31101. Definitions. For the purposes of this subchapter, the term: (1) Associate Commissioner for Securities and Banking means the Associate Commissioner of the Securities and Banking Bureau. (2) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking, who shall be the chief executive officer of the Department of Insurance, Securities, and Banking. (3) Department means the Department of Insurance, Securities, and Banking. (4) Deputy Commissioner means the Deputy Commissioner of the Department of Insurance, Securities, and Banking. (5) District of Columbia Banking Code means the statutory provisions concerning banking and financial institutions codified in Title 26, laws administered by the Commissioner, and rules and regulations promulgated under those statutory provisions and laws. (6) Insurance Bureau means the office overseeing the regulation of insurance, insurers, and health maintenance organizations. (6A) "Licensee" means the holder of a SLS license. (6B) "Ombudsman" means the position of Student Loan Ombudsman established within the Department by  31-106.01. (7) Securities and Banking Bureau means the office administering the District of Columbia Banking Code and overseeing the regulation of securities. (8) "Student education loan" means a loan obtained for personal use to finance education or other school-related expenses. (9) "Student loan borrower" means a resident of the District of Columbia who has received or agreed to pay a student education loan, or a person who shares legal responsibility with such a resident for the repayment of a student education loan. (10) "Student loan servicer" means a person or entity, whether located within or outside the District, responsible for the servicing of a student education loan of a student loan borrower. (11) "Student loan servicing" means the process of collecting payments and interest and performing other administrative tasks associated with maintaining a student education loan. The term "student loan servicing" includes: (A) Receiving any scheduled periodic payments from a student loan borrower or notification of payments; (B) Applying payments to the student loan borrower's account pursuant to the terms of the student education loan or contract governing the servicing; (C) Maintaining account records for the student education loan during a period when no payment is required on the loan; and (D) Communicating with the student loan borrower regarding the student education loan; and having other interactions to assist a student loan borrower, including activities to help prevent default on obligations arising from a student education loan. (12) "SLS license" means the business license issued by the Department pursuant to  31-106.02 that is required for a student loan servicer.  (May 21, 1997, D.C. Law 11-268,  7c; May 21, 1997, D.C. Law 11-268,  2, 44 DCR 1730; June 11, 2004, D.C. Law 15-166,  3(a), 51 DCR 2817; Apr. 13, 2005, D.C. Law 15-354,  98, 52 DCR 2638; Sept. 24, 2010, D.C. Law 18-223,  2112(a), 57 DCR 6242; Feb. 18, 2017, D.C. Law 21-214,  2(a), 63 DCR 15334.)  Prior Codifications 1981 Ed.,  35-121. Effect of Amendments D.C. Law 15-166 redesignated par. (1) as paragraph (1B); in the redesignated par. (1B), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance and Securities; rewrote par. (1); added par. (1A); and in par. (2), substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities Regulation. Prior to amendment, par. (1) had read as follows: (1) Commissioner means the Commissioner of Insurance and Securities, who shall be the chief executive officer of the Department of Insurance and Securities Regulation. D.C. Law 15-354 validated a previously made technical correction. D.C. Law 18-223 rewrote the section. Emergency Legislation For temporary (90 day) amendment of section, see  3(a) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). For temporary (90 day) amendment of section, see  2112(a) of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542). Short Title Short title: Section 2111 of D.C. Law 18-223 provided that subtitle K of title II of the act may be cited as the Department of Insurance, Securities, and Banking Reorganization Amendment Act of 2010.
 31102. Establishment of the Department of Insurance, Securities, and Banking. The Department, under the supervision of the Commissioner, is established as a cabinet level agency of the District government.  (May 21, 1997, D.C. Law 11-268,  3, 44 DCR 1730; June 11, 2004, D.C. Law 15-166,  3(b), 51 DCR 2817; Apr. 13, 2005, D.C. Law 15-354,  40(a), 52 DCR 2638.)  Prior Codifications 1981 Ed.,  35-122. Section References This section is referenced in  31-1131.02 and  31-3171.01. Effect of Amendments D.C. Law 15-166 rewrote the section which had read as follows: Pursuant to  1-204.04(b), the Council establishes the Department of Insurance and Securities Regulation as a cabinet level agency of the executive branch of the Government of the District of Columbia, under the supervision of the Commissioner of Insurance and Securities. D.C. Law 15-354, in the section heading, validated a previously made technical correction. Emergency Legislation For temporary (90 day) amendment of section, see  3(b) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
 31103. Functions and duties. (a) The functions and duties contained and referenced herein are transferred to the Department and shall be performed by the following major organizational components of the Department. (1) All duties and responsibilities in respect to the regulation of life and health and property and casualty insurance, insurers, and health maintenance organizations that heretofore have been given to the Mayor, the Superintendent of Insurance, or the Insurance Administrator, by virtue of various District of Columbia laws, shall be assumed by the Commissioner of Insurance and Securities who shall exercise those regulatory responsibilities through the Insurance Bureau. (2) All functions and duties assigned to the Public Service Commission in Chapter 36 [repealed] of Title 3 and Chapter 37 [repealed] of Title 3, shall be assumed by the Commissioner, who shall exercise those regulatory responsibilities through the Securities and Banking Bureau. (3) Pursuant to  26-551.03 and 26-551.05, the Commissioner, through the Securities and Banking Bureau, shall administer the District of Columbia Banking Code, as defined in  26-551.02(14). (b) The Mayor, at his or her discretion, may transfer the regulatory functions and duties of other executive offices and agencies to the Department.  (May 21, 1997, D.C. Law 11-268,  4, 44 DCR 1730; June 11, 2004, D.C. Law 15-166,  3(c), 51 DCR 2817; Apr. 13, 2005, D.C. Law 15-354,  40(b), 52 DCR 2638; Sept. 24, 2010, D.C. Law 18-223,  2112(b), 57 DCR 6242.)  Prior Codifications 1981 Ed.,  35-123. Effect of Amendments D.C. Law 15-166, in subsec. (a), deleted of Insurance and Securities following Commissioner in par. (2), and added par. (3). D.C. Law 15-354, in subsec. (a)(3), substituted Banking Code, as defined in  26-551.02(14) for Banking Code. D.C. Law 18-223, in subsec. (a)(2), substituted Securities and Banking Bureau for Securities Bureau; and, in subsec. (a)(3), substituted Securities and Banking Bureau for Banking Bureau. Emergency Legislation For temporary (90 day) amendment of section, see  3(c) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). For temporary (90 day) amendment of section, see  2112(b) of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 31104.01. Emergency authority of the Commissioner during a declared public emergency.  *NOTE: This section was created by temporary legislation that will expire on December 29, 2022.*  (a) For the duration of a public emergency declared by the Mayor pursuant to  7-2304, and to address the circumstances giving rise to that emergency, the Commissioner may issue emergency rulemaking, orders, or bulletins that: (1) Apply to any person or entity regulated by the Commissioner; and (2) Address: (A) Submission of claims or proof of loss; (B) Grace periods for payment of premiums and performance of other duties by insureds; (C) Temporary postponement of: (i) Cancellations; (ii) Nonrenewals; or (iii) Premium increases; (D) Modifications to insurance policies; (E) Insurer operations; (F) Filing requirements; (G) Procedures for obtaining nonelective-health care services; (H) Time restrictions for filling or refilling prescription drugs; (I) Time frames applicable to an action by the Commissioner under this section; (J) Temporarily waiving application of laws, rulemaking, or requirements to ensure that depository services, non-depository services, and securities transactions can continue to be provided, including allowing for the opening of a temporary service location, which may be a mobile branch, temporary office space, or other facility; and (K) Any other activity related to insurance, securities, and banking under the purview of the Commissioner reasonably calculated to protect the health, safety, and welfare of District residents during the public emergency. (b) The Commissioner may require licensees to answer questions related to, and submit documentation of, the licensee's continuity of operations plan. (c)(1) To accomplish the purposes of this section, the Commissioner may issue emergency rulemaking, orders, or bulletins pursuant to this section specifying: (A) That the rulemaking, order, or bulletin is effective immediately; (B) The line or lines of business or the class or classes of licenses to which the regulation, order, or bulletin applies; (C) The geographic areas to which the regulation, order, or bulletin applies; and (D) The period of time for which the regulation, order, or bulletin applies. (2) A regulation issued under paragraph (1) of this subsection may not apply for longer than the duration of the effects of the declared public emergency.  (May 18, 2022, D.C. Law 24-124,  2, 69 DCR 002677.)  Emergency Legislation  For temporary (90 days) creation of this section, see  2 of Department of Insurance, Securities, and Banking Emergency Powers Emergency Amendment Act of 2022 (D.C. Act 24-335, Feb. 4, 2022, 69 DCR 001468).  Temporary Legislation  For temporary (225 days) creation of this section, see  2 of Department of Insurance, Securities and Banking Emergency Powers Temporary Amendment Act of 2022 (D.C. Law 24-124, May 18, 2022, 69 DCR 002677). 
 31104. Commissioner of the Department of Insurance, Securities, and Banking. (a) The Commissioner shall be appointed by the Mayor, with the advice and consent of the Council, pursuant to  1-204.22(1). (1) Notwithstanding the provisions of  1-611.07(c) [repealed], the rate of pay for the Commissioner or for any other position in the Department for which the Mayor deems it necessary, may exceed the rate of pay for the Mayor. (2) The Mayor shall submit a resolution to the Council for a 45-day period of review, excluding Saturdays, Sundays, holidays, and periods of Council recess, indicating the proposed rate of pay for the Commissioner and for each other employee in the Department. A resolution which has not been approved or disapproved, in whole or part, within the prescribed period of 45 days shall be deemed approved by the Council. (b) The Commissioner shall employ staff as needed, in accordance with annual appropriations.  (May 21, 1997, D.C. Law 11-268,  5, 44 DCR 1730; June 11, 2004, D.C. Law 15-166,  3(d), 51 DCR 2817; Apr. 13, 2005, D.C. Law 15-354,  40(c), 52 DCR 2638.)  Prior Codifications 1981 Ed.,  35-124. Effect of Amendments D.C. Law 15-166, deleted of Insurance and Securities following Commissioner throughout the section. D.C. Law 15-354, in the section heading, validated a previously made technical correction. Emergency Legislation  For temporary (90 days) amendment to emergency authority of the Commissioner during a declared public health emergency, see  2 of Department of Insurance, Securities, and Banking Emergency Powers Emergency Amendment Act of 2021 (D.C. Act 24-205, Nov. 5, 2021, 68 DCR 012186).   For temporary (90 days) emergency authority of the Commissioner during a declared public health emergency, see  3(n) of Public Emergency Extension and Eviction and Utility Moratorium Phasing Emergency Amendment Act of 2021 (D.C. Act 24-125, July 24, 2021, 68 DCR 007342).   For temporary (90 days) emergency authority of the Commissioner during a declared public health emergency, see  310 of Coronavirus Support Congressional Review Emergency Amendment Act of 2021 (D.C. Act 24-96, June 7, 2021, 68 DCR 006025).   For temporary (90 days) emergency authority of the Commissioner during a declared public health emergency, see  310 of Coronavirus Support Emergency Amendment Act of 2021 (D.C. Act 24-30, Mar. 17, 2021, 68 DCR 003101).   For temporary (90 days) emergency authority of the Commissioner during a declared public health emergency, see  310 of Coronavirus Support Congressional Review Emergency Amendment Act of 2020 (D.C. Act 23-328, June 8, 2020, 67 DCR 7598).   For temporary (90 days) emergency authority of the Commissioner during a declared public health emergency, see  310 of Coronavirus Support Emergency Amendment Act of 2020 (D.C. Act 23-326, May 27, 2020, 67 DCR 7045).   For temporary (90 days) emergency authority of the Commissioner during a declared public health emergency, see  302 of COVID-19 Response Emergency Amendment Act of 2020 (D.C. Act 23-247, Mar. 17, 2020, 67 DCR 3093).  For temporary (90 day) amendment of section, see  3(d) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). Temporary Legislation  For temporary (225 days) amendment to emergency authority of the Commissioner during a declared public health emergency, see  3(n) of Public Emergency Extension and Eviction and Utility Moratorium Phasing Temporary Amendment Act of 2021 (D.C. Law 24-39, Oct. 27, 2021, 68 DCR 009487).   For temporary (225 days) emergency authority of the Commissioner during a declared public health emergency, see  310 of Coronavirus Support Temporary Amendment Act of 2021 (D.C. Law 24-9, June 24, 2021, 68 DCR 004824).   For temporary (225 days) creation of  31-104.01, see  310 of Coronavirus Support Temporary Amendment Act of 2020 (D.C. Law 23-130, Oct. 9, 2020, 67 DCR 8622).  Editor's Notes Commissioner of the Department of Insurance and Securities Regulation Salary Approval Resolution of 1998: Pursuant to Resolution 12-582, effective July 7, 1998, the Council approved the rate of pay for the Commissioner of the Department of Insurance and Securities Regulation.
 31105. Transfers. (a) All positions, property, records, and unexpended balances of appropriations, allocations, assessments, and other funds available or to be made available to the Department of Consumer and Regulatory Affairs and the Public Service Commission relating to the duties and functions assigned herein, are transferred to the Department. (b) All powers, duties, and functions transferred to the Department of Banking and Financial Institutions under  26-551.03, are hereby transferred to the Department of Insurance, Securities, and Banking. (c) All positions, property, records, and unexpended balances of appropriations, allocations, assessments, and other funds available or to be made available to the Department of Banking and Financial Institutions under  26-551.03, are hereby transferred to the Department.  (May 21, 1997, D.C. Law 11-268,  6, 44 DCR 1730; June 11, 2004, D.C. Law 15-166,  3(e), 51 DCR 2817; Apr. 13, 2005, D.C. Law 15-354,  40(d), 52 DCR 2638.)  Prior Codifications 1981 Ed.,  35-125. Effect of Amendments D.C. Law 15-166 designated the existing text as subsec. (a); and added subsecs. (b) and (c). D.C. Law 15-354, in subsec. (a), validated a previously made technical correction. Emergency Legislation For temporary (90 day) amendment of section, see  3(e) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
 31106.01. Student Loan Ombudsman. (a) There is established within the Department the position of the Student Loan Ombudsman. (b)(1) The Ombudsman shall be: (A) Appointed by the Commissioner of the Department; (B) A District resident within 180 days of appointment; and (C) Experienced in consumer finance, including student loan servicing and debt collection. (2) If a vacancy in the position of Ombudsman occurs as a consequence of removal, resignation, disability, death, or other reason, the Commissioner shall appoint an Ombudsman to fill the vacancy within 90 days of the occurrence of the vacancy. (c) The Ombudsman, in consultation with the Commissioner, shall: (1) Assist in the enforcement of the licensing provisions of  31-106.02, including the referral of actions to the Office of the Attorney General for the District of Columbia for the enforcement of an order of the Commissioner pursuant to  31-106.02 or other authority of the Commissioner related to a licensee or a person required to have a license under this subchapter; (2) Receive, review, and attempt to resolve any complaints from a student loan borrower, including attempts to resolve such complaints in collaboration with student loan servicers, and any other participants in student-loan lending, including those entities engaging student loan borrowers about existing student debt; (3) Compile and analyze data on student loan borrower complaints; (4) Develop and provide information to assist student loan borrowers in understanding their rights and responsibilities under the terms of the student loan borrower's student education loan; (5) Monitor the actions that student loan servicers take to ensure that student loan borrowers are informed of their rights and responsibilities under the terms of the student loan borrower's student education loan in a transparent, accessible, and timely manner; (6) Make recommendations to the Commissioner for resolving problems and concerns of student loan borrowers; (7) Analyze and monitor the development and implementation of federal and local laws, regulations, and policies relating to student loan borrowers; (8) Upon the request and written consent of a student loan borrower, review the student education loan history of the student loan borrower; provided, that the student loan borrower has provided documentation of the student loan borrower's student education loan history; (9) By October 1, 2017, establish, publicize, and maintain an education course to assist student loan borrowers in understanding their student education loans, which shall include: (A) Educational presentations; (B) Explanations of key loan terms; (C) Documentation requirements; (D) Monthly payment obligations, including: (i) Income-based repayment options; (ii) Loan forgiveness; and (iii) Disclosure requirements; and (E) Other educational materials that the Commissioner considers necessary or appropriate; (10) By October 1, 2017, develop a student loan borrower bill of rights; (11) Conduct an examination of the activities of each student loan servicer at least once every 3 years, and as the Commissioner considers necessary; (12) Charge each student loan servicer an examination fee, which shall be assessed in an amount set by the Mayor; and (13) Take any other action required by the Commissioner. (d) Beginning March 1, 2018, and by March 1 of each year thereafter, the Commissioner shall submit an annual report to the Mayor and the Council on the Ombudsman's activities, as required or authorized by this section, of the previous year, which shall include the number of educational presentations held across the city, the number of residents in attendance for the educational presentations, and the number of complaints received and the action taken to resolve the complaints. (e) The Ombudsman shall not: (1) Disclose personally identifiable information regarding a student loan borrower without the written consent of the student loan borrower; (2) Disclose the identity of a person who brings a complaint or provides information to the Ombudsman without the person's consent, unless the Commissioner determines that disclosure is necessary to further the resolution of a complaint or an investigation; (3) Provide legal advice or legal representation; or (4) Be held personally liable for the good-faith performance of his or her responsibilities or duties under this section or rules issued pursuant to this section; except, that no immunity shall extend to criminal acts, or other acts that violate District or federal law.  (May 21, 1997, D.C. Law 11-268,  7a; May 21, 1997, D.C. Law 11-268,  7c; as added Feb. 18, 2017, D.C. Law 21-214,  2(b), 63 DCR 15334.) 
 31106.02. Student loan servicer; licensure and reporting requirements. (a) Except as provided in subsection (b) of this section, no person or entity shall operate as a student loan servicer in the District, directly or indirectly, without first obtaining a SLS license pursuant to this section. (b) The following persons and entities shall be exempt from the requirements of subsection (a) of this section: (1) A bank, trust company, or other loan company doing business under the authority of, or in accordance with, a license, certificate, or charter issued by the United States or any state, district, territory, or commonwealth of the United States that is authorized to transact business in the District; (2) A federally chartered savings and loan association, federal savings bank, or federal credit union that is authorized to transact business in the District; (3) A savings and loan association, savings bank, or credit union organized under the laws of the District or any other state that is authorized to transact business in the District; or (4) A public postsecondary educational institution or a private nonprofit postsecondary educational institution servicing a student loan it extended to a student loan borrower. (c)(1) Except as provided in subsection (b) of this section, a person or entity seeking to operate as a student loan servicer in the District shall apply for a SLS license by submitting to the Department: (A) A completed application, in a form and manner prescribed by the Commissioner, that is signed under penalty of perjury; (B) Application fees and other fees as prescribed by the Commissioner; (C) Three years of audited financial statements prepared in accordance with generally accepted accounting principles and acceptable to the Department that show a net worth of at least $250,000; (D) A surety bond in an amount determined by the Mayor to be used for the recovery of damages incurred by a student loan borrower as the result of a licensee's noncompliance with the requirements of this subchapter or the recovery of fees or expenses levied against a licensee pursuant to this subchapter; and (E) Any other information the Commissioner considers necessary and appropriate as prescribed by rules issued pursuant to  31-106.03. (2) An applicant shall notify the Department in writing of any change in the information provided in the applicant's application for an initial SLS license or a renewal within 10 business days of the change having occurred. The failure to timely notify the Department of a change in the accuracy of the application may result in the denial of the application. (d) The Commissioner shall issue a SLS license if the application meets all the requirements for licensure prescribed this subchapter and by the Commissioner by rule. (e)(1)(A) A SLS license issued pursuant to this section before November 1 of a given year shall expire on December 31 of that same year, unless renewed or earlier surrendered, suspended, or revoked. (B) A SLS license issued pursuant to this section on or after November 1 of a given year shall expire on December 31 of the following year, unless renewed or earlier surrendered, suspended, or revoked. (2) No later than 15 days after a licensee ceases to engage in the business of being a student loan servicer, the licensee shall surrender the SLS license to the Commissioner, along with a signed notice of the surrender. (3) The signed notice of surrender shall provide the: (A) Location where the records of the licensee will be stored; (B) Name, address, and telephone number of an individual authorized to provide access to the records; and (C) Reason for the cessation of business. (f) The surrender of a SLS license does not toll or eliminate a licensee's civil or criminal liability arising from acts or omissions occurring before the surrender of the SLS license, including any administrative actions undertaken by the Commissioner to revoke or suspend the SLS license. (g)(1)(A) A SLS license may be renewed for a term prescribed by the Commissioner upon the timely filing of an application, along with all required documents and the payment of fees, as required by this section, or rules issued pursuant to this section. (B) If an application for a renewal of a SLS license has been filed with the Department on or before the date the current SLS license expires, the current SLS license shall continue in full force and effect until the Commissioner issues a renewal or notifies the licensee in writing that the licensee's application for renewal has been denied, including the grounds for the denial. (C) The Commissioner may deny an application for renewal of a SLS license on any ground that the Commissioner may deny an application for an initial SLS license. (2) A SLS license shall not be transferable or assignable. (h)(1) The Commissioner may revoke any license issued pursuant to this subchapter if, after notice and a hearing, the Commissioner finds that the licensee has: (A) Committed any fraudulent acts, engaged in any dishonest activities, or made any misrepresentation in any business transaction; (B) Been convicted of a felony under the laws of the District of Columbia, any state, or the United States; (C) Violated any applicable banking laws of the District of Columbia, or any rules or regulations issued pursuant to any of those laws, or has violated any other law in the course of dealings as a licensee; (D) Made a material misstatement in the application for a license under this subchapter; (E) Demonstrated incompetency or untrustworthiness to act as a licensee; (F) Violated any provision of this subchapter or of any implementing regulation; or (G) Failed to satisfy any of the criteria for obtaining a license as set out in this subchapter. (2) Whenever the Commissioner revokes a license issued pursuant to this subchapter, the Commissioner shall issue a written order setting forth the grounds for revocation, with a copy to be served on the licensee either personally or by mail to the last known address of the licensee. (i) Pending the hearing required by subsection (h) of this section, the Commissioner may suspend the license for a period not to exceed 30 days if the Commissioner determines that the suspension is in the public interest and that one or more grounds for revocation of a license, as set forth in subsection (h) of this section, exist. Whenever the Commissioner suspends a license pursuant to this subsection, the Commissioner shall issue a written notice to the licensee setting forth, with particularity, the grounds for suspension and the licensee's right to a hearing, with a copy to be served on the licensee either personally or by mail to the last known address of the licensee. (j)(1) Beginning January 30, 2018, and by January 30th, each year thereafter, a licensee shall file an annual report with the Commissioner, which shall include the number of loans that were sold, assigned, or transferred in the preceding calendar year and any other information that the Commissioner reasonably requires concerning the business operations conducted by the licensee during the preceding calendar year. (2) The Department shall provide a copy of each report to the Mayor and the Council and make the reports available to the public by publishing them on the Department's website.  (May 21, 1997, D.C. Law 11-268,  7b; May 21, 1997, D.C. Law 11-268,  7c; as added Feb. 18, 2017, D.C. Law 21-214,  2(b), 63 DCR 15334.) 
 31106.03. Rules. Within 180 days of February 18, 2017, the Mayor, pursuant to subchapter I of Chapter 5 of Title 2, shall issue rules to implement of provisions of  31-106.01 and31-106.02.  (May 21, 1997, D.C. Law 11-268,  7c; as added Feb. 18, 2017, D.C. Law 21-214,  2(b), 63 DCR 15334.) 
 31106. Organization. (a) The Commissioner, as the chief executive officer of the Department is authorized to organize the personnel and property transferred herein within any organizational unit of the Department as the Commissioner deems appropriate. (b)(1) The Securities and Banking Bureau is established to oversee the regulation of securities under the supervision of the Commissioner and administer the District of Columbia Banking Code. (2) The position of Associate Commissioner for Securities and Banking is hereby established to administer the Banking Bureau under the supervision of the Commissioner.  (May 21, 1997, D.C. Law 11-268,  7, 44 DCR 1730; June 11, 2004, D.C. Law 15-166,  3(f), 51 DCR 2817; Sept. 24, 2010, D.C. Law 18-223,  2112(c), 57 DCR 6242.)  Prior Codifications 1981 Ed.,  35-126. Effect of Amendments D.C. Law 15-166 designated the text of the existing section as subsection (a); in subsec. (a), substituted Commissioner for Commissioner of Insurance and Securities and substituted Department for Department of Insurance and Securities Regulation; and added subsec. (b). D.C. Law 18-223 rewrote subsec. (b)(1); and, in subsec. (b)(2), substituted Associate Commissioner for Securities and Banking for Director of the Bureau of Banking and Financial Institutions. Prior to amendment, subsec. (b)(1) read as follows: (b)(1) The Bureau of Banking and Financial Institutions is hereby established to administer the District of Columbia Banking Code under supervision of the Commissioner. Emergency Legislation For temporary (90 day) amendment of section, see  3(f) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). For temporary (90 day) amendment of section, see  2112(c) of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 31107. Department of Insurance, Securities, and Banking funding. (a) Control of the Insurance Regulatory Trust Fund, and all monies required to be deposited therein, pursuant to Chapter 7 of this title, is transferred to the Department. (b) Repealed. (b-1) Repealed. (b-2)(1) There is established within the General Fund of the District of Columbia a trust fund designated as the Securities and Banking Regulatory Trust Fund ("Fund"), which shall be administered by the Mayor, through the Commissioner. (2) All licensing fees, fines, and any other fees imposed, assessed, and collected for securities regulation and banking regulation shall be deposited into the Fund. (3) Money in the Fund, in order of priority shall be: (A) Used for the expenses of the Securities and Banking Bureau in the discharge of its administrative and regulatory duties as prescribed by law; and (B) Beginning October 1, 2018 and on October 1 of each year thereafter, converted to local funds revenue in the amount of $11.1 million. (c) The administrative costs of the Department, including the compensation of the Commissioner and the Departments central administrative staff, shall be charged on a pro-rata basis to each of the respective Bureau trust funds in a manner reflecting the central administrative costs associated with the operation of each Bureau. In no circumstances shall monies collected and deposited pursuant to the statutory funding requirements of the District of Columbia Securities Act, the Investment Advisors Act, and the Insurance Regulatory Trust Fund Act, be commingled or used to fund the regulatory activities of a bureau other than the bureau regulating the activities for which the respective funds were established. (d) The Mayor shall submit to the Council, as part of the annual budget, a budget for the Department and a request for an appropriation for expenditures from the Insurance Regulatory Trust Fund and the Securities and Banking Regulatory Trust Fund. The Mayors request shall be based on an estimated projection of the expenditures necessary to perform the administration and regulatory functions of the Department. This estimate shall include, but not be limited to, expenditures for salaries, fringe benefits, overhead charges, travel, training, supplies, technical, professional, and any and all other services necessary to discharge the duties and responsibilities of this subchapter.  (May 21, 1997, D.C. Law 11-268,  8, 44 DCR 1730; June 11, 2004, D.C. Law 15-166,  3(g), 51 DCR 2817; Sept. 24, 2010, D.C. Law 18-223,  2112(d), 57 DCR 6242; Sept. 14, 2011, D.C. Law 19-21,  9039, 58 DCR 6226; Oct. 30, 2018, D.C. Law 22-168,  2262, 65 DCR 9388.)  Prior Codifications 1981 Ed.,  35-127. Section References This section is referenced in  31-5041.02. Effect of Amendments D.C. Law 15-166, in subsec. (a), substituted Department for Department of Insurance and Securities Regulation; added subsec. (b-1); and, in subsec. (d), substituted , the Security Regulatory Trust Fund, and the Banking Regulatory Trust Fund for and the Security Regulatory Trust Fund. D.C. Law 18-223 repealed subsecs. (b) and (b-1); added subsec. (b-2); and, in subsec. (d), substituted and the Securities and Banking Regulatory Trust Fund for , the Securities Regulatory Trust Fund, and the Banking Regulatory Trust Fund. D.C. Law 19-21, in subsec. (b-2), substituted all proceeds from licensure and any funds for all funds. Emergency Legislation  For temporary (90 days) amendment of this section, see  2262 of Fiscal Year 2019 Budget Support Congressional Review Emergency Act of 2018 (D.C. Act 22-458, Oct. 3, 2018, 65 DCR 11212).   For temporary (90 days) amendment of this section, see  2262 of Fiscal Year 2019 Budget Support Emergency Act of 2018 (D.C. Act 22-434, July 30, 2018, 65 DCR 8200).  For temporary (90 day) amendment of section, see  3(g) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). For temporary (90 day) amendment of section, see  2112(d) of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542). References in Text The District of Columbia Securities Act, referred to in (c), is the Act of August 30, 1964, 78 Stat. 620, Pub. L. 88-503, which is codified primarily as  3-3601 et seq. The Investment Advisors Act, referred to in (c), is D.C. Law 9-216, which is codified as  3-3701 et seq. The Insurance Regulatory Trust Fund Act, referred to in (c), is D.C. Law 10-40, which is codified as  31-1201 et seq.
 31108. Abolition of Insurance Administration. The Insurance Administration in the Department of Consumer and Regulatory Affairs as currently organized is abolished.  (May 21, 1997, D.C. Law 11-268,  9, 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-128.
 31121. Regulations. The Commissioner may promulgate rules, regulations, and orders as are necessary or appropriate to conform to the Gramm-Leach-Bliley Act, approved November 12, 1999 (113 Stat. 1338; codified in scattered sections of the U.S. Code), or regulations promulgated thereunder.  (Oct. 21, 2000, D.C. Law 13-191,  8, 47 DCR 7311.)  Emergency Legislation For temporary (90 day) amendment of section, see  2 of the Insurer Confidentiality and Information Sharing Emergency Act of 2000 (D.C. Act 13-444, October 24, 2000, 47 DCR 9007).
 311001. Report requirement. (a) Every insurer domiciled in the District of Columbia shall file a report with the Commissioner of the Department of Insurance, Securities, and Banking (Commissioner) disclosing material acquisitions and dispositions of assets or material nonrenewals, cancellations or revisions of ceded reinsurance agreements unless such acquisitions and dispositions of assets or material nonrenewals, cancellations or revisions of ceded reinsurance agreements that have been submitted to the Commissioner for review, approval, or information purposes pursuant to other provisions of the insurance code, laws, regulations, or other requirements. (b) The report required in subsection (a) of this section is due within 15 days after the end of the calendar month in which any of the transactions enumerated in subsection (a) of this section occur. (c) One complete copy of the report, including any exhibits or other attachments, shall be filed with: (1) The insurance department of the insurers state of domicile; and (2) The National Association of Insurance Commissioners. (d) Repealed.  (May 24, 1996, D.C. Law 11-123,  2, 43 DCR 1542; Mar. 24, 1998, D.C. Law 12-81,  42(a), 45 DCR 745; Oct. 21, 2000, D.C. Law 13-191,  6(a), 47 DCR 7311; Apr. 13, 2005, D.C. Law 15-354,  42, 52 DCR 2638.)  Prior Codifications 1981 Ed.,  35-4101. Section References This section is referenced in  31-1002 and  31-1003. Effect of Amendments D.C. Law 13-191 repealed subsec. (d) providing: (d) All reports obtained by or disclosed to the Commissioner pursuant to this chapter shall be given confidential treatment and shall not be subject to subpoena, shall not be subject to disclosure under subchapter II of Chapter 15 of Title 1 1981 Ed., and shall not be made public by the Commissioner, the National Association of Insurance Commissioners, or any other person except to insurance departments of other states, without the prior written consent of the insurer to which it pertains, unless the Commissioner, after giving the insurer who would be affected notice and an opportunity to be heard, determines that the interest of policyholders, shareholders, or the public will be served by the publication thereof, in which event the Commissioner may publish all or any part in the manner the Commissioner may deem appropriate. D.C. Law 15-354, in subsec. (a), substituted of the Department of Insurance, Securities, and Banking for of Insurance and Securities.
 311002. Acquisition and disposition of assets. (a) No acquisition or disposition of assets need be reported pursuant to  31-1001 if the acquisitions or dispositions are not material. For purposes of this chapter, a material acquisition (or the aggregate of any series of related acquisitions during any 30-day period) or disposition (or the aggregate of any series of related dispositions during any 30-day period) is one that is nonrecurring and not in the ordinary course of business and involves more than 5% of the reporting insurers total admitted assets as reported in its most recent statutory statement filed with the insurance department of the insurers state of domicile. (b)(1) Asset acquisitions subject to this chapter include every purchase, lease, exchange, merger, consolidation, succession, or other acquisition other than the construction or development of real property by or for the reporting insurer or the acquisition of materials for such purpose. (2) Asset dispositions subject to this chapter include every sale, lease, exchange, merger, consolidation, mortgage, hypothecation, assignment (whether for the benefit of creditors or otherwise), abandonment, destruction, or other disposition. (c) The following information is required to be disclosed in any report of a material acquisition or disposition of assets: (1) Date of the transaction; (2) Manner of acquisition or disposition; (3) Description of the assets involved; (4) Nature and amount of the consideration given or received; (5) Purpose of, or reason for, the transaction; (6) Manner by which the amount of consideration was determined; (7) Gain or loss recognized or realized as a result of the transaction; and (8) Names of the persons from whom the assets were acquired or to whom they were disposed. (d) Insurers are required to report material acquisitions and dispositions on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers which utilizes a pooling arrangement or 100% reinsurance agreement that affects the solvency and integrity of the insurers reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if: (1) The insurer has less than $1,000,000 total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement; and (2) The net income of the business not subject to the pooling arrangement represents less than 5% of the insurers capital and surplus.  (May 24, 1996, D.C. Law 11-123,  3, 43 DCR 1542.)  Prior Codifications 1981 Ed.,  35-4102.
 311003. Nonrenewals, cancellations, or revisions of ceded reinsurance agreements. (a) No nonrenewals, cancellations, or revisions of ceded reinsurance agreements need be reported pursuant to  31-1001 if the nonrenewals, cancellations, or revisions are not material. (b) For purposes of this chapter, a material nonrenewal, cancellation, or revision is one that affects: (1) As respects property and casualty business, including accident and health business written by a property and casualty insurer: (A) More than 50% of the insurers total ceded written premium; or (B) More than 50% of the insurers total ceded indemnity and loss adjustment reserves. (2) As respects life, annuity, and accident and health business, more than 50% of the total reserve credit taken for business ceded, on an annualized basis, as indicated in the insurers most recent annual statement. (c) As respects either property and casualty or life, annuity, and accident and health business, either of the following events shall constitute a material revision which must be reported: (1) An authorized reinsurer representing more than 10% of a total cession is replaced by one or more unauthorized reinsurers; or (2) Previously established collateral requirements that have been reduced or waived as respects one or more unauthorized reinsurers representing collectively more than 10% of a total cession. (d) No filing shall be required if: (1) As respects property and casualty business, including accident and health business written by a property and casualty insurer, the insurers total ceded written premium represents, on an annualized basis, less than 10% of its total written premium for direct and assumed business; or (2) As respects life, annuity, and accident and health business, the total reserve credit taken for business ceded represents, on an annualized basis, less than 10% of the statutory reserve requirement prior to any cession. (e) The following information is required to be disclosed in any report of a material nonrenewal, cancellation, or revision of ceded reinsurance agreements: (1) Effective date of the nonrenewal, cancellation, or revision; (2) The description of the transaction with an identification of the initiator thereof; (3) Purpose of, or reason for, the transaction; and (4) if applicable, the identity of the replacement reinsurers. (f) Insurers are required to report all material nonrenewals, cancellations, or revisions of ceded reinsurance agreements on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers which utilizes a pooling arrangement or 100% reinsurance agreement that affects the solvency and integrity of the insurers reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than $1,000,000 total direct plus assumed written premiums during a calendar year that $1,000,000 total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than 5% of the insurers capital and surplus.  (May 24, 1996, D.C. Law 11-123,  4, 43 DCR 1542; Mar. 24, 1998, D.C. Law 12-81,  42(b), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-4103.
 311004. Confidentiality. (a) All reports obtained by or disclosed to the Commissioner under this chapter in the possession or control of the Department of Insurance, Securities, and Banking shall be confidential and privileged; shall not be subject to subchapter II of Chapter 5 of Title 2; shall not be subject to subpoena; and shall not be subject to discovery or admissible in evidence in a private civil action without the prior written consent of the insurer to which it pertains; provided, that the Commissioner may use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the Commissioners official duties. (b) If the Commissioner, after giving the insurer who would be affected notice and an opportunity to be heard, determines that the interest of policyholders, shareholders, or the public will be served by publication of the information subject to subsection (a) of this section, the Commissioner may publish all or any part in the manner that the Commissioner considers appropriate. (c) The Commissioner or any person who received documents, materials, or other information while acting under the authority of the Commissioner shall not be permitted or required to testify in a private civil action concerning any confidential documents, materials, or information subject to subsection (a) of this section. (d) To assist in the performance of the Commissioners duties, the Commissioner: (1) May share documents, materials, or other information, including the confidential and privileged documents, materials, or other information subject to subsection (a) of this section, with other state, federal, and international regulatory agencies; with the National Association of Insurance Commissioners, including its affiliates and subsidiaries; and with state, federal, and international law enforcement authorities; provided, that the recipient agrees, and has the legal authority, to maintain the confidentiality and privileged status of the documents, materials, or other information; (2) May receive documents, materials, or other information, including confidential and privileged documents, materials, or other information, from the National Association of Insurance Commissioners, including its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or other information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or other information; or (3) May enter into agreements governing the sharing and use of information consistent with this section. (e) No waiver of an applicable privilege or claim of confidentiality in the documents, materials, or other information shall occur as a result of disclosure to the Commissioner under this section or of sharing as authorized in subsection (d) of this section. Nothing in this section shall require an insurer to disclose documents, materials, or other information that is not otherwise required by law to be disclosed.  (May 24, 1996, D.C. Law 11-123,  4a; as added Oct. 21, 2000, D.C. Law 13-191,  6(b), 47 DCR 7311; June 11, 2004, D.C. Law 15-166,  4(f), 51 DCR 2817.)  Effect of Amendments D.C. Law 15-166, in subsec. (a), substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities Regulation. Emergency Legislation For temporary (90 day) amendment of section, see  4(f) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
 311101. Applicability of provisions. The provisions of this chapter shall not apply with respect to: (1) Any insurance company licensed to do business in the District; (2) Any banking institution, trust, loan, mortgage, safe deposit, or title company, building association, credit union, moneylenders, or common trust fund authorized to do business in the District; (3) The inclusion of a charge for insurance in connection with an installment sale of a motor vehicle make in accordance with Chapter 6 of Title 50; or (4) The financing of insurance premiums in the District in accordance with the provisions of  28-3301 and 28-3302 relating to rates of interest.  (Oct. 9, 1940, ch. 792, ch. III,  51; Apr. 18, 1966, 80 Stat. 126, Pub. L. 89-403,  1.)  Prior Codifications 1981 Ed.,  35-1551. 1973 Ed.,  35-1361.
 311102. Definitions. For the purposes of this chapter: (1) The term insurance premium finance company means a person engaged in the business of entering into insurance premium finance agreements. (2) The term premium finance agreement means an agreement by which an insured or prospective insured promises to pay to a premium finance company the amount advanced or to be advanced under the agreement to an insurer or to an insurance agent or broker in payment of premiums on an insurance contract together with a service charge as authorized and limited by this chapter. (3) The term licensee means a premium finance company holding a license issued by the Commissioner under this chapter.  (Oct. 9, 1940, ch. 792, ch. III,  52; Apr. 18, 1966, 80 Stat. 126, Pub. L. 89-403,  1; May 21, 1997, D.C. Law 11-268,  10, 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  29(d), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-1552. 1973 Ed.,  35-1362. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03.
 311103. Licenses  Persons required to obtain; fees; other requirements. (a) No person shall engage in the business of financing insurance premiums in the District without first having obtained a license as a premium finance company from the Commissioner. Any person who shall engage in the business of financing insurance premiums in the District without obtaining a license as provided hereunder shall, upon conviction in the Superior Court of the District of Columbia, be guilty of a misdemeanor and shall be subject to the penalties in  31-2502.42. (b) The annual license fee shall be $150. Licenses may be renewed from year to year as of the 1st day of May of each year upon payment of the fee of $150. The fee for said license shall be paid through the Commissioner to the District of Columbia Treasurer. (c) The person to whom the license or the renewal thereof may be issued shall file sworn answers, subject to the penalties of perjury, to such interrogatories as the Commissioner may require. The Commissioner shall have authority, at any time, to require the applicant fully to disclose the identity of all stockholders, partners, officers, and employees and he may, in his discretion, refuse to issue or renew a license in the name of any firm, partnership, or corporation if he is not satisfied that any officer, employee, stockholder, or partner thereof who may materially influence the applicants conduct meets the standards of this chapter. (d) Any license issued pursuant to this section shall be issued as a Financial Services endorsement to a basic business license under the basic business license system as set forth in subchapter I-A of Chapter 28 of Title 47.  (Oct. 9, 1940, ch. 792, ch. III,  53; Apr. 18, 1966, 80 Stat. 126, Pub. L. 89-403,  1; July 29, 1970, 84 Stat. 570, Pub. L. 91-358, title I,  155(a); June 14, 1994, D.C. Law 10-128,  403(b), 41 DCR 2096; May 21, 1997, D.C. Law 11-268,  10(r)(3), 44 DCR 1730; Apr. 20, 1999, D.C. Law 12-261,  2003(ii), 46 DCR 3142; Oct. 28, 2003, D.C. Law 15-38,  3(v), 50 DCR 6913.)  Prior Codifications 1981 Ed.,  35-1553. 1973 Ed.,  35-1363. Effect of Amendments D.C. Law 15-38, in subsec. (d), substituted Financial Services endorsement to a basic business license under the basic for Class A Financial Services endorsement to a master business license under the master. Emergency Legislation For temporary (90 day) amendment of section, see  3(v) of Streamlining Regulation Emergency Act of 2003 (D.C. Act 15-145, August 11, 2003, 50 DCR 6896). Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03.
 311104. Licenses  Issuance or renewal. (a) Upon the filing of an application and the payment of the license fee the Commissioner shall make an investigation of each applicant and shall issue a license if the applicant is qualified in accordance with this chapter. If the Commissioner does not so find, he shall, within 30 days after he has received such application, at the request of the applicant, give the applicant a full hearing. (b) The Commissioner shall issue or renew a license as may be applied for when he is satisfied that the person to be licensed: (1) Is competent and trustworthy and intends to act in good faith in the capacity involved by the license applied for; (2) Has a good business reputation and has had experience, training, or education so as to be qualified in the business for which the license is applied for; and (3) If a corporation, is a corporation incorporated under the laws of the District or a foreign corporation authorized to transact business in the District.  (Oct. 9, 1940, ch. 792, ch. III,  54; Apr. 18, 1966, 80 Stat. 126, Pub. L. 89-403,  1; May 21, 1997, D.C. Law 11-268,  10, 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  29(e), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-1554. 1973 Ed.,  35-1554. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03.
 311105. Licenses  Revocation, suspension or refusal to renew; penalty in lieu of revocation or suspension; right of applicant or licensee to administrative or judicial hearing. (a) The Commissioner may revoke or suspend the license of any premium finance company when and if after investigation it appears to the Commissioner that: (1) Any license issued to such company was obtained by fraud; (2) There was any misrepresentation in the application for the license; (3) The holder of such license has otherwise shown himself untrustworthy or incompetent to act as a premium finance company; (4) Such company has violated any of the provisions of this chapter; or (5) Such company has been rebating part of the service charge as allowed and permitted herein to any insurance agent or any employee of an insurance agent or to any other person as an inducement to the financing of any insurance policy with the premium finance company. (b) Before the Commissioner shall revoke, suspend, or refuse to renew the license of any premium finance company, he shall give to such person an opportunity to be fully heard and to introduce evidence in his behalf. In lieu of revoking or suspending the license for any of the causes enumerated in this section, after hearing as herein provided, the Commissioner may subject such company to a penalty of not more than $200 for each offense when in his judgment he finds that the public interest would not be harmed by the continued operation of such company. The amount of any such penalty shall be paid by such company through the office of the Commissioner to the District of Columbia Treasurer. At any hearing provided by this section, the Commissioner shall have authority to administer oaths to witnesses. Anyone testifying falsely, after having been administered such oath, shall be subject to the penalty of perjury. (c) If the Commissioner refuses to issue or renew any license or if any applicant or licensee is aggrieved by any action of the Commissioner, said applicant or licensee shall have the right to a hearing and court proceeding as provided for in  31-2502.35 [repealed], 31-2502.43 [repealed] and 31-2502.44 [repealed].  (Oct. 9, 1940, ch. 792, ch. III,  55; Apr. 18, 1966, 80 Stat. 126, Pub. L. 89-403,  1; May 21, 1997, D.C. Law 11-268,  10(r)(3), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-1555. 1973 Ed.,  35-1365. Section References This section is referenced in  31-2231.17. Cross References Administrative procedure, see  2-501 et seq. Judicial review, see  2-510 and 11-722. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03.
 311106. Records. (a) Every licensee shall maintain records of its premium finance transactions and the said records shall be open to examination and investigation by the Commissioner. The Commissioner may at any time require any licensee to bring such records as he may direct to the Commissioners office for examination. (b) Every licensee shall preserve its records of such premium finance transactions, including cards used in a card system, for at least 3 years after making the final entry in respect to any premium finance agreement. The preservation of records in photographic form shall constitute compliance with this requirement.  (Oct. 9, 1940, ch. 792, ch. III,  56; Apr. 18, 1966, 80 Stat. 126, Pub. L. 89-403,  1; May 21, 1997, D.C. Law 11-268,  10(r)(3), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-1556. 1973 Ed.,  35-1366. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03.
 311107. Rules and regulations. The Commissioner shall have authority to make and enforce such reasonable rules and regulations as may be necessary in making effective the provisions of this chapter, but such rules and regulations shall not be contrary to nor inconsistent with the provisions of this chapter.  (Oct. 9, 1940, ch. 792, ch. III,  57; Apr. 18, 1966, 80 Stat. 126, Pub. L. 89-403,  1; May 21, 1997, D.C. Law 11-268,  10(r)(3), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-1557. 1973 Ed.,  35-1367. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03.
 311108. Form and contents of agreements. (a) A premium finance agreement shall: (1) Be dated, signed by or on behalf of the insured, and the printed portion thereof shall be in at least 8-point type; (2) Contain the name and place of business of the insurance agent negotiating the related insurance contract, the name and residence or the place of business of the premium finance company to which payments are to be made, a description of the insurance contracts involved and the amount of the premium therefor; and (3) Set forth the following items where applicable: (A) The total amount of the premiums; (B) The amount of the downpayment; (C) The principal balance (the difference between subparagraphs (A) and (B) of this paragraph); (D) The amount of the service charge; (E) The balance payable by the insured (sum of subparagraphs (C) and (D) of this paragraph); and (F) The number of installments required, the amount of each installment expressed in dollars, and the due date or period thereof. (b) The items set out in subsection (a)(3) of this section need not be stated in the sequence or order in which they appear in such paragraph, and additional items may be included to explain the computations made in determining the amount to be paid by the insured.  (Oct. 9, 1940, ch. 792, ch. III,  58; Apr. 18, 1966, 80 Stat. 126, Pub. L. 89-403,  1.)  Prior Codifications 1981 Ed.,  35-1558. 1973 Ed.,  35-1368.
 311109. Service charges. (a) A premium finance company shall not charge, contract for, receive, or collect a service charge other than as permitted by this chapter. (b) The service charge is to be computed on the balance of the premiums due (after subtracting the downpayment made by the insured in accordance with the premium finance agreement) from the effective date of the insurance coverage, for which the premiums are being advanced, to and including the date when the final installment of the premium finance agreement is payable. (c) The service charge shall be a maximum of $10 per $100 per year plus an additional charge of $20 per premium finance contract which need not be refunded upon cancellation or prepayment.  (Oct. 9, 1940, ch. 792, ch. III,  59; Apr. 18, 1966, 80 Stat. 126, Pub. L. 89-403,  1; Nov. 15, 1983, D.C. Law 5-40,  2(a), 30 DCR 4994.)  Prior Codifications 1981 Ed.,  35-1559. 1973 Ed.,  35-1369.
 311110. Delinquency charges. A premium finance agreement may provide for the payment by the insured of a delinquency charge of $1 to a maximum of 5% of the delinquent installment which is in default for a period of 5 days or more.  (Oct. 9, 1940, ch. 792, ch. III,  60; Apr. 18, 1966, 80 Stat. 126, Pub. L. 89-403,  1; Nov. 15, 1983, D.C. Law 5-40,  2(b), 30 DCR 4994.)  Prior Codifications 1981 Ed.,  35-1560. 1973 Ed.,  35-1370.
 311111. Cancellation of insurance contracts. (a) When a premium finance agreement contains a power of attorney enabling the premium finance company to cancel any insurance contract or contracts listed in the agreement, the insurance contract or contracts shall not be canceled by the premium finance company unless such cancellation is effectuated in accordance with this section. (b) Not less than 10 days written notice shall be mailed to the insured of the intent of the premium finance company to cancel the insurance contract unless the default is cured within such 10-day period. (c) After expiration of such 10-day period, the premium finance company may thereafter request, in the name of the insured, cancellation of such insurance contract or contracts by mailing to the insurer a notice of cancellation, and the insurance contract shall be canceled as if such notice of cancellation had been submitted by the insured himself, but without requiring the return of the insurance contract or contracts. The premium finance company shall also mail a notice of cancellation to the insured at his last known address. (d) All statutory, regulatory, and contractual restrictions providing that the insurance contract may not be canceled unless notice is given to a governmental agency, mortgagee, or other third party shall apply where cancellation is effected under the provisions of this section. The insurer shall give the prescribed notice in behalf of itself or the insured to any governmental agency, mortgagee, or other third party on or before the 2nd business day after the day it receives the notice of cancellation from the premium finance company and shall determine the effective date of cancellation taking into consideration the number of days notice required to complete the cancellation. (e) Whenever an insurance contract is cancelled in accordance with this section, the insurer shall return whatever gross unearned premiums are due under the insurance contract to the premium finance company affecting the cancellation for the account of the insured or insureds. (f) In the event that the crediting of return premiums to the account of the insured results in a surplus over the amount due from the insured, the premium finance company shall refund such excess to the insured provided that no such refund shall be required if it amounts to less than $1. (g) When a default results in the cancellation of an insurance contract listed in the premium finance agreement, the premium finance agreement may provide for the payment by the insured of a cancellation charge equal to the difference between any delinquent charge imposed in respect of the installment or installments in default and $10; provided, however, that should the cancellation notice be withdrawn prior to its effective date and the insurance coverage reinstated, the agreement may provide for payment by the insured of a reinstatement charge equal to the cancellation charge herein provided.  (Oct. 9, 1940, ch. 792, ch. III,  61; Apr. 18, 1966, 80 Stat. 126, Pub. L. 89-403,  1; Nov. 15, 1983, D.C. Law 5-40,  2(c), 30 DCR 4994.)  Prior Codifications 1981 Ed.,  35-1561. 1973 Ed.,  35-1371.
 311112. Validity of agreements as secured transactions. No filing of the premium finance agreement shall be necessary to perfect the validity of such agreement as a secured transaction as against creditors, subsequent purchasers, pledges, and encumbrances, successors, or assigns.  (Oct. 9, 1940, ch. 792, ch. III,  62; Apr. 18, 1966, 80 Stat. 126, Pub. L. 89-403,  1.)  Prior Codifications 1981 Ed.,  35-1562. 1973 Ed.,  35-1372.
 311131.01. Short title. This chapter may be cited as the Producer Licensing Act of 2002.  (Mar. 27, 2003, D.C. Law 14-264,  1, 50 DCR 260.)  Section References This section is referenced in  31-631,  31-5041.01, and  31-5041.12.
 311131.02. Definitions. For the purposes of this chapter, the term: (1) Business entity means a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity. (2) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking. (2A) Department means the Department of Insurance, Securities, and Banking, established by  31-102. (3) District means the District of Columbia. (4) Home state means the District or any state or territory of the United States in which an insurance producer: (A) Maintains his or her principal place of residence or principal place of business; and (B) Is licensed as a resident insurance producer. (4A) Individual means a natural person. (5) Insurance means any of the lines of authority enumerated in  31-1131.07(a). (6) Insurance producer means a person required to be licensed in the District to sell, solicit, or negotiate insurance under this chapter. (7) Insurer means a company offering protection through the sale of an insurance policy to an insured. (8) License means a document issued by the Commissioner authorizing a person to act as an insurance producer for the lines of authority specified in the document. (9) Repealed. (10) Repealed. (11) Limited line of insurance means a line of insurance: (A) Enumerated in  31-1131.07(a)(10)(A), (B), (C), (D), or (E); (B) Established by the Commissioner pursuant to  31-1131.07(a)(10)(F); or (C) Recognized by the Commissioner pursuant to  31-1131.07(a)(10)(G). (12) Limited lines insurance producer means a person authorized by the Commissioner to sell, solicit, or negotiate a limited line of insurance. (13) NAIC means the National Association of Insurance Commissioners. (14) Negotiate means the act of conferring directly with, or offering advice directly to, a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms, or conditions of the contract; provided, that the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers. (14A) Nonresident insurance producer means an insurance producer whose home state is not the District. (15) Person means an individual or a business entity. (15A) Resident insurance producer means an insurance producer whose home state is the District. (16) Sell means to sell or exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company. (17) Solicit means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company. (18) Terminate means the cancellation of the relationship between an insurance producer and an insurer or the termination of a producers authority to transact insurance. (19) Uniform Business Entity Application means the current version of the NAIC Uniform Application for Business Entity Insurance License/Registration. (20) Uniform Individual Application means the current version of the NAIC Uniform Application for Individual Insurance Producer License.  (Mar. 27, 2003, D.C. Law 14-264,  2, 50 DCR 260; June 11, 2004, D.C. Law 15-166,  4(g)(1), 51 DCR 2817; Apr. 13, 2005, D.C. Law 15-354,  43, 52 DCR 2638; Mar. 2, 2007, D.C. Law 16-191,  44(b), 53 DCR 6794; May 13, 2008, D.C. Law 17-155,  2(a), 55 DCR 3683.)  Effect of Amendments D.C. Law 15-166, in par. (2), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance and Securities. D.C. Law 15-354, in par. (2), validated a previously made technical correction. D.C. Law 16-191, in par. (2), validated a previously made technical correction. D.C. Law 17-155 added pars. (2A), (4A), (14A), (15A); rewrote pars. (4), (5), (6), (11), (18), (19), and (20); and repealed pars. (9) and (10). Emergency Legislation For temporary (90 day) amendment of section, see  4(g)(1) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
 311131.03. License required. (a) A person shall not sell, solicit, or negotiate insurance in the District for any class of insurance unless the person is licensed for that line of authority in accordance with this chapter. The license itself shall not create any authority in the licensee to represent or commit an insurance carrier. (b)(1) A person who maintains his or her principal place of residence and principal place of business in the District shall apply for a resident insurance producer license. (2) A person who maintains his or her principal place of residence and principal place of business outside the District shall apply for a nonresident insurance producer license. (3) A person who maintains either, but not both, his or her principal place of residence or principal place of business in the District shall apply for: (A) A nonresident insurance producer license if the person is licensed as a resident insurance producer in another state; or (B) A resident insurance producer license if the person is not licensed as a resident insurance producer in another state.  (Mar. 27, 2003, D.C. Law 14-264,  3, 50 DCR 260; May 13, 2008, D.C. Law 17-155,  2(b), 55 DCR 3683.)  Effect of Amendments D.C. Law 17-155 designated the existing text as subsec. (a); and added subsec. (b).
 311131.04. Exceptions to licensing. (a) This chapter shall not require an insurer to obtain an insurance producer license. For the purposes of this section, the term insurer shall not include an insurers officers, directors, employees, subsidiaries, or affiliates. (b) The following persons shall not be required to be licensed as an insurance producer: (1) An officer, director, or employee of an insurer or of an insurance producer; provided, that: (A) The officer, director, or employee does not receive any commission on policies written or sold to insure risks residing, located, or to be performed in the District; and (B)(i) The officer, director, or employees activities are executive, administrative, managerial, clerical, or a combination of these, and are only indirectly related to the sale, solicitation, or negotiation of insurance; (ii) The officer, director, or employees function relates to underwriting, loss control, inspection, or the processing, adjusting, investigating, or settling of a claim on a contract of insurance; or (iii) The officer, director, or employee is acting in the capacity of a special agent or agency supervisor assisting insurance producers, the persons activities are limited to providing technical advice and assistance to licensed insurance producers, and the persons activities do not include the sale, solicitation, or negotiation of insurance; (2) If no commission is paid for the service, a person who: (A) Secures and furnishes information for the purpose of: (i) Selling group life insurance, group property and casualty insurance, group annuities, or group or blanket accident and health insurance; (ii) Enrolling individuals under plans; or (iii) Issuing certificates under plans or otherwise assisting in administering plans; or (B) Performs administrative services related to mass-marketed property and casualty insurance; (3) An employer or association, its officers, directors, employees, or the trustees of an employee trust plan, to the extent that the employers, officers, employees, directors, or trustees are engaged in the administration or operation of a program of employee benefits for the employers or associations own employees or the employees of its subsidiaries or affiliates, which program involves the use of insurance issued by an insurer; provided, that the employers, associations, officers, directors, employees, or trustees are not in any manner compensated, directly or indirectly, by the company issuing the contracts; (4) Employees of insurers or organizations employed by insurers who are: (A) Engaging in: (i) The inspection, rating, or classification of risks; or (ii) The supervision of the training of insurance producers; and (B) Are not individually engaged in the sale, solicitation, or negotiation of insurance; (5) A person whose activities in the District are limited to advertising, without the intent to solicit insurance in the District, through communications in printed publications or other forms of electronic mass media; provided, that the person does not sell, solicit, or negotiate insurance that would insure risks of persons residing in, located in, or activities to be performed in the District; (6) A person who is not a resident of the District who sells, solicits, or negotiates a contract of insurance for commercial property and casualty risks to an insured with risks located in more than one state insured under that contract; provided, that the person is otherwise licensed as an insurance producer to sell, solicit, or negotiate that insurance in the state where the insured maintains its principal place of business and the contract of insurance insures risks located in that state; or (7) A salaried full-time employee who counsels or advises his or her employer relative to the insurance interests of the employer or of the subsidiaries or business affiliates of the employer; provided, that the employee does not sell or solicit insurance or receive a commission.  (Mar. 27, 2003, D.C. Law 14-264,  4, 50 DCR 260.) 
