Forms - Incorporation by Reference, Summaries and Omissions
Section 6
Forms - Extension of Time to Furnish
Section 7
Forms - Additional Information and Exhibits
Section 8
Definitions
Section 9
Subsidiaries of Domestic Insurers
Section 10
Acquisition of Control - Statement Filing (Form A)
Section 11
Amendments to Form A
Section 12
Acquisition of Section 1311(3) Insurers
Section 13
(Omitted)
Section 14
Annual Registration of Insurers - Statement Filing (Form B)
Section 15
Summary of Registration - Statement Filing (Form C)
Section 16
Amendments to Form B
Section 17
Alternative and Consolidated Registration
Section 18
Disclaimers of Affiliation
Section 19
Transactions Subject to Prior Notice - Notice Filing (Form D)
Section 20
Extraordinary Dividends and Reporting of All Dividends
Section 21
Adequacy of Surplus
Section 1
Authority
These forms are promulgated pursuant to the authority
granted by Sections 249, 249a, 438, 1311, 1312, 1325, 1341, and 1343
of the Insurance Code of 1956, as amended.
Section 2
Purpose
The purpose of these forms and instructions are: to
set forth forms and procedural requirements which the Commissioner
deems necessary to carry out the provisions of the Insurance Holding
Company System Regulatory Act, Chapter 13 of the Insurance Code, hereinafter
referred to as "the Act." The information called for by these forms
is hereby declared to be necessary and appropriate in the public interest
and for the protection of the policyholders in this State.
Section 3
Severability Clause
If any provision of these forms, or the application
thereof to any person or circumstance, is held invalid, such determination
shall not affect other provisions or applications of these forms which
can be given effect without the invalid provision or application,
and to that end the provisions of these forms are severable.
Section 4
Forms - General Requirements
A.
Forms A, B, C, and D are intended
to be guides in the preparation of the statements required by
the Act. They are not intended to be blank forms which are
to be filled in. The statements filed shall contain the numbers
and captions of all items, but the text of the items may be
omitted provided the answers thereto are prepared in such a
manner as to indicate clearly the scope and coverage of the
items. All instructions, whether appearing under the items
of the form or elsewhere therein, are to be omitted. Unless
expressly provided otherwise, if any item is inapplicable or
the answer thereto is in the negative, an appropriate statement
to that effect shall be made.
B.
One complete copy of each statement including
exhibits and all other papers and documents filed as a part
thereof, shall be filed with the Commissioner by personal delivery
or mail addressed to: Commissioner of Office of Financial and
Insurance Services, P.O. Box 30220, Lansing, MI 48909, or 611
W. Ottawa, Lansing, MI 48933, Attention: Office of Financial
Evaluation. A copy of Form C shall be filed in each state in
which an insurer is authorized to do business, if the Commissioner
of that state has notified the insurer of its request in writing,
in which case the insurer has 30 days from receipt of the notice
to file such form. The copy shall be manually signed in the
manner prescribed on the form. If an individual or group of
individuals are ultimate controlling persons, the individuals
shall sign the Form A and Form B statements. Unsigned copies
shall be rejected. If the signature of any person is affixed
pursuant to a power of attorney or other similar authority,
a copy of the power of attorney or other authority shall also
be filed with the statement.
C.
Statements should be prepared on paper 8 ½" x
11" in size. Exhibits and financial statements, unless specifically
prepared for the filing, may be submitted in their original
size. All copies of any statement, financial statements or
exhibits shall be clear, easily readable and suitable for photocopying.
Debits in credit categories and credits in debit categories
shall be designated so as to be clearly distinguishable as such
on photocopies. Statements shall be in the English language
and monetary values shall be stated in United States currency.
If any exhibit or other paper or document filed with the statement
is in a foreign language, it shall be accompanied by a translation
into the English language and any monetary value shown in a
foreign currency normally shall be converted into United States
currency.
Section 5
Forms - Incorporation by Reference, Summaries and
Omissions
A.
Information required by any item
of Form A, Form B, or Form D may be incorporated by reference
in answer or partial answer to any other item. Information
contained in any financial statement, annual report, proxy statement,
statement filed with a governmental authority, or any other
document may be incorporated by reference in answer or partial
answer to any item of Form A, Form B, or Form D provided the
document or paper is filed as an exhibit to the statement.
Excerpts of documents may be filed as exhibits if the documents
are extensive. Documents currently on file with the Commissioner
which were filed within three (3) years need not be attached
as exhibits. References to information contained in exhibits
or in documents already on file shall clearly identify the material
and shall specifically indicate that such material is to be
incorporated by reference in answer to the item. Matter shall
not be incorporated by reference in any case where the incorporation
would render the statement incomplete, unclear or confusing.
B.
