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§ 991.1406b. Group-wide supervision for international insurance groups

Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 40 P.S. InsuranceEffective: September 9, 2022

Purdon's Pennsylvania Statutes and Consolidated Statutes
Title 40 P.S. Insurance (Refs & Annos)
Chapter 2. Insurance Companies (Refs & Annos)
Article XIV. Insurance Holding Companies (Refs & Annos)
Effective: September 9, 2022
40 P.S. § 991.1406b
§ 991.1406b. Group-wide supervision for international insurance groups
Currentness
(a) (Reserved).
(b) The department is authorized to act as the group-wide supervisor for any international insurance group where the international insurance group's ultimate controlling person is domiciled in Pennsylvania. However, the department may otherwise acknowledge another jurisdiction as the group-wide supervisor where the international insurance group:
(1) Does not have substantial insurance operations in the United States.
(2) Has substantial insurance operations in the United States, but not in Pennsylvania.
(3) Has substantial insurance operations in the United States and Pennsylvania, but the department has determined pursuant to the factors set forth in subsections (c)(1), (2), (3), (4), (5), (6) and (7) and (f) that the other jurisdiction is the appropriate group supervisor.
(c) In cooperation with other supervisors, the department may determine that it is the appropriate group-wide supervisor for an international insurance group with substantial operations concentrated in Pennsylvania or in insurance operations conducted by subsidiary insurance companies domiciled in Pennsylvania, where the ultimate controlling person is domiciled outside Pennsylvania, or it may acknowledge that another chief insurance regulatory official is the appropriate group-wide supervisor for the international insurance group. The department shall consider the following factors and the relative scale of each when making a determination or acknowledgment under this subsection:
(1) The location where the international insurance group is based or the place of domicile of the ultimate controlling person of the international insurance group.
(2) The locations of the international insurance group's executive offices.
(3) The locations of origin of the insurance business of the international insurance group.
(4) The locations of the assets and liabilities of the international insurance group.
(5) The locations of the business operations and activities of the international insurance group.
(6) Whether another chief insurance regulatory official is acting or seeking to act as the lead group-wide supervisor under a regulatory system that the department determines to be:
(i) substantially similar to that provided under the laws of this Commonwealth; or
(ii) otherwise sufficient in terms of provision of group-wide supervision, enterprise risk analysis and cooperation with other chief regulatory officials.
(7) Whether a chief insurance regulatory official acting or seeking to act as the lead group-wide supervisor provides the department with reasonably reciprocal recognition and cooperation.
(d) Pursuant to section 1406,1 the department is authorized to collect from any insurer registered pursuant to section 14042 all information necessary to determine whether the department may act as the group-wide supervisor or if the department may acknowledge another insurance regulatory official to act as the group-wide supervisor. Prior to issuing a determination that an international insurance group is subject to group-wide supervision by the department, the department shall notify the insurer registered pursuant to section 1404 and the ultimate controlling person within the international insurance group. The international insurance group shall have not less than thirty (30) days to provide the department with additional information pertinent to the pending determination. The department shall publish in the Pennsylvania Bulletin and on its Internet website the identity of international insurance groups that it has determined are subject to its group-wide supervision.
(e) If the department is the group-wide supervisor for an international insurance group, the department is authorized to engage in conducting and coordinating any of the following group-wide supervision activities:
(1) Assess the enterprise risks within the international insurance group, pursuant to section 1406, to ensure that:
(i) The material financial condition and liquidity risks to the members of the international insurance group which are engaged in the business of insurance are identified by management.
(ii) Reasonable and effective mitigation measures are in place.
(2) Request, from any member of an international insurance group subject to the department's supervision, information necessary and appropriate to assess enterprise risk, including, but not limited to, information about the members of the international insurance group regarding:
(i) Governance, risk assessment and management.
(ii) Capital adequacy.
(iii) Material intercompany transactions.
(3) Compel development and implementation of reasonable measures designed to assure that the international insurance group is able to timely recognize and mitigate material risks to members that are engaged in the business of insurance.
(4) Communicate with other insurance regulatory officials for members within the international insurance group and share relevant information subject to the confidentiality provisions of section 1407,3 through supervisory colleges as set forth in section 1406.14 or otherwise.
(5) Enter into agreements with or obtain documentation from any insurer registered under section 1404, any member of the international insurance group and any other chief insurance regulatory officials for members, providing the basis for or otherwise clarifying the department's role as group supervisor, including provisions for resolving disputes with other relevant supervisory authorities. Such agreements or documentation shall not serve as evidence in any proceeding that any insurer or person within an insurance holding company system not incorporated in this Commonwealth is doing business in this Commonwealth or is otherwise subject to jurisdiction in this Commonwealth.
(6) Other group-wide supervisory activities as considered appropriate by the department.
(f) If the department acknowledges that a regulatory official from a jurisdiction which is not accredited by the NAIC is the group-wide supervisor, the department is authorized to reasonably cooperate, through supervisory colleges or otherwise, with group supervision undertaken by the group-wide supervisor, provided that:
(1) The department's cooperation is in compliance with the laws of this Commonwealth.
(2) The regulator also recognizes and cooperates with the department's activities as a group-wide supervisor for other international insurance groups where applicable. Where such recognition and cooperation is not reasonably reciprocal, the department is authorized to refuse recognition and cooperation.
(g) The department is authorized to enter into agreements with or obtain documentation from any insurer registered under section 1404, any affiliate of the insurer and other regulatory officials for members of the insurance group, which provide the basis for or otherwise clarify a regulatory official's role as group supervisor.
(h) The department may promulgate regulations necessary for the administration of this section. In determining whether a regulation should be promulgated, the department shall give due consideration to model laws, model regulations and definitions or guidelines pertaining to group-wide supervision, if any, promulgated by the NAIC or other recognized insurance regulatory bodies or associations.
(i) A registered insurer subject to this section shall be liable for and shall pay the reasonable expenses of the department's participation in the administration of this section, including the engagement of attorneys, actuaries and any other professionals and all reasonable travel expenses.
(j) Deleted by 2022, July 11, P.L. 1599, No. 93, § 5, effective in 60 days [Sept. 9, 2022].

Credits

1921, May 17, P.L. 682, No. 284, art. XIV, § 1406.2, added 2012, July 5, P.L. 1111, No. 136, § 7, effective in 60 days [Sept. 4, 2012]. Amended 2022, July 11, P.L. 1599, No. 93, § 5, effective in 60 days [Sept. 9, 2022].

Footnotes

1
40 P.S. § 991.1406.
2
40 P.S. § 991.1404.
3
40 P.S. § 991.1407.
4
40 P.S. § 991.1406a.
40 P.S. § 991.1406b, PA ST 40 P.S. § 991.1406b
Current through Act 10 of the 2024 Regular Session. Some statute sections may be more current, see credits for details.
End of Document