 311131.05. Examination prior to licensure. (a) An individual applying for a resident insurance producer license shall pass a written examination unless the individual is: (1) Applying for a limited lines insurance producer license or a license in the surplus lines line of authority; or (2) Exempt from examination under  31-1131.05b or  31-1131.09. (a-1) The examination required by subsection (a) of this section shall test the knowledge of the individual concerning the lines of authority for which application is made, the duties and responsibilities of an insurance producer, and the insurance laws and regulations of the District. (b) The Commissioner may make arrangements, including contracting with an outside testing service, for administering examinations and collecting a nonrefundable fee for the examination. (c) Each individual applying for an examination shall remit a nonrefundable fee for the examination as prescribed by the Commissioner. (d) An individual who fails to appear for the examination as scheduled or fails to pass the examination may reapply for an examination. The individual shall remit all required fees and forms before being rescheduled for another examination.  (Mar. 27, 2003, D.C. Law 14-264,  5, 50 DCR 260; May 13, 2008, D.C. Law 17-155,  2(c), 55 DCR 3683; Sept. 24, 2010, D.C. Law 18-223,  2166(a), 57 DCR 6242.)  Section References This section is referenced in  31-1131.05a,  31-1131.05b,  31-1131.07, and  31-1131.08. Effect of Amendments D.C. Law 17-155 rewrote the section name line which had read as follows:  Application for examination; rewrote subsec. (a); added subsec. (a-1); and, in subsec. (d), substituted may reapply for an examination. The individual shall remit for shall reapply for an examination and remit. Prior to amendment, subsec. (a) read as follows: (a) A resident individual applying for an insurance producer license shall pass a written examination unless exempt under  31-1131.09. The examination shall test the knowledge of the individual concerning the lines of authority for which application is made, the duties and responsibilities of an insurance producer, and the insurance laws and regulations of the District. Examinations required by this section shall be developed and conducted under rules and regulations promulgated by the Commissioner. D.C. Law 18-223 substituted  31-1131.05b or  31-1131.09 for  31-1131.09. Emergency Legislation For temporary (90 day) amendment of section, see  2166(a) of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 311131.05a. Pre-licensing education. (a) The Commissioner may require, by rule, that an individual, other than an applicant for a title insurance producer license, complete a pre-licensing course of study before: (1) Taking the examination required by  31-1131.05; or (2) Applying for an insurance producer license. (b) An insurer that sells, solicits, or negotiates a limited line of insurance in the District shall provide to each individual whose duties will include selling, soliciting, or negotiating the insurers limited line of insurance in the District a program of instruction that is approved by the Commissioner. The insurer shall provide the program of instruction to the individual prior to the individuals application for licensure as a limited lines insurance producer.  (Mar. 27, 2003, D.C. Law 14-264,  5a; as added May 13, 2008, D.C. Law 17-155,  2(d), 55 DCR 3683; Sept. 24, 2010, D.C. Law 18-223,  2166(b), 57 DCR 6242.)  Section References This section is referenced in  31-1131.09 and  31-5051.02. Effect of Amendments D.C. Law 18-223, in subsec. (a), substituted individual, other than an applicant for a title insurance producer license, complete for individual complete. Emergency Legislation For temporary (90 day) amendment of section, see  2166(b) of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 311131.05b. Pre-licensing education for title insurers. (a) The Commissioner may require, by rule, that an individual, not exempt under subsections (b), (c), or (d) of this section, complete a pre-licensing course of study before: (1) Taking the examination required by  31-1131.05; or (2) Applying for an insurance producer license. (b) An attorney who holds a license to practice law in any state or the District of Columbia shall be exempt from pre-licensing course of study requirements and examination requirements. (c) An title agent insurance applicant who provides certification from a title insurance insurer that the agent has had signing authority on policies or title insurance commitments for the past 3 years relating to properties located within the District of Columbia shall be exempt from the pre-licensing course of study requirements and the examination requirements; provided, that the certification is submitted to the Commissioner within one year after September 24, 2010. (d) A full-time employee of a title insurer shall be exempt from the pre-licensing course of study requirement. (e) The District of Columbia Land Title Association, or other organization designated by the Commissioner by rule, shall provide to each individual whose duties will include selling, soliciting, or negotiating a title insurers limited line of title insurance in the District a program of instruction that is approved by the Commissioner. The insurer shall provide the program of instruction to the individual prior to the individuals application for licensure as a limited lines insurance producer.  (Mar. 27, 2003, D.C. Law 14-264,  5b; as added Sept. 24, 2010, D.C. Law 18-223,  2166(3), 57 DCR 6242; Nov. 5, 2013, D.C. Law 20-40,  6(a), 60 DCR 12304.)  Section References This section is referenced in  31-1131.05. Effect of Amendments The 2013 amendment by D.C. Law 20-40 substituted may for shall in the introductory language of (a). Emergency Legislation For temporary (90 day) addition of section, see  2166(3) of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 311131.06. Application for resident insurance producer license. (a) An individual applying for a resident insurance producer license shall make application to the Commissioner on the Uniform Individual Application and declare under penalty of refusal, suspension, or revocation of the license that the statements made in the application are true, correct, and complete to the best of the individuals knowledge and belief. Before approving the application, the Commissioner shall find that the individual: (1) Is at least 18 years of age; (2) Has not committed any act that is a ground for denial, suspension, or revocation set forth in  31-1131.12. (3) If required by the Commissioner, has completed a pre-licensing course of study for the lines of authority for which the person has applied; (4) Has paid the fees prescribed by the Commissioner; and (5) Unless exempt under  31-1131.09, has successfully passed the examinations for the lines of authority for which the person has applied. (b) A business entity applying for a resident business entity producer license shall make application to the Commissioner on the Uniform Business Entity Application. Before approving the application, the Commissioner shall find that the business entity has: (1) Paid the fees prescribed by the Commissioner; and (2) Designated a licensed individual producer responsible for the business entitys compliance with the insurance laws, rules, and regulations of the District. (c) The Commissioner may require any documents reasonably necessary or appropriate to verify the information contained in an application. (d) Repealed.  (Mar. 27, 2003, D.C. Law 14-264,  6, 50 DCR 260; May 13, 2008, D.C. Law 17-155,  2(e), 55 DCR 3683; Mar. 25, 2009, D.C. Law 17-353,  234, 56 DCR 1117; Sept. 24, 2010, D.C. Law 18-223,  2166(c), 57 DCR 6242; Nov. 5, 2013, D.C. Law 20-40,  6(b), 60 DCR 12304.)  Section References This section is referenced in  31-1131.07,  31-1131.08,  31-1131.08a, and  31-5051.02. Effect of Amendments D.C. Law 17-155, in the section name line, substituted resident insurance producer for for; in subsec. (a), substituted An individual applying for a resident insurance for A person applying for an insurance, and substituted Uniform Individual Application for Uniform Application; in subsec. (b), substituted applying for a resident business entity producer license shall make application to the Commissioner on for acting as an insurance producer shall obtain an insurance producer license. Application shall be made using; and repealed subsec. (d), which had read as follows: (d) An insurer that sells, solicits, or negotiates any form of limited line credit insurance shall provide to each individual whose duties will include selling, soliciting, or negotiating limited line credit insurance a program of instruction that is approved by the Commissioner. D.C. Law 17-353, in the section heading, inserted for. D.C. Law 18-223, in subsec. (a)(2), substituted set forth in  31-1131.12; provided, that if an applicant for a title insurance producer license has been convicted of any such act and 10 years have elapsed since the individuals conviction, and a title insurer submits written verification that the person has had authority from the title insurer to issue title insurance policies or commitments related to real or personal property within the District of Columbia for a period of not less than 3 years prior to the application for license, such act or conviction may be considered not to apply by the Commissioner for set forth in  31-1131.12. The 2013 amendment by D.C. Law 20-40 deleted provided, that if an applicant for a title insurance producer license has been convicted of any such act and 10 years have elapsed since the individuals conviction, and a title insurer submits written verification that the person has had authority from the title insurer to issue title insurance policies or commitments related to real or personal property within the District of Columbia for a period of not less than 3 years prior to the application for license, such act or conviction may be considered not to apply by the Commissioner from the end of (a)(2). Emergency Legislation For temporary (90 day) amendment of section, see  2166(c) of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 311131.06a. Fingerprinting. (a) An individual applying for a resident insurance producer license under this chapter (except for an individual applying only for a limited lines insurance producer license) and each officer, director, partner of, and owner of a controlling interest in, a business entity applying for a resident insurance producer license under this chapter (except for a business entity applying only for a limited lines insurance producer license) shall submit to the Commissioner the individuals fingerprints along with the individuals name, address, and written consent to the performance of a criminal history record background check. (b) The Commissioner may require, by rule, that an individual applying only for a resident limited lines insurance producer license and each officer, director, partner of, and owner of a controlling interest in, a business entity applying only for a resident limited lines insurance producer license, shall submit to the Commissioner his or her fingerprints along with his or her name, address, and written consent to the performance of a criminal history record background check. (c) The Commissioner may exchange the fingerprints and other information with, and receive criminal history record information from, the Metropolitan Police Department and the Federal Bureau of Investigation for the purposes of facilitating determinations regarding eligibility for licensure under this chapter. (d) The individual or business entity applying for licensure shall bear the cost of the criminal history record background check and all costs of administering and processing the background check.  (Mar. 27, 2003, D.C. Law 14-264,  6a; as added May 13, 2008, D.C. Law 17-155,  2(f), 55 DCR 3683.) 
 311131.07. License. (a) Unless denied licensure under  31-1131.12, persons who have met the requirements of  31-1131.05 and 31-1131.06 shall be issued a resident insurance producer license. An insurance producer may receive qualification for a license in one or more of the following lines of insurance permitted under law or regulations: (1) Life, consisting of insurance coverage on human lives, including benefits of endowment and annuities, benefits in the event of death or dismemberment by accident, and benefits for disability income; (2) Accident and health or sickness, consisting of insurance coverage for sickness, bodily injury, or accidental death, including benefits for disability income; (3) Property, consisting of insurance coverage for the direct or consequential loss or damage to property of every kind; (4) Casualty, consisting of insurance coverage against legal liability, including that for death, injury, or disability, or damage to real or personal property; (5) Variable life and variable annuity, consisting of insurance coverage provided under variable life insurance contracts and variable annuities; (6) Personal lines, consisting of property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes; (7) Repealed; (8) Bail bonds, consisting of insuring or guaranteeing that a person will attend court when required, or will obey the orders or judgment of a court, as a condition to the release of the person from confinement; (9) Surplus lines, consisting of insurance coverage provided pursuant to  31-2502.40(a) by a company not otherwise authorized to do business in the District; and (10) Any of the following limited lines of insurance: (A) Car rental; (B) Credit; (C) Crop; (C-i) Portable electronics; (D) Surety; (E) Travel; (F) A limited line of insurance established by the Commissioner by rule; and (G) A line of insurance the Commissioner recognizes as a limited line of insurance for the purposes of complying with  31-1131.08(e). (a-1) A person shall not be issued a license in the bail bonds or surplus lines line of insurance unless the person holds, or is simultaneously issued, a license in the property or casualty line of insurance. (b) Repealed. (c) Repealed. (d) Repealed. (e) The license shall contain the licensees name, address, personal identification number, the date of issuance, the lines of authority, the expiration date, and any other information the Commissioner considers useful or necessary. (f) Repealed. (g) To assist in the performance of the Commissioners duties, the Commissioner may contract with a third party, including the NAIC, or its affiliates or subsidiaries, to perform any ministerial functions, including the collection of fees, related to producer licensing that the Commissioner may consider appropriate.  (Mar. 27, 2003, D.C. Law 14-264,  7, 50 DCR 260; May 13, 2008, D.C. Law 17-155,  2(g), 55 DCR 3683; May 1, 2013, D.C. Law 19-306,  201, 60 DCR 2746.)  Section References This section is referenced in  31-1131.02 and  31-1131.08. Effect of Amendments D.C. Law 17-155 rewrote the section. The 2013 amendment by D.C. Law 19-306 added (a)(10)(C-i). Cross References Portable electronics insurance,  31-5051.01 et seq.
 311131.07a. Term of license; renewal. (a) An initial individual insurance producer license issued after May 13, 2008, and the first renewal after May 13, 2008, of an individual insurance producer license initially issued before May 13, 2008, shall expire on the last day of the birth month of the producer that falls not less than 18 months and not more than 29 months after the effective date of the license. (b) An initial business entity insurance producer license issued after May 13, 2008, and the first renewal after May 13, 2008, of a business entity insurance producer license initially issued before May 13, 2008, shall expire on the May 31 that falls not less than 18 months and not more than 29 months after the effective date of the license. (c) A renewal of an existing license shall expire 2 years after the expiration date of the license period; provided, that the first renewal after May 13, 2008, of a license initially issued before May 13, 2008, shall be governed by subsections (a) and (b) of this section. (d) A person shall apply for or request renewal of a license on a form, or through such means, as may be prescribed by the Commissioner. (e) The Commissioner shall renew an insurance producer license if: (1) The producer applies for or requests license renewal on the form, or through such means, prescribed by the Commissioner; (2) All fees prescribed by the Commissioner are paid; (3) If the producer is a resident insurance producer: (A) The continuing education requirements, if any, have been met; (B) The license is not subject to non-renewal under  31-1131.12; and (C) The person has submitted a full set of fingerprints, if required by law or rule; and (4) If the producer is a nonresident producer, he or she continues to be licensed as a resident producer, in good standing, in his or her home state. (f) An individual insurance producer who allows his or her license to lapse may, within one year after the expiration date of the license, reinstate the same license without the necessity of passing a written examination; provided, that the producer shall pay a penalty in the amount of twice the unpaid renewal fee. (g) An insurance producer who is unable to comply with the license renewal procedures due to military service or some other extenuating circumstance may request a waiver of those procedures. The insurance producer may also request a waiver of any examination requirement or any other penalty or sanction imposed for failure to comply with renewal procedures.  (Mar. 27, 2003, D.C. Law 14-264,  7a; as added May 13, 2008, D.C. Law 17-155,  2(h), 55 DCR 3683.) 
 311131.07b. Continuing education. All individual title insurance producers shall fulfill the following continuing education requirements: (1) Eight hours biennially for District of Columbia barred attorneys in courses specific to District of Columbia real estate laws and related regulations, and any other continuing education courses approved by the Commissioner; (2) Sixteen hours biennially for resident title insurance producers in instruction specific to District of Columbia real estate laws and related regulations, and continuing education courses approved by the Commissioner of which not more than 8 hours may be completed through on-line or video-based courses; or (3) Four hours of instruction biennially for nonresident title insurance producers in instruction specific to District of Columbia real estate laws and related regulations.  (Mar. 27, 2003, D.C. Law 14-264,  7b; as added May 13, 2008, D.C. Law 17-155,  2(h), 55 DCR 3683; Sept. 24, 2010, D.C. Law 18-223,  2166(d), 57 DCR 6242; Nov. 5, 2013, D.C. Law 20-40,  6(c), 60 DCR 12304.)  Effect of Amendments D.C. Law 18-223 rewrote the section, which had read as follows: The Commissioner may establish continuing education requirements for resident insurance producers. The 2013 amendment by D.C. Law 20-40 rewrote this section. Emergency Legislation For temporary (90 day) amendment of section, see  2166(d) of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 311131.08. Nonresident licensing. (a) A person may request a nonresident license if the person is licensed as a resident insurance producer in another state. (a-1) A person requesting a nonresident insurance producer license shall make his or her request on a form, or through such means, prescribed by the Commissioner. (a-2) Unless denied licensure under  31-1131.12 or granted a resident insurance producer license by meeting the requirements of  31-1131.05 and 31-1131.06, a nonresident person shall receive a nonresident insurance producer license if: (1) The person is currently licensed as a resident and in good standing in his or her home state; (2) The person has submitted the proper request for a nonresident insurance producer license and has paid the fees as prescribed by the Commissioner; and (3) The person has submitted or transmitted to the Commissioner a completed NAIC Uniform Application or the application for licensure that the person submitted to his or her home state. (b) The Commissioner may verify the insurance producers licensing status through the producer database maintained by the NAIC, its affiliates, or subsidiaries. (c) Repealed. (d) Notwithstanding any other provision of this chapter, a person licensed as a surplus lines producer in his or her home state shall receive a nonresident surplus lines producer license under subsection (a) of this section. Except as provided in subsection (a) of this section, this section shall not amend or supersede any provision of  31-2502.39 and 31-2502.40. (e) Notwithstanding any other provision of this chapter, a person licensed as a limited line insurance producer in his or her home state shall receive a nonresident limited lines insurance producer license under subsection (a) of this section granting the same scope of authority as granted under the license issued by the producers home state. For the purposes of this subsection, the term limited line insurance means any authority granted by the home state which restricts the authority of the license to less than the total authority prescribed in the associated major lines under  31-1131.07(a)(1) through (6). (f) An applicant may qualify for a license under this chapter as a nonresident only if the applicant holds an equivalent license in the applicants home state. A license issued to a nonresident of the District shall grant the same rights and privileges as a resident licensee. (g) Repealed. (h) Any license and appointment issued to a nonresident pursuant to this section shall be terminated at any time that the nonresidents equivalent authority in his or her home state is terminated, suspended, or revoked.  (Mar. 27, 2003, D.C. Law 14-264,  8, 50 DCR 260; May 13, 2008, D.C. Law 17-155,  2(i), 55 DCR 3683; Sept. 24, 2010, D.C. Law 18-223,  2166(e), 57 DCR 6242; Nov. 5, 2013, D.C. Law 20-40,  6(d), 60 DCR 12304.)  Section References This section is referenced in  31-1131.07,  31-1131.16, and  31-5051.02. Effect of Amendments D.C. Law 17-155 rewrote subsec. (a); added subsecs. (a-1), (a-2), and (f); repealed subsec. (c); and, in subsec. (e), substituted limited lines insurance for limited line credit insurance or other type of limited lines and substituted nonresident limited lines insurance for nonresident limited lines. D.C. Law 18-223 added subsec. (g). The 2013 amendment by D.C. Law 20-40 repealed (g) which read: A nonresident title insurance producer shall have a registered agent in the District of Columbia at the time of application for a title insurance producer license and shall maintain a registered agent in the District of Columbia as a condition of licensing under this section; and added (h). Emergency Legislation For temporary (90 day) amendment of section, see  2166(e) of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 311131.08a. Changes of name, residency, or address. (a) A licensee shall inform the Commissioner of a change of the licensees residential or business address within 30 days of the change of address. A nonresident insurance producer who moves from one state to another state or a resident insurance producer who moves from the District to another state shall file a change of address and provide certification from the new resident state within 30 days after the change of residence. No fee or license application shall be required. (b) A licensee shall inform the Commissioner of a change of the licensees legal or corporate name within 30 days after the change of name. (c) Failure to timely inform the Commissioner of a change in legal name or address shall result in a penalty as prescribed by the Commissioner. (d) A person licensed as an insurance producer in another state who moves to the District shall make application within 90 days of establishing legal residence to become a resident licensee under  31-1131.06 unless the person maintains his principal place of business in another state and the person has a resident insurance producer license in that state.  (Mar. 27, 2003, D.C. Law 14-264,  8a; as added May 13, 2008, D.C. Law 17-155,  2(j), 55 DCR 3683.) 
 311131.09. Exemption from examination and prelicensing education. (a) An individual who applies for a resident insurance producer license in the District shall not be required to complete any prelicensing education (if prelicensing education is required by the Commissioner pursuant to  31-1131.05a) or examination if: (1) The individual is currently licensed for the same line of authority in another state; or (2)(A) The application is received within 90 days of the cancellation of the applicants previous license for the same lines of authority in another state; and (B)(i) The prior state issues a certification that, at the time of cancellation, the person was in good standing in that state; or (ii) The states producer database records, maintained by the NAIC, its affiliates, or subsidiaries, indicate that the producer is or was licensed in good standing for the line of authority requested. (b) Repealed. (c) Repealed. (d) Repealed. (e) Repealed.  (Mar. 27, 2003, D.C. Law 14-264,  9, 50 DCR 260; May 13, 2008, D.C. Law 17-155,  2(k), 55 DCR 3683.)  Section References This section is referenced in  31-1131.05 and  31-1131.06. Effect of Amendments D.C. Law 17-155 rewrote the section.
 311131.10. Assumed names. An insurance producer doing business under any name other than the producers legal name shall notify the Commissioner prior to using the assumed name.  (Mar. 27, 2003, D.C. Law 14-264,  10, 50 DCR 260.) 
 311131.11. Temporary licensing. (a) The Commissioner may issue a temporary insurance producer license for a period not to exceed 180 days without requiring an examination if the Commissioner determines that the temporary license shall be necessary for the servicing of an insurance business for: (1) The surviving spouse or court-appointed personal representative of a licensed insurance producer who dies or acquires a mental or physical disability to allow adequate time for the sale of the insurance business owned by the producer or for the recovery or return of the producer to the business or to provide for the training and licensing of new personnel to operate the producers business; (2) A member or employee of a business entity licensed as an insurance producer upon the death or disability of an individual designated in the business entity application or the license; (3) The designee of a licensed insurance producer entering active service in the armed forces of the United States of America; or (4) Any other circumstance that the Commissioner determines that the public interest will best be served by the issuance of the license. (b) The Commissioner may, by order, limit the authority of a temporary licensee in any way which the Commissioner considers to be necessary to protect insureds and the public. The Commissioner may require the temporary licensee to have a suitable sponsor who is a licensed insurance producer or insurer and who assumes responsibility for all acts of the temporary licensee and may impose other similar requirements designed to protect insureds and the public. The Commissioner may, by order, revoke a temporary license if the interests of the insureds or the public are endangered. A temporary license shall not continue after the owner or the personal representative disposes of the business.  (Mar. 27, 2003, D.C. Law 14-264,  11, 50 DCR 260; Apr. 24, 2007, D.C. Law 16-305,  40, 53 DCR 6198.)  Effect of Amendments D.C. Law 16-305, in subsec. (a)(1), substituted acquires a mental or physical disability for becomes mentally or physically disabled.
 311131.12. License denial, nonrenewal, suspension, or revocation. (a) The Commissioner may refuse to issue an insurance producer license; place an insurance producer on probation; suspend, revoke, or refuse to renew an insurance producers license; levy a civil penalty in accordance with subsection (d) of this section; issue subpoenas and administer oaths; or take any combination of these actions if an insurance producer or an applicant for an insurance producer license: (1) Provides incorrect, misleading, incomplete, or materially untrue information in the license application; (2) Violates any insurance laws or any regulation, subpoena, or order of the Commissioner or of another states insurance commissioner; (3) Obtains, or attempts to obtain, a license through misrepresentation or fraud; (4) Improperly withholds, misappropriates, or converts any monies or properties received in the course of doing insurance business; (5) Intentionally misrepresents the terms of an actual or proposed insurance contract or application for insurance; (6) Is convicted of a felony; (7) Admits committing, or is found to have committed, any insurance unfair trade practice or fraud; (8) Uses fraudulent, coercive, or dishonest practices, or demonstrates incompetence, untrustworthiness, or financial irresponsibility in the conduct of business in the District or elsewhere; (9) Has an insurance producer license, or its equivalent, denied, suspended, or revoked in any state or territory of the United States, province of Canada, or other foreign country; (10) Forges anothers name to an application for insurance or to any document related to an insurance transaction; (11) Improperly uses notes or any other reference material to complete, or otherwise cheats on, an examination for an insurance license; (12) Knowingly accepts insurance business from an individual who is not licensed; (13) Fails to comply with an administrative or court order imposing a child support obligation; (14) Fails to pay District income tax or comply with any administrative or court order directing payment of District income tax; (15) Repealed; or (16) Is found to have misrepresented satisfactory completion of, or improperly used notes or other reference material to complete, or otherwise cheats on, an examination in a prelicensure or continuing education course. (a-1) In addition to the reasons set forth in subsection (a) of this section, the Commissioner may place a business entity insurance producer on probation; suspend, revoke, or refuse to renew a business entity insurance producers license; or levy a civil penalty against a business entity insurance producer if: (1) One or more of the partners, officers, or managers acting on behalf of the business entity knew or should have known of the occurrence of a license violation; (2) The violation was not reported to the Commissioner; and (3) Corrective action was not taken. (b)(1) Except as provided in paragraph (2) of this subsection, the Commissioner shall not place an insurance producer on probation; suspend, revoke, or refuse to renew an insurance producers license; or levy a civil penalty against an insurance producer without first providing the following notice and opportunity for hearing to the applicant or licensee. The Commissioner shall notify the applicant or licensee, in writing, of the proposed action and the reason for the proposed action. The Commissioner shall also inform the applicant or licensee, in writing, that the applicant or licensee may, within 30 days after the date of the Commissioners notice, request a hearing to determine whether the proposed action should be taken. If a hearing is requested, the Commissioner, or a designee of the Commissioner, shall hold the hearing within 30 days after the date of receipt by the Commissioner of the written request, and the Commissioner shall not, except as provided in paragraph (2) of this subsection, take the proposed action before the close of the hearing. (2)(A) If the Commissioner determines that further transaction of business by a producer would be hazardous to the public or the policyholders or creditors of the producer, the Commissioner may revoke or suspend the license of the producer without giving notice or prior opportunity for a hearing; provided, that the Commissioner shall provide to the producer the opportunity for a hearing within 30 days after the effective date of the order of the revocation or suspension. (B) The Commissioner may refuse to issue an initial insurance producer license without giving notice or prior opportunity for a hearing; provided, that the Commissioner shall provide to the applicant the opportunity for a hearing within 30 days after the date of the denial. (3) In a hearing under this subsection, the Commissioner may administer oaths to witnesses and issue subpoenas for witnesses and documents. A witness testifying falsely under oath shall be subject to the penalties of perjury. The Commissioners authority to issue subpoenas shall not be limited to hearings if the Commissioner determines that the issuance of a subpoena is useful or necessary to protect the public interest. If a person refuses to obey a subpoena issued by the Commissioner, the Commissioner may petition the Superior Court of the District of Columbia (Superior Court) to enforce the subpoena, and the Superior Court may issue an order requiring the person to appear and testify before the Commissioner or produce documents. A person failing to obey the Superior Courts order may be held in contempt of court. (c) Repealed. (d) In addition to or in lieu of any applicable denial of renewal, suspension, or revocation of a license, the Commissioner may, after a hearing, take any of the following actions: (1) Impose a civil penalty not to exceed $5,000; or (2) Require restitution to any person who has suffered financial injury or damage as a result of the violation of the license. (d-1) A person affected or aggrieved by an order, ruling, proceeding, or action of the Commissioner, or any person acting on behalf of the Commissioner, under this section may contest the validity of the same in any court of competent jurisdiction by appeal or through any other appropriate proceedings. In any proceeding or appeal, the Commissioner shall not be: (1) Taxed with any costs; (2) Required to give any supersedeas bond or security for costs or damages; (3) Subject to suit or action or liable for any judgment or decree for any damages, loss, or injury claimed by any person on any appeal taken; or (4) Required to make any deposit for costs or pay for any service to the clerks of any court or to any marshal of the United States, except as may be inconsistent with law. (e) Notwithstanding the revocation, surrender, or lapse of a license, the Commissioner may enforce the provisions of, and impose any penalty or remedy authorized by, this chapter or any other District law relating to insurance against any person who is under investigation for or charged with a violation of this chapter or any other District law relating to insurance.  (Mar. 27, 2003, D.C. Law 14-264,  12, 50 DCR 260; Mar. 8, 2006, D.C. Law 16-55,  2, 53 DCR 7; May 13, 2008, D.C. Law 17-155,  2(l), 55 DCR 3683.)  Section References This section is referenced in  31-1131.06,  31-1131.07,  31-1131.07a,  31-1131.08, and  31-1131.15. Effect of Amendments D.C. Law 16-55, in the section heading, inserted , suspension,; rewrote the lead-in language of subsec. (a); designated the existing text of subsec. (b)(1) as subsec. (b)(1)(A); added subsec. (b)(1)(B); and added subsec. (c). Prior to amendment, the lead-in language of subsec. (a) read as follows: (a) The Commissioner may place an insurance producer on probation; suspend, revoke, or refuse to issue or renew an insurance producers license; may levy a civil penalty in accordance with subsection (f) of this section; or take any combination of these actions if an insurance producer:. D.C. Law 17-155 rewrote the section. Emergency Legislation For temporary (90 day) amendment of section, see  2 of Producer Summary Suspension Emergency Amendment Act of 2004 (D.C. Act 15-548, October 26, 2004, 51 DCR 10332). For temporary (90 day) amendment of section, see  2 of Producer Summary Suspension Congressional Review Emergency Amendment Act of 2005 (D.C. Act 16-18, February 17, 2005, 52 DCR 2962). For temporary (90 day) amendment of section, see  2 of Producer Summary Suspension Emergency Amendment Act of 2005 (D.C. Act 16-192, October 28, 2005, 52 DCR 10029). Temporary Legislation For temporary (225 day) amendment of section, see  2 of Producer Summary Suspension Temporary Amendment Act of 2004 (D.C. Law 15-259, March 17, 2009, law notification 52 DCR 4371). For temporary (225 day) amendment of section, see  2 of Producer Summary Suspension Temporary Amendment Act of 2005 (D.C. Law 16-47, February 9, 2006, law notification 53 DCR 1455).
 311131.13. Commissions. (a) An insurer or insurance producer shall not pay a commission, service fee, brokerage fee, or other valuable consideration to a person for selling, soliciting, or negotiating insurance in the District if that person is required to be licensed under this chapter and is not licensed. (b) A person shall not accept a commission, service fee, brokerage fee, or other valuable consideration for selling, soliciting, or negotiating insurance in the District if that person is required to be licensed under this chapter and is not licensed. (c) Renewal or other deferred commissions may be paid to a person for selling, soliciting, or negotiating insurance in the District if the person was required to be licensed under this chapter at the time of the sale, solicitation, or negotiation and was licensed at that time. (d) An insurer or insurance producer may pay or assign commissions, service fees, brokerage fees, or other valuable consideration to an insurance agency or to persons who do not sell, solicit, or negotiate insurance in the District unless the payment would violate this chapter or any other District law relating to insurance.  (Mar. 27, 2003, D.C. Law 14-264,  13, 50 DCR 260.) 
 311131.14. Appointments. (a) An insurance producer shall not act as an agent of an insurer unless the insurance producer becomes an appointed agent of that insurer. An insurance producer who is not acting as an agent of an insurer shall not be required to become appointed. (b) To appoint an insurance producer as its agent, the appointing insurer shall file, on a form prescribed by the Commissioner, a notice of appointment within 30 days from the date that the agency contract is executed or the first insurance application is submitted. (c) Upon receipt of the notice of appointment, the Commissioner shall verify, within 10 days, that the insurance producer is eligible for appointment. If the insurance producer is determined to be ineligible for appointment, the Commissioner shall notify the insurer within 5 days of the determination. (d) An insurer shall pay an appointment fee, in the amount and on or before the date prescribed by the Commissioner, for each insurance producer appointed by the insurer. (e) An insurer shall pay a renewal appointment fee in the amount and on or before the date prescribed by the Commissioner.  (Mar. 27, 2003, D.C. Law 14-264,  14, 50 DCR 260.) 
 311131.15. Notification to Commissioner of termination. (a) An insurer, or authorized representative of the insurer, that terminates the appointment, employment, contract, or other insurance business relationship with an insurance producer shall notify the Commissioner within 30 days after the effective date of the termination, on a form prescribed by the Commissioner, if the reason for termination is set forth in  31-1131.12 or the insurer has knowledge that the producer was found by a court, government body, or self-regulatory organization authorized by law to have engaged in any of the activities in set forth in  31-1131.12. Upon the written request of the Commissioner, the insurer shall provide additional information, documents, records, or other data pertaining to the termination or activity of the insurance producer. (b) An insurer, or authorized representative of the insurer, that terminates the appointment, employment, or contract with an insurance producer for any reason not set forth in  31-1131.12, shall notify the Commissioner within 30 days after the effective date of the termination on a form prescribed by the Commissioner. Upon written request of the Commissioner, the insurer shall provide additional information, documents, records, or other data pertaining to the termination. (c) The insurer, or the authorized representative of the insurer, shall promptly notify the Commissioner, on a form prescribed by the Commissioner, if, upon further review or investigation, the insurer discovers additional information that would have been reported to the Commissioner in accordance with subsection (a) of this section. (d)(1) Within 15 days after making the notification required by subsections (a), (b), and (c) of this section, the insurer shall mail a copy of the notification to the insurance producer at his or her last known address. If the insurance producer is terminated for cause for any of the reasons set forth in  31-1131.12, the insurer shall provide a copy of the notification to the producer at his or her last known address by certified mail, return receipt requested, postage prepaid or by overnight delivery using a nationally recognized carrier. (2) Within 30 days after the insurance producer has received the original or additional notification, the insurance producer may file written comments concerning the substance of the notification with the Commissioner. The insurance producer shall, by the same means, simultaneously send a copy of the comments to the reporting insurer. The comments shall become a part of the Commissioners file and accompany every copy of a report distributed or disclosed for any reason about the insurance producer as permitted under subsection (f) of this section. (e)(1) In the absence of actual malice, an insurer, the authorized representative of the insurer, an insurance producer, the Commissioner, an organization of which the Commissioner is a member and that compiles the information and makes it available to other insurance commissioners or regulatory or law enforcement agencies, or their agents or employees shall not be subject to civil liability as a result of: (A) A statement or information required by or provided under this section or any information relating to any statement that may be requested in writing by the Commissioner from an insurer or an insurance producer; or (B) A statement by a terminating insurer or insurance producer to an insurer or insurance producer limited solely and exclusively to whether a termination for cause under subsection (a) of this section was reported to the Commissioner; provided, that the propriety of a termination for cause under subsection (a) of this section is certified in writing by an officer or authorized representative of the insurer or insurance producer terminating the relationship. (2) In an action brought against a person that may have immunity under paragraph (1) of this section for making any statement required by this section or providing any information relating to any statement that may be requested by the Commissioner, the party bringing the action shall prove actual malice with particularity. (3) Paragraph (1) or (2) of this section shall not abrogate or modify any existing statutory or common law privileges or immunities. (f)(1) Any documents, materials, or other information in the control or possession of the Department of Insurance, Securities, and Banking that is furnished by an insurer, an insurance producer, or an employee or agent thereof acting on behalf of the insurer or producer or obtained by the Commissioner in an investigation pursuant to this section shall be confidential and privileged, shall not be subject to subchapter II of Chapter 5 of Title 2, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in a private civil action; provided, that the Commissioner may use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the Commissioners duties. (2) The Commissioner or any person who received documents, materials, or other information while acting under the authority of the Commissioner shall not testify in a private civil action concerning any confidential documents, materials, or information subject to paragraph (1) of this section. (3) To assist in the performance of the Commissioners duties under this chapter, the Commissioner: (A) May share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to paragraph (1) of this subsection, with other state, federal, and international regulatory agencies, with the NAIC, its affiliates, or subsidiaries, or with state, federal, and international law enforcement authorities; provided, that the recipient agrees to maintain the confidentiality and privileged status of the document, material, or other information; (B) May receive documents, materials, or information, including otherwise confidential and privileged documents, materials, or information, from the NAIC, its affiliates, or subsidiaries or from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information; and (C) May enter into agreements governing sharing and use of information consistent with this subsection. (4) No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information shall occur as a result of disclosure to the Commissioner under this section or as a result of sharing as authorized in paragraph (3) of this subsection. (5) This chapter shall not prohibit the Commissioner from releasing final, adjudicated actions, including terminations for cause that are open to public inspection under subchapter II of Chapter 5 of Title 2 to a database or other clearinghouse service maintained by the NAIC, its affiliates, or subsidiaries. (g) An insurer, the authorized representative of the insurer, or producer that fails to report as required under the provisions of this section or that is found to have reported with actual malice by a court of competent jurisdiction may, after notice and hearing, have its license or certificate of authority suspended or revoked and may be fined in accordance with  31-1131.12(d).  (Mar. 27, 2003, D.C. Law 14-264,  15, 50 DCR 260; June 11, 2004, D.C. Law 15-166,  4(g)(2), 51 DCR 2817.)  Effect of Amendments D.C. Law 15-166, in par. (1) of subsec. (f), substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities Regulation. Emergency Legislation For temporary (90 day) amendment of section, see  4(g)(2) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
 311131.16. Reciprocity. (a) Except for the requirements imposed by  31-1131.08, the Commissioner shall waive any requirements for a nonresident license applicant with a valid license from his or her home state, if the applicants home state awards nonresident licenses to residents of the District on the same basis. The Commissioner may waive any requirements, except for those imposed by  31-1131.08, for a nonresident license applicant with a valid license from the applicants home state if the applicants home state does not award nonresident licenses to residents of the District on the same basis. (b) A nonresident insurance producers satisfaction of his or her home states continuing education requirements for licensed insurance producers shall constitute satisfaction of the Districts continuing education requirements if the nonresident producers home state recognizes the satisfaction of its continuing education requirements imposed upon insurance producers from the District on the same basis. The Commissioner may determine that a nonresident insurance producers satisfaction of his or her home states continuing education requirements for licensed insurance producers constitutes satisfaction of the Districts continuing education requirements if the nonresident producers home state does not recognize the satisfaction of its continuing education requirements imposed upon insurance producers from the District on the same basis. (c) A license issued to a nonresident of the District shall grant the same rights and privileges as a resident licensee.  (Mar. 27, 2003, D.C. Law 14-264,  16, 50 DCR 260; May 13, 2008, D.C. Law 17-155,  2(m), 55 DCR 3683.)  Effect of Amendments D.C. Law 17-155, in subsec. (a), inserted: The Commissioner may waive any requirements, except for those imposed by  31-1131.08, for a nonresident license applicant with a valid license from the applicants home state if the applicants home state does not award nonresident licenses to residents of the District on the same basis.; in subsec. (b), inserted The Commissioner may determine that a nonresident insurance producers satisfaction of his or her home states continuing education requirements for licensed insurance producers constitutes satisfaction of the Districts continuing education requirements if the nonresident producers home state does not recognize the satisfaction of its continuing education requirements imposed upon insurance producers from the District on the same basis.; and, in subsec. (c) deleted: An applicant may qualify for a license under this chapter as a nonresident only if the applicant holds an equivalent license in his or her home state.
 311131.17. Reporting of actions. (a) An insurance producer shall report to the Commissioner any administrative action taken against the insurance producer in another jurisdiction or by another governmental agency in the District within 30 days of the final disposition of the matter. The report shall include a copy of the order, consent to order, or other relevant legal documents. (b) Within 30 days of the initial pretrial hearing date, an insurance producer shall report to the Commissioner any criminal prosecution of the insurance producer taken in any jurisdiction. The report shall include a copy of the initial complaint filed, the order resulting from the hearing, and any other relevant legal documents.  (Mar. 27, 2003, D.C. Law 14-264,  17, 50 DCR 260.) 
 311131.18. Regulations. The Commissioner may promulgate rules and regulations necessary or appropriate to implement the provisions of this chapter.  (Mar. 27, 2003, D.C. Law 14-264,  18, 50 DCR 260; May 13, 2008, D.C. Law 17-155,  2(n), 55 DCR 3683.)  Effect of Amendments D.C. Law 17-155 substituted necessary or appropriate for necessary.
 311131.19. Transition. (a) A license to do business as an insurance agent or broker in the District issued prior to March 27, 2003, shall be valid. (b) This chapter shall not apply to any action, prosecution, or proceeding which is pending or may be initiated on the basis of facts and circumstances occurring before March 27, 2003.  (Mar. 27, 2003, D.C. Law 14-264,  19, 50 DCR 260.) 
 311201. Definitions. For the purposes of this chapter, the term: (1) Assessable year means the calendar year in which the direct gross receipts are received or derived from insurance business in the District of Columbia. (1A) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking. (1A-i) Continuing Care Retirement Community Regulatory and Supervision Trust Account or Account means the account established within the Insurance Regulatory Trust Fund for the purpose of administering Chapter 1A of Title 44 [ 44-151.01 et seq.], and for reasonable expenses incurred in promoting the continuing care retirement community industry in the District. (1B) Department of Insurance, Securities, and Banking means the District of Columbias regulatory body which is responsible for administering the insurance laws and health maintenance organization laws of the District of Columbia. (2) Direct gross receipts means all policy and membership fees and net premium receipts or consideration received in a calendar year on all insurance risks and annuity contracts originating in or from the District of Columbia. Direct gross receipts shall not include any policy or membership fees, net premium receipts, or consideration received from or paid by the District of Columbias Department of Health Care Finance. (3) Repealed. (4) Insurer means any person, firm, association, or corporation duly licensed in the District of Columbia pursuant to the applicable provisions of District insurance law as an insurer. In addition, Group Hospitalization and Medical Service Incorporated, shall be defined as an insurer. (5) Net premium receipts or consideration received means gross premiums or consideration received less the sum of premiums received for reinsurance assumed and premiums or consideration returned on policies or contracts canceled or not taken. (6) Repealed.  (Oct. 21, 1993, D.C. Law 10-40,  2, 40 DCR 6009; Apr. 9, 1997, D.C. Law 11-235,  24(a), 44 DCR 818; May 21, 1997, D.C. Law 11-268,  10(y), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  36(a), 45 DCR 745; June 11, 2004, D.C. Law 15-166,  4(h)(1), 51 DCR 2817; Apr. 5, 2005, D.C. Law 15-270,  201(a), 52 DCR 799; Sept. 24, 2010, D.C. Law 18-223,  5024, 57 DCR 6242.)  Prior Codifications 1981 Ed.,  35-2701. Effect of Amendments D.C. Law 15-166, in par. (1A), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance and Securities; and, in par. (1B), substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities Regulation. D.C. Law 15-270 added subsec. (1A-i). D.C. Law 18-223, in par. (2), added the last sentence. Emergency Legislation For temporary (90 day) amendment of section, see  4(h)(1) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). For temporary (90 day) amendment of section, see  4 of Medicaid Resource Maximization Emergency Amendment Act of 2010 (D.C. Act 18-390, May 7, 2010, 57 DCR 4339). For temporary (90 day) amendment of section, see  5024 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542). Temporary Legislation Section 4 of D.C. Law 18-205, in par. (2), inserted Direct gross receipts shall not include any policy or membership fees, net premium receipts, or consideration received from or paid by the Department of Health Care Finance.. Section 7(b) of D.C. Law 18-205 provided that the act shall expire after 225 days of its having taken effect. Editor's Notes Mayor authorized to issue rules: Section 12 of D.C. Law 10-40 provided that the Mayor may, pursuant to subchapter I of Chapter 15 of Title 1subchapter I of Chapter 5 of Title 2, 2001 Ed., issue rules to implement the provisions of this chapter. Delegation of Authority Delegation of authority pursuant to D.C. Law 10-40, the Insurance Regulatory Trust Fund Act of 1993, see Mayors Order 94-54, March 7, 1994 ( 41 DCR 1433).
 311202. Establishment of the Insurance Regulatory Trust Fund; funding; uses; budget. (a) There is established within the General Fund of the District of Columbia a trust fund designated as the Insurance Regulatory Trust Fund, to which shall be credited all funds obtained pursuant to this chapter and Chapter 52A of this title without regard to fiscal year limitation. All monies and interest earned on monies deposited in the Insurance Regulatory Trust Fund shall be credited to the Fund and used solely for the purpose of this chapter and Chapter 52A of this title. Insurers and health maintenance organizations will be assessed separately. The funds obtained from assessments on insurance companies and health maintenance organizations will not be commingled within the Trust Fund, and separate accounts will be maintained within the Trust Fund in order to properly allocate assessment revenue and expenditures to insurers and health maintenance organizations. (b) Subject to the applicable laws relating to the appropriation of District funds, monies received and deposited in the Insurance Regulatory Trust Fund or a division thereof, shall be used to defray the expenses of the Department of Insurance, Securities, and Banking in the discharge of its administrative and regulatory duties as prescribed by law. These monies shall be deemed to include all administrative costs for regulating insurers and health maintenance organizations doing business in the District of Columbia, and no other assessments shall be charged for such purpose after the effective date of this chapter. The Mayor shall be responsible for the deposit and expenditure of these monies as provided by law. (b-1)(1) There is established a separate account within the Insurance Regulatory Trust Fund for the purpose of funding the expenses of the Department of Insurance, Securities, and Banking in the discharge of all of its administrative, regulatory, and marketing functions under Chapter 39A of this title. All fees, fines, penalties, assessments, and other funds received by the Commissioner under Chapter 39A of this title and regulations promulgated thereunder, shall be deposited in, and credited to, the account. The Mayor shall be responsible for the deposit and expenditure of these monies as provided by law. At the end of each fiscal year, any funds in the account shall revert to the General Fund of the District of Columbia. (2) Captive insurance companies conducting business in the District under Chapter 39A of this title shall be exempt from the assessments imposed on insurers and health maintenance organizations under  31-1203. (b-2)(1) There is established a separate account within the Insurance Regulatory Trust Fund for the purpose of administering Chapter 1A of Title 44, and for the reasonable expenses incurred in promoting the continuing care retirement community industry in the District. Continuing care retirement community providers conducting business in the District under Chapter 1A of Title 44, shall be exempt from the assessments imposed on insurers and health maintenance organizations under  31-1203. All fees, fines, penalties, and assessments received by the Commissioner under the administration of Chapter 1A of Title 44, shall be deposited in, and credited to, the Account. (2) Subject to the applicable law relating to the appropriation of District funds, all funds in the Continuing Care Retirement Community Regulatory and Supervision Trust Fund Account shall be disbursed only upon the approval of the Commissioner. (3) At the end of each fiscal year, any funds in the Continuing Care Retirement Community Regulatory and Supervision Fund Account shall be applied against the budget for the ensuing year. (c)(1) The Mayor shall submit to the Council, as a part of the annual budget, a requested appropriation for expenditures from the Insurance Regulatory Trust Fund. Any monies received but not expended in a given fiscal year shall be retained by the Fund and applied against the budget for the ensuing year, and the assessments for that year reduced accordingly. (2) The Mayors request shall be based on an estimated projection of the expenditures necessary to perform the administrative and regulatory functions of the Insurance Administration. This estimate shall include, but not be limited to, expenditures for salaries, fringe benefits, overhead charges, travel, training, supplies, technical, professional, and any and all other services necessary to discharge the duties and responsibilities of administering the insurance laws of the District of Columbia. (d) The Council of the District of Columbia shall approve and establish the budget of the Insurance Regulatory Trust Fund in the same manner and at the same level of detail as approved and established for departments and agencies under the administrative control of the Mayor as provided in  1-204.04(f).  (Oct. 21, 1993, D.C. Law 10-40,  3, 40 DCR 6009; Apr. 9, 1997, D.C. Law 11-235,  24(b)-(d), 44 DCR 818; June 11, 2004, D.C. Law 15-166,  4(h)(2), 51 DCR 2817; Mar. 17, 2005, D.C. Law 15-262,  25, 52 DCR 1205; Apr. 5, 2005, D.C. Law 15-270,  201(b), 52 DCR 799; Oct. 20, 2005, D.C. Law 16-33, 2202, 52 DCR 7503; Apr. 7, 2006, D.C. Law 16-91,  102(c), 52 DCR 10637; Mar. 2, 2007, D.C. Law 16-191,  44(c), 52, 54(e), 53 DCR 6794.)  Prior Codifications 1981 Ed.,  35-2702. Section References This section is referenced in  31-3402,  31-3931.12,  31-3931.19,  31-5238.01, and  44-151.18. Effect of Amendments D.C. Law 15-166, in subsec. (b), substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities Regulation. D.C. Law 15-262 added subsec. (b-1). D.C. Law 15-270 added subsec. (b-2). D.C. Law 16-33, in subsec. (a), substituted this chapter and Chapter 52A of this title, for this chapter. D.C. Law 16-91, in subsec. (b-1)(1), deleted Except as otherwise provided in  31-3931.12(g), preceding All fees, fines. D.C. Law 16-191, in subsecs. (b), (b-1), and (b-2), validated previously made technical corrections. Cross References Establishment of health maintenance organizations, deposit of filing fee, see  31-3402. Emergency Legislation For temporary (90 day) amendment of section, see  4(h)(2) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). For temporary (90 day) amendment of section, see  3 of the Captive Insurance Company Enhancement Emergency Amendment Act of 2004 (D.C. Act 15-481, July 19, 2004, 51 DCR 7811). For temporary (90 day) amendment of section, see  3 of Captive Insurance Company Enhancement Congressional Review Emergency Amendment Act of 2004 (D.C. Act 15-549, October 26, 2004, 51 DCR 10336). For temporary (90 day) amendment of section, see  25 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238). For temporary (90 day) amendment of section, see  2202 of Fiscal Year 2006 Budget Support Emergency Act of 2005 (D.C. Act 16-168, July 26, 2005, 52 DCR 7667). Temporary Legislation For temporary (225 day) amendment of section, see  3 of Captive Insurance Company Enhancement Temporary Amendment Act of 2004 (D.C. Law 15-215, December 7, 2004, law notification 52 DCR 459). Short Title Short title of subtitle L of title II of Law 16-33: Section 2201 of D.C. Law 16-33 provided that subtitle L of title II of the act may be cited as the Insurance Regulatory Trust Fund Enhancement Act of 2005.
 311203. Assessments. (a) The Mayor shall assess annually each insurer and health maintenance organization doing business in the District an amount based on a percentage of its direct gross receipts for the preceding year, provided that each insurer and health maintenance organization shall be subject to a minimum annual assessment of no less than $1000. The Mayor shall establish in each assessable year the assessment rate, not to exceed 3/10 of 1% of the direct gross receipts. In no event shall the amount assessed exceed the amount budgeted by the Council. (b) The Mayor shall compute the assessment for each insurer and health maintenance organization and send the insurer and health maintenance organization this information in a Notice of Assessment. Each insurer and health maintenance organization shall pay to the Mayor the amount stated in the Notice of Assessment within 30 days of the mailing date of the Notice of Assessment. The assessment shall be a tax and licensing and regulatory fee for purposes of 45 CFR  158.221(c) and 158.161(b). (c) The annual billing cycle for the assessment established by this section shall be the fiscal year of the District of Columbia.  (Oct. 21, 1993, D.C. Law 10-40,  4, 40 DCR 6009; Apr. 9, 1997, D.C. Law 11-235,  24(e), 44 DCR 818; Feb. 26, 2015, D.C. Law 20-155,  5082(a), 61 DCR 9990.)  Prior Codifications 1981 Ed.,  35-2703. Section References This section is referenced in  31-1202 and  31-1204. Effect of Amendments The 2015 amendment by D.C. Law 20-155 added the last sentence in (b). Emergency Legislation For temporary (90 days) amendment of this section, see  5082(a) of the Fiscal Year 2015 Budget Support Emergency Act of 2014 (D.C. Act 20-377, July 14, 2014, 61 DCR 7598, 20 STAT 3696). For temporary (90 days) amendment of this section, see  5082(a) of the Fiscal Year 2015 Budget Support Congressional Review Emergency Act of 2014 (D.C. Act 20-449, October 10, 2014, 61 DCR 10915, 20 STAT 4188). For temporary (90 days) amendment of this section, see  5082(a) of the Fiscal Year 2015 Budget Support Second Congressional Review Emergency Act of 2014 (D.C. Act 20-566, January 9, 2015, 62 DCR 884, 21 STAT 541).
 311204. Failure to pay share of assessment. (a) Any insurer or health maintenance organization that fails to pay an assessment on or before the date set forth in  31-1203 shall be subject to a penalty imposed by the Mayor, which shall be 10% of the assessment plus interest at one-half of 1% per month for the period between the due date and the date of full payment. If a payment is made in an amount later found to be in error, the Mayor shall do one of the following: (1) If an additional amount is due, notify the insurer of the additional amount which shall be due within 15 days of the date of mailing of the notice; or (2) If overpayment is made, order a refund. (b) If an insurer or health maintenance organization fails to pay the amount of the assessment in a timely manner, the Mayor shall send the insurer or health maintenance organization a notice of deficiency, and 10 days after serving the deficiency notice may take whatever action, in the Mayors discretion, the Mayor deems appropriate, including suspending or revoking the insurers or health maintenance organizations certificate of authority or license to transact business, or any other appropriate action or sanction authorized under the insurance laws for failure to comply with District laws, including referring the matter to the Corporation Counsel for legal action to collect the assessment. (c) In the event that any insurer or health maintenance organization fails, by reason of insolvency, impairment of capital and surplus, or other reason approved by the Mayor, to pay its assessment in full, the unpaid amounts shall be assessed against the remaining insurers or health maintenance organizations respectively, on a proportionate basis in comparison to their direct gross receipts. Any insurer or health maintenance organization paying this additional assessment shall have a claim against the defaulting insurer or health maintenance organization for the amount paid.  (Oct. 21, 1993, D.C. Law 10-40,  5, 40 DCR 6009; May 16, 1995, D.C. Law 10-255,  28, 41 DCR 5193; Apr. 9, 1997, D.C. Law 11-235,  24(f)-(h), 44 DCR 818; Mar. 24, 1998, D.C. Law 12-81,  36(b), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-2704. Section References This section is referenced in  31-1205.
 311205. Appeal from assessment. Any insurer or health maintenance organization aggrieved by an assessment may appeal under procedures established in  101 of Title 26 of the District of Columbia Municipal Regulations (26 DCMR 101 ), or as otherwise may be provided by the Mayor. If an appellant fails to pay the assessment when due, the appellant shall be liable for any amounts correctly assessed and any penalties and interest due thereon. The appellant shall pay any amounts owed within 10 days of a final decision and the Mayor may take whatever action is appropriate under this chapter, including action under  31-1204, or any other laws regulating the insurance industry to effect collection. In addition, the Insurance Regulatory Trust Fund Bureau may appeal to the Mayor the entire annual assessment or a specific expenditure or category of expenditure, in accordance with the procedures established in 26 DCMR 101 , if it believes the assessment is not in accordance with this chapter or applicable laws.  (Oct. 21, 1993, D.C. Law 10-40,  6, 40 DCR 6009; Apr. 9, 1997, D.C. Law 11-235,  24(i), 44 DCR 818.)  Prior Codifications 1981 Ed.,  35-2705.
 311206. Insurers and health maintenance organizations continuing obligations. Any insurer or health maintenance organization whose license has been revoked, cancelled, terminated, or surrendered shall continue to be bound by the obligations of this chapter including payment of all assessments, regardless of whether the insurer or health maintenance organization continues to do business in the District of Columbia.  (Oct. 21, 1993, D.C. Law 10-40,  7, 40 DCR 6009; Apr. 9, 1997, D.C. Law 11-235,  24(j), 44 DCR 818.)  Prior Codifications 1981 Ed.,  35-2706.
 311207. Records. The Mayor shall, at all reasonable times, make books, records, and files available to insurance company representatives for the purpose of examining any matter coming within the scope of the chapter and the insurance laws of the District of Columbia.  (Oct. 21, 1993, D.C. Law 10-40,  8, 40 DCR 6009.)  Prior Codifications 1981 Ed.,  35-2707.
 311208. Insurance Regulatory Trust Fund Bureau. (a) All insurers and health maintenance organizations subject to assessments in accordance with this chapter shall be members of an Insurance Regulatory Trust Fund Bureau, organized and maintained by such insurers and health maintenance organizations at their own expense, for the purpose of advising the Commissioner and the Executive Director of the District of Columbia Health Benefit Exchange Authority as to the need for the proposed assessments, including the assessment of health carriers in  31-3171.03(f), the fairness of the proposed assessments, and any other matters with respect to the administration of the Insurance Regulatory Trust Fund. The Commissioner and the Executive Director of the District of Columbia Health Benefit Exchange Authority shall submit to the Insurance Regulatory Trust Fund Bureau annually, in advance of the Mayors budget submission to the Council, a detailed budget showing how the proposed assessments are to be expended. (b) The board of directors of the Insurance Regulatory Trust Fund Bureau shall consist of no fewer than 15 members and shall include at least a majority of the health carriers issuing qualified health plans and some representation from health carriers issuing qualified dental plans as defined in  31-3171.01.  (Oct. 21, 1993, D.C. Law 10-40,  9, 40 DCR 6009; Apr. 9, 1997, D.C. Law 11-235,  24(k), 44 DCR 818; May 21, 1997, D.C. Law 11-268,  10(y), 44 DCR 1730; June 11, 2004, D.C. Law 15-166,  4(h)(3), 51 DCR 2817; Feb. 26, 2015, D.C. Law 20-155,  5082(b), 61 DCR 9990.)  Prior Codifications 1981 Ed.,  35-2708. Effect of Amendments D.C. Law 15-166 substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance and Securities. The 2015 amendment by D.C. Law 20-155 designated the existing text as (a); rewrote (a); and added (b). Emergency Legislation For temporary (90 day) amendment of section, see  4(h)(3) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). For temporary (90 days) amendment of this section, see  5082(b) of the Fiscal Year 2015 Budget Support Emergency Act of 2014 (D.C. Act 20-377, July 14, 2014, 61 DCR 7598, 20 STAT 3696). For temporary (90 days) amendment of this section, see  5082(b) of the Fiscal Year 2015 Budget Support Congressional Review Emergency Act of 2014 (D.C. Act 20-449, October 10, 2014, 61 DCR 10915, 20 STAT 4188). For temporary (90 days) amendment of this section, see  5082(b) of the Fiscal Year 2015 Budget Support Second Congressional Review Emergency Act of 2014 (D.C. Act 20-566, January 9, 2015, 62 DCR 884, 21 STAT 541).
