CORRECTION: Florida Office of Insurance Regulation Data Call Seeks Florida-Domiciled Property and Casualty Insurance Holding Company Information by July 1, 2012

 

CORRECTION:  The State of Florida has not yet adopted the most recent amendments to the NAIC Insurance Holding Company Model Law and Regulation.

 

Although Florida has not yet adopted the most recent amendments to the National Association of Insurance Commissioners (“NAIC”) Insurance Holding Company Model Law and Regulation, the Florida Office of Insurance Regulation (“OIR”) has issued a data call to Florida domiciled property and casualty companies seeking information on their holding company structure, as well as information contained on their holding company registration statements filed pursuant to applicable regulation.

Given the ongoing focus on systemic risk issues with insurance holding company systems, the NAIC model changes are a partial effort to establish a “windows and walls” approach to holding company review and insurer regulation (i.e., wall off the insurer from any financial contagion related to affiliate business and review holding company system financial information and related risks that may ultimately affect the insurer).

To date, select states have adopted the NAIC recommended changes and more are likely to follow. The NAIC is currently in process of determining which provisions of its holding company model law and regulation will be required for adoption under NAIC accreditation standards.

Meanwhile, the following information must be submitted by Florida-domiciled property and casualty carriers to the OIR by July 1, 2012:

a)        Ultimate controlling party(s) or person(s)

b)        Nature and level of complexity of structure (e.g., public, non-public, mutual, complex, simple, etc.)

c)        Business segments (real estate, banking, insurance, etc.) and dollar amount/percentage of overall revenue per segment

d)        A statement discussing the level of international insurance activities (including branches)

e)        A listing of the number of insurers within the holding company system and their respective jurisdictions

f)        The nature and function of all non-insurance legal entities within the holding company system

g)        Potential risks as a result of aforementioned considerations defined in items “a” through “f”

h)        A high-level summary of the holding company’s overall financial position, including profitability, leverage and liquidity.  In addition, specifically address the holding company’s ability to provide surplus infusions to insurance subsidiaries as needed.

i)        The 2011 annual financial statement for the ultimate controlling entity (audited, if applicable) and all related documents, such as management’s assessment of internal controls  (This question only applies to companies that do not file with the SEC.)

j)        The identity of any other regulated entity within the holding company system and the respective involved regulatory/supervisor responsible for its regulatory oversight

k)        The number of employees of the insurance company that hold dual roles with other entities within the holding company system, including a description of how time and costs are allocated.

The OIR has advised that every attempt should be made to complete the Holding Company Registration Statement in the greatest detail pursuant to Rule 69O-143.046.  The information contained in the Holding Company Registration Statement will aid the OIR in the review of the holding company system.  The completed document should be uploaded into Florida’s Regulatory Electronic Filing System (“REFS”) as part of the Annual Statement file.   

The OIR has reminded insurance companies that they are required to keep the holding company registration statements current throughout the year, pursuant to Rule 69O-143.046.  Insurers are required to submit updates within 15 days after the end of the month in which a change occurs.   Amended Holding Company Registration Statements should be filed timely to the Office through the REFS system, either as a periodic filing or into the current open quarterly/annual financial statement file.

If there are multiple Florida-licensed entities within a Holding Company System, each company must have a separate, duplicate response uploaded into its 2011 Annual Statement REFS file.

 

 

Should you have any questions or comments, please contact Colodny Fass.

 

 

Click here to follow Colodny Fass on Twitter (@CFTLAWcom)

 

 

To unsubscribe from this newsletter, please send an email to Brooke Ellis at bellis@cftlaw.com