HB 709 - Insurance; material acquisitions, etc.; reports
Georgia House of Representatives - 1995/1996 Sessions
HB 709 - Insurance; material acquisitions, etc.; reports
Page Numbers - 1/ 2/ 3/ 4/ 5
1. Heard 89th
House Comm: Ins / Senate Comm: /
House Vote: Yeas Nays Senate Vote: Yeas Nays
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House Action Senate
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2/10/95 Read 1st Time
2/13/95 Read 2nd Time
2/22/95 Favorably Reported
3/17/95 Recommitted
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Rules Suspended to Introduce
Code Sections amended: 33-54-1, 33-54-2, 33-54-3
HB 709 LC 15 4076
A BILL TO BE ENTITLED
AN ACT
1- 1 To amend Title 33 of the Official Code of Georgia Annotated,
1- 2 relating to insurance, so as to require insurers domiciled
1- 3 in this state to file reports with the Commissioner of
1- 4 Insurance and other entities disclosing material
1- 5 acquisitions and dispositions of assets or material
1- 6 nonrenewals, cancellations, or revisions of ceded
1- 7 reinsurance agreements; to provide for the time of filing
1- 8 such reports; to provide for the confidential treatment of
1- 9 such reports; to provide what acquisitions and dispositions
1-10 of assets shall be considered material; to provide what
1-11 nonrenewals, cancellations, or revisions shall be considered
1-12 material; to provide exemptions; to provide for matters
1-13 relative to the foregoing; to repeal conflicting laws; and
1-14 for other purposes.
1-15 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
1-16 Title 33 of the Official Code of Georgia Annotated, relating
1-17 to insurance, is amended by adding a new chapter, to be
1-18 designated Chapter 54, to read as follows:
"CHAPTER 54
1-19 33-54-1. (Index)
1-20 (a) Every insurer domiciled in this state shall file a
1-21 report with the Commissioner disclosing material
1-22 acquisitions and dispositions of assets or material
1-23 nonrenewals, cancellations, or revisions of ceded
1-24 reinsurance agreements unless such acquisitions and
1-25 dispositions of assets or material nonrenewals,
1-26 cancellations, or revisions of ceded reinsurance
1-27 agreements have been submitted to the Commissioner for
1-28 review, approval, or information purposes pursuant to
1-29 other provisions of this title, regulations, or other
1-30 requirements.
-1- (Index)
LC 15 4076
2- 1 (b)(1) The report required in subsection (a) of this
2- 2 Code section is due within 15 days after the end of the
2- 3 calendar month in which any of the covered transactions
2- 4 occur.
2- 5 (2) One complete copy of the report, including any
2- 6 exhibits or other attachments filed as part thereof,
2- 7 shall be filed with:
2- 8 (A) The Commissioner of Insurance; and
2- 9 (B) The National Association of Insurance
2-10 Commissioners.
2-11 (c) All reports obtained by or disclosed to the
2-12 Commissioner pursuant to this Code section shall be given
2-13 confidential treatment, shall not be subject to subpoena,
2-14 and shall not be made public by the Commissioner, the
2-15 National Association of Insurance Commissioners, or any
2-16 other person, except to insurance departments of other
2-17 states, without the prior written consent of the insurer
2-18 to which it pertains unless the Commissioner, after giving
2-19 the insurer who would be affected thereby notice and an
2-20 opportunity to be heard, determines that the interest of
2-21 policyholders, shareholders, or the public will be served
2-22 by the publication thereof, in which event the
2-23 Commissioner may publish all or any part thereof in such
2-24 manner as he or she may deem appropriate.
2-25 33-54-2. (Index)
2-26 (a) No acquisitions or dispositions of assets need be
2-27 reported pursuant to Code Section 33-54-1 if the
2-28 acquisitions or dispositions are not material. For
2-29 purposes of this chapter, a material acquisition or
2-30 disposition or the aggregate of any series of related
2-31 acquisitions or related dispositions during any 30 day
2-32 period is one that is nonrecurring and not in the ordinary
2-33 course of business and involves more than 5 percent of the
2-34 reporting insurer's total admitted assets as reported in
2-35 its most recent statutory statement filed with the
2-36 insurance department of the insurer's state of domicile.
2-37 (b)(1) Asset acquisitions subject to this chapter
2-38 include every purchase, lease, exchange, merger,
2-39 consolidation, succession, or other acquisition other
2-40 than the construction or development of real property by
2-41 or for the reporting insurer or the acquisition of
2-42 materials for such purpose.
-2- (Index)
LC 15 4076
3- 1 (2) Asset dispositions subject to this chapter include
3- 2 every sale, lease, exchange, merger, consolidation,
3- 3 mortgage, hypothecation, assignment for the benefit of
3- 4 creditors or otherwise, abandonment, destruction, or
3- 5 other disposition.