 311209. Annual audit of Insurance Regulatory Trust Fund or District of Columbia Health Benefit Exchange Authority Fund. Upon a vote of the Insurance Regulatory Trust Fund Bureau taken in accordance with its bylaws, the Insurance Regulatory Trust Fund Bureau, at its own expense, may annually arrange for an independent audit of the expenditures made in any fiscal year by the Insurance Regulatory Trust Fund or the District of Columbia Health Benefit Exchange Authority Fund established in  31-3171.03(a). The Commissioner, the Department of Insurance, Securities, and Banking, the Executive Director of the District of Columbia Health Benefit Exchange Authority, and all other elements of the District of Columbia government shall cooperate with such an audit and shall make available all documents and records reasonably necessary to the conduct of the audit.  (Oct. 21, 1993, D.C. Law 10-40,  10, 40 DCR 6009; Apr. 9, 1997, D.C. Law 11-235,  24(l), 44 DCR 818; May 21, 1997, D.C. Law 11-268,  10(y), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  36(c), 45 DCR 745; June 11, 2004, D.C. Law 15-166,  4(h)(4), 51 DCR 2817; Feb. 26, 2015, D.C. Law 20-155,  5082(c), 61 DCR 9990.)  Prior Codifications 1981 Ed.,  35-2709. Effect of Amendments D.C. Law 15-166 substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities Regulation. The 2015 amendment by D.C. Law 20-155 rewrote the section. Emergency Legislation For temporary (90 day) amendment of section, see  4(h)(4) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). For temporary (90 days) amendment of this section, see  5082(c) of the Fiscal Year 2015 Budget Support Emergency Act of 2014 (D.C. Act 20-377, July 14, 2014, 61 DCR 7598, 20 STAT 3696). For temporary (90 days) amendment of this section, see  5082(c) of the Fiscal Year 2015 Budget Support Congressional Review Emergency Act of 2014 (D.C. Act 20-449, October 10, 2014, 61 DCR 10915, 20 STAT 4188). For temporary (90 days) amendment of this section, see  5082(c) of the Fiscal Year 2015 Budget Support Second Congressional Review Emergency Act of 2014 (D.C. Act 20-566, January 9, 2015, 62 DCR 884, 21 STAT 541).
 311210. Applicability. (a) All health maintenance organizations, life, health, property, marine, title, casualty, fidelity, surety, insurance companies and fraternal benefit associations now or hereafter incorporated or formed in the District of Columbia or authorized to do business in the District of Columbia, shall be subject to this chapter. This chapter shall also apply to Group Hospitalization and Medical Service, Incorporated, and any other company or organization whether for profit or nonprofit subject to regulation by the Insurance Administration. (b) The provisions of this chapter shall not apply until October 1, 1993.  (Oct. 21, 1993, D.C. Law 10-40,  11, 40 DCR 6009; Apr. 9, 1997, D.C. Law 11-235,  24(m), 44 DCR 818.)  Prior Codifications 1981 Ed.,  35-2710.
 311301. Definitions. For the purposes of this chapter, the term: (1) Ancillary state means any state other than a domiciliary state. (1A) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking. (2) Creditor is a person having any claim, whether matured or unmatured, liquidated or unliquidated, secured or unsecured, absolute, fixed, or contingent. (3) Delinquency proceeding means any proceeding instituted against an insurer for the purpose of liquidating, rehabilitating, reorganizing, or conserving the insurer, and any summary proceeding under  31-1308. (4) District means the District of Columbia. (5) Doing business includes any of the following acts, whether effected by mail or otherwise: (A) The issuance or delivery of contracts of insurance to persons resident in the District; (B) The solicitation of applications for the contracts, or other negotiations preliminary to the execution of the contracts; (C) The collection of premiums, membership fees, assessments, or other consideration for the contracts; (D) The transaction of matters subsequent to execution of the contracts and arising out of them; or (E) Operating under a license or certificate of authority, as an insurer, issued by the District. (6) Domiciliary state means the state in which an insurer is incorporated or organized, or, in the case of an alien insurer, its state of entry. (7) Fair consideration is given for property or obligation: (A) When, in exchange for the property or obligation, as a fair equivalent therefor and in good faith, property is conveyed, services are rendered, an obligation is incurred, or an antecedent debt is satisfied; or (B) When the property or obligation is received in good faith to secure a present advance or antecedent debt in an amount not disproportionately small as compared to the value of the property or obligation obtained. (8) Foreign country means any other jurisdiction not in any state. (9) Formal delinquency proceeding means any liquidation or rehabilitation proceeding. (10) General assets means all property, real, personal, or otherwise, not specifically mortgaged, pledged, deposited, or otherwise encumbered for the security or benefit of specified persons or classes of persons. As to specifically encumbered property, the term general assets includes all the property or its proceeds in excess of the amount necessary to discharge the sum or sums secured thereby. Assets held in trust and on deposit for the security or benefit of all policyholders or all policyholders and creditors, in more than a single state, shall be treated as general assets. (11) Guaranty association means the District of Columbia Property and Casualty Insurance Guaranty Association, and any other similar entity now or hereafter created by the Council of the District of Columbia for the payment of claims of insolvent insurers. The term foreign guaranty association means any similar entities now in existence in or hereafter created by the legislature of any other state. (12) Insolvency or insolvent means: (A) For an insurer issuing only assessable fire insurance policies: (i) The inability to pay any obligation within 30 days after it becomes payable; or (ii) If an assessment be made within 30 days after the date, the inability to pay the obligation 30 days following the date specified in the first assessment notice issued after the date of loss; (B) For any other insurer, that it is unable to pay its obligations when they are due, or when its admitted assets do not exceed its liabilities plus the greater of: (i) Any capital and surplus required by law for its organization; or (ii) The total par or stated value of its authorized and issue capital stock; (C) As to any insurer licensed to do business in the District as of October 15, 1993, which does not meet the standard established under subparagraph (B) of this paragraph for a period not to exceed 3 years from October 15, 1993, that it is unable to pay its obligations when they are due or that its admitted assets do not exceed its liabilities plus any required capital contribution ordered by the Commissioner under provisions of the insurance law; and (D) For purposes of this paragraph, the term liabilities shall include, but not be limited to, capital, surplus, or other reserves required by statute or by insurance administration general regulations, or specific requirements imposed by the Commissioner upon a subject company at the time of admission or subsequent thereto. (13) Insurer means any person who has done, purports to do, is doing, or is licensed to do an insurance business, and is or has been subject to the authority of, or to liquidation, rehabilitation, reorganization, supervision, or conservation by, any insurance superintendent or commissioner. (14) Person means corporations, partnerships, associations, trusts, and individual natural persons. (15) Preferred claim means any claim with respect to which the terms of this chapter accord priority of payment from the general assets of the insurer. (16) Receiver means receiver, liquidator, rehabilitator, or conservator as the context requires. (17) Reciprocal state means any state other than the District in which in substance and effect  31-1316(a), 31-1350, 31-1351, and 31-1353 through 31-1355 are in force, and in which provisions are in force requiring that the Commissioner or equivalent official be the receiver of a delinquent insurer, and in which fraudulent conveyances and preferential transfers by a delinquent insurer may be avoided. (18) Secured claim means any claim secured by mortgage, trust deed, pledge, deposit as security, escrow, or otherwise, but not including special deposit claims or claims against general assets. The term secured claim also includes claims which have become liens upon specific assets by reason of judicial process. (19) Special deposit claim means any claim secured by a deposit made pursuant to statute for the security or benefit of a limited class or classes of persons, but not including any claim secured by general assets. (20) State means any state, district, or territory of the United States and the Panama Canal Zone. (21) Repealed. (22) Transfer shall include the sale and every other and different mode, direct or indirect, of disposing of or parting with property or with an interest therein, or with the possession thereof or of fixing a lien upon property or upon an interest therein, absolutely or conditionally, voluntarily, by or without judicial proceedings. The retention of a security title to property delivered to a debtor shall be deemed a transfer suffered by the debtor.  (Oct. 15, 1993, D.C. Law 10-35,  2, 40 DCR 5773; May 16, 1995, D.C. Law 10-255,  27(a), 41 DCR 5193; May 21, 1997, D.C. Law 11-268,  10(z)(1), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  37(a), 45 DCR 745; June 11, 2004, D.C. Law 15-166,  4(i)(1), 51.)  Prior Codifications 1981 Ed.,  35-2801. Section References This section is referenced in  31-305,  31-5031.01, and  31-5041.09. Effect of Amendments D.C. Law 15-166, in par. (1A), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance and Securities. Emergency Legislation For temporary (90 day) amendment of section, see  4(i)(1) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
 311302. Applicability. The proceedings authorized by this chapter may be applied to: (1) All insurers who are doing, or have done, an insurance business in the District, and against whom claims arising from that business may exist now or in the future; (2) All insurers who purport to do an insurance business in the District; (3) All insurers who have insureds resident in the District; (4) All other persons organized or in the process of organizing with the intent to do an insurance business in the District; (5) All title insurance companies subject to the laws of the District; (6) All prepaid health care delivery plans; (7) All nonprofit service plans and all fraternal benefit societies and beneficial societies; and (8) All insurers making contracts of fidelity or surety contracts or other negotiations preliminary to the executions of the contracts.  (Oct. 15, 1993, D.C. Law 10-35,  3, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2802.
 311303. Jurisdiction and venue. (a) No delinquency proceeding shall be commenced under this chapter by anyone other than the Commissioner of the Department of Insurance, Securities, and Banking and no court shall have jurisdiction to entertain, hear, or determine any proceeding commenced by any other person. (b) No court of the District of Columbia shall have jurisdiction to entertain, hear, or determine any complaint praying for the dissolution, liquidation, rehabilitation, sequestration, conservation, or receivership of any insurer; or praying for an injunction or restraining order or other relief preliminary to, incidental to, or relating to these proceedings other than in accordance with this chapter. (c) In addition to other grounds for jurisdiction provided by law of the District, the Superior Court of the District of Columbia has jurisdiction over a person served pursuant to the Superior Court Rules of Civil Procedure or other applicable provisions of law in an action brought by the receiver of a domestic insurer or an alien insurer domiciled in the District: (1) If the person served is an agent, broker, or other person who has at any time written policies of insurance for or has acted in any manner whatsoever on behalf of an insurer against which a delinquency proceeding has been instituted, in any action resulting from or incident to such a relationship with the insurer; (2) If the person served is a reinsurer who has at any time entered into a contract of reinsurance with an insurer against which a delinquency proceeding has been instituted, or is an agent or broker of or for the reinsurer, in any action on or incident to the reinsurance contract; (3) If the person served is or has been an officer, director, manager, trustee, organizer, promoter, or other person in a position of comparable authority or influence over an insurer against which a delinquency proceeding has been instituted, in any action resulting from or incident to such a relationship with the insurer; (4) If the person served is or was at the time of the institution of the delinquency proceeding against the insurer holding assets in which the receiver claims an interest on behalf of the insurer, in any action concerning the assets; or (5) If the person served is obligated to the insurer, in any way whatsoever, in any action on or incident to the obligation. (d) If the court, on motion of any party, finds that any action should as a matter of substantial justice be tried in a forum outside the District, the court may enter an appropriate order to stay further proceedings on the action in the District. (e) All action authorized in this section shall be brought in the Superior Court of the District of Columbia.  (Oct. 15, 1993, D.C. Law 10-35,  4, 40 DCR 5773; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730; June 11, 2004, D.C. Law 15-166,  4(i)(2), 51 DCR 2817.)  Prior Codifications 1981 Ed.,  35-2803. Effect of Amendments D.C. Law 15-166, in subsec. (a), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance and Securities. Emergency Legislation For temporary (90 day) amendment of section, see  4(i)(2) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
 311304. Injunctions and orders. (a) Any receiver appointed in a proceeding under this chapter may at any time apply for, and any court of general jurisdiction may grant, restraining orders, preliminary and permanent injunctions, and other orders deemed necessary and proper to prevent: (1) The transaction of further business; (2) The transfer of property; (3) Interference with the receiver or with a proceeding under this chapter; (4) Waste of the insurers assets; (5) Dissipation and transfer of bank accounts; (6) The institution or further prosecution of any actions or proceedings; (7) The obtaining of preferences, judgments, attachments, garnishments, or liens against the insurer, its assets or its policyholders; (8) The levying of execution against the insurer, its assets, or its policyholders; (9) The making of any sale or deed for nonpayment of taxes or assessments that would lessen the value of the assets of the insurer; (10) The withholding from the receiver of books, accounts, documents, or other records relating to the business of the insurer; or (11) Any other threatened or contemplated action that might lessen the value of the insurers assets or prejudice the rights of policyholders, creditors, or shareholders, or the administration of any proceeding under this chapter. (b) The receiver may apply to any court outside of the jurisdiction for the relief described in subsection (a) of this section.  (Oct. 15, 1993, D.C. Law 10-35,  5, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2804.
 311305. Cooperation of officers, owners, and employees. (a) Any officer, manager, director, trustee, owner, employee, or agent of any insurer, or any other persons with authority over or in charge of any segment of the insurers affairs, shall cooperate with the Commissioner in any proceeding under this chapter or any investigation preliminary to the proceeding. For the purposes of this section, the term person shall include any person who exercises control directly or indirectly over activities of the insurer through any holding company or other affiliate of the insurer. The term to cooperate shall include, but shall not be limited to, the following: (1) To reply promptly in writing to any inquiry from the Commissioner requesting such a reply; and (2) To make available to the Commissioner any books, accounts, documents, or other records or information or property of or pertaining to the insurer and in his possession, custody, or control. (b) No person shall obstruct or interfere with the Commissioner in the conduct of any delinquency proceeding or any investigation preliminary or incidental thereto. (c) This section shall not be construed to abridge otherwise existing legal rights, including the right to resist a petition for liquidation, other delinquency proceedings, or other orders. (d) Any person included within subsection (a) of this section who fails to cooperate with the Commissioner, or any person who obstructs or interferes with the Commissioner in the conduct of any delinquency proceeding or any investigation preliminary or incidental thereto, or who violates any order of the Commissioner issued validly under this chapter may: (1) Be sentenced to pay a fine not exceeding $10,000 or imprisonment for a term of not more than 1 year, or both; or (2) After a hearing, be subject to the imposition by the Commissioner of a civil penalty not to exceed $10,000 and be subject further to the revocation or suspension of any insurance license issued by the Commissioner.  (Oct. 15, 1993, D.C. Law 10-35,  6, 40 DCR 5773; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2805. Section References This section is referenced in  31-1321.
 311306. Continuation of delinquency proceedings. Every proceeding commenced under  31-2502.05 through 31-2502.07 [repealed], and  31-4319 through 31-4321 [repealed], shall be deemed to have commenced under this chapter for the purpose of continuing the proceeding, except that in the discretion of the Commissioner the proceeding may be continued, in whole or in part, as it would have been continued had this chapter not been enacted.  (Oct. 15, 1993, D.C. Law 10-35,  7, 40 DCR 5773; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2806. References in Text  Sections 31-4319 through 31-4321, referred to in this section, were repealed by D.C. Law 10-35,  59(a), 40 DCR 5773, effective October 15, 1993.  Sections 31-2502.05 through 31-2502.07, referred to in this section, were repealed by D.C. Law 10-35,  59(b), 40 DCR 5773, effective October 15, 1993.
 311307. Condition on release from delinquency proceedings; conditions on operations during proceedings. No insurer that is subject to any delinquency proceedings, whether formal or informal (administrative or judicial), shall: (1) Be released from the proceeding, unless the proceeding is converted into a judicial rehabilitation or liquidation proceeding; (2) Be permitted to solicit or accept new business, or request or accept the restoration of any suspended or revoked license or certificate of authority; (3) Be returned to the control of its shareholders or private management; or (4) Have any of its assets returned to the control of its shareholders or private management until all payments of or on account of the insurers contractual obligations by all guaranty associations, along with all expenses and interest on all payments and expenses, shall have been repaid to the guaranty associations or a plan of repayment by the insurer shall have been approved by the guaranty association.  (Oct. 15, 1993, D.C. Law 10-35,  8, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2807.
 311308. Temporary seizure order. (a) The Commissioner may file in the Superior Court of the District of Columbia a petition alleging, with respect to a domestic insurer, that there exists grounds that would justify a court order for a formal delinquency proceeding against an insurer under this chapter, and that the interests of policyholders, creditors, or the public will be endangered by delay in the Commissioners determination of the financial condition of the insurer. (b) Upon a filing under subsection (a) of this section, the court may issue, ex parte and without a hearing, the requested order which shall direct the Commissioner to take possession and control of all or part of the property, books, accounts, documents, and other records of an insurer, and of the premises occupied by it for transaction of its business; and until further order of the court enjoins the insurer and its officers, managers, agents, and employees from disposition of its property and from the transaction of its business except with the written consent of the Commissioner. (c) The court shall specify in the order its duration, which shall be the time the court deems necessary for the Commissioner to ascertain the condition of the insurer. On motion of either party or on its own motion, the court may from time to time hold hearings it deems desirable after notice it deems appropriate, and may extend, shorten, or modify the terms of the seizure order. The court shall vacate the seizure order if the Commissioner fails to commence a formal proceeding under this chapter after having had a reasonable opportunity to do so. An order of the court pursuant to a formal proceeding under this chapter shall ipso facto vacate the seizure order. (d) Entry of a seizure order under this section shall not constitute an anticipatory breach of any contract of the insurer. (e) An insurer subject to an ex parte order under this section may petition the court at any time after the issuance of the order for a hearing and review of the order. The court shall hold such a hearing and review not more than 15 days after the request. A hearing under this subsection may be held privately in chambers and it shall be if the insurer proceeded against so requests. (f) If, at any time after the issuance of such an order, it appears to the court that any person whose interest is or will be substantially affected by the order did not appear at the hearing and has not been served, the court may order that notice be given. An order that notice be given shall not stay the effect of any order previously issued by the court.  (Oct. 15, 1993, D.C. Law 10-35,  9, 40 DCR 5773; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2808. Section References This section is referenced in  31-1301,  31-1309, and  31-1352. Cross References Ancillary proceedings, domiciliary state of any foreign or alien insurer having property located in the District, see  31-1352.
 311309.01. Duty to provide information to other insurance regulators and guaranty associations. The domiciliary receiver shall provide information to other state insurance regulators and guaranty associations, including reports and analyses of financial condition and the status of development of a plan of rehabilitation. The domiciliary receiver shall also permit a state insurance regulator or guaranty association to obtain a listing of policyholders and certificate holders residing in the requestors state, including current addresses and summary policy information; provided, that (1) the regulator or guaranty association agrees, and has the legal authority, to maintain the confidentiality of the records, and (2) records will be used only for regulatory or guaranty association purposes. Access to financial records shall be at least equivalent to that to which a state insurance regulator was entitled before the commencement of a formal delinquency proceeding. Access to records may be limited to normal business hours. If the domiciliary receiver believes that certain information is sensitive and disclosure might cause a diminution in recovery, the receiver may apply for a protective order imposing additional restrictions on access. No waiver of an applicable privilege shall occur as a result of disclosure to the Commissioner or receiver or of sharing documents, materials, or other information under this section. Nothing in this section shall require an insurer to disclose documents, materials, or other information that is not otherwise required by law to be disclosed.  (Oct. 15, 1993, D.C. Law 10-35,  10a; as added Oct. 21, 2000, D.C. Law 13-191,  2(b), 47 DCR 7311.) 
 311309. Confidentiality of records. In all proceedings and judicial reviews under  31-1308, all records of the insurer, other documents, all Department of Insurance, Securities, and Banking files, court records, and papers, so far as they pertain to or are a part of the record of the proceedings, shall be and remain confidential except as is necessary to obtain compliance, unless and until the Superior Court of the District of Columbia, after hearing arguments from the parties in chambers, shall order otherwise, or unless the insurer requests that the matter be made public. Until such a court order, all papers filed with the clerk of the Superior Court of the District of Columbia shall be held in a confidential file. The Commissioner may share documents, materials, or other information in the possession or control of the Department of Insurance, Securities, and Banking pertaining to an insurer that is the subject of a proceeding under this chapter with other state, federal, and international regulatory agencies; with the National Association of Insurance Commissioners, including its affiliates and subsidiaries; and with state, federal, and international law enforcement authorities; provided, that the recipient agrees, and has the legal authority, to maintain the confidentiality of the documents, material, or other information. No waiver of an applicable privilege or claim of confidentiality shall occur as a result of disclosure to the Commissioner or of sharing documents, materials, or other information under this section. Nothing in this section shall require an insurer to disclose documents, materials, or other information that is not otherwise required by law to be disclosed.  (Oct. 15, 1993, D.C. Law 10-35,  10, 40 DCR 5773; May 21, 1997, D.C. Law 11-268,  10(z)(1), 44 DCR 1730; Oct. 21, 2000, D.C. Law 13-191,  2(a), 47 DCR 7311; June 11, 2004, D.C. Law 15-166,  4(i)(3), 51 DCR 2817.)  Prior Codifications 1981 Ed.,  35-2809. Section References This section is referenced in  31-1352. Effect of Amendments D.C. Law 13-191 added the concluding three sentences to the section. D.C. Law 15-166 substituted Department of Insurance, Securities, and Banking for Department of Insurance Securities and substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities Regulation. Cross References Ancillary proceedings, domiciliary state of any foreign or alien insurer having property located in the District, see  31-1352. Emergency Legislation For temporary (90 day) amendment of section, see  4(i)(3) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
 311310. Grounds for rehabilitation. The Commissioner may apply by petition to the Superior Court of the District of Columbia for an order authorizing him or her to rehabilitate a domestic insurer or an alien insurer domiciled in the District based on any one or more of the following grounds: (1) The insurer is in such a condition that the further transaction of business would be hazardous financially to its policyholders, creditors, or the public. (2) There is reasonable cause to believe that there has been embezzlement from the insurer, wrongful sequestration or diversion of the insurers assets, forgery or fraud affecting the insurer, or other illegal conduct in, by, or with respect to the insurer that if established would endanger assets in an amount threatening the solvency of the insurer. (3) The insurer has failed to remove any person who in fact has executive authority in the insurer, whether an officer, manager, general agent, employee, or other person, if the person has been found after notice and hearing by the Commissioner to be dishonest or untrustworthy in a way affecting the insurers business. (4) Control of the insurer, whether by stock ownership or otherwise, and whether direct or indirect, is in a person or persons found after notice and hearing to be untrustworthy in any way that affects the insurers business. (5) Any person who in fact has executive authority in the insurer, whether an officer, manager, general agent, director or trustee, employee, or other person, has refused to be examined under oath by the Commissioner concerning its affairs, whether in the District or elsewhere, and after reasonable notice of the fact, the insurer has failed promptly and effectively to terminate its relationship with that person, or to prevent that person from influencing the insurers management. (6) After demand by the Commissioner under this chapter, or any law authorizing the Commissioner to examine the operations of an insurer, the insurer has failed to promptly make available for examination any of its own property, books, accounts, documents, or other records, or those of any subsidiary or related company within the control of the insurer, or those of any person having executive authority in the insurer so far as they pertain to the insurer. (7) Without first obtaining the written consent of the Commissioner, the insurer has transferred, or attempted to transfer, in a manner contrary to Chapter 7 of this title, substantially its entire property or business, or has entered into any transaction the effect of which is to merge, consolidate, or reinsure substantially its entire property or business in or with the property or business of any other person. (8) The insurer or its property has been or is the subject of an application for the appointment of a receiver, trustee, custodian, conservator, or sequestrator or similar fiduciary of the insurer or its property other than as authorized under the insurance laws of the District, and the appointment has been made or is imminent, and the appointment would deprive the courts of the District of Columbia of jurisdiction or might prejudice the orderly delinquency proceedings under this chapter. (9) The insurer, within the previous 4 years, willfully violated its charter or articles of incorporation, its bylaws, any insurance law of the District, or any valid order of the Commissioner. (10) The insurer has failed to pay, within 60 days after due date, any obligation to any state or any subdivision or any judgment entered in any state, if the court in which the judgment was entered had jurisdiction over the subject matter, except that the nonpayment shall not be a ground until 60 days after any good faith effort by the insurer to contest the obligation has been terminated, whether it is before the Commissioner or in court, or the insurer has systematically attempted to compromise or renegotiate previously agreed settlements with its creditors on the ground that it is financially unable to pay its obligations in full. (11) The insurer has failed to file its annual report or other financial report required by statute within the time allowed by law, and, after written demand by the Commissioner, has failed to give an adequate explanation immediately. (12) The board of directors or the holders of a majority of the shares entitled to vote, or a majority of those individuals entitled to the control of those entities specified in the insurance laws of the District, request or consent to rehabilitation under this chapter.  (Oct. 15, 1993, D.C. Law 10-35,  11, 40 DCR 5773; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2810. Section References This section is referenced in  31-1314,  31-1315,  31-1348,  31-1349, and  31-3420. Cross References Rehabilitation, liquidation, or conservation of health maintenance organizations, see  31-3420.
 311311. Rehabilitation orders. (a) An order to rehabilitate the business of a domestic insurer, or an alien insurer domiciled in the District, shall appoint the Commissioner and his or her successors in office the rehabilitator, and shall direct the rehabilitator forthwith to take possession of the assets of the insurer, and to administer them under the general supervision of the court. The filing or recording of the order with the clerk of the Superior Court of the District of Columbia shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with the recorder of deeds would have imparted. The order to rehabilitate the insurer shall by operation of law vest title to all assets of the insurer in the rehabilitator. (b) Any order issued under this section shall require accountings to the court by the rehabilitator. Accountings shall be at intervals the court specifies in its order, but no less frequently than semiannually. Each accounting shall include a report concerning the rehabilitators opinion as to the likelihood that a plan under  31-1312(e) will be prepared by the rehabilitator and the timetable for doing so. (c) Entry of an order of rehabilitation shall not constitute an anticipatory breach of any contracts of the insurer nor shall it be grounds for retroactive revocation or retroactive cancellation of any contracts of the insurer, unless the revocation or cancellation is done by the rehabilitator pursuant to  31-1312.  (Oct. 15, 1993, D.C. Law 10-35,  12, 40 DCR 5773; May 16, 1995, D.C. Law 10-255,  27(b), 41 DCR 5193; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2811. Section References This section is referenced in  31-1335.
 311312. Powers and duties of the rehabilitator. (a) The Commissioner as rehabilitator may appoint 1 or more special deputies, who shall have all the powers and responsibilities of the rehabilitator granted under this section, and the Commissioner may employ any counsel, clerks, and assistants deemed necessary. The compensation of the special deputy, counsel, clerks, and assistants and all expenses of taking possession of the insurer and of conducting the proceedings shall be fixed by the Commissioner, with the approval of the court, and shall be paid out of the funds or assets of the insurer. The persons appointed under this section shall serve at the pleasure of the Commissioner. The Commissioner, as rehabilitator, may, with the approval of the court, appoint an advisory committee of policyholders, claimants, or other creditors, including guaranty associations, should that committee be deemed necessary. The advisory committee shall serve at the pleasure of the Commissioner and shall serve without compensation other than reimbursement for reasonable travel and per diem living expenses. No other committee of any nature shall be appointed by the Commissioner or the court in rehabilitation proceedings conducted under this chapter. (b) In the event that the property of the insurer does not contain sufficient cash or liquid assets to defray the costs incurred, the Commissioner may advance the costs so incurred out of any appropriation for the maintenance of the Department of Insurance, Securities, and Banking. Any amounts so advanced for expenses of administration shall be repaid to the Commissioner for the use of the Department of Insurance, Securities, and Banking out of the first available money of the insurer. (c) The rehabilitator may take such action as deemed necessary or appropriate to reform and revitalize the insurer. The rehabilitator shall have all the powers of the directors, officers, and managers, whose authority shall be suspended, except as they are redelegated by the rehabilitator. The rehabilitator shall have full power to direct and manage, to hire and discharge employees subject to any contract rights they may have, and to deal with the property and business of the insurer. (d) If it appears to the rehabilitator that there has been criminal or tortious conduct, or breach of any contractual or fiduciary obligation detrimental to the insurer by any officer, manager, agent, broker, employee, or other person, he or she may pursue all appropriate legal remedies on behalf of the insurer. (e) If the rehabilitator determines that reorganization, consolidation, conversion, reinsurance, merger, or other transformation of the insurer is appropriate, the rehabilitator shall prepare a plan to effect the changes. Upon application of the rehabilitator for approval of the plan, and after any notice and hearings the court may prescribe, the court may either approve or disapprove the plan proposed, or may modify it and approve it as modified. Any plan approved under this section shall be, in the judgment of the court, fair and equitable to all parties concerned. If the plan is approved, the rehabilitator shall carry out the plan. In the case of a life insurer, the plan proposed may include the imposition of liens upon the policies of the company, if all rights of shareholders are first relinquished. A plan for a life insurer may also propose imposition of a moratorium upon loan and cash surrender rights under policies, for such a period and to such an extent as may be necessary. (f) The rehabilitator shall have the power under  31-1324 and 31-1325 to avoid fraudulent transfers.  (Oct. 15, 1993, D.C. Law 10-35,  13, 40 DCR 5773; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730; June 11, 2004, D.C. Law 15-166,  4(i)(4), 51 DCR 2817.)  Prior Codifications 1981 Ed.,  35-2812. Section References This section is referenced in  31-1311 and  31-1314. Effect of Amendments D.C. Law 15-166, in subsec. (b), substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities both times it appears. Emergency Legislation For temporary (90 day) amendment of section, see  4(i)(4) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
 311313. Actions by and against the rehabilitator. (a) Any court in the District before which any action or proceeding in which the insurer is a party, or is obligated to defend a party, is pending when a rehabilitation order against the insurer is entered shall stay the action or proceeding for 90 days and any additional time necessary for the rehabilitator to obtain proper representation and prepare for further proceedings. The rehabilitator shall take any action respecting the pending litigation deemed necessary in the interests of, justice and for the protection of creditors, policyholders, and the public. The rehabilitator shall immediately consider all litigation pending outside the District and shall petition the court having jurisdiction over that litigation for a stay whenever necessary to protect the estate of the insurer. (b) No statute of limitations or defense of laches shall run with respect to any action by or against an insurer between the filing of a petition for appointment of a rehabilitator for that insurer and the order granting or denying that petition. Any action against the insurer that might have been commenced when the petition was filed may be commenced for at least 60 days after the order of rehabilitation is entered or the petition is denied. The rehabilitator may, upon an order for rehabilitation, within 1 year or any other longer time as applicable law may permit, institute an action or proceeding on behalf of the insurer upon any cause of action against which the period of limitation fixed by applicable law has not expired at the time of the filing of the petition upon which the order is entered. (c) Any guaranty association or foreign guaranty association covering life or health insurance or annuities shall have standing to appear in any court proceeding concerning the rehabilitation of a life or health insurer if the association is or may become liable to act as a result of the rehabilitation.  (Oct. 15, 1993, D.C. Law 10-35,  14, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2813.
 311314. Termination of rehabilitation. (a) Whenever the Commissioner believes further attempts to rehabilitate an insurer would substantially increase the risk of loss to creditors, policyholders, or the public, or would be futile, the Commissioner may petition the Superior Court of the District of Columbia for an order of liquidation. A petition under this subsection shall have the same effect as a petition under  31-1315. The Superior Court of the District of Columbia shall permit the directors of the insurer to take any action reasonably necessary to defend against the petition and may order payment from the estate of the insurer of the costs and other expenses of defense as justice may require. (b) The protection of the interests of insureds, claimants, and the public requires the timely performance of all insurance policy obligations. If the payment of policy obligations is suspended in substantial part for a period of 6 months at any time after the appointment of the rehabilitator and the rehabilitator has not filed an application for approval of a plan under  31-1312(e), the rehabilitator shall petition the court for an order of liquidation on grounds of insolvency. (c) The rehabilitator may at any time petition the Superior Court of the District of Columbia for an order terminating rehabilitation of an insurer. The court shall also permit the directors of the insurer to petition the court for an order terminating rehabilitation of the insurer and may order payment from the estate of the insurer of the costs and other expenses of the petition as justice may require. If the Superior Court of the District of Columbia finds that rehabilitation has been accomplished and that grounds for rehabilitation under  31-1310 no longer exist, it shall order that the insurer be restored to possession of its property and the control of the business. The Superior Court of the District of Columbia may also make that finding and issue that order at any time upon its own motion.  (Oct. 15, 1993, D.C. Law 10-35,  15, 40 DCR 5773; May 16, 1995, D.C. Law 10-255,  27(c), 41 DCR 5193; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2814.
 311315. Grounds for liquidation. The Commissioner may petition the Superior Court of the District of Columbia for an order directing him or her to liquidate a domestic insurer or an alien insurer domiciled in the District on the basis: (1) Of any ground for an order of rehabilitation as specified in  31-1310, whether or not there has been a prior order directing the rehabilitation of the insurer; (2) That the insurer is insolvent; or (3) That the insurer is in such a condition that the further transaction of business would be hazardous, financially or otherwise, to its policyholders, its creditors, or the public.  (Oct. 15, 1993, D.C. Law 10-35,  16, 40 DCR 5773; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2815. Section References This section is referenced in  31-1314,  31-1349, and  31-3420. Cross References Rehabilitation, liquidation, or conservation of health maintenance organizations, see  31-3420.
 311316. Liquidation orders. (a) An order to liquidate the business of a domestic insurer shall appoint the Commissioner and his or her successors in office liquidator and shall direct the liquidator to take possession of the assets of the insurer and to administer them under the general supervision of the court. The liquidator shall be vested by operation of law with the title to all of the property, contracts, and rights of action, and all of the books and records of the insurer ordered liquidated, wherever located, as of the entry of the final order of liquidation. The filing or recording of the order with the Clerk of the Superior Court of the District of Columbia, or, in the case of real estate, with the recorder of deeds of the county where the property is located, shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with that recorder of deeds would have imparted. (b) Upon issuance of the order, the rights and liabilities of any insurer and of its creditors, policyholders, shareholders, members, and all other persons interested in its estate shall become fixed as of the date of entry of the order of liquidation, except as provided in  31-1317 and 31-1335. (c) An order to liquidate the business of an alien insurer domiciled in the District shall be in the same terms and have the same legal effect as an order to liquidate a domestic insurer, except that the assets and the business in the United States shall be the only assets and business included therein. (d) At the time of petitioning for an order of liquidation, or at any time thereafter, the Commissioner, after making appropriate findings of an insurers insolvency, may petition the court for a judicial declaration of insolvency. After providing notice and hearing it deems proper, the court may make the declaration. (e) Any order issued under this section shall require financial reports to the court by the liquidator. Financial reports shall include, at a minimum, the assets and liabilities of the insurer and all funds received or disbursed by the liquidator during the current period. Financial reports shall be filed within 1 year of the liquidation order and at least annually thereafter. (f)(1) Within 5 days of October 15, 1993, or, if later, within 5 days after the initiation of an appeal of an order of liquidation, which order has not been stayed, the Commissioner shall present for the courts approval a plan for the continued performance of the defendant companys policy claims obligations, including the duty to defend insureds under liability insurance policies, during the pendency of an appeal. Such a plan shall provide for the continued performance and payment of policy claims obligations in the normal course of events, notwithstanding the grounds alleged in support of the order of liquidation including the ground of insolvency. In the event the defendant companys financial condition will not, in the judgment of the Commissioner, support the full performance of all policy claims obligations during the appeal pendency period, the plan may prefer the claims of certain policyholders and claimants over creditors and interested parties as well as other policyholders and claimants, as the Commissioner finds to be fair and equitable considering the relative circumstances of the policyholders and claimants. The court shall examine the plan submitted by the Commissioner, and, if it finds the plan to be in the best interests of the parties, the court shall approve the plan. No action shall lie against the Commissioner or any of his deputies, agents, clerks, assistants, or attorneys by any party based on preference in an appeal pendency plan approved by the court. (2) The appeal pendency plan shall not supersede or affect the obligations of any insurance guaranty association. (3) Any plans shall provide for equitable adjustments to be made by the liquidator to any distributions of assets to guaranty associations, in the event that the liquidator pays claims from assets of the estate, which would otherwise be the obligations of any particular guaranty association but for the appeal of the order of liquidation, so that all guaranty associations equally benefit on a pro rata basis from the assets of the estate. Further, in the event an order of liquidation is set aside upon any appeal, the company shall not be released from delinquency proceedings unless and until all funds advanced by any guaranty association, including reasonable administrative expenses in connection therewith relating to obligations of the company, shall be repaid in full, together with interest at the judgment rate of interest, or unless an arrangement for repayment has been made with the consent of all applicable guaranty associations.  (Oct. 15, 1993, D.C. Law 10-35,  17, 40 DCR 5773; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2816. Section References This section is referenced in  31-1301,  31-1317,  31-1329,  31-1335, and  31-5501. Cross References Property and liability insurance guaranty association, insolvent insurer defined, see  31-5501.
 311317. Continuance of coverage. (a) All policies, including bonds and other noncancellable business, other than life or health insurance or annuities, in effect at the time of issuance of an order of liquidation shall continue in force only for the lesser of: (1) A period of 30 days from the date of entry of the liquidation orders; (2) The expiration of the policy coverage; (3) The date when the insured has replaced the insurance coverage with equivalent insurance in another insurer or otherwise terminated the policy; (4) The liquidator has effected a transfer of the policy obligation pursuant to  31-1319(a)(9); or (5) The date proposed by the liquidator and approved by the court to cancel coverage. (b) An order of liquidation under  31-1316 shall terminate coverages at the time specified in subsection (a) of this section for purposes of any other statute. (c) Policies of life or health insurance or annuities shall continue in force for such a period and under the terms provided for by any applicable guaranty association or foreign guaranty association. (d) Policies of life or health insurance or annuities or any period or coverage of any policies not covered by a guaranty association or foreign guaranty association shall terminate under subsections (a) and (b) of this section.  (Oct. 15, 1993, D.C. Law 10-35,  18, 40 DCR 5773; May 16, 1995, D.C. Law 10-255,  27(d), 41 DCR 5193; Apr. 18, 1996, D.C. Law 11-110,  40, 43 DCR 530.)  Prior Codifications 1981 Ed.,  35-2817. Section References This section is referenced in  31-1316.
 311318. Dissolution of insurer. The Commissioner may petition for an order dissolving the corporate existence of a domestic insurer or the United States branch of an alien insurer domiciled in the District at the time he or she applies for a liquidation order. The court shall order dissolution of the corporation upon petition by the Commissioner upon or after the granting of a liquidation order. If the dissolution has not previously been ordered, it shall be effected by operation of law upon the discharge of the liquidator if the insurer is insolvent, but may be ordered by the court upon the discharge of the liquidator if the insurer is under a liquidation order for some other reason.  (Oct. 15, 1993, D.C. Law 10-35,  19, 40 DCR 5773; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2818. Section References This section is referenced in  31-1319.
 311319. Powers of liquidator. (a) The liquidator shall have the power: (1) To appoint a special deputy or deputies to act for him or her under this chapter, and to determine his or her reasonable compensation. The special deputy shall have all powers of the liquidator granted by this section. The special deputy shall serve at the pleasure of the liquidator; (2) To hire employees, agents, legal counsel, actuaries, accountants, appraisers, consultants, and other personnel he or she deems necessary to assist in the liquidation; (3) To appoint, with the approval of the court, an advisory committee of policyholders, claimants, or other creditors, including guaranty associations, should such a committee be deemed necessary. The committee shall serve at the pleasure of the Commissioner and shall serve without compensation other than reimbursement for reasonable travel and per diem living expenses. No other committee of any nature shall be appointed by the Commissioner or the court in liquidation proceedings conducted under this chapter; (4) To fix the reasonable compensation of employees and agents, legal counsel, actuaries, accountants, appraisers, and consultants with the approval of the court; (5) To pay reasonable compensation to persons appointed, and to defray from the funds or assets of the insurer all expenses of taking possession of, conserving, conducting, liquidating, disposing of, or otherwise dealing with the business and property of the insurer. In the event that the property of the insurer does not contain sufficient cash or liquid assets to defray the costs incurred, the Commissioner may advance the costs incurred out of any appropriation for the maintenance of the Department of Insurance, Securities, and Banking. Any amounts advanced for expenses of administration shall be repaid to the Commissioner for the use of the Department of Insurance, Securities, and Banking out of the first available monies of the insurer; (6) To hold hearings, subpoena witnesses to compel their attendance, administer oaths, examine any person under oath, and compel any person to subscribe to his or her testimony after it has been correctly reduced to writing; and in connection therewith to require the production of any books, papers, records, or other documents which the liquidator deems relevant to the inquiry; (7) To audit the books and records of all agents of the insurer insofar as those records relate to the business activities of the insurer; (8) To collect all debts and moneys due and claims belonging to the insurer, wherever located, and for this purpose: (A) To institute timely action in other jurisdictions, in order to forestall garnishment and attachment proceedings against the debts; (B) To do any other acts necessary or expedient to collect, conserve, or protect assets or property of the insurer, including the power to sell, compound, compromise, or assign debts for purposes of collection upon terms and conditions as he or she deems best; and (C) To pursue any creditors remedies available to enforce his or her claims; (9) To conduct public and private sales of the property of the insurer; (10) To use assets of the estate of an insurer under a liquidation order to transfer policy obligations to a solvent assuming insurer, if the transfer can be arranged without prejudice to applicable priorities under  31-1340; (11) To acquire, hypothecate, encumber, lease, improve, sell, transfer, abandon, or otherwise dispose of or deal with, any property of the insurer at its market value or upon terms and conditions that are fair and reasonable. The liquidator shall also have power to execute, acknowledge, and deliver all deeds, assignments, releases, and other instruments necessary or proper to effectuate any sale of property or other transaction in connection with the liquidation; (12) To borrow money on the security of the insurers assets or without security and to execute and deliver all documents necessary to that transaction for the purpose of facilitating the liquidation. Any funds borrowed may be repaid as an administrative expense and have priority over any other claims in Class 1 under the priority of distribution; (13) To enter into any contracts necessary to carry out the order to liquidate, and to affirm or disavow any contracts to which the insurer is a party; (14) To continue to prosecute and to institute in the name of the insurer, or in his or her own name, any and all suits and other legal proceedings, in the District or elsewhere, and to abandon the prosecution of claims he or she deems unprofitable to pursue further. If the insurer is dissolved under  31-1318, the liquidator shall have the power to apply to any court in the District or elsewhere for leave to substitute himself or herself for the insurer as plaintiff; (15) To prosecute any action which may exist in behalf of the creditors, members, policyholders, or shareholders of the insurer against any officer of the insurer, or any other person; (16) To remove any or all records and property of the insurer to the offices of the Commissioner or to any other place convenient for the purposes of efficient and orderly execution of the liquidation. Guaranty associations and foreign guaranty associations shall have reasonable access to the records of the insurer necessary for them to carry out their statutory obligations; (17) To deposit in 1 or more banks in the District the sums required for meeting current administration expenses and dividend distributions; (18) To invest all sums not currently needed, subject to the same standards that would apply if those sums were invested by the insurer, unless the court orders otherwise; (19) To file any necessary documents for record in the office of any recorder of deeds or record office in the District or elsewhere where property of the insurer is located; (20) To assert all defenses available to the insurer against third persons, including statutes of limitation, statutes of frauds, and the defense of usury. A waiver of any defense by the insurer after a petition in liquidation has been filed shall not bind the liquidator. Whenever a guaranty association or foreign guaranty association has an obligation to defend any suit, the liquidator shall give precedence to such an obligation and may defend only in the absence of a defense by the guaranty associations; (21) To exercise and enforce all the rights, remedies, and powers of any creditor, shareholder, policyholder, or member, including any power to avoid any transfer or lien that may be given by the general law and that is not included within  31-1324 through 31-1326; (22) To intervene in any proceeding wherever instituted that might lead to the appointment of a receiver or trustee, and to act as the receiver or trustee whenever the appointment is offered; (23) To enter into agreements with any receiver or superintendent or commissioner of insurance of any other state relating to the rehabilitation, liquidation, conservation, or dissolution of an insurer doing business in both states; and (24) To exercise all powers now held or hereafter conferred upon receivers by the laws of the District not inconsistent with the provisions of this chapter. (b)(1) If a company placed in liquidation issued liability policies on a claims-made basis, which provided an option to purchase an extended period to report claims, the liquidator may make available to holders of the policies, for a charge, an extended period to report claims as stated herein. The extended reporting period shall be made available only to those insureds who have not secured substitute coverage. The extended period made available by the liquidator shall begin upon termination of any extended period to report claims in the basic policy and shall end at the earlier of the final date for filing of claims in the liquidation proceeding or 18 months from the order of liquidation. (2) The extended period to report claims made available by the liquidator shall be subject to the terms of the policy to which it relates. The liquidator shall make available such an extended period within 60 days after the order of liquidation at a charge to be determined by the liquidator subject to approval of the court. The offer shall be deemed rejected unless the offer is accepted in writing and the charge is paid within 90 days after the order of liquidation. No commissions, premium taxes, assessments, or other fees shall be due on the charge pertaining to the extended period to report claims. (c) The enumeration, in this section, of the powers and authority of the liquidator shall not be construed as a limitation upon him or her, nor shall it exclude in any manner his or her right to do other acts not specifically enumerated or otherwise provided for, necessary or appropriate for the accomplishment of or in aid of the purpose of liquidation. (d) Notwithstanding the powers of the liquidator stated in subsections (a) and (b) of this section, the liquidator shall have no obligation to defend claims or to continue to defend claims subsequent to the entry of a liquidation order.  (Oct. 15, 1993, D.C. Law 10-35,  20, 40 DCR 5773; May 16, 1995, D.C. Law 10-255,  27(e), 41 DCR 5193; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  37(b), 45 DCR 745; Apr. 20, 1999, D.C. Law 12-264,  57(e), 46 DCR 2118; June 11, 2004, D.C. Law 15-166,  4(i)(5), 51 DCR 2817.)  Prior Codifications 1981 Ed.,  35-2819. Section References This section is referenced in  31-1317. Effect of Amendments D.C. Law 15-166, in par. (5) of subsec. (a), substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities both times it appears. Emergency Legislation For temporary (90 day) amendment of section, see  4(i)(5) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
 311320. Notice to creditors and others. (a) Unless the court otherwise directs, the liquidator shall give, or cause to be given, notice of the liquidation order as soon as possible: (1) By first class mail and either by telegram or telephone to the insurance commissioner of each jurisdiction in which the insurer is doing business; (2) By first class mail to any guaranty association or foreign guaranty association which is or may become obligated as a result of the liquidation; (3) By first class mail to all insurance agents of the insurer; (4) By first class mail to all persons known or reasonably expected to have claims against the insurer, including all policyholders, at their last known address as indicated by the records of the insurer; and (5) By publication in a newspaper of general circulation in the county in which the insurer has its principal place of business and in other locations the liquidator deems appropriate. (b) Notice to potential claimants under subsection (a) of this section shall require claimants to file with the liquidator their claims, together with proper proofs under  31-1334, on or before a date the liquidator shall specify in the notice. Although an earlier date may be set by the liquidator, the last day to file claims shall be no later than 18 months following the order of liquidation. The liquidator need not require persons claiming cash surrender values or other investment values in life insurance and annuities to file a claim. All claimants shall have a duty to keep the liquidator informed of any changes of address. (c)(1) Notice under subsection (a) of this section to agents of the insurer and to potential claimants who are policyholders shall include, where applicable, notice that coverage by state guaranty associations may be available for all or part of policy benefits in accordance with applicable state guaranty laws. (2) The liquidator shall promptly provide to the guaranty associations any information concerning the identities and addresses of the policyholders and their policy coverages as may be within the liquidators possession or control, and otherwise cooperate with guaranty associations to assist them in providing to the policyholders timely notice of the guaranty associations coverage of policy benefits, including, as applicable, coverage of claims and continuation or termination of coverages. (d) If notice is given in accordance with this section, the distribution of assets of the insurer under this chapter shall be conclusive with respect to all claimants, whether or not they received notice.  (Oct. 15, 1993, D.C. Law 10-35,  21, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2820. Section References This section is referenced in  31-1321,  31-1333, and  31-1336.
 311321. Duties of agents. (a) Every person who receives notice in the form prescribed in  31-1320 that an insurer which he represents as an agent is the subject of a liquidation order shall, within 30 days of the notice, provide to the liquidator (in addition to the information he may be required to provide pursuant to  31-1305) the information in the agents records related to any policy issued by the insurer through the agent, and, if the agent is a general agent, the information in the general agents records related to any policy issued by the insurer through an agent under contract to him or her, including the name and address of such subagent. A policy shall be deemed issued through an agent if the agent has a property interest in the expiration of the policy, or if the agent has had in his or her possession a copy of the declarations of the policy at any time during the life of the policy, except where the ownership of the expiration of the policy has been transferred to another. (b) Any agent failing to provide information to the liquidator as required in subsection (a) of this section may be subject to payment of a penalty of not more than $1,000 and may have his or her licenses suspended, the penalty to be imposed after a hearing held by the Commissioner.  (Oct. 15, 1993, D.C. Law 10-35,  22, 40 DCR 5773; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2821.
 311322. Actions by and against liquidator. (a) Upon issuance of an order appointing a liquidator of a domestic insurer or of an alien insurer domiciled in the District, no action at law or equity or in arbitration shall be brought against the insurer or liquidator, whether in the District or elsewhere, nor shall any existing actions be maintained or further presented after issuance of the order. The courts of the District shall give full faith and credit to injunctions against the liquidator or the company, or the continuation of existing actions against the liquidator or the company, when the injunctions are included in an order to liquidate an insurer issued pursuant to corresponding provisions in other states. Whenever, in the liquidators judgment, protection of the estate of the insurer necessitates intervention in an action against the insurer that is pending outside the District, he or she may intervene in the action. The liquidator may defend any action in which he or she intervenes under this section at the expense of the estate of the insurer. (b) The liquidator may, upon or after an order for liquidation, within 2 years, or other longer time as applicable law may permit, institute an action or proceeding on behalf of the estate of the insurer upon any cause of action against which the period of limitation fixed by applicable law has not expired at the time of the filing of the petition upon which the order is entered. Where, by any agreement, a period of limitation is fixed for instituting a suit or proceeding upon any claim, or for filing any claim, proof of claim, proof of loss, demand, notice, or the like, or where in any proceeding, judicial or otherwise, a period of limitation is fixed, either in the proceeding or by applicable law, for taking any action, filing any claim or pleading, or doing any act, and where in such a case the period had not expired at the date of the filing of the petition, the liquidator may, for the benefit of the estate, take any action or do any act required of or permitted to the insurer within a period of 180 days subsequent to the entry of an order for liquidation, or within any further period shown to the satisfaction of the court not to be unfairly prejudicial to the other party. (c) No statute of limitation or defense of laches shall run with respect to any action against an insurer between the filing of a petition for liquidation against an insurer and the denial of the petition. Any action against the insurer that might have been commenced when the petition was filed may be commenced for at least 60 days after the petition is denied. (d) Any guaranty association or foreign guaranty association shall have standing to appear in any court proceeding concerning the liquidation of an insurer if the association is or may become liable to act as a result of the liquidation.  (Oct. 15, 1993, D.C. Law 10-35,  23, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2822.
 311323. Collection and list of assets. (a) As soon as practicable after the liquidation order, but not later than 120 days thereafter, the liquidator shall prepare in duplicate a list of the insurers assets. The list shall be amended or supplemented from time to time as the liquidator may determine. One copy shall be filed in the office of the Clerk of the Superior Court of the District of Columbia, and 1 copy shall be retained for the liquidators files. All amendments and supplements shall be similarly filed. (b) The liquidator shall reduce the assets to a degree of liquidity that is consistent with the effective execution of the liquidation. (c) A submission to the court for disbursement of assets in accordance with  31-1332 fulfills the requirements of subsection (a) of this section.  (Oct. 15, 1993, D.C. Law 10-35,  24, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2823.
 311324. Fraudulent transfer prior to petition. (a) Every transfer made or suffered and every obligation incurred by an insurer within 1 year prior to the filing of a successful petition for rehabilitation or liquidation under this chapter is fraudulent as to then existing and future creditors if made or incurred without fair consideration, or with actual intent to hinder, delay, or defraud either existing or future creditors. A transfer made or an obligation incurred by an insurer ordered to be rehabilitated or liquidated under this chapter, which is fraudulent under this section, may be avoided by the receiver, except as to a person who in good faith is a purchaser, lienor, or obligee for a present fair equivalent value, and except that any purchaser, lienor, or obligee, who in good faith has given a consideration less than fair for the transfer, lien, or obligation, may retain the property, lien, or obligation as security for repayment. The court may, on due notice, order such a transfer or obligation to be preserved for the benefit of the estate, and in that event, the receiver shall succeed to and may enforce the rights of the purchaser, lienor, or obligee. (b)(1) A transfer of property other than real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent lien obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee under  31-1326(c). (2) A transfer of real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent bona fide purchaser from the insurer could obtain rights superior to the rights of the transferee. (3) A transfer which creates an equitable lien shall not be deemed to be perfected if there are available means by which a legal lien could be created. (4) Any transfer not perfected prior to the filing of a petition for liquidation shall be deemed to be made immediately before the filing of the successful petition. (5) The provisions of this subsection apply whether or not there are or were creditors who might have obtained any liens or persons who might have become bona fide purchasers. (c) Any transaction of the insurer with a reinsurer shall be deemed fraudulent and may be avoided by the receiver under subsection (a) of this section if: (1) The transaction consists of the termination, adjustment, or settlement of a reinsurance contract in which the reinsurer is released from any part of its duty to pay the originally specified share of losses that had occurred prior to the time of the transactions, unless the reinsurer gives a present fair equivalent value for the release; and (2) Any part of the transaction took place within 1 year prior to the date of filing of the petition through which the receivership was commenced. (d) Every person receiving any property from the insurer, or any benefit thereof, which is a fraudulent transfer under subsection (a) of this section shall be personally liable therefor and shall be bound to account to the liquidator.  (Oct. 15, 1993, D.C. Law 10-35,  25, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2824. Section References This section is referenced in  31-1312,  31-1319, and  31-1333.
 311325. Fraudulent transfer after petition. (a) After a petition for rehabilitation or liquidation has been filed, a transfer of any of the real property of the insurer made to a person acting in good faith shall be valid against the receiver if made for a present fair equivalent value, or, if not made for a present fair equivalent value, then to the extent of the present consideration actually paid, for which amount the transferee shall have a lien on the property so transferred. The commencement of a proceeding in rehabilitation or liquidation shall be constructive notice upon the recording of a copy of the petition for or order of rehabilitation or liquidation with the recorder of deeds in the county where any real property in question is located. The exercise by a court of the United States or any state or jurisdiction to authorize or effect a judicial sale of real property of the insurer within any county in any state shall not be impaired by the pendency of such a proceeding unless the copy is recorded in the county prior to the consummation of the judicial sale. (b) After a petition for rehabilitation or liquidation has been filed and before either the receiver takes possession of the property of the insurer or an order of rehabilitation or liquidation is granted: (1) A transfer of any of the property of the insurer, other than real property, made to a person acting in good faith shall be valid against the receiver if made for a present fair equivalent value, or, if not made for a present fair equivalent value, then to the extent of the present consideration actually paid, for which amount the transferee shall have a lien on the property so transferred. (2) A person indebted to the insurer or holding property of the insurer may, if acting in good faith, pay the indebtedness or deliver the property, or any part thereof, to the insurer or upon his or her order, with the same effect as if the petition were not pending. (3) A person having actual knowledge of the pending rehabilitation or liquidation shall be deemed not to act in good faith. (4) A person asserting the validity of a transfer under this section shall have the burden of proof. Except as elsewhere provided in this section, no transfer by or on behalf of the insurer after the date of the petition for liquidation by any person other than the liquidator shall be valid against the liquidator. (c) Every person receiving any property from the insurer or any benefit thereof which is a fraudulent transfer under subsection (a) of this section shall be personally liable therefor and shall be bound to account to the liquidator. (d) Nothing in this chapter shall impair the negotiability of currency or negotiable instruments.  (Oct. 15, 1993, D.C. Law 10-35,  26, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2825. Section References This section is referenced in  31-1312.
