	272	+	furnishing all parties in interest with notice and an opportunity to be 212
	273	+	heard, and after making specific findings of fact to support such 213
	274	+	disallowance. 214
	275	+	[(k)] (m) The failure to file a registration statement or any 215
	276	+	amendment, addition thereto or summary or an enterprise risk report 216
	277	+	required by this section within the time specified for such filing shall be 217
	278	+	a violation of sections 38a-129 to 38a-140, inclusive, as amended by this 218
	279	+	act. 219
	280	+	[(l)] (n) The commissioner may by regulation or order exempt any 220
	281	+	insurance company or class of insurance companies from registration 221
	282	+	under this section if, in the commissioner's judgment, registration by 222
	283	+	such company or class of companies is not necessary to effectuate the 223
	284	+	purposes of said sections. 224
	285	+	[(m)] (o) A foreign or alien insurer shall not be required to register 225
	286	+	pursuant to this section if it is (1) subject to disclosure requirements and 226
	287	+	standards adopted by statute or regulation in the jurisdiction of its 227
	288	+	domicile that are substantially similar to those contained in this section 228 Raised Bill No. 5382
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293		-	standards adopted by statute or regulation in the jurisdiction of its 228
294		-	domicile that are substantially similar to those contained in this section 229
295		-	and subsections (a), (b), (f) and (g) of section 38a-136, as amended by 230
296		-	this act, or (2) admitted in the domiciliary jurisdiction of the principal 231
297		-	insurer in its holding company system and in said jurisdiction is subject 232
298		-	to disclosure requirements and standards adopted by statute or 233
299		-	regulation that are substantially similar to those contained in this section 234
300		-	and subsections (a), (b), (f) and (g) of section 38a-136, as amended by 235
301		-	this act. The commissioner may require any authorized insurer that is a 236
302		-	member of a holding company system not subject to registration under 237
303		-	this section to furnish a copy of the registration statement or other 238
304		-	information filed by such insurance company with the insurance 239
305		-	regulatory authority of its domicile or the domicile of the principal 240
306		-	insurer in its holding company system, as the case may be. 241
307		-	[(n)] (p) (1) To assess the business strategy, financial, legal or 242
308		-	regulatory position risk exposure, risk management or governance 243
309		-	processes of a domestic insurance company registered under this 244
310		-	section that is part of an insurance holding company system that has 245
311		-	international operations, and as part of the examination pursuant to 246
312		-	section 38a-14a of such insurance company, the commissioner may 247
313		-	initiate, be a member of or participate in a supervisory college, which 248
314		-	shall be a temporary or permanent forum for communication between 249
315		-	and cooperation among state, federal and international regulatory 250
316		-	officials. 251
317		-	(2) If the commissioner initiates a supervisory college, the 252
318		-	commissioner shall (A) establish the membership of, and participation 253
319		-	by state, federal or international regulatory officials in, such supervisory 254
320		-	college, (B) establish the functions of the supervisory college and the role 255
321		-	of members and participants, and select a chairperson for such 256
322		-	supervisory college, (C) coordinate the activities of the supervisory 257
323		-	college, including meeting planning and processes for information 258
324		-	sharing that comply with the applicable confidentiality provisions set 259
325		-	forth in section 38a-137, as amended by this act, and (D) establish a crisis 260 Substitute Bill No. 5382
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	293	+
	294	+	and subsections (a), (b), (f) and (g) of section 38a-136, as amended by 229
	295	+	this act, or (2) admitted in the domiciliary jurisdiction of the principal 230
	296	+	insurer in its holding company system and in said jurisdiction is subject 231
	297	+	to disclosure requirements and standards adopted by statute or 232
	298	+	regulation that are substantially similar to those contained in this section 233
	299	+	and subsections (a), (b), (f) and (g) of section 38a-136, as amended by 234
	300	+	this act. The commissioner may require any authorized insurer that is a 235
	301	+	member of a holding company system not subject to registration under 236
	302	+	this section to furnish a copy of the registration statement or other 237
	303	+	information filed by such insurance company with the insurance 238
	304	+	regulatory authority of its domicile or the domicile of the principal 239
	305	+	insurer in its holding company system, as the case may be. 240
	306	+	[(n)] (p) (1) To assess the business strategy, financial, legal or 241
	307	+	regulatory position risk exposure, risk management or governance 242
	308	+	processes of a domestic insurance company registered under this 243
	309	+	section that is part of an insurance holding company system that has 244
	310	+	international operations, and as part of the examination pursuant to 245
	311	+	section 38a-14a of such insurance company, the commissioner may 246
	312	+	initiate, be a member of or participate in a supervisory college, which 247
	313	+	shall be a temporary or permanent forum for communication between 248
	314	+	and cooperation among state, federal and international regulatory 249
	315	+	officials. 250
	316	+	(2) If the commissioner initiates a supervisory college, the 251
	317	+	commissioner shall (A) establish the membership of, and participation 252
	318	+	by state, federal or international regulatory officials in, such supervisory 253
	319	+	college, (B) establish the functions of the supervisory college and the role 254
	320	+	of members and participants, and select a chairperson for such 255
	321	+	supervisory college, (C) coordinate the activities of the supervisory 256
	322	+	college, including meeting planning and processes for information 257
	323	+	sharing that comply with the applicable confidentiality provisions set 258
	324	+	forth in section 38a-137, as amended by this act, and (D) establish a crisis 259
	325	+	management plan for such supervisory college. 260
	326	+	(3) The commissioner may enter into written agreements with state, 261 Raised Bill No. 5382
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332		-	management plan for such supervisory college. 261
333		-	(3) The commissioner may enter into written agreements with state, 262
334		-	federal or international regulatory officials for the governing of the 263
335		-	activities of a supervisory college. Any such agreements shall maintain 264
336		-	the confidentiality requirements under section 38a-137, as amended by 265
337		-	this act. 266
338		-	(4) Each insurance company subject to registration under this section 267
339		-	shall be assessed for and shall pay to the commissioner its share of the 268
340		-	reasonable costs, including reasonable travel expenses, of the 269
341		-	commissioner's participation in a supervisory college. Such payment 270
342		-	shall be in addition to any other taxes, fees and moneys otherwise 271
343		-	payable to the state. The commissioner shall establish the assessment 272
344		-	method for such costs and provide reasonable notice to each insurance 273
345		-	company subject to any such assessment. 274
346		-	(5) Nothing in this subsection shall be construed to limit the authority 275
347		-	of the commissioner to regulate an insurance company or its affiliate 276
348		-	under the commissioner's jurisdiction or to delegate any regulatory 277
349		-	authority of the commissioner to a supervisory college. 278
350		-	[(o)] (q) (1) As used in this subsection: (A) "Group-wide supervisor" 279
351		-	means the regulatory official (i) authorized by such official's jurisdiction 280
352		-	to conduct and coordinate group-wide supervisory activities, and (ii) 281
353		-	who is determined or acknowledged to be the group-wide supervisor of 282
354		-	an internationally active insurance group pursuant to this subsection; 283
355		-	and (B) "internationally active insurance group" means any insurance 284
356		-	holding company system that (i) includes an insurance company 285
357		-	registered pursuant to this section, and (ii) meets the following criteria: 286
358		-	(I) Premiums are written in at least three countries; (II) the percentage 287
359		-	of gross premiums written, including, for purposes of this subsection, 288
360		-	administrative service fees, associated expenses and claims payments, 289
361		-	without such amounts transacted in the United States is at least ten per 290
362		-	cent of the insurance holding company system's total gross written 291
363		-	premiums; and (III) based on a three-year rolling average, the total 292 Substitute Bill No. 5382
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	332	+	federal or international regulatory officials for the governing of the 262
	333	+	activities of a supervisory college. Any such agreements shall maintain 263
	334	+	the confidentiality requirements under section 38a-137, as amended by 264
	335	+	this act. 265
	336	+	(4) Each insurance company subject to registration under this section 266
	337	+	shall be assessed for and shall pay to the commissioner its share of the 267
	338	+	reasonable costs, including reasonable travel expenses, of the 268
	339	+	commissioner's participation in a supervisory college. Such payment 269
	340	+	shall be in addition to any other taxes, fees and moneys otherwise 270
	341	+	payable to the state. The commissioner shall establish the assessment 271
	342	+	method for such costs and provide reasonable notice to each insurance 272
	343	+	company subject to any such assessment. 273
	344	+	(5) Nothing in this subsection shall be construed to limit the authority 274
	345	+	of the commissioner to regulate an insurance company or its affiliate 275
	346	+	under the commissioner's jurisdiction or to delegate any regulatory 276
	347	+	authority of the commissioner to a supervisory college. 277
	348	+	[(o)] (q) (1) As used in this subsection: (A) "Group-wide supervisor" 278
	349	+	means the regulatory official (i) authorized by such official's jurisdiction 279
	350	+	to conduct and coordinate group-wide supervisory activities, and (ii) 280
	351	+	who is determined or acknowledged to be the group-wide supervisor of 281
	352	+	an internationally active insurance group pursuant to this subsection; 282
	353	+	and (B) "internationally active insurance group" means any insurance 283
	354	+	holding company system that (i) includes an insurance company 284
	355	+	registered pursuant to this section, and (ii) meets the following criteria: 285
	356	+	(I) Premiums are written in at least three countries; (II) the percentage 286
	357	+	of gross premiums written, including, for purposes of this subsection, 287
	358	+	administrative service fees, associated expenses and claims payments, 288
	359	+	without the United States is at least ten per cent of the insurance holding 289
	360	+	company system's total gross written premiums; and (III) based on a 290
	361	+	three-year rolling average, the total assets of the insurance holding 291
	362	+	company system are at least fifty billion dollars or the total gross written 292
	363	+	premiums of the insurance holding company system are at least ten 293
	364	+	billion dollars. 294 Raised Bill No. 5382
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370		-	assets of the insurance holding company system are at least fifty billion 293
371		-	dollars or the total gross written premiums of the insurance holding 294
372		-	company system are at least ten billion dollars. 295
373		-	(2) (A) The commissioner, in cooperation with other state, federal and 296
374		-	international regulatory agencies of the jurisdictions where members of 297
375		-	the internationally active insurance group are domiciled, shall 298
376		-	determine a single group-wide supervisor for an internationally active 299
377		-	insurance group. An insurance holding company system that does not 300
378		-	qualify as an internationally active insurance group may request that 301
379		-	the commissioner make a determination or acknowledgment of a group-302
380		-	wide supervisor as set forth in this subsection. 303
381		-	(B) The commissioner may determine that the commissioner is the 304
382		-	appropriate group-wide supervisor for an internationally active 305
383		-	insurance group that conducts substantial insurance business 306
384		-	operations in this state and may act as a group-wide supervisor for any 307
385		-	internationally active insurance group in accordance with the 308
