Effective 28 Aug 2019

382.227. Internationally active insurance group, director to act as supervisor or acknowledge another regulatory authority as supervisor, when — duties, activities — rulemaking authority. — 1. The director is authorized to act as the groupwide supervisor for any internationally active insurance group in accordance with the provisions of this section. However, the director may otherwise acknowledge another regulatory official as the groupwide supervisor if the internationally active 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 this state; or

(3) Has substantial insurance operations in the United States and in this state but the director has determined, pursuant to the factors set forth in subsections 3 and 9 of this section, that another regulatory official is the appropriate groupwide supervisor.

2. An insurance holding company system that does not otherwise qualify as an internationally active insurance group may request that the director make a determination or acknowledgment as to a groupwide supervisor pursuant to this section.

3. In cooperation with other state, federal, and international regulatory agencies, the director shall identify a single groupwide supervisor for an internationally active insurance group. The director may determine that the director is the appropriate groupwide supervisor for an internationally active insurance group that conducts substantial insurance operations concentrated in this state. However, the director may acknowledge that a regulatory official from another jurisdiction is the appropriate groupwide supervisor for the internationally active insurance group. The director shall consider the following factors when making a determination or acknowledgment under this subsection:

(1) The domicile of the insurers within the internationally active insurance group that hold the largest share of the internationally active insurance group's written premiums, assets, or liabilities;

(2) The domicile of the top-tiered insurers in the insurance holding company system of the internationally active insurance group;

(3) The location of the executive offices or largest operational offices of the internationally active insurance group;

(4) Whether another regulatory official is acting as or is seeking to act as the groupwide supervisor under a regulatory system that the director determines to be:

(a) Substantially similar to the system of regulation provided under the laws of this state; or

(b) Otherwise sufficient in terms of providing for groupwide supervision, enterprise risk analysis, and cooperation with other regulatory officials; and

(5) Whether another regulatory official acting or seeking to act as the groupwide supervisor provides the director with reasonably reciprocal recognition and cooperation.

4. A director identified under this section as the groupwide supervisor may determine that it is appropriate to acknowledge another regulatory official to serve as the groupwide supervisor. The acknowledgment of the groupwide supervisor shall be made after consideration of the factors listed in subdivisions (1) to (5) of subsection 3 of this section, and shall be made in cooperation with and subject to the acknowledgment of other regulatory officials involved with supervision of members of the internationally active insurance group, and in consultation with the internationally active insurance group.

5. Notwithstanding any other provision of the law, when another regulatory official is acting as the groupwide supervisor of an internationally active insurance group, the director shall acknowledge that regulatory official as the groupwide supervisor, subject to subsection 6 of this section. In the event of a material change in the internationally active insurance group that results in either the internationally active insurance group's insurers domiciled in this state holding the largest share of the internationally active insurance group's premiums, assets, or liabilities, or this state being the domicile of the top-tiered insurers in the insurance holding company system of the internationally active insurance group, the director shall make a determination or acknowledgment as to the appropriate groupwide supervisor for such an internationally active insurance group under subsections 3 and 4 of this section.

6. In the event of a dispute as to the proper regulatory official to act as groupwide supervisor, a determination by the director not to acknowledge the current groupwide supervisor shall be made only after notice and a public hearing, and such determination shall be accompanied by specific findings of fact and conclusions of law including, but not limited to, application of the factors listed in subdivisions (1) to (5) of subsection 3 of this section.

7. Under section 382.220, the director is authorized to collect from any insurer registered under sections 382.100 to 382.180 all information necessary to determine whether the director may act as the groupwide supervisor of an internationally active insurance group or if the director may acknowledge another regulatory official to act as the groupwide supervisor. Prior to issuing a determination that an internationally active insurance group is subject to groupwide supervision by the director, the director shall notify the insurer registered under sections 382.100 to 382.180 and the ultimate controlling person within the internationally active insurance group. The internationally active insurance group shall have not less than thirty days to provide the director with additional information pertinent to the pending determination. The director shall publish on the department's website the identity of internationally active insurance groups that the director has determined are subject to groupwide supervision by the director.

8. If the director is the groupwide supervisor for an internationally active insurance group, the director is authorized to engage in any of the following groupwide supervisory activities:

(1) Assess the enterprise risks within the internationally active insurance group to ensure that:

(a) The material financial condition and liquidity risks to the members of the internationally active insurance group that are engaged in the business of insurance are identified by management; and

(b) Reasonable and effective mitigation measures are in place;

(2) Request, from any member of an internationally active insurance group subject to the director's supervision, information necessary and appropriate to assess enterprise risk including, but not limited to, information about the members of the internationally active insurance group regarding:

(a) Governance, risk assessment, and management;

(b) Capital adequacy; and

(c) Material intercompany transactions;

(3) Coordinate and, through the authority of the regulatory officials of the jurisdictions where members of the internationally active insurance group are domiciled, compel development and implementation of reasonable measures designed to ensure that the internationally active insurance group is able to timely recognize and mitigate enterprise risks to members of such internationally active insurance group that are engaged in the business of insurance;

(4) Communicate with other state, federal, and international regulatory agencies for members within the internationally active insurance group and share relevant information, subject to the confidentiality provisions of section 382.230, through supervisory colleges as set forth in section 382.225 or otherwise;

(5) Enter into agreements with or obtain documentation from any insurer registered under sections 382.100 to 382.180, any member of the internationally active insurance group, and any other state, federal, and international regulatory agencies for members of the internationally active insurance group, providing the basis for or otherwise clarifying the director's role as groupwide supervisor, including provisions for resolving disputes with other regulatory officials. Such agreements or documentation shall not serve as evidence in any proceeding that any insurer or person within an insurance holding company system not domiciled or incorporated in this state is doing business in this state or is otherwise subject to jurisdiction in this state; and

(6) Other groupwide supervision activities, consistent with the authorities and purposes enumerated in this subsection, as considered necessary by the director.

9. If the director acknowledges that another regulatory official from a jurisdiction that is not accredited by the National Association of Insurance Commissioners is the groupwide supervisor, the director is authorized to reasonably cooperate, through supervisory colleges or otherwise, with groupwide supervision undertaken by the groupwide supervisor, provided that:

(1) The director's cooperation is in compliance with the laws of this state; and

(2) The regulatory official acknowledged as the groupwide supervisor also recognizes and cooperates with the director's activities as a groupwide supervisor for other internationally active insurance groups where applicable. Where such recognition and cooperation are not reasonably reciprocal, the director is authorized to refuse recognition and cooperation.

10. The director is authorized to enter into agreements with, or obtain documentation from, any insurer registered under sections 382.100 to 382.180, any affiliate of the insurer, and other state, federal, and international regulatory agencies, regarding members of the internationally active insurance group, which provides the basis for or otherwise clarifies a regulatory official's role as groupwide supervisor.

11. The director may promulgate regulations necessary for the administration of this section. Any rule or portion of a rule, as that term is defined in section 536.010, that is created under the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and, if applicable, section 536.028. This section and chapter 536 are nonseverable, and if any of the powers vested with the general assembly pursuant to chapter 536 to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2019, shall be invalid and void.

12. An insurer registered under sections 382.100 to 382.180 and subject to this section shall be liable for and shall pay the reasonable expenses of the director's participation in the administration of this section, including the engagements of attorneys, actuaries, and any other professionals and all reasonable travel expenses.

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(L. 2019 S.B. 54)