 311326. Voidable preferences and liens. (a)(1) A preference is a transfer of any of the property of an insurer to or for the benefit of a creditor, for or on account of an antecedent debt, made or suffered by the insurer within 1 year before the filing of a successful petition for liquidation under this chapter, the effect of which transfer may be to enable the creditor to obtain a greater percentage of this debt than another creditor of the same class would receive. If a liquidation order is entered while the insurer is already subject to a rehabilitation order, then the transfers shall be deemed preferences if made or suffered within 1 year before the filing of the successful petition for rehabilitation, or within 2 years before the filing of the successful petition for liquidation, whichever time is shorter. (2) Any preference may be avoided by the liquidator if: (A) The insurer was insolvent at the time of the transfer; (B) The transfer was made within 4 months before the filing of the petition; (C) The creditor receiving it or to be benefitted thereby or his agent acting with reference thereto had, at the time when the transfer was made, reasonable cause to believe that the insurer was insolvent or was about to become insolvent; or (D) The creditor receiving it was an officer, or any employee or attorney or other person who was in fact in a position of comparable influence in the insurer to an officer whether or not he or she held such a position, or any shareholder holding directly or indirectly more than 5% of any class of any equity security issued by the insurer, or any other person, firm, corporation, association, or aggregation of persons with whom the insurer did not deal at arms length. (3) Where the preference is voidable, the liquidator may recover the property or, if it has been converted, its value from any person who has received or converted the property, except where a bona fide purchaser or lienor has given less than fair equivalent value, he or she shall have a lien upon the property to the extent of the consideration actually given by him or her. Where a preference by way of lien or security title is voidable, the court may on due notice order the lien or title to be preserved for the benefit of the estate, in which event the lien or title shall pass to the liquidator. (b)(1) A transfer of property other than real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent lien obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee. (2) A transfer of real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent bona fide purchaser from the insurer could obtain rights superior to the rights of the transferee. (3) A transfer which creates an equitable lien shall not be deemed to be perfected if there are available means by which a legal lien could be created. (4) A transfer not perfected prior to the filing of a petition for liquidation shall be deemed to be made immediately before the filing of the successful petition. (5) The provisions of this subsection apply whether or not there are or were creditors who might have obtained liens or persons who might have become bona fide purchasers. (c)(1) A lien obtainable by legal or equitable proceedings upon a simple contract is one arising in the ordinary course of the proceedings upon the entry or docketing of a judgment or decree, or upon attachment, garnishment, execution, or like process, whether before, upon, or after judgment or decree and whether before or upon levy. It does not include liens which under applicable law are given a special priority over other liens which are prior in time. (2) A lien obtainable by legal or equitable proceedings could become superior to the rights of a transferee, or a purchaser could obtain rights superior to the rights of a transferee within the meaning of subsection (b) of this section, if the consequences would follow only from the lien or purchase itself, or from the lien or purchase followed by any step wholly within the control of the respective lienholder or purchaser, with or without the aid of ministerial action by public officials. Such a lien could not, however, become superior and such a purchase could not create superior rights for the purpose of subsection (b) of this section through any acts subsequent to the obtaining of such a lien or subsequent to such a purchase which require the agreement or concurrence of any third party or which require any further judicial action or ruling. (d) A transfer of property for or on account of a new and contemporaneous consideration which is deemed under subsection (b) of this section to be made or suffered after the transfer because of delay in perfecting it does not thereby become a transfer for or on account of an antecedent debt if any acts required by the applicable law to be performed in order to perfect the transfer as against liens or bona fide purchasers rights are performed within 21 days or any period expressly allowed by the law, whichever is less. A transfer to secure a future loan, if such a loan is actually made, or a transfer which becomes security for a future loan, shall have the same effect as a transfer for or on account of a new and contemporaneous consideration. (e) If any lien deemed voidable under subsection (a)(2) of this section has been dissolved by the furnishing of a bond or other obligation, the surety on which has been indemnified directly or indirectly by the transfer of or the creation of a lien upon any property of an insurer before the filing of a petition under this chapter which results in a liquidation order, the indemnifying transfer or lien shall also be deemed voidable. (f) The property affected by any lien deemed voidable under subsections (a) and (e) of this section shall be discharged from the lien, and that property and any of the indemnifying property transferred to or for the benefit of a surety shall pass to the liquidator, except that the court may on due notice order such a lien to be preserved for the benefit of the estate and the court may direct that such a conveyance be executed as may be proper or adequate to evidence the title of the liquidator. (g) The Superior Court of the District of Columbia shall have summary jurisdiction of any proceeding by the liquidator to hear and determine the rights of any parties under this section. Reasonable notice of any hearing in the proceeding shall be given to all parties in interest, including the obligee of a releasing bond or other like obligation. Where an order is entered for the recovery of indemnifying property in kind or for the avoidance of an indemnifying lien, the court, upon application of any party in interest, shall in the same proceeding ascertain the value of the property or lien, and if the value is less than the amount for which the property is indemnified or than the amount of the lien, the transferee or lienholder may elect to retain the property or lien upon payment of its value, as ascertained by the court, to the liquidator, within a reasonable time as the court shall fix. (h) The liability of the surety under a releasing bond or other like obligation shall be discharged to the extent of the value of the indemnifying property recovered or the indemnifying lien nullified and avoided by the liquidator, or, where the property is retained under subsection (g) of this section, to the extent of the amount paid to the liquidator. (i) If a creditor has been preferred, and afterward in good faith gives the insurer further credit without security of any kind, for property which becomes a part of the insurers estate, the amount of the new credit remaining unpaid at the time of the petition may be set off against the preference which would otherwise be recoverable from him. (j) If an insurer, directly or indirectly, within 4 months before the filing of a successful petition for liquidation under this chapter, or at any time in contemplation of a proceeding to liquidate it, pays money or transfers property to an attorney-at-law for services rendered or to be rendered, the transactions may be examined by the court on its own motion or shall be examined by the court on petition of the liquidator and shall be held valid only to the extent of a reasonable amount to be determined by the court, and the excess may be recovered by the liquidator for the benefit of the estate provided that where the attorney is in a position of influence in the insurer or an affiliate payment of any money or the transfer of any property to the attorney-at-law for services rendered or to be rendered shall be governed by the provisions of subsection (a)(2)(D) of this section. (k)(1) Every officer, manager, employee, shareholder, member, subscriber, attorney, or any other person acting on behalf of the insurer who knowingly participates in giving any preference when he or she has reasonable cause to believe the insurer is or is about to become insolvent at the time of the preference shall be personally liable to the liquidator for the amount of the preference. It is permissible to infer that there is a reasonable cause to so believe if the transfer was made within 4 months before the date of filing of this successful petition for liquidation. (2) Every person receiving any property from the insurer or the benefit thereof as a preference voidable under subsection (a) of this section shall be personally liable therefor and shall be bound to account to the liquidator. (3) Nothing in this subsection shall prejudice any other claim by the liquidator against any person.  (Oct. 15, 1993, D.C. Law 10-35,  27, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2826. Section References This section is referenced in  31-1324.
 311327. Claims of holders of void or voidable rights. (a) No claims of a creditor who has received or acquired a preference, lien, conveyance, transfer, assignment, or encumbrance voidable under this chapter shall be allowed unless he or she surrenders the preference, lien, conveyance, transfer, assignment, or encumbrance. If the avoidance is effected by a proceeding in which a final judgment has been entered, the claim shall not be allowed unless the money is paid or the property is delivered to the liquidator within 30 days from the date of the entering of the final judgment, except that the court having jurisdiction over the liquidation may allow further time if there is an appeal or other continuation of the proceeding. (b) A claim allowable under subsection (a) of this section by reason of the avoidance, whether voluntary or involuntary, or a preference, lien, conveyance, transfer, assignment, or encumbrance, may be filed as an excused last filing under  31-1333 if filed within 30 days from the date of the avoidance, or within the further time allowed by the court under subsection (a) of this section.  (Oct. 15, 1993, D.C. Law 10-35,  28, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2827. Section References This section is referenced in  31-1333.
 311328. Setoffs. (a) Mutual debts or mutual credits, whether arising out of 1 or more contracts between the insurer and another person in connection with any action or proceeding under this chapter, shall be set off and the balance only shall be allowed or paid, except as provided in subsection (b) of this section and  31-1331. (b) No setoff shall be allowed in favor of any person where: (1) The obligation of the insurer to the person would not at the date of the filing of a petition for receivership entitle the person to share as a claimant in the assets of the insurer; (2) The obligation of the insurer to the person was purchased by or transferred to the person with a view to its being used as a setoff; (3) The obligation of the insurer is owed to an affiliate of the person, or any other entity or association other than the person; (4) The obligation of the person is owed to an affiliate of the insurer, or any other entity or association other than the insurer; (5) The obligation of the person is to pay an assessment levied against the members or subscribers of the insurer, or is in any other way in the nature of a capital contribution; or (6) The obligations between the person and the insurer arise from business where either the person or the insurer has assumed risks and obligations from the other party and then has ceded back to that party substantially the same risks and obligations. (c) The receiver shall provide persons with accounting statements identifying all debts which are due and payable. Where a person owes to the insurer amounts which are due and payable, against which the person asserts setoff of mutual credits which may become due and payable from the insurer in the future, the person shall promptly pay to the receiver the amounts due and payable; provided that, notwithstanding  31-1340 or any other provision of this chapter, the receiver shall promptly and fully refund, to the extent of the persons prior payments, any mutual credits that become due and payable to the person by the insurer. Prior to the termination of any proceeding under this chapter, the amount due the person shall be determined for the purpose of the receiver making a final refund, if any. (d) These amendments shall be effective October 15, 1994 and shall apply to all contracts entered into, renewed, extended, or amended on or after that date, and to debts or credits arising from any business written or transactions occurring after the effective date pursuant to any such contract. For purposes of this section, any change in the terms of, or consideration for, any such contract shall be deemed an amendment.  (Oct. 15, 1993, D.C. Law 10-35,  29, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2828. Editor's Notes Application of Law 10-35: Section 60 of D.C. Law 10-35 provided that  35-2828 31-1328, 2001 Ed. shall apply 6 months from the effective date of this act and shall apply to all contracts entered into, renewed, extended, or amended, including any change in the terms of, or consideration for, such a contract on or after that date, and to debts or credits arising from any business written or transaction occurring after the effective date pursuant to any contract, including those in existence prior to the effective date, and shall supersede any agreement or contractual provisions which might be construed to enlarge the setoff rights of any person under any contract with the insurer.
 311329. Assessments. (a) As soon as practicable but not more than 2 years from the date of an order of liquidation under  31-1316 of an insurer issuing assessable policies, the liquidator shall make a report to the court setting forth: (1) The reasonable value of the assets of the insurer; (2) The insurers probable total liabilities; (3) The probable aggregate amount of the assessment necessary to pay all claims of creditors and expenses in full, including expenses of administration and costs of collecting the assessment; and (4) A recommendation as to whether or not an assessment should be made and in what amount. (b)(1) Upon the basis of the report provided in subsection (a) of this section, including any supplements and amendments, the Superior Court of the District of Columbia may levy 1 or more assessments against all members of the insurer who are subject to assessment. (2) Subject to any applicable legal limits on assessability, the aggregate assessment shall be for the amount that the sum of the probable liabilities, the expenses of administration, and the estimated cost of collection of the assessment exceeds the value of existing assets, with due regard being given to assessments that cannot be collected economically. (c) After the levy of assessment under subsection (b) of this section, the liquidator shall issue an order directing each member who has not paid the assessment pursuant to the order to show cause why the liquidator should not pursue a judgment therefor. (d) The liquidator shall give notice of the order to show cause by publication and by first class mail to each member liable mailed to his or her last known address as it appears on the insurers records, at least 20 days before the return date of the order to show cause. (e)(1) If a member does not appear and serve duly verified objections upon the liquidator on or before the return date of the order to show cause under subsection (c) of this section, the court shall issue an order adjudging the member liable for the amount of the assessment against him or her pursuant to subsection (c) of this section, together with costs, and the liquidator shall have a judgment against the member. (2) If on or before the return date, the member appears and serves duly verified objections upon the liquidator, the Commissioner may hear and determine the matter, or may appoint a referee to hear it, and issue such an order as the facts warrant. In the event that the Commissioner determines that the objections do not warrant relief from assessment, the member may request that the court review the matter and vacate the order to show cause. (f) The liquidator may enforce any order or collect any judgment under subsection (e) of this section by any lawful means.  (Oct. 15, 1993, D.C. Law 10-35,  30, 40 DCR 5773; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2829.
 311330. Reinsurers liability. The amount recoverable by the liquidator from reinsurers shall not be reduced as a result of the delinquency proceedings, regardless of any provision in the reinsurance contracts or other agreements. The reinsurance shall be payable under contracts reinsured by the assuming insurer on the basis of reported claims allowed by the Superior Court of the District of Columbia, without diminution because of the insolvency of the ceding insurer. The payments shall be made directly to the ceding insurer or to its domiciliary liquidator, except where: (1) The contracts or other written agreements specifically provide for another payee of the reinsurance in the event of the insolvency of the ceding insurer; or (2) The assuming insurer, with the consent of the direct insureds, has assumed the policy obligations of the ceding insurer as the direct obligation of the assuming insurer to the payees under such policies and in substitution for the obligations of the ceding insurer to the payees.  (Oct. 15, 1993, D.C. Law 10-35,  31, 40 DCR 5773; Oct. 21, 2000, D.C. Law 13-185,  2, 47 DCR 7068.)  Prior Codifications 1981 Ed.,  35-2830. Effect of Amendments D.C. Law 13-185 rewrote this section which prior thereto provided: The amount recoverable by the liquidator from reinsurers shall not be reduced as a result of the delinquency proceedings, regardless of any provision in the reinsurance contract or other agreement. Payment made directly to an insured or other creditor shall not diminish the reinsurers obligation to the insurers estate except when the reinsurance contract provided for direct coverage of a named insured and the payment was made in discharge of that obligation.
 311331. Recovery of premiums owed. (a)(1) An agent, broker, premium finance company, or any other person, other than the insured, responsible for the payment of a premium shall be obligated to pay any unpaid premium for the full policy term due the insurer at the time of the declaration of insolvency, whether earned or unearned, as shown on the records of the insurer. The liquidator shall also have the right to recover from such a person any part of an unearned premium that represents the commission of such a person. Credits or setoffs, or both, shall not be allowed to an agent, broker, or premium finance company for any amounts advanced to the insurer by the agent, broker, or premium finance company on behalf of, but in the absence of a payment by, the insured. (2) An insured shall be obligated to pay any unpaid earned premium due the insurer at the time of the declaration of insolvency, as shown on the records of the insurer. (b) Upon satisfactory evidence of a violation of this section, the Commissioner may pursue either one or both of the following courses of action: (1) Suspend, revoke, or refuse to renew the licenses of the offending party or parties; or (2) Impose a penalty of not more than $1,000 for each act in violation of this section by the party or parties. (c) Before the Commissioner takes any action as set forth in subsection (b) of this section, he or she shall give written notice to the person, company, association, or exchange accused of violating the law, stating specifically the nature of the alleged violation, and fixing a time and place, at least 10 days thereafter, when a hearing on the matter shall be held. After the hearing, or upon failure of the accused to appear at the hearing, the Commissioner, if he or she finds the violation, shall impose any of the penalties under subsection (b) of this section as he or she deems advisable. (d) When the Commissioner takes action in any or all of the ways set out in subsection (b) of this section, the party aggrieved may appeal from the action to the Superior Court of the District of Columbia.  (Oct. 15, 1993, D.C. Law 10-35,  32, 40 DCR 5773; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2831. Section References This section is referenced in  31-1328.
 311332. Domiciliary liquidators proposal to distribute assets. (a) Within 120 days of a final determination of insolvency of an insurer by a court of competent jurisdiction of the District of Columbia, the liquidator shall make application to the court for approval of a proposal to disburse assets out of marshalled assets, from time to time as the assets become available, to a guaranty association or foreign guaranty association having obligations because of the insolvency. If the liquidator determines that there are insufficient assets to disburse, the application required by this section shall be considered satisfied by a filing by the liquidator stating the reasons for this determination. (b) The proposal required by subsection (a) of this section shall at least include provisions for: (1) Reserving amounts for the payment of expenses of administration and the payment of claims of secured creditors, to the extent of the value of the security held, and claims falling within the priorities established in  31-1340, classes 1 and 2; (2) Disbursement of the assets marshalled to date and subsequent disbursement of assets as they become available; (3) Equitable allocation of disbursements to each of the guaranty associations and foreign guaranty associations entitled thereto; (4) The securing by the liquidator, from each of the associations entitled to disbursements pursuant to this section, of an agreement to return to the liquidator those assets, together with income earned on assets previously disbursed, required to pay claims of secured creditors and claims falling within the priorities established in  31-1340 in accordance with those priorities. No bond shall be required of such an association; and (5) A full report to be made by each association to the liquidator accounting for all assets so disbursed to the association, all disbursements made therefrom, any interest earned by the association on the assets, and any other matter the court may direct. (c) The liquidators proposal shall provide for disbursements to the associations in amounts estimated at least equal to the claim payments made or to be made thereby for which the associations could assert a claim against the liquidator, and shall further provide that if the assets available for disbursement from time to time do not equal or exceed the amount of the claim payments made or to be made by the association, then disbursements shall be in the amount of available assets. (d) The liquidators proposal shall, with respect to an insolvent insurer writing life or health insurance or annuities, provide for disbursements of assets to any guaranty association or any foreign guaranty association covering life or health insurance or annuities, or to any other entity or organization reinsuring, assuming, or guaranteeing policies or contracts of insurance under the acts creating the associations. (e) Notice of the application shall be given to the association in and to the commissioners of insurance of each of the states. Such a notice shall be deemed to have been given when deposited in the United States certified mails, first class postage prepaid, at least 30 days prior to submission of the application to the court. Action on the application may be taken by the court provided the above required notice has been given, and, provided further, that the liquidators proposal complies with subsection (b)(1) and (2) of this section.  (Oct. 15, 1993, D.C. Law 10-35,  33, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2832. Section References This section is referenced in  31-1323.
 311333. Filing of claims. (a) Proof of all claims shall be filed with the liquidator in the form required by  31-1334 on or before the last day for filing specified in the notice required under  31-1320, except that proof of claims for cash surrender values or other investment values in life insurance and annuities need not be filed unless the liquidator expressly so requires. (b) The liquidator may permit a claimant making a late filing to share in distributions, whether past or future, as if he or she were not late, to the extent that such a payment will not prejudice the orderly administration of the liquidation, under the following circumstances: (1) The existence of the claim was not known to the claimant and that he or she filed his or her claim as promptly thereafter as reasonably possible after learning of it; (2) A transfer to a creditor was avoided under  31-1324 through 31-1326, or was voluntarily surrendered under  31-1327, and that the filing satisfies the conditions of  31-1327; or (3) The valuation under  31-1339 of security held by a secured creditor shows a deficiency, which is filed within 30 days after the valuation. (c) The liquidator shall permit late filing claims to share in distributions, whether past or future, as if they were not late, if the claims are claims of a guaranty association or foreign guaranty association for reimbursement of covered claims paid or expenses incurred, or both, subsequent to the last day for filing where the payments were made and expenses incurred as provided by law. (d) The liquidator may consider any claim filed late, which is not covered by subsection (b) of this section, and permit it to receive distributions which are subsequently declared on any claims of the same or lower priority if the payment does not prejudice the orderly administration of the liquidation. The late-filing claimant shall receive, at each distribution, the same percentage of the amount allowed on his or her claim as is then being paid to claimants of any lower priority. This shall continue until his or her claim has been paid in full.  (Oct. 15, 1993, D.C. Law 10-35,  34, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2833. Section References This section is referenced in  31-1327,  31-1335, and  31-1354.
 311334. Proof of claim. (a) Proof of claim shall consist of a statement signed by the claimant that includes all of the following that are applicable: (1) The particulars of the claim including the consideration given for it; (2) The identity and amount of the security on the claim; (3) The payments made on the debt, if any; (4) That the sum claimed is justly owing and that there is no setoff, counterclaim, or defense to the claim; (5) Any right of priority of payment or other specific right asserted by the claimants; (6) A copy of the written instrument which is the foundation of the claim; and (7) The name and address of the claimant and the attorney who represents him or her, if any. (b) No claim need be considered or allowed if it does not contain all the information in subsection (a) of this section which may be applicable. The liquidator may require that a prescribed form be used, and may require that other information and documents be included. (c) At any time the liquidator may request the claimant to present information or evidence supplementary to that required under subsection (a) of this section and may take testimony under oath, require production of affidavits or depositions, or otherwise obtain additional information or evidence. (d) No judgment or order against an insured or the insurer entered after the date of filing of a successful petition for liquidation, and no judgment or order against an insured or the insurer entered at any time by default or by collusion, need be considered as evidence of liability or of quantum of damages. No judgment or order against an insured or the insurer entered within 4 months before the filing of the petition need be considered as evidence of liability or of the quantum of damages. (e) All claims of a guaranty association or foreign guaranty association shall be in the form and contain the substantiation agreed to by the association and the liquidator.  (Oct. 15, 1993, D.C. Law 10-35,  35, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2834. Section References This section is referenced in  31-1320,  31-1333, and  31-1354.
 311335. Special claims. (a) The claim of a third party which is contingent only on his first obtaining a judgment against the insured shall be considered and allowed as if there were no contingency. (b) A claim may be allowed even if contingent, if it is filed in accordance with  31-1333. It may be allowed and may participate in all distributions declared after it is filed to the extent that it does not prejudice the orderly administration of the liquidation. (c) Claims that are due except for the passage of time shall be treated as absolute claims are treated, except that the claims may be discounted at the legal rate of interest. (d) Claims made under employment contracts by directors, principal officers, or persons in fact performing similar functions or having similar powers are limited to payment for services rendered prior to the issuance of any order of rehabilitation or liquidation under  31-1311 or  31-1316.  (Oct. 15, 1993, D.C. Law 10-35,  36, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2835. Section References This section is referenced in  31-1316.
 311336. Special provisions for third party claims. (a) Whenever any third party asserts a cause of action against an insured of an insurer in liquidation, the third party may file a claim with the liquidator. (b) Whether or not the third party files a claim, the insured may file a claim on his or her own behalf in the liquidation. If the insured fails to file a claim by the date for filing claims specified in the order of liquidation or within 60 days after mailing of the notice required by  31-1320, whichever is later, he or she is an unexcused late filer. (c) The liquidator shall make his or her recommendations to the court under  31-1340 for the allowance of an insureds claim under subsection (b) of this section after consideration of the probable outcome of any pending action against the insured on which the claim is based, the probable damages recoverable in the action, and the probable costs and expenses of defense. After allowance by the court, the liquidator shall withhold any dividends payable on the claim pending the outcome of litigation and negotiation with the insured. Whenever it seems appropriate, he or she shall reconsider the claim on the basis of additional information and amend his or her recommendations to the court. The insured shall be afforded the same notice and opportunity to be heard on all changes in the recommendation as in its initial determination. The court may amend its allowance as it thinks appropriate. As claims against the insured are settled or barred, the insured shall be paid from the amount withheld the same percentage dividend as was paid on other claims of like property, based on the lesser of the amount actually recovered from the insured by action, or paid by agreement, plus the reasonable costs and expense of defense, or the amount allowed on the claims by the court. After all claims are settled or barred, any sum remaining from the amount withheld shall revert to the undistributed assets of the insurer. Delay in final payment under this subsection shall not be a reason for unreasonable delay of final distribution and discharge of the liquidator. (d) If several claims founded upon one policy are filed, whether by third parties or as claims by the insured under this section, and the aggregate allowed amount of the claims to which the same limit of liability in the policy is applicable exceeds that limit, each claim as allowed shall be reduced in the same proportion so that the total equals the policy limit. Claims by the insured shall be evaluated as in subsection (c) of this section. If any insureds claim is subsequently reduced under subsection (c) of this section, the amount thus freed shall be apportioned ratably among the claims which have been reduced under this subsection. (e) No claim may be presented under this section if it is, or may be, covered by any guaranty association or foreign guaranty association.  (Oct. 15, 1993, D.C. Law 10-35,  37, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2836. Section References This section is referenced in  31-1343.
 311337. Disputed claims. (a) When a claim is denied in whole or in part by the liquidator, written notice of the determination shall be given to the claimant, or his or her attorney, by first class mail at the address shown in the proof of claim. Within 60 days from the mailing of the notice, the claimant may file his or her objections with the liquidator. If no filing is made, the claimant may not further object to the determination. (b) Whenever objections are filed with the liquidator and the liquidator does not alter his or her denial of the claim as a result of the objections, the liquidator shall ask the court for a hearing as soon as practicable and give notice of the hearing by first class mail to the claimant, or his or her attorney, and to any other persons directly affected, not less than 10 nor more than 30 days before the date of the hearing. The matter may be heard by the court or by a court-appointed referee who shall submit findings of fact along with his or her recommendation.  (Oct. 15, 1993, D.C. Law 10-35,  38, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2837. Section References This section is referenced in  31-1341 and  31-1354.
 311338. Claims of surety. Whenever a creditor whose claim against an insurer is secured, in whole or in part, by the undertaking of another person fails to prove and file that claim, the other person may do so in the creditors name, and shall be subrogated to the rights of the creditor, whether the claim has been filed by the creditor or by the other person in the creditors name, to the extent that he or she discharges the undertaking. In the absence of an agreement with the creditor to the contrary, the other person shall not be entitled to any distribution, however, until the amount paid to the creditor on the undertaking plus the distributions paid on the claim from the insurers estate to the creditor equals the amount of the entire claim of the creditor. Any excess received by the creditor shall be held by him in trust for such other person. The term other person, as used in this section, is not intended to apply to a guaranty association or foreign guaranty association.  (Oct. 15, 1993, D.C. Law 10-35,  39, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2838.
 311339. Secured creditors claims. (a) The value of any security held by a secured creditor shall be determined in one of the following ways, as the court may direct: (1) By converting the same into money according to the terms of the agreement pursuant to which the security was delivered to the creditors; or (2) By agreement, arbitration, compromise, or litigation between the creditor and the liquidator. (b) The determination shall be under the supervision and control of the court with due regard for the recommendation of the liquidator. The amount so determined shall be credited upon the secured claim, and any deficiency shall be treated as an unsecured claim. If the claimant shall surrender his or her security to the liquidator, the entire claim shall be allowed as if unsecured.  (Oct. 15, 1993, D.C. Law 10-35,  40, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2839. Section References This section is referenced in  31-1333 and  31-1356.
 311340. Priority of distribution. The priority of distribution of claims from the insurers estate shall be in accordance with the order in which each class of claims is set forth in this chapter. Every claim in each class shall be paid in full or adequate funds retained for the payment before the members of the next class receive any payment. No subclasses shall be established within any class. The order of distribution of claims shall be: (1) Class 1. The costs and expenses of administration during rehabilitation and liquidation, including, but not limited to the following: (A) The actual and necessary costs of preserving or recovering the assets of the insurer; (B) Compensation for all authorized services rendered in the rehabilitation and liquidation; (C) Any necessary filing fees; (D) The fees and mileage payable to witnesses; (E) Authorized reasonable attorneys fees and other professional services rendered in the rehabilitation and liquidation; and (F) The reasonable expenses of a guaranty association or foreign guaranty association for unallocated loss adjustment expenses. (2) Class 2. All claims under policies including the claims of the federal or any state or local government for losses incurred (loss claims), including third party claims and all claims of a guaranty association or foreign guaranty association. All claims under life insurance and annuity policies, whether for death proceeds, annuity proceeds, or investment values, shall be treated as loss claims. That portion of any loss, indemnification for which is provided by other benefits or advantages recovered by the claimant, shall not be included in this class, other than benefits or advantages recovered or recoverable in discharge of familial obligation of support, by way of succession at death, as proceeds of life insurance, or as gratuities. No payment by an employer to his or her employee shall be treated as a gratuity. (3) Class 3. Claims of the federal or any state or local government, except those under Class 2. Claims, including those of any governmental body for a penalty or forfeiture, shall be allowed in this class only to the extent of the pecuniary loss sustained from the act, transaction, or proceeding out of which the penalty or forfeiture arose, with reasonable and actual costs occasioned thereby. The remainder of the claims shall be postponed to the class of claims under paragraph (8) of this section. (4) Class 4. Reasonable compensation to employees for services performed to the extent that they do not exceed 2 months of monetary compensation and represent payment for services performed within one year before the filing of the petition for liquidation or, if rehabilitation preceded liquidation, within one year before the filing of the petition for rehabilitation. Principal officers and directors shall not be entitled to the benefit of this priority except as otherwise approved by the liquidator and the court. This priority shall be in lieu of any other similar priority that may be authorized by law as to wages or compensation of employees. (5) Class 5. Claims under nonassessable policies for unearned premium or other premium refunds and claims of general creditors, including claims of ceding and assuming companies in their capacity as general creditors. (6) Class 6. Claims filed late or any other claims other than claims under paragraphs (7) and (8) of this section. (7) Class 7. Surplus or contribution notes, or similar obligations, and premium refunds on assessable policies. Payments to members of domestic mutual insurance companies shall be limited in accordance with law. (8) Class 8. The claims of shareholders or other owners in their capacity as shareholders.  (Oct. 15, 1993, D.C. Law 10-35,  41, 40 DCR 5773; Mar. 8, 2007, D.C. Law 16-232,  201, 54 DCR 368.)  Prior Codifications 1981 Ed.,  35-2840. Section References This section is referenced in  31-1319,  31-1328,  31-1332,  31-1336,  31-1343,  31-1353,  31-1357, and  31-3932.06. Effect of Amendments D.C. Law 16-232 rewrote pars. (2) to (5), which formerly read: (2) Class 2. Reasonable compensation to employees for services performed to the extent that they do not exceed 2 months of monetary compensation and represent payment for services performed within 1 year before the filing of the petition for liquidation, or, if rehabilitation preceded liquidation, within 1 year before the filing of the petition for rehabilitation. Principal officers and directors shall not be entitled to the benefit of this priority except as otherwise approved by the liquidator and the court. Such a priority shall be in lieu of any other similar priority which may be authorized by law as to wages or compensation of employees. (3) Class 3. All claims under policies including the claims of the federal or any state or local government for losses incurred (loss claims), including third party claims and all claims of a guaranty association or foreign guaranty association. All claims under life insurance and annuity policies, whether for death proceeds, annuity proceeds, or investment values, shall be treated as loss claims. That portion of any loss, indemnification for which is provided by other benefits or advantages recovered by the claimant, shall not be included in this class, other than benefits or advantages recovered or recoverable in discharge of familial obligation of support or by way of succession at death or as proceeds of life insurance, or as gratuities. No payment by an employer to his or her employee shall be treated as a gratuity. (4) Class 4. Claims under nonassessable policies for unearned premium or other premium refunds and claims of general creditors, including claims of ceding and assuming companies in their capacity as general creditors. (5) Class 5. Claims of the federal or any state or local government, except those under Class 3. Claims, including those of any governmental body for a penalty or forfeiture, shall be allowed in this class only to the extent of the pecuniary loss sustained from the act, transaction, or proceeding out of which the penalty or forfeiture arose, with reasonable and actual costs occasioned thereby. The remainder of the claims shall be postponed to the class of claims under paragraph (8) of this section.
 311341. Liquidators recommendations to the court. (a) The liquidator shall review all claims duly filed in the liquidation and shall make any further investigation he or she deems necessary. He or she may compound, compromise, or in any other manner negotiate the amount for which claims will be recommended to the court, except where the liquidator is required by law to accept claims as settled by any person or organization, including any guaranty association or foreign guaranty association. Unresolved disputes shall be determined under  31-1337. As soon as practicable, the liquidator shall present to the court a report of the claims against the insurer with his or her recommendations. The report shall include the name and address of each claimant and the amount of the claim finally recommended, if any. If the insurer has issued annuities or life insurance policies, the liquidator shall report the persons to whom, according to the records of the insurer, amounts are owed as cash surrender values or other investment value and the amounts owed. (b) The court may approve, disapprove, or modify the report on claims by the liquidator. The reports not modified by the court within a period of 60 days following submission by the liquidator shall be treated by the liquidator as allowed claims, subject to later modification or to rulings made by the court pursuant to  31-1337. No claim under a policy of insurance shall be allowed for an amount in excess of the applicable policy limits.  (Oct. 15, 1993, D.C. Law 10-35,  42, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2841. Section References This section is referenced in  31-1354.
 311342. Distribution of assets. Under the direction of the court, the liquidator shall pay distributions in a manner that will assure the proper recognition of priorities and a reasonable balance between the expeditious completion of the liquidation and the protection of unliquidated and undetermined claims, including third party claims. Distribution of assets in kind may be made at valuations set by agreement between the liquidator and the creditor and approved by the court.  (Oct. 15, 1993, D.C. Law 10-35,  43, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2842.
 311343. Unclaimed and withheld funds. (a) All unclaimed funds subject to distribution remaining in the liquidators hands when he or she is ready to apply to the court for discharge, including the amount distributable to any creditor, shareholder, member, or other person who is unknown or cannot be found, shall be deposited with the District of Columbia, and shall be paid without interest, except in accordance with  31-1340, to the person entitled thereto or his or her legal representative upon proof satisfactory to the District of Columbia Treasurer of his or her right thereto. Any amount on deposit and not claimed at the time of the discharge of the liquidator shall be distributed in accordance with Chapter 1 of Title 41. (b) All funds withheld under  31-1336 and not distributed shall, upon discharge of the liquidator, be deposited with the District of Columbia Treasurer and paid by him or her in accordance with  31-1340. Any sums remaining, which under  31-1340 would revert to the undistributed assets of the insurer, shall be transferred to the District of Columbia Treasurer and become the property of the District under subsection (a) of this section, unless the Commissioner in his or her discretion petitions the court to reopen the liquidation under  31-1345.  (Oct. 15, 1993, D.C. Law 10-35,  44, 40 DCR 5773; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2843.
 311344. Termination of proceedings. (a) When all assets justifying the expense of collection and distribution have been collected and distributed under this chapter, the liquidator shall apply to the court for discharge. The court may grant the discharge and make any other orders, including an order to transfer any remaining funds that are uneconomic to distribute, deemed appropriate. (b) Any other person may apply to the court at any time for an order under subsection (a) of this section. If the application is denied, the applicant shall pay the costs and expenses of the liquidator in resisting the application, including a reasonable attorneys fee.  (Oct. 15, 1993, D.C. Law 10-35,  45, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2844.
 311345. Reopening liquidation. After the liquidation proceeding has been terminated and the liquidator discharged, the Commissioner or other interested party may at any time petition the Superior Court of the District of Columbia to reopen the proceedings for good cause, including the discovery of additional assets. If the court is satisfied that there is justification for reopening, it shall so order.  (Oct. 15, 1993, D.C. Law 10-35,  46, 40 DCR 5773; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2845. Section References This section is referenced in  31-1343.
 311346. Disposition of records during and after termination of liquidation. Whenever it shall appear to the Commissioner that the records of any insurer in process of liquidation or completely liquidated are no longer useful, he or she may recommend to the court, and the court shall direct, what records should be retained for future reference and what records should be destroyed.  (Oct. 15, 1993, D.C. Law 10-35,  47, 40 DCR 5773; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2846.
 311347. External audit of the receivers books. The Superior Court of the District of Columbia may, as it deems desirable, order audits to be made of the books of the Commissioner relating to any receivership established under this chapter, and a report of each audit shall be filed with the Commissioner and with the court. The books, records, and other documents of the receivership shall be made available to the auditor at any time without notice. The expense of each audit shall be considered a cost of administration of the receivership.  (Oct. 15, 1993, D.C. Law 10-35,  48, 40 DCR 5773; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2847.
 311348. Conservation of property of foreign or alien insurers found in the District of Columbia. (a) If a domiciliary liquidator has not been appointed, the Commissioner may apply to the Superior Court of the District of Columbia by verified petition for an order directing him or her to act as conservator to conserve the property of an alien insurer not domiciled in the District, or a foreign insurer, on any one or more of the following grounds: (1) Any of the grounds in  31-1310; (2) That any of its property has been sequestered by official action in its domiciliary state, or in any other state; (3) That enough of its property has been sequestered in a foreign country to give reasonable cause to fear that the insurer is or may become insolvent; or (4)(A) That its certificate of authority to do business in the District has been revoked or that none was ever issued; and (B) That there are residents of the District with outstanding claims or outstanding policies. (b) When an order is sought under subsection (a) of this section, the court shall cause the insurer to be given notice and time to respond reasonable under the circumstances. (c) The court may issue the order in whatever terms it deems appropriate. The filing or recording of the order with the Clerk of the Superior Court of the District of Columbia shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with that recorder of deeds would have imparted. (d) The conservator may at any time petition for, and the court may grant, an order under  31-1349 to liquidate assets of a foreign or alien insurer under conservation, or, if appropriate, for an order under  31-1351 to be appointed ancillary receiver. (e) The conservator may at any time petition the court for an order terminating conservation of an insurer. If the court finds that the conservation is no longer necessary, it shall order that the insurer be restored to possession of its property and control of its business. The court may also make such a finding and issue such an order at any time upon motion of any interested party, but, if the motion is denied, all costs shall be assessed against the interested party.  (Oct. 15, 1993, D.C. Law 10-35,  49, 40 DCR 5773; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2848. Section References This section is referenced in  31-1349 and  31-1350.
 311349. Liquidation of property of foreign or alien insurers found in the District of Columbia. (a) If no domiciliary receiver has been appointed, the Commissioner may apply to the Superior Court of the District of Columbia by verified petition for an order directing him or her to liquidate the assets, found in the District, of a foreign insurer or an alien insurer not domiciled in the District, on any of the following grounds: (1) Any of the grounds in  31-1310 or  31-1315; or (2) Any of the grounds specified in  31-1348(a)(2) through (4). (b) When an order is sought under subsection (a) of this section, the court shall cause the insurer to be given notice and time to respond reasonable under the circumstances. (c) If it appears to the court that the best interests of creditors, policyholders, and the public so require, the court may issue an order to liquidate in whatever terms it shall deem appropriate. The filing or recording of the order with the Clerk of the Superior Court of the District of Columbia or the recorder of deeds of the District of Columbia shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with that recorder of deeds would have imparted. (d) If a domiciliary liquidator is appointed in a reciprocal state while a liquidation is proceeding under this section, the liquidator under this section shall thereafter act as ancillary receiver under  31-1351. If a domiciliary liquidator is appointed in a nonreciprocal state while a liquidation is proceeding under this section, the liquidator under this section may petition the court for permission to act as ancillary receiver under  31-1351. (e) On the same grounds as are specified in subsection (a) of this section, the Commissioner may petition any appropriate federal district court to be appointed receiver to liquidate that portion of the insurers assets and business over which the court will exercise jurisdiction, or any lesser part thereof that the Commissioner deems desirable for the protection of the policyholders and creditors in the District. (f) The court may order the Commissioner, when he or she has liquidated the assets of a foreign or alien insurer under this section, to pay claims of residents of the District against the insurer under rules concerning liquidation of insurers under this chapter as are otherwise compatible with the provisions of this section.  (Oct. 15, 1993, D.C. Law 10-35,  50, 40 DCR 5773; Feb. 27, 1996, D.C. Law 11-90,  2, 42 DCR 7155; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2849. Section References This section is referenced in  31-1348 and  31-1350. Emergency Legislation For temporary amendment of section, see  2 of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and  2 of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, Temporary Legislation For temporary (225 day) amendment of section, see  2 of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305).
 311350. Domiciliary liquidators in other states. (a) The domiciliary liquidator of an insurer domiciled in a reciprocal state shall, except as to special deposits and security on secured claims under  31-1351(c), be vested by operation of law with the title to all of the assets, property, contracts, and rights of action, agents balances, and all of the books, accounts, and other records of the insurer located in the District. The date of vesting shall be the date of the filing of the petition, if that date is specified by the domiciliary law for the vesting of property in the domiciliary state. Otherwise, the date of vesting shall be the date of entry of the order directing possession to be taken. The domiciliary liquidator shall have the immediate right to recover balances due from agents and to obtain possession of the books, accounts, and other records of the insurer located in this state. He also shall have the right to recover all other assets of the insurer located in this state, subject to  31-1351. (b) If a domiciliary liquidator is appointed for an insurer not domiciled in a reciprocal state, the Commissioner shall be vested by operation of law with the title to all of the property, contracts, and right of action, and all of the books, accounts and other records of the insurer located in the District, at the same time that the domiciliary liquidator is vested with title in the domicile. The Commissioner may petition for a conservation or liquidation order under  31-1348 or  31-1349, or for an ancillary receivership under  31-1351, or, after approval by the Superior Court of the District of Columbia, may transfer title to the domiciliary liquidator, as the interests of justice and the equitable distribution of the assets require. (c) Claimants residing in the District may file claims with the liquidator or ancillary receiver, if any, in the District or with the domiciliary liquidator, if the domiciliary law permits. The claims must be filed on or before the last date fixed for the filing of claims in the domiciliary liquidation proceedings.  (Oct. 15, 1993, D.C. Law 10-35,  51, 40 DCR 5773; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2850. Section References This section is referenced in  31-1301.
 311351. Ancillary formal proceedings. (a) If a domiciliary liquidator has been appointed for an insurer not domiciled in the District, the Commissioner may file a petition with the Superior Court of the District of Columbia requesting appointment as ancillary receiver in the District: (1) If he or she finds that there are sufficient assets of the insurer located in the District to justify the appointment of an ancillary receiver; or (2) If the protection of creditors or policyholders in the District so requires. (b) The court may issue an order appointing an ancillary receiver in whatever terms it deems appropriate. The filing or recording of the order with the recorder of deeds in the District imparts the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with that recorder of deeds. (c) When a domiciliary liquidator has been appointed in a reciprocal state, then the ancillary receiver appointed in the District may, whenever necessary, aid and assist the domiciliary liquidator in recovering assets of the insurer located in the District. The ancillary receiver shall, as soon as practicable, liquidate from their respective securities those special deposit claims and secured claims which are proved and allowed in the ancillary proceedings in the District, and shall pay the necessary expenses of the proceedings. He or she shall promptly transfer all remaining assets, books, accounts, and records to the domiciliary liquidator. Subject to this section, the ancillary receiver and his or her deputies shall have the same powers and be subject to the same duties with respect to the administration of assets as a liquidator of an insurer domiciled in the District. (d) When a domiciliary liquidator has been appointed in the District, ancillary receivers appointed in reciprocal states shall have, as to assets and books, accounts, and other records in their respective states, corresponding rights, duties, and powers to those provided in subsection (c) of this section for ancillary receivers appointed in the District.  (Oct. 15, 1993, D.C. Law 10-35,  52, 40 DCR 5773; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2851. Section References This section is referenced in  31-1301,  31-1348,  31-1349, and  31-1350.
 311352. Ancillary summary proceedings. The Commissioner, in his or her sole discretion, may institute proceedings under  31-1308 and 31-1309 at the request of the commissioner or other appropriate insurance official of the domiciliary state of any foreign or alien insurer having property located in the District.  (Oct. 15, 1993, D.C. Law 10-35,  53, 40 DCR 5773; May 21, 1997, D.C. Law 11-268,  10(z)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2852.
 311353. Claims of nonresidents against insurers domiciled in the District of Columbia. (a) In a liquidation proceeding begun in the District against an insurer domiciled in the District, claimants residing in foreign countries or in states not reciprocal states must file claims in the District, and claimants residing in reciprocal states may file claims either with the ancillary receivers, if any, in their respective states, or with the domiciliary liquidator. Claims must be filed on or before the last date fixed for the filing of claims in the domiciliary liquidation proceeding. (b) Claims belonging to claimants residing in reciprocal states may be proved either in the liquidation proceeding in the District as provided in this chapter, or in ancillary proceedings, if any, in the reciprocal states. If notice of the claims and opportunity to appear and be heard is afforded the domiciliary liquidator of the District as provided in  31-1354(b) with respect to ancillary proceedings, the final allowance of claims by the courts in ancillary proceedings in reciprocal states shall be conclusive as to amount and priority against special deposits or other security located in ancillary states, but shall not be conclusive with respect to priorities against general assets under  31-1340.  (Oct. 15, 1993, D.C. Law 10-35,  54, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2853. Section References This section is referenced in  31-1301.
 311354. Claims of residents against insurers domiciled in reciprocal states. (a) In a liquidation proceeding in a reciprocal state against an insurer domiciled in that state, claimants against the insurer who reside within the District may file claims either with the ancillary receiver, if any, in the District, or with the domiciliary liquidator. Claims must be filed by the last dates fixed for the filing of claims in the domiciliary liquidation proceeding. (b) Claims belonging to claimants residing in the District may be proved either in the domiciliary state under the law of that state, or in ancillary proceedings, if any, in the District. If a claimant elects to prove his or her claim in the District, the claimant shall file his or her claim with the liquidator in the manner provided in  31-1333 and 31-1334. The ancillary receiver shall make his or her recommendation to the court as under  31-1341. He or she shall also arrange a date for hearing if necessary under  31-1337 and shall give notice to the liquidator in the domiciliary state, either by certified mail or by personal service at least 40 days prior to the date set for hearing. If the domiciliary liquidator, within 30 days after the giving of notice, gives notice in writing to the ancillary receiver and to the claimant, either by certified mail or by personal service, of his or her intention to contest the claim, he or she shall be entitled to appear or to be represented in any proceeding in the District involving the adjudication of the claim. (c) The final allowance of the claim by the courts of the District shall be accepted as conclusive as to amount and as to priority against special deposits or other security located in the District.  (Oct. 15, 1993, D.C. Law 10-35,  55, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2854. Section References This section is referenced in  31-1353.
 311355. Attachment, garnishment, and levy of execution. During the pendency in this, or any other state, of a liquidation proceeding, whether called by that name or not, no action or proceeding in the nature of an attachment, garnishment, or levy of execution shall be commenced or maintained in the District against the delinquent insurer or its assets.  (Oct. 15, 1993, D.C. Law 10-35,  56, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2855.
 311356. Interstate priorities. (a) In a liquidation proceeding in the District involving 1 or more reciprocal states, the order of distribution of the domiciliary state shall control as to all claims of residents of this and reciprocal states. All claims of residents of reciprocal states shall be given equal priority of payment from general assets regardless of where the assets are located. (b) The owners of special deposit claims against an insurer for which a liquidator is appointed in this or any other state shall be given priority against the special deposits in accordance with the statutes governing the creation and maintenance of the deposits. If there is a deficiency in any deposit so that the claims secured by it are not fully discharged from it, the claimants may share in the general assets, but the sharing shall be deferred until general creditors, and also claimants against other special deposits who have received smaller percentages from their respective special deposits, have been paid percentages of their claims equal to the percentage paid from the special deposit. (c) The owner of a secure claim against an insurer for which a liquidator has been appointed in this or any other state may surrender his or her security and file his or her claim as a general creditor, or the claim may be discharged by resort to the security in accordance with  31-1339, in which case the deficiency, if any, shall be treated as a claim against the general assets of the insurer on the same basis as claims of unsecured creditors.  (Oct. 15, 1993, D.C. Law 10-35,  57, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2856.
 311357. Subordination of claims for noncooperation. If an ancillary receiver in another state or foreign country, whether called by that name or not, fails to transfer to the domiciliary liquidator in the District any assets within his or her control other than special deposits, diminished only by the expenses of the ancillary receivership, if any, the claims filed in the ancillary receivership, other than special deposit claims or secured claims, shall be placed in the class of claims under  31-1340(7).  (Oct. 15, 1993, D.C. Law 10-35,  58, 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-2857.
 311371.01. Application. This chapter shall apply only to investments and investment practices of domestic insurers and United States branches of non-U.S. insurers that are authorized to use the District of Columbia as a state of entry to transact insurance through its United States branch under  31-2202. This chapter shall not apply to separate accounts of an insurer pertaining to variable or modified guaranteed contracts.  (Apr. 11, 2003, D.C. Law 14-297,  101, 50 DCR 330.)  Section References This section is referenced in  31-1372.01,  31-3931.07, and  31-5031.07.
