Neb. Rev. Stat. § 44-2132 — NE Code / Chapter 44 / Section 44-2132
View Statute 44-2132
Status: in_force

(1) Every insurer which is authorized to do business in this state and which is a member of an insurance holding company system shall register with the director, except that registration shall not be required for a foreign insurer subject to registration requirements and standards adopted by statute or regulation in the jurisdiction of its domicile which are substantially similar to those contained in this section, subsection (1) of section 44-2133 , sections 44-2134 and 44-2136 , and either subsection (2) of section 44-2133 or a provision such as the following: Each registered insurer shall keep current the information required to be disclosed in its registration statement by reporting all material changes or additions within fifteen days after the end of the month in which it learns of each such change or addition. Any insurer which is subject to registration under this section shall register within fifteen days after it becomes subject to registration and annually thereafter by May 1 of each year for the previous calendar year unless the director for good cause shown extends the time for such initial or annual registration and then within such extended time. The director may require any insurer which is authorized to do business in the state, which is a member of an insurance holding company system, and which is not subject to registration under this section to furnish a copy of the registration statement, the summary specified in subsection (3) of this section, or other information filed by such insurer with the insurance regulatory authority of its domiciliary jurisdiction.

(2) Every insurer subject to registration shall file the registration statement with the director on a form and in a format prescribed by the National Association of Insurance Commissioners which shall contain the following current information:

(a) The capital structure, general financial condition, ownership, and management of the insurer and any person controlling the insurer;

(b) The identity and relationship of every member of the insurance holding company system;

(c) The following agreements in force and transactions currently outstanding or which have occurred during the last calendar year between such insurer and its affiliates:

(i) Loans, other investments, or purchases, sales, or exchanges of securities of the affiliates by the insurer or of the insurer by its affiliates;

(ii) Purchases, sales, or exchanges of assets;

(iii) Transactions not in the ordinary course of business;

(iv) Guarantees or undertakings for the benefit of an affiliate which result in an actual contingent exposure of the insurer's assets to liability, other than insurance contracts entered into in the ordinary course of the insurer's business;

(v) All management agreements, service contracts, and cost-sharing arrangements;

(vi) Reinsurance agreements;

(vii) Dividends and other distributions to shareholders; and

(viii) Consolidated tax allocation agreements;

(d) Any pledge of the insurer's stock, including stock of any subsidiary or controlling affiliate, for a loan made to any member of the insurance holding company system;

(e) If requested by the director, the insurer shall include financial statements of or within an insurance holding company system, including all affiliates. Financial statements may include, but are not limited to, annual audited financial statements filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. An insurer required to file financial statements pursuant to this subdivision may satisfy the request by providing the director with the most recently filed parent corporation financial statements that have been filed with the Securities and Exchange Commission;

(f) Statements that show that the insurer's board of directors oversees corporate governance and internal controls and that the insurer's officers or senior management have approved, implemented, and continue to maintain and monitor corporate governance and internal control procedures;

(g) Other matters concerning transactions between registered insurers and any affiliates as may be included from time to time in any registration forms adopted or approved by the director; and

(h) Any other information required by rules and regulations which the director may adopt and promulgate.

(3) All registration statements shall contain a summary outlining all items in the current registration statement representing changes from the prior registration statement.

(4) It shall not be necessary to disclose on the registration statement information which is not material for the purposes of this section. Unless the director by rule, regulation, or order provides otherwise, sales, purchases, exchanges, loans, or extensions of credit, investments, or guarantees involving one-half of one percent or less of an insurer's admitted assets as of December 31 next preceding shall not be deemed material for purposes of this section. Such exclusion from the definition of material shall not apply for purposes of group capital calculation instructions or the NAIC Liquidity Stress Test Framework.

(5) Subject to the requirements of section 44-2134 , each registered insurer shall give notice to the director of all dividends and other distributions to shareholders within five business days following the declaration thereof and shall not pay any such dividends or other distributions to shareholders within ten business days following receipt of such notice by the director unless for good cause shown the director has approved such payment within such ten-business-day period.