386		-	provisions of this subsection. 309
387		-	(C) The commissioner may acknowledge that the regulatory official 310
388		-	of another jurisdiction is an appropriate group-wide supervisor for an 311
389		-	internationally active insurance group that (i) does not conduct 312
390		-	substantial insurance business operations in the United States, (ii) 313
391		-	conducts substantial insurance business operations in the United States 314
392		-	but not in this state, or (iii) conducts substantial insurance business 315
393		-	operations in the United States and in this state but the commissioner 316
394		-	has determined, pursuant to the factors set forth in subdivision (3) of 317
395		-	this subsection, that the regulatory official of another jurisdiction is the 318
396		-	appropriate group-wide supervisor. 319
397		-	(D) When another regulatory official is acting as the group-wide 320
398		-	supervisor of an internationally active insurance group, the 321
399		-	commissioner shall acknowledge such official as the group-wide 322
400		-	supervisor, except that the commissioner shall make a determination or 323
401		-	acknowledgment of a group-wide supervisor for such insurance group 324 Substitute Bill No. 5382
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	370	+	(2) (A) The commissioner, in cooperation with other state, federal and 295
	371	+	international regulatory agencies of the jurisdictions where members of 296
	372	+	the internationally active insurance group are domiciled, shall 297
	373	+	determine a single group-wide supervisor for an internationally active 298
	374	+	insurance group. An insurance holding company system that does not 299
	375	+	qualify as an internationally active insurance group may request that 300
	376	+	the commissioner make a determination or acknowledgment of a group-301
	377	+	wide supervisor as set forth in this subsection. 302
	378	+	(B) The commissioner may determine that the commissioner is the 303
	379	+	appropriate group-wide supervisor for an internationally active 304
	380	+	insurance group that conducts substantial insurance business 305
	381	+	operations in this state and may act as a group-wide supervisor for any 306
	382	+	internationally active insurance group in accordance with the 307
	383	+	provisions of this subsection. 308
	384	+	(C) The commissioner may acknowledge that the regulatory official 309
	385	+	of another jurisdiction is an appropriate group-wide supervisor for an 310
	386	+	internationally active insurance group that (i) does not conduct 311
	387	+	substantial insurance business operations in the United States, (ii) 312
	388	+	conducts substantial insurance business operations in the United States 313
	389	+	but not in this state, or (iii) conducts substantial insurance business 314
	390	+	operations in the United States and in this state but the commissioner 315
	391	+	has determined, pursuant to the factors set forth in subdivision (3) of 316
	392	+	this subsection, that the regulatory official of another jurisdiction is the 317
	393	+	appropriate group-wide supervisor. 318
	394	+	(D) When another regulatory official is acting as the group-wide 319
	395	+	supervisor of an internationally active insurance group, the 320
	396	+	commissioner shall acknowledge such official as the group-wide 321
	397	+	supervisor, except that the commissioner shall make a determination or 322
	398	+	acknowledgment of a group-wide supervisor for such insurance group 323
	399	+	if a material change in such insurance group results in (i) the largest 324
	400	+	share of such insurance group's premiums, assets or liabilities being 325
	401	+	held by member insurance companies domiciled in this state, or (ii) this 326
	402	+	state being the place of domicile of the top-tiered insurance company or 327 Raised Bill No. 5382
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408		-	if a material change in such insurance group results in (i) the largest 325
409		-	share of such insurance group's premiums, assets or liabilities being 326
410		-	held by member insurance companies domiciled in this state, or (ii) this 327
411		-	state being the place of domicile of the top-tiered insurance company or 328
412		-	companies in such insurance group. 329
413		-	(E) A regulatory official determined or acknowledged to be a group-330
414		-	wide supervisor of an internationally active insurance group may 331
415		-	determine, after considering the factors set forth in subdivision (3) of 332
416		-	this subsection, that it is appropriate to acknowledge another regulatory 333
417		-	official to serve as the group-wide supervisor of such insurance group. 334
418		-	Such acknowledgment shall be made (i) in cooperation with and subject 335
419		-	to the acknowledgment of other regulatory officials of the jurisdictions 336
420		-	where members of such insurance group are domiciled, and (ii) in 337
421		-	consultation with such insurance group. 338
422		-	(3) The commissioner shall consider the following factors in making 339
423		-	a determination or acknowledgment under subdivision (2) of this 340
424		-	subsection: 341
425		-	(A) The place of domicile of the member insurance companies of the 342
426		-	internationally active insurance group that holds the largest share of 343
427		-	such insurance group's premiums, assets or liabilities; 344
428		-	(B) The place of domicile of the top-tiered insurance company or 345
429		-	companies in the internationally active insurance group; 346
430		-	(C) The locations of the executive offices or the largest operational 347
431		-	offices of the internationally active insurance group; and 348
432		-	(D) Whether (i) a regulatory official of another jurisdiction is acting 349
433		-	or seeking to act as the group-wide supervisor under a regulatory 350
434		-	system the commissioner determines to be substantially similar to that 351
435		-	provided under the laws of this state or is otherwise sufficient in terms 352
436		-	of group-wide supervision, enterprise risk analysis and cooperation 353
437		-	with other regulatory officials, and (ii) such regulatory official acting or 354
438		-	seeking to act as the group-wide supervisor provides the commissioner 355 Substitute Bill No. 5382
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	408	+	companies in such insurance group. 328
	409	+	(E) A regulatory official determined or acknowledged to be a group-329
	410	+	wide supervisor of an internationally active insurance group may 330
	411	+	determine, after considering the factors set forth in subdivision (3) of 331
	412	+	this subsection, that it is appropriate to acknowledge another regulatory 332
	413	+	official to serve as the group-wide supervisor of such insurance group. 333
	414	+	Such acknowledgment shall be made (i) in cooperation with and subject 334
	415	+	to the acknowledgment of other regulatory officials of the jurisdictions 335
	416	+	where members of such insurance group are domiciled, and (ii) in 336
	417	+	consultation with such insurance group. 337
	418	+	(3) The commissioner shall consider the following factors in making 338
	419	+	a determination or acknowledgment under subdivision (2) of this 339
	420	+	subsection: 340
	421	+	(A) The place of domicile of the member insurance companies of the 341
	422	+	internationally active insurance group that holds the largest share of 342
	423	+	such insurance group's premiums, assets or liabilities; 343
	424	+	(B) The place of domicile of the top-tiered insurance company or 344
	425	+	companies in the internationally active insurance group; 345
	426	+	(C) The locations of the executive offices or the largest operational 346
	427	+	offices of the internationally active insurance group; and 347
	428	+	(D) Whether (i) a regulatory official of another jurisdiction is acting 348
	429	+	or seeking to act as the group-wide supervisor under a regulatory 349
	430	+	system the commissioner determines to be substantially similar to that 350
	431	+	provided under the laws of this state or is otherwise sufficient in terms 351
	432	+	of group-wide supervision, enterprise risk analysis and cooperation 352
	433	+	with other regulatory officials, and (ii) such regulatory official acting or 353
	434	+	seeking to act as the group-wide supervisor provides the commissioner 354
	435	+	with reasonably reciprocal recognition and cooperation. 355
	436	+	(4) The commissioner may collect, pursuant to section 38a-14a, from 356
	437	+	any insurance company registered pursuant to this section any 357 Raised Bill No. 5382
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445		-	with reasonably reciprocal recognition and cooperation. 356
446		-	(4) The commissioner may collect, pursuant to section 38a-14a, from 357
447		-	any insurance company registered pursuant to this section any 358
448		-	information necessary for the commissioner to determine whether the 359
449		-	commissioner may act as the group -wide supervisor of an 360
450		-	internationally active insurance group of which such company is a 361
451		-	member or whether the commissioner may acknowledge t hat a 362
452		-	regulatory official of another jurisdiction should act as the group-wide 363
453		-	supervisor of such insurance group. 364
454		-	(5) Prior to issuing any determination or acknowledgment under this 365
455		-	subsection, the commissioner shall notify the member insurance 366
456		-	company registered pursuant to this section and the ultimate controlling 367
457		-	person of the internationally active insurance group of such pending 368
458		-	determination or acknowledgment. The commissioner shall provide the 369
459		-	internationally active insurance group at least thirty calendar days to 370
460		-	submit any additional information pertinent to such determination or 371
461		-	acknowledgment that is requested by the commissioner or that such 372
462		-	insurance group chooses to submit. The commissioner shall publish in 373
463		-	the Connecticut Law Journal and post on the Insurance Department's 374
464		-	Internet web site a current list of internationally active insurance groups 375
465		-	that the commissioner has determined are subject to group-wide 376
466		-	supervision by the commissioner. 377
467		-	(6) The commissioner may conduct and coordinate the following 378
468		-	group-wide supervision activities for an internationally active insurance 379
469		-	group for which the commissioner is determined to be the group-wide 380
470		-	supervisor: 381
471		-	(A) Assess the enterprise risks within the internationally active 382
472		-	insurance group to ensure that material financial conditions of and 383
473		-	liquidity risks to the members of such insurance group that are engaged 384
474		-	in the business of insurance are identified by management and that 385
475		-	reasonable and effective mitigation measures are in place; 386 Substitute Bill No. 5382
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	443	+	information necessary for the commissioner to determine whether the 358
	444	+	commissioner may act as the group -wide supervisor of an 359
	445	+	internationally active insurance group of which such company is a 360
	446	+	member or whether the commissioner may acknowledge that a 361
	447	+	regulatory official of another jurisdiction should act as the group-wide 362
	448	+	supervisor of such insurance group. 363
	449	+	(5) Prior to issuing any determination or acknowledgment under this 364
	450	+	subsection, the commissioner shall notify the member insurance 365
	451	+	company registered pursuant to this section and the ultimate controlling 366
	452	+	person of the internationally active insurance group of such pending 367
	453	+	determination or acknowledgment. The commissioner shall provide the 368
	454	+	internationally active insurance group at least thirty calendar days to 369
	455	+	submit any additional information pertinent to such determination or 370
	456	+	acknowledgment that is requested by the commissioner or that such 371
	457	+	insurance group chooses to submit. The commissioner shall publish in 372
	458	+	the Connecticut Law Journal and post on the Insurance Department's 373
	459	+	Internet web site a current list of internationally active insurance groups 374
	460	+	that the commissioner has determined are subject to group-wide 375
	461	+	supervision by the commissioner. 376
	462	+	(6) The commissioner may conduct and coordinate the following 377
	463	+	group-wide supervision activities for an internationally active insurance 378
	464	+	group for which the commissioner is determined to be the group-wide 379
	465	+	supervisor: 380
	466	+	(A) Assess the enterprise risks within the internationally active 381
	467	+	insurance group to ensure that material financial conditions of and 382
	468	+	liquidity risks to the members of such insurance group that are engaged 383
