23 CAR pt. 9, Appendix D. Prior Notice of a Transaction

FORM D PRIOR NOTICE OF A TRANSACTION Filed with the Insurance Department of the State of _______________ By _________________________ Name of Registrant On Behalf of the Following Insurance Companies Name Address _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ Date: ________________________, (Year)____________ Name, Title, Address and telephone number of Individuals to whom Notice and Correspondence concerning This Statement Should be Addressed: _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ ITEM 1. IDENTITY OF PARTIES TO TRANSACTION Furnish the following information for each of the parties to the transaction: (a) Name; (b) Home office address; (c) Principal executive office address; (d) The organizational structure, i.e. corporation, partnership, individual, trust, etc.; (e) A description of the nature of the parties' business operations; (f) Relationship, if any, of other parties to the transaction to the insurer filing the notice, including any ownership or debtor/creditor interest by any other parties to the transaction in the insurer seeking approval, or by the insurer filing the notice in the affiliated parties; and (g) Where the transaction is with a non-affiliate, the name(s) of the affiliate(s) which will receive, in whole or in substantial part, the proceeds of the transaction. ITEM 2. DESCRIPTION OF THE TRANSACTION Furnish the following information for each transaction for which notice is being given: (a) A statement as to whether notice is being given under Ark. Code Ann. § 23-63-515(a)(2)(A), (B), (C), (D) or (E). (b) A statement of the nature of the transaction. (c) A statement of how the transaction meets the “fair and reasonable” standard of Ark. Code Ann. § 23-63-515(a)(1)(A). (d) The proposed effective date of the transaction. ITEM 3. SALES, PURCHASES, EXCHANGES, LOANS, EXTENSIONS OF CREDIT, GUARANTEES OR INVESTMENTS Furnish a brief description of the amount and source of funds, securities, property or other consideration for the sale, purchase, exchange, loan, extension of credit, guarantee, or investment, whether any provision exists for purchase by the insurer filing notice, by any party to the transaction, or by any affiliate of the insurer filing notice, a description of the terms of any securities being received, if any, and a description of any other agreements relating to the transaction such as contracts or agreements for services, consulting agreements and the like. If the transaction involves other than cash, furnish a description of the consideration, its cost and its fair market value, together with an explanation of the basis for evaluation. If the transaction involves a loan, extension of credit or a guarantee, furnish a description of the maximum amount which the insurer will be obligated to make available under such loan, extension of credit or guarantee, the date on which the credit or guarantee will terminate, and any provisions for the accrual of or deferral of interest. If the transaction involves an investment, guarantee or other arrangement, state the time period during which the investment, guarantee or other arrangement will remain in effect, together with any provisions for extensions or renewals of such investments, guarantees or arrangements. Furnish a brief statement as to the effect of the transaction upon the insurer's surplus. No notice need be given if the maximum amount which can at any time be outstanding or for which the insurer can be legally obligated under the loan, extension of credit or guarantee is less than (a) in the case of non-life insurers, the lesser of three percent (3%) of the insurer's admitted assets or twenty-five percent (25%) of surplus as regards policyholders or, (b) in the case of life insurers, three percent (3%) of the insurer's admitted assets, each as of the 31st day of December next preceding. ITEM 4. LOANS OR EXTENSIONS OF CREDIT TO A NON-AFFILIATE If the transaction involves a loan or extension of credit to any person who is not an affiliate, furnish a brief description of the agreement or understanding whereby the proceeds of the proposed transaction, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase the assets of, or to make investments in, any affiliate of the insurer making such loans or extensions of credit, and specify in what manner the proceeds are to be used to loan to, extend credit to, purchase assets of or make investments in any affiliate. Describe the amount and source of funds, securities, property or other consideration for the loan or extension of credit and, if the transaction is one involving consideration other than cash, a description of its cost and its fair market value together with an explanation of the basis for evaluation. Furnish a brief statement as to the effect of the transaction upon the insurer's surplus. No notice need be given if the loan or extension of credit is one which equals less than, in the case of non-life insurers, the lesser of three percent (3%) of the insurer's admitted assets or twenty-five percent (25%) of surplus as regards policyholders or, with respect to life insurers, three percent (3%) of the insurer's admitted assets, each as of the 31st day of December next preceding. ITEM 5. REINSURANCE If the transaction is a reinsurance agreement or modification thereto, as described by Ark. Code Ann. § 23-63-515(a)(2)(C), furnish a description of the known and/or estimated amount of liability to be ceded and/or assumed in each calendar year, the period of time during which the agreement will be in effect, and a statement whether an agreement or understanding exists between the insurer and non-affiliate to the effect that any portion of the assets constituting the consideration for the agreement will be transferred to one or more of the insurer's affiliates. Furnish a brief description of the consideration involved in the transaction, and a brief statement as to the effect of the transaction upon the insurer's surplus. No notice need be given for reinsurance agreements or modifications thereto if the reinsurance premium or a change in the insurer's liabilities, or the projected reinsurance premium or change in the insurer’s liabilities in any of the next three (3) years, in connection with the reinsurance agreement or modification thereto is less than five percent (5%) of the insurer's surplus as regards policyholders, as of the 31st day of December next preceding. ITEM 6. MANAGEMENT AGREEMENTS, SERVICE AGREEMENTS AND COST- SHARING ARRANGEMENTS For management and service agreements, furnish: (a) A brief description of the managerial responsibilities, or services to be performed; and (b) A brief description of the agreement, including a statement of its duration, together with brief descriptions of the basis for compensation and the terms under which payment or compensation is to be made. For cost-sharing arrangements, furnish: (a) A brief description of the purpose of the agreement; (b) A description of the period of time during which the agreement is to be in effect; (c) A brief description of each party's expenses or costs covered by the agreement; (d) A brief description of the accounting basis to be used in calculating each party's costs under the agreement; (e) A brief statement as to the effect of the transaction upon the insurer’s policyholder surplus; (f) A statement regarding the cost allocation methods that specifies whether proposed charges are based on “cost or market.” If market based, rationale for using market instead of cost, including justification for the company’s determination that amounts are fair and reasonable; and (g) A statement regarding compliance with the NAIC Accounting Practices and Procedure Manual regarding expense allocation. ITEM 7. SIGNATURE AND CERTIFICATION Signature and certification required as follows: SIGNATURE Pursuant to the requirements of Ark. Code Ann. § 23-63-515 ______________ has caused this notice to be duly signed on its behalf in the City of _________________ and State of _______________ on the _______ day of ___________, (Year)__________. ________________________________ Name of Applicant (SEAL) BY________________________________ (Name) (Title) Attest: _______________________________ ________________________________ (Signature of Officer) (Title) CERTIFICATION The undersigned deposes and says that (s)he has duly executed the attached statement dated _______________, (Year)_______, for and on behalf of ____________________ (Name of Applicant); that (s)he is the______________________ (Title of Officer) of such company and that (s)he is authorized to execute and file such instrument. Deponent further says that (s)he is familiar with such instrument and the contents thereof, and that the facts therein set forth are true to the best of his/her knowledge, information and belief. (Signature) ________________________________ (Type or print name beneath) ________________________________