(6) Any person within an insurance holding company system subject to registration shall be required to provide complete and accurate information to an insurer when such information is reasonably necessary to enable the insurer to comply with the Insurance Holding Company System Act.

(7) The director shall terminate the registration of any insurer which demonstrates that it no longer is a member of an insurance holding company system.

(8) The director may require or allow two or more affiliated insurers subject to registration under this section to file a consolidated registration statement.

(9) The director may allow an insurer which is authorized to do business in this state and which is part of an insurance holding company system to register on behalf of any affiliated insurer which is required to register under subsection (1) of this section and to file all information and material required to be filed under this section.

(10) This section shall not apply to any insurer, information, or transaction if and to the extent that the director by rule, regulation, or order exempts the same from this section.

(11) Any person may file with the director a disclaimer of affiliation with any authorized insurer or such a disclaimer may be filed by such insurer or any member of an insurance holding company system. The disclaimer shall fully disclose all material relationships and bases for affiliation between such person and such insurer as well as the basis for disclaiming such affiliation. A disclaimer of affiliation shall be deemed to have been granted unless the director, within thirty days after receipt of a complete disclaimer, notifies the filing party that the disclaimer is disallowed. If the disclaimer is disallowed, the disclaiming party may request and shall be entitled to an administrative hearing. The disclaiming party shall be relieved of its duty to register under this section if approval of the disclaimer has been granted by the director or if the disclaimer is deemed to have been approved.

(12) The ultimate controlling person of every insurer subject to registration shall also file an annual enterprise risk report. The report shall, to the best of the ultimate controlling person's knowledge and belief, identify the material risks within the insurance holding company system that could pose enterprise risk to the insurer. The report shall be filed with the director or commissioner of the lead state.

(13)(a) Except as otherwise provided in this section, the ultimate controlling person of every insurer subject to registration shall concurrently file with the registration an annual group capital calculation as directed by the director or commissioner of the lead state. The annual group capital calculation shall be completed in accordance with the group capital calculation instructions, which may permit the director or commissioner of the lead state to allow a controlling person that is not the ultimate controlling person to file the annual group capital calculation. The annual group capital calculation shall be filed with the director or commissioner of the lead state. The following insurance holding company systems shall be exempt from filing an annual group capital calculation:

(i) An insurance holding company system that has only one insurer within its holding company structure, only writes business and is only licensed in its domestic state, and assumes no business from any other insurer;

(ii) An insurance holding company system that is required to perform a group capital calculation specified by the Federal Reserve Board. The director or commissioner of the lead state shall request the calculation from the Federal Reserve Board under the terms of information-sharing agreements in effect. If the Federal Reserve Board cannot share the calculation with the director or commissioner of the lead state, the insurance holding company system is not exempt from the annual group capital calculation filing requirement;

(iii) An insurance holding company system whose non-United-States group-wide supervisor is located within a reciprocal jurisdiction as described in subdivision (7)(a)(i) of section 44-416.06 that recognizes the state regulatory approach to group supervision and group capital of the United States; and

(iv) An insurance holding company system:

(A) That provides information to the director or commissioner of the lead state that meets the requirements for accreditation under the financial standards and accreditation program of the National Association of Insurance Commissioners, either directly or indirectly through the group-wide supervisor, who has determined such information is satisfactory to allow the director or commissioner of the lead state to comply with the group supervision approach of the National Association of Insurance Commissioners, as detailed in the Financial Analysis Handbook of the National Association of Insurance Commissioners; and

(B) Whose non-United-States group-wide supervisor, that is not in a reciprocal jurisdiction, recognizes and accepts, as provided in subsection (15) of this section, the group capital calculation as the worldwide group capital assessment for United States' insurance groups who operate in that jurisdiction.