	469	+	in the business of insurance are identified by management and that 384
	470	+	reasonable and effective mitigation measures are in place; 385
	471	+	(B) Request from members of such insurance group information 386
	472	+	necessary and appropriate to assess enterprise risk, including, but not 387
	473	+	limited to, information about governance, risk assessment and 388
	474	+	management, capital adequacy and material intercompany transactions; 389 Raised Bill No. 5382
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482		-	(B) Request from members of such insurance group information 387
483		-	necessary and appropriate to assess enterprise risk, including, but not 388
484		-	limited to, information about governance, risk assessment and 389
485		-	management, capital adequacy and material intercompany transactions; 390
486		-	(C) Coordinate and, through the authority of the regulatory officials 391
487		-	of the jurisdictions where members of the internationally active 392
488		-	insurance group are domiciled, compel the development and 393
489		-	implementation of reasonable measures designed to ensure the 394
490		-	internationally active insurance group is able to timely recognize and 395
491		-	mitigate material enterprise risks to the members of such insurance 396
492		-	group that are engaged in the business of insurance; 397
493		-	(D) Communicate with other state, federal and international 398
494		-	regulatory agencies of the jurisdictions where members of the 399
495		-	internationally active insurance group are domiciled and share relevant 400
496		-	information, subject to the confidentiality provisions of section 38a-137, 401
497		-	as amended by this act, through a supervisory college, as set forth in 402
498		-	subsection [(n)] (p) of this section; 403
499		-	(E) Enter into agreements with or obtain documentation from any 404
500		-	member insurance company registered under this section, any other 405
501		-	member of the internationally active insurance group and any other 406
502		-	state, federal and international regulatory agencies of the jurisdictions 407
503		-	where members of the internationally active insurance group are 408
504		-	domiciled, to establish or clarify the commissioner's role as group-wide 409
505		-	supervisor and that may include provisions for resolving disputes with 410
506		-	other regulatory officials. No such agreement or documentation shall 411
507		-	serve as evidence that an insurance company or person within an 412
508		-	insurance company holding system that is not domiciled or 413
509		-	incorporated in this state is doing business in this state or is otherwise 414
510		-	subject to the jurisdiction of this state; and 415
511		-	(F) Other activities necessary to effectuate the group-wide 416
512		-	supervisory purposes of this section and sections 38a-129 to 38a-140, 417
513		-	inclusive, as amended by this act, and within the authority granted in 418 Substitute Bill No. 5382
	478	+	LCO No. 2192 14 of 29
	479	+
	480	+	(C) Coordinate and, through the authority of the regulatory officials 390
	481	+	of the jurisdictions where members of the internationally active 391
	482	+	insurance group are domiciled, compel the development and 392
	483	+	implementation of reasonable measures designed to ensure the 393
	484	+	internationally active insurance group is able to timely recognize and 394
	485	+	mitigate material enterprise risks to the members of such insurance 395
	486	+	group that are engaged in the business of insurance; 396
	487	+	(D) Communicate with other state, federal and international 397
	488	+	regulatory agencies of the jurisdictions where members of the 398
	489	+	internationally active insurance group are domiciled and share relevant 399
	490	+	information, subject to the confidentiality provisions of section 38a-137, 400
	491	+	as amended by this act, through a supervisory college, as set forth in 401
	492	+	subsection [(n)] (p) of this section; 402
	493	+	(E) Enter into agreements with or obtain documentation from any 403
	494	+	member insurance company registered under this section, any other 404
	495	+	member of the internationally active insurance group and any other 405
	496	+	state, federal and international regulatory agencies of the jurisdictions 406
	497	+	where members of the internationally active insurance group are 407
	498	+	domiciled, to establish or clarify the commissioner's role as group-wide 408
	499	+	supervisor and that may include provisions for resolving disputes with 409
	500	+	other regulatory officials. No such agreement or documentation shall 410
	501	+	serve as evidence that an insurance company or person within an 411
	502	+	insurance company holding system that is not domiciled or 412
	503	+	incorporated in this state is doing business in this state or is otherwise 413
	504	+	subject to the jurisdiction of this state; and 414
	505	+	(F) Other activities necessary to effectuate the group-wide 415
	506	+	supervisory purposes of this section and sections 38a-129 to 38a-140, 416
	507	+	inclusive, as amended by this act, and within the authority granted in 417
	508	+	said sections. 418
	509	+	(7) If the commissioner acknowledges that a regulatory official of a 419
	510	+	jurisdiction not accredited by NAIC is the group-wide supervisor of an 420
	511	+	internationally active insurance group, the commissioner shall 421 Raised Bill No. 5382
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520		-	said sections. 419
521		-	(7) If the commissioner acknowledges that a regulatory official of a 420
522		-	jurisdiction not accredited by NAIC is the group-wide supervisor of an 421
523		-	internationally active insurance group, the commissioner shall 422
524		-	reasonably cooperate through a supervisory college or otherwise with 423
525		-	group supervision undertaken by such group -wide supervisor, 424
526		-	provided such cooperation is in compliance with the laws of this state 425
527		-	and such group-wide supervisor recognizes and cooperates with the 426
528		-	commissioner's activities as a group-wide supervisor for other 427
529		-	internationally active insurance groups, where applicable. The 428
530		-	commissioner may refuse to cooperate if the commissioner determines 429
531		-	such recognition and cooperation are not reasonably reciprocated. The 430
532		-	commissioner may enter into agreements with or obtain documentation 431
533		-	from any member insurance company registered pursuant to this 432
534		-	section, any affiliate of such insurance company and any other state, 433
535		-	federal and international regulatory agencies of the jurisdictions where 434
536		-	members of the internationally active insurance group are domiciled, to 435
537		-	establish or clarify such official's role as group-wide supervisor. 436
538		-	(8) The commissioner may adopt regulations, in accordance with the 437
539		-	provisions of chapter 54, to carry out the provisions of this subsection. 438
540		-	(9) Each insurance company registered pursuant to this section shall 439
541		-	be liable for and shall pay the reasonable expenses of the commissioner's 440
542		-	administration of this subsection, including the engagement of the 441
543		-	services of attorneys, actuaries and other professionals and all 442
544		-	reasonable travel expenses. 443
545		-	Sec. 3. Section 38a-136 of the general statutes is repealed and the 444
546		-	following is substituted in lieu thereof (Effective July 1, 2022): 445
547		-	(a) Transactions within an insurance holding company system to 446
548		-	which an insurance company subject to registration under section 38a-447
549		-	135, as amended by this act, is a party shall be subject to the following 448
550		-	requirements: 449 Substitute Bill No. 5382
	515	+	LCO No. 2192 15 of 29
	516	+
	517	+	reasonably cooperate through a supervisory college or otherwise with 422
	518	+	group supervision undertaken by such group -wide supervisor, 423
	519	+	provided such cooperation is in compliance with the laws of this state 424
	520	+	and such group-wide supervisor recognizes and cooperates with the 425
	521	+	commissioner's activities as a group-wide supervisor for other 426
	522	+	internationally active insurance groups, where applicable. The 427
	523	+	commissioner may refuse to cooperate if the commissioner determines 428
	524	+	such recognition and cooperation are not reasonably reciprocated. The 429
	525	+	commissioner may enter into agreements with or obtain documentation 430
	526	+	from any member insurance company registered pursuant to this 431
	527	+	section, any affiliate of such insurance company and any other state, 432
	528	+	federal and international regulatory agencies of the jurisdictions where 433
	529	+	members of the internationally active insurance group are domiciled, to 434
	530	+	establish or clarify such official's role as group-wide supervisor. 435
	531	+	(8) The commissioner may adopt regulations, in accordance with the 436
	532	+	provisions of chapter 54, to carry out the provisions of this subsection. 437
	533	+	(9) Each insurance company registered pursuant to this section shall 438
	534	+	be liable for and shall pay the reasonable expenses of the commissioner's 439
	535	+	administration of this subsection, including the engagement of the 440
	536	+	services of attorneys, actuaries and other professionals and all 441
	537	+	reasonable travel expenses. 442
	538	+	Sec. 3. Section 38a-136 of the general statutes is repealed and the 443
	539	+	following is substituted in lieu thereof (Effective July 1, 2022): 444
	540	+	(a) Transactions within an insurance holding company system to 445
	541	+	which an insurance company subject to registration under section 38a-446
	542	+	135, as amended by this act, is a party shall be subject to the following 447
	543	+	requirements: 448
	544	+	(1) The terms shall be fair and reasonable; 449
	545	+	(2) [charges] Charges or fees for services performed shall be 450
	546	+	reasonable; 451 Raised Bill No. 5382
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557		-	(1) The terms shall be fair and reasonable; 450
558		-	(2) [charges] Charges or fees for services performed shall be 451
559		-	reasonable; 452
560		-	(3) [expenses] Expenses incurred and payment received shall be 453
561		-	allocated to the insurance company in conformity with customary 454
562		-	insurance accounting practices consistently applied; 455
563		-	(4) [the] The books, accounts and records of each party shall be so 456
564		-	maintained as to clearly and accurately disclose the precise nature and 457
565		-	details of the transactions, including such accounting information as is 458
566		-	necessary to support the reasonableness of the charges or fees to the 459
567		-	respective parties; 460
568		-	(5) [the] The insurance company's surplus shall be reasonable in 461
569		-	relation to such company's outstanding liabilities and adequate to its 462
570		-	financial needs; [and] 463
571		-	(6) [agreements] Agreements for cost-sharing services and 464
572		-	management shall include such provisions as may be required by 465
573		-	regulations adopted by the commissioner; [.] 466
574		-	(7) If an insurance company subject to sections 38a-129 to 38a-140, 467
575		-	inclusive, as amended by this act, is determined by the commissioner to 468
576		-	be in a hazardous financial condition as set forth in sections 38a-8-101 to 469
577		-	38a-8-104, inclusive, of the regulations of Connecticut state agencies or 470
578		-	a condition that would be grounds for supervision, conservation or a 471
579		-	delinquency proceeding as set forth in chapter 704c, the commissioner 472
580		-	may require the insurance company to secure and maintain either a 473
581		-	deposit, held by the commissioner, or a bond, as determined by the 474
582		-	insurance company at the insurance company's discretion, for the 475
583		-	protection of the insurance company for the duration of the contracts or 476
584		-	agreements, or the existence of the condition for which the 477
585		-	commissioner required the deposit or the bond. In determining whether 478
586		-	the bond is required, the commissioner shall consider whether concerns 479
587		-	exist with respect to affiliates of the insurance company to fulfill the 480 Substitute Bill No. 5382
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	551	+
	552	+	(3) [expenses] Expenses incurred and payment received shall be 452
	553	+	allocated to the insurance company in conformity with customary 453
	554	+	insurance accounting practices consistently applied; 454
	555	+	(4) [the] The books, accounts and records of each party shall be so 455
	556	+	maintained as to clearly and accurately disclose the precise nature and 456
	557	+	details of the transactions, including such accounting information as is 457
	558	+	necessary to support the reasonableness of the charges or fees to the 458
