760 IAC 1-15.1-3.6 Group capital calculation

Sec. 3.6. (a) Where an insurance holding company system has previously filed the annual group capital calculation at least once, the lead state commissioner has the discretion to exempt the ultimate controlling person from filing the annual group capital calculation if the lead state commissioner makes a determination based on that filing that the insurance holding company system meets the following criteria: (1) Has annual direct written and unaffiliated assumed premium, including international direct and assumed premium, but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of less than one billion dollars ($1,000,000,000). (2) Has no insurers within its holding company structure domiciled outside the United States or one (1) of its territories. (3) Has no banking, depository, or other financial entity subject to an identified regulatory capital framework within its holding company structure. (4) The holding company system attests that there are no material changes in the transactions between insurers and noninsurers in the group that have occurred since the last filing of the annual group capital. (5) The noninsurers within the holding company system do not pose a material financial risk to the insurer's ability to honor policyholder obligations. (b) Where an insurance holding company system has previously filed the annual group capital calculation at least once, the lead state commissioner has the discretion to accept, instead of the group capital calculation, a limited group capital filing if the insurance holding company system has annual direct written and unaffiliated assumed premium, including international direct and assumed premium, but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of less than one billion dollars ($1,000,000,000) and the following additional criteria are met: (1) Has no insurers within its holding company structure domiciled outside the United States or one (1) of its territories. (2) Does not include a banking, depository, or other financial entity subject to an identified regulatory capital framework. (3) The holding company system attests that there are no material changes in transactions between insurers and noninsurers in the group that have occurred since the last filing of the report to the lead state commissioner, and noninsurers within the holding company system do not pose a material financial risk to the insurers ability to honor policyholder obligations. (c) For an insurance holding company that has previously met an exemption with respect to the group capital calculation under subsection (a) or (b), the lead state commissioner may require at any time the ultimate controlling person to file an annual group capital calculation, completed in accordance with the NAIC Group Capital Calculation Instructions, if any of the following criteria are met: (1) An insurer within the insurance holding company system is in a Risk Based Capital action level event, as set forth in IC 27-1-36-5 or a similar standard for a non-U.S. insurer. (2) An insurer within the insurance holding company system meets at least one (1) of the standards of an insurer deemed to be in hazardous financial condition as defined in 760 IAC 1-53-3. (3) An insurer within the insurance holding company system otherwise exhibits qualities of a troubled insurer, as determined by the lead state commissioner, based on unique circumstances, including, but not limited to, the type and volume of business written, ownership and organizational structure, federal agency requests, and international supervisor requests. (d) A non-U.S. jurisdiction is considered to recognize and accept the group capital calculation if it satisfies the following criteria: (1) With respect to IC 27-1-23-3(m)(4): (A) the non-U.S. jurisdiction recognizes the U.S. state regulatory approach to group supervision and group capital, by providing confirmation by a competent regulatory authority in that jurisdiction, that insurers and insurance groups whose lead state is accredited by the NAIC under the NAIC Accreditation Program are subject only to worldwide prudential insurance group supervision, including worldwide group governance, solvency and capital, and reporting, as applicable, by the lead state and will not be subject to group supervision, including worldwide group governance, solvency and capital, and reporting, at the level of the worldwide parent undertaking of the insurance or reinsurance group by the non-U.S. jurisdiction; or (B) where no U.S. insurance group operates in the non-U.S. jurisdiction, that non-U.S. jurisdiction indicates formally in writing to the lead state, with a copy to the International Association of Insurance Supervisors, that the group capital calculation is an acceptable international capital standard. This will serve as the documentation otherwise required in clause (A). (2) The non-U.S. jurisdiction provides confirmation by a competent regulatory authority in that jurisdiction that information regarding insurers and their parent, subsidiary, or affiliated entities, if applicable, will be provided to the lead state commissioner in accordance with a memorandum of understanding or similar document between the commissioner and jurisdiction, including, but not limited to, the International Association of Insurance Supervisors Multilateral Memorandum of Understanding or other multilateral memoranda of understanding coordinated by the NAIC. The commissioner shall determine, in consultation with the NAIC Committee Process, if the requirements of the information sharing agreements are in force. (e) A list of non-U.S. jurisdictions that recognize and accept the group capital calculation will be published through the NAIC Committee Process as follows: (1) A list of jurisdictions that recognize and accept the group capital calculation under IC 27-1-23-3(m)(4) is published by the NAIC Committee Process to assist the lead state commissioner in determining which insurers shall file an annual group capital calculation. The list will clarify those situations in which a jurisdiction is exempted from filing under IC 27-1-23-3(m)(4). To assist with a determination under IC 27-1-23-3(m)(5), the list will also identify whether a jurisdiction that is exempted under either IC 27-1-23-3(m)(3) or IC 27-1-23-3(m)(4) requires a group capital filing for any U.S. based insurance group's operations in that non-U.S. jurisdiction. (2) For a non-U.S. jurisdiction where no U.S. insurance groups operate, the confirmation provided to meet the requirement in subsection (d)(1)(B) will serve as support for a recommendation to be published as a jurisdiction that recognizes and accepts the group capital calculation through the NAIC Committee Process. (3) If the lead state commissioner makes a determination under IC 27-1-23-3(m)(4) that differs from the NAIC List, the lead state commissioner shall provide thoroughly documented justification to the NAIC and other states. (4) Upon determination by the lead state commissioner that a non-U.S. jurisdiction no longer meets at least one (1) of the requirements to recognize and accept the group capital calculation, the lead state commissioner may provide a recommendation to the NAIC that the non-U.S. jurisdiction be removed from the list of jurisdictions that recognizes and accepts the group capital calculation.