(b) Notwithstanding subdivisions (13)(a)(iii) and (iv) of this section, the director or commissioner of the lead state shall require the filing of the annual group capital calculation for the United States operations of any non-United-States-based insurance holding company system if, after any necessary consultation with other supervisors or officials, it is deemed appropriate by the director or commissioner of the lead state for prudential oversight and solvency monitoring purposes or for ensuring the competitiveness of the insurance marketplace.

(c) Notwithstanding the exemptions from filing the annual group capital calculation stated in subdivisions (13)(a)(i) through (iv) of this section, the director or commissioner of the lead state has the discretion to exempt the ultimate controlling person from filing the annual group capital calculation or to accept a limited group capital filing in accordance with subsection (14) of this section.

(d) If the director or commissioner of the lead state determines that an insurance holding company system no longer meets one or more of the requirements for an exemption from filing the annual group capital calculation under this subsection, the insurance holding company system shall file the annual group capital calculation at the next annual filing date unless given an extension by the director or commissioner of the lead state based on reasonable grounds shown.

(14)(a) The director or commissioner of the lead state has the discretion to exempt the ultimate controlling person from filing the annual group capital calculation if the director or commissioner of the lead state determines that:

(i) The 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 the national flood insurance program, of less than one billion dollars;

(ii) The holding company system has no insurers within its holding company structure that are domiciled outside of the United States or one of its territories;

(iii) The holding company system has no banking, depository, or other financial entity that is subject to an identified regulatory capital framework within its holding company structure;

(iv) The holding company system attests that there are no material changes in the transactions between insurers and noninsurers in the group; and

(v) The noninsurers within the holding company system do not pose a material financial risk to the insurer's ability to honor policyholder obligations.

(b) The director or commissioner of the lead state has the discretion to accept, in lieu of the group capital calculation, a limited group capital filing if the holding company system:

(i) 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 the national flood insurance program, of less than one billion dollars;

(ii) Has no insurers within its holding company structure that are domiciled outside of the United States or one of its territories;

(iii) Does not include a banking, depository, or other financial entity that is subject to an identified regulatory capital framework; and

(iv) Attests that there are no material changes in transactions between insurers and noninsurers in the group that have occurred and the 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 pursuant to subdivisions (14)(a) and (b) of this section, the director or commissioner of the lead state may require, at any time, the ultimate controlling person to file an annual group capital calculation, completed in accordance with the group capital calculation instructions, if:

(i) Any insurer within the insurance holding company system is in a risk-based capital company action level event as set forth in section 44-6016 or a similar standard for a non-United-States insurer;

(ii) Any insurer within the insurance holding company system meets one or more of the standards of an insurer deemed to be in hazardous financial condition as defined by rule and regulation adopted and promulgated by the director to define standards for companies deemed to be in hazardous financial condition; or

(iii) Any insurer within the insurance holding company system otherwise exhibits qualities of a troubled insurer as determined by the director or commissioner of the lead state 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.

(15) A non-United-States jurisdiction is considered to recognize and accept the group capital calculation if:

(a) For annual group capital calculations under subdivision (13)(a)(iv) of this section:

(i) The non-United-States jurisdiction recognizes the United States state regulatory approach to group supervision and group capital by providing confirmation by a competent regulatory authority in such jurisdiction that insurers and insurance groups whose lead state is accredited by the National Association of Insurance Commissioners under its accreditation program shall be 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-United-States jurisdiction; or

(ii) The non-United-States jurisdiction, if such jurisdiction has no United States insurance groups operating in such 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. Such writing will serve as the documentation otherwise required in subdivision (15)(a)(i) of this section; or

(b) The non-United-States jurisdiction provides confirmation by a competent regulatory authority in such jurisdiction that information regarding insurers and their parent, subsidiary, or affiliated entities, if applicable, shall be provided to the director or commissioner of the lead state in accordance with a memorandum of understanding or similar document between the director and such 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 National Association of Insurance Commissioners. The director shall determine, in consultation with the National Association of Insurance Commissioners, if the requirements of the information-sharing agreements are in force.

