New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

NOTE: WITHDRAWN EFFECTIVE JULY 30, 2009

Circular Letter No. 17 (2001)
August 13, 2001
TO: All Authorized Insurers (including Alien Insurers Transacting Business in this State through United States Branches) that are Exempt from the Provisions of Article 15 of the New York Insurance Law (Holding Companies)
RE: Holding Company System Annual Registration Statements Filed with other States and Reporting of Planned Transactions
STATUTORY REFERENCE: Section 308 of the New York Insurance Law


Under Section 1502(a) of the New York Insurance Law certain authorized insurers including alien insurers transacting business in this state through United States branches are not considered to be "holding companies" or "controlled insurers" as those terms are defined in Article 15 of the New York Insurance Law and accordingly are exempt from the provisions of Article 15 of the New York Insurance Law.

A domestic insurer that is exempt from the provisions of Article 15 of the New York Insurance Law includes every domestic mutual insurer and its insurance subsidiaries as well as any domestic insurer owned by an authorized insurer deemed to be the ultimate parent. An authorized insurer is exempt if it is deemed to be the ultimate parent. However, such exempt insurer may in fact be subject to the holding company reporting or registration requirements of other states.

Section 308 of the Insurance Law authorizes the Superintendent to require an authorized insurer to submit special reports in relation to its transactions or condition or any matter connected therewith. Therefore, to enhance the Superintendent’s understanding of the holding company structure of authorized insurers operating in this State, and to assess the current or potential risk to insurance subsidiaries, the Insurance Department is requiring the submission of the following reports:

  1. Every domestic insurer that is exempt from the provisions of Article 15 of the New York Insurance Law is hereby directed, pursuant to Section 308 of the New York Insurance Law, to furnish this Department by September 1, 2001 a copy of the latest Insurance Holding Company System Annual Registration Statement (NAIC Form B) filed by it or its parent authorized insurer in another state. If the insurer is required to file such annual registration statement in more than one state, only one such filing need be furnished. If the insurer is not required to file a registration statement in another state, the insurer should file with the Insurance Department the information that is contained in the NAIC Form B.

  2. Until further notice, every domestic insurer that is exempt from the provisions of Article 15 of the New York Insurance Law is hereby directed, pursuant to Section 308 of the New York Insurance Law, to furnish this Department with future copies of such filings referenced in (1) above, and any amendments thereto, at the same time that they are filed with any other state. If the insurer is not required to file Form B in another state, the information contained in NAIC Form B must be filed with the Department within 120 days following the close of the ultimate holding company’s fiscal year.

  3. Beginning September 1, 2001, every authorized insurer that is exempt from the provisions of Article 15 of the New York Insurance Law is hereby directed, pursuant to Section 308 of the New York Insurance Law, to furnish this Department by e-mail with a report on the attached Form CL 17 (2001), at least 30 days in advance of taking any activity resulting in acquiring control, as defined by Section 1501(a)(2) of the New York Insurance Law, of any domestic insurer.

  4. Beginning September 1, 2001, every authorized domestic insurer that is exempt from the provisions of Article 15 of the New York Insurance Law is hereby directed, pursuant to Section 308 of the New York Insurance Law, to furnish this Department by e-mail with a report on the attached Form CL 17 (2001), at least 30 days in advance of entering into any of the following transactions: (An "affiliate" means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with the insurer.)
  1. Sales, purchases, exchanges, loans, extensions of credit, or investments with an affiliate, provided the transactions are equal to or exceed:
  • With respect to nonlife insurers, the lesser of three percent (3%) of the insurer’s admitted assets or twenty-five percent (25%) of surplus to policyholders or for an accident & health insurer or an Article 43 corporation hereinafter referred to as "health insurers," capital and surplus, as of the 31st day of December next preceding; or
  • With respect to life insurers, three percent (3%) of the insurer’s admitted assets as of the 31st day of December next preceding.
  1. Loans or extensions of credit to any person who is not an affiliate, where the insurer makes loans or extensions of credit with the agreement or understanding that the proceeds of such transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of, or to make investments in, any affiliate of the insurer making the loans or extensions of credit provided the transactions are equal to or exceed:
  • With respect to nonlife insurers, the lesser of three percent (3%) of the insurer’s admitted assets or twenty-five percent (25%) of surplus to policyholders or for health insurers, capital and surplus, as of the 31st day of December next preceding; or
  • With respect to life insurers, three percent (3%) of the insurer’s admitted assets, as of the 31st day of December next preceding.
  1. Reinsurance agreements or modifications thereto with an affiliate that have not otherwise been submitted to the Department, in which the reinsurance premium, or a change in the insurer’s liabilities equals or exceeds five percent (5%) of the insurer’s surplus to policyholders or for health insurers, capital and surplus, as of the 31st day of December next preceding. This includes those agreements which may require as consideration the transfer of assets from an insurer to a non-affiliate, if an agreement or understanding exists between the insurer and non-affiliate that any portion of the assets will be transferred to one or more affiliates of the insurer.

  2. Entering into any management agreements, service contracts, contracts of guarantee or surety and all cost-sharing arrangements.

  3. All contracts of guarantee or surety involving an affiliate, provided, however, that a contract of guarantee or surety that is quantifiable as to amount only if it exceeds the lesser of three percent (3%) of the insurer’s admitted assets or twenty-five percent (25%) of surplus to policyholders, or, for health insurers, capital and surplus, as of the 31st day of December next preceding. All contracts of guarantee or surety that are not quantifiable as to amount are to be reported.

  4. With respect to life insurers, direct or indirect acquisitions or investments in a person that controls the insurer or in an affiliate of the insurer in an amount which, together with its present holdings in such investments, exceeds two and one-half percent (2.5%) of the insurer’s surplus to policyholders as of the 31st day of the December next preceding. Direct or indirect acquisitions or investments in subsidiaries acquired pursuant to Article 17 of the New York Insurance law, or subsidiaries that are exempt under the provisions of Section 1704 of the New York Insurance Law do not have to be reported.

Confidential treatment based upon trade secret or substantial injury to the competitive position of the insurer pursuant to the Freedom of Information Law will be accorded to all reports submitted pursuant to this circular letter. In this instance, the insurer shall not need to submit a claim for exemption under the Freedom of Information Law.

The reports required pursuant to items 1, 2, 3 and 4 of this circular letter and any questions relating to the content of this Circular Letter should be directed to:

For Life Companies
Mr. Ronald P. Gage
Supervising Examiner -- Life Bureau
New York State Insurance Department
25 Beaver Street
New York, New York 10004
Phone: (212) 480-5037
E-mail: rgage@ins.state.ny.us

For Property/Casualty Companies
JoAnne Brazenor
Supervising Examiner--Property Bureau
New York State Insurance Department
25 Beaver Street
New York, New York 10004
Phone: (212) 480-5076
E-Mail: jbrazeno@ins.state.ny.us

For Health Insurance Companies
Charles Lovejoy
Principal Examiner --Health Bureau
New York State Insurance Department
25 Beaver Street
New York, New York 10004
Phone: (212) 480-5045
E-Mail: clovejoy@ins.state.ny.us

Attachment

____________________
Jeffrey Angelo
Deputy Chief
Life Bureau
____________________
Charles S. Henricks
Chief Examiner and Co-Chief
Health Bureau
____________________
Mark Presser
Assistant Deputy Superintendent
and Bureau Chief
Property Bureau