Bill Text: GA HB341 | 2011-2012 | Regular Session | Introduced

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Bill Title: Insurers; limited purpose subsidiary life insurance companies; establish

Spectrum: Slight Partisan Bill (Republican 3-1)

Status: (Passed) 2011-07-01 - Effective Date [HB341 Detail]

Download: Georgia-2011-HB341-Introduced.html

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11 LC 37 1158/AP

House Bill 341 (AS PASSED HOUSE AND SENATE)

By: Representatives Rogers of the 26th, Heard of the 114th, and Harbin of the 118th

A BILL TO BE ENTITLED
AN ACT

To amend Chapter 14 of Title 33 of the Official Code of Georgia Annotated, relating to domestic stock and mutual insurers, so as to provide for the establishment of limited purpose subsidiary life insurance companies; to provide for definitions; to provide for requirements; to provide for investment of funds; to provide for organization; to provide for reinsurance; to provide for applicability; to provide for promulgation of rules; to provide for related matters; to repeal conflicting laws; and for other purposes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

SECTION 1.

Chapter 14 of Title 33 of the Official Code of Georgia Annotated, relating to domestic stock and mutual insurers, is amended by adding a new article to read as follows:

"ARTICLE 5

33-14-100.

As used in this article, the term:

(1) 'Limited purpose subsidiary' means a subsidiary life, accident, and sickness reinsurer that is organized under this article and is wholly owned by an organizing domestic reinsurer.

(2) 'Organizing domestic reinsurer' means a domestic life, accident, and sickness reinsurer that organizes a limited purpose subsidiary under this article.

(3) 'Reinsurer' means an insurer that:

(A) Is principally engaged in the business of reinsurance;

(B) Does not conduct a significant amount of direct insurance as a percentage of the insurer's net premiums; and

(C) Is not engaged on an ongoing basis in the business of soliciting direct insurance.

(4) 'Risk' means a risk that is associated with an insurance policy or annuity that is assumed by an organizing domestic reinsurer and for which the organizing domestic reinsurer is required to hold statutory reserves for the policy or annuity.

33-14-101.

A domestic life, accident, and sickness reinsurer may organize a domestic limited purpose subsidiary pursuant to the provisions of this article.

33-14-102.

(a) Before assuming risk under a reinsurance agreement, a limited purpose subsidiary must:

(1) Obtain from the Commissioner approval of the limited purpose subsidiary's plan of operation; and

(2) Be granted a certificate of authority to engage in the business of reinsurance in Georgia.

(b) A limited purpose subsidiary shall produce or disclose in its plan of operation, amendments, and records, books, documents, reports, and other information that the Commissioner requires the limited purpose subsidiary to produce or disclose under:

(1) This article;

(2) Rules adopted pursuant to this article; or

(3) An order pursuant to an examination performed in accordance with the provisions of Chapter 2 of this title.

(c) The Commissioner shall examine domestic limited purpose subsidiaries pursuant to Code Section 33-2-11.

33-14-103.

A limited purpose subsidiary that is granted a certificate of authority by the Commissioner under this article:

(1) Is wholly owned by the organizing domestic reinsurer;

(2) Is authorized to engage in the business of reinsurance only for the lines of insurance for which the organizing domestic reinsurer is authorized;

(3) May reinsure only risks of the organizing domestic reinsurer; and

(4) May access alternative forms of financing.

33-14-104.

An organizing domestic reinsurer may invest funds from the surplus of the organizing domestic reinsurer in a limited purpose subsidiary that is organized by the organizing domestic reinsurer pursuant to this article.

33-14-105.

The officers and directors of an organizing domestic reinsurer may serve as officers and directors of a limited purpose subsidiary organized by the organizing domestic reinsurer pursuant to this article.

33-14-106.

A limited purpose subsidiary may, upon approval of the Commissioner, reinsure the risks assumed by the limited purpose subsidiary.

33-14-107.

(a) Assets of a limited purpose subsidiary that are approved by the Commissioner as admitted assets must comply with requirements established by the Commissioner under rules adopted pursuant to this article.

(b) All other assets shall be nonadmitted.

33-14-108.

The following provisions of the Code do not apply to a limited purpose subsidiary organized under this article:

(1) Code Section 33-3-6;

(2) Code Section 33-3-7;

(3) Code Section 33-3-8;

(4) Code Section 33-7-14;

(5) Article 2 of Chapter 11 of this title;

(6) Code Section 33-13-4;

(7) Code Section 33-13-5;

(8) Code Section 33-14-40; and

(9) Chapter 56 of this title.

33-14-109.

(a) The Commissioner shall, before approving a limited purpose subsidiary under this article, adopt rules pursuant to Code Section 33-2-9 to implement this article.

(b) The rules adopted under subsection (a) of this Code section shall address, but not be limited to, the following concerning limited purpose subsidiaries:

(1) Requirements for organization of a limited purpose subsidiary;

(2) Requirements for a plan of operation;

(3) Capital, surplus, and risk-based capital requirements;

(4) Requirements for reporting and notifications;

(5) Requirements for reserves, including actuarial certification;

(6) Requirements for authorized investments;

(7) Requirements with respect to reinsurance ceded or assumed by the limited purpose subsidiary;

(8) Requirements and restrictions for material transactions;

(9) Requirements for dividends and distributions;

(10) Requirements for operations; and

(11) Conditions of, forms for, and approval of the financing of a limited purpose subsidiary."

SECTION 2.

All laws and parts of laws in conflict with this Act are repealed.