 311371.02. Definitions. For the purposes of this chapter, the term: (1) Acceptable collateral means: (A) As to securities lending transactions, and for the purpose of calculating the counterparty exposure amount, cash, cash equivalents, letters of credit, direct obligations of, or securities that are fully guaranteed as to principal and interest by, the government of the United States, any agency of the United States, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation; (B) As to foreign lending securities transactions, investments set forth in subparagraph (A) of this paragraph and sovereign debt rated 1 by the SVO; (C) As to repurchase transactions, cash, cash equivalents and direct obligations of, or securities that are fully guaranteed as to principal and interest by, the government of the United States, an agency of the United States, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation; and (D) As to reverse repurchase transactions, cash and cash equivalents. (2) Acceptable private mortgage insurance means insurance written by a private insurer protecting a mortgage lender against loss occasioned by a mortgage loan default and issued by a licensed mortgage insurance company, with an SVO 1 designation or a rating issued by a nationally recognized statistical rating organization equivalent to an SVO 1 designation, that covers losses to an 80% loan-to-value ratio. (3) Accident and health insurance means protection which provides payment of benefits for covered sickness or accidental injury, excluding credit insurance, disability insurance, accidental death and dismemberment insurance, and long-term care insurance. (4) Accident and health insurer means a licensed life or health insurer or health service corporation whose insurance premiums and required statutory reserves for accident and health insurance constitute at least 95% of total premium considerations or total statutory required reserves, respectively. (5) Admitted assets means assets having economic value which can be used to fulfill policy obligations and permitted, as allowed in the National Association of Insurance Commissioners Accounting Practices and Procedures Manual, to be reported as admitted assets on the statutory financial statement of the insurer most recently required to be filed with the Commissioner, but excluding assets of separate accounts, the investments of which are not subject to the provisions of this chapter. (6) Affiliate means, as to any person, another person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the person. (7) Asset-backed security means a security or other instrument, excluding a mutual fund, evidencing an interest in, providing the right to receive payments from, or payable from distributions on, an asset, a pool of assets, or specifically divisible cash flows which are legally transferred to a trust or another special purpose bankruptcy-remote business entity, under the following conditions: (A) The trust or other business entity is established solely for the purpose of acquiring specific types of assets or right to cash flows, issuing securities and other instruments representing an interest in or right to receive cash flows from those assets or rights, and engaging in activities required to service the assets or rights and any credit enhancement or support features held by the trust or other business entity; and (B) The assets of the trust or other business entity consist solely of interest-bearing obligations or other contractual obligations representing the right to receive payment from the cash flows from the assets or rights; provided, that the existence of credit enhancements, such as letters of credit or guarantees, or support features, such as swap agreements, shall not disqualify the security or other instrument as an asset-backed security. (8) Business entity includes a sole proprietorship, corporation, limited liability company, association, partnership, joint stock company, joint venture, mutual fund, trust, joint tenancy or other similar form of business organization, whether organized for profit or not for profit. (9) Cap means an agreement obligating the seller to make payments to the buyer, with each payment based on the amount by which a reference price or level or the performance or value of one or more underlying interests exceeds a predetermined number, sometimes called the strike rate or strike price. (10) Capital and surplus means the sum of the capital and surplus of the insurer required to be shown on the statutory financial statement of the insurer most recently required to be filed with the Commissioner. (11) Cash equivalents means short-term, highly rated, and highly liquid investments or securities readily convertible to known amounts of cash without penalty. Cash equivalents shall include government money market mutual funds and class one money market mutual funds. For the purposes of this definition: (A) Short-term means investments with a remaining term to maturity of 90 days or less. (B) Highly rated means an investment rated P-1 by Moodys Investors Services, Inc., A-1 by the Standard and Poors division of The McGraw Hill Companies, Inc., or its equivalent rating by a nationally recognized statistical rating organization recognized by the SVO. (12) Class one bond mutual fund means a bond mutual fund that at all times qualifies for investment using the bond class one reserve factor under the Purposes and Procedures of the Securities Valuation Office of the Securities Valuation Office or any successor publication. (13) Class one money market mutual fund means a money market mutual fund that at all times qualifies for investment using the bond class one reserve factor under the Purposes and Procedures of the Securities Valuation Office of the Securities Valuation Office or any successor publication. (14) Code means the laws relating to insurance which are codified in this title of the D.C. Official Code. (15) Collar means an agreement to receive payments as the buyer of an option, cap, or floor and to make payments as the seller of a different option, cap, or floor. (16) Commercial mortgage loan means a loan secured by a mortgage other than a residential mortgage loan. (17) Construction loan means a loan with a term of less than 3 years made for financing the cost of construction of a building or other improvement to real estate and secured by the real estate to be improved. (18) Control means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract (other than a commercial contract for goods or non-management services), or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if a person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, 10% or more of the voting securities of another person. This presumption may be rebutted by a showing that control does not exist in fact. The Commissioner may determine, after furnishing all interested persons notice and an opportunity to be heard and making specific findings of fact to support the determination, that control exists in fact, notwithstanding the absence of a presumption to that effect. (19)(A) Counterparty exposure amount means the net amount of credit risk attributable to a derivative instrument entered into with a business entity other than through a qualified exchange, qualified foreign exchange, or cleared through a qualified clearinghouse (over-the-counter derivative instrument). (B)(i) The net amount of credit risk equals: (I) The market value of the over-the-counter derivative instrument if the liquidation of the derivative instrument would result in a final cash payment to the insurer; or (II) Zero if the liquidation of the derivative instrument would not result in a final cash payment to the insurer. (ii) If over-the-counter derivative instruments are entered into under a written master agreement which provides for netting of payments owed by the respective parties, and the domiciliary jurisdiction of the counterparty is either within the United States or, if not within the United States, within a foreign jurisdiction listed in the Purposes and Procedures of the Securities Valuation Office of the Securities Valuation Office as eligible for netting, the net amount of credit risk shall be the greater of zero or the net sum of: (I) The market value of the over-the-counter derivative instruments entered into under the agreement, the liquidation of which would result in a final cash payment to the insurer; and (II) The market value of the over-the-counter derivative instruments entered into under the agreement, the liquidation of which would result in a final cash payment by the insurer to the business entity. (iii) For open transactions, market value shall be determined at the end of the most recent quarter of the insurers fiscal year and shall be reduced by the market value of acceptable collateral held by the insurer or placed in escrow by one or both parties. (20) Covered means that, in an income generation transaction, an insurer owns or can immediately acquire, through the exercise of options, warrants, or conversion rights already owned, the underlying interest to fulfill or secure its obligations under a call option, cap, or floor it has written, or has set aside under a custodial or escrow agreement cash or cash equivalents with a market value equal to the amount required to fulfill its obligations under a put option it has written. (21) Credit tenant loan means a mortgage loan which is made primarily in reliance on the credit standing of a major tenant, structured with an assignment of the rental payments to the lender, and is secured by a first lien on the real estate. (22)(A) Derivative instrument means an agreement, option, instrument, or a series or combination thereof: (i) To make or take delivery of, or assume or relinquish, a specified amount of one or more underlying interests; (ii) To make a cash settlement in lieu thereof; or (iii) That has a price, performance, value, or cash flow based primarily upon the actual or expected price, level, performance, value, or cash flow of one or more underlying interests. (B) Derivative instruments shall include options, warrants used in a hedging transaction and not attached to another financial instrument, caps, floors, collars, swaps, forwards, and futures; any other agreements, options, or instruments substantially similar thereto, or any series or combination thereof; and any agreements, options, or instruments permitted under regulations adopted under  31-1375.01. Derivative instruments shall not include an investment authorized by  31-1372.03 through 31-1372.09, 31-1372.11, and 31-1373.04 through 31-1373.10. (23) Derivative transaction means a transaction involving the use of one or more derivative instruments. (24) Direct or directly, when used in connection with an obligation, means that the designated obligor is primarily liable on the instrument representing the obligation. (25) Dollar roll transaction means 2 simultaneous transactions with different settlement dates no more than 96 days apart, where, in the first transaction, an insurer sells to a business entity and, in the second transaction, the insurer is obligated to purchase from the same business entity, substantially similar securities of the following types: (A) Asset-backed securities issued, assumed, or guaranteed by the Government National Mortgage Association, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation, or their respective successors; and (B) Other asset-backed securities referred to in section 106 of the Secondary Mortgage Market Enhancement Act of 1984, approved October 3, 1984 (98 Stat. 1691; 15 U.S.C.  77r-1). (26) Domestic jurisdiction means the United States, Canada, the District of Columbia, any state, any province of Canada, or any political subdivision of any of the foregoing. (27) Equity interest means any of the following that are not rated credit instruments: (A) Common stock; (B) Preferred stock; (C) Trust certificate; (D) Equity investment in an investment company other than a money market mutual fund or a class one bond mutual fund; (E) Investment in a common trust fund of a bank regulated by a federal or state agency; (F) An ownership interest in minerals, oil, or gas, the rights to which have been separated from the underlying fee interest in the real estate where the minerals, oil, or gas are located; (G) Instruments which are mandatorily, or at the option of the issuer, convertible to equity; (H) Limited partnership interests and those general partnership interests authorized under  31-1371.05; (I) Member interests in limited liability companies; (J) Warrants or other rights to acquire equity interests that are created by the person that owns or would issue the equity to be acquired; or (K) Instruments that would be rated credit instruments except as excluded by paragraph (71)(B) of this section. (28) Equivalent securities means: (A) In a securities lending transaction, securities that are identical to the loaned securities in all features, including the amount of the loaned securities, except as to certificate number if held in physical form; provided, that if any different security shall be exchanged for a loaned security by recapitalization, merger, consolidation, or other corporate action, the different security shall be deemed to be the loaned security; (B) In a repurchase transaction, securities that are identical to the purchased securities in all features, including the amount of the purchased securities, except as to the certificate number if held in physical form; or (C) In a reverse repurchase transaction, securities that are identical to the sold securities in all features, including the amount of the sold securities, except as to the certificate number if held in physical form. (29) Floor means an agreement obligating the seller to make payments to the buyer in which each payment is based on the amount by which a predetermined number, sometimes called the floor rate or price, exceeds a reference price, level, performance, or value of one or more underlying interests. (30) Foreign currency means a currency other than that of a domestic jurisdiction. (31)(A) Foreign investment means an investment in a foreign jurisdiction, or any investment in a person, real estate, or asset domiciled in a foreign jurisdiction, that is substantially of the same type as those eligible for investment under this chapter, other than under  31-1372.09 and 31-1373.10. An investment shall not be a foreign investment if the issuing person, qualified primary credit source, or qualified guarantor is a domestic jurisdiction or a person domiciled in a domestic jurisdiction, unless: (i) The issuing person is a shell business entity; and (ii) The investment is not assumed, accepted, guaranteed, insured, or otherwise backed by a domestic jurisdiction or a person, that is not a shell business entity, domiciled in a domestic jurisdiction. (B) For the purposes of this definition: (i) Shell business entity means a business entity having no economic substance except as a vehicle for owning interests in assets issued, owned, or previously owned by a person domiciled in a foreign jurisdiction. (ii) Qualified guarantor means a guarantor against which an insurer has a direct claim under contract for full and timely payment for which an enforcement action can be brought in a domestic jurisdiction. (iii) Qualified primary credit source means the credit source to which an insurer looks for payment as to an investment and against which an insurer has a direct claim under contract for full and timely payment for which an enforcement action can be brought in a domestic jurisdiction. (32) Foreign jurisdiction means a jurisdiction other than a domestic jurisdiction. (33) Forward means an agreement (other than a future) to make or take delivery of, or effect a cash settlement based on the actual or expected price, level, performance, or value of, one or more underlying interests. (34) Future means an agreement, traded on a qualified exchange or qualified foreign exchange, to make or take delivery of, or effect a cash settlement based on the actual or expected price, level, performance or value of, one or more underlying interests. (35) Government money market mutual fund means a money market mutual fund that at all times: (A) Invests only in obligations issued, guaranteed, or insured by the federal government of the United States or collateralized repurchase agreements composed of these obligations; and (B) Qualified for investment without a reserve under the Purposes and Procedures of the Securities Valuation Office of the Securities Valuation Office or any successor publication. (36) Government-sponsored enterprise means a: (A) Governmental agency; or (B) Corporation, limited liability company, association, partnership, joint stock company, joint venture, trust, or other entity or instrumentality organized under the laws of any domestic jurisdiction to accomplish a public policy or other governmental purpose; provided, that this subparagraph shall not apply to any entity or instrumentality which qualifies for exemption under section 501(c)(3) of the Internal Revenue Code of 1986, approved October 26, 1986 (68A Stat. 163; 26 U.S.C.  501(c)(3)). (37) Guaranteed or insured, when used in connection with an obligation acquired under this chapter, means that the guarantor or insurer has agreed to: (A) Perform or insure the obligation of the obligor or purchase the obligation; or (B) Be unconditionally obligated until the obligation is repaid to maintain in the obligor a minimum net worth, fixed charge coverage, minimum stockholders equity, or sufficient liquidity to enable the obligor to pay the obligation in full. (38) Hedging transaction means a derivative transaction which is entered into and maintained to reduce: (A) The risk of a change in the value, yield, price, cash flow, or quantity of assets or liabilities which the insurer has acquired or incurred or anticipates acquiring or incurring; or (B) The currency exchange rate risk or the degree of exposure as to assets or liabilities which an insurer has acquired or incurred, or anticipates acquiring or incurring. (39) High grade investment means a rated credit instrument rated 1 or 2 by the SVO. (40) Income means, as to a security, interest, accrual of discount, dividends, or other distributions, such as rights, tax or assessment credits, warrants, and distributions in kind. (41) Income generation transaction means a derivative transaction involving the writing of covered call option, covered put options, covered caps, or covered floors that is intended to generate income or enhance return. (42) Initial margin means the amount of cash, securities, or other consideration initially required to be deposited to establish a futures position. (43) Insurance future means a future relating to an index or pool that is based on insurance-related items. (44) Insurance futures option means an option on an insurance futures contract. (45) Investment company means an investment company as defined in section 3(a)(1) of the Investment Company Act of 1940, approved August 20, 1940 (56 Stat. 867; 15 U.S.C.  80a-3(a)(1)), and a person described in section 3(c) of the Investment Company Act of 1940, approved August 20, 1940 (56 Stat. 867; 15 U.S.C. 80a-3(c)). (46) Investment company series means an investment portfolio of an investment company that is organized as a series company and to which assets of the investment company have been specifically allocated. (47) Investment practices means transactions of the types described in  31-1372.08,  31-1372.10,  31-1373.09, or  31-1373.11. (48) Investment subsidiary means a subsidiary of an insurer engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer if each subsidiary agrees to limit its investment in any asset so that its investments will not cause the amount of the total investment of the insurer to exceed any of the investment limitations or avoid any other provisions of this chapter applicable to the insurer. For the purposes of this paragraph, the total investment of the insurer shall include: (A) Direct investment by the insurer in an asset; and (B) The insurers proportionate share of an investment in an asset by an investment subsidiary of the insurer, which share shall be calculated by multiplying the amount of the subsidiarys investment by the percentage of the insurers ownership interest in the subsidiary. (49) Investment strategy means the techniques and methods used by an insurer to meet its investment objectives, such as active bond portfolio management, passive bond portfolio management, interest rate anticipation, growth investment, and value investing. (50) Letter of credit means a clean, irrevocable, and unconditional letter of credit issued or confirmed by, and payable and presentable at, a financial institution on the list of financial institutions meeting the standards for issuing letters of credit under the Purposes and Procedures of the Securities Valuation Office of the Securities Valuation Office of the Securities Valuation Office, or any successor publication. To constitute acceptable collateral for the purposes of  31-1372.08 and  31-1373.02, a letter of credit shall have an expiration date beyond the term of the subject transaction. (51) Limited liability company means an entity that is an unincorporated association, having perpetual duration, having one or more members that is organized and existing under Chapter 8 of Title 29, or under the laws of the United States or any state thereof that limits the personal liability of each member to the equity investment of the member in the business entity. (52) Lower grade investment means a rated credit instrument rated 4, 5, or 6 by the SVO. (53) Market value means: (A) As to cash and a letter of credit, the amount thereof; and (B) As to a security, as of any date, the price of the security on that date obtained from a generally recognized source or the most recent quotation from such a source or, to the extent no generally recognized source exists, the price for the security as determined in good faith by the parties to a transaction, plus accrued but unpaid income thereon to the extent not included in the price as of that date. (54) Medium grade investment means a rated credit instrument rated 3 by the SVO. (55) Modified guaranteed contracts means a modified guaranteed annuity or modified guaranteed life insurance policy or contract. (56) Money market mutual fund means a mutual fund that meets the conditions of 17 C.F.R.  270.2a-7. (57) Mortgage loan means an obligation secured by a mortgage, deed of trust, trust deed, or other consensual lien on real estate. (58) Multilateral development bank means an international development organization of which the United States is a member. (59) Mutual fund means an investment company or, in the case of an investment company that is organized as a series company, an investment company series, that is registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940, approved August 20, 1940 (56 Stat. 789; 15 U.S.C.  80a-1 et seq.). (60) NAIC means the National Association of Insurance Commissioners. (61) Obligation means a bond, note, debenture, trust certificate, including an equipment certificate, production payment, negotiable bank certificate of deposit, bankers acceptance, credit tenant loan, loan secured by financing, net leases and other evidence of indebtedness for the payment of money (or participations, certificates, or other evidences of an interest in any of the foregoing), whether constituting a general obligation of the issuer or payable only out of certain revenues or certain funds pledged or otherwise dedicated for payment. (62)(A) Option means an agreement giving the buyer the right to buy or receive, sell or deliver, enter into, extend or terminate or effect a cash settlement based on the actual or expected price, level, performance, or value of one or more underlying interests. (B) Call option means the right of the buyer to buy or receive the option. (C) Put option means the right of the buyer to sell or deliver the option. (63) Person means an individual, a business entity, a multilateral development bank, or a government or quasi-governmental body, such as a political subdivision or a government-sponsored enterprise. (64) Potential exposure means the amount determined in accordance with the NAIC Annual Statement Instructions. (65) Preferred stock means stock of a business entity, which stock has a preference in liquidation over the common stock of the business entity. (66) Qualified bank means: (A) A national bank, state bank, or trust company that at all times is no less than adequately capitalized as determined by standards adopted by United States banking regulators and that is either regulated by state banking laws or is a member of the Federal Reserve System; or (B) A bank or trust company incorporated or organized under the laws of a country other than the United States that is regulated as a bank or trust company by that countrys government or an agency thereof and that at all times is no less than adequately capitalized as determined by the standards adopted by international banking authorities. (67) Qualified business entity means a business entity that is: (A) An issuer of obligations or preferred stock that are rated 1 or 2 by the SVO or an issuer of obligations, preferred stock, or derivative instruments that are rated the equivalent of 1 or 2 by the SVO or by a nationally recognized statistical rating organization recognized by the SVO; or (B) A primary dealer in United States government securities, recognized by the Federal Reserve Bank of New York. (68) Qualified clearinghouse means a clearinghouse for, and subject to the rules of, a qualified exchange or a qualified foreign exchange, which provides clearing services, including acting as a counterparty to each of the parties to a transaction such that the parties no longer have credit risk as to each other. (69) Qualified exchange means: (A) A securities exchange registered as a national securities exchange or a securities market regulated under the Securities Exchange Act of 1934 approved June 6, 1934 (48 Stat. 881; 15 U.S.C.  78 et seq.); (B) A board of trade or commodities exchange designated as a contract market by the Commodity Futures Trading Commission; (C) Private Offerings, Resales and Trading through Automated Linkages (PORTAL); (D) A designated offshore securities market as defined in 17 C.F.R.  230.902(b); or (E) A qualified foreign exchange. (70) Qualified foreign exchange means a foreign exchange, board of trade, or contract market located outside the United States, its territories, or possessions: (A) That has received regulatory comparability relief under Rule 30.10, Appendix C, 17 C.F.R. Part 30 (Rule 30.10); (B) That is, or its members are, subject to the jurisdiction of a foreign futures authority that has received regulatory comparability relief under Rule 30.10 as to futures transactions in the jurisdiction where the exchange, board of trade, or contract market is located; or (C) Upon which foreign stock index futures contracts are listed that are the subject of no-action relief issued by the Office of General Counsel of the Commodity Futures Trading Commission; provided, that an exchange, board of trade, or contract market that is a qualified foreign exchange under this subparagraph shall only be a qualified foreign exchange as to foreign stock index futures contracts that are the subject of no-action relief. (71)(A) Rated credit instrument means a contractual right to receive cash or another rated credit instrument from another entity which instrument: (i) Is rated, or required to be rated, by the SVO; (ii) In the case of an instrument with a maturity not exceeding 397 days, is issued, guaranteed, or insured by an entity that is rated by, or another obligation of such entity is rated by, the SVO or by a nationally recognized statistical rating organization recognized by the SVO; (iii) In the case of an instrument with a maturity not exceeding 90 days, is issued by a qualified bank; (iv) Is a share of a class one bond mutual fund; or (v) Is a share of a money market mutual fund. (B) The term rated credit instrument shall not mean: (i) An instrument that is mandatorily, or at the option of the issuer, convertible to an equity interest; or (ii) A security that has a par value and whose terms provide that the issuers net obligation to repay all or part of the securitys par value is determined by reference to the performance of an equity, a commodity, a foreign currency, or an index of equities, commodities, foreign currencies, or combinations thereof. (72)(A) Real estate means: (i) Real property; (ii) Interests in real property, such as leaseholds, minerals, and oil and gas that have not been separated from the underlying fee interest; (iii) Improvements and fixtures located on or in real property; or (iv) The sellers equity in a contract providing for a deed of real estate. (B) As to a mortgage on a leasehold estate, real estate shall include the leasehold estate only if it has an unexpired term, including renewal options exercisable at the option of the lessee, extending beyond the scheduled maturity date of the obligation that is secured by a mortgage on the leasehold estate by a period equal to the greater of 20% of the original term of the obligation or 10 years. (73) Replication transaction means a derivative transaction that is intended to replicate the performance of one or more assets that an insurer may acquire under this chapter. A derivative transaction that is entered into as a hedging transaction shall not be considered a replication transaction. (74) Repurchase transaction means a transaction in which an insurer purchases securities from a business entity that is obligated to repurchase the purchased securities or equivalent securities from the insurer at a specified price, either within a specified period of time or upon demand. (75) Required liabilities means total liabilities required to be reported on the statutory financial statement of the insurer most recently required to be filed with the Commissioner. (76) Residential mortgage loan means a loan primarily secured by a mortgage on real estate improved with a residence for up to 4 families. (77) Reverse repurchase transaction means a transaction in which an insurer sells securities to a business entity and is obligated to repurchase the sold securities or equivalent securities from the business entity at a specified price, either within a specified period of time or upon demand. (78) Secured location means the contiguous real estate owned by one person. (79) Securities lending transaction means a transaction in which securities are loaned by an insurer to a business entity that is obligated to return the loaned securities or equivalent securities to the insurer, either within a specified period of time or upon demand. (80) Series company means an investment company that is organized as a series company, as defined in SEC Rule 18f-2(a), 17 C.F.R.  270.18f-2. (81) Sinking fund stock means preferred stock that: (A) Is subject to a mandatory sinking fund or similar arrangement that will provide for the redemption or open market purchase of the entire issue over a period not longer than 40 years from the date of acquisition; and (B) Provides for mandatory sinking fund installments or open market purchases commencing not more than 10.5 years from the date of issue, with the sinking fund installments providing for the purchase or redemption, on a cumulative basis commencing 10 years from the date of issue, of at least 2.5% per year of the original number of shares of that issue of preferred stock. (82) Special rated credit instrument means a rated credit instrument that is: (A) An instrument that is structured so that, if it is held until retired by or on behalf of the issuer, its rate of return, based on its purchase cost and any possible cash flow, may become negative due to reasons other than the credit risk associated with the issuer of the instrument; provided, that a rated credit instrument shall not be a special rated credit instrument under this subsection if it is: (i) A share in a class one bond mutual fund; (ii) An instrument, other than an asset-backed security, which: (I) Has payments of par value fixed as to amount and timing or is callable; (II) Is payable only at par or greater; and (III) Has interest or dividend cash flows that are based on either a fixed or variable rate determined by reference to a specified rate or index; (iii) An instrument, other than an asset-backed security, that has a par value and is purchased at a price no greater than 110% of par value; (iv) An instrument, including an asset-backed security, whose rate of return would become negative only as a result of a prepayment due to casualty, condemnation or economic obsolescence of collateral, or change of law; (v) An asset-backed security that relies on collateral that meets the requirements of sub-subparagraph (ii) of this subparagraph, the par value of which collateral: (I) Is not permitted to be paid sooner than 1/2 of the remaining term to maturity from the date of acquisition; (II) Is permitted to be paid prior to maturity only at a premium sufficient to provide a yield to maturity for the investment, considering the amount prepaid and reinvestment rates at the time of early repayment, at least equal to the yield to maturity of the initial investment; or (III) Is permitted to be paid prior to maturity at a premium at least equal to the yield of a treasury issue of comparable remaining life; or (vi) An asset-backed security that relies on cash flows from assets that are not prepayable at any time at par value, but is not otherwise governed by sub-subparagraph (v) of this subparagraph, if the asset-backed security has par value reflecting principal payments to be received if held until retired by or on behalf of the issuer and is purchased at a price not greater than 105% of such par amount; or (B)(i) An asset-backed security that: (I) Relies on cash flows from assets that are prepayable at par value at any time; (II) Does not make payments of par value that are fixed as to amount and timing; and (III) Has a negative rate of return at the time of acquisition if a prepayment threshold assumption is used, with the prepayment threshold assumption defined as: (aa) Twice the prepayment expectation reported by a recognized, publicly available source as being the median of expectations contributed by broker-dealers or other entities, except insurers, engaged in the business of selling or evaluating such securities or assets. The prepayment expectation used in this calculation shall be, at the insurers election, the prepayment expectation for pass-through securities of the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Government National Mortgage Association, or for other assets of the same type as the assets that underlie the asset-backed security, in either case which has a gross weighted average coupon comparable to the gross weighted average coupon of the assets that underlie the asset-backed security; or (bb) Another prepayment threshold assumption specified by the Commissioner by regulation promulgated under  31-1375.01. (ii) For the purposes of this subparagraph, if the asset-backed security is purchased in combination with one or more other asset-backed securities that are supported by identical underlying collateral, the insurer may calculate the rate of return for these specific combined asset-backed securities in combination; provided, that the insurer shall maintain documentation demonstrating that the securities were acquired and are continuing to be held in combination. (83) State means any of the several states, the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of Northern Mariana Islands. (84) Substantially similar securities means securities that meet all criteria for substantially similar specified in the NAIC Accounting Practices and Procedures Manual, and in an amount that constitutes good delivery form as determined from time to time by the Public Securities Administration. (85) SVO means the Securities Valuation Office of the NAIC, or any successor office established by the NAIC. (86) Swap means an agreement to exchange or to net payments at one or more times based on the actual or expected price, level, performance, or value of one or more underlying interests. (87) Variable contracts means a variable annuity or a variable life insurance policy. (88) Underlying interest means the assets, liabilities, other interests or a combination thereof underlying a derivative instrument, such as any one or more securities, currencies, rates, indices, commodities, or derivative instruments. (89) Unrestricted surplus means the amount by which total admitted assets exceed 125% of the insurers required liabilities. (90) Warrant means an instrument that gives the holder the right to purchase an underlying financial instrument at a given price and time or at a series of prices and times outlined in the warrant agreement. Warrants may be issued alone or in connection with the sale of other securities or to facilitate divestiture of the securities of another business entity.  (Apr, 11, 2003, D.C. Law 14-297,  102, 50 DCR 330; July 2, 2011, D.C. Law 18-378,  3(v), 58 DCR 1720.)  Effect of Amendments D.C. Law 18-378, in par. (51), substituted Chapter 8 of Title 29 for Chapter 10 of Title 29.
 311371.03. General investment qualifications. (a) Domestic insurers may acquire, hold, or invest in investments or engage in investment practices as set forth in this chapter. In addition to investments conforming to this act, domestic insurers may also invest in securities of one or more subsidiaries of the insurer to the extent permitted by  31-702. (b) Subject to subsection (c) of this section, an insurer shall not acquire or hold an investment as an admitted asset unless, at the time of acquisition, it is: (1) Eligible for the payment or accrual of interest or discount, whether in cash or other securities; eligible to receive dividends or other distributions; or is otherwise income-producing; or (2) Acquired under  31-1372.07(c), 31-1372.08, 31-1372.10, 31-1372.12, 31-1373.08(c), 31-1373.09, 31-1373.11, or 31-1373.12, or under other provisions of District of Columbia law other than this chapter. (c) An insurer may acquire or hold as admitted assets investments that do not otherwise qualify as provided in this chapter if the insurer has not acquired them for the purpose of circumventing any limitations contained in this chapter, the insurer complies with the provisions of  31-1371.04 and 31-1371.06 as to the investments, and the insurer acquires the investments in the following circumstances: (1) As payment on account of existing indebtedness or in connection with the refinancing, restructuring, or workout of existing indebtedness, if taken to protect the insurers interest in that investment; (2) As realization on collateral for an obligation; (3) In connection with an otherwise qualified investment or investment practice, (A) as interest on or a dividend or other distribution related to the investment or investment practice or in connection with the refinancing of the investment, and (B) for no additional or only nominal consideration; (4) Under a lawful and bona fide agreement of recapitalization or voluntary or involuntary reorganization in connection with an investment held by the insurer; or (5) Under a bulk reinsurance, merger, or consolidation transaction approved by the Commissioner if the assets constitute admissible investments for the ceding, merged, or consolidated companies. (d) Unless within the period the investment has become a qualified investment under a section of this chapter other than subsection (c) of this section, an investment, or portion of an investment, acquired by an insurer under subsection (c) of this section shall become a nonadmitted asset 3 years (or 5 years in the case of mortgage loans and real estate) from the date of its acquisition; provided, that an investment acquired under an agreement of bulk reinsurance, merger, or consolidation may be qualified for a long period if so provided in the plan for reinsurance, merger, or consolidation as approved by the Commissioner. Upon application by the insurer and a showing that the nonadmission of an asset held under subsection (c) of this section would materially injure the interests of the insurer, the Commissioner may extend the period for admissibility for an additional reasonable period of time. (e) Except as provided in subsections (f) and (h) of this section, an investment shall qualify under this chapter if, on the date that the insurer committed to acquire the investment or on the date of its acquisition, it would have qualified under this chapter. For the purposes of determining limitations contained in this chapter, an insurer shall give appropriate recognition to any commitments to acquire investments. (f)(1) An investment held as an admitted asset by an insurer on April 11, 2003, which qualified under  31-4435 [repealed], and  31-2502.18 [repealed], shall remain qualified as an admitted asset under this chapter. (2) Each specific transaction constituting an investment practice of the type described in this chapter that was lawfully entered into by an insurer and was in effect on April 11, 2003, shall continue to be permitted under this chapter until its expiration or termination under its terms. (g) Unless otherwise specified, an investment limitation computed on the basis of an insurers admitted assets or capital and surplus shall relate to the amount required to be shown on the statutory balance sheet of the insurer most recently required to be filed with the Commissioner. For purposes of computing any limitation based upon admitted assets, the insurer shall deduct from the amount of its admitted assets the amount of the liability recorded on its statutory balance sheet for: (1) The return of acceptable collateral received in a reverse repurchase transaction or a securities lending transaction; (2) Cash received in a dollar roll transaction; and (3) The amount reported as borrowed money in the most recently filed financial statement to the extent not included in paragraphs (1) and (2) of this subsection. (h) An investment qualified, in whole or in part, for acquisition or holding as an admitted asset may be qualified or requalified at the time of acquisition or a later date, in whole or in part, under any other section, if the relevant conditions contained in the other section are satisfied at the time of qualification or requalification. (i) An insurer shall maintain documentation demonstrating that investments were acquired in accordance with this chapter and specifying the section of this chapter under which they were acquired. (j) An insurer shall not enter into an agreement to purchase securities in advance of their issuance for resale to the public as part of a distribution of the securities by the issuer or otherwise guarantee the distribution, except that an insurer may acquire privately placed securities with registration rights. (k) Notwithstanding any provision of this chapter, the Commissioner may, by rule or order, permit an insurer to nonadmit, limit, dispose of, withdraw from, or discontinue an investment or investment practice to the extent the Commissioner finds that the investment or investment practice endangers the solvency of the insurer or is otherwise hazardous to policyholders, creditors, or the public in the District of Columbia. The authority of the Commissioner under this subsection shall be in addition to any other authority of the Commissioner. (l) Insurance future and insurance futures options shall not be considered investments or investment practices for purposes of this chapter.  (Apr. 11, 2003, D.C. Law 14-297,  103, 50 DCR 330.)  Section References This section is referenced in  31-1371.05,  31-1372.07, and  31-1373.08.
 311371.04. Authorization of investments by the board of directors. (a) An insurers board of directors shall adopt a written plan for acquiring and holding investments and for engaging in investment practices that specifies guidelines as to the quality, maturity, and diversification of investments and other specifications, including investment strategies intended to assure that the investments and investment practices are appropriate for the business conducted by the insurer, its liquidity needs, and its capital and surplus. The board of directors shall review and assess the insurers technical investment and administrative capabilities and expertise before adopting a written plan concerning an investment strategy or investment practice. (b) Investments acquired and held under this chapter shall be acquired and held under the supervision and direction of the board of directors of the insurer. The board of directors shall evidence by formal resolution, at least annually, that it has determined whether all investments have been made in accordance with delegations, standards, limitations, and investment objectives prescribed by the board of directors or a committee of the board of directors charged with the responsibility to direct its investments. (c) On no less than a quarterly basis, and more often if considered appropriate, an insurers board of directors, or committee of the board of directors, shall: (1) Receive and review a summary report on the insurers investment portfolio, its investment activities, and investment practices engaged in under delegated authority, to determine whether the investment activity of the insurer is consistent with its written plan; and (2) Review and revise, as appropriate, the written plan. (d) In discharging its duties under this section, the board of directors shall require that records of an authorization or approval, other documentation as the board of directors may require, and the report of an action taken under authority delegated under the plan referred to in subsection (a) of this section shall be made available on a regular basis to the board of directors. (e) In discharging their duties under this section, the directors of an insurer shall perform their duties in good faith and with that degree of care that ordinarily prudent individuals in like positions would use under similar circumstances. (f) If an insurer does not have a board of directors, all references to the board of directors in this chapter shall refer to the governing body of the insurer having authority equivalent to that of a board of directors.  (Apr. 11, 2003, D.C. Law 14-297,  104, 50 DCR 330.)  Section References This section is referenced in  31-1371.03,  31-1372.08, and  31-1373.09.
 311371.05. Prohibited investments. (a) An insurer shall not, directly or indirectly: (1) Invest in an obligation or security or make a guarantee for the benefit of or in favor of an officer or director of the insurer, except as provided in  31-1371.06; (2) Invest in an obligation or security, make a guarantee for the benefit of or in favor of, or make other investments in a business entity of which 10% or more of the voting securities or equity interests are owned, directly or indirectly, by or for the benefit of one or more officers or directors of the insurer, except as authorized in  31-701, or provided in  31-1371.06; (3) Engage on its own behalf or through one or more affiliates in a transaction or series of transactions designed to evade the prohibitions of this chapter; (4) Invest in a partnership as a general partner; provided, that an insurer may make an investment as a general partner: (A) If all other partners in the partnership are subsidiaries of the insurer; (B) For the purpose of: (i) Meeting cash calls committed to prior to April 11, 2003; (ii) Completing those specific projects or activities of the partnership in which the insurer was a general partner as of April 11, 2003, that had been undertaken as of that date; or (iii) Making capital improvements to property owned by the partnership on April 11, 2003, if the insurer was a general partner as of that date; or (C) In accordance with  31-1371.03(c); or (5) Invest in or lend its funds upon the security of shares of its own stock, except that an insurer may acquire shares of its own stock, which shall not be admitted assets of the insurer for the following purposes: (A) Conversion of a stock insurer into a mutual or reciprocal insurer or a mutual or reciprocal insurer into a stock insurer; (B) Issuance to the insurers officers, employees, or agents in connection with a plan approved by the Commissioner for converting a publicly-held insurer into a privately-held insurer under  31-903, or in connection with other stock option and employee benefit plans; or (C) In accordance with any other plan approved by the Commissioner. (b) Subsection (a)(3) of this section shall not prohibit a subsidiary or other affiliate of the insurer from becoming a general partner.  (Apr. 11, 2003, D.C. Law 14-297,  105, 50 DCR 330.)  Section References This section is referenced in  31-1371.02,  31-1371.06,  31-1372.06,  31-1372.07,  31-1372.12,  31-1373.07, and  31-1373.08.
 311371.06. Loans to officers and directors. (a) Except as provided in subsection (b) of this section, an insurer shall not, without the prior written approval of the Commissioner, directly or indirectly: (1) Make a loan to or other investment in an officer or director of the insurer or a person in which the officer or director has any direct or indirect financial interest; (2) Make a guarantee for the benefit of or in favor of an officer or director of the insurer or a person in which the officer or director has any direct or indirect financial interest; or (3) Enter into an agreement for the purchase or sale of property from or to an officer to director of the insurer or a person in which the officer or director has any direct or indirect financial interest. (b)(1) For purposes of this section, an officer or director shall not be deemed to have a financial interest by reason of: (A) An interest that is held directly or indirectly through the ownership of equity interests representing less than 2% of all outstanding equity interests issued by a person that is a party to the transaction; or (B) The individuals position as a director or officer of a person that is a party to the transaction. (2) Paragraph (1) of this subsection shall not: (A) Permit an investment that is prohibited by  31-1371.05; or (B) Apply to a transaction between an insurer and any of its subsidiaries or affiliates that is entered into in connection with  31-701, other than a transaction between an insurer and its officer or director. (c) An insurer may make, without the prior written approval of the Commissioner: (1) Policy loans in accordance with the terms of the policy or contract and  31-1372.11; (2) Advances to officers or directors for expenses reasonably expected to be incurred in the ordinary course of the insurers business or guarantees associated with credit or charge cards issued or credit extended for the purpose of financing these expenses; (3) Loans secured by the principal residence of an existing or new officer of the insurer made in connection with the officers relocation at the insurers request, if the loans comply with the requirements of  31-1372.07 or  31-1372.08 and the terms and conditions otherwise are the same as those generally available from unaffiliated third parties; (4) Secured loans to an existing or new officer of the insurer made in connection with the officers relocation at the insurers request, if the loans: (A) Do not have a term exceeding 2 years; (B) Are required to finance mortgage loans outstanding at the same time on the prior and new residences of the officer; (C) Do not exceed an amount equal to the equity of the officer in the prior residence; and (D) Are required to be fully repaid upon the earlier of the end of the 2-year period or the sale of the prior residence; or (5) Loans and advances to officers or directors made in compliance with state or federal law specifically related to the loans and advances by a regulated non-insurance subsidiary or affiliate of the insurer in the ordinary course of business and on terms no more favorable than available to other customers of the entity.  (Apr. 11, 2003, D.C. Law 14-297,  106, 50 DCR 330.)  Section References This section is referenced in  31-1371.03 and  31-1371.05.
 311371.07. Valuation of investments. For the purposes of this chapter, the value or amount of an investment acquired or held, or any investment practice engaged in, under this chapter, unless otherwise specified in this code, shall be the value at which assets of an insurer are required to be reported for statutory accounting purposes as determined in accordance with procedures prescribed in published accounting and valuation standards of the NAIC, including thePurposes and Procedures of the Securities Valuation OfficeValuation of SecuritiesAccounting Practices and ProceduresAnnual Statement Instructions , or any successor valuation procedures officially adopted by the NAIC. , the  , the  , the   (Apr. 11, 2003, D.C. Law 14-297,  107, 50 DCR 330.) 
 311372.01. Application of subchapter. This subchapter shall apply to the investments and investment practices of life insurers subject to the provisions of this chapter pursuant to  31-1371.01.  (Apr. 11, 2003, D.C. Law 14-297,  201, 50 DCR 330.) 
 311372.02. General 3% diversification, medium and lower grade investments, and Canadian investments. (a)(1) Except as otherwise specified in this chapter, an insurer shall not acquire, directly or indirectly through an investment subsidiary, an investment under this chapter if, as a result of and other giving effect to the investment, the insurer would hold more than 3% of its admitted assets in investments of all kinds issued, assumed, accepted, insured, or guaranteed by a single person. (2) The 3% limitation shall not apply to the aggregate amounts insured by a single financial guaranty insurer with the highest generic rating issued by a nationally recognized statistical rating organization. (3) Asset-backed securities shall not be subject to the limitations of paragraph (1) of this subsection; provided, that an insurer shall not acquire an asset-backed security if, as a result of and after giving effect to the investment, the aggregate amount of asset-backed securities secured by or evidencing an interest in a single asset or single pool of assets held by a trust or other business entity held by the insurer would exceed 3% of its admitted assets. (b)(1) An insurer shall not acquire, directly or indirectly through an investment subsidiary, an investment under  31-1372.03, 31-1372.06, or 31-1372.09, or counterparty exposure under  31-1372.10(d) if, as a result of and after giving effect to the investment: (A) The aggregate amount of medium and lower grade investments then held by the insurer would exceed 20% of its admitted assets; (B) The aggregate amount of lower grade investments then held by the insurer would exceed 10% of its admitted assets; (C) The aggregate amount of investments rated 5 or 6 by the SVO then held by the insurer would exceed 3% of its admitted assets; (D) The aggregate amount of investments rated 6 by the SVO then held by the insurer would exceed one percent of its admitted assets; or (E) The aggregate amount of medium and lower grade investments held by the insurer that receive as cash income less than the equivalent yield for Treasury issues with a comparative average life would exceed one percent of its admitted assets. (2) An insurer shall not acquire, directly or indirectly through an investment subsidiary, an investment under  31-1372.03,  31-1372.06, or  31-1372.09, or counterparty exposure under  31-1372.10(d) if, as a result of and after giving effect to the investment: (A) The aggregate amount of medium and lower grade investments issued, assumed, guaranteed, accepted, or insured by any one person or, as to asset-backed securities, secured by or evidencing an interest in a single asset or pool of assets held by the insurer would exceed one percent of its admitted assets; or (B) The aggregate amount of lower grade investments issued, assumed, guaranteed, accepted, or insured by any one person or, as to asset-backed securities secured by or evidencing an interest in a single asset or pool of assets, then held by the insurer would exceed 0.5% of its admitted assets. (3) If an insurer attains or exceeds the limit of any rating category referred to in this subsection, the insurer shall not be precluded from acquiring investments in other rating categories subject to the specific and multi-category limits applicable to those investments. (c)(1) An insurer shall not acquire, directly or indirectly through an investment subsidiary, a Canadian investment authorized by this chapter if, as a result of and after giving effect to the investment, the aggregate amount of these investments then held by the insurer would exceed 40% of its admitted assets or if the aggregate amount of Canadian investments not acquired under  31-1372.03(b) held by the insurer would exceed 25% of its admitted assets. (2) For an insurer that is authorized to do business in Canada or that has outstanding insurance, annuity, or reinsurance contracts on lives or risks resident or located in Canada and denominated in Canadian currency, the limitations of paragraph (1) of this subsection shall be increased by the greater of: (A) The amount the insurer is required by Canadian law to invest in Canada or to be denominated in Canadian currency; or (B) One hundred fifteen percent of the amount of its reserves and other obligations under contracts on lives or risks resident or located in Canada.  (Apr. 11, 2003, D.C. Law 14-297,  202, 50 DCR 330.)  Section References This section is referenced in  31-1372.03,  31-1372.04,  31-1372.05,  31-1372.06,  31-1372.07,  31-1372.08,  31-1372.09, and  31-1372.12.
 311372.03. Rated credit instruments. (a) Subject to the limitations of  31-1372.02(b) and subsection (f) of this section, but not to the limitations of  31-1372.02(a), an insurer may acquire rated credit instruments issued, assumed, guaranteed, or insured by: (1) The United States; or (2) A government-sponsored enterprise of the United States if the instruments of the government-sponsored enterprise are assumed, guaranteed, or insured by the United States or are otherwise backed or supported by the full faith and credit of the United States. (b)(1) Subject to the limitations of  31-1372.02(b) and paragraph (2) of this subsection, but not the limitations of  31-1372.02(a), an insurer may acquire rated credit instruments issued, assumed, guaranteed, or insured by: (A) Canada; or (B) A government-sponsored enterprise of Canada if the instruments of the government-sponsored enterprise are assumed, guaranteed, or insured by Canada or are otherwise backed or supported by the full faith and credit of Canada. (2) An insurer shall not acquire an instrument under this subsection if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the insurer under this subsection would exceed 40% of its admitted assets. (c)(1) Subject to the limitations of  31-1372.02(b) and paragraph (2) of this subsection, but not to the limitations of  31-1372.02(a), an insurer may acquire rated credit instruments, excluding asset-backed securities: (A) Issued by a government money market mutual fund, a class one money market mutual fund, or a class one bond mutual fund; (B) Issued, assumed, guaranteed, or insured by a government-sponsored enterprise of the United States other than those eligible under subsection (a) of this section; (C) Issued, assumed, guaranteed, or insured by a state if the instruments are general obligations of the state; or (D) Issued by a multilateral development bank. (2) An insurer shall not acquire an instrument of any fund, enterprise or entity, or state under this subsection if, as a result of and after giving effect to the investment, the aggregate amount of investments then held in any one fund, enterprise or entity, or state under this subsection would exceed 10% of its admitted assets. (d) Subject to the limitations of  31-1372.02, an insurer may acquire preferred stocks that are not foreign investments and that meet the requirements of rated credit instruments if, as a result of and after giving effect to the investment: (1) The aggregate amount of preferred stock then held by the insurer under this subsection does not exceed 20% of its admitted assets; and (2) The aggregate amount of preferred stock then held by the insurer under this subsection which are not sinking fund stocks or rated P1 or P2 by the SVO does not exceed 10% of its admitted assets. (e) Subject to the limitations of  31-1372.02, in addition to those investments eligible under subsections (a), (b), (c), and (d) of this section, an insurer may acquire rated credit instruments that are not foreign investments. (f) Notwithstanding any other provision of this section, an insurer shall not acquire special rated credit instruments under this section if, as a result of and after giving effect to the investment, the aggregate amount of special rated credit instruments held by the insurer would exceed 5% of its admitted assets. (g) For purposes of this section, obligations of the Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, or other mortgage-backed or mortgage-related securities as defined in section 106 of the Secondary Mortgage Market Enhancement Act of 1984, approved October 3, 1984 (98 Stat. 1691; 15 U.S.C.  77r-1), may be acquired to the same extent as allowed under subsection (a) of this section, whether or not they are rated credit instruments authorized in subsection (a) of this section.  (Apr. 11, 2003, D.C. Law 14-297,  203, 50 DCR 330.)  Section References This section is referenced in  31-1371.02,  31-1372.02,  31-1372.06, and  31-1372.07.
 311372.04. Insurer investment pools. (a) An insurer may acquire investments in investment pools that invest only in: (1) Obligations that are rated 1 or 2 by the SVO or have an equivalent of an SVO 1 or 2 rating (or, in the absence of a 1 or 2 rating or equivalent rating, the issuer has outstanding obligations with an SVO 1 or 2 or equivalent rating) by a nationally recognized statistical rating organization recognized by the SVO and have: (A) A remaining maturity not exceeding 397 days or a put that entitles the holder to receive the principal amount of the obligation, which put may be exercised through maturity at specified intervals not exceeding 397 days; or (B) A remaining maturity not exceeding 3 years, a floating interest rate that resets no less frequently than quarterly on the basis of a current short-term index (including federal funds, prime rate, treasury bills, London InterBank Offered Rate, or commercial paper), and is subject to no maximum limit if the obligations do not have an interest rate that varies inversely to market interest rate changes; (2) Government money market mutual funds or class one money market mutual funds; or (3) Securities lending, repurchase, and reverse repurchase transactions that meet all the requirements of  31-1372.08, except the quantitative limitations of  31-1372.08(d); or (4) Investments which an insurer may acquire under this chapter if the insurers proportionate interest in the amount invested in these investments does not exceed the applicable limits of this chapter. (b) For an investment in an investment pool to be qualified, the investment pool shall not: (1) Acquire securities issued, assumed, guaranteed, or insured by the insurer or an affiliate of the insurer; (2) Borrow or incur any indebtedness for borrowed money, except for securities lending and reverse repurchase transactions that meet the requirements of  31-1372.08 other than the quantitative limitations of  31-1372.08(d); or (3) Permit the aggregate value of securities then loaned or sold to, purchased from, or invested in any one business entity under this section to exceed 10% of the total assets of the investment pool. (c) The limitations of  31-1372.02(a) shall not apply to an insurers investment in an investment pool; provided, that an insurer shall not acquire an investment in an investment pool under this section if, as a result of and after giving effect to the investment, the aggregate amount of investments held by the insurer under this section: (1) In any one investment pool would exceed 10% of its admitted assets; (2) In all investment pools investing in investments permitted under subsection (a)(2) of this section, would exceed 25% of its admitted assets; or (3) In all investment pools would exceed 35% of its admitted assets. (d) For an investment in an investment pool to be qualified, the manager of the investment pool shall: (1) Be organized under the laws of the United States or a state and designated as the pool manager in a pooling agreement; (2)(A) Be the insurer; an affiliated insurer or a business entity affiliated with the insurer; a qualified bank; or a business entity registered under the Investment Advisors Act of 1940, approved August 22, 1984 (54 Stat. 789; 15 U.S.C.  80a-1 et seq.); (B) In the case of a reciprocal insurer or interinsurance exchange, be its attorney-in-fact; or (C) In the case of a United States branch of non-U.S. insurer, be its United States manager or affiliates or subsidiaries of its United States manager; (3) Compile and maintain detailed accounting records setting forth: (A) The cash receipts and disbursements reflecting each participants proportionate investment in the investment pool; (B) A complete description of all underlying assets of the investment pool (including amount, interest rate, maturity date, if any, and other appropriate designations); and (C) Other records which, on a daily basis, allow third parties to verify each participants investment in the investment pool; and (4) Maintain the assets of the investment pool in one or more accounts, in the name of or on behalf of the investment pool, under a custody agreement with a qualified bank, which custody agreement shall: (A) State and recognize the claims and rights of each participant; (B) Acknowledge that the underlying assets of the investment pool are held solely for the benefit of each participant in proportion to the aggregate amount of its investment in the investment pool; and (C) Contain an agreement that the underlying assets of the investment pool shall not be commingled with the general assets of the custodian qualified bank or any other person. (e) The pooling agreement for each investment pool shall be in writing and shall provide that: (1) An insurer and its affiliated insurers; in the case of an investment pool investing solely in investments permitted under subsection (a)(1) of this section, the insurer and its subsidiaries, affiliates, or any pension or profit-sharing plan of the insurer, its subsidiaries, and affiliates; and, in the case of a United States branch of a non-U.S. insurer, the affiliates or subsidiaries of its United States manager, shall, at all times, hold 100% of the interests in the investment pool; (2) The underlying assets of the investment pool shall not be commingled with the general assets of the pool manager or any other person; (3) In proportion to the aggregate amount of each pool participants interest in the investment pool: (A) Each participant owns an undivided interest in the underlying assets of the investment pool; and (B) The underlying assets of the investment pool are held solely for the benefit of each participant; (4) A participant, or in the event of the participants insolvency, bankruptcy, or receivership, its trustee, receiver, or other successor-in-interest, may withdraw all or any portion of its investment from the investment pool under the terms of the pooling agreement; (5) Withdrawals may be made on demand without penalty or other assessment on any business day; provided, that settlement of funds shall occur within a reasonable and customary period thereafter not to exceed five 5 business days. (6) The pool manager shall make the records of the investment pool available for inspection by the Commissioner. (f) Distributions under subsection (e)(5) of this section shall be calculated net of all then applicable fees and expenses of the investment pool. The pooling agreement shall provide that the pool manager may distribute to a participant, at the discretion of the pool manager: (A) In cash, the fair market value of the participants pro rata share of each underlying asset of the investment pool; (B) In kind, a pro rata share of each underlying asset; or (C) In a combination of cash and in kind distributions, a pro rata share in each underlying asset.  (Apr. 11, 2003, D.C. Law 14-297,  204, 50 DCR 330.)  Section References This section is referenced in  31-1372.09.
 311372.05. Equity interests. (a) Subject to the limitations of  31-1372.02, an insurer may acquire equity interests in business entities organized under the laws of any domestic jurisdiction. (b) An insurer shall not acquire an investment under this section if, as a result of and after giving effect to the investment, the aggregate amount of investments held by the insurer under this section would exceed 20% of its admitted assets or the amount of equity interests held by the insurer that are not listed on a qualified exchange would exceed 5% of its admitted assets. An accident and health insurer shall not be subject to this section, but shall be subject to the same aggregate limitation on equity interests as a fire, casualty, and marine insurer under  31-1373.06 and to the provisions of  31-1373.02. (c) An insurer shall not acquire under this section any investments that the insurer may acquire under  31-1372.07. (d) An insurer shall not short sell equity investments unless the insurer covers the short sale by owning the equity investment or an unrestricted right to the equity instrument exercisable within 6 months of the short sale.  (Apr. 11, 2003, D.C. Law 14-297,  205, 50 DCR 330.) 
 311372.06. Tangible personal property under lease. (a)(1) Subject to the limitations of  31-1372.02, an insurer may acquire tangible personal property or equity interests therein, which property or interests are located or used wholly or in part within a domestic jurisdiction, directly or indirectly through: (A) Limited partnership interests and general partnership interests not otherwise prohibited  31-1371.05; (B) Joint ventures; (C) Stock of an investment subsidiary; (D) Membership interests in a limited liability company; (E) Trust certificates; or (F) Other similar instruments. (2) Investments acquired under paragraph (1) of this subsection shall be eligible only if: (A) The property is subject to a lease or other agreement with a person whose rated credit instruments the insurer could acquire under  31-1372.03 for a price equal to the purchase price of the personal property; and (B) The lease or other agreement provides the insurer the right to receive rental, purchase, or other fixed payments for the use or purchase of the property, and the aggregate value of the payments, together with the estimated residual value of the property at the end of its useful life and the estimated tax benefits to the insurer resulting from ownership of the property, shall be adequate to return the cost of the insurers investment in the property, plus a return considered adequate by the insurer. (b) The insurer shall compute the amount of each investment under this section on the basis of the cash purchase price and applicable related expenses paid by the insurer for the investment, net of each borrowing made to finance the purchase price and expenses to the extent the borrowing is nonrecourse to the insurer. (c) An insurer shall not acquire an investment under this section if, as a result of and after giving effect to the investment, the aggregate amount of all investments held by the insurer under this section would exceed: (1) Two percent of its admitted assets; or (2) One half of one percent of its admitted assets as to any single item of tangible personal property. (d) For purposes of determining compliance with the limitations of  31-1372.02: (1) Investments acquired by an insurer under this section shall be aggregated with those acquired under  31-1372.03; and (2) Each lessee of the property under a lease referred to in this section shall be deemed the issuer of an obligation in the amount of the investment of the insurer in the property determined as provided under subsection (b) of this section. (e) This section shall not be applicable to a lease of tangible personal property between an insurer and its subsidiaries or affiliates under a cost sharing arrangement or agreement permitted under subchapter I of Chapter 7 of Title 31.  (Apr. 11, 2003, D.C. Law 14-297,  206, 50 DCR 330.)  Section References This section is referenced in  31-1372.02.
 311372.07. Mortgage loans and real estate. (a)(1) Subject to the limitations of  31-1372.02, an insurer may acquire, directly or indirectly, through limited partnership interests and general partnership interests not otherwise prohibited by by  31-1371.05, joint ventures, stock of an investment subsidiary, membership interests in a limited liability company, trust certificates, or other similar instruments, obligations secured by a first mortgage on real estate situated within a domestic jurisdiction; provided, that a mortgage loan which is secured by a subordinate lien may be acquired if the insurer is the holder of the first lien. The obligations held by the insurer and any obligations with an equal lien priority, shall not, at the time of acquisition of the obligations, exceed: (A) Ninety percent of the fair market value of the real estate if the mortgage loan is secured by a purchase money mortgage or like security received by the insurer upon disposition of the real estate; (B) Eighty percent of the fair market value of the real estate if the mortgage loan requires immediate scheduled payment in periodic installments of principal and interest, has an amortization period not exceeding 30 years, and periodic payments made no less frequently than annually; provided, that: (i) Each periodic payment shall be sufficient to assure that at all times the outstanding principal balance of the mortgage loan shall be not greater than the outstanding principal balance that would be outstanding under a mortgage loan with the same original principal balance, with the same interest rate, and requiring equal payments of principal and interest with the same frequency over the same amortization period; (ii) Mortgage loans permitted under this paragraph shall be permitted notwithstanding the fact that they provide for a payment of the principal balance prior to the end of the period of amortization of the loan; and (iii) For residential mortgage loans, the 80% limitation shall be 97% if acceptable private mortgage insurance has been obtained; or (C) Seventy-five percent of the fair market value of the real estate for mortgage loans that do not meet the requirements of subparagraphs (A) or (B) of this paragraph. (2) For purposes of paragraph (1) of this subsection, the amount of an obligation required to be included in the calculation of the loan-to-value ratio may be reduced to the extent the obligation is insured by the Federal Housing Administration or guaranteed by the Administrator of Veterans Affairs, or their successors. (3) A mortgage loan that is held by an insurer under  31-1371.03(f) or acquired under this section and is restructured in a manner that meets the requirements of a restructured mortgage loan in accordance with the NAICAccounting Practices and Procedures Manual, or successor publication, shall continue to qualify as a mortgage loan. (4) Subject to the limitations of  31-1372.02, credit lease transactions that do not qualify for investment under  31-1372.03 shall be exempt from the provisions of paragraph (1) of this subsection if their terms are as follows: (A) The loan balance at the end of the initial term of the lease will not exceed the original appraised value of the real estate; (B) The lease payments equal or exceed the total debt service over the term of the loan; (C) A tenant or its affiliated entity whose rated credit instruments have a SVO 1 or 2 designation or a comparable rating from a nationally recognized statistical rating organization recognized by the SVO is obligated to make the lease payments; (D) The insurer holds, or is the beneficial holder of, a first mortgage on the real estate; (E) The expenses of the maintenance and operation of the real estate, excluding exterior repairs, structural repairs, parking, and heating, ventilation and air conditioning replacement expenses, are passed through to the tenant, or annual escrow contributions from the lease payments equal or exceed any deficiency in such expenses; and (F) There is a perfected assignment of the rents due under the lease to, or for the benefit of, the insurer. (b)(1) An insurer may acquire, manage, and dispose of real estate situated in a domestic jurisdiction, directly or indirectly, through limited partnership interests and general partnership interests not otherwise prohibited by  31-1371.05, joint ventures, stock of an investment subsidiary, membership interests in a limited liability company, trust certificates, or other similar instruments. The real estate shall be income-producing or intended for improvement or development for investment purposes under an existing program. (2) The real estate may be subject to mortgages, liens, or other encumbrances, the amount of which shall, to the extent that the obligations secured by the mortgages, liens, or encumbrances are nonrecourse to the insurer, be deducted from the amount of the investment of the insurer in the real estate for purposes of determining compliance with subsection (d)(2) and (d)(3) of this section. (c)(1) An insurer may acquire, manage, and dispose of real estate for the convenient accommodation of the business operations, including home office, branch office, and field office operations of the insurer, its affiliates, or subsidiaries. (2) Real estate acquired under this subsection may include excess space for rent to others if the excess space, valued at its fair market value, would otherwise be a permitted investment under subsection (b) of this section and is so qualified by the insurer. (3) The real estate acquired under this subsection may be subject to one or more mortgages, liens, or other encumbrances, the amount of which shall, to the extent that the obligations secured by the mortgages, liens, or encumbrances are nonrecourse to the insurer, be deducted from the amount of the investment of the insurer in the real estate for purposes of determining compliance with subsection (d)(4) of this section. (4) For purposes of this subsection, business operations shall not include that portion of real estate used for the direct provision of health care services by an accident and health insurer for its insureds. An insurer may acquire real estate used for these purposes under subsection (b) of this section. (d)(1) An insurer shall not acquire an investment under subsection (a) of this section if, as a result of and after giving effect to the investment, the aggregate amount of all investments held by the insurer under subsection (a) of this section would exceed: (A) One percent of its admitted assets in mortgage loans covering any one secured location; (B) One quarter of one percent of its admitted assets in construction loans covering any one secured location; or (C) Two percent of its admitted assets in construction loans in the aggregate. (2) An insurer shall not acquire an investment under subsection (b) of this section if, as a result of and after giving effect to the investment and any outstanding guarantees made by the insurer in connection with the investment, the aggregate amount of investments held by the insurer under subsection (b) of this section and the guarantees then outstanding would exceed: (A) One percent of its admitted assets in one parcel or group of contiguous parcels of real estate; provided, that this limitation shall not apply to that portion of real estate used for the direct provision of health care services by an accident and health insurer for its insureds, such as hospitals, medical clinics, medical professional buildings, or other health facilities used for the purpose of providing health services; or (B) Fifteen percent of its admitted assets in the aggregate, but not more than 5% of its admitted assets, as to properties that are to be improved or developed. (3) An insurer shall not acquire an investment under subsection (a) or (b) of this section if, as a result of and after giving effect to the investment and any guarantees made by the insurer in connection with the investment, the aggregate amount of all investments held by the insurer under subsections (a) and (b) of this section and the guarantees then outstanding would exceed 45% of its admitted assets; provided, that an insurer may exceed this limitation by no more than 30% of its admitted assets if: (A) This increased amount is invested only in residential mortgage loans; (B) The insurer has not more than 10% of its admitted assets invested in mortgage loans other than residential mortgage loans; (C) The loan-to-value ratio of each residential mortgage loan does not exceed 60% at the time the mortgage loan is qualified and the fair market value is supported by an appraisal no more than 2 years old, prepared by an independent appraiser; (D) A single mortgage loan qualified does not exceed 0.5% of its admitted assets; (E) The insurer receives approval from the Commissioner for a plan that is designed to result in a portfolio of residential mortgage loans that is sufficiently geographically diversified; and (F) The insurer agrees to file annually with the Commissioner records that demonstrate that its portfolio of residential mortgage loans is geographically diversified in accordance with the plan. (4) The limitations of  31-1372.02 shall not apply to an insurers acquisition of real estate under subsection (c) of this section. An insurer shall not acquire real estate under subsection (c) of this section if, as a result of and after giving effect to the acquisition, the aggregate amount of real estate held by the insurer under subsection (c) of this section would exceed 10% of its admitted assets. With the permission of the Commissioner, additional amounts of real estate may be acquired under subsection (c) of this section.  (Apr. 11, 2003, D.C. Law 14-297,  207, 50 DCR 330.)  Section References This section is referenced in  31-1371.03,  31-1371.06, and  31-1372.05.
 311372.08. Securities lending, repurchase, reverse repurchase, and dollar roll transactions. (a) An insurer may enter into securities lending, repurchase, reverse repurchase, and dollar roll transactions with business entities, subject to the requirements of this section. (b) The insurers board of directors shall adopt a written plan that is consistent with the requirements of the written plan in  31-1371.04(a) that specifies guidelines and objectives to be followed, such as: (1) A description of how cash received will be invested or used for general corporate purposes of the insurer; (2) Operations procedures to manage interest rate risk and counterparty default risk, the conditions under which proceeds from reverse repurchase transactions may be used in the ordinary course of business, and the use of acceptable collateral in a manner that reflects the liquidity needs of the transaction; and (3) The extent to which the insurer may engage in these transactions. (c) The insurer shall enter into a written agreement for all transactions authorized in this section other than dollar roll transactions. The written agreement shall require that each transaction terminate no more than one year from its inception or upon the earlier demand of the insurer. The agreement shall be with the business entity counterparty; provided, that for securities lending transactions, the agreement may be with an agent acting on behalf of the insurer if: (1) The agent is a qualified business entity; and (2) The agreement: (A) Requires the agent to enter into separate agreement with each counterparty that are consistent with the requirements of this section; and (B) Prohibits securities lending transactions under the agreement with the agent or its affiliates. (d) Cash received in a transaction under this section shall be invested in accordance with this chapter and in a manner that recognizes the liquidity needs of the transaction or used by the insurer for its general corporate purposes. As long as the transaction remains outstanding, the insurer, its agent, or custodian shall maintain, as to acceptable collateral received in a transaction under this section, either physically or through the book entry systems of the Federal Reserve, Depository Trust Company, Participants Trust Company, or other securities depositories approved by the Commissioner: (1) Possession of the acceptable collateral; (2) A perfected security interest in the acceptable collateral; or (3) In the case of a jurisdiction outside of the United States, title, or rights of a secured creditor, to the acceptable collateral. (e) The limitations of  31-1372.02 and 31-1372.09 shall not apply to the business entity counterparty exposure created by transactions under this section. For purposes of calculations made to determine compliance with this subsection, no effect shall be given to the insurers future obligation to resell securities in the case of a repurchase transaction or to repurchase securities in the case of a reverse repurchase transaction. An insurer shall not enter into a transaction under this section if, as a result of and after giving effect to the transaction: (1) The aggregate amount of securities loaned to, sold to, or purchased from any one business entity counterparty under this section would exceed 5% of its admitted assets; provided, that in calculating the amount sold to or purchased from a business entity counterparty under repurchase or reverse repurchase transactions, effect may be given to netting provisions under a master written agreement; or (2) The aggregate amount of all securities then loaned to, sold to, or purchased from all business entities under this section would exceed 40% of its admitted assets. (f) In a securities lending transaction, the insurer shall receive acceptable collateral having a market value as of the transaction date at least equal to 102% of the market value of the securities loaned by the insurer in the transaction as of that date. If at any time the market value of the acceptable collateral is less than the market value of the loaned securities, the business entity counterparty shall be obligated to deliver additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral held in connection with the transaction, at least equals 102% of the market value of the loaned securities. (g) In a reverse repurchase transaction, other than a dollar roll transaction, the insurer shall receive acceptable collateral having a market value as of the transaction date at least equal to 95% of the market value of the securities transferred by the insurer in the transaction as of that date. If at any time the market value of the acceptable collateral is less than 95% of the market value of the securities transferred, the business entity counterparty shall be obligated to deliver additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral held in connection with the transaction, equals at least 95% of the market value of the transferred securities. (h) In a dollar roll transaction, the insurer shall receive cash in an amount at least equal to the market value of the securities transferred by the insurer in the transaction as of the transaction date. (i) In a repurchase transaction, the insurer shall receive as acceptable collateral transferred securities having a market value at least equal to 102% of the purchase price paid by the insurer for the securities. If at any time the market value of the acceptable collateral is less than 100% of the purchase price paid by the insurer, the business entity counterparty shall be obligated to provide additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral held in connection with the transaction, equals at least 102% of the purchase price. Securities acquired by an insurer in a repurchase transaction shall not be sold in a reverse repurchase transaction, loaned in a securities lending transaction, or otherwise pledged.  (Apr. 11, 2003, D.C. Law 14-297,  208, 50 DCR 330.)  Section References This section is referenced in  31-1371.02,  31-1371.03,  31-1371.06,  31-1372.04, and  31-1372.12.
 311372.09. Foreign investments and foreign currency exposure. (a) Subject to the limitations of  31-1372.02, an insurer may acquire foreign investments, or engage in investment practices with persons of or in foreign jurisdictions, of substantially the same types as those that an insurer is permitted to acquire under this chapter, other than of the type permitted under  31-1372.04, if, as a result and after giving effect to the investment: (1) The aggregate amount of foreign investment held by the insurer under this subsection does not exceed 20% of its admitted assets; and (2) The aggregate amount of foreign investments held by the insurer under this subsection in a single foreign jurisdiction does not exceed 10% of its admitted assets as to a foreign jurisdiction that has a sovereign debt rating of SVO 1 or 3% of its admitted assets as to any other foreign jurisdiction. (b)(1) Subject to the limitations of  31-1372.02, an insurer may acquire investments, or engage in investment practices denominated in foreign currencies, whether or not they are foreign investments acquired under subsection (a) of this section, or additional foreign currency exposure as a result of the termination or expiration of a hedging transaction with respect to investments denominated in a foreign currency, if: (A) The aggregate amount of investments held by the insurer under this subsection denominated in foreign currencies does not exceed 10% of its admitted assets; and (B) The aggregate amount of investments held by the insurer under this subsection denominated in the foreign currency of a single foreign jurisdiction does not exceed 10% of its admitted assets as to a foreign jurisdiction that has a sovereign debt rating of SVO 1 or 3% of its admitted assets as to any other foreign jurisdiction. (2) For the purposes of this section, an investment shall not be considered denominated in a foreign currency if the acquiring insurer enters into one or more contracts in transactions permitted under  31-1372.10 and the business entity counterparty agrees under the contract to exchange all payments made on the foreign currency denominated investment for United States currency at a rate which insulates the investment cash flow against future changes in currency exchange rates. (c) In addition to investment permitted under subsections (a) and (b) of this section subject to the limitations of  31-1372.02, an insurer that is authorized to do business in a foreign jurisdiction and that has outstanding insurance, annuity, or reinsurance contracts on lives or risks resident or located in that foreign jurisdiction and denominated in foreign currency of that jurisdiction may acquire foreign investments respecting that foreign jurisdiction and investments denominated in the currency of that jurisdiction; provided, that investments made under this subsection in obligations of foreign governments, their political subdivisions, and government-sponsored enterprises shall not be subject to the limitations of  31-1372.02 if those investments carry an SVO rating of 1 or 2. The aggregate amount of investments acquired by the insurer under this subsection shall not exceed the greater of: (1) The amount the insurer is required by the law of the foreign jurisdiction to invest in the foreign jurisdiction; or (2) One hundred fifteen percent of the amount of its reserves, net of reinsurance, and other obligations under the contracts on lives or risks resident or located in the foreign jurisdiction. (d) In addition to investments permitted under subsections (a) and (b) of this section, subject to t he limitations of  31-1372.02, an insurer that is not authorized to do business in a foreign jurisdiction, but which has outstanding insurance, annuity, or reinsurance contracts on lives or risks resident or located in that foreign jurisdiction and denominated in foreign currency of that jurisdiction, may acquire foreign investments respecting that foreign jurisdiction and investments denominated in the currency of that jurisdiction; provided, that investments made under this subsection in obligations of foreign governments, their political subdivisions, and government-sponsored enterprises shall not be subject to the limitations of  31-1372.02 if those investments carry an SVO rating of 1 or 2. The aggregate amount of investments acquired by the insurer under this subsection shall not exceed 105% of the amount of its reserves, net of reinsurance, and other obligations under the contracts on lives or risks resident or located in the foreign jurisdiction. (e) Investments acquired under this section shall be aggregated with investments of the same types made under all other sections of this chapter, and in a similar manner, for purposes of determining compliance with the limitations, if any, contained in the other sections. Investments in obligations of foreign governments, their political subdivisions, and government-sponsored enterprises of these persons, except for those exempt under subsections (c) and (d) of this section, shall be subject to the limitations of  31-1372.02.  (Apr. 11, 2003, D.C. Law 14-297,  209, 50 DCR 330.)  Section References This section is referenced in  31-1371.02,  31-1372.02, and  31-1372.08.