(16)(a) A list of non-United-States jurisdictions that recognize and accept the group capital calculation shall be published through the National Association of Insurance Commissioners committee process.

(b) A list of jurisdictions that recognize and accept the group capital calculation pursuant to subdivision (13)(a)(iv) of this section shall be published in accordance with the National Association of Insurance Commissioners committee process to assist the director or commissioner of the lead state in determining which insurers shall file an annual group capital calculation. The list will clarify those situations in which a jurisdiction is exempt from filing under subdivision (13)(a)(iv) of this section. To assist with a determination under subdivision (13)(b) of this section, the list will also identify whether a jurisdiction that is exempt under subdivision (13)(a)(iii) or (iv) of this section requires a group capital filing for any United-States-based insurance group's operations in that non-United-States jurisdiction.

(c) For a non-United-States jurisdiction where no United States insurance groups operate, the confirmation provided to meet the requirement of subdivision (15)(a)(ii) of this section will serve as support for a recommendation that such non-United-States jurisdiction be published as a jurisdiction that recognizes and accepts the group capital calculation through the National Association of Insurance Commissioners committee process.

(d) If the director or commissioner of the lead state makes a determination pursuant to subdivision (13)(a)(iv) of this section that differs from the National Association of Insurance Commissioners list, the director or commissioner of the lead state shall provide thoroughly documented justification to the National Association of Insurance Commissioners and other states.

(e) Upon determination by the director or commissioner of the lead state that a non-United-States jurisdiction no longer meets one or more of the requirements to recognize and accept the group capital calculation, the director or commissioner of the lead state may provide a recommendation to the National Association of Insurance Commissioners that the non-United-States jurisdiction be removed from the list of jurisdictions that recognize and accept the group capital calculation.

(17)(a) The ultimate controlling person of every insurer that is subject to registration and scoped into the NAIC Liquidity Stress Test Framework shall file the results of a specific data year's liquidity stress test. The filing shall be made to the director or commissioner of the lead state.

(b) The NAIC Liquidity Stress Test Framework includes scope criteria applicable to a specific data year. These scope criteria are reviewed at least annually by the Financial Stability Task Force of the National Association of Insurance Commissioners or any successor to the task force. Any change to the NAIC Liquidity Stress Test Framework or to the data year for which the scope criteria are to be measured shall be effective on January 1 following the calendar year when such changes are adopted. Insurers meeting at least one threshold of the scope criteria shall be considered scoped into the NAIC Liquidity Stress Test Framework for the specified data year unless the director or commissioner of the lead state, in consultation with the Financial Stability Task Force of the National Association of Insurance Commissioners or any successor to the task force, determines the insurer should not be scoped into the framework for such data year. Similarly, insurers that do not meet at least one threshold of the scope criteria shall be considered scoped out of the NAIC Liquidity Stress Test Framework for the specified data year unless the director or commissioner of the lead state, in consultation with the Financial Stability Task Force or any successor to the task force, determines the insurer should be scoped into the framework for that data year.

(c) In order for regulators to avoid having insurers scoped in and out of the NAIC Liquidity Stress Test Framework on a frequent basis, the director or commissioner of the lead state, in consultation with the Financial Stability Task Force or any successor to the task force, shall assess this concern as part of the determination for an insurer.

(d) The performance of, and filing of the results from, a liquidity stress test for a specific data year shall comply with the instructions and reporting templates for the NAIC Liquidity Stress Test Framework for such data year and any determinations made by the director or commissioner of the lead state, in consultation with the Financial Stability Task Force or any successor to the task force, provided within the NAIC Liquidity Stress Test Framework.

(18) The failure to file a registration statement or any summary of the registration statement thereto or enterprise risk report required by this section within the time specified for such filing shall be a violation of this section.

Laws 1991, LB 236, § 12;

Laws 1996, LB 689, § 2;

Laws 2005, LB 119, § 11;

Laws 2012, LB887, § 8;

Laws 2022, LB863, § 22.