	559	+	respective parties; 459
	560	+	(5) [the] The insurance company's surplus shall be reasonable in 460
	561	+	relation to such company's outstanding liabilities and adequate to its 461
	562	+	financial needs; [and] 462
	563	+	(6) [agreements] Agreements for cost-sharing services and 463
	564	+	management shall include such provisions as may be required by 464
	565	+	regulations adopted by the commissioner; [.] 465
	566	+	(7) If an insurance company subject to sections 38a-129 to 38a-140, 466
	567	+	inclusive, as amended by this act, is determined by the commissioner to 467
	568	+	be in a hazardous financial condition as set forth in sections 38a-8-101 to 468
	569	+	38a-8-104, inclusive, of the regulations of Connecticut state agencies or 469
	570	+	a condition that would be grounds for supervision, conservation or a 470
	571	+	delinquency proceeding as set forth in chapter 704c, the commissioner 471
	572	+	may require the insurance company to secure and maintain either a 472
	573	+	deposit, held by the commissioner, or a bond, as determined by the 473
	574	+	insurance company at the insurance company's discretion, for the 474
	575	+	protection of the insurance company for the duration of the contracts or 475
	576	+	agreements, or the existence of the condition for which the 476
	577	+	commissioner required the deposit or the bond. In determining whether 477
	578	+	the bond is required, the commissioner shall consider whether concerns 478
	579	+	exist with respect to affiliates of the insurance company to fulfill the 479
	580	+	contracts or agreements if the insurance company were to be put into 480
	581	+	liquidation. Once the insurance company is determined to be in a 481
	582	+	hazardous financial condition or a condition that would be grounds for 482
	583	+	supervision, conservation or a delinquency proceeding, and a deposit 483 Raised Bill No. 5382
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594		-	contracts or agreements if the insurance company were to be put into 481
595		-	liquidation. Once the insurance company is determined to be in a 482
596		-	hazardous financial condition or a condition that is grounds for 483
597		-	supervision, conservation or a delinquency proceeding, and a deposit 484
598		-	or bond is necessary, the commissioner may determine the amount of 485
599		-	the deposit or bond, not to exceed the value of the contracts or 486
600		-	agreements in any one year, and whether such deposit or bond shall be 487
601		-	required for a single contract, multiple contracts or a contract only with 488
602		-	a specific affiliate of the insurance company; 489
603		-	(8) All records and data of the insurance company held by an affiliate 490
604		-	shall remain the property of the insurance company and shall be subject 491
605		-	to control of the insurance company, identifiable, and segregated or 492
606		-	readily capable of segregation, at no additional cost to the insurance 493
607		-	company, from all other persons' records and data, including, but not 494
608		-	limited to, all records and data that are otherwise the property of the 495
609		-	insurance company, in whatever form maintained, including, but not 496
610		-	limited to, claims and claim files, policyholder lists, application files, 497
611		-	litigation files, premium records, rate books, underwriting manuals, 498
612		-	personnel records, financial records or similar records within the 499
613		-	possession, custody or control of the affiliate. At the request of the 500
614		-	insurance company, the affiliate shall provide that the receiver can 501
615		-	obtain a complete set of all records of any type that pertain to the 502
616		-	insurance company's business; obtain access to the operating systems 503
617		-	on which the data is maintained; obtain the software that runs such 504
618		-	systems either through assumption of licensing agreements or 505
619		-	otherwise; and restrict the use of the data by the affiliate if it is not 506
620		-	operating the insurance company's business. The affiliate shall provide 507
621		-	a waiver of any landlord lien or other encumbrance to give the insurance 508
622		-	company access to all records and data in the event of the affiliate's 509
623		-	default under a lease or other agreement; and 510
624		-	(9) Premiums or other funds that belong to the insurance company 511
625		-	that are collected by or held by an affiliate or affiliates are the exclusive 512
626		-	property of the insurance company and shall be subject to the control of 513 Substitute Bill No. 5382
	587	+	LCO No. 2192 17 of 29
	588	+
	589	+	or bond is necessary, the commissioner may determine the amount of 484
	590	+	the deposit or bond, not to exceed the value of the contracts or 485
	591	+	agreements in any one year, and whether such deposit or bond shall be 486
	592	+	required for a single contract, multiple contracts or a contract only with 487
	593	+	a specific affiliate of the insurance company; 488
	594	+	(8) All records and data of the insurance company held by an affiliate 489
	595	+	shall remain the property of the insurance company and shall be subject 490
	596	+	to control of the insurance company, identifiable, and segregated or 491
	597	+	readily capable of segregation, at no additional cost to the insurance 492
	598	+	company, from all other persons' records and data, including, but not 493
	599	+	limited to, all records and data that are otherwise the property of the 494
	600	+	insurance company, in whatever form maintained, including, but not 495
	601	+	limited to, claims and claim files, policyholder lists, application files, 496
	602	+	litigation files, premium records, rate books, underwriting manuals, 497
	603	+	personnel records, financial records or similar records within the 498
	604	+	possession, custody or control of the affiliate. At the request of the 499
	605	+	insurance company, the affiliate shall provide that the receiver can 500
	606	+	obtain a complete set of all records of any type that pertain to the 501
	607	+	insurance company's business; obtain access to the operating systems 502
	608	+	on which the data is maintained; obtain the software that runs such 503
	609	+	systems either through assumption of licensing agreements or 504
	610	+	otherwise; and restrict the use of the data by the affiliate if it is not 505
	611	+	operating the insurance company's business. The affiliate shall provide 506
	612	+	a waiver of any landlord lien or other encumbrance to give the insurance 507
	613	+	company access to all records and data in the event of the affiliate's 508
	614	+	default under a lease or other agreement; and 509
	615	+	(9) Premiums or other funds that belong to the insurance company 510
	616	+	that are collected by or held by an affiliate are the exclusive property of 511
	617	+	the insurance company and shall be subject to the control of the 512
	618	+	insurance company. Any right of offset in the event an insurance 513
	619	+	company is placed into receivership shall be subject to chapter 704c. 514
	620	+	(b) (1) The following transactions involving a domestic insurance 515
	621	+	company and any person in its holding company system, including 516 Raised Bill No. 5382
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633		-	the insurance company. Any right of offset of amounts due to or due 514
634		-	from the insurance company and an affiliate or affiliates in the event an 515
635		-	insurance company is placed into receivership shall be subject to chapter 516
636		-	704c. 517
637		-	(b) (1) The following transactions involving a domestic insurance 518
638		-	company and any person in its holding company system, including 519
639		-	amendments to or modifications of affiliate agreements previously filed 520
640		-	pursuant to this section and that are subject to any materiality standards 521
641		-	specified in subparagraphs (A) to (G), inclusive, of this subdivision, may 522
642		-	not be entered into unless the insurance company has notified the 523
643		-	commissioner in writing of its intention to enter into such transaction at 524
644		-	least thirty days prior thereto, or such shorter period as the 525
645		-	commissioner may permit, and the commissioner has approved or not 526
646		-	disapproved it within such period. The written notice for such 527
647		-	amendments or modifications shall specify the reasons for the change 528
648		-	and the financial impact on the domestic insurance company. Not later 529
649		-	than thirty days after the termination of a previously filed agreement, 530
650		-	the domestic insurance company shall notify the commissioner of such 531
651		-	termination for the commissioner's determination of what written notice 532
652		-	or filing shall be required, if any: 533
653		-	(A) Sales, purchases, exchanges, loans or extensions of credit, or 534
654		-	investments, provided such transactions are equal to or exceed: (i) With 535
655		-	respect to nonlife insurance companies, the lesser of three per cent of the 536
656		-	insurance company's admitted assets or twenty-five per cent of surplus; 537
657		-	or (ii) with respect to life insurance companies, three per cent of the 538
658		-	insurance company's admitted assets; each as of the thirty-first day of 539
659		-	December next preceding; 540
660		-	(B) Loans or extensions of credit to any person who is not an affiliate, 541
661		-	where the insurance company makes such loans or extensions of credit 542
662		-	with the agreement or understanding that the proceeds of such 543
663		-	transactions, in whole or in substantial part, are to be used to make loans 544
664		-	or extensions of credit to, to purchase assets of, or to make investments 545
665		-	in, any affiliate of the insurance company making such loans or 546 Substitute Bill No. 5382
	625	+	LCO No. 2192 18 of 29
	626	+
	627	+	amendments to or modifications of affiliate agreements previously filed 517
	628	+	pursuant to this section and that are subject to any materiality standards 518
	629	+	specified in subparagraphs (A) to (G), inclusive, of this subdivision, may 519
	630	+	not be entered into unless the insurance company has notified the 520
	631	+	commissioner in writing of its intention to enter into such transaction at 521
	632	+	least thirty days prior thereto, or such shorter period as the 522
	633	+	commissioner may permit, and the commissioner has approved or not 523
	634	+	disapproved it within such period. The written notice for such 524
	635	+	amendments or modifications shall specify the reasons for the change 525
	636	+	and the financial impact on the domestic insurance company. Not later 526
	637	+	than thirty days after the termination of a previously filed agreement, 527
	638	+	the domestic insurance company shall notify the commissioner of such 528
	639	+	termination for the commissioner's determination of what written notice 529
	640	+	or filing shall be required, if any: 530
	641	+	(A) Sales, purchases, exchanges, loans or extensions of credit, or 531
	642	+	investments, provided such transactions are equal to or exceed: (i) With 532
	643	+	respect to nonlife insurance companies, the lesser of three per cent of the 533
	644	+	insurance company's admitted assets or twenty-five per cent of surplus; 534
	645	+	or (ii) with respect to life insurance companies, three per cent of the 535
	646	+	insurance company's admitted assets; each as of the thirty-first day of 536
	647	+	December next preceding; 537
	648	+	(B) Loans or extensions of credit to any person who is not an affiliate, 538
	649	+	where the insurance company makes such loans or extensions of credit 539
	650	+	with the agreement or understanding that the proceeds of such 540
	651	+	transactions, in whole or in substantial part, are to be used to make loans 541
	652	+	or extensions of credit to, to purchase assets of, or to make investments 542
	653	+	in, any affiliate of the insurance company making such loans or 543
	654	+	extensions of credit, provided such transactions are equal to or exceed: 544
	655	+	(i) With respect to nonlife insurance companies, the lesser of three per 545
	656	+	cent of the insurance company's admitted assets or twenty-five per cent 546
	657	+	of surplus; or (ii) with respect to life insurance companies, three per cent 547
	658	+	of the insurance company's admitted assets; each as of the thirty-first 548
	659	+	day of December next preceding; 549 Raised Bill No. 5382
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672		-	extensions of credit, provided such transactions are equal to or exceed: 547
673		-	(i) With respect to nonlife insurance companies, the lesser of three per 548
674		-	cent of the insurance company's admitted assets or twenty-five per cent 549
675		-	of surplus; or (ii) with respect to life insurance companies, three per cent 550
676		-	of the insurance company's admitted assets; each as of the thirty-first 551