Where an item requires a summary or outline of
the provisions of any document, only a brief statement shall
be made as to the pertinent provisions of the document. In
addition to the statement, the summary or outline may incorporate
by reference particular parts of any exhibit or document currently
on file with the Commissioner which was filed within three (3)
years and may be qualified in its entirety by such reference.
In any case where two (2) or more documents required to be filed
as exhibits are substantially identical in all material respects
except as to the parties thereto, the dates of execution, or
other details, a copy of only one of the documents need be filed
with a schedule identifying the omitted documents and setting
forth the material details in which the documents differ from
the documents, a copy of which is filed.
Section 6
Forms - Extension of Time to Furnish
If it is impractical to furnish any required information,
document or report at the time it is required to be filed, there may
be filed with the Commissioner as a separate document:
(1)
Identifying the information, document
or report in question;
(2)
Stating why the filing thereof at the time required
is impractical; and
(3)
Requesting an extension of time for filing the
information, document or report to a specified date. The request
for extension shall be deemed granted unless the Commissioner
within 60 days after receipt thereof denies the request.
Section 7
Forms - Additional Information and Exhibits
In addition to the information expressly required to
be included in Form A, Form B, Form C, and Form D, the Commissioner
may request such further material information, if any, as may be necessary
to make the information contained therein not misleading. The person
filing may also file such exhibits as it may desire in addition to
those expressly required by the statement. The exhibits shall be
so marked as to indicate clearly the subject matters to which they
refer. Changes to Forms A, B, C, or D shall include on the top of
the cover page the phrase: "Change No. [insert number] to" and shall
indicate the date of the change and not the date of the original filing.
Section 8
Definitions
A.
Executive officer" means chief executive
officer, chief operating officer, chief financial officer, treasurer,
secretary, controller, and any other individual performing functions
corresponding to those performed by the foregoing officers under
whatever title.
B.
"Ultimate controlling person" means a controlling
person who is not controlled by any other person.
C.
Unless the context otherwise requires, other terms
found in these forms are used as defined in the Insurance Code.
Other nomenclature or terminology is according to industry usage
if not defined by the Code.
Section 9
Subsidiaries of Domestic Insurers
The authority to invest in subsidiaries under Section
1305 of the Act is in addition to any authority to invest in subsidiaries
which may be contained in any other provision of the Insurance Code.
Section 10
Acquisition of Control - Statement Filing
A person required to file a statement pursuant to Section
1311 of the Act shall furnish the required information on Form A,
hereby made a part of these forms and instructions.
Section 11
Amendments to Form A
The applicant shall promptly advise the Commissioner
of any changes in the information furnished on Form A arising subsequent
to the date upon which the information was furnished but prior to
the Commissioner’s disposition of the application.
Section 12
Acquisition of Section 1311(3) Insurers (Commercial
Domestic)
A.
If the person being acquired is deemed
to be a "domestic insurer" solely because of the provisions
of Section 1311(3) of the Act, the name of the domestic insurer
on the cover page should be indicated as follows:
"ABC Insurance Company, a subsidiary of XYZ Holding Company."
B.
Where a Section 1311(3) insurer is being acquired,
references to "the insurer" contained in Form A shall refer
to both the domestic subsidiary insurer and the person being
acquired.
Section 13
(Omitted)
Section 14
Annual Registration of Insurers - Statement Filing
An insurer required to file an annual registration statement
pursuant to Section 1324 of the Act shall furnish the required information
on Form B, hereby made a part of these forms and instructions, by
May 1 of each year for the immediately preceding calendar year.
Section 15
Summary of Registration - Statement Filing
An insurer required to file an annual registration statement
pursuant to Section 1324 of the Act is also required to furnish information
required on Form C, hereby made a part of these forms and instructions,
by May 1 of each year for the immediately preceding calendar year.
An insurer shall file copy of Form C in each state in which the insurer
is authorized to do business, if requested by the Commissioner of
that state.
Section 16
Amendments to Form B
A.
An amendment to Form B shall be
filed within fifteen (15) days after the end of any month in
which there is a material change to the information provided
in the annual registration statement.
B.
Amendments shall be filed in the Form B format
with only those items which are being amended reported. Each
amendment shall include at the top of the cover page "Amendment
No. [insert number] to Form B for [insert year]" and shall indicate
the date of the change and not the date of the original filings.
Section 17
Alternative and Consolidated Registrations
A.
Any authorized insurer may file
a registration statement on behalf of any affiliated insurer
or insurers which are required to register under Section 1324
of the Act. A registration statement may include information
not required by the Act regarding any insurer in the insurance
holding company system even if the insurer is not authorized
to do business in this State. In lieu of filing a registration
statement on Form B, the authorized insurer may file a copy
of the registration statement or similar report which it is
required to file in its State of domicile, provided:
(1)
The statement or report contains substantially
similar information required to be furnished on Form B;
and
(2)
The filing insurer is the principal insurance
company in the insurance holding company system.