 311372.10. Derivative transactions. (a) An insurer may, directly or indirectly through an investment subsidiary, engage in derivative transactions under this section, subject to the requirements of this section. (b)(1) An insurer may use derivative instruments under this section to engage in hedging transactions and certain income generation transactions, as these terms may be further defined in regulations promulgated by the Commissioner. (2) An insurer shall be able to demonstrate to the Commissioner the intended hedging characteristics and the ongoing effectiveness of the derivative transaction, or combination of the transactions, through cash flow testing or other appropriate analyses. (c) An insurer may enter into hedging transactions under this section if, as a result of and after giving effect to the transaction: (1) The aggregate statement value of options, caps, floors, and warrants not attached to another financial instrument purchased and used in hedging transactions does not exceed 7.5% of its admitted assets; (2) The aggregate statement value of options, caps, and floors written in hedging transactions does not exceed 3% of its admitted assets; and (3) The aggregate potential exposure of collars, swaps, forwards, and futures used in hedging transactions does not exceed 6.5% of its admitted assets. (d) An insurer may enter into the following types of income generation transactions if, as a result of and after giving effect to the transactions, the aggregate statement value of the fixed income assets that are subject to call or that generate the cash flow for payments under the caps or floors, the face value of fixed income securities underlying a derivative instrument subject to call, and the amount of the purchase obligations under the puts, do not exceed 10% of its admitted assets: (1) Sales of covered call options on non-callable fixed income securities, callable fixed income securities if the option expires by its terms prior to the end of the noncallable period, or derivative instruments based on fixed income securities; (2) Sales of covered call options on equity securities if the insurer holds in its portfolio, or can immediately acquire through the exercise of options, warrants, or conversion rights already owned, the equity securities subject to call during the complete term of the call option sold; (3) Sales of covered puts on investments that the insurer is permitted to acquire under this chapter if the insurer has escrowed, or entered into a custodian agreement segregating, cash or cash equivalents with a market value equal to the amount of its purchase obligations under the put during the complete term of the put option sold; or (4) Sales of covered caps or floors if the insurer holds in its portfolio the investments generating the cash flow to make the required payments under the caps or floors during the complete term that the cap or floor is outstanding. (e) An insurer shall include all counterparty exposure amounts in determining compliance with the limitations of  3-1372.02. (f) Under regulations promulgated under  31-1375.01, the Commissioner may approve additional transactions involving the use of derivative instruments in excess of the limits of subsection (c) of this section or for other risk management purposes under regulations promulgated by the Commissioner; provided, that the replication transactions shall not be permitted for other than risk management purposes.  (Apr. 11, 2003, D.C. Law 14-297,  210, 50 DCR 330.)  Section References This section is referenced in  31-1371.02,  31-1371.03,  31-1372.02,  31-1372.09, and  31-1372.12.
 311372.11. Policy loans. A life insurer may lend to a policyholder on the security of the cash surrender value of the policyholders policy a sum not exceeding the legal reserve that the insurer is required to maintain on the policy.  (Apr. 11, 2003, D.C. Law 14-297,  211, 50 DCR 330.)  Section References This section is referenced in  31-1371.06.
 311372.12. Additional investment authority. (a) Solely for the purpose of acquiring investments that exceed the quantitative limitations of  31-1372.02 through 31-1372.09, an insurer may acquire under this subsection an investment, or engage in investment practices, described in  31-1372.08; provided, that an insurer shall not acquire and investment, or engage in investment practices, described in  31-1372.08 under this subsection if, as a result of and after giving effect to the transaction: (1) The aggregate amount of investments held by an insurer under this subsection would exceed 3% of its admitted assets; or (2) The aggregate amount of investments as to one limitation in  31-1372.02 through 31-1372.09 held by the insurer under this subsection would exceed 1% of its admitted assets. (b)(1) In addition to the authority provided under subsection (a) of this section, subject to paragraph (2) of this subsection, an insurer may acquire under this subsection an investment of any kind, or engage in investment practices described in  31-1372.08, that are not specifically prohibited by this chapter without regard to the categories, conditions, standards, or other limitations of  31-1372.02 through 31-1372.09 if, as a result of and after giving effect to the transaction, the aggregate amount of investments held under this subsection would not exceed the lesser of: (A) Ten percent of its admitted assets; or (B) Seventy-five percent of its capital and surplus. (2) An insurer shall not acquire any investment or engage in any investment practice under this subsection if, as a result of and after giving effect to the transaction, the aggregate amount of all investments in any one person held by the insurer under this subsection would exceed 3% of its admitted assets. (c) In addition to the investments acquired under subsections (a) and (b) of this section, an insurer may acquire under this subsection an investment of any kind, or engage in investment practices described in  31-1372.08, that are not specifically prohibited by this chapter without regard to any limitations of  31-1372.02 through 31-1372.09 if: (1) The Commissioner grants prior approval; (2) The insurer demonstrates that its investments are being made in a prudent manner and that the additional amounts will be invested in a prudent manner; and (3) As a result of and after giving effect to the transaction, the aggregate amount of investments held by the insurer under this subsection does not exceed the greater of: (A) Twenty-five percent of its capital and surplus; or (B) One hundred percent of capital and surplus, less 10% of its admitted assets. (d) An investment prohibited under  31-1371.05 or  31-1372.10 or additional derivative instruments acquired under  31-1372.10 shall not be acquired under this section.  (Apr. 11, 2003, D.C. Law 14-297,  212, 50 DCR 330.)  Section References This section is referenced in  31-1371.03.
 311373.01. Application of subchapter. This subchapter shall apply to the investment and investment practices of domestic fire, casualty, and marine insurers.  (Apr. 11, 2003, D.C. Law 14-297,  301, 50 DCR 330.) 
 311373.02. Reserve requirements. (a)(1) Subject to all other limitations and requirements of this chapter, a fire, casualty, and marine insurer shall maintain an amount at least equal to 100% of adjusted loss reserves and loss adjustment expense reserves, 100% of adjusted unearned premium reserves, and 100% of statutorily required policy and contract reserves in: (A) Cash and cash equivalents; (B) High and medium grade investments that qualify under  31-1373.04 or  31-1373.05; (C) Equity interests that qualify under  31-1373.06 and that are traded on a qualified exchange; (D) Investments of the type set forth in  31-1373.10 if the investments are rated in the highest generic rating category by a nationally recognized statistical rating organization recognized by the SVO for rating foreign jurisdictions and if any foreign currency exposure is effectively hedged through the maturity date of the investments; (E) Qualifying investments of the type set forth in subparagraphs (B), (C), or (D) of this paragraph that are acquired under  31-1373.12; (F) Interest and dividends receivable on qualifying investments of the type set forth in subparagraphs (A) through (E) of this paragraph; or (G) Reinsurance recoverable on paid losses. (2)(A) For purposes of determining the amount of assets to be maintained under this subsection, the calculation of adjusted loss reserves, loss adjustment expense reserves, adjusted unearned premium reserves, and statutorily required policy and contract reserves shall be based on the amounts reported to the Commissioner on its most recent annual or quarterly statement. (B)(i) Adjusted loss reserves and loss adjustment expense reserves shall be calculated as follows: (I) The losses and loss adjustment expenses reported by the insurer as unpaid for each accident year for each individual line of business (unpaid losses); multiplied by (II) The discount factor that is applicable to the line of business and accident year published by the Internal Revenue Service under 26 U.S.C.  846, for the calendar year that corresponds to the most recent annual statement of the insurer; less (III) Accrued retrospective premiums discounted by an average discount factor, which shall be calculated by dividing the unpaid losses, discounted (as provided under sub-sub-subparagraph (II) of this sub-subparagraph), by the unpaid losses. (ii) For purposes of these calculations, the unpaid losses shall be net of anticipated salvage and subrogation and gross of any discount for the time value of money or tabular discount. (C) Adjusted unearned premium reserves shall be equal to: (i) The amount reported by the insurer as unearned premium reserves; less (ii) The admitted asset amounts reported by the insurer as: (I) Premiums, and agents balances, in the course of collection, accident and health premiums due and unpaid, and uncollected premiums for accident and health premiums; (II) Premiums, agents balances, and installments booked but deferred and not yet due; and (III) Bills receivable taken for premium. (D) Statutorily required policy and contract reserves shall include the amounts required by Chapter 19 of Title 31. (b) A fire, casualty, and marine insurer shall supplement its annual statement with a reconciliation and summary of its assets and reserve requirements as required under subsection (a) of this section. A reconciliation and summary showing that an insurers assets as required under subsection (a) of this section are at least equal to its undiscounted reserves required under subsection (a) of this section shall be sufficient to satisfy this requirement. Upon prior notification, the Commissioner may require an insurer to submit the reconciliation and summary with any quarterly statement filed during the calendar year. (c) If a fire, casualty, and marine insurers assets and reserves is not in compliance with subsection (a) of this section, the insurer shall notify the Commissioner immediately of the amount by which the reserve requirements exceed the annual statement value of the qualifying assets, explain why the deficiency exists, and, within 30 days of the date of the notice, propose a plan of action to remedy the deficiency. (d)(1) If the Commissioner determines that an insurer is not in compliance with subsection (a) of this section, the Commissioner shall require the insurer to eliminate the condition causing the noncompliance within a specified time from the date that the notice of the Commissioners requirement is mailed or delivered to the insurer. (2) If an insurer fails to comply with the Commissioners requirement under paragraph (1) of this subsection, the insurer shall be deemed to be in hazardous financial condition and the Commissioner shall take one or more of the actions authorized by law as to insurers in hazardous financial condition.  (Apr. 11, 2003, D.C. Law 14-297,  302, 50 DCR 330.)  Section References This section is referenced in  31-1371.02 and  31-1372.05.
 311373.03. General 5% diversification, medium and lower grade investments, and Canadian investments. (a)(1) Except as otherwise specified in this chapter, an insurer shall not acquire, directly or indirectly through an investment subsidiary, an investment under this chapter if, as a result of and after giving effect to the investment, the insurer would hold more than 5% of its admitted assets in investments of all kinds issued, assumed, accepted, insured, or guaranteed by a single person. (2) The 5% limitation shall not apply to the aggregate amounts insured by a single financial guaranty insurer with the highest generic rating issued by a nationally recognized statistical rating organization. (3) Asset-backed securities shall not be subject to the limitations of paragraph (1) of this subsection; provided, that an insurer shall not acquire an asset-backed security if, as a result of and after giving effect to the investment, the aggregate amount of asset-backed securities secured by or evidencing an interest in a single asset or single pool of assets held by a trust or other business entity, held by the insurer would exceed 5% of its admitted assets. (b)(1) An insurer shall not acquire, directly or indirectly through an investment subsidiary, an investment under  31-1373.04,  31-1373.07, or  31-1373.10, or counterparty exposure under  31-1373.11(d) if, as a result of and after giving effect to the investment: (A) The aggregate amount of all medium and lower grade investments held by the insurer would exceed 20% of its admitted assets; (B) The aggregate amount of lower grade investments held by the insurer would exceed 10% of its admitted assets; (C) The aggregate amount of investments rated 5 or 6 by the SVO held by the insurer would exceed 5% of its admitted assets; (D) The aggregate amount of investments rated 6 by the SVO held by the insurer would exceed one percent of its admitted assets; or (E) The aggregate amount of medium and lower grade investments held by the insurer that receive as cash income less than the equivalent yield for Treasury issues with a comparative average life would exceed one percent of its admitted assets. (2) An insurer shall not acquire, directly or indirectly through an investment subsidiary, an investment under  31-1373.04,  31-1373.07, or  31-1373.10, or counterparty exposure under  31-1373.11(d) if, as a result of and after giving effect to the investment: (A) The aggregate amount of medium and lower grade investments issued, assumed, guaranteed, accepted, or insured by any one person or, as to asset-backed securities secured by or evidencing an interest in a single asset or pool of assets, held by the insurer would exceed one percent of its admitted assets; or (B) The aggregate amount of lower grade investments issued, assumed, guaranteed, accepted, or insured by any one person or, as to asset-backed securities secured by or evidencing an interest in a single asset or pool of assets, held by the insurer would exceed 0.5% of its admitted assets. (3) If an insurer attains or exceeds the limit of any one rating category under this subsection, the insurer shall not be precluded from acquiring investments in other rating categories subject to the specific and multi-category limits applicable to those investments. (c)(1) An insurer shall not acquire, directly or indirectly through an investment subsidiary, a Canadian investment authorized by this chapter if, as a result of and after giving effect to the investment: (A) The aggregate amount of these investments held by the insurer would exceed 40% of its admitted assets; or (B) The aggregate amount of Canadian investments not acquired under  31-1373.04(b) held by the insurer would exceed 25% of its admitted assets. (2) As to an insurer that is authorized to do business in Canada or that has outstanding insurance, annuity, or reinsurance contracts on lives or risks resident or located in Canada and denominated in Canadian currency, the limitations of paragraph (1) of this subsection shall be increased by the greater of: (A) The amount the insurer is required by Canadian law to invest in Canada or to be denominated in Canadian currency; or (B) One hundred twenty-five percent of the amount of its reserves and other obligations under contracts on risks resident or located in Canada.  (Apr. 11, 2003, D.C. Law 14-297,  303, 50 DCR 330.)  Section References This section is referenced in  31-1373.04,  31-1373.05,  31-1373.06,  31-1373.07,  31-1373.08,  31-1373.09,  31-1373.10,  31-1373.11, and  31-1373.12.
 311373.04. Rated credit instruments. (a) Subject to the limitations of  31-1373.03(b) and subsection (f) of this section, but not to the limitations of  31-1373.03(a), an insurer may acquire rated credit instruments issued, assumed, guaranteed, or insured by: (1) The United States; or (2) A government-sponsored enterprise of the United States if the instruments of the government-sponsored enterprise are assumed, guaranteed, or insured by the United States or are otherwise backed or supported by the full faith and credit of the United States. (b)(1) Subject to the limitations of  31-1373.03(b), but not to the limitations of  31-1373.03(a), an insurer may acquire rated credit instruments issued, assumed, guaranteed, or insured by: (A) Canada; or (B) A government-sponsored enterprise of Canada if the instruments of the government-sponsored enterprise are assumed, guaranteed, or insured by Canada or are otherwise backed or supported by the full faith and credit of Canada; (2) An insurer shall not acquire an instrument under this subsection if, as a result of and after giving effect to the investment, the aggregate amount of investments held by the insurer under this subsection would exceed 40% of its admitted assets. (c)(1) Subject to the limitations of  31-1373.03(b) and paragraph (2) of this subsection, but not to the limitations of  31-1373.03(a), an insurer may acquire rated credit instruments, excluding asset-backed securities: (A) Issued by a government money market mutual fund, a class one money market mutual fund, or a class one bond mutual fund; (B) Issued, assumed, guaranteed, or insured by a government-sponsored enterprise of the United States other than those eligible under subsection (a) of this section; (C) Issued, assumed, guaranteed, or insured by a state if the instruments are general obligations of the state; or (D) Issued by a multilateral development bank. (2) An insurer shall not acquire an instrument of any fund, enterprise, or entity, or state under this subsection if, as a result of and after giving effect to the investment, the aggregate amount of investments held in any one fund, enterprise or entity or state under this subsection would exceed 10% of its admitted assets. (d) Subject to the limitations of  31-1373.03, an insurer may acquire preferred stocks that are not foreign investments and that meet the requirements of rated credit instruments if, as a result of and after giving effect to the investment: (1) The aggregate amount of preferred stocks held by the insurer under this subsection does not exceed 20% of its admitted assets; and (2) The aggregate amount of preferred stocks held by the insurer under this subsection which are not sinking fund stocks or rated P1 or P2 by the SVO does not exceed 10% of its admitted assets. (e) Subject to the limitations of  31-1373.03, in addition to those investments eligible under subsections (a), (b), (c), and (d) of this section, an insurer may acquire rated credit instruments that are not foreign investments. (f) Notwithstanding any other provision of this section, an insurer shall not acquire special rated credit instruments under this section if, as a result of and after giving effect to the investment, the aggregate amount of special rated credit instruments held by the insurer would exceed 5% of its admitted assets. (g) For purposes of this section, obligations of Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, and other mortgage related securities as defined in section 106 of the Secondary Mortgage Market Enhancement Act of 1984, approved October 3, 1984 (98 Stat. 1691; 15 U.S.C.  77r-1), may be acquired to the same extent as allowed under subsection (a) of this section, whether or not they are rated credit instruments authorized in  31-1373.04(a).  (Apr. 11, 2003, D.C. Law 14-297,  304, 50 DCR 330.)  Section References This section is referenced in  31-1371.02,  31-1373.02,  31-1373.03,  31-1373.07, and  31-1373.08.
 311373.05. Insurer investment pools. (a) An insurer may acquire investments in investment pools that invest only in: (1) Obligations that are rated 1 or 2 by the SVO or have an equivalent of an SVO 1 or 2 rating (or, in the absence of a 1 or 2 rating or equivalent rating, the issuer has outstanding obligations with an SVO 1 or 2 or equivalent rating) by a nationally recognized statistical rating organization recognized by the SVO and have: (A) A remaining maturity not exceeding 397 days or a put that entitles the holder to receive the principal amount of the obligation, which put may be exercised through maturity at specified intervals not exceeding 397 days; or (B) A remaining maturity not exceeding 3 years, and a floating interest rate that resets no less frequently than quarterly on the basis of a current short-term index (including federal funds, prime rate, treasury bills, London InterBank Offered Rate, or commercial paper) and is subject to no maximum limit, if the obligations do not have an interest rate that varies inversely to market interest rate changes; (2) Government money market mutual funds or class one money market mutual funds; or (3) Securities lending, repurchase, and reverse repurchase transactions that meet all the requirements of  31-1373.09 other than the quantitative limitations of 31-1373.09(d); or (4) Investments which an insurer may acquire under this chapter if the insurers proportionate interest in the amount invested in these investments does not exceed the applicable limits of this chapter. (b) For an investment in an investment pool to be qualified under this chapter, the investment pool shall not: (1) Acquire securities issued, assumed, guaranteed, or insured by the insurer or an affiliate of the insurer; (2) Borrow or incur any indebtedness for borrowed money, except for securities lending and reverse repurchase transactions that meet the requirements of  31-1373.09 other than the quantitative limitations of  31-1373.09(d); or (3) Permit the aggregate value of securities then loaned or sold to, purchased from, or invested in any one business entity under this section to exceed 10% of the total assets of the investment pool. (c) The limitations of  31-1373.03(a) shall not apply to an insurers investment in an investment pool; provided, that an insurer shall not acquire an investment in an investment pool under this section if, as a result of and after giving effect to the investment, the aggregate amount of investments held by the insurer under this section: (1) In any one investment pool would exceed 10% of its admitted assets; (2) In all investment pools investing in investments permitted under subsection (a)(2) of this section, would exceed 25% of its admitted assets; or (3) In all investment pools would exceed 40% of its admitted assets. (d) For an investment in an investment pool to be qualified under this chapter, the manager of the investment pool shall: (1) Be organized under the laws of the United States or a state and designated as the pool manager in a pooling agreement; (2)(A) Be the insurer; an affiliated insurer or a business entity affiliated with the insurer; a qualified bank; a business entity registered under the Investment Advisors Act of 1940, approved August 22, 1984 (54 Stat. 789; 15 U.S.C.  80a-1 et seq.); (B) In the case of a reciprocal insurer or interinsurance exchange, be its attorney-in-fact; or (C) In the case of a United States branch of a non-U.S. insurer, be its United States manager or affiliates or subsidiaries of its United States manager; (3) Compile and maintain detailed accounting records setting forth: (A) The cash receipts and disbursements reflecting each participants proportionate investment in the investment pool; (B) A complete description of all underlying assets of the investment pool (including amount, interest rate, maturity date, if any, and other appropriate designations); and (C) Other records which, on a daily basis, allow third parties to verify each participants investment in the investment pool; and (4) Maintain the assets of the investment pool in one or more accounts, in the name of or on behalf of the investment pool, under a custody agreement with a qualified bank, which custody agreement shall: (A) State and recognize the claims and rights of each participant; (B) Acknowledge that the underlying assets of the investment pool are held solely for the benefit of each participant in proportion to the aggregate amount of its investments in the investment pool; and (C) Contain an agreement that the underlying assets of the investment pool shall not be commingled with the general assets of the custodian qualified bank or any other person. (e) The pooling agreement for each investment pool shall be in writing and shall provide that: (1) An insurer and its affiliated insurers; in the case of an investment pool investing solely in investments permitted under subsection (a)(1) of this section, the insurer and its subsidiaries, affiliates, or any pension or profit-sharing plan of the insurer, its subsidiaries, and affiliates; and, in the case of a United States branch of a non-U.S. insurer, affiliates or subsidiaries of its United States manager, shall, at all times, hold 100% of the interests in the investment pool; (2) The underlying assets of the investment pool shall not be commingled with the general assets of the pool manager or any other person; (3) In proportion to the aggregate amount of each pool participants interest in the investment pool: (A) Each participant owns an undivided interest in the investment pool underlying assets; and (B) The underlying assets of the investment pool are held solely for the benefit of each participant; (4) A participant, or in the event of the participants insolvency, bankruptcy, or receivership, its trustee, receiver, or other successor-in-interest, may withdraw all or any portion of its investment from the investment pool under the terms of the pooling agreement; (5) Withdrawals may be made on demand without penalty or other assessment on any business day; provided, that settlement of funds shall occur within a reasonable and customary period thereafter not to exceed 5 business days; and (6) The pool manager shall make the records of the investment pool available for inspection by the Commissioner. (f) Distributions under subsection (e)(5) of this section shall be calculated net of all applicable fees and expenses of the investment pool. The pooling agreement shall provide that the pool manager may distribute to a participant, at the discretion of the pool manager: (1) In cash, the fair market value of the participants pro rata share of each underlying asset of the investment pool; (2) In kind, a pro rata share of each underlying asset; or (3) In a combination of cash and in kind distributions, a pro rata share in each underlying asset.  (Apr. 11, 2003, D.C. Law 14-297,  305, 50 DCR 330.)  Section References This section is referenced in  31-1373.02 and  31-1373.10.
 311373.06. Equity interests. (a) Subject to the limitations of  31-1373.03, an insurer may acquire equity interests in business entities organized under the laws of any domestic jurisdiction. (b) An insurer shall not acquire an investment under this section if, as a result of and after giving effect to the investment, the aggregate amount of investments held by the insurer under this section would exceed the greater of 25% of its admitted assets or 100% of its surplus as regards policyholders. (c) An insurer shall not acquire under this section any investments that the insurer may acquire under  31-1373.08. (d) An insurer shall not short sell equity investments unless the insurer covers the short sale by owning the equity investment or an unrestricted right to the equity instrument exercisable within 6 months of the short sale.  (Apr. 11, 2003, D.C. Law 14-297,  306, 50 DCR 330.)  Section References This section is referenced in  31-1372.05 and  31-1373.02.
 311373.07. Tangible personal property under lease. (a)(1) Subject to the limitations of  31-1373.03, an insurer may acquire tangible personal property or equity interests therein, which property or interests are located or used wholly or in part within a domestic jurisdiction, directly or indirectly, through: (A) Limited partnership interests and general partnership interests not otherwise prohibited by section 31-1371.05; (B) Joint ventures; (C) Stock of an investment subsidiary; (D) Membership interests in a limited liability company; (E) Trust certificates; or (F) Other similar instruments. (2) Investments acquired under paragraph (1) of this subsection shall be eligible only if: (A) The property is subject to a lease or other agreement with a person whose rated credit instruments the insurer could acquire under  31-1373.04 for a price equal to the purchase price of the personal property; and (B) The lease or other agreement provides the insurer the right to receive rental, purchase, or other fixed payments for the use or purchase of the property, and the aggregate value of the payments, together with the estimated residual value of the property at the end of its useful life and the estimated tax benefits to the insurer resulting from ownership of the property, shall be at least equal to the cost of the insurers investment in the property, plus a return considered adequate by the insurer. (b) The insurer shall compute the amount of each investment under this section on the basis of the cash purchase price and applicable related expenses paid by the insurer for the investment, net of each borrowing made to finance the purchase price and expenses to the extent the borrowing is nonrecourse to the insurer. (c) An insurer shall not acquire an investment under this section if, as a result of and after giving effect to the investment, the aggregate amount of all investments held by the insurer under this section would exceed: (1) Two percent of its admitted assets; or (2) One half of one percent of its admitted assets as to any single item of tangible personal property. (d) For purposes of determining compliance with the limitations of  31-1373.03: (1) Investments acquired by an insurer under this section shall be aggregated with those acquired under  31-1373.04; and (2) Each lessee of the property under a lease referred to in this section shall be deemed the issuer of an obligation in the amount of the investment of the insurer in the property determined as provided under subsection (b) of this section. (e) This section shall not be applicable to a lease of tangible personal property between an insurer and its subsidiaries or affiliates under a cost sharing arrangement or agreement permitted under subchapter I of Chapter 7 of Title 31.  (Apr. 11, 2003, D.C. Law 14-297,  307, 50 DCR 330.)  Section References This section is referenced in  31-1373.03.
 311373.08. Mortgage loans and real estate. (a)(1) Subject to the limitations of  31-1373.03, an insurer may acquire, directly or indirectly, through limited partnership interests and general partnership interests not otherwise prohibited by  31-1371.05, joint ventures, stock of an investment subsidiary, membership interests in a limited liability company, trust certificates, or other similar instruments, obligations secured by a first mortgage on real estate situated within a domestic jurisdiction; provided, that a mortgage loan which is secured by a subordinate lien shall not be acquired unless the insurer is the holder of the first lien. The obligations held by the insurer and any obligations with an equal lien priority, shall not, at the time of acquisition of the obligation, exceed: (A) Ninety percent of the fair market value of the real estate if the mortgage loan is secured by a purchase money mortgage or like security received by the insurer upon disposition of the real estate; (B) Eighty percent of the fair market value of the real estate if the mortgage loan requires immediate scheduled payment in periodic installments of principal and interest, has an amortization period not exceeding 30 years, periodic payments made no less frequently than annually; provided, that: (i) Each periodic payment shall be sufficient to assure that at all times the outstanding principal balance of the mortgage loan shall be not greater than the outstanding principal balance which would be outstanding under a mortgage loan with the same original principal balance, with the same interest rate and requiring equal payments of principal and interest with the same frequency over the same amortization period; (ii) Mortgage loans permitted under this paragraph shall be permitted notwithstanding the fact that they provide for a payment of the principal balance prior to the end of the period of amortization of the loan; (iii) For residential mortgage loans, the 80% limitation shall be 97% if acceptable private mortgage insurance has been obtained; or (C) Seventy-five percent of the fair market value of the real estate for mortgage loans that do not meet the requirements of subparagraphs (A) or (B) of this paragraph. (2) For purposes of paragraph (1) of this subsection, the amount of an obligation required to be included in the calculation of the loan-to-value ratio may be reduced to the extent the obligation is insured by the Federal Housing Administration or guaranteed by the Administrator of Veterans Affairs, or their successors. (3) A mortgage loan that is held by an insurer under  31-1371.03(f) or acquired under this section and is restructured in a manner that meets the requirements of a restructured mortgage loan in accordance with the NAIC Accounting Practices and Procedures Manual, or successor publication, shall continue to qualify as a mortgage loan. (4) Subject to the limitations of  31-1373.03, credit lease transactions that do not qualify for investment under  31-1373.04 shall be exempt from the provisions of paragraph (1) of this subsection if their terms are as follows: (A) The loan balance at the end of the initial term of the lease will not exceed the original appraised value of the real estate; (B) The lease payments equal or exceed the total debt service over the term of the loan; (C) A tenant or its affiliated entity whose rated credit instruments have a SVO 1 or 2 designation or a comparable rating from a nationally recognized statistical rating organization recognized by the SVO is obligated to make the lease payments; (D) The insurer holds, or is the beneficial holder of, a first lien mortgage on the real estate; (E) The expenses of the maintenance and operation of the real estate, excluding exterior, structural, parking, and heating, ventilation and air conditioning replacement expenses, are passed through to the tenant, or annual escrow contributions from the lease payments equal or exceed the deficiencies in any such expense; and (F) There is a perfected assignment of the rents due under the lease to, or for the benefit of, the insurer. (b)(1) An insurer may acquire, manage, and dispose of real estate situated in a domestic jurisdiction, directly or indirectly, through limited partnership interests and general partnership interests not otherwise prohibited by  31-1371.05, joint ventures, stock of an investment subsidiary, membership interests in a limited liability company, trust certificates, or other similar instruments. The real estate shall be income-producing or intended for improvement or development for investment purposes under an existing program. (2) The real estate may be subject to mortgages, liens, other encumbrances, the amount of which shall, to the extent that the obligations secured by the mortgages, liens, or encumbrances are nonrecourse to the insurer, be deducted from the amount of the investment of the insurer in the real estate for purposes of determining compliance with subsection (d)(2) and (d)(3) of this section. (c)(1) An insurer may acquire, manage, and dispose of real estate for the convenient accommodation of the business operations, including home office, branch office, and field office operations of the insurer, its affiliates, or subsidiaries. (2) Real estate acquired under this subsection may include excess space for rent to others if the excess space, valued at its fair market value, would otherwise be a permitted investment under subsection (b) of this section and is so qualified by the insurer. (3) The real estate acquired under this subsection may be subject to one or more mortgages, liens, or other encumbrances, the amount of which shall, to the extent that the obligations secured by the mortgages, liens, or encumbrances are nonrecourse to the insurer, be deducted from the amount of the investment of the insurer in the real estate for purposes of determining compliance with subsection (d)(4) of this section. (4) For purposes of this subsection, business operations shall not include that portion of real estate used for the direct provision of health care services by an insurer whose insurance premiums and required statutory reserves for accident and health insurance constitute at least 95% of total premium considerations or total statutory required reserves, respectively. An insurer may acquire real estate used for these purposes under subsection (b) of this section. (d)(1) An insurer shall not acquire an investment under subsection (a) of this section if, as a result of and after giving effect to the investment, the aggregate amount of all investments held by the insurer under subsection (a) of this section would exceed: (A) One percent of its admitted assets in mortgage loans covering any one secured location; (B) One quarter of one percent of its admitted assets in construction loans covering any one secured location; or (C) One percent of its admitted assets in construction loans in the aggregate. (2) An insurer shall not acquire an investment under subsection (b) of this section if, as a result of and after giving effect to the investment and any outstanding guarantees made by the insurer in connection with the investment, the aggregate amount of investments held by the insurer under subsection (b) of this section plus the guarantees then outstanding would exceed: (A) One percent of its admitted assets in one parcel or group of contiguous parcels of real estate; provided, that this limitation shall not apply to that portion of real estate used for the direct provision of health care services by an insurer whose insurance premiums and required statutory reserves for accident and health insurance constitute at least 95% of total premium considerations or total statutory required reserves, respectively, such as hospitals, medical clinics, medical professional buildings, or other health facilities used for the purpose of providing health services; or (B) The lesser of 10% of its admitted assets or 40% of its surplus as regards policyholders in the aggregate as to properties that are to be improved or developed; provided, that for an insurer whose insurance premiums and required statutory reserves for accident and health insurance constitute at least 95% of total premium considerations or total statutory required reserves, respectively, this limitation shall be increased to 15% of its admitted assets in the aggregate. (3) An insurer shall not acquire an investment under subsection (a) or (b) of this section if, as a result of and after giving effect to the investment and any guarantees it has made in connection with the investment, the aggregate amount of all investments held by the insurer under subsections (a) and (b) of this section, and the guarantees then outstanding would exceed 25% of its admitted assets. (4) The limitations of  31-1373.03 shall not apply to an insurers acquisition of real estate under subsection (c) of this section. An insurer shall not acquire real estate under subsection (c) of this section if, as a result of and after giving effect to the acquisition, the aggregate amount of all real estate held by the insurer under subsection (c) of this section would exceed 10% of its admitted assets. With the permission of the Commissioner, additional amounts of real estate may be acquired under subsection (c) of this section.  (Apr. 11, 2003, D.C. Law 14-297,  308, 50 DCR 330.)  Section References This section is referenced in  31-1371.03 and  31-1373.06.
 311373.09. Securities lending, repurchase, reverse repurchase and dollar roll transactions. (a) An insurer may enter into securities lending, repurchase, reverse repurchase, and dollar roll transactions with business entities, subject to the requirements of this section. (b) The insurers board of directors shall adopt a written plan that is consistent with the requirements of the written plan in  31-1371.04(a) that specifies guidelines and objectives to be followed, such as: (1) A description of how cash received will be invested or used for general corporate purposes of the insurer; (2) Operational procedures to manage interest rate risk and counterparty default risk, the conditions under which proceeds from reverse repurchase transactions may be used in the ordinary course of business, and the use of acceptable collateral in a manner that reflects the liquidity needs of the transaction; and (3) The extent to which the insurer may engage in these transactions. (c) The insurer shall enter into a written agreement for all transactions authorized in this section other than dollar roll transactions. The written agreement shall require that each transaction terminate no more than one year from its inception or upon the earlier demand of the insurer. The agreement shall be with the business entity counterparty; provided, that for securities lending transactions, the agreement may be with an agent acting on behalf of the insurer if: (1) The agent is a qualified business entity; (2) The agreement: (A) Requires the agent to enter into separate agreements with each counterparty that are consistent with the requirements of this section; and (B) Prohibits securities lending transactions under the agreement with the agent or its affiliates. (d) Cash received in a transaction under this section shall be invested in accordance with this chapter and in a manner that recognizes the liquidity needs of the transaction or used by the insurer for its general corporate purposes. As long as the transaction remains outstanding, the insurer, its agent, or custodian shall maintain, as to acceptable collateral received in a transaction under this section, either physically or through the book entry systems of the Federal Reserve, Depository Trust Company, Participants Trust Company, or other securities depositories approved by the Commissioner: (1) Possession of the acceptable collateral; (2) A perfected security interest in the acceptable collateral; or (3) In the case of a jurisdiction outside of the United States, title, or rights of a secured creditor, to the acceptable collateral. (e) The limitations of  31-1373.03 and 31-1373.10 shall not apply to the business entity counterparty exposure created by transactions under this section. For purposes of calculations made to determine compliance with this subsection, no effect shall be given to the insurers future obligation to resell securities in the case of a repurchase transaction or to repurchase securities in the case of a reverse repurchase transaction. An insurer shall not enter into a transaction under this section if, as a result of and after giving effect to the transaction: (1) The aggregate amount of securities loaned to, sold to, or purchased from any one business entity counterparty under this section would exceed 5% of its admitted assets; provided, that in calculating the amount sold to or purchased from a business entity counterparty under repurchase or reverse repurchase transactions, effect may be given to netting provisions under a master written agreement; or (2) The aggregate amount of all securities then loaned to, sold to, or purchased from all business entities under this section would exceed 40% of its admitted assets; provided, that the limitation of this subsection shall not apply to reverse repurchase transactions if the borrowing is used to meet operational liquidity requirements resulting from an officially declared catastrophe and subject to a plan approved by the Commissioner. (f) In a securities lending transaction, the insurer shall receive acceptable collateral having a market value as of the transaction date at least equal to 102% of the market value of the securities loaned by the insurer in the transaction as of that date. If at any time the market value of the acceptable collateral is less than the market value of the loaned securities, the business entity counterparty shall be obligated to deliver additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral held in connection with the transaction, at least equals 102% of the market value of the loaned securities. (g) In a reverse repurchase transaction, other than a dollar roll transaction, the insurer shall receive acceptable collateral having a market value as of the transaction date at least equal to 95% of the market value of the securities transferred by the insurer in the transaction as of that date. If at any time the market value of the acceptable collateral is less than 95% of the market value of the securities transferred, the business entity counterparty shall be obligated to deliver additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral held in connection with the transaction, equals at least 95% of the market value of the transferred securities. (h) In a dollar roll transaction, the insurer shall receive cash in an amount at least equal to the market value of the securities transferred by the insurer in the transaction as of the transaction date. (i) In a repurchase transaction, the insurer shall receive as acceptable collateral transferred securities having a market value at least equal to 102% of the purchase price paid by the insurer for the securities. If at any time the market value of the acceptable collateral is less than 100% of the purchase price paid by the insurer, the business entity counterparty shall be obligated to provide additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral held in connection with the transaction, equals at least 102% of the purchase price. Securities acquired by an insurer in a repurchase transaction shall not be sold in a reverse repurchase transaction, loaned in a securities lending transaction, or otherwise pledged.  (Apr. 11, 2003, D.C. Law 14-297,  309, 50 DCR 330.)  Section References This section is referenced in  31-1371.02,  31-1371.03, and  31-1373.05.
 311373.10. Foreign investments and foreign currency exposure. (a) Subject to the limitations of  31-1373.03, an insurer may acquire foreign investments, or engage in investment practices with persons of or in foreign jurisdictions, of substantially the same types as those that an insurer is permitted to acquire under this chapter, other than of the type permitted under  31-1373.05, if, as a result and after giving effect to the investment: (1) The aggregate amount of foreign investments held by the insurer under this subsection does not exceed 20% of its admitted assets; and (2) The aggregate amount of foreign investments held by the insurer under this subsection in a single foreign jurisdiction does not exceed 10% of its admitted assets as to a foreign jurisdiction that has a sovereign debt rating of SVO 1 or 5% of its admitted assets as to any other foreign jurisdiction. (b)(1) Subject to the limitations of  31-1373.03, an insurer may acquire investments, or engage in investment practices denominated in foreign currencies, whether or not they are foreign investments acquired under subsection (a) of this section, or additional foreign currency exposure as a result of the termination or expiration of a hedging transaction with respect to investments denominated in a foreign currency, if: (A) The aggregate amount of investments held by the insurer under this subsection denominated in foreign currencies does not exceed 15% of its admitted assets; and (B) The aggregate amount of investments held by the insurer under this subsection denominated in the foreign currency of a single foreign jurisdiction does not exceed 10% of its admitted as to a foreign jurisdiction that has a sovereign debt rating of SVO 1 or 5% of its admitted assets as to any other foreign jurisdiction. (2) For the purposes of this subsection, an investment shall not be considered denominated in a foreign currency if the acquiring insurer enters into one or more contracts in transactions permitted under  31-1373.11 and the business entity counterparty agrees under the contract or contracts to exchange all payments made on the foreign currency denominated investment for United States currency at a rate which insulates the investment cash flow against future changes in currency exchange rates. (c) In addition to investments permitted under subsections (a) and (b) of this section, subject to the limitations of  31-1373.03, an insurer that is authorized to do business in a foreign jurisdiction and that has outstanding insurance, annuity, or reinsurance contracts on lives or risks resident or located in that foreign jurisdiction and denominated in foreign currency of that jurisdiction, may acquire foreign investments respecting that foreign jurisdiction and investments denominated in the currency of that jurisdiction; provided, that investments made under this subsection in obligations of foreign governments, their political subdivisions, and government-sponsored enterprises shall not be subject to the limitations of  31-1373.03 if those investments carry an SVO rating of 1 or 2. The aggregate amount of investments acquired by the insurer under this subsection shall not exceed the greater of: (1) The amount the insurer is required by law to invest in the foreign jurisdiction; or (2) One hundred twenty-five percent of the amount of its reserves, net of reinsurance, and other obligations under the contracts. (d) In addition to investments permitted under subsections (a) and (b) of this section, subject to the limitations set forth in  31-1373.03, an insurer that is not authorized to do business in a foreign jurisdiction but which has outstanding insurance, annuity, or reinsurance contracts on lives or risks resident or located in a foreign jurisdiction and denominated in foreign currency of that jurisdiction may acquire foreign investments respecting that foreign jurisdiction and investments denominated in the currency of that jurisdiction; provided, that investments made under this subsection in obligations of foreign governments, their political subdivisions, and government-sponsored enterprises shall not be subject to the limitations of  31-1373.03 if those investments carry an SVO rating of 1 or 2. The aggregate amount of investments acquired by the insurer under this subsection shall not exceed 105% of the amount of its reserves, net of reinsurance, and other obligations under the contracts on risks resident or located in the foreign jurisdiction. (e) Investments acquired under this section shall be aggregated with investments of the same types made under all other sections of this chapter, and in a similar manner, for purposes of determining compliance with the limitations, if any, contained in the other sections. Investments in obligations of foreign governments, their political subdivisions, and government-sponsored enterprises of these persons, except for those exempt under subsections (c) and (d) of this section, shall be subject to the limitations of  31-1373.03.  (Apr. 11, 2003, D.C. Law 14-297,  310, 50 DCR 330.)  Section References This section is referenced in  31-1371.02,  31-1373.02,  31-1373.03, and  31-1373.09.
 311373.11. Derivative transactions. (a) An insurer may, directly or indirectly through an investment subsidiary, engage in derivative transactions under this section, subject to the requirements of this section. (b)(1) An insurer may use derivative instruments under this section to engage in hedging transactions and certain income generation transactions, as these terms may be further defined in regulations promulgated by the Commissioner. (2) An insurer shall be able to demonstrate to the Commissioner the intended hedging characteristics and the ongoing effectiveness of the derivative transaction, or combination of transactions, through cash flow testing or other appropriate analyses. (c) An insurer may enter into hedging transactions under this section if, as a result of and after giving effect to the transaction: (1) The aggregate statement value of options, caps, floors, and warrants not attached to another financial instrument purchased and used in hedging transactions does not exceed 7.5% of its admitted assets; (2) The aggregate statement value of options, caps, and floors written in hedging transactions does not exceed 3% of its admitted assets; and (3) The aggregate potential exposure of collars, swaps, forwards, and futures used in hedging transactions does not exceed 6.5% of its admitted assets. (d) An insurer may enter into the following types of income generation transactions if, as a result of and after giving effect to the transactions, the aggregate statement value of the fixed income assets that are subject to call, the face value of fixed income securities underlying a derivative instrument subject to call, and the amount of the purchase obligations under the puts, do not exceed 10% of its admitted assets: (1) Sales of covered call options on non-callable fixed income securities, callable fixed income securities if the option expires by its terms prior to the end of the noncallable period, or derivative instruments based on fixed income securities; (2) Sales of covered call options on equity securities if the insurer holds in its portfolio, or can immediately acquire through the exercise of options, warrants, or conversion rights already owned, the equity securities subject to call during the complete term of the call option sold; or (3) Sales of covered puts on investments that the insurer is permitted to acquire under this chapter if the insurer has escrowed, or entered into a custodian agreement segregating, cash or cash equivalents with a market value equal to the amount of its purchase obligations under the put during the complete term of the put option sold. (e) An insurer shall include all counterparty exposure amounts in determining compliance with the limitations of  31-1373.03. (f) Under regulations promulgated under  31-1375.01, the Commissioner may approve additional transactions involving the use of derivative instruments in excess of the limits of subsection (c) of this section or for other risk management purposes under regulations promulgated by the Commissioner; provided, that replication transactions shall not be permitted for other than risk management purposes.  (Apr. 11, 2003, D.C. Law 14-297,  311, 50 DCR 330.)  Section References This section is referenced in  31-1371.02,  31-1371.03,  31-1373.03, and  31-1373.10.
 311373.12. Additional investment authority. (a) An insurer may acquire under this section investments, or engage in investment practices, of any kind that are not specifically prohibited by this chapter or engage in investment practices without regard to any limitation in  31-1373.03 through 31-1373.10; provided, that an insurer shall not acquire an investment or engage in an investment practice under this section if, as a result of and after giving effect to the transaction, the aggregate amount of the investments held by the insurer under this section would exceed the greater of: (1) Its unrestricted surplus; or (2) The lesser of: (A) Ten percent of its admitted assets; or (B) Fifty percent of its surplus as regards policyholders. (b) An insurer shall not acquire any investment or engage in any investment practice under subsection (a)(2) of this section if, as a result of and after giving effect to the transaction the aggregate amount of all investments in any one person held by the insurer under that subsection would exceed 5% of its admitted assets.  (Apr. 11, 2003, D.C. Law 14-297,  312, 50 DCR 330.)  Section References This section is referenced in  31-1371.03 and  31-1373.02.
 311374.01. [Reserved].
 311375.01. Regulations. The Commissioner may, in accordance with  2-505, promulgate rules and regulations to carry out the purposes of this chapter.  (Apr. 11, 2003, D.C. Law 14-297,  501, 50 DCR 330.)  Section References This section is referenced in  31-1371.02,  31-1372.10,  31-1373.11, and  31-3931.07.
 311391. Authority to enter into Interstate Insurance Product Regulation Compact. (a) In general.  The District of Columbia is authorized to enter into an interstate compact to establish a joint state commission as an instrumentality of the District of Columbia for the purpose of establishing uniform insurance product regulations among the participating States. (b) Delegation.  Any insurance product regulation compact that the Council of the District of Columbia authorizes the Mayor to execute on behalf of the District may contain provisions that delegate the requisite power and authority to the joint State commission to achieve the purposes for which the interstate compact is established.  (Oct. 16, 2006, 120 Stat. 2023, Pub. L. 109-356,  104.) 