677		-	day of December next preceding; 552
678		-	(C) Reinsurance agreements or modifications thereto, including (i) all 553
679		-	reinsurance pooling agreements, and (ii) agreements in which the 554
680		-	reinsurance premium or a change in the insurance company's liabilities, 555
681		-	or the projected reinsurance premium or a projected change in the 556
682		-	insurance company's liabilities in any of the next three years, equals or 557
683		-	exceeds five per cent of the insurance company's surplus, as of the 558
684		-	thirty-first day of December next preceding, including those agreements 559
685		-	that may require as consideration the transfer of assets from an 560
686		-	insurance company to a nonaffiliate, if an agreement or understanding 561
687		-	exists between the insurance company and nonaffiliate that any portion 562
688		-	of such assets will be transferred to one or more affiliates of the 563
689		-	insurance company; 564
690		-	(D) All management agreements, service contracts, tax allocation 565
691		-	agreements and cost-sharing arrangements; 566
692		-	(E) Guarantees by a domestic insurance company, except that a 567
693		-	guarantee that is (i) quantifiable as to amount, and (ii) does not exceed 568
694		-	the lesser of one-half of one per cent of the insurance company's 569
695		-	admitted assets or ten per cent of surplus with regard to policyholders, 570
696		-	as of the thirty-first day of December next preceding, shall not be subject 571
697		-	to the notice requirement of this subsection; 572
698		-	(F) Direct or indirect acquisitions or investments in a person that 573
699		-	controls the domestic insurance company or in an affiliate of the 574
700		-	insurance company in an amount that, together with the insurance 575
701		-	company's present holdings in such investments, exceeds two and one-576
702		-	half per cent of the insurance company's surplus with regard to 577
703		-	policyholders. This subsection shall not apply to direct or indirect 578 Substitute Bill No. 5382
	663	+	LCO No. 2192 19 of 29
	664	+
	665	+	(C) Reinsurance agreements or modifications thereto, including (i) all 550
	666	+	reinsurance pooling agreements, and (ii) agreements in which the 551
	667	+	reinsurance premium or a change in the insurance company's liabilities, 552
	668	+	or the projected reinsurance premium or a projected change in the 553
	669	+	insurance company's liabilities in any of the next three years, equals or 554
	670	+	exceeds five per cent of the insurance company's surplus, as of the 555
	671	+	thirty-first day of December next preceding, including those agreements 556
	672	+	that may require as consideration the transfer of assets from an 557
	673	+	insurance company to a nonaffiliate, if an agreement or understanding 558
	674	+	exists between the insurance company and nonaffiliate that any portion 559
	675	+	of such assets will be transferred to one or more affiliates of the 560
	676	+	insurance company; 561
	677	+	(D) All management agreements, service contracts, tax allocation 562
	678	+	agreements and cost-sharing arrangements; 563
	679	+	(E) Guarantees by a domestic insurance company, except that a 564
	680	+	guarantee that is (i) quantifiable as to amount, and (ii) does not exceed 565
	681	+	the lesser of one-half of one per cent of the insurance company's 566
	682	+	admitted assets or ten per cent of surplus with regard to policyholders, 567
	683	+	as of the thirty-first day of December next preceding, shall not be subject 568
	684	+	to the notice requirement of this subsection; 569
	685	+	(F) Direct or indirect acquisitions or investments in a person that 570
	686	+	controls the domestic insurance company or in an affiliate of the 571
	687	+	insurance company in an amount that, together with the insurance 572
	688	+	company's present holdings in such investments, exceeds two and one-573
	689	+	half per cent of the insurance company's surplus with regard to 574
	690	+	policyholders. This subsection shall not apply to direct or indirect 575
	691	+	acquisitions of or investments in (i) subsidiaries acquired pursuant to 576
	692	+	section 38a-102d or authorized pursuant to any section of this title other 577
	693	+	than sections 38a-129 to 38a-140, inclusive, as amended by this act, or (ii) 578
	694	+	nonsubsidiary affiliates that are subject to the provisions of sections 38a-579
	695	+	129 to 38a-140, inclusive, as amended by this act; and 580
	696	+	(G) Any material transactions, specified by regulation, that the 581 Raised Bill No. 5382
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709	699
710		-	acquisitions of or investments in (i) subsidiaries acquired pursuant to 579
711		-	section 38a-102d or authorized pursuant to any section of this title other 580
712		-	than sections 38a-129 to 38a-140, inclusive, as amended by this act, or (ii) 581
713		-	nonsubsidiary affiliates that are subject to the provisions of sections 38a-582
714		-	129 to 38a-140, inclusive, as amended by this act; and 583
715		-	(G) Any material transactions, specified by regulation, that the 584
716		-	commissioner determines may adversely affect the interests of the 585
717		-	insurance company's policyholders. 586
718		-	(2) Nothing contained in this section shall be deemed to authorize or 587
719		-	permit any transactions that, in the case of an insurance company not a 588
720		-	member of the same insurance holding company system, would be 589
721		-	otherwise contrary to law. 590
722		-	(c) A domestic insurance company may not enter into transactions 591
723		-	that are part of a plan or series of like transactions with persons within 592
724		-	the insurance holding company system if the purpose of those separate 593
725		-	transactions is to avoid the statutory threshold amount and thus avoid 594
726		-	the review that would otherwise occur. If the commissioner determines 595
727		-	that such separate transactions were entered into over any twelve-596
728		-	month period for such purpose, the commissioner may exercise 597
729		-	authority under section 38a-140. 598
730		-	(d) The commissioner, in reviewing transactions pursuant to 599
731		-	subsection (b) of this section, shall consider whether the transactions 600
732		-	comply with the standards set forth in subsection (a) of this section and 601
733		-	whether they may adversely affect the interests of policyholders. 602
734		-	(e) Except as may be exempted pursuant to regulations adopted, in 603
735		-	accordance with the provisions of chapter 54, by the commissioner or 604
736		-	otherwise waived by the commissioner, the commissioner shall be 605
737		-	notified not later than thirty days after any material investment of the 606
738		-	domestic insurance company in any one corporation if the total 607
739		-	investment in such corporation by such insurance company's insurance 608
740		-	holding company system exceeds ten per cent of such corporation's 609 Substitute Bill No. 5382
	700	+	LCO No. 2192 20 of 29
	701	+
	702	+	commissioner determines may adversely affect the interests of the 582
	703	+	insurance company's policyholders. 583
	704	+	(2) Nothing contained in this section shall be deemed to authorize or 584
	705	+	permit any transactions that, in the case of an insurance company not a 585
	706	+	member of the same insurance holding company system, would be 586
	707	+	otherwise contrary to law. 587
	708	+	(c) A domestic insurance company may not enter into transactions 588
	709	+	that are part of a plan or series of like transactions with persons within 589
	710	+	the insurance holding company system if the purpose of those separate 590
	711	+	transactions is to avoid the statutory threshold amount and thus avoid 591
	712	+	the review that would otherwise occur. If the commissioner determines 592
	713	+	that such separate transactions were entered into over any twelve-593
	714	+	month period for such purpose, the commissioner may exercise 594
	715	+	authority under section 38a-140. 595
	716	+	(d) The commissioner, in reviewing transactions pursuant to 596
	717	+	subsection (b) of this section, shall consider whether the transactions 597
	718	+	comply with the standards set forth in subsection (a) of this section and 598
	719	+	whether they may adversely affect the interests of policyholders. 599
	720	+	(e) Except as may be exempted pursuant to regulations adopted, in 600
	721	+	accordance with the provisions of chapter 54, by the commissioner or 601
	722	+	otherwise waived by the commissioner, the commissioner shall be 602
	723	+	notified not later than thirty days after any material investment of the 603
	724	+	domestic insurance company in any one corporation if the total 604
	725	+	investment in such corporation by such insurance company's insurance 605
	726	+	holding company system exceeds ten per cent of such corporation's 606
	727	+	voting securities. 607
	728	+	(f) (1) No insurance company subject to registration under section 608
	729	+	38a-135, as amended by this act, shall pay any extraordinary dividend 609
	730	+	or make any other extraordinary distribution to its stockholders until 610
	731	+	the commissioner has approved such payment or until thirty days after 611
	732	+	the commissioner has received notice from such company of the 612
	733	+	declaration thereof within which period the commissioner has not 613 Raised Bill No. 5382
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746	736
747		-	voting securities. 610
748		-	(f) (1) No insurance company subject to registration under section 611
749		-	38a-135, as amended by this act, shall pay any extraordinary dividend 612
750		-	or make any other extraordinary distribution to its stockholders until 613
751		-	the commissioner has approved such payment or until thirty days after 614
752		-	the commissioner has received notice from such company of the 615
753		-	declaration thereof within which period the commissioner has not 616
754		-	disapproved such payment, whichever is sooner. For the purposes of 617
755		-	this subsection, an extraordinary dividend or distribution is any 618
756		-	dividend or distribution of cash or other property, whose fair market 619
757		-	value together with that of other dividends or distributions made within 620
758		-	the preceding twelve months, exceeds the greater of (A) ten per cent of 621
759		-	such insurance company's surplus as of the thirty-first day of December 622
760		-	last preceding, or (B) the net gain from operations of such insurance 623
761		-	company, if such company is a life insurance company, or the net 624
762		-	income, if such company is not a life insurance company, for the twelve-625
763		-	month period ending the thirty-first day of December last preceding, 626
764		-	but shall not include pro rata distributions of any class of the insurance 627
765		-	company's own securities. 628
766		-	(2) Notwithstanding any other provision of law, an insurance 629
767		-	company may declare an extraordinary dividend or distribution that is 630
768		-	conditional upon the commissioner's approval thereof, but such a 631
769		-	declaration shall confer no rights upon stockholders until (A) the 632
770		-	commissioner has approved the payment of such dividend or 633
771		-	distribution, or (B) until thirty days after such declaration thereof within 634
772		-	which period the commissioner has not disapproved such declaration, 635
773		-	whichever is sooner. 636
774		-	(g) For purposes of sections 38a-129 to 38a-140, inclusive, as amended 637
775		-	by this act, in determining whether an insurance company's surplus is 638
776		-	reasonable in relation to the insurance company's outstanding liabilities 639
777		-	and adequate to its financial needs, the following factors, in addition to 640
778		-	others, shall be considered: (1) The size of the insurance company as 641
779		-	measured by its assets, capital and surplus, reserves, premium writings, 642 Substitute Bill No. 5382
	737	+	LCO No. 2192 21 of 29
	738	+
	739	+	disapproved such payment, whichever is sooner. For the purposes of 614
	740	+	this subsection, an extraordinary dividend or distribution is any 615
	741	+	dividend or distribution of cash or other property, whose fair market 616
	742	+	value together with that of other dividends or distributions made within 617
	743	+	the preceding twelve months, exceeds the greater of (A) ten per cent of 618
	744	+	such insurance company's surplus as of the thirty-first day of December 619
	745	+	last preceding, or (B) the net gain from operations of such insurance 620
	746	+	company, if such company is a life insurance company, or the net 621
	747	+	income, if such company is not a life insurance company, for the twelve-622
	748	+	month period ending the thirty-first day of December last preceding, 623
	749	+	but shall not include pro rata distributions of any class of the insurance 624
	750	+	company's own securities. 625