B.
The question of whether the filing insurer is
the principal insurance company in the insurance holding company
system is a question of fact and an insurer filing a registration
statement or report in lieu of Form B on behalf of an affiliated
insurer, shall set forth a brief statement of facts which will
substantiate the filing insurer’s claim that it, in fact, is
the principal insurer in the insurance holding company system.
C.
With the prior approval of the Commissioner, an
unauthorized insurer may follow any of the procedures which
could be done by an authorized insurer under Subsection A above.
D.
Any insurer may take advantage of the provisions
of Section 1329 or 1330 of the Act without obtaining the prior
approval of the Commissioner. The Commissioner, however, reserves
the right to require individual filings if he or she deems such
filings necessary in the interest of clarity, ease of administration
or the public good.
Section 18
Disclaimers of Affiliation
A petition for disclaimer of affiliation or a request
for termination of registration claiming that a person does not, or
will not upon the taking of some proposed action, control another
person (hereinafter referred to as the "subject") shall contain the
following information:
(1)
The number of authorized, issued
and outstanding voting securities of the subject;
(2)
With respect to the person whose control is denied
and all affiliates of such person, the number and percentage
of shares of the subject’s voting securities which are held
of record or known to be beneficially owned, and the number
of shares concerning which there is a right to acquire, directly
or indirectly
(3)
All material relationships and bases for affiliation
between the subject and the person whose control is denied and
all affiliates of such person;
(4)
A statement explaining why the person should not
be considered to control the subject.
Section 19
Transactions Subject to Prior Notice - Notice Filing
An insurer required to give notice of a proposed transaction
pursuant to Section 1341 of the Act shall furnish the required information
on Form D, hereby made a part of these regulations.
Section 20
Extraordinary Dividends and Reporting of All Dividends
A.
Requests for approval of extraordinary
dividends or any other extraordinary distribution to shareholders
and the reporting of non-extraordinary dividends declared but
not yet paid shall include the following:
(1)
The amount of the proposed dividend;
(2)
The date established for payment of the
dividend;
(3)
A statement as to whether the dividend is
to be in cash or other property and, if in property, a
description thereof, its cost, and its fair market value
together with an explanation of the basis for valuation;
(4)
A copy of the calculations determining whether
the proposed dividend is extraordinary. The work paper
shall include the following information:
(a)
The amounts, dates and form of payment
of all dividends or distributions (including regular
dividends but excluding distributions of the insurers
own securities) paid within the period of twelve
(12) consecutive months ending on the date fixed
for payment of the proposed dividend for which approval
is sought and commencing on the day after the same
day of the same month in the last preceding year;
(b)
Surplus as regards policyholders (total
capital and surplus) as of the 31st day of December
next preceding;
(c)
If the insurer is a life insurer,
the net gain from operations for the 12-month period
ending the 31st day of December next preceding;
(d)
If the insurer is not a life insurer,
the net income less realized capital gains for the
12-month period ending the 31st day of December
next preceding and the two preceding 12-month periods;
and
(e)
If the insurer is not a life insurer, the dividends
paid to stockholders excluding distributions of
the insurer’s own securities in the preceding two
(2) calendar years;
(5)
A balance sheet and statement of income
for the period intervening from the last annual statement
filed with the Commissioner and the end of the month preceding
the month in which the request for dividend approval is
submitted; and
(6)
A brief statement as to the effect of the
proposed dividend upon the insurer’s surplus and the reasonableness
of surplus in relation to the insurer’s outstanding liabilities
and the adequacy of surplus relative to the insurer’s
financial needs.
B.
Subject to Section 1343(4) of the Act, any domestic
insurer that is a member of an insurance holding company system
and declares a shareholder dividend shall report the dividend
to the commissioner within 5 business days after declaring the
dividend and at least 10 business days before the payment.
Subject to Section 1343(5) of the Act, an insurer subject to
registration under Section 1324 of the Act shall not pay any
extraordinary dividend or make any other extraordinary distribution
to its shareholders until 30 days after the commissioner has
received notice of the declaration and has not disapproved or
has approved the payment within that period.
C.
All filings pursuant to 1343 of the Act, which
either report the declaration of all dividends prior to payment
or request approval of an extraordinary dividend shall be directed
to the attention of the Division of Insurance’s Office of Financial
Evaluation.
Section 21
Adequacy of Surplus
The factors set forth in Sections 1341, 1342, 1343,
403 and 436a of the Insurance Code are not intended to be an exhaustive
list. In determining the adequacy and reasonableness of an insurer’s
surplus, no single factor is necessarily controlling.
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