 311392.01. Mayoral Authority. The Mayor is authorized to execute, on behalf of the District of Columbia, an Interstate Insurance Product Regulation Compact in the form substantially as follows: "Interstate Insurance Product Regulation Compact. " Article I. Purpose. "The purpose of the interstate compact, through means of joint and cooperative action among the Compacting States, is to promote and protect the interest of consumers of individual and group annuity, life insurance, disability income, and long-term care insurance products; to develop uniform standards for insurance products covered by the Compact; to establish a central clearinghouse to receive and provide prompt review of insurance products covered under the Compact and, in certain cases, Advertisements related thereto, submitted by insurers authorized to do business in one or more Compacting jurisdictions; to give appropriate uniform standards; to improve coordination of regulatory resources and expertise between state insurance departments regarding the setting of uniform standards and review of the insurance products covered by the Compact; to create the Interstate Insurance Product Regulation Commission; and to perform these and such other related functions as may be consistent with the state regulation of the business of insurance. "Article II. Definitions. "(1) "Advertisement" means any material designed to create public interest in a Product, or induce the public to purchase, increase, modify, reinstate, borrow on, surrender, replace, or retain a policy, as more specifically defined in the Rules and Operating Procedures of the Commission. "(2) "Bylaws" mean those bylaws established by the Commission for its governance, or for directing or controlling the Commission's actions or conduct. "(3) "Compacting State" means any State that has enacted this Compact legislation and has not withdrawn pursuant to Article XIV, paragraphs (a) through (f) of the Compact, or been terminated pursuant to Article XIV, paragraphs (g) through (i) of this Compact. "(4) "Commission" means the Interstate Insurance Product Regulation Commission established by this Compact. "(5) "Commissioner" means the chief insurance regulatory official of a State including, but not limited to, commissioner, superintendent, director, or administrator. "(6) "Domiciliary State" means the state in which an Insurer is incorporated or organized; or, in the case of an alien Insurer, its state of entry. "(7) "Insurer" means any entity licensed by a State to issue contracts of insurance for any of the lines of insurance covered by this act. "(8) "Member" means the person chosen by a Compacting State as its representative to the Commission, or his or her designee. "(9) "Non-compacting State" means any State which is not at the time a Compacting State. "(10) "Operating Procedures" mean procedures promulgated by the Commission implementing a Rule, Uniform Standard, or a provision of this Compact. "(11) "Product" means the form of a policy or contract, including any application, endorsement, or related form that is attached to and made a part of the policy or contract, and any evidence of coverage or certificate, for an individual or group annuity, life insurance, disability income, or long-term care insurance product that an Insurer is authorized to issue. "(12) "Rule" means a statement of general or particular applicability and future effect promulgated by the Commission, including a Uniform Standard developed pursuant to Article VII of this Compact, designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of the Commission, which shall have the force and effect of law in the Compacting States. "(13) "State" means any state, district, or territory of the United States of America. "(14) "Third-Party Filer" means an entity that submits a Product filing to the Commission on behalf of an Insurer. "(15) "Uniform Standard" means a standard adopted by the Commission for a Product line, pursuant to Article VII of this Compact, and shall include all of the Product requirements in aggregate; provided, that each Uniform Standard shall be construed, whether express or implied, to prohibit the use of any inconsistent, misleading, or ambiguous provisions in a Product and the form of the Product made available to the public shall not be unfair, inequitable, or against public policy as determined by the Commission. "Article III. Establishment of the Commission and Venue. "(a) The Compacting States hereby create and establish a joint public agency known as the "Interstate Insurance Product Regulation Commission." Pursuant to Article IV, the Commission will have the power to develop Uniform Standards for Product lines, receive and provide prompt review of Products filed therewith, and give approval to those Product filings satisfying applicable Uniform Standards; provided, that it is not intended for the Commission to be the exclusive entity for receipt and review of insurance Product filings. Nothing herein shall prohibit any Insurer from filing its Product in any State wherein the Insurer is licensed to conduct the business of insurance; and any such filing shall be subject to the laws of the State where filed. "(b) The Commission is a body corporate and politic, and an instrumentality of the Compacting States. "(c) The Commission is solely responsible for its liabilities except as otherwise specifically provided in this Compact. "(d) Venue is proper and judicial proceedings by or against the Commission shall be brought solely and exclusively in a court of competent jurisdiction where the principal office of the Commission is located. " Article IV. Powers of the Commission. "(a) The Commission shall have the following powers: "(1) To promulgate Rules, pursuant to Article VII of this Compact, which shall have the force and effect of law and shall be binding in the Compacting States to the extent and "(2) To exercise its rule-making authority and establish reasonable Uniform Standards for Products covered under the Compact, and Advertisement related thereto, which shall have the force and effect of law and shall be binding in the Compacting States, but only for those Products filed with the Commission; provided, that a Compacting State shall have the right to opt out of such Uniform Standard pursuant to Article VII to the extent and in the manner provided in this Compact; provided further, that any Uniform Standard established by the Commission for long-term care insurance products may provide the same or greater protections for consumers as, but shall not provide less than, those protections set forth in the National Association of Insurance Commissioners'("NAIC") Long-Term Care Insurance Model Act and Long-Term Care Insurance Model Regulation, adopted as of 2001. The Commission shall consider whether any subsequent amendments to the NAIC Long-Term Care Insurance Model Act or Long-Term Care Insurance Model Regulation adopted by the NAIC require amending of the Uniform Standards established by the Commission for long-term care insurance products; "(3) To receive and review in an expeditious manner Products filed with the Commission, and rate filings for disability income and long-term care insurance Products, and give approval of those Products and rate filings that satisfy the applicable Uniform Standard, where such approval shall have the force and effect of law and be binding on the Compacting States to the extent and in the manner provided in the Compact; "(4) To receive and review in an expeditious manner Advertisement relating to long-term care insurance products for which Uniform Standards have been adopted by the Commission, and give approval to all Advertisement that satisfies the applicable Uniform Standard. For any Product covered under this Compact, other than long-term care insurance products, the Commission shall have the authority to require an Insurer to submit all or any part of its Advertisement with respect to that Product for review or approval prior to use, if the Commission determines that the nature of the Product is such that an Advertisement of the Product could have the capacity or tendency to mislead the public. The actions of Commission as provided in this Article shall have the force and effect of law and shall be binding in the Compacting States to the extent and in the manner provided in the Compact; "(5) To exercise its rule-making authority and designate Products and Advertisement that may be subject to a self-certification process without the need for prior approval by the Commission. "(6) To promulgate Operating Procedures, pursuant to Article VII of this Compact, which shall be binding in the Compacting States to the extent and in the manner provided in this Compact; "(7) To bring and prosecute legal proceedings or actions in its name as the Commission; provided, that the standing of any state insurance department to sue or be sued under applicable law shall not be affected; "(8) To issue subpoenas requiring the attendance and testimony of witnesses and the production of evidence; "(9) To establish and maintain offices; "(10) To purchase and maintain insurance and bonds; "(11) To borrow, accept, or contract for services of personnel, including, but not limited to, employees of a Compacting State; "(12) To hire employees, professionals, or specialists, and elect or appoint officers, and to fix their compensation, define their duties, and give them appropriate authority to carry out the purposes of the Compact, and determine their qualifications; and to establish the Commission's personnel policies and programs relating to, among other things, conflicts of interest, rates of compensation, and qualifications of personnel; "(13) To accept any and all appropriate donations and grants of money, equipment, supplies, materials, and services, and to receive, utilize, and dispose of the same; provided, that at all times the Commission shall strive to avoid any appearance of impropriety; "(14) To lease, purchase, accept appropriate gifts or donations of, or otherwise to own, hold, improve or use, any property, real, personal, or mixed; provided, that at all times the Commission shall strive to avoid any appearance of impropriety; "(15) To sell, convey, mortgage, pledge, lease, exchange, abandon, or otherwise dispose of any property, real, personal, or mixed; "(16) To remit filing fees to Compacting States as may be set forth in the Bylaws, Rules, or Operating Procedures; "(17) To enforce compliance by Compacting States with Rules, Uniform Standards, Operating Procedures, and Bylaws; "(18) To provide for dispute resolution among Compacting States; "(19) To advise Compacting States on issues relating to Insurers domiciled or doing business in Non-compacting jurisdictions, consistent with the purposes of this Compact; "(20) To provide advice and training to those personnel in state insurance departments responsible for Product review, and to be a resource for state insurance departments; "(21) To establish a budget and make expenditures; "(22) To borrow money; "(23) To appoint committees, including advisory committees comprising Members, state insurance regulators, state legislators or their representatives, insurance industry and consumer representatives, and such other interested persons as may be designated in the Bylaws; "(24) To provide and receive information from, and to cooperate with, law enforcement agencies; "(25) To adopt and use a corporate seal; and "(26) To perform such other functions as may be necessary or appropriate to achieve the purposes of this Compact consistent with the state regulation of the business of insurance." "Article V. Organization of the Commission. "(a) Each Compacting State shall have and be limited to one Member. Each Member shall be qualified to serve in that capacity pursuant to applicable law of the Compacting State Any Member may be removed or suspended from office as provided by the law of the State from which he or she shall be appointed. Any vacancy occurring in the Commission shall be filled in accordance with the laws of the Compacting State wherein the vacancy exists. Nothing herein shall be construed to affect the manner in which a Compacting State determines the election or appointment and qualification of its own Commissioner. "(b) Each Member shall be entitled to one vote and shall have an opportunity to participate in the governance of the Commission in accordance with the Bylaws. Notwithstanding any provision herein to the contrary, no action of the Commission with respect to the promulgation of a Uniform Standard shall be effective unless two-thirds (2/3) of the Members vote in favor thereof. "(c) The Commission shall, by a majority of the Members, prescribe Bylaws to govern its conduct as may be necessary or appropriate to carry out the purposes, and exercise the powers, of the Compact, including, but not limited to: "(1) Establishing the fiscal year of the Commission; "(2) Providing reasonable procedures for appointing and electing members, as well as holding meetings, of the Management Committee; "(3) Providing reasonable standards and procedures: (i) for the establishment and meetings of other committees, and (ii) governing any general or specific delegation of any authority or function of the Commission; "(4) Providing reasonable procedures for calling and conducting meetings of the Commission that consists of a majority of Commission members, ensuring reasonable advance notice of each such meeting, and providing for the right of citizens to attend each such meeting with enumerated exceptions designed to protect the public's interest, the privacy of individuals, and insurers' proprietary information, including trade secrets. The Commission may meet in camera only after a majority of the entire membership votes to close a meeting en toto or in part. As soon as practicable, the Commission must make public (i) a copy of the vote to close the meeting revealing the vote of each Member with no proxy votes allowed, and (ii) votes taken during such meeting; "(5) Establishing the titles, duties, and authority of and reasonable procedures for the election of the officers of the Commission; "(6) Providing reasonable standards and procedures for the establishment of the personnel policies and programs of the Commission. Notwithstanding any civil service or other similar laws of any Compacting State, the Bylaws shall exclusively govern the personnel policies and programs of the Commission; "(7) Promulgating a code of ethics to address permissible and prohibited activities of Commission members and employees; and "(8) Providing a mechanism for winding up the operations of the Commission and the equitable disposition of any surplus funds that may exist after the termination of the Compact after the payment and reserving of all of its debts and obligations. "(d) The Commission shall publish its bylaws in a convenient form and file a copy thereof and a copy of any amendment thereto, with the appropriate agency or officer in each of the Compacting States. "(e) A Management Committee comprising no more than fourteen (14) members shall be established as follows: "(1) One (1) member from each of the six (6) Compacting States with the largest premium volume for individual and group annuities, life insurance, disability income, and long-term care insurance products determined from the records of the NAIC for the prior year; "(2) Four (4) members from those Compacting States with at least two percent (2%) of the market, based on the premium volume described above, other than the six (6) Compacting States with the largest premium volume, selected on a rotating basis as provided in the Bylaws; and "(3) Four (4) members from those Compacting States with less than two percent (2%) of the market, based on the premium volume described above, with one (1) selected from each of the four (4) zone regions of the NAIC as provided in the Bylaws. "(f) The Management Committee shall have such authority and duties as may be set forth in the Bylaws, including but not limited to: "(1) Managing the affairs of the Commission in a manner consistent with the Bylaws and purposes of the Commission; "(2) Establishing and overseeing an organizational structure within, and appropriate procedures for, the Commission to provide for the creation of Uniform Standards and Rules, receipt and review of Product filings, administrative and technical support functions, review of decisions regarding the disapproval of a Product filing, and the review of elections made by a Compacting State to opt out of a Uniform Standard; provided, that a Uniform Standard shall not be submitted to the Compacting States for adoption unless approved by two-thirds (2/3) of the members of the Management Committee; "(3) Overseeing the offices of the Commission; and "(4) Planning, implementing, and coordinating communications and activities with other state, federal, and local government organizations in order to advance the goals of the Commission. "(g) The Commission shall elect annually officers from the Management Committee, with each having such authority and duties as may be specified in the Bylaws. "(h) The Management Committee may, subject to the approval of the Commission, appoint or retain an executive director for such period, upon such terms and conditions, and for such compensation as the Commission may deem appropriate. The executive director shall serve as secretary to the Commission, but shall not be a Member of the Commission. The executive director shall hire and supervise such other staff as may be authorized by the Commission. "(i) A legislative committee comprising state legislators or their designees shall be established to monitor the operations of, and make recommendations to, the Commission, including the Management Committee; provided, that the manner of selection and term of any legislative committee member shall be as set forth in the Bylaws. Prior to the adoption by the Commission of any Uniform Standard, revision to the Bylaws, annual budget, or other significant matter as may be provided in the Bylaws, the Management Committee shall consult with and report to the legislative committee. "(j) The Commission shall establish two (2) advisory committees, one comprising consumer representatives independent of the insurance industry and the other comprising insurance industry representatives. "(k) The Commission may establish additional advisory committees as its Bylaws may provide for the carrying out of its functions. "(l) The Commission shall maintain its corporate books and records in accordance with the Bylaws. "(m) The Members, officers, executive director, employees, and representatives of the Commission shall be immune from suit and liability, either personally or in their official capacity, for any claim for damage to or loss of property or personal injury or other civil liability caused by or arising out of any actual or alleged act, error, or omission that occurred, or that the person against whom the claim is made had a reasonable basis for believing occurred within the scope of Commission employment, duties, or responsibilities; provided, that nothing in this paragraph shall be construed to protect any such person from suit or liability for any damage, loss, injury, or liability caused by the intentional or willful and wanton misconduct of that person. "(n) The Commission shall defend any Member, officer, executive director, employee, or representative of the Commission in any civil action seeking to impose liability arising out of any actual or alleged act, error, or omission that occurred within the scope of Commission employment, duties, or responsibilities, or that the person against whom the claim is made had a reasonable basis for believing occurred within the scope of Commission employment, duties, or responsibilities; provided, that nothing herein shall be construed to prohibit that person from retaining his or her own counsel; provided further, that the actual or alleged act, error, or omission did not result from that person's intentional or willful and wanton misconduct. "(o) The Commission shall indemnify and hold harmless any Member, officer, executive director, employee, or representative of the Commission for the amount of any settlement or judgment obtained against that person arising out of any actual or alleged act, error, or omission that occurred within the scope of Commission employment, duties, or responsibilities, or that such person had a reasonable basis for believing occurred within the scope of Commission employment, duties, or responsibilities, provided, that the actual or alleged act, error, or omission did not result from the intentional or willful and wanton misconduct of that person. "Article VI. Meetings and Acts of the Commission. "(a) The Commission shall meet and take such actions as are consistent with the provisions of this Compact and the Bylaws. "(b) Each Member of the Commission shall have the right and power to cast a vote to which that Compacting State is entitled and to participate in the business and affairs of the Commission. A Member shall vote in person or by such other means as provided in the Bylaws. The Bylaws may provide for Members' participation in meetings by telephone or other means of communication. "(c) The Commission shall meet at least once during each calendar year. Additional meetings shall be held as set forth in the Bylaws. "Article VII. Rules and Operating Procedures: Rulemaking Functions of the Commission and Opting Out of Uniform Standards. "(a) The Commission shall promulgate reasonable Rules, including Uniform Standards, and Operating Procedures in order to effectively and efficiently achieve the purposes of this Compact. Notwithstanding the foregoing, in the event the Commission exercises its rulemaking authority in a manner that is beyond the scope of the purposes of this act, or the powers granted hereunder, then such an action by the Commission shall be invalid and have no force and effect. "(b) Rules and Operating Procedures shall be made pursuant to a rulemaking process that conforms to the Model State Administrative Procedure Act of 1981, as amended, as may be appropriate to the operations of the Commission. Before the Commission adopts a Uniform Standard, the Commission shall give written notice to the relevant state legislative committee(s) in each Compacting State responsible for insurance issues of its intention to adopt the Uniform Standard. The Commission in adopting a Uniform Standard shall consider fully all submitted materials and issue a concise explanation of its decision. "(c) A Uniform Standard shall become effective ninety (90) days after its promulgation by the Commission or such later date as the Commission may determine; provided, that a Compacting State may opt out of a Uniform Standard as provided in this Article. The term "opt out" shall be defined as any action by a Compacting State to decline to adopt or participate in a promulgated Uniform Standard. All other Rules and Operating Procedures, and amendments thereto, shall become effective as of the date specified in each Rule, Operating Procedure, or amendment. "(d) A Compacting State may opt out of a Uniform Standard, either by legislation or regulation duly promulgated by the insurance department under the Compacting State's administrative procedure act. If a Compacting State elects to opt out of a Uniform Standard by regulation, it must (i) give written notice to the Commission no later than ten (10) business days after the Uniform Standard is promulgated, or at the time the State becomes a Compacting State, and (ii) find that the Uniform Standard does not provide reasonable protections to the citizens of the State, given the conditions in the State. The Commissioner shall make specific findings of fact and conclusions of law, based on a preponderance of the evidence, detailing the conditions in the State that warrant a departure from the Uniform Standard and determining that the Uniform Standard would not reasonably protect the citizens of the State. The Commissioner must consider and balance the following factors and find that the conditions in the State and needs of the citizens of the State outweigh: "(1) The intent of the legislature to participate in, and the benefits of, an interstate agreement to establish national uniform consumer protections for the Products subject to this act; and "(2) The presumption that a Uniform Standard adopted by the Commission provides reasonable protections to consumers of the relevant Product. "(e)(1) Notwithstanding the foregoing, a Compacting State may, at the time of its enactment of this Compact, prospectively opt out of all Uniform Standards involving long-term care insurance products by expressly providing for such opt out in the enacted Compact, and such an opt out shall not be treated as a material variance in the offer or acceptance of any State to participate in this Compact. Such an opt out shall be effective at the time of enactment of this Compact by the Compacting State and shall apply to all existing Uniform Standards involving long-term care insurance products and those subsequently promulgated. "(2) In accordance with subparagraph (1) of this paragraph, the District of Columbia opts out of all existing and prospective uniform standards involving long-term care insurance products in order to preserve the District's statutory requirements governing these insurance products. "(f) If a Compacting State elects to opt out of a Uniform Standard, the Uniform Standard shall remain applicable in the Compacting State electing to opt out until such time the opt out legislation is enacted into law or the regulation opting out becomes effective. "(g) Once the opt out of a Uniform Standard by a Compacting State becomes effective as provided under the laws of that State, the Uniform Standard shall have no further force and effect in that State unless and until the legislation or regulation implementing the opt out is repealed or otherwise becomes ineffective under the laws of the State. If a Compacting State opts out of a Uniform Standard after the Uniform Standard has been made effective in that State, the opt out shall have the same prospective effect as provided under Article XIV of this Compact for withdrawals. "(h) If a Compacting State has formally initiated the process of opting out of a Uniform Standard by regulation, and while the regulatory opt out is pending, the Compacting State may petition the Commission, at least fifteen (15) days before the effective date of the Uniform Standard, to stay the effectiveness of the Uniform Standard in that State. The Commission may grant a stay if it determines the regulatory opt out is being pursued in a reasonable manner and there is a likelihood of success. If a stay is granted or extended by the Commission, the stay or extension thereof may postpone the effective date by up to ninety (90) days, unless affirmatively extended by the Commission; provided, that a stay may not be permitted to remain in effect for more than one (1) year unless the Compacting State can show extraordinary circumstances that warrant a continuance of the stay, including, but not limited to, the existence of a legal challenge that prevents the Compacting State from opting out. A stay may be terminated by the Commission upon notice that the rulemaking process has been terminated. "(i) Not later than thirty (30) days after a Rule or Operating Procedure is promulgated, any person may file a petition for judicial review of the Rule or Operating Procedure; provided, that the filing of such a petition shall not stay or otherwise prevent the Rule or Operating Procedure from becoming effective unless the court finds that the petitioner has a substantial likelihood of success. The court shall give deference to the actions of the Commission consistent with applicable law and shall not find the Rule or Operating Procedure to be unlawful if the Rule or Operating Procedure represents a reasonable exercise of the Commission's authority. "Article VIII. Commission Records and Enforcement. "(a) The Commission shall promulgate Rules establishing conditions and procedures for public inspection and copying of its information and official records, except such information and records involving the privacy of individuals and insurers' trade secrets. The Commission may promulgate additional Rules under which it may make available to federal and state agencies, including law enforcement agencies, records and information otherwise exempt from disclosure and may enter into agreements with such agencies to receive or exchange information or records subject to nondisclosure and confidentiality provisions. "(b) Except as to privileged records, data, and information, the laws of any Compacting State pertaining to confidentiality or nondisclosure shall not relieve any Compacting State Commissioner of the duty to disclose any relevant records, data, or information to the Commission; provided, that disclosure to the Commission shall not be deemed to waive or otherwise affect any confidentiality requirement; provided further, that, except as otherwise expressly provided in this act, the Commission shall not be subject to the Compacting State's laws pertaining to confidentiality and nondisclosure with respect to records, data, and information in its possession. Confidential information of the Commission shall remain confidential after such information is provided to any Commissioner. "(c) The Commission shall monitor Compacting States for compliance with duly adopted Bylaws, Rules, including Uniform Standards, and Operating Procedures. The Commission shall notify any non-complying Compacting State in writing of its noncompliance with Commission Bylaws, Rules, or Operating Procedures. If a non-complying Compacting State fails to remedy its noncompliance within the time specified in the notice of noncompliance, the Compacting State shall be deemed to be in default as set forth in Article XIV. "(d) The Commissioner of any State in which an Insurer is authorized to do business, or is conducting the business of insurance, shall continue to exercise his or her authority to oversee the market regulation of the activities of the Insurer in accordance with the provisions of the State's law. The Commissioner's enforcement of compliance with the Compact is governed by the following provisions: "(1) With respect to the Commissioner's market regulation of a Product or Advertisement that is approved or certified to the Commission, the content of the Product or Advertisement shall not constitute a violation of the provisions, standards, or requirements of the Compact except upon a final order of the Commission issued at the request of a Commissioner after prior notice to the Insurer and an opportunity for hearing before the Commission. "(2) Before a Commissioner may bring an action for violation of any provision, standard, or requirement of the Compact relating to the content of an Advertisement not approved or certified to the Commission, the Commission, or an authorized Commission officer or employee, must authorize the action. However, authorization pursuant to this paragraph does not require notice to the Insurer, opportunity for hearing, or disclosure of requests for authorization or records of the Commission's action on such requests. "Article IX. Dispute Resolution. "The Commission shall attempt, upon the request of a Member, to resolve any disputes or other issues that are subject to this Compact that may arise between two (2) or more Compacting States, or between Compacting States and Non-compacting States. The Commission shall promulgate an Operating Procedure providing for resolution of such disputes. "Article X. Product Filing and Approval. "(a) Insurers and Third-Party Filers seeking to have a Product approved by the Commission shall file the Product with, and pay applicable filing fees to, the Commission. Nothing in this act shall be construed to restrict or otherwise prevent an insurer from filing its Product with the insurance department in any State wherein the insurer is licensed to conduct the business of insurance, and such filing shall be subject to the laws of the States where filed. "(b) The Commission shall establish appropriate filing and review processes and procedures pursuant to Commission Rules and Operating Procedures. Notwithstanding any provision herein to the contrary, the Commission shall promulgate Rules to establish conditions and procedures under which the Commission will provide public access to Product filing information. In establishing such Rules, the Commission shall consider the interests of the public in having access to such information, as well as protection of personal medical and financial information and trade secrets, that may be contained in a Product filing or supporting information. "(c) Any Product approved by the Commission may be sold or otherwise issued in those Compacting States for which the Insurer is legally authorized to do business. "Article XI. Review of Commission Decisions Regarding Filings. "(a) Not later than thirty (30) days after the Commission has given notice of a disapproved Product or Advertisement filed with the Commission, the Insurer or Third Party Filer whose filing was disapproved may appeal the determination to a review panel appointed by the Commission. The Commission shall promulgate Rules to establish procedures for appointing such review panels and provide for notice and hearing. An allegation that the Commission in disapproving a Product or Advertisement filed with the Commission, acted arbitrarily, capriciously, or in a manner that is an abuse of discretion or otherwise not in accordance with the law is subject to judicial review in accordance with paragraph (d), Article III. "(b) The Commission shall have authority to monitor, review, and reconsider Products and Advertisement subsequent to their filing or approval upon a finding that the Product does not meet the relevant Uniform Standard. Where appropriate, the Commission may withdraw or modify its approval after proper notice and hearing, subject to the appeal process in paragraph (a) of this Article. "Article XII. Finance. "(a) The Commission shall pay or provide for the payment of the reasonable expenses of its establishment and organization. To fund the cost of its initial operations, the Commission may accept contributions and other forms of funding from the NAIC, Compacting States, and other sources. Contributions and other forms of funding from other sources shall be of such a nature that the independence of the Commission concerning the performance of its duties shall not be compromised. "(b) The Commission shall collect a filing fee from each Insurer and Third Party Filer filing a Product with the Commission to cover the cost of the operations and activities of the Commission and its staff in a total amount sufficient to cover the Commission's annual budget. "(c) The Commission's budget for a fiscal year shall not be approved until it has been subject to notice and comment as set forth in Article VII of this Compact. "(d) The Commission shall be exempt from all taxation in and by the Compacting States. "(e) The Commission shall not pledge the credit of any Compacting State except by and with the appropriate legal authority of that Compacting State. "(f) The Commission shall keep complete and accurate accounts of all its internal receipts, including grants and donations, and disbursements of all funds under its control. The internal financial accounts of the Commission shall be subject to the accounting procedures established under its Bylaws. The financial accounts and reports including the system of internal controls and procedures of the Commission shall be audited annually by an independent certified public accountant. Upon the determination of the Commission, but no less frequently than every three (3) years, the review of the independent auditor shall include a management and performance audit of the Commission. The Commission shall make an annual report to the Governor/Executive and legislature of the Compacting States, which shall include a report of the independent audit. The Commission's internal accounts shall not be confidential and such materials may be shared with the Commissioner of any Compacting State upon request; provided, that any work papers related to any internal or independent audit and any information regarding the privacy of individuals and insurers' proprietary information, including trade secrets, shall remain confidential. "(g) No Compacting State shall have any claim to or ownership of any property held by or vested in the Commission or to any Commission funds held pursuant to the provisions of this Compact. "Article XIII. Compacting States, Effective Date, and Amendment. "(a) Any State is eligible to become a Compacting State. "(b) The Compact shall become effective and binding upon legislative enactment of the Compact into law by two (2) Compacting States; provided, that the Commission shall become effective for purposes of adopting Uniform Standards for reviewing and giving approval or disapproval of Products filed with the Commission that satisfy applicable Uniform Standards only after twenty-six (26) States are Compacting States or, alternatively, by States representing greater than forty percent (40%) of the premium volume for life insurance, annuity, disability income, and long-term care insurance products, based on records of the NAIC for the prior year. Thereafter, it shall become effective and binding as to any other Compacting State upon enactment of the Compact into law by that State. "(c) Amendments to the Compact may be proposed by the Commission for enactment by the Compacting States. No amendment shall become effective and binding upon the Commission and the Compacting States unless and until all Compacting States enact the amendment into law. "Article XIV. Withdrawal, Default, and Termination. "(a) Once effective, the Compact shall continue in force and remain binding upon each and every Compacting State; provided, that a Compacting State may withdraw from the Compact ("Withdrawing State") by enacting a statute specifically repealing the statute that enacted the Compact into law. "(b) The effective date of withdrawal is the effective date of the repealing statute. However, the withdrawal shall not apply to any Product filings approved or self-certified, or any Advertisement of such Products, on the date the repealing statute becomes effective, except by mutual agreement of the Commission and the Withdrawing State, unless the approval is rescinded by the Withdrawing State as provided in paragraph (e) of this Article. "(c) The Commissioner of the Withdrawing State shall immediately notify the Management Committee in writing upon the introduction of legislation repealing this Compact in the Withdrawing State. "(d) The Commission shall notify the other Compacting States of the introduction of such legislation within ten (10) days after its receipt of notice thereof. "(e) The Withdrawing State is responsible for all obligations, duties, and liabilities incurred through the effective date of withdrawal, including any obligations, the performance of which extend beyond the effective date of withdrawal, except to the extent those obligations may have been released or relinquished by mutual agreement of the Commission and the Withdrawing State. The Commission's approval of Products and Advertisement prior to the effective date of withdrawal shall continue to be effective and be given full force and effect in the Withdrawing State, unless formally rescinded by the Withdrawing State in the same manner as provided by the laws of the Withdrawing State for the prospective disapproval of Products or Advertisement previously approved under the State's law. "(f) Reinstatement following withdrawal of any Compacting State shall occur upon the effective date of the Withdrawing State reenacting the Compact. "(g) If the Commission determines that any Compacting State has at any time defaulted ("Defaulting State") in the performance of any of its obligations or responsibilities under this Compact, the Bylaws, or duly promulgated Rules or Operating Procedures, then, after notice and hearing as set forth in the Bylaws, all rights, privileges, and benefits conferred by this Compact on the Defaulting State shall be suspended from the effective date of default as fixed by the Commission. The grounds for default include, but are not limited to, the failure of a Compacting State to perform its obligations or responsibilities and any other grounds designated in Commission Rules. The Commission shall immediately notify the Defaulting State in writing of the Defaulting State's suspension pending a cure of the default. The Commission shall stipulate the conditions and the time period within which the Defaulting State must cure its default. If the Defaulting State fails to cure the default within the time period specified by the Commission, the Defaulting State shall be terminated from the Compact and all rights, privileges, and benefits conferred by this Compact shall be terminated from the effective date of termination. "(h) Product approvals by the Commission or Product self-certifications, or any Advertisement in connection with such Product, that are in force on the effective date of termination shall remain in force in the Defaulting State in the same manner as if the Defaulting State had withdrawn voluntarily pursuant to paragraphs (a) through (f) of this Article. "(i) Reinstatement following termination of any Compacting State requires a reenactment of the Compact. "(j) The Compact dissolves effective upon the date of the withdrawal or default of the Compacting State that reduces membership in the Compact to one Compacting State. "(k) Upon the dissolution of this Compact, the Compact becomes null and void and shall be of no further force or effect, and the business and affairs of the Commission shall be wound up and any surplus funds shall be distributed in accordance with the Bylaws. "Article XV. Severability and Construction. "(a) The provisions of this Compact shall be severable. If any phrase, clause, sentence, or provision is deemed unenforceable, the remaining provisions of the Compact shall be enforceable. "(b) The provisions of this Compact shall be liberally construed to effectuate its purposes. "Article XVI. Binding Effect of Compact and Other Laws. "(a) Nothing herein prevents the enforcement of any other law of a Compacting State, except as provided in paragraph (b) of this Article. "(b) For any Product approved or certified to the Commission, the Rule, Uniform Standard, or other requirement of the Commission shall constitute the exclusive provisions applicable to the content, approval, and certification of such Product. For Advertisement that is subject to the Commission's authority, the Rule, Uniform Standard, or other requirement of the Commission that governs the content of the Advertisement shall constitute the exclusive provision that a Commissioner may apply to the content of the Advertisement. Notwithstanding the foregoing, no action taken by the Commission shall abrogate or restrict: "(1) The access of any person to state courts; "(2) Remedies available under state law related to breach of contract, tort, or other laws not specifically directed to the content of the Product; "(3) State law relating to the construction of insurance contracts; or "(4) The authority of the attorney general of the State, including, but not limited to, maintaining any actions or proceedings, as authorized by law. "(c) All insurance Products filed with individual States shall be subject to the laws of those States. "(d) All lawful actions of the Commission, including all Rules and Operating Procedures promulgated by the Commission, are binding upon the Compacting States. "(e) All agreements between the Commission and the Compacting States are binding in accordance with their terms. "(f) Upon the request of a party to a conflict over the meaning or interpretation of Commission actions and a majority vote of the Compacting States, the Commission may issue advisory opinions regarding the meaning or interpretation in dispute. "(g) In the event any provision of this Compact exceeds the constitutional limits imposed on the legislature of any Compacting State, the obligations, duties, powers, or jurisdiction sought to be conferred by that provision upon the Commission shall be ineffective as to that Compacting State and those obligations, duties, powers, or jurisdiction shall remain in the Compacting State and shall be exercised by the agency thereof to which those obligations, duties, powers, or jurisdiction are delegated by law in effect at the time this Compact becomes effective.".  (Feb. 22, 2019, D.C. Law 22-213,  2, 65 DCR 12933.) 
 311392.02. Commissioner Designated. The Commissioner of the Department of Insurance, Securities, and Banking is designated to serve as the representative of the District to the Interstate Insurance Product Regulation Commission.  (Feb. 22, 2019, D.C. Law 22-213,  3, 65 DCR 12933.) 
 311401. Definitions. For the purposes of this chapter, the term: (1) Repealed. (2) Company means any person engaging in or proposing or attempting to engage in any transaction or kind of insurance or surety business and any person or group of persons who may otherwise be subject to the insurance laws of the District of Columbia, including fraternal benefit associations and excluding the District of Columbia Life and Health Guaranty Association and the District of Columbia Property and Liability Insurance Guaranty Association. (2A) Department means the Department of Insurance, Securities, and Banking. (3) District means the District of Columbia. (4) Examiner means any individual or firm having been authorized by the Mayor to conduct an examination under this chapter. (5) Person means any individual, aggregation of individuals, trust, association, partnership, or corporation, or any affiliate thereof.  (Oct. 21, 1993, D.C. Law 10-49,  2, 40 DCR 6110; May 21, 1997, D.C. Law 11-268,  10(ff)(1), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  39, 45 DCR 745; June 11, 2004, D.C. Law 15-166,  4(j), 51 DCR 2817.)  Prior Codifications 1981 Ed.,  35-3601. Effect of Amendments D.C. Law 15-166, in par. (2A), substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities Regulation. Emergency Legislation For temporary (90 day) amendment of section, see  4(j) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). Editor's Notes Mayor authorized to issue rules: Section 10 of D.C. Law 10-49 provided that the Mayor shall, pursuant to subchapter I of Chapter 15 of Title 1subchapter I of Chapter 5 of Title 2, 2001 Ed., issue rules to implement the provisions of this chapter. Delegation of Authority Delegation of authority pursuant to D.C. Law 10-49, the Law on Examinations Act of 1993, see Mayors Order 94-54, March 7, 1994 ( 41 DCR 1433).
 311402. Authority, scope, and scheduling of examinations. (a) The Mayor, or any of his or her examiners, may conduct an examination under this chapter of any company as often as the Mayor in his or her sole discretion deems appropriate, but shall at a minimum conduct an examination of every insurer licensed in the District at least once every 5 years. In scheduling and determining the nature, scope, and frequency of the examinations, the Mayor shall consider such factors as the results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, reports of independent certified public accountants, and other criteria set forth in the Examiners Handbook adopted by the National Association of Insurance Commissioners and in effect when the Mayor exercises discretion under this section. (b) For purposes of completing an examination of any company under this chapter, the Mayor may examine or investigate any person, or the business of any person, insofar as the examination or investigation is, in the sole discretion of the Mayor, necessary or material to the examination of the company. (c) In lieu of an examination under this chapter of any foreign or alien insurer licensed in the District, the Mayor may accept, until January 1, 1994, an examination report on the company prepared by the insurance department for the companys state of domicile or port-of-entry state. Thereafter, these reports may be accepted only if the insurance department was at the time of the examination accredited under the National Association of Insurance Commissioners Financial Regulation Standards and Accreditation Program, or the examination is performed under the supervision of an accredited state insurance department or with the participation of one or more examiners who are employed by such an accredited state insurance department, and who, after a review of the examination workpapers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department.  (Oct. 21, 1993, D.C. Law 10-49,  3, 40 DCR 6110.)  Prior Codifications 1981 Ed.,  35-3602.
 311403. Conduct of examinations. (a) Upon determining that an examination should be conducted, the Mayor shall issue an examination warrant appointing one or more examiners to perform the examination and instructing them as to the scope of the examination. In conducting the examination, the examiner shall observe those guidelines and procedures set forth in the Examiners Handbook adopted by the National Association of Insurance Commissioners. The Mayor may also employ any other guidelines or procedures the Mayor deems appropriate. (b) Every company or person from whom information is sought, or its officers, directors, and agents, must provide to the examiners appointed under subsection (a) of this section, at all reasonable hours at its offices, convenient and free access to all books, records, accounts, papers, documents, and any or all computer or other recordings relating to the property, assets, business, and affairs of the company being examined. The officers, directors, employees, and agents of the company or person must facilitate the examination and aid in the examination so far as it is in their power to do so. The refusal of any company, by its officers, directors, employees, or agents, to submit to examination or to comply with any reasonable written request of the examiners shall be grounds for suspension, revocation, or nonrenewal of any license or authority held by the company to engage in an insurance or other business subject to the insurance laws of the District. Any proceedings for suspension, revocation, or nonrenewal of any license or authority shall be conducted pursuant to  31-4305 and 31-2502.03. (c) The Mayor, or any of his or her examiners, may issue subpoenas, administer oaths, and examine under oath any person as to any matter pertinent to the examination. Upon the failure or refusal of any person to obey a subpoena, the Mayor may petition a court of competent jurisdiction, and upon proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence. Failure to obey the court order shall be punishable as contempt of court. (d) When making an examination under this chapter, the Mayor may retain attorneys, appraisers, independent actuaries, independent certified public accountants, or other professionals and specialists as examiners, the cost of which shall be borne by the company which is the subject of the examination. (e) Nothing contained in this chapter shall be construed to limit the Mayors authority to terminate, suspend, or complete any examination in order to pursue other legal or regulatory action pursuant to the insurance laws of the District. Findings of fact and conclusions of law made pursuant to any examination shall be prima facie evidence in any legal or regulatory action. (f) Nothing contained in this chapter shall be construed to limit the Mayors authority to use and, if appropriate, to make public any final or preliminary examination report, any examiner or company workpapers or other documents, or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action which the Mayor may, in his or her sole discretion, deem appropriate. (g)(1) Any insurer, agent, or broker may cause its accounts, records, documents, and files described in subsection (b) of this section to be created, recorded, copied, or reproduced by any photographic, photostatic, microfilm, microcard, miniature photographic, optical disk, electronic imaging, electronic data processing, electronically transmitted facsimile, printout, or reproduction of electronically stored data or other process which accurately reproduces or forms a durable medium for the reproduction of an account, record, document, or file. (2) If the items so stored are not the original but accurately represent the original, the original may be destroyed unless held in a custodial or fiduciary capacity, but only if the data is easily accessible to the department in readable form and readable reproduced copies are obtainable. (3) A record so stored and accurately reproduced is admissible in evidence as the original in any judicial or administrative proceeding whether the original is in existence or not. The introduction of a reproduced record does not preclude admission of the original. This shall not be construed to exclude from evidence any document or copy thereof which is otherwise admissible under the rules of evidence.  (Oct. 21, 1993, D.C. Law 10-49,  4, 40 DCR 6110; Apr. 26, 1994, D.C. Law 10-103,  10, 41 DCR 1005; Apr. 9, 1997, D.C. Law 11-225,  2, 44 DCR 122.)  Prior Codifications 1981 Ed.,  35-3603. Section References This section is referenced in  31-853. Temporary Legislation For temporary (225 day) amendment of section, see  10 of Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17, 1994, law notification 41 DCR 1626).
 311404. Examination reports. (a) General description.  All examination reports shall be comprised of only facts appearing upon the books, records, or other documents of the company, its agents or other persons examined, or as ascertained from the testimony of its officers or agents or other persons examined concerning its affairs, and those conclusions and recommendations as the examiners find reasonably warranted from the facts. (b) Filing of examination report.  No later than 60 days following completion of the examination, the examiner in charge shall file with the Mayor a verified written report of examination under oath. Upon receipt of the verified report, the Mayor shall transmit the report to the company examined, together with a notice which shall afford the company examined a reasonable opportunity of not more than 30 days to make a written submission or rebuttal with respect to any matters contained in the examination report. (c) Adoption of report on examination.  Within 30 days of the end of the period allowed for the receipt of written submissions or rebuttals, the Mayor shall fully consider and review the report, together with any written submissions or rebuttals and any relevant portions of the examiners workpapers and enter an order: (1) Adopting the examination report as filed or with modification or corrections. If the examination report reveals that the company is operating in violation of any law, regulation, or prior order of the Mayor, the Mayor may order the company to take any action the Mayor considers necessary and appropriate to cure the violation; (2) Rejecting the examination report with directions to the examiners to reopen the examination for purposes of obtaining additional data, documentation, or information, and refiling pursuant to subsections (a) and (b) of this section; or (3) Calling for an investigatory hearing with no less than 20 days notice to the company for purposes of obtaining additional documentation, data, information, and testimony. (d) Orders and procedures.  (1) All orders entered pursuant to subsection (c)(1) of this section shall be accompanied by findings of fact and conclusions of law resulting from the Mayors consideration and review of the examination report, relevant examiner workpapers, and any written submissions or rebuttals. These orders shall be considered final administrative decisions and may be appealed to the Mayor pursuant to  31-4332 and 31-2502.43 [repealed], and shall be served upon the company by certified mail, together with a copy of the adopted examination report. Within 30 days of the issuance of the adopted report, the company shall file affidavits executed by each of its directors stating under oath that they have received a copy of the adopted report and related orders. (2) Any hearing conducted under subsection (c)(3) of this section by the Mayor shall be conducted as a nonadversarial confidential investigatory proceeding necessary for the resolution of any inconsistencies, discrepancies, or disputed issues apparent upon the face of the filed examination report or raised by or as a result of the Mayors review of relevant workpapers or by the written submission or rebuttal of the company. Within 20 days of the conclusion of such a hearing, the Mayor shall enter an order pursuant to subsection (c)(1) of this section. (A) The hearing shall proceed expeditiously with discovery by the company limited to the examiners workpapers which tend to substantiate any assertions set forth in any written submission or rebuttal. The Mayor may issue subpoenas for the attendance of any witnesses or the production of any documents deemed relevant to the investigation whether under the control of the Department, the company, or other persons. The documents produced shall be included in the record, and testimony taken by the Mayor shall be under oath and preserved for the record. Nothing contained in this section shall require the Department to disclose any information or records which would indicate or show the existence or content of any investigation or activity of a criminal justice agency. (B) The hearing shall proceed with the Mayor posing questions to the persons subpoenaed. Thereafter the company and the Department may present testimony relevant to the investigation. Cross examination shall be conducted only by the Mayor. The company and the Department shall be permitted to make closing statements and may be represented by counsel of their choice. (e) Publication and use.  (1) Upon the adoption of the examination report under subsection (c)(1) of this section, the Mayor shall continue to hold the content of the examination report as private and confidential information for a period of 10 days, except to the extent provided in subsection (b) of this section. Thereafter, the Mayor may open the report for public inspection so long as no court of competent jurisdiction has stayed its publication. (2) No District law shall prevent or be construed as prohibiting the Mayor from disclosing the content of an examination report, preliminary examination report, or results, or any related matter, to the Department or the department of insurance of any other state or country, or to law enforcement officials of the District or any other state or any agency of the federal government at any time, so long as the agency or office receiving the report or related matters agrees in writing to hold it confidential in a manner consistent with this chapter. (3) In the event the Mayor determines that regulatory action is appropriate as a result of any examination, the Mayor may initiate any proceedings or actions as provided by the laws of the District. (f) Confidentiality of ancillary information.  All working papers, recorded information, documents, and copies produced by, created by, obtained by, or disclosed to the Mayor or any other person in the course of an examination made under this chapter or in the course of analysis by the Commissioner of the financial condition or market conduct of a company shall be confidential and privileged; shall not be subject to subchapter II of Chapter 5 of Title 2; shall not be subject to subpoena; and shall not be subject to discovery or admissible in evidence in a private civil action. The Commissioner may use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as part of the Commissioners official duties. Documents, materials, or other information, including all working papers, and copies, in the possession or control of the National Association of Insurance Commissioners, including its affiliates and subsidiaries, shall be confidential and privileged; shall not be subject to subpoena; and shall not be subject to discovery or admissible in evidence in a private civil action, if they are: (1) Created, produced, or obtained by, or disclosed to, the National Association of Insurance Commissioners, including its affiliates and subsidiaries, while the National Association of Insurance Commissioners, including its affiliates and subsidiaries, are (A) assisting in an examination made under this chapter or an examination made by another jurisdiction with a law that is substantially similar to this chapter, or (B) assisting the Commissioner or the chief insurance regulatory official of another jurisdiction in the analysis of the financial condition or market conduct of a company; or (2) Disclosed to the National Association of Insurance Commissioners, including its affiliates and subsidiaries, under subsection (f-2) of this section by the chief insurance regulatory official of another jurisdiction. (f-1) The Commissioner or any person who received documents, material, or other information while acting under the authority of the Commissioner, including the National Association of Insurance Commissioners, including its affiliates and subsidiaries, shall not be permitted to testify in a private civil action concerning confidential documents, materials, or other information subject to subsection (f) of this section. (f-2) To assist in the performance of the Commissioners duties, the Commissioner: (1) May share documents, materials, or other information, including confidential and privileged documents, materials, or other information subject to subsection (f) of this section, with other state, federal, and international regulatory agencies; with the National Association of Insurance Commissioners, including its affiliates and subsidiaries; and with state, federal and international law enforcement authorities; provided, that the recipient agrees, and has the legal authority, to maintain the confidentiality and privileged status of the documents, materials, communication, or other information; (2) May receive documents, materials, communications, or other information, including otherwise confidential and privileged documents, materials, or other information, from the National Association of Insurance Commissioners, including its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or other information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or other information; or (3) May enter into agreements governing the sharing and use of information consistent with this subsection. (f-3) No waiver of an applicable privilege or claim of confidentiality in the documents, materials, or other information shall occur as a result of disclosure to the Commissioner under this section or of sharing as authorized in subsection (f-2) of this section. Nothing in this section shall require an insurer to disclose documents, materials, or other information that is not otherwise required by law to be disclosed. (f-4) A privilege established under the law of a state or jurisdiction that is substantially similar to the privilege established under this section shall be available and enforced in any proceeding in, and in any court of, the District. (f-5) In this section, the terms Department, insurance department, law enforcement agency, regulatory agency, and National Association of Insurance Commissioners shall include their employees, agents, consultants, and contractors.  (Oct. 21, 1993, D.C. Law 10-49,  5, 40 DCR 6110; Feb. 27, 1996, D.C. Law 11-90,  7, 42 DCR 7155; May 21, 1997, D.C. Law 11-268,  10(ff)(2), 44 DCR 1730; Oct. 21, 2000, D.C. Law 13-191,  5, 47 DCR 7311.)  Prior Codifications 1981 Ed.,  35-3604. Effect of Amendments D.C. Law 13-191 rewrote subsec. (f) and added subsecs. (f-1) to (f-5). Prior to amendment, subsec. (f) provided: (f) Confidentiality of ancillary information.All working papers, recorded information, documents, and copies produced by, obtained by, or disclosed to the Mayor or any other person in the course of an examination made under this chapter must be given confidential treatment, are not subject to subpoena, and may not be made public by the Mayor or any other person, except to the extent provided in subsection (e) of this section. Access may also be granted to the National Association of Insurance Commissioners. Parties must agree in writing prior to receiving the information to provide it the same confidential treatment required by this section, unless the prior written consent of the company to which it pertains has been obtained. Emergency Legislation For temporary amendment of section, see  8 of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and  7 of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844). Temporary Legislation For temporary (225 day) amendment of section, see  7 of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305).
 311405. Conflict of interest. (a) No examiner may be appointed by the Mayor if the examiner, either directly or indirectly, has a conflict of interest or is affiliated with the management of or owns a pecuniary interest in any person subject to examination under this chapter. This section shall not be construed to automatically preclude an examiner from being: (1) A policyholder or claimant under an insurance policy; (2) A grantor of a mortgage or similar instrument on the examiners residence to a regulated entity if done under customary terms and in the ordinary course of business; (3) An investment owner in shares of regulated diversified investment companies; or (4) A settlor or beneficiary of a blind trust into which any otherwise impermissible holdings have been placed. (b) Notwithstanding the requirements of this section, the Mayor may retain from time to time, on an individual basis, qualified actuaries, certified public accountants, or other similar individuals who are independently practicing their professions, even though these persons may from time to time be similarly employed or retained by persons subject to examination under this chapter.  (Oct. 21, 1993, D.C. Law 10-49,  6, 40 DCR 6110.)  Prior Codifications 1981 Ed.,  35-3605.
 311406. Cost of examinations. All expenses of the examinations shall be paid by the company examined, and the company shall timely pay the Mayor the actual expense of such an examination upon receipt of itemized bills provided by the Mayor. For purposes of expenses assessed and paid under this section, the provisions of Unit A of Chapter 3 of Title 2 shall not apply.  (Oct. 21, 1993, D.C. Law 10-49,  7, 40 DCR 6110; Mar. 25, 2003, D.C. Law 14-236,  4, 49 DCR 10483.)  Prior Codifications 1981 Ed.,  35-3606. Effect of Amendments D.C. Law 14-236 added the last sentence. Emergency Legislation For temporary (90 day) amendment of section, see  4 of Department of Insurance and Securities Regulation Procurement Emergency Act of 2002 (D.C. Act 14-314, March 26, 2002, 49 DCR 3451). For temporary (90 day) amendment of section, see  4 of Department of Insurance and Securities Regulation Procurement Congressional Review Emergency Act of 2003 (D.C. Act 15-9, January 27, 2003, 50 DCR 1478). Temporary Legislation For temporary (225 day) amendment of section, see  4 of Department of Insurance and Securities Regulation Procurement Temporary Act of 2002 (D.C. Law 14-159, June 25, 2002, law notification 49 DCR 6495).
 311407. Immunity from liability. (a) No cause of action shall arise nor shall any liability be imposed against the Mayor, the Mayors authorized representatives, or an examiner appointed by the Mayor for any statements made or conduct performed in good faith while carrying out the provisions of this chapter. (b) No cause of action shall arise nor shall any liability be imposed against any person for the act of communicating or delivering information or data to the Mayor or the Mayors authorized representative or examiner pursuant to an examination made under this chapter, if the act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive. (c) This section does not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed by any person identified in subsection (a) of this section. (d) A person identified in subsection (a) of this section shall be entitled to an award of attorneys fees and costs if the person is the prevailing party in a civil cause of action for libel, slander, or any other relevant tort arising out of activities in carrying out the provisions of this chapter and the party bringing the action was not substantially justified in doing so. For purposes of this section, the term substantially justified means a proceeding that had a reasonable basis in law or fact at the time that it was initiated.  (Oct. 21, 1993, D.C. Law 10-49,  8, 40 DCR 6110.)  Prior Codifications 1981 Ed.,  35-3607. Section References This section is referenced in  31-3932.04.
 311501. Definitions. For the purposes of this chapter, the term: (1) Actuary means a person who is a member in good standing of the American Academy of Actuaries. (2) District means the District of Columbia. (3) Insurer means any person, firm, association, or corporation duly licensed in the District as an insurance company pursuant to  31-4304 and 31-2502.02. (4)(A) Managing general agent means any person, firm, association, or corporation who: (i) Negotiates and binds ceding reinsurance contracts on behalf of an insurer; or (ii) Manages all or part of the insurance business of an insurer, including the management of a separate division, department, or underwriting office; and (iii) Acts as an agent for such an insurer whether known as a managing general agent, manager, or other similar term, who, with or without the authority, either separately or together with affiliates, produces, directly or indirectly, and underwrites an amount of gross direct written premiums equal to or more than 5% of the policyholder surplus as reported in the last annual statement of the insurer in any one quarter or year, and, in addition, adjusts or pays claims in excess of an amount determined by the Mayor, or negotiates reinsurance on behalf of the insurer. (B) Notwithstanding the above definition, the term managing general agent shall not apply to the following persons for the purposes of this chapter: (i) An employee of the insurer; (ii) A United States manager of the United States branch of an alien insurer; (iii) An underwriting manager who, pursuant to contract, manages all or part of the insurance operations of the insurer, is under common control with the insurer, subject to Chapter 7 of this title, or its predecessor, and whose compensation is not based on the volume of premiums written; or (iv) The attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or inter-insurance exchange under powers of attorney. (5) Producers means an insurance broker or brokers or any other person, firm, association, or corporation, when for any compensation, commission or other thing of value, such person, firm, association, or corporation acts or aids in any manner in soliciting, negotiating, or procuring the making of any insurance contract on behalf of an insured other than the person, firm, association, or corporation. (6) Underwrite means the authority to accept or reject risks on behalf of the insurer.  (Oct. 21, 1993, D.C. Law 10-41,  2, 40 DCR 6014; Apr. 18, 1996, D.C. Law 11-110,  41, 43 DCR 530.)  Prior Codifications 1981 Ed.,  35-3001. Section References This section is referenced in  31-1504. Editor's Notes Mayor authorized to issue rules: Section 8 of D.C. Law 10-41 provided that the Mayor shall, pursuant to subchapter I of Chapter 15 of Title 1subchapter I of Chapter 5 of Title 2, 2001 Ed., issue rules to implement the provisions of this chapter. Delegation of Authority Delegation of authority pursuant to D.C. Law 10-41, the Managing General Agents Act of 1993, see Mayors Order 94-54, March 7, 1994 ( 41 DCR 1433).
 311502. Licensure. (a) No person, firm, association, or corporation shall act in the capacity of a managing general agent with respect to risks located in the District for an insurer licensed in the District, unless the person is a licensed broker in the District. (b) No person, firm, association, or corporation shall act in the capacity of a managing general agent representing an insurer domiciled in the District with respect to risks located outside the District, nor shall an insurer utilize the services of such a managing general agent, unless the person is licensed as a broker in the District, which license may be a nonresident license, pursuant to the provisions of this chapter. (c) The Mayor may require a bond in an amount acceptable to him or her for the protection of the insurer. (d) The Mayor may require the managing general agent to maintain an errors and omissions policy.  (Oct. 21, 1993, D.C. Law 10-41,  3, 40 DCR 6014; May 16, 1995, D.C. Law 10-255,  29(a), 41 DCR 5193.)  Prior Codifications 1981 Ed.,  35-3002.
 311503. Required contract provisions. No person, firm, association, or corporation acting in the capacity of a managing general agent shall place business with an insurer unless there is in force a written contract between the parties which sets forth the responsibilities of each party, and where both parties share responsibility for a particular function, specifies the division of the responsibilities, and which contains the following minimum provisions: (1) The insurer may terminate the contract for cause upon written notice to the managing general agent. The insurer may suspend the underwriting authority of the managing general agent during the pendency of any dispute regarding the cause for termination. (2) The managing general agent will render accounts to the insurer detailing all transactions and remit all funds due under the contract to the insurer on not less than a monthly basis. (3) All funds collected for the account of an insurer will be held in a separate account by the managing general agent in a fiduciary capacity in a bank which is a member of the Federal Reserve System. This account shall be used for all payments on behalf of the insurer. The managing general agent may retain no more than 3 months estimated claims payments and allocated loss adjustment expenses. (4) Separate records of business written by the managing general agent will be maintained. The insurer shall have access and right to copy all accounts and records related to its business in a form usable by the insurer, and the Mayor shall have access to all books, bank accounts, and records of the managing general agent in a form usable to the Mayor. These records shall be retained according to Chapter 14 of this title, and  31-4440 and 31-5204. (5) The contract may not be assigned in whole or part by the managing general agent. (6) Appropriate underwriting guidelines are required, including: (A) The maximum annual premium volume; (B) The basis of the rates to be charged; (C) The types of risks which may be written; (D) Maximum limits of liability; (E) Applicable exclusions; (F) Territorial limitations; (G) Policy cancellation provisions; and (H) The maximum policy period. (7) The insurer shall have the right to cancel or not renew any policy of insurance subject to the applicable laws and regulations of the District governing the cancellation and nonrenewal of insurance policies. (8) If the contract permits the managing general agent to settle claims on behalf of the insurer: (A) All claims must be reported to the company within 48 hours of receipt. (B) A copy of the claim file will be sent to the insurer at its request or as soon as it becomes known that the claim: (i) Has the potential to exceed an amount determined by the Mayor or exceeds the limit set by the company, whichever is less; (ii) Involves a coverage dispute; (iii) May exceed the managing general agents claims settlement authority; (iv) Is open for more than 6 months; or (v) Is closed by payment of an amount set by the Mayor or an amount set by the company, whichever is less. (C) All claim files will be the joint property of the insurer and managing general agent. Upon an order of liquidation of the insurer, however, these files shall become the sole property of the insurer or its estate; the managing general agent shall have reasonable access to and the right to copy the files on a timely basis. (D) Any settlement authority granted to the managing general agent may be terminated for cause upon the insurers written notice to the managing general agent or upon the termination of the contract. The insurer may suspend the settlement authority during the pendency of any dispute regarding the cause for termination. (9) Where electronic claims files are in existence, the contract must address the timely transmission of the data. (10) If the contract provides for a sharing of interim profits by the managing general agent, and the managing general agent has the authority to determine the amount of the interim profits by establishing loss reserves or controlling claim payments, or in any other manner, interim profits will not be paid to the managing general agent until 1 year after they are earned for property insurance business and 5 years after they are earned on casualty business and not until the profits have been verified pursuant to  31-1504. (11) The managing general agent shall not: (A) Bind reinsurance or retrocessions on behalf of the insurer, except that the managing general agent may bind facultative reinsurance contracts pursuant to obligatory facultative agreements if the contract with the insurer contains reinsurance underwriting guidelines including, for both reinsurance assumed and ceded, a list of reinsurers with which such automatic agreements are in effect, the coverages and amounts or percentages that may be reinsured, and commission schedules; (B) Commit the insurer to participate in insurance or reinsurance syndicates; (C) Appoint any producer without assuring that the producer is lawfully licensed to transact the type of insurance for which he is appointed; (D) Without prior approval of the insurer, pay or commit the insurer to pay a claim over a specified amount, net of reinsurance, which shall not exceed 1% of the insurers policyholders surplus as of December 31 of the last completed calendar year; (E) Collect any payment from a reinsurer or commit the insurer to any claim settlement with a reinsurer without prior approval of the insurer. If prior approval is given, a report must be promptly forwarded to the insurer; (F) Permit its subproducer to serve on the insurers board of directors; (G) Jointly employ an individual who is employed with the insurer; or (H) Appoint a submanaging general agent.  (Oct. 21, 1993, D.C. Law 10-41,  4, 40 DCR 6014; May 16, 1995, D.C. Law 10-255,  29(b), 41 DCR 5193.)  Prior Codifications 1981 Ed.,  35-3003.
 311504. Duties of insurers. (a) The insurer shall have on file an independent financial examination, in a form acceptable to the Mayor, of each managing general agent with which it has done business. (b) If a managing general agent establishes loss reserves, the insurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the managing general agent. This is in addition to any other required loss reserve certification. (c) The insurer shall periodically (at least semiannually) conduct an on-site review of the underwriting and claims processing operations of the managing general agent. (d) Binding authority for all reinsurance contracts or participation in insurance or reinsurance syndicates shall rest with an officer of the insurer, who shall not be affiliated with the managing general agent. (e) Within 30 days of entering into or terminating a contract with a managing general agent, the insurer shall provide written notification of the appointment or termination to the Mayor. Notices of appointment of a managing general agent shall include a statement of duties which the applicant is expected to perform on behalf of the insurer, the lines of insurance for which the applicant is to be authorized to act, and any other information the Mayor may request. (f) An insurer shall review its books and records each quarter to determine if any producer has, because of  31-1501(4), become a managing general agent as defined in that section. If the insurer determines that a producer has become a managing general agent pursuant to the above, the insurer shall promptly notify the producer and the Mayor of the determination, and the insurer and producer shall fully comply with the provisions of this chapter within 30 days. (g) An insurer shall not appoint to its board of directors an officer, director, employee, subproducer, or controlling shareholder of its managing general agents. This subsection shall not apply to relationships governed by Chapter 7 of this title or, if applicable, Chapter 4 of this title.  (Oct. 21, 1993, D.C. Law 10-41,  5, 40 DCR 6014; May 16, 1995, D.C. Law 10-255,  29(c), 41 DCR 5193.)  Prior Codifications 1981 Ed.,  35-3004. Section References This section is referenced in  31-1503.
 311505. Examination authority. The acts of the managing general agent are considered to be the acts of the insurer on whose behalf it is acting. A managing general agent may be examined as if it were the insurer.  (Oct. 21, 1993, D.C. Law 10-41,  6, 40 DCR 6014.)  Prior Codifications 1981 Ed.,  35-3005.
 311506. Penalties and liabilities. (a) If the Mayor determines that the managing general agent or any other person has not materially complied with this chapter, or any regulation or order promulgated thereunder, after notice and opportunity to be heard, the Mayor may order: (1) For each separate violation, a penalty in an amount not exceeding $10,000, or not more than $25,000 for intentional violations; (2) Revocation or suspension of the producers license; and (3) If it was found that because of material noncompliance the insurer has suffered any loss or damage, the Commissioner may maintain a civil action brought by or on behalf of the insurer and its policyholders and creditors for recovery of compensatory damages for the benefit of the insurer and its policyholders and creditors, or other appropriate relief. (b) The decision, determination, or order of the Mayor pursuant to subsection (a) of this section shall be subject to judicial review pursuant to subchapter I of Chapter 5 of Title 2,  31-2502.43 [repealed] and 31-2502.44 [repealed], and  31-4327 [repealed] and 31-4332. (c) Nothing in this section shall affect the right of the Mayor to impose any other penalties provided in the insurance law of the District. (d) Nothing in this chapter is intended to or shall in any manner limit or restrict the rights of policyholders, claimants, and auditors.  (Oct. 21, 1993, D.C. Law 10-41,  7, 40 DCR 6014; Apr. 26, 1994, D.C. Law 10-103,  5, 41 DCR 1005.)  Prior Codifications 1981 Ed.,  35-3006. Cross References Hospital and medical services corporations, applicable law, see  31-3503. Temporary Legislation For temporary (225 day) amendment of section, see  5(a) of Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17, 1994, law notification 41 DCR 1626).
 311601. Definitions. For the purposes of this chapter, the term: (1) AIDS means acquired immune deficiency syndrome as defined by the Centers for Disease Control of the United States Public Health Service. (2) ARC means AIDS-related complex as defined by the Centers for Disease Control of the United States Public Health Service or, during any period when the Centers for Disease Control have not issued a definition, by the District of Columbia Commission of Public Health. (3) District means the District of Columbia. (3A) Gender identity or expression shall have the same meaning as provided in  2-1401.02(12A). (4) Health maintenance organization or HMO means any person that undertakes to provide or arrange for the delivery of basic health care services to enrollees on a prepaid basis, except for enrollees responsibility for co-payments and deductibles, and qualifies as a health maintenance organization under Chapter 34 of Title 31. (5) HIV means human immunodeficiency virus. (6) Mayor means the Mayor of the District of Columbia. (7) Insurer means any individual, partnership, corporation, association, fraternal benefit association, nonprofit health service plan, health maintenance organization, or other business entity that issues, amends, or renews individual or group health, disability, or life insurance policies or contracts, including health maintenance organization membership contracts, in the District. The term insurer shall include Group Hospitalization and Medical Services, Incorporated.  (Aug. 7, 1986, D.C. Law 6-132,  2, 33 DCR 3615; Mar. 16, 1989, D.C. Law 7-208,  2(a), 36 DCR 471; June 18, 2003, D.C. Law 14-312,  301, 50 DCR 306; June 25, 2008, D.C. Law 17-177,  15(a), 55 DCR 3696.)  Prior Codifications 1981 Ed.,  35-221. Effect of Amendments D.C. Law 14-312 rewrote par. (4) which had read as follows: (4) Health maintenance organization means a public or private organization that is a qualifying health maintenance organization under federal regulations, or has been determined to be a health maintenance organization pursuant to regulations adopted by the State Health Planning and Development Agency of the District of Columbia. D.C. Law 17-177 added par. (3A).
 311602. Application of chapter. The requirements of this chapter shall apply to the practices and procedures employed by insurers and their agents and employees in making determinations about any individual or group policy or contract of health, disability, or life insurance.  (Aug. 7, 1986, D.C. Law 6-132,  3, 33 DCR 3615.)  Prior Codifications 1981 Ed.,  35-222.
 311603. Prohibited actions. (a) Repealed. (b)(1) In determining whether to issue, cancel, or renew insurance coverage, an insurer may not use age, marital status, geographic area of residence, occupation, sex, sexual orientation, gender identity or expression, or any similar factor or combination of factors for the purpose of seeking to predict whether any individual may in the future develop AIDS or ARC. (2) In determining rates, premiums, dues, assessments, benefits covered, or expenses reimbursable, or in any other aspect of insurance marketing or coverage, an insurer may not use age, marital status, geographic area of residence, occupation, sex, sexual orientation, gender identity or expression, or any similar factor or combination of factors for the purpose of seeking to predict whether any individual may in the future develop AIDS or ARC. (c) No health or disability insurance policy or contract shall contain any exclusion, reduction, other limitation of coverage, deductibles, or coinsurance provisions related to the care and treatment of AIDS, ARC, HIV infection, or any illness or disease arising from these medical conditions, unless the provisions apply generally to all benefits under the policy or contract. (d) No life insurance policy or contract shall contain any exclusion, reduction, or other limitation of benefits related to AIDS, ARC, HIV infection, or any disease arising from these medical conditions, as a cause of death.  (Aug. 7, 1986, D.C. Law 6-132,  4, 33 DCR 3615; Mar. 16, 1989, D.C. Law 7-208,  2(b), 36 DCR 471; June 25, 2008, D.C. Law 17-177,  15(b), 55 DCR 3696.)  Prior Codifications 1981 Ed.,  35-223. Effect of Amendments D.C. Law 17-177, in subsec. (b), substituted sexual orientation, gender identity or expression for sexual orientation.
 311604. AIDS testing standards, protocols, and appeals. (a)(1) Within 30 days of March 16, 1989, the District of Columbia Commissioner of Public Health (Commissioner) shall certify the testing protocol that is the most reliable and accurate in identifying exposure to the probable causative agent of AIDS, ARC, and the HIV infection. The notice of certification shall include an estimate based on scientific evidence of the proportion of false positive results expected in use of the testing protocol. (2) Within 12 months from the date of the initial certification and at least annually thereafter, the Commissioner shall publish a new or renewal certification based upon an ongoing review of scientific evidence regarding the accuracy and reliability of the testing protocol. (b)(1) A named insured who tests positive under the testing protocol certified by the Commissioner may appeal to the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking] to review the testing procedures and results, and may present additional medical evidence, including the results of similar tests for exposure to the probable causative agent of AIDS that the named insured independently obtains, to rebut the positive test results. If the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking] determines that the result of the test of the proposed insured is not a true positive, the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking] shall order the insurer from which the applicant sought coverage to disregard the positive test result. The Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking] shall, when necessary, request the advice of the Commissioner in making this determination. (2) Hearings related to the appeal provided for in paragraph (1) of this subsection shall be held in accordance with subchapter I of Chapter 5 of Title 2. (3) An insurer shall apply standard underwriting practices, in accordance with applicable laws and rules of the District, to all life, health, or disability income insurance policies or contracts for individuals who test positive under the testing protocol certified by the Commissioner.  (Aug. 7, 1986, D.C. Law 6-132,  5, 33 DCR 3615; Mar. 16, 1989, D.C. Law 7-208,  2(c), 36 DCR 471; May 21, 1997, D.C. Law 11-268,  10(g), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-224. Section References This section is referenced in  31-1606. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03.
 311605. Diagnosis of AIDS. (a) Nothing in this chapter shall be construed as preventing or restricting insurers or their agents or employees from following standard procedures for determining the insurability of or establishing the rates or premiums for new applicants diagnosed by a licensed physician as having AIDS, provided that the procedures: (1) Apply in the same manner to all other new applicants within the same category of insurance; (2) Are justified on the basis of actuarial evidence; and (3) Comply with other laws and rules of the District. (b) Repealed.  (Aug. 7, 1986, D.C. Law 6-132,  6, 33 DCR 3615; Mar. 16, 1989, D.C. Law 7-208,  2(d), 36 DCR 471.)  Prior Codifications 1981 Ed.,  35-225.
 311606. Informed consent requirements; restrictions on disclosure. (a) No insurer shall request or require a proposed insured to take the testing protocol certified pursuant to  31-1604 without first obtaining the signature of the proposed insured or the legal guardian of the named insured on a standard informed consent statement prepared and furnished by the Commissioner of Insurance and Securities. (b) An insurer shall provide information about the availability of counseling at public and private health facilities to each proposed insured who the insurer requests or requires to take the testing protocol. (c) Before any proposed insured or his or her legal guardian is requested to sign an informed consent statement, the insurer shall provide the proposed insured, or his or her legal guardian an explanation of the nature of AIDS, ARC, and the HIV infection, an explanation of the testing protocol, including its purpose, potential uses, limitations, and an updated percentage of false positives, and notice of the right of the proposed insured to appeal to the Commissioner of Insurance and Securities, an explanation of the meaning of test results, and a description of the disclosure restrictions established by this chapter. (d) Once an insurer has requested a signature on an informed consent statement pursuant to subsection (a) of this section, and has complied with subsections (b) and (c) of this section, the proposed insured or legal guardian of the proposed insured may wait 14 days before signing the informed consent statement. (1) An insurer shall not disclose the fact that a proposed insured was tested or the results of the test except to: (A) The proposed insured or the legal guardian of the proposed insured; (B) A court of competent jurisdiction, pursuant to a lawful court order; or (C) Any person named in a written authorization executed by the proposed insured or the legal guardian of the proposed insured. (2) An insurer that requires testing of a proposed insured shall maintain records and establish procedures in a manner that protects the privacy of the proposed insured and the confidentiality of the test results. (3)(A) The Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking] may, by rule, require an insurer to report numerical data regarding test results to the Commissioner for the limited purpose of performing epidemiological studies. The name, address, or other information that reveals the identity of the individual tested shall not be reported to the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking]. (B) An insurer shall report numerical data regarding test results to actuaries employed or consulted by the insurer for the limited purpose of performing actuarial studies related to the business of insurance. The name, address, or other information that reveals the identity of the individual tested shall not be reported to the actuaries.  (Aug. 7, 1986, D.C. Law 6-132,  7, 33 DCR 3615; Mar. 16, 1989, D.C. Law 7-208,  2(e), 36 DCR 471; Feb. 5, 1994. D.C. Law 10-68,  30, 40 DCR 6311; May 21, 1997, D.C. Law 11-268,  10(g), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-226. Section References This section is referenced in  31-1608.