	751	+	(2) Notwithstanding any other provision of law, an insurance 626
	752	+	company may declare an extraordinary dividend or distribution that is 627
	753	+	conditional upon the commissioner's approval thereof, but such a 628
	754	+	declaration shall confer no rights upon stockholders until (A) the 629
	755	+	commissioner has approved the payment of such dividend or 630
	756	+	distribution, or (B) until thirty days after such declaration thereof within 631
	757	+	which period the commissioner has not disapproved such declaration, 632
	758	+	whichever is sooner. 633
	759	+	(g) For purposes of sections 38a-129 to 38a-140, inclusive, as amended 634
	760	+	by this act, in determining whether an insurance company's surplus is 635
	761	+	reasonable in relation to the insurance company's outstanding liabilities 636
	762	+	and adequate to its financial needs, the following factors, in addition to 637
	763	+	others, shall be considered: (1) The size of the insurance company as 638
	764	+	measured by its assets, capital and surplus, reserves, premium writings, 639
	765	+	insurance in force and other appropriate criteria; (2) the extent to which 640
	766	+	the insurance company's business is diversified among the several lines 641
	767	+	of insurance; (3) the number and size of risks insured in each line of 642
	768	+	business; (4) the nature of the geographical dispersion of the insurance 643
	769	+	company's insured risks; (5) the nature and extent of the insurance 644
	770	+	company's reinsurance program; (6) the quality, diversification and 645
	771	+	liquidity of the insurance company's investment portfolio; (7) the recent 646
	772	+	past and projected future trend in the size of the insurance company's 647 Raised Bill No. 5382
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785	775
786		-	insurance in force and other appropriate criteria; (2) the extent to which 643
787		-	the insurance company's business is diversified among the several lines 644
788		-	of insurance; (3) the number and size of risks insured in each line of 645
789		-	business; (4) the nature of the geographical dispersion of the insurance 646
790		-	company's insured risks; (5) the nature and extent of the insurance 647
791		-	company's reinsurance program; (6) the quality, diversification and 648
792		-	liquidity of the insurance company's investment portfolio; (7) the recent 649
793		-	past and projected future trend in the size of the insurance company's 650
794		-	surplus; (8) the surplus maintained by other comparable insurance 651
795		-	companies; (9) the adequacy of the insurance company's reserves; (10) 652
796		-	the quality of the company's earnings and the extent to which the 653
797		-	reported earnings include extraordinary items; and (11) the quality and 654
798		-	liquidity of investments in affiliates. The commissioner may discount 655
799		-	any such investment or treat any such investment as a disallowed asset 656
800		-	for purposes of determining the adequacy of surplus whenever, in the 657
801		-	commissioner's judgment, such investment warrants. 658
802		-	(h) (1) Any domestic insurance company that is affiliated with an 659
803		-	insurance holding company system shall report for informational 660
804		-	purposes to the Insurance Commissioner all dividends and other 661
805		-	distributions to securityholders, not later than five business days after 662
806		-	the declaration and at least ten days, commencing from the date of 663
807		-	receipt by the Insurance Department, prior to payment thereof. 664
808		-	(2) No dividend or other distribution may be paid when the surplus 665
809		-	of the insurance company is less than the surplus required by section 666
810		-	38a-72 for the kind or kinds of business authorized to be transacted by 667
811		-	such company, nor when the payment of a dividend or other 668
812		-	distribution would reduce its surplus to less than such amount. 669
813		-	(3) Except as otherwise provided by law, no dividend or other 670
814		-	distribution exceeding an amount equal to an insurance company's 671
815		-	earned surplus may be paid without the Insurance Commissioner's 672
816		-	prior approval. For purposes of this subsection, "earned surplus" means 673
817		-	"unassigned funds-surplus", as defined in the annual report of the 674
818		-	insurance company that was most recently submitted pursuant to 675 Substitute Bill No. 5382
	776	+	LCO No. 2192 22 of 29
	777	+
	778	+	surplus; (8) the surplus maintained by other comparable insurance 648
	779	+	companies; (9) the adequacy of the insurance company's reserves; (10) 649
	780	+	the quality of the company's earnings and the extent to which the 650
	781	+	reported earnings include extraordinary items; and (11) the quality and 651
	782	+	liquidity of investments in affiliates. The commissioner may discount 652
	783	+	any such investment or treat any such investment as a disallowed asset 653
	784	+	for purposes of determining the adequacy of surplus whenever, in the 654
	785	+	commissioner's judgment, such investment warrants. 655
	786	+	(h) (1) Any domestic insurance company that is affiliated with an 656
	787	+	insurance holding company system shall report for informational 657
	788	+	purposes to the Insurance Commissioner all dividends and other 658
	789	+	distributions to securityholders, not later than five business days after 659
	790	+	the declaration and at least ten days, commencing from the date of 660
	791	+	receipt by the Insurance Department, prior to payment thereof. 661
	792	+	(2) No dividend or other distribution may be paid when the surplus 662
	793	+	of the insurance company is less than the surplus required by section 663
	794	+	38a-72 for the kind or kinds of business authorized to be transacted by 664
	795	+	such company, nor when the payment of a dividend or other 665
	796	+	distribution would reduce its surplus to less than such amount. 666
	797	+	(3) Except as otherwise provided by law, no dividend or other 667
	798	+	distribution exceeding an amount equal to an insurance company's 668
	799	+	earned surplus may be paid without the Insurance Commissioner's 669
	800	+	prior approval. For purposes of this subsection, "earned surplus" means 670
	801	+	"unassigned funds-surplus", as defined in the annual report of the 671
	802	+	insurance company that was most recently submitted pursuant to 672
	803	+	section 38a-53, reduced by twenty-five per cent of unrealized 673
	804	+	appreciation in value or revaluation of assets or unrealized profits on 674
	805	+	investments, as defined in such report. 675
	806	+	(i) (1) The commissioner may require a domestic insurance company 676
	807	+	of which control has been acquired pursuant to section 38a-130 to 677
	808	+	submit to a financial examination and a market conduct examination 678
	809	+	within thirty days after such acquisition in accordance with procedures 679 Raised Bill No. 5382
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824	812
825		-	section 38a-53, reduced by twenty-five per cent of unrealized 676
826		-	appreciation in value or revaluation of assets or unrealized profits on 677
827		-	investments, as defined in such report. 678
828		-	(i) (1) The commissioner may require a domestic insurance company 679
829		-	of which control has been acquired pursuant to section 38a-130 to 680
830		-	submit to a financial examination and a market conduct examination 681
831		-	within thirty days after such acquisition in accordance with procedures 682
832		-	set forth by NAIC's examiner's handbook and such regulations as the 683
833		-	commissioner may adopt. 684
834		-	(2) No domestic insurance company of which control has been 685
835		-	acquired pursuant to section 38a-130 shall, without the prior approval 686
836		-	of the commissioner: (A) Pay or propose to pay any dividend during the 687
837		-	period of two years from the date of acquisition of control of such 688
838		-	insurance company; (B) acquire or enter into an agreement or 689
839		-	understanding to acquire control, during the period of three years after 690
840		-	the date of acquisition of control of such insurance company, of any 691
841		-	other person or persons whose assets exceed twenty-five million dollars; 692
842		-	(C) provide or propose to provide directly or indirectly, during the 693
843		-	period of three years after the date of acquisition of control of such 694
844		-	insurance company, any loans, advances, guarantees, pledges or other 695
845		-	financial assistance; or (D) engage in any material transaction with any 696
846		-	person during the period of three years after the date of acquisition of 697
847		-	such insurance company. For purposes of this subsection, a "material 698
848		-	transaction" shall include, but not be limited to, any transfer or 699
849		-	encumbrance of assets not in the ordinary course of business that, 700
850		-	together with all other transfers or encumbrances made within the 701
851		-	preceding twelve months, exceeds in value the greater of (i) ten per cent 702
852		-	of such insurance company's surplus as of the December thirty-first last 703
853		-	preceding, or (ii) the net gain from operations of such insurance 704
854		-	company, if such company is a life insurance company, or the net 705
855		-	investment income of such company, if such company is not a life 706
856		-	insurance company, for the twelve-month period ending the December 707
857		-	thirty-first last preceding. 708 Substitute Bill No. 5382
	813	+	LCO No. 2192 23 of 29
	814	+
	815	+	set forth by NAIC's examiner's handbook and such regulations as the 680
	816	+	commissioner may adopt. 681
	817	+	(2) No domestic insurance company of which control has been 682
	818	+	acquired pursuant to section 38a-130 shall, without the prior approval 683
	819	+	of the commissioner: (A) Pay or propose to pay any dividend during the 684
	820	+	period of two years from the date of acquisition of control of such 685
	821	+	insurance company; (B) acquire or enter into an agreement or 686
	822	+	understanding to acquire control, during the period of three years after 687
	823	+	the date of acquisition of control of such insurance company, of any 688
	824	+	other person or persons whose assets exceed twenty-five million dollars; 689
	825	+	(C) provide or propose to provide directly or indirectly, during the 690
	826	+	period of three years after the date of acquisition of control of such 691
	827	+	insurance company, any loans, advances, guarantees, pledges or other 692
	828	+	financial assistance; or (D) engage in any material transaction with any 693
	829	+	person during the period of three years after the date of acquisition of 694
	830	+	such insurance company. For purposes of this subsection, a "material 695
	831	+	transaction" shall include, but not be limited to, any transfer or 696
	832	+	encumbrance of assets not in the ordinary course of business that, 697
	833	+	together with all other transfers or encumbrances made within the 698
	834	+	preceding twelve months, exceeds in value the greater of (i) ten per cent 699
	835	+	of such insurance company's surplus as of the December thirty-first last 700
	836	+	preceding, or (ii) the net gain from operations of such insurance 701
	837	+	company, if such company is a life insurance company, or the net 702
	838	+	investment income of such company, if such company is not a life 703
	839	+	insurance company, for the twelve-month period ending the December 704
	840	+	thirty-first last preceding. 705
	841	+	(3) The commissioner shall, upon a written request from the 706
	842	+	controlled domestic insurance company and, upon public hearing after 707
	843	+	notice to all interested parties, determine whether any limitations 708
	844	+	contained in subdivision (2) of this subsection shall be continued, or 709
	845	+	whether and on what conditions they may be waived. Such 710
	846	+	determination shall be predicated on the results of the examinations 711
	847	+	under subdivision (1) of this subsection and such further examinations, 712
	848	+	if any, the commissioner may require concerning the adequacy of the 713 Raised Bill No. 5382
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863	851
864		-	(3) The commissioner shall, upon a written request from the 709
865		-	controlled domestic insurance company and, upon public hearing after 710
866		-	notice to all interested parties, determine whether any limitations 711
867		-	contained in subdivision (2) of this subsection shall be continued, or 712
868		-	whether and on what conditions they may be waived. Such 713
869		-	determination shall be predicated on the results of the examinations 714
870		-	under subdivision (1) of this subsection and such further examinations, 715
871		-	if any, the commissioner may require concerning the adequacy of the 716
872		-	insurance company's reserves, the effect any proposed transaction will 717