3- 6 (c)(1) The following information is required to be
3- 7 disclosed in any report of a material acquisition or
3- 8 disposition of assets:
3- 9 (A) Date of the transaction;
3-10 (B) Manner of acquisition or disposition;
3-11 (C) Description of the assets involved;
3-12 (D) Nature and amount of the consideration given or
3-13 received;
3-14 (E) Purpose of or reason for the transaction;
3-15 (F) Manner by which the amount of consideration was
3-16 determined;
3-17 (G) Gain or loss recognized or realized as a result of
3-18 the transaction; and
3-19 (H) Name or names of the person or persons from whom
3-20 the assets were acquired or to whom they were
3-21 disposed.
3-22 (2) Insurers are required to report material
3-23 acquisitions and dispositions on a nonconsolidated basis
3-24 unless the insurer is part of a consolidated group of
3-25 insurers which utilizes a pooling arrangement or 100
3-26 percent reinsurance agreement that affects the solvency
3-27 and integrity of the insurer's reserves and such insurer
3-28 ceded substantially all of its direct and assumed
3-29 business to the pool. An insurer is deemed to have
3-30 ceded substantially all of its direct and assumed
3-31 business to a pool if the insurer has less than $1
3-32 million total direct premiums plus assumed written
3-33 premiums during a calendar year that are not subject to
3-34 a pooling arrangement and the net income of the business
3-35 not subject to the pooling arrangement represents less
3-36 than 5 percent of the insurer's capital and surplus.
3-37 33-54-3. (Index)
3-38 (a) Nonrenewals, cancellations, or revisions of ceded
3-39 reinsurance agreements shall not be required to be
3-40 reported pursuant to Code Section 33-54-1 if the
-3- (Index)
LC 15 4076
4- 1 nonrenewals, cancellations, or revisions are not material.
4- 2 For purposes of this chapter, a material nonrenewal,
4- 3 cancellation, or revision is one that affects:
4- 4 (1) With respect to property and casualty business,
4- 5 including accident and health business written by a
4- 6 property and casualty insurer:
4- 7 (A) More than 50 percent of the insurer's total ceded
4- 8 written premium; or
4- 9 (B) More than 50 percent of the insurer's total ceded
4-10 indemnity and loss adjustment reserves;
4-11 (2) With respect to life, annuity, and accident and
4-12 sickness business, more than 50 percent of the total
4-13 reserve credit taken for business ceded on an annualized
4-14 basis, as indicated in the insurer's most recent annual
4-15 statement; or
4-16 (3) With respect to either property and casualty or
4-17 life, annuity, and accident and sickness business,
4-18 either of the following events shall constitute a
4-19 material revision which must be reported:
4-20 (A) An authorized reinsurer representing more than 10
4-21 percent of a total cession is replaced by one or more
4-22 unauthorized reinsurers; or
4-23 (B) Previously established collateral requirements
4-24 have been reduced or waived as respects one or more
4-25 unauthorized reinsurers representing collectively more
4-26 than 10 percent of a total cession.
4-27 (b) Notwithstanding the provisions of subsection (a) of
4-28 this Code section, no filing shall be required if:
4-29 (1) With respect to property and casualty business,
4-30 including accident and sickness business written by a
4-31 property and casualty insurer, the insurer's total
4-32 written premium represents, on an annualized basis, less
4-33 than 10 percent of its total written premium for direct
4-34 and assumed business; or
4-35 (2) With respect to life, annuity, and accident and
4-36 sickness business, the total reserve credit taken for
4-37 business ceded represents, on an annualized basis, less
4-38 than 10 percent of the statutory reserve requirement
4-39 prior to any cession.
-4- (Index)
LC 15 4076
5- 1 (c)(1) The following information is required to be
5- 2 disclosed in any report of a material nonrenewal,
5- 3 cancellation, or revision of ceded reinsurance
5- 4 agreements:
5- 5 (A) The effective date of the nonrenewal,
5- 6 cancellation, or revision;
5- 7 (B) The description of the transaction with an
5- 8 identification of the initiator thereof;
5- 9 (C) The purpose of or reason for the transaction; and
5-10 (D) The identity of the replacement reinsurers, if
5-11 applicable.
5-12 (2) Insurers are required to report all material
5-13 nonrenewals, cancellations, or revisions of ceded
5-14 reinsurance agreements on a nonconsolidated basis unless
5-15 the insurer is part of a consolidated group of insurers
5-16 which utilizes a pooling arrangement or 100 percent
5-17 reinsurance agreement that affects the solvency and
5-18 integrity of the insurer's reserves and the insurer
5-19 ceded substantially all of its direct and assumed
5-20 business to the pool. An insurer is deemed to have
5-21 ceded substantially all of its direct and assumed
5-22 business to a pool if the insurer has less than $1
5-23 million total direct premiums plus assumed written
5-24 premiums during a calendar year that are not subject to
5-25 a pooling arrangement and the net income of the business
5-26 not subject to the pooling arrangement represents less
5-27 than 5 percent of the insurer's capital and surplus."
SECTION 2.
5-28 All laws and parts of laws in conflict with this Act are
5-29 repealed.
-5- (Index)
Office of the Clerk of the House
Robert E. Rivers, Jr., Clerk of the House
Last Updated on 01/02/97