873		-	have on the insurance company's surplus, its cash flow needs and its 718
874		-	ability to satisfy any reasonably anticipated obligations in the 719
875		-	foreseeable future, and any other effect the proposed transaction would 720
876		-	have on the financial stability or solvency of the insurance company and 721
877		-	the quality and liquidity of its assets. All fees and expenses relating to 722
878		-	such examinations shall be paid by the insurance company. 723
879		-	(4) Nothing in this subsection shall be interpreted to prohibit any 724
880		-	transactions between a domestic insurance company and any of its 725
881		-	subsidiaries in the ordinary course of business. 726
882		-	(j) (1) Any affiliate that is a party to an agreement or contract with a 727
883		-	domestic insurance company that is subject to subparagraph (D) of 728
884		-	subdivision (1) of subsection (b) of this section shall be subject to the 729
885		-	jurisdiction of any order of rehabilitation or liquidation against the 730
886		-	insurance company and to the authority of any rehabilitator or 731
887		-	liquidator for the insurance company appointed pursuant to chapter 732
888		-	704c, for the purpose of interpreting, enforcing and overseeing the 733
889		-	affiliate's obligations under the agreements or contracts to perform 734
890		-	services for the insurance company that: 735
891		-	(A) Are an integral part of the insurance company's operations, 736
892		-	including, but not limited to, management, administration, accounting, 737
893		-	data processing, marketing, underwriting, claims handling, investment 738
894		-	or any other similar functions; or 739
895		-	(B) Are essential to the insurance company's ability to fulfill its 740 Substitute Bill No. 5382
	852	+	LCO No. 2192 24 of 29
	853	+
	854	+	insurance company's reserves, the effect any proposed transaction will 714
	855	+	have on the insurance company's surplus, its cash flow needs and its 715
	856	+	ability to satisfy any reasonably anticipated obligations in the 716
	857	+	foreseeable future, and any other effect the proposed transaction would 717
	858	+	have on the financial stability or solvency of the insurance company and 718
	859	+	the quality and liquidity of its assets. All fees and expenses relating to 719
	860	+	such examinations shall be paid by the insurance company. 720
	861	+	(4) Nothing in this subsection shall be interpreted to prohibit any 721
	862	+	transactions between a domestic insurance company and any of its 722
	863	+	subsidiaries in the ordinary course of business. 723
	864	+	(j) (1) Any affiliate that is a party to an agreement or contract with a 724
	865	+	domestic insurance company that is subject to subparagraph (D) of 725
	866	+	subdivision (1) of subsection (b) of this section shall be subject to the 726
	867	+	jurisdiction of any order of rehabilitation or liquidation against the 727
	868	+	insurance company and to the authority of any rehabilitator or 728
	869	+	liquidator for the insurance company appointed pursuant to chapter 729
	870	+	704c, for the purpose of interpreting, enforcing and overseeing the 730
	871	+	affiliate's obligations under the agreements or contracts to perform 731
	872	+	services for the insurance company that: 732
	873	+	(A) Are an integral part of the insurance company's operations, 733
	874	+	including, but not limited to, management, administration, accounting, 734
	875	+	data processing, marketing, underwriting, claims handling, investment 735
	876	+	or any other similar functions; or 736
	877	+	(B) Are essential to the insurance company's ability to fulfill its 737
	878	+	obligations under insurance policies. 738
	879	+	(2) The commissioner may require that an agreement or contract 739
	880	+	pursuant to subparagraph (D) of subdivision (1) of subsection (b) of this 740
	881	+	section for provisions or services set forth in subparagraphs (A) and (B) 741
	882	+	of subdivision (1) of this subsection specify that the affiliate consents to 742
	883	+	the jurisdiction described in subdivision (1) of this subsection. 743
	884	+	Sec. 4. Section 38a-137 of the general statutes is repealed and the 744 Raised Bill No. 5382
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901	887
902		-	obligations under insurance policies. 741
903		-	(2) The commissioner may require that an agreement or contract 742
904		-	pursuant to subparagraph (D) of subdivision (1) of subsection (b) of this 743
905		-	section for provisions or services set forth in subparagraphs (A) and (B) 744
906		-	of subdivision (1) of this subsection specify that the affiliate consents to 745
907		-	the jurisdiction described in subdivision (1) of this subsection. 746
908		-	Sec. 4. Section 38a-137 of the general statutes is repealed and the 747
909		-	following is substituted in lieu thereof (Effective July 1, 2022): 748
910		-	(a) All information, documents, materials and copies thereof obtained 749
911		-	by or disclosed to the commissioner or any other person in the course of 750
912		-	an examination or investigation made pursuant to section 38a-14a and 751
913		-	all information reported, furnished or filed pursuant to sections 38a-131, 752
914		-	38a-135, as amended by this act, and 38a-136, as amended by this act, 753
915		-	shall (1) be confidential by law and privileged, (2) not be subject to 754
916		-	disclosure under section 1-210, (3) not be subject to subpoena, and (4) 755
917		-	not be subject to discovery or admissible in evidence in any civil action. 756
918		-	The commissioner shall not make such information, documents, 757
919		-	materials or copies public without the prior written consent of the 758
920		-	insurance company to which it pertains unless the commissioner, after 759
921		-	giving the insurance company and its affiliates who would be affected 760
922		-	thereby notice and opportunity to be heard, determines that the interests 761
923		-	of policyholders, securityholders or the public will be served by the 762
924		-	publication thereof, in which event the commissioner may publish all or 763
925		-	any part thereof in such manner as the commissioner may deem 764
926		-	appropriate. The commissioner may use such information, documents, 765
927		-	materials or copies in the furtherance of any regulatory or legal action 766
928		-	brought as part of the commissioner's official duties. 767
929		-	(b) Neither the commissioner nor any person who receives 768
930		-	information, documents, materials or copies as set forth in subsection 769
931		-	(a) of this section or with whom such information, documents, materials 770
932		-	or copies are shared, while acting under the authority of the 771
933		-	commissioner, shall testify or be required to testify in any civil action 772 Substitute Bill No. 5382
	888	+	LCO No. 2192 25 of 29
	889	+
	890	+	following is substituted in lieu thereof (Effective July 1, 2022): 745
	891	+	(a) All information, documents, materials and copies thereof obtained 746
	892	+	by or disclosed to the commissioner or any other person in the course of 747
	893	+	an examination or investigation made pursuant to section 38a-14a and 748
	894	+	all information reported, furnished or filed pursuant to sections 38a-131, 749
	895	+	38a-135, as amended by this act, and 38a-136, as amended by this act, 750
	896	+	shall (1) be confidential by law and privileged, (2) not be subject to 751
	897	+	disclosure under section 1-210, (3) not be subject to subpoena, and (4) 752
	898	+	not be subject to discovery or admissible in evidence in any civil action. 753
	899	+	The commissioner shall not make such information, documents, 754
	900	+	materials or copies public without the prior written consent of the 755
	901	+	insurance company to which it pertains unless the commissioner, after 756
	902	+	giving the insurance company and its affiliates who would be affected 757
	903	+	thereby notice and opportunity to be heard, determines that the interests 758
	904	+	of policyholders, securityholders or the public will be served by the 759
	905	+	publication thereof, in which event the commissioner may publish all or 760
	906	+	any part thereof in such manner as the commissioner may deem 761
	907	+	appropriate. The commissioner may use such information, documents, 762
	908	+	materials or copies in the furtherance of any regulatory or legal action 763
	909	+	brought as part of the commissioner's official duties. 764
	910	+	(b) Neither the commissioner nor any person who receives 765
	911	+	information, documents, materials or copies as set forth in subsection 766
	912	+	(a) of this section or with whom such information, documents, materials 767
	913	+	or copies are shared, while acting under the authority of the 768
	914	+	commissioner, shall testify or be required to testify in any civil action 769
	915	+	concerning such information, documents, materials or copies. 770
	916	+	(c) Except as specified in subdivision (2) of subsection (f) of section 771
	917	+	38a-135, as amended by this act, to assist the commissioner in the 772
	918	+	performance of the commissioner's duties, the commissioner: 773
	919	+	(1) May share information, documents, materials or copies thereof, 774
	920	+	including information, documents, materials or copies deemed 775
	921	+	confidential and privileged pursuant to subsection (a) of this section, 776 Raised Bill No. 5382
934	922
935	923
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938		-	26 of 29
939	924
940		-	concerning such information, documents, materials or copies. 773
941		-	(c) Except as specified in subdivision (2) of subsection (f) of section 774
942		-	38a-135, as amended by this act, to assist the commissioner in the 775
943		-	performance of the commissioner's duties, the commissioner: 776
944		-	(1) May share information, documents, materials or copies thereof, 777
945		-	including information, documents, materials or copies deemed 778
946		-	confidential and privileged pursuant to subsection (a) of this section, 779
947		-	with (A) other state, federal and international regulatory officials, (B) 780
948		-	the NAIC [or its affiliate or subsidiaries] and any third-party consultants 781
949		-	designated by the commissioner, (C) the International Association of 782
950		-	Insurance Supervisors, (D) the Bank for International Settlements, (E) 783
951		-	the Federal Insurance Office, (F) state, federal and international law 784
952		-	enforcement authorities, and (G) members or participants of a 785
953		-	supervisory college, as described in subsection [(n)] (p) of section 38a-786
954		-	135, as amended by this act, of which the commissioner is a member or 787
955		-	a participant, provided the recipient of any such information, 788
956		-	documents, materials or copies agrees, in writing, to maintain the 789
957		-	confidentiality and privileged status of such information, documents, 790
958		-	materials and copies, and has verified, in writing, the recipient's legal 791
959		-	authority to maintain confidentiality; 792
960		-	(2) May receive information, documents, materials or copies thereof, 793
961		-	including confidential and privileged information, documents, 794
962		-	materials or copies, from the NAIC [or its affiliates or subsidiaries] and 795
963		-	any third-party consultants designated by the commissioner, the 796
964		-	International Association of Insurance Supervisors, the Bank for 797
965		-	International Settlements, the Federal Insurance Office, or state, federal 798
966		-	and international law enforcement authorities. The commissioner shall 799
967		-	maintain as confidential and privileged any information, documents, 800
968		-	materials or copies received with notice or the understanding that such 801
969		-	information, documents, materials or copies are confidential and 802
970		-	privileged under the laws of the jurisdiction that is the source of such 803
971		-	information, documents, materials or copies; and 804 Substitute Bill No. 5382
	925	+	LCO No. 2192 26 of 29
	926	+
	927	+	with (A) other state, federal and international regulatory officials, (B) 777
	928	+	the NAIC [or its affiliate or subsidiaries] and any third-party consultants 778
	929	+	designated by the commissioner, (C) the International Association of 779
	930	+	Insurance Supervisors, (D) the Bank for International Settlements, (E) 780
	931	+	the Federal Insurance Office, (F) state, federal and international law 781
	932	+	enforcement authorities, and (G) members or participants of a 782
	933	+	supervisory college, as described in subsection [(n)] (p) of section 38a-783
	934	+	135, as amended by this act, of which the commissioner is a member or 784
	935	+	a participant, provided the recipient of any such information, 785
	936	+	documents, materials or copies agrees, in writing, to maintain the 786
	937	+	confidentiality and privileged status of such information, documents, 787
	938	+	materials and copies, and has verified, in writing, the recipient's legal 788
	939	+	authority to maintain confidentiality; 789
	940	+	(2) May receive information, documents, materials or copies thereof, 790
	941	+	including confidential and privileged information, documents, 791
	942	+	materials or copies, from the NAIC [or its affiliates or subsidiaries] and 792
	943	+	any third-party consultants designated by the commissioner, the 793
	944	+	International Association of Insurance Supervisors, the Bank for 794
	945	+	International Settlements, the Federal Insurance Office, or state, federal 795
	946	+	and international law enforcement authorities. The commissioner shall 796
	947	+	maintain as confidential and privileged any information, documents, 797
	948	+	materials or copies received with notice or the understanding that such 798
	949	+	information, documents, materials or copies are confidential and 799
	950	+	privileged under the laws of the jurisdiction that is the source of such 800
	951	+	information, documents, materials or copies; and 801
	952	+	(3) Shall enter into written agreements consistent with this subsection 802
	953	+	with the NAIC and any third-party consultants designated by the 803
	954	+	commissioner, and may enter into written agreements consistent with 804
	955	+	this subsection with the International Association of Insurance 805
	956	+	Supervisors or the Bank for International Settlements, governing the 806
	957	+	sharing and use of information, documents, materials or copies thereof 807
	958	+	shared or received pursuant to sections 38a-129 to 38a-140, inclusive, as 808
	959	+	amended by this act. Any such agreement consistent with this 809
	960	+	subsection shall (A) specify the procedures and protocols regarding the 810 Raised Bill No. 5382
972	961
973	962
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976		-	27 of 29
977	963
978		-	(3) Shall enter into written agreements consistent with this subsection 805
979		-	with the NAIC and any third-party consultants designated by the 806
980		-	commissioner, and may enter into written agreements consistent with 807
981		-	this subsection with the International Association of Insurance 808
982		-	Supervisors or the Bank for International Settlements, governing the 809
983		-	sharing and use of information, documents, materials or copies thereof 810
984		-	shared or received pursuant to sections 38a-129 to 38a-140, inclusive, as 811
985		-	amended by this act. Any such agreement consistent with this 812
986		-	subsection shall (A) specify the procedures and protocols regarding the 813
987		-	confidentiality and security of information shared (i) with the NAIC [or 814
988		-	its affiliates or subsidiaries] or a third-party consultant designated by 815
989		-	the commissioner, the International Association of Insurance 816
990		-	Supervisors or the Bank for International Settlements pursuant to 817
991		-	sections 38a-129 to 38a-140, inclusive, as amended by this act, and (ii) by 818
992		-	the NAIC [or its affiliates or subsidiaries] or a third-party consultant 819
993		-	designated by the commissioner, the International Association of 820
994		-	Insurance Supervisors or the Bank for International Settlements with 821
995		-	other state, federal or international regulatory officials, (B) provide that 822
996		-	the recipient agrees in writing to maintain the confidentiality and 823
997		-	privileged status of the documents, materials or other information and 824
998		-	has verified in writing the recipient's legal authority to maintain such 825
999		-	confidentiality or privilege, (C) specify that the commissioner shall 826
1000		-	retain ownership of such information and that the use of such 827
1001		-	information by the NAIC [or its affiliates or subsidiaries] or a third-party 828
1002		-	consultant, the International Association of Insurance Supervisors or the 829
1003		-	Bank for International Settlements is subject to the commissioner's 830
1004		-	discretion, [(C)] (D) excluding documents, material or information 831
1005		-	reported pursuant to subsection (h) of section 38a-135, as amended by 832
1006		-	this act, prohibit the NAIC or third-party consultant designated by the 833
1007		-	commissioner from storing such information shared pursuant to 834
1008		-	sections 38a-129 to 38a-140, inclusive, as amended by this act, in a 835
1009		-	permanent database after the underlying analysis is completed, (E) 836
1010		-	require prompt notice to be given to an insurance company whose 837
1011		-	confidential information is in the possession of the NAIC or [its affiliates 838
1012		-	or subsidiaries] a third-party consultant designated by the 839 Substitute Bill No. 5382
	964	+	LCO No. 2192 27 of 29
	965	+
	966	+	confidentiality and security of information shared (i) with the NAIC [or 811
	967	+	its affiliates or subsidiaries] or a third-party consultant designated by 812
	968	+	the commissioner, the International Association of Insurance 813
	969	+	Supervisors or the Bank for International Settlements pursuant to 814
	970	+	sections 38a-129 to 38a-140, inclusive, as amended by this act, and (ii) by 815
	971	+	the NAIC [or its affiliates or subsidiaries] or a third-party consultant 816
	972	+	designated by the commissioner, the International Association of 817
	973	+	Insurance Supervisors or the Bank for International Settlements with 818
	974	+	other state, federal or international regulatory officials, (B) provide that 819
	975	+	the recipient agrees in writing to maintain the confidentiality and 820
	976	+	privileged status of the documents, materials or other information and 821
	977	+	has verified in writing the recipient's legal authority to maintain such 822
	978	+	confidentiality or privilege, (C) specify that the commissioner shall 823
	979	+	retain ownership of such information and that the use of such 824
	980	+	information by the NAIC [or its affiliates or subsidiaries] or a third-party 825
	981	+	consultant, the International Association of Insurance Supervisors or the 826
	982	+	Bank for International Settlements is subject to the commissioner's 827
	983	+	discretion, [(C)] (D) excluding documents, material or information 828
	984	+	reported pursuant to subsection (h) of section 38a-135, as amended by 829
	985	+	this act, prohibit the NAIC or third-party consultant designated by the 830
	986	+	commissioner from storing such information shared pursuant to 831
	987	+	sections 38a-129 to 38a-140, inclusive, as amended by this act, in a 832
	988	+	permanent database after the underlying analysis is completed, (E) 833
	989	+	require prompt notice to be given to an insurance company whose 834
	990	+	confidential information is in the possession of the NAIC or [its affiliates 835
	991	+	or subsidiaries] a third-party consultant designated by the 836
	992	+	commissioner, the International Association of Insurance Supervisors or 837
	993	+	the Bank for International Settlements, if the NAIC or [its affiliates or 838
	994	+	subsidiaries] a third-party consultant designated by the commissioner, 839
	995	+	the International Association of Insurance Supervisors or the Bank for 840
	996	+	International Settlements is subject to a request or subpoena for 841
	997	+	disclosure or production of such information, [and (D)] (F) require the 842
	998	+	NAIC or [its affiliates or subsidiaries] a third-party consultant 843
	999	+	designated by the commissioner, the International Association of 844
	1000	+	Insurance Supervisors or the Bank for International Settlements, if any 845 Raised Bill No. 5382
1013	1001
1014	1002
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1017		-	28 of 29
1018	1003
1019		-	commissioner, the International Association of Insurance Supervisors or 840
1020		-	the Bank for International Settlements, if the NAIC or [its affiliates or 841
1021		-	subsidiaries] a third-party consultant designated by the commissioner, 842
1022		-	the International Association of Insurance Supervisors or the Bank for 843
1023		-	International Settlements is subject to a request or subpoena for 844
1024		-	disclosure or production of such information, [and (D)] (F) require the 845
1025		-	NAIC or [its affiliates or subsidiaries] a third-party consultant 846
1026		-	designated by the commissioner, the International Association of 847
1027		-	Insurance Supervisors or the Bank for International Settlements, if any 848
1028		-	said entity [or such affiliate or subsidiary] is subject to disclosure of an 849
1029		-	insurance company's confidential information that has been shared with 850
1030		-	said entity, [or such affiliate or subsidiary,] to allow such insurance 851
1031		-	company to intervene in any judicial or administrative action regarding 852
1032		-	such disclosure or information, and (G) for documents, material or 853
1033		-	information reported pursuant to subsection (h) of section 38a-135, as 854
1034		-	amended by this act, in the case of an agreement involving a third-party 855
1035		-	consultant, provide for notification of the identity of the consultant to 856
1036		-	the applicable insurer. 857
1037		-	(d) No waiver of any applicable privilege or claim of confidentiality 858
1038		-	in any information, documents, materials or copies thereof shall occur 859
1039		-	as a result of disclosure to the commissioner or of sharing in accordance 860
1040		-	with this section. Nothing in this section shall be construed to delegate 861
1041		-	any regulatory authority of the commissioner to any person or entity 862
1042		-	with which any information, documents, materials or copies thereof 863
1043		-	have been shared. 864
1044		-	(e) Any information, documents, materials or copies thereof in the 865
1045		-	possession of the NAIC or [its affiliates or subsidiaries] a third-party 866
1046		-	consultant designated by the commissioner, the International 867
1047		-	Association of Insurance Supervisors or the Bank for International 868
1048		-	Settlements pursuant to this section shall be confidential by law and 869
1049		-	privileged and shall not be subject to discovery or admissible in 870
1050		-	evidence in any civil action in this state. 871 Substitute Bill No. 5382
	1004	+	LCO No. 2192 28 of 29
1051	1005
1052		-
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1055		-	29 of 29
1056		-
	1006	+	said entity [or such affiliate or subsidiary] is subject to disclosure of an 846
	1007	+	insurance company's confidential information that has been shared with 847
	1008	+	said entity, [or such affiliate or subsidiary,] to allow such insurance 848
	1009	+	company to intervene in any judicial or administrative action regarding 849
	1010	+	such disclosure or information, and (G) for documents, material or 850
	1011	+	information reported pursuant to subsection (h) of section 38a-135, as 851
	1012	+	amended by this act, in the case of an agreement involving a third-party 852
	1013	+	consultant, provide for notification of the identity of the consultant to 853
	1014	+	the applicable insurer. 854
	1015	+	(d) No waiver of any applicable privilege or claim of confidentiality 855
	1016	+	in any information, documents, materials or copies thereof shall occur 856
	1017	+	as a result of disclosure to the commissioner or of sharing in accordance 857
	1018	+	with this section. Nothing in this section shall be construed to delegate 858
	1019	+	any regulatory authority of the commissioner to any person or entity 859
	1020	+	with which any information, documents, materials or copies thereof 860
	1021	+	have been shared. 861
	1022	+	(e) Any information, documents, materials or copies thereof in the 862
	1023	+	possession of the NAIC or [its affiliates or subsidiaries] a third-party 863
	1024	+	consultant designated by the commissioner, the International 864
	1025	+	Association of Insurance Supervisors or the Bank for International 865
	1026	+	Settlements pursuant to this section shall be confidential by law and 866
	1027	+	privileged and shall not be subject to discovery or admissible in 867
	1028	+	evidence in any civil action in this state. 868
1057	1029		This act shall take effect as follows and shall amend the following
1058	1030		sections:
1059	1031
1060	1032		Section 1 July 1, 2022 38a-129
1061	1033		Sec. 2 July 1, 2022 38a-135(g) to (o)
1062	1034		Sec. 3 July 1, 2022 38a-136
1063	1035		Sec. 4 July 1, 2022 38a-137
	1036	+	Raised Bill No. 5382
1064	1037
1065		-	INS Joint Favorable Subst.
	1038	+
	1039	+
	1040	+	LCO No. 2192 29 of 29
	1041	+
	1042	+	Statement of Purpose:
	1043	+	To adopt the most recent amendments made by the National
	1044	+	Association of Insurance Commissioners to the Model Insurance
	1045	+	Holding Company Act regarding group capital calculation.
	1046	+	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
	1047	+	that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
	1048	+	underlined.]
1066	1049