 311607. Contestability. An insurer may contest the validity of a policy or contract for 3 years from the date of issuance, amendment, or renewal of the policy or contract, if the basis for contesting the validity is that the insured knowingly failed or refused to disclose to the insurer that he or she had AIDS at the time of issuance, amendment, or renewal of any policy issued under this chapter, and the insurance company was prohibited by law from conducting a test to determine the exposure of the insured to the AIDS virus on the date the insurer and insured entered into a contract.  (Aug. 7, 1986, D.C. Law 6-132,  8, 33 DCR 3615; Mar. 16, 1989, D.C. Law 7-208,  2(f), 36 DCR 471.)  Prior Codifications 1981 Ed.,  35-227.
 311608. Special enforcement provisions. (a) An insurer, or an agent, broker or employee of the insurer who violates any provision of this chapter or rule issued pursuant to this chapter shall be subject to the suspension or revocation of its license or certificate of authority to transact business in the District, as appropriate, in accordance with the provisions of  31-2502.03, 31-2502.36 [repealed], 31-4305, and 31-4326 [repealed], or other applicable District laws. (b) Any person who violates the restrictions on disclosure in  31-1606(d) shall be fined not less than $500 or more than $5,000 for each disclosure. In the case of an insurer or an agent, broker or employee of an insurer, the fine shall be in addition to the penalties provided in subsection (a) of this section. (c) Any person injured as the result of a violation of this chapter, or a rule issued pursuant to this chapter, may bring an action for civil damages and other appropriate relief in the Superior Court of the District of Columbia without first pursuing administrative remedies.  (Aug. 7, 1986, D.C. Law 6-132,  9, 33 DCR 3615; Mar. 16, 1989, D.C. Law 7-208,  2(g), 36 DCR 471.)  Prior Codifications 1981 Ed.,  35-228.
 311609. Rules. The Mayor shall issue proposed rules, within 90 days of August 7, 1986, to implement the provisions of this chapter. The proposed rules shall be submitted to the Council of the District of Columbia (Council) for a 45-day period of review, excluding Saturdays, Sundays, holidays, and days of Council recess. If the Council does not disapprove the proposed rules by resolution, within the 45-day review period, the proposed rules shall be deemed approved. The Council may approve or disapprove the proposed rules, in whole or in part, by resolution prior to the expiration of the 45-day review period.  (Aug. 7, 1986, D.C. Law 6-132,  10, 33 DCR 3615.)  Prior Codifications 1981 Ed.,  35-229.
 311610. Prohibition against discrimination in use of AIDS tests. (a) No insurer shall inquire about the sexual orientation or gender identity or expression of an applicant in an application for health, life, or disability income insurance coverage or in an investigation conducted by an insurer or insurance support organization on behalf of an insurer in connection with an application for the coverage. (b) Sexual orientation or gender identity or expression, shall not be used as a factor in the underwriting process or in the determination of insurability. (c) Insurance support organizations shall be directed by insurers not to investigate, directly or indirectly, the sexual orientation or gender identity or expression of a proposed insured. (d) An insurance company shall not use sexual orientation, gender identity or expression, lifestyle, living arrangements, occupation, gender, or beneficiary designation to determine whether to test an individual who applies for life, health, or disability income insurance.  (Aug. 7, 1986, D.C. Law 6-132,  11; as added Mar. 16, 1989, D.C. Law 7-208,  2(h), 36 DCR 471; June 25, 2008, D.C. Law 17-177,  15(c), 55 DCR 3696.)  Prior Codifications 1981 Ed.,  35-230. Effect of Amendments D.C. Law 17-177, in subsecs. (a) and (c), substituted sexual orientation or gender identity or expression for sexual orientation; in subsec. (b), substituted Sexual orientation or gender identity or expression, shall not for Sexual orientation shall not; and, in subsec. (d), substituted sexual orientation, gender identity or expression for sexual orientation.
 311631.01. Short title. This chapter may be cited as the Public Insurance Adjuster Licensure Act of 2002.  (Mar. 27, 2003, D.C. Law 14-256,  1, 50 DCR 238.)  Section References This section is referenced in  28-3811 and  31-631.
 311631.02. Definitions. For the purposes of this chapter, the term: (1) Commissioner means the Commissioner of Insurance and Securities Regulation [Commissioner of the Department of Insurance, Securities, and Banking]. (2) District means the District of Columbia. (3) License means a license issued by the Commissioner to act as a public insurance adjuster. (4) Licensee means any person licensed in the District to do business as a public insurance adjuster. (5) Public insurance adjuster shall include any person who, for compensation or any other thing of value: (A) Acts or aids, solely in relation to first party claims arising under insurance contracts that insure the real or personal property of the insured, on behalf of an insured individual in negotiating for, or effecting the settlement of, a claim for loss or damage covered by an insurance contract; (B) Advertises for employment as an adjuster of insurance claims; solicits business or represents himself or herself to the public as an adjuster of first party insurance claims for losses or damages arising out of policies of insurance that insure real or personal property; or (C) Directly or indirectly solicits business, investigates or adjusts losses, or advises an insured about first party claims for losses or damages arising out of policies of insurance that insure real or personal property for another person engaged in the business of adjusting losses or damages covered by an insurance policy.  (Mar. 27, 2003, D.C. Law 14-256,  2, 50 DCR 238.) 
 311631.03. License requirement. No person shall, directly or indirectly, act as a public insurance adjuster without first procuring a license from the Commissioner to act as a public insurance adjuster.  (Mar. 27, 2003, D.C. Law 14-256,  3, 50 DCR 238.) 
 311631.04. Licensure. (a) The Commissioner shall issue a license to an applicant for a public insurance adjusters license who: (1) Has paid the applicable fee established by the Commissioner by rule; (2) Passes a written examination for which a fee may be charged; and (3) Has sufficient experience, training, and instruction concerning the adjusting of first party claims for damages or losses under insurance contracts that insure the real or personal property of the insured, as determined by the Commissioner in accordance with regulations issued pursuant to this chapter. (b) The Commissioner may issue a license to any applicant without an examination if: (1) The applicant holds a like license in good standing from another state and the public official having supervision of public insurance adjusters in the other state certifies that the applicant has passed a written examination; and (2) The other state recognizes public insurance adjusters with District public insurance adjuster licenses for the purpose of licensing the applicant without the requirement of an examination. (c) A license issued pursuant to this section shall continue in force from the date of issuance until April 30th of the next odd-numbered year, unless suspended, revoked, or otherwise terminated prior thereto. Requests for renewal of the license shall be made to the Commissioner and accompanied by the license fee. Unless a request for renewal, accompanied by the appropriate fee, is received by the termination date, the license shall expire.  (Mar. 27, 2003, D.C. Law 14-256,  4, 50 DCR 238; Sept. 24, 2010, D.C. Law 18-223,  2172, 57 DCR 6242.)  Effect of Amendments D.C. Law 18-223, in subsec. (a)(1), substituted established by the Commissioner by rule for specified by this chapter. Emergency Legislation For temporary (90 day) amendment of section, see  2172 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542). Short Title Short title: Section 2171 of D.C. Law 18-223 provided that subtitle N of title II of the act may be cited as the Public Insurance Adjuster Licensure Amendment Act of 2010.
 311631.05. Bond requirement. (a) At the time of the application for license as a public insurance adjuster, the applicant shall file with the Commissioner a bond executed and issued by a surety insurer authorized to transact business in the District in the amount of $20,000, which bond shall serve the faithful performance of his or her duties as a public insurance adjuster. A public insurance adjuster license shall automatically terminate when the bond is not in force. (b) The bond shall have the following characteristics: (1) The bond shall be in favor of the District and shall specifically authorize recovery by the Commissioner of the damages sustained if the licensee is convicted of fraud or unfair practices in connection with his or her business as a public insurance adjuster. (2) The aggregate liability of the surety for all damages shall not exceed the amount of the bond. (3) The bond shall not be terminated unless at least 30 days written notice is given to the licensee and filed with the Commissioner.  (Mar. 27, 2003, D.C. Law 14-256,  5, 50 DCR 238.) 
 311631.06. Maintenance of records. (a) A public insurance adjuster shall maintain a complete record of each transaction as a public insurance adjuster. The records required by this section shall include the: (1) Name of the insured; (2) Date, location, and amount of the loss; (3) Copy of the contract between the public insurance adjuster and insured; (4) Name of the insurer, amount, expiration date, and number of each policy carried with respect to the loss; (5) Itemized statement of the insureds recoveries; and (6) Itemized statement of all compensation received by the public insurance adjuster, from any source whatsoever, in connection with a particular claim. (b) Records shall be maintained for at least 5 years after the termination of the transaction with an insured and shall be open to examination by the Commissioner at all times. (c) Records submitted in accordance with this section that contain proprietary information, identified in writing as such by the public insurance adjuster, shall be treated as confidential by the Commissioner.  (Mar. 27, 2003, D.C. Law 14-256,  6, 50 DCR 238.) 
 311631.07. License denial, suspension, revocation, and refusal to renew; civil penalties. (a) The Commissioner may deny a license to an applicant or suspend, revoke, or refuse to renew a license if the applicant or licensee: (1) Violates the provisions of this chapter or any standard of conduct prescribed by the Commissioner in regulations; (2) Makes a material misstatement in the application for the license; (3) Engages in fraudulent or dishonest practices; or (4) Demonstrates incompetency or untrustworthiness to act as a public insurance adjuster. (b) Upon a finding by the Commissioner of a violation of subsection (a)(1) or (3) of this section, the Commissioner may impose a civil penalty not to exceed $1,000 for each violation. (c) This chapter shall not be applied or interpreted to bar a borrower from bringing an action pursuant to any District or federal law for damages, injunctive relief, or any other relief.  (Mar. 27, 2003, D.C. Law 14-256,  7, 50 DCR 238.)  Section References This section is referenced in  28-3811.
 311631.08. Contracts and solicitation of contracts. (a) No licensee shall, directly or indirectly, act within the District as a public insurance adjuster without having first entered into a contract, in writing, on a form approved by the Commissioner and executed in duplicate by the public insurance adjuster and the insured or a duly authorized representative. One copy of the contract shall be kept on file by the licensee and available at all times for inspection without notice by the Commissioner. (b)(1) An insured who contracts for the services of a public insurance adjuster shall have the right to cancel the contract until midnight on the 3rd business day after the day on which he or she signs the contract. Contracts that do not substantially conform to the requirements contained in this section shall be void. Cancellation of the contract shall be effective when mailed if the following conditions are met: (A) The cancellation shall be in writing, but need not take a particular form, and shall be sufficient if it indicates the intent of the person not to go forward with the representation. (B) The right to cancel shall be contained in the approved contract prescribed by this chapter. (2) The right of recession contained in this subsection shall be in addition to, and not in limitation of, any other rights of the insured. (3) In a commercial loss, if a contract is cancelled in accordance with this subsection, the public insurance adjuster shall be entitled to reasonable compensation for actual services rendered and costs incurred between the time the contract was entered into and the time it was cancelled. (c) A licensee shall not solicit, or attempt to solicit, a client for employment during the progress of a loss-producing occurrence, as defined in the clients insurance contract. (d) A licensee shall not permit an unlicensed employee or agent in his or her own name to advertise, engage clients, furnish reports, or present bills to clients, or in any manner whatsoever to conduct business for which a license is required under this chapter. (e) A licensee shall not charge the client a fee that exceeds 10% of the total insurance recovery of the client.  (Mar. 27, 2003, D.C. Law 14-256,  8, 50 DCR 238.) 
 311631.09. Adjustments to comply with insurance contract and law. A public insurance adjuster shall adjust or investigate every claim, damage, or loss made or occurring under an insurance contract for which the public insurance adjuster has been employed in accordance with the terms and conditions of his or her contract with the insured and the applicable laws and regulations of the District.  (Mar. 27, 2003, D.C. Law 14-256,  9, 50 DCR 238.) 
 311631.10. Regulations. The Commissioner shall promulgate rules and regulations as are necessary to carry out this chapter.  (Mar. 27, 2003, D.C. Law 14-256,  10, 50 DCR 238.) 
 311631.11. [Reserved].
 311631.12. Scope. This chapter shall not apply to: (1) An adjuster for or an agent or employee of an insurer or group of insurers under common control or ownership that, as a representative of the insurer or group, adjusts losses or damages under policies issued by the insurer or group; (2) A broker that acts as an adjuster without compensation for an insured for whom the broker is acting as a broker; (3) An attorney at law who does not: (A) Regularly act as a public insurance adjuster; or (B) Represent to the public by sign, advertisement, or other written or oral communication indicating that the attorney at law acts as a public insurance adjuster; or (4) A licensed health care provider, or employee of a licensed health care provider, who prepares or files a health insurance claim form on behalf of a patient, a licensed insurance agent, or salaried employee of an insurance company.  (Mar. 27, 2003, D.C. Law 14-256,  12, 50 DCR 238.) 
 311701. Definitions. For the purposes of this chapter, the term: (1) Commissioner means the Commissioner of the Department of Insurance, Securities and Banking. (1A) District means the District of Columbia. (2) Redomestication means the transfer to the District the corporate domicile of an authorized foreign insurance company. (3) Repealed. (4) Transferring insurer means any authorized foreign insurance company seeking redomestication.  (May 24, 1996, D.C. Law 11-127,  2, 43 DCR 1559; Mar. 24, 1998, D.C. Law 12-81,  44(a), 45 DCR 745; Apr. 13, 2005, D.C. Law 15-354,  46(a), 52 DCR 2638.)  Prior Codifications 1981 Ed.,  35-4301. Effect of Amendments D.C. Law 15-354, in par. (1), substituted of the Department of Insurance, Securities, and Banking for of Insurance and Securities Regulation.
 311702. Approval as a domestic insurer. Any insurer which is organized under laws of any state and is admitted to do business in the District for the purpose of writing insurance may become a domestic insurer by complying with all of the requirements of law relative to the organization and licensing of a domestic insurer of the same type and by designating its principal place of business at a place in the District. The domestic insurer shall be entitled to like certificates and licenses to transact business in the District, and shall be subject to the authority and jurisdiction of the District.  (May 24, 1996, D.C. Law 11-127,  3, 43 DCR 1559.)  Prior Codifications 1981 Ed.,  35-4302.
 311703. Conversion to foreign insurer. Any domestic insurer may, upon the approval of the Commissioner, transfer its domicile to any state in which it is admitted to transact the business of insurance, and upon such a transfer shall cease to be a domestic insurer and shall be admitted to the District, if qualified, as a foreign insurer. The Commissioner shall approve any proposed transfer unless he or she determines such a transfer is not in the best interest of the policyholders of the District.  (May 24, 1996, D.C. Law 11-127,  4, 43 DCR 1559; Mar. 24, 1998, D.C. Law 12-81,  44(b), 45 DCR 745; Apr. 13, 2005, D.C. Law 15-354,  46(b), 52 DCR 2638.)  Prior Codifications 1981 Ed.,  35-4303. Effect of Amendments D.C. Law 15-354 deleted of Insurance and Securities following approval of the Commissioner.
 311704. Effects of redomestication. (a) The certificate of authority, agent appointments and licenses, rates, and other items which the Commissioner allows, in his or her discretion, which are in existence at the time any insurer licensed to transact the business of insurance in the District transfers its corporate domicile to the District or any other state by merger, consolidation, or any other lawful method shall continue in full force and effect upon the transfer if the insurer remains duly qualified to transact the business of insurance in the District. All outstanding policies of any transferring insurer shall remain in full force and effect and need not be endorsed as to the new name of the company or its new location unless so ordered by the Commissioner. (b) Every transferring insurer shall file new policy forms with the Commissioner on or before the effective date of the transfer, but may use existing policy forms with appropriate endorsements if allowed by, and under such conditions as approved by, the Commissioner. (c) Every such transferring insurer shall notify the Commissioner of the details of the proposed transfer and shall file promptly any resulting amendments to corporate documents filed or required to be filed with the Commissioner.  (May 24, 1996, D.C. Law 11-127,  5, 43 DCR 1559; Mar. 24, 1998, D.C. Law 12-81,  44(c), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-4304.
 311705. Rulemaking. The Mayor, pursuant to subchapter I of Chapter 5 of Title 2, may issue rules and regulations to carry out the purpose of this chapter.  (May 24, 1996, D.C. Law 11-127,  6, 43 DCR 1559.)  Prior Codifications 1981 Ed.,  35-4305.
 311801. Definitions. For the purposes of this chapter, the term: (1) Actuary means a person who is a member in good standing of the American Academy of Actuaries. (2) Controlling person means any person, firm, association, or corporation who directly or indirectly has the power to direct, or cause to be directed, the management, control, or activities of the reinsurance intermediary. (3) District means the District of Columbia. (4) Holding Company Act means the Holding Company System Act of 1993, Chapter 7 of this title. (5) Insurer means any person, firm, association, or corporation duly licensed in the District pursuant to the applicable provisions of District insurance law as an insurer. (6) Licensed producer means an agent, broker, or reinsurance intermediary licensed pursuant to the applicable provision of insurance law. (7) Reinsurance intermediary means a reinsurance intermediary-broker or a reinsurance intermediary-manager as these terms are defined in paragraphs (8) and (9) of this section. (8) Reinsurance intermediary-broker (RB) means any person, other than an officer or employee of the ceding insurer, firm, association, or corporation who solicits, negotiates, or places reinsurance cessions or retrocessions on behalf of a ceding insurer without the authority or power to bind reinsurance on behalf of the insurer. (9) Reinsurance intermediary-manager (RM) means any person, firm, association, or corporation that has authority to bind or manages all or part of the assumed reinsurance business of a reinsurer, including the management of a separate division, department, or underwriting office, and acts as an agent for the reinsurer whether known as a RM, manager, or other similar term. Notwithstanding the above, for the purposes of this chapter, the following persons shall not be considered a RM, with respect to such a reinsurer: (A) An employee of the reinsurer; (B) A United States manager of the United States branch of an alien reinsurer; (C) An underwriting manager that, pursuant to contract, manages all the reinsurance operations of the reinsurer, is under common control with the reinsurer, subject to Chapter 7 of this title, and whose compensation is not based on the volume of premiums written; or (D) The manager of a group, association, pool, or organization of insurers that engage in joint underwriting or joint reinsurance and who are subject to examination by the insurance commissioner or superintendent of insurance of the state in which the managers principal business office is located. (10) Reinsurer means any person, firm, association, or corporation duly licensed in the District pursuant to the applicable provisions of insurance law of the District as an insurer with the authority to assume reinsurance. (11)  To be in violation means that the reinsurance intermediary, insurer, or reinsurer for whom the reinsurance intermediary was acting failed to substantially comply with the provisions of this chapter. (12) Qualified United States financial institution means an institution that: (A) Is organized or, in the case of a United States office of a foreign banking organization, licensed under the laws of the United States, any state, or the District; (B) Is regulated, supervised, and examined by United States federal, state, or District authorities having regulatory authority over banks and trust companies; and (C) Has been determined, by either the Mayor or the Securities Valuation Office of the National Association of Insurance Commissioners, to meet the standards of financial condition and standing considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the Mayor.  (Oct. 21, 1993, D.C. Law 10-47,  2, 40 DCR 6093; May 16, 1995, D.C. Law 10-255,  30, 41 DCR 5193.)  Prior Codifications 1981 Ed.,  35-3101. Section References This section is referenced in  31-1803. Editor's Notes Mayor authorized to issue rules: Section 12 of D.C. Law 10-47 provided that the Mayor may, pursuant to subchapter I of Chapter 15 of Title 1subchapter I of Chapter 5 of Title 2, 2001 Ed., issue rules to implement the provisions of this chapter. Delegation of Authority Delegation of authority pursuant to D.C. Law 10-47, the Reinsurance Intermediary Act of 1993, see Mayors Order 94-54, March 7, 1994 ( 41 DCR 1433).
 311802. Licensure. (a) No person, firm, association, or corporation shall act as a reinsurance broker in the District if the reinsurance broker maintains an office either directly or as a member or employee of a firm or association, or an officer, director, or employee of a corporation: (1) In the District, unless the reinsurance broker is a licensed broker in the District; or (2) In another state, unless the reinsurance broker is a licensed broker in the District or another state having a law substantially similar to this chapter or the reinsurance broker is licensed in the District as a nonresident reinsurance intermediary. (b) No person, firm, association, or corporation shall act as a reinsurance manager: (1) For a reinsurer domiciled in the District unless the reinsurance manager is a licensed broker in the District; (2) In the District, if the reinsurance manager maintains an office either directly or as a member or employee of a firm or association, or an officer, director, or employee of a corporation in the District, unless the reinsurance manager is a licensed broker in the District; or (3) In another state for a nondomestic insurer, unless the reinsurance manager is a licensed broker in the District or another state having a law substantially similar to this chapter or the person is licensed in the District as a nonresident reinsurance intermediary. (c) The Mayor may require a reinsurance manager subject to subsection (b) of this section to: (1) File a bond in an amount from an insurer acceptable to the Mayor for the protection of the reinsurer; and (2) Maintain an errors and omissions policy in an amount acceptable to the Mayor. (d)(1) The Mayor may issue a reinsurance intermediary license to any person, firm, association, or corporation that has complied with the requirements of this chapter. Such a license issued to a firm or association will authorize all the members of the firm or association, and any designated employees, to act as reinsurance intermediaries under the license, and all those persons shall be named in the application and any subsequent supplements. Such a license issued to a corporation shall authorize all of the officers, and any designated employees and directors, to act as reinsurance intermediaries on behalf of the corporation, and all those persons shall be named in the application and any subsequent supplements. (2) If the applicant for a reinsurance intermediary license is a nonresident, such an applicant, as a condition precedent to receiving or holding a license, shall comply with the service of process provisions of  31-202. Such a licensee shall promptly notify the Mayor in writing of every change in its designated agent for service of process, and no change shall become effective until acknowledged by the Mayor. (e) The Mayor may refuse to issue a reinsurance intermediary license if, in his or her judgment, the applicant, anyone named on the application, or any member, principal, officer, or director of the applicant, is not trustworthy, or that any controlling person of such an applicant is not trustworthy to act as a reinsurance intermediary, or that any of the foregoing has given cause for revocation or suspension of such a license, or has failed to comply with any prerequisite for the issuance of such a license. Upon written request, the Mayor will furnish a summary of the basis for refusal to issue a license, which document shall be privileged and not subject to subchapter II of Chapter 5 of Title 2. (f) Licensed attorneys at law of the District, when acting in their professional capacity, shall be exempt from this section. (g) Any license issued pursuant to this section for a reinsurance intermediary shall be issued as a Financial Services endorsement to a basic business license under the basic business license system as set forth in subchapter I-A of Chapter 28 of Title 47.  (Oct. 21, 1993, D.C. Law 10-47,  3, 40 DCR 6093; Apr. 26, 1994, D.C. Law 10-103,  6(a), 41 DCR 1005; Mar. 21, 1995, D.C. Law 10-233,  10, 42 DCR 24; Apr. 20, 1999, D.C. Law 12-261,  2003(mm), 46 DCR 3142; Oct. 28, 2003, D.C. Law 15-38,  3(w), 50 DCR 6913.)  Prior Codifications 1981 Ed.,  35-3102. Section References This section is referenced in  31-1805 and  31-1808. Effect of Amendments D.C. Law 15-38, in subsec. (g), substituted Financial Services endorsement to a basic business license under the basic for Class A Financial Services endorsement to a master business license under the master. Emergency Legislation For temporary (90 day) amendment of section, see  3(w) of Streamlining Regulation Emergency Act of 2003 (D.C. Act 15-145, August 11, 2003, 50 DCR 6896). Temporary Legislation For temporary (225 day) amendment of section, see  6(a) of Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17, 1994, law notification 41 DCR 1626).
 311803. Required contract provisions; reinsurance intermediary-brokers. Transactions between a reinsurance broker and the insurer it represents shall only be entered into pursuant to a written authorization, specifying the responsibilities of each party. The authorization shall, at a minimum, provide that: (1) The insurer may terminate the reinsurance brokers authority at any time. (2) The reinsurance broker shall render accounts to the insurer accurately detailing all material transactions, including information necessary to support all commissions, charges, and other fees received by, or owing to, the reinsurance broker, and remit all funds due to the insurer within 30 days of receipt. (3) All funds collected for the insurers account will be held by the reinsurance broker in a fiduciary capacity in a bank which is a qualified United States financial institution as defined in  31-1801. (4) The reinsurance broker will comply with  31-1804. (5) The reinsurance broker will comply with the written standards established by the insurer for the cession or retrocession of all risks. (6) The reinsurance broker will disclose to the insurer any relationship with any reinsurer to which business will be ceded or retroceded.  (Oct. 21, 1993, D.C. Law 10-47,  4, 40 DCR 6093.)  Prior Codifications 1981 Ed.,  35-3103.
 311804. Books and records; reinsurance intermediary brokers. (a) For at least 10 years after expiration of each contract of reinsurance transacted by the reinsurance broker, the reinsurance broker will keep a complete record for each transaction showing: (1) The type of contract, limits, underwriting restrictions, classes, or risks and territory; (2) Period of coverage, including effective and expiration dates, cancellation provisions, and notice required of cancellation; (3) Reporting and settlement requirements of balances; (4) Rate used to compute the reinsurance premium; (5) Names and addresses of assuming reinsurers; (6) Rates of all reinsurance commissions, including the commissions on any retrocessions handled by the reinsurance broker; (7) Related correspondence and memoranda; (8) Proof of placement; (9) Details regarding retrocessions handled by the reinsurance broker including the identity of retrocessionaires and percentage of each contract assumed or ceded; (10) Financial records, including, but not limited to, premium and loss accounts; and (11) When the reinsurance broker procures a reinsurance contract on behalf of a licensed ceding insurer: (A) Directly from any assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk; or (B) If placed through a representative of the assuming reinsurer, other than an employee, written evidence that the reinsurer has delegated binding authority to the representative. (b) The insurer will have access and the right to copy and audit all accounts and records maintained by the reinsurance broker related to its business in a form usable by the insurer.  (Oct. 21, 1993, D.C. Law 10-47,  5, 40 DCR 6093.)  Prior Codifications 1981 Ed.,  35-3104. Section References This section is referenced in  31-1803.
 311805. Duties of insurers utilizing the services of a reinsurance intermediary-broker. (a) An insurer shall not engage the services of any person, firm, association, or corporation to act as a reinsurance broker on its behalf unless the person is licensed as required by  31-1802(a). (b) An insurer may not employ an individual who is employed by a reinsurance broker with which it transacts business, unless the reinsurance broker is under common control with the insurer and subject to Chapter 7 of this title. (c) The insurer shall annually obtain a copy of statements of the financial condition of each reinsurance broker with which it transacts business.  (Oct. 21, 1993, D.C. Law 10-47,  6, 40 DCR 6093.)  Prior Codifications 1981 Ed.,  35-3105.
 311806. Required contract provisions; reinsurance intermediary-managers. Transactions between a reinsurance manager and the reinsurer it represents shall only be entered into pursuant to a written contract, specifying the responsibilities of each party, which shall be approved by the reinsurers board of directors. At least 30 days before a reinsurer assumes or cedes business through such a producer, a true copy of the approved contract shall be filed with the Mayor for approval. The contract shall, at a minimum, provide that: (1) The reinsurer may terminate the contract for cause upon written notice to the reinsurance manager. The reinsurer may immediately suspend the authority of the reinsurance manager to assume or cede business during the pendency of any dispute regarding the cause for termination. (2) The reinsurance manager will render accounts to the reinsurer accurately detailing all material transactions, including information necessary to support all commissions, charges, and other fees received by, or owing to, the reinsurance manager, and remit all funds due under the contract to the reinsurer on not less than a monthly basis. (3) All funds collected for the reinsurers account will be held by the reinsurance manager in a fiduciary capacity in a bank which is a qualified United States financial institution. The reinsurance manager may retain no more than 3 months estimated claims payments and allocated loss adjustment expenses. The reinsurance manager shall maintain a separate bank account for each reinsurer that it represents. (4) For at least 10 years after expiration of each contract of reinsurance transacted by the reinsurance manager, the reinsurance manager will keep a complete record for each transaction showing: (A) The type of contract, limits, underwriting restrictions, classes, or risks, and territory; (B) Period of coverage, including effective and expiration dates, cancellation provisions and notice required of cancellation, and disposition of outstanding reserves on covered risks; (C) Reporting and settlement requirements of balances; (D) Rate used to compute the reinsurance premium; (E) Names and addresses of ceding insurers; (F) Rates of all reinsurance commissions, including the commissions on any retrocessions handled by the reinsurance manager; (G) Related correspondence and memoranda; (H) Proof of placement; (I) Details regarding retrocessions handled by the RM, as permitted by  31-1808(d), including the identity of retrocessionaires and percentage of each contract assumed or ceded; (J) Financial records, including, but not limited to, premium and loss accounts; and (K) When the reinsurance manager places a reinsurance contract on behalf of a ceding insurer: (i) Directly from any assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk; or (ii) If placed through a representative of the assuming reinsurer, other than an employee, written evidence that the reinsurer has delegated binding authority to the representative. (5) The reinsurer will have access and the right to copy all accounts and records maintained by the reinsurance manager related to its business in a form usable by the reinsurer. (6) The contract cannot be assigned in whole or in part by the reinsurance manager. (7) The reinsurance manager will comply with the written underwriting and rating standards established by the insurer for the acceptance, rejection, or cession of all risks. (8) The rates shall be set forth, as well as the terms and purposes of commissions, charges, and other fees which the reinsurance manager may levy against the reinsurer. (9) If the contract permits the reinsurance manager to settle claims on behalf of the reinsurer: (A) All claims will be reported to the reinsurer in a timely manner. (B) A copy of the claim file will be sent to the reinsurer at its request or as soon as it becomes known that the claim: (i) Has the potential to exceed the lesser of an amount determined by the Mayor or the limit set by the reinsurer; (ii) Involves a coverage dispute; (iii) May exceed the reinsurance managers claims settlement authority; (iv) Is open for more than 6 months; or (v) Is closed by payment of the lesser of an amount set by the Mayor or an amount set by the reinsurer. (C) All claim files will be the joint property of the reinsurer and reinsurance manager. However, upon an order of liquidation of the reinsurer, the files shall become the sole property of the reinsurer or its estate; the reinsurance manager shall have reasonable access to and the right to copy the files on a timely basis. (D) Any settlement authority granted to the reinsurance manager may be terminated for cause upon the reinsurers written notice to the reinsurance manager or upon the termination of the contract. The reinsurer may suspend the settlement authority during the pendency of the dispute regarding the cause of termination. (10) If the contract provides for a sharing of interim profits by the reinsurance manager, the interim profits will not be paid until 1 year after the end of each underwriting period for property business, and 5 years after the end of each underwriting period for casualty business, or a later period set by the Mayor for specified lines of insurance, and not until the adequacy of reserves on remaining claims has been verified pursuant to  31-1808(c). (11) The reinsurance manager will annually provide the reinsurer with a statement of its financial condition prepared by an independent certified accountant. (12) The reinsurer shall periodically, at least semi-annually, conduct an on-site review of the underwriting and claims processing operations of the reinsurance manager. (13) The reinsurance manager will disclose to the reinsurer any relationship it has with any insurer prior to ceding or assuming any business with the insurer pursuant to this contract. (14) Within the scope of its actual or apparent authority, the acts of the reinsurance manager shall be deemed to be the acts of the reinsurer on whose behalf it is acting.  (Oct. 21, 1993, D.C. Law 10-47,  7, 40 DCR 6093; Feb. 27, 1996, D.C. Law 11-90,  4(a), 42 DCR 7155.)  Prior Codifications 1981 Ed.,  35-3106. Emergency Legislation For temporary amendment of section, see  5(a) of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and  4(a) of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844). Temporary Legislation For temporary (225 day) amendment of section, see  4(a) of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305).
 311807. Prohibited acts. The reinsurance manager shall not: (1) Cede retrocessions on behalf of the reinsurer, except that the reinsurance manager may cede facultative retrocessions pursuant to obligatory facultative agreements if the contract with the reinsurer contains reinsurance underwriting guidelines for retrocessions. These guidelines shall include a list of reinsurers with which the automatic agreements are in effect, and for each reinsurer, the coverages and amounts or percentages that may be reinsured, and commission schedules; (2) Commit the reinsurer to participate in reinsurance syndicates; (3) Appoint any broker without assuring that the broker is lawfully licensed to transact the type of reinsurance for which he or she is appointed; (4) Without prior approval of the reinsurer, pay or commit the reinsurer to pay a claim, net of retrocessions, that exceeds the lesser of an amount specified by the reinsurer or 1% of the reinsurers policyholders surplus as of December 31 of the last complete calendar year; (5) Collect any payment from a retrocessionaire, or commit the reinsurer to any claim settlement with a retrocessionaire, without prior approval of the reinsurer. If prior approval is given, a report must be promptly forwarded to the reinsurer; (6) Jointly employ an individual who is employed by the reinsurer unless the reinsurance manager is under common control with the reinsurer subject to Chapter 7 of this title; or (7) Appoint a sub-reinsurance manager.  (Oct. 21, 1993, D.C. Law 10-47,  8, 40 DCR 6093.)  Prior Codifications 1981 Ed.,  35-3107.
 311808. Duties of reinsurers utilizing the services of a reinsurance-intermediary-manager. (a) A reinsurer shall not engage the services of any person, firm, association, or corporation to act as a reinsurance manager on its behalf unless the person is licensed as required by  31-1802(b). (b) The reinsurer shall annually obtain a copy of statements of the financial condition of each reinsurance manager which the reinsurer has engaged prepared by an independent certified accountant in a form acceptable to the Mayor. (c) If a reinsurance manager establishes loss reserves, the reinsurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the reinsurance manager. This opinion shall be in addition to any other required loss reserve certification. (d) Binding authority for all retrocessional contracts or participation in reinsurance syndicates shall rest with an officer of the reinsurer who shall not be affiliated with the reinsurance manager. (e) Within 30 days of termination of a contract with a reinsurance manager, the reinsurer shall provide written notification of the termination to the Commissioner. (f) A reinsurer shall not appoint to its board of directors, any officer, director, employee, controlling shareholder, or subproducer of its reinsurance manager. This subsection shall not apply to relationships governed by Chapter 7 of this title.  (Oct. 21, 1993, D.C. Law 10-47,  9, 40 DCR 6093; May 21, 1997, D.C. Law 11-268,  10(bb), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-3108. Section References This section is referenced in  31-1806.
 311809. Examination authority. (a) A reinsurance intermediary shall be subject to examination by the Mayor. The Mayor shall have access to all books, bank accounts, and records of the reinsurance intermediary in a form usable to the Mayor. (b) A reinsurance manager may be examined as if it were the reinsurer.  (Oct. 21, 1993, D.C. Law 10-47,  10, 40 DCR 6093.)  Prior Codifications 1981 Ed.,  35-3109.
 311810. Penalties and liabilities. (a) If the Mayor determines that the reinsurer intermediary or any other person has not materially complied with this chapter, or any regulation or order promulgated thereunder, after notice and opportunity to be heard, the Mayor may order: (1) For each separate violation, a penalty in an amount not exceeding $10,000; (2) Revocation or suspension of the producers license; and (3) If it was found that because of material noncompliance the insurer has suffered any loss or damage, the Commissioner may maintain a civil action brought by or on behalf of the insurer and its policyholders and creditors for recovery of compensatory damages for the benefit of the insurer and its policyholders and creditors, or other appropriate relief. (b) If an order of rehabilitation or liquidation of the insurer has been entered pursuant to Chapter 13 of this title, and the receiver appointed under that order determines that the reinsurance intermediary or any other person has not materially complied with this chapter, or any regulation or order promulgated thereunder, and the insurer suffered any loss or damage, the receiver may maintain a civil action for recovery of damages or other appropriate sanctions for the benefit of the insurer. (c) Nothing contained in this section shall affect the right of the Mayor to impose any other penalties provided in District insurance law. (d) Nothing contained in this chapter is intended to or shall in any manner limit or restrict the rights of policyholders, claimants, creditors, or other third parties or confer any rights to those persons.  (Oct. 21, 1993, D.C. Law 10-47,  11, 40 DCR 6093; Apr. 26, 1994, D.C. Law 10-103,  6(b), 41 DCR 1005; Feb. 27, 1996, D.C. Law 11-90,  4(b), 4(c), 42 DCR 7155; May 21, 1997, D.C. Law 11-268,  10(bb), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-3110. Emergency Legislation For temporary amendment of section, see  5(b) and (c) of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and  4(b) and (c) of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844). Temporary Legislation For temporary (225 day) amendment of section, see  6(b) of Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17, 1994, law notification 41 DCR 1626). For temporary (225 day) amendment of section, see  4(b) of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305).
 311901. Filing requirements. (a) Every company or association authorized to transact insurance business in the District shall file annually with the Mayor, before March 1st of each year, a financial statement for the year ending December 31st immediately preceding on forms furnished by the Mayor. The Mayor may extend the time for filing the statement by any company for reasons which the Mayor shall deem sufficient. Such a statement shall be verified by the oath of the president and secretary of the company, or, in their absence, by 2 other principal officers. The Mayor shall annually, in the month of December, furnish to each of the companies and associations authorized to do insurance business in the District forms necessary for filing the annual financial statement required by this section. The forms shall conform substantially to the form of statement adopted by the National Association of Insurance Commissioners (NAIC). The filing of these statements shall be in accordance with the NAIC Accounting Practices and Procedures Manual. The Mayor shall have power to make modifications and additions in the financial statement forms as the Mayor may deem necessary to ascertain the condition and affairs of the company. The Mayor may also require that at least once in the month of March in each year a summary of the annual statement by the company be published in a daily newspaper in the District. (b) Each domestic, foreign, and alien insurer authorized to transact insurance in the District shall annually, on or before March 1st of each year, file with the NAIC, and pay the fee established by the NAIC for filing, reviewing, or processing the information, a copy of its annual statement convention form, along with any additional filings prescribed by the Mayor for the preceding year. The information filed with the NAIC shall be in the same format and scope as that required by the Mayor and shall include the signed jurat page and the actuarial certification. Any amendments and addendums to the annual statement filing subsequently filed with the Mayor shall also be filed with the NAIC. (c) Foreign insurers domiciled in a state which has a law substantially similar to subsection (a) of this section shall be deemed in compliance with this section if they file their annual statements in compliance with that jurisdictions law.  (Oct. 21, 1993, D.C. Law 10-42,  2, 40 DCR 6020.)  Prior Codifications 1981 Ed.,  35-3401. Section References This section is referenced in  31-303,  31-2502.26b,  31-3510,  31-3513, and  31-5031.08. Cross References Hospital and medical services corporation, additional required reports, see  31-3513. Hospital and medical services corporation, real property investments, see  31-3510. Hospital and medical services corporations, open enrollment statement, see  31-3514. Editor's Notes Mayor authorized to issue rules: Section 6 of D.C. Law 10-42 provided that the Mayor shall, pursuant to subchapter I of Chapter 15 of Title 1 [subchapter I of Chapter 5 of Title 2, 2001 Ed.], issue rules to implement the provisions of this chapter. Delegation of Authority Delegation of authority pursuant to D.C. Law 10-42, the Required Annual Financial Statements and Participation in the NAIC Insurance Regulatory Information System Act of 1993, see Mayors Order 94-54, March 7, 1994 ( 41 DCR 1433).
 311902. Immunity. (a) In the absence of fraud, actual malice, or bad faith, members of the NAIC, their duly authorized committees, subcommittees, and task forces, their delegates, NAIC employees, and all others, including District employees, charged with the responsibility of collecting, reviewing, analyzing, and disseminating the information developed from the filing of the annual statement convention blanks shall be acting as agents of the Mayor under the authority of this chapter, and shall not be subject to civil liability for libel, slander, or any other cause of action by virtue of their collection, review, and analysis or dissemination of the data and information collected from the filings required by this chapter. (b) Nothing in this section is intended to abrogate or modify in any way any common law or statutory privilege or immunity enjoyed by any person prior to this chapter.  (Oct. 21, 1993, D.C. Law 10-42,  3, 40 DCR 6020.)  Prior Codifications 1981 Ed.,  35-3402.
 311903. Confidentiality. All financial analysis ratios and examination synopses and related information concerning insurance companies that are submitted to the Mayor by the NAIC Insurance Regulatory Information System are confidential and may not be disclosed by the Mayor or any member of the Department of Insurance, Securities, and Banking. This information shall not be subject to disclosure under the District of Columbia Freedom of Information Act or any other District law relating to disclosure of information.  (Oct. 21, 1993, D.C. Law 10-42,  4, 40 DCR 6020; May 21, 1997, D.C. Law 11-268,  10(dd), 44 DCR 1730; June 11, 2004, D.C. Law 15-166,  4(k), 51 DCR 2817.)  Prior Codifications 1981 Ed.,  35-3403. Effect of Amendments D.C. Law 15-166 substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities Regulation. Emergency Legislation For temporary (90 day) amendment of section, see  4(k) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). References in Text The District of Columbia Freedom of Information Act, referred to in this section, is D.C. Law 1-96, codified at  2-531 et seq.
 311904. Revocation of Certificate of Authority. The Mayor may fine insurance companies or suspend, revoke, or refuse to renew the Certificate of Authority of any insurer failing to file its annual statement when due or within any extension of time which the Mayor, for good cause, may have granted.  (Oct. 21, 1993, D.C. Law 10-42,  5, 40 DCR 6020.)  Prior Codifications 1981 Ed.,  35-3404.
 31201. Establishment; appointment of Superintendent and clerk. [Repealed] Repealed.  (May 21, 1997, D.C. Law 11-268,  10(c), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-101. Section References This section is referenced in  31-3503. Editor's Notes Department of Insurance abolished: The Department of Insurance, including the Superintendent, was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. Reorganization Order No. 43, dated June 23, 1953, as amended, established, under the direction and control of a Commissioner, a Department of Insurance headed by a Superintendent. The Order provided for the organization of the Department, abolished the previously existing Department of Insurance, and provided that all functions and positions of the previous Department would be transferred to the new Department of Insurance, including the duties, powers, and authorities of all officers and employees; and that all personnel, property, records and unexpended balances relating to the functions and positions transferred would also be transferred to the new Department. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. The functions of the Superintendent of Insurance were transferred to the Department of Consumer and Regulatory Affairs by Reorganization Plan No. 1 of 1983, effective March 31, 1983. Pursuant to the provisions of D.C. Law 11- (Act 11-524), the Department of Insurance and Securities Regulation was established and the duties of the Superintendent of Insurance and the Insurance Administration were assumed by the Commissioner of Insurance and Securities, and the Insurance Administration in the Department of Consumer and Regulatory Affairs was abolished.
 31202. General duties of Commissioner; companies or associations to file certain information; service of legal process; rules and regulations. (a) It shall be the duty of the Commissioner to see that all laws of the United States relating to insurance or insurance companies, benefit orders, associations, and others doing insurance business in the District are faithfully executed, to keep on file in the Insurance Administration office copies of the charters, declarations of organizations, or articles of incorporation of every company, association, or order doing business in the District. (b) Before any such insurance company, association, or order shall be licensed to do business in the District it shall file with the Commissioner a copy of its charter, declaration of organization, or articles of incorporation duly certified in accordance with the law by the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking], Insurance Commissioner, or other proper officers of the state, territory, or nation where the company, association, group, or organization was organized, a certificate setting forth that it is entitled to transact business and assume risks and issue policies of insurance therein and any other information required by the Commissioner; and a duly executed instrument appointing some suitable person in the District of Columbia, or not 10 miles beyond the territorial limits of the District of Columbia, as the agent for such company, upon whom all lawful process in any action or legal proceeding against it in the District may be served and shall register with the Commissioner the address of its principal office and the name and address of its agent for service of process in the District, including any changes in address. (c) Should said company refuse to appoint such agent, or should any person, after making reasonable efforts to do so (which efforts shall be documented), be unable to serve such agent, said legal process shall be served upon the Commissioner and shall be deemed service upon the company. The Commissioner may by regulation establish fees to be paid when legal process is served upon the Commissioner pursuant to this section. Whenever the Commissioner is served pursuant to this section, he or she shall forward forthwith such process by certified mail to the company named therein, and shall maintain a log showing when such process was served upon the Commissioner and when it was forwarded to the person named therein. The Commissioner shall provide to any person, upon request, the name and address of the agent for any company, or in the alternative, a list of all such agents. (d) Any company, association, group, or organization that fails to comply with the requirements of subsection (b) of this section shall be guilty of a misdemeanor and shall be fined not more than $500 a day for each violation. Civil fines, penalties, and fees may be imposed as alternative sanctions on any company, association, group, or organization that fails to comply with the requirements of subsection (b) of this section, or any rules or regulations issued pursuant to this section. Any company, association, group, or organization against which a fine, penalty, or fee has been imposed may, within 30 days after notice of the penalty is sent, contest the imposition or the amount of the civil fine, penalty, or fee. The hearing shall commence not less than 10 days nor more than 30 days from the date the request for the hearing is received by the Commissioner. The hearing shall be conducted according to the rules for contested cases enumerated in Title 26 (Insurance) of the District of Columbia Municipal Regulations (26 DCMR). (e) The Commissioner shall maintain as confidential any documents or information received from the National Association of Insurance Commissioners or insurance departments of other states which is confidential in such other jurisdictions. The Commissioner may share information, including otherwise confidential information, with the National Association of Insurance Commissioners or insurance departments of other states so long as such other jurisdictions agree to maintain the same level of confidentiality as is available under District of Columbia law.  (Mar. 3, 1901, 31 Stat. 1290, ch. 854,  646; Jan. 17, 1912, 37 Stat. 53, ch. 11; June 14, 1994, D.C. Law 10-128,  404, 41 DCR 2096; Mar. 21, 1995, D.C. Law 10-233,  2, 42 DCR 24; Apr. 18, 1996, D.C. Law 11-110,  35, 43 DCR 530; May 24, 1996, D.C. Law 11-121,  2, 43 DCR 1538; May 21, 1997, D.C. Law 11-268,  10(d), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  19, 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-102. 1973 Ed.,  35-102. Section References This section is referenced in  31-501,  31-1802,  31-2502.22,  31-3503,  31-3931.11,  31-4103,  31-4107,  31-4446,  31-4501, and  31-5201. Cross References Certificate of authority of fire, casualty, or marine insurance company, revocation or suspension, see  31-2502.03. Domestic ceding insurers, compliance with this section, see  31-501. Election to convert stock company to mutual company, rules and regulations governing, see  31-4419. Failure of domestic company to keep books, records, and files within District, effect, see  31-5204. Failure to file annual statements, effect, see  47-2607. Foreign and alien life companies, proof of compliance with this section, see  31-4501. Foreign or alien fire, casualty and marine insurers, proof of compliance with this section, see  31-2502.22. Hospital and medical services corporation, proof of compliance with this section, see  31-3503. Insurance under Employees Compensation Act, see  31-5205. Licenses for insurance companies, see  47-2603. Life and fire insurance, compliance with this section, see  31-5201. Merger or consolidation, foreign and domestic companies, agent for service of process, see  31-4446. Organization permits of domestic life companies, revocation or suspension, see  31-4406. Reinsurance intermediary, compliance with this section, see  31-1802. Revocation or suspension of license or certificate of authority of life insurance companies, see  31-4305. Revocation or suspension of permit for impairment of capital, see  31-5202. Risk retention groups doing business in district not chartered in district, compliance with requirements of this section, see  31-4103. Risk retention purchasing groups, proof of compliance with this section, see  31-4107. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-201.
 31203. Required annual financial statements of companies or associations  Contents; publication. [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-42,  7(a), 40 DCR 6020.)  Prior Codifications 1981 Ed.,  35-103. Section References This section is referenced in  31-4901.
 31204. Required annual financial statements of companies or associations  Foreign companies or associations. The financial statements of insurance companies or associations, required hereby to be filed annually with the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking], shall set forth specifically the assets, liabilities, and conduct of the affairs within the United States of companies or associations organized outside of the territorial limits of the United States, and such statement shall be verified under oath by the manager and assistant manager or other proper officers of such companies or associations within the United States; and so much of this chapter as requires the publication of annual statements shall only extend to the statements respecting the affairs of such foreign companies or associations within the United States.  (Mar. 3, 1901, 31 Stat. 1291, ch. 854,  649; May 21, 1997, D.C. Law 11-268,  10(d), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-104. 1973 Ed.,  35-104. Cross References Annual statements and taxes, see  31-5202. Taxation and fiscal affairs of insurance companies, see  47-2601 et seq. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-201.
 31205. Required annual statement of business; tax payments; annuities exemption. (a) Every insurance company and association doing business in the District of Columbia shall, through its local agents or representatives, furnish to the Commissioner, during the month of January of each year, a statement of its business in the District, setting forth specifically the net amount of its premium receipts, the amount of losses paid, the amount of expenses incurred, respecting the business done in the District during the calendar year next preceding, and the Commissioner shall preserve a separate record of the same in his office for convenient reference, showing the ratio of such losses and expenses, respectively, to the premium receipts. (b) Every insurance company or association of whatever kind or character, not including fraternal beneficiary associations, shall, as required by law, pay to the Director of the Department of Finance and Revenue, or to a depository designated by the Director, in lieu of all other taxes, except taxes upon real estate and any license fees provided for in  31-804 [repealed] an amount equal to the following: (1)(A) One and seven tenths percent of the gross amount of premiums received during the preceding calendar year by every life insurance company or association, not including fraternal beneficiary associations, or the gross payments or deposits collected from holders of fraternal beneficiary association certificates, on contracts of insurance covering risks resident in the District during the preceding year, including contracts for group insurance and annuities and without including or deducting any amounts received or paid for reinsurance. (B) In determining the gross amount of premiums to be taxed, there shall be excluded all premiums received from policies or contracts issued in connection with a pension, annuity, profit-sharing plan or individual retirement annuity qualified or exempt under  401, 403, 404, 408, or 501(a) of the Internal Revenue Code, or successor provisions, and all premiums returned to policyholders or annuitants during the preceding calendar year, except cash surrender values, all dividends that, during the year, have been paid in cash or applied in reduction of premiums or left to accumulate to the credit of policyholders or annuitants. (C) In determining the gross amount of premiums to be taxed, there shall be excluded all consideration received in connection with an annuity contract whether or not such contract is qualified or exempt under the Internal Revenue Code, and all premiums returned to policyholders or annuitants during the preceding calendar year, except cash surrender values, and all dividends that, during said year, have been paid in cash or applied in reduction of premiums or left to accumulate to the credit of policyholders or annuitants. (2) One and seven tenths percent of the gross amount of premiums, assessments, and fees received during the preceding calendar year by every company or association other than life on contracts of insurance other than life for business done in the District, after deducting the amount returned upon canceled policies, certificates, and rejected applications. (3) Except as provided in paragraph (4) of this subsection, the premium tax shall be paid on or before March 1 of the year following the calendar year for which the tax is due. The Commissioner may suspend or revoke the license of a company or association that fails to pay premium tax on or before the due date. (4) Each insurance company and association transacting business in the District whose District premium tax liability for the preceding calendar year was $1,000 or more shall remit on or before June 1, on a prepayment basis, an amount equal to one-half of the premium tax liability for the preceding calendar year. The sums prepaid by a company or association under this subsection shall be allowed as credits against its premium tax liability for the calendar year during which the payments are made. If a prepayment made under this subsection exceeds the annual premium tax liability, the excess shall be allowed as a credit against subsequent prepayment or tax liabilities. The Commissioner may suspend or revoke the license of a company or association that fails to make a prepayment on or before the due date. (c) A hospital service corporation or medical service corporation may deduct, up to $550,000, the corporations payment to the rate stabilization fund under  31-3514 and payments and expenditures pursuant to a public-private partnership entered into in accordance with Chapter 35 of this title from the amount otherwise due by the corporation under subsection (b) of this section. (d) The Commissioner shall determine whether or not the tax remitted is correct. If the tax remitted is not sufficient, the Commissioner shall notify the delinquent company of the amount of such delinquency and certify the amount thereof to the Department of Finance and Revenue which shall proceed to collect such delinquency. (e) An insurer may offset an assessment made pursuant to  31-5406 (Life and Health Insurance Guaranty Association Act), against its premium tax liability pursuant to  31-5410 to the extent of 10% of the amount of the assessment for each of the 10 calendar years following the year in which the assessment was paid. If an insurer ceases doing business, all uncredited assessments may be credited against its premium tax liability for the year it ceases doing business. (f)(1) When by the laws of any other jurisdiction a premium or income or other taxes, or fees, fines, penalties, licenses, deposit requirement, or other obligations, prohibitions or restrictions are imposed upon District domestic insurance companies doing business in the other jurisdiction, or upon the agents of District companies, which in the aggregate are in excess of the aggregate of the taxes, fees, fines, penalties, licenses, deposit requirements or other obligations, prohibitions or restrictions directly imposed upon insurance companies of the other jurisdiction under the statutes of the District, the same obligations, prohibitions or restrictions for whatever kind are in the same manner and for the same purpose imposed upon insurance companies of the other jurisdiction doing business in the District. (2) Insurance premium taxes paid which were not paid under protest shall not be refunded if the refund claim is based upon an alleged error or mistake of law or erroneous interpretation of statute regarding the validity or legality of this section under the laws or constitution of the United States. (3) For the purpose of this section, an alien insurer is deemed domiciled in a United States jurisdiction designated by it wherein it has established its principal office or agency in the United States, maintains the largest amount of its assets held in trust or on deposit for the security of its policyholders or policyholders and creditors in the United States, or in which it was admitted to do business in the United States. (4) This section does not apply to ad valorem taxes on real or personal property or to personal income taxes.  (Mar. 3, 1901, 31 Stat. 1291, ch. 854,  650; June 30, 1902, 32 Stat. 534, ch. 1329; May 21, 1997, D.C. Law 11-268, 44 DCR 1730; Apr. 29, 1998, D.C. Law 12-86,  201, 45 DCR 1172; Mar. 2, 2007, D.C. Law 16-192,  5013(a), 53 DCR 6899; Feb. 4, 2010, D.C. Law 18-104,  4(a), 56 DCR 9182; Sept. 24, 2010, D.C. Law 18-223,  2182, 57 DCR 6242.)  Prior Codifications 1981 Ed.,  35-105. 1973 Ed.,  35-105. Section References This section is referenced in  31-3514,  31-5231, and  31-5233. Effect of Amendments D.C. Law 16-192, in subsec. (b), deleted and nonprofit hospital and medical service corporations following beneficiary associations; and rewrote subsec. (c) which had read as follows: (c) Notwithstanding section 105, a hospital service corporation, medical service corporation, pharmaceutical service corporation, optometric service corporation and any other health service corporation shall pay as taxes to the director of the Department of Finance and Revenue an amount equal to 1% of the gross amount of payments received during the preceding calendar year for subscriber contracts covering residents in the District after deducting the amounts returned to subscribers upon canceled subscriber contracts and rejected applications. D.C. Law 18-104, in subsec. (c), substituted payment to the rate stabilization fund under  31-3514, and payments and expenditures pursuant to a public-private partnership entered into in accordance with Chapter 35 of this title, for payment to the rate stabilization fund under  31-3514,. D.C. Law 18-223, in subsecs. (b)(1A) and (2), substituted Two for One and seven tenths. Cross References Annual statements and taxes, see  31-5202. Insurance companies, taxation and fiscal affairs, see  47-2601 et seq. Liability for failure to pay tax, see  47-2609. Retaliatory charges against certain insurance companies, see  47-2610. Emergency Legislation For temporary (90 day) amendment of section, see  5013(a) of Fiscal Year 2007 Budget Support Emergency Act of 2006 (D.C. Act 16-477, August 8, 2006, 53 DCR 7068). For temporary (90 day) amendment of section, see  5013(a) of Fiscal Year 2007 Budget Support Congressional Review Emergency Act of 2006 (D.C. Act 16-499, October 23, 2006, 53 DCR 8845). For temporary (90 day) amendment of section, see  5013(a) of Fiscal Year 2007 Budget Support Congressional Review Emergency Act of 2007 (D.C. Act 17-1, January 16, 2007, 54 DCR 1165). For temporary (90 day) amendment of section, see  4(a) of Hospital and Medical Services Corporation Regulatory Emergency Amendment Act of 2009 (D.C. Act 18-277, January 11, 2010, 57 DCR 935). For temporary (90 day) amendment of section, see  2182 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542). Temporary Legislation For temporary (225 day) amendment of section, see  4(a) of the Hospital and Medical Services Corporation Regulatory Temporary Amendment Act of 2010 (D.C. Law 18-134, March 23, 2010, law notification 57 DCR 3373). References in Text  Sections 401, 403, 404, 408, and 501(a) of the Internal Revenue Code, referred to in (b)(1)(B), are codified at 26 U.S.C.  401, 403, 404, 408, and 501(a), respectively. Pursuant to the Office of the Chief Financial Officers Notice of Public Interest published in the April 18, 1997, issue of the District of Columbia Register ( 44 DCR 2345) the Office of Tax and Revenue assumed all of the duties and functions previously performed by the Department of Finance and Revenue, as set forth in Commissioners Order 69-96, dated March 7, 1969. This action was made effective January 22, 1997, nunc pro tunc. Editor's Notes Application of Law 12-86: Section 203 of D.C. Law 12-86 provided that the provisions of title II of the act shall be applicable to premiums received during the calendar year beginning Jan. 1, 1998, and subsequent years. Office of Collector of Taxes abolished: The Office of the Collector of Taxes was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. All functions of the Office of the Collector of Taxes including the functions of all officers, employees, and subordinate agencies were transferred to the Director, Department of General Administration by Reorganization Order No. 3, dated August 28, 1952. Reorganization Order No. 20, dated November 10, 1952, transferred the functions of the Collector of Taxes to the Finance Office. The same Order provided for the Office of the Collector of Taxes headed by a Collector in the Finance Office, and abolished the previously existing Office of the Collector of Taxes. Reorganization Order No. 20 was superseded and replaced by Organization Order No. 121, dated December 12, 1957, which provided that the Finance Office (consisting of the Office of the Finance Officer, Property Tax Division, Revenue Division, Treasury Division, Accounting Division, and Data Processing Division) would continue under the direction and control of the Director of General Administration, and that the Treasury Division would perform the function of collecting revenues of the District of Columbia and depositing the same with the Treasurer of the United States. Organization Order No. 121 was revoked by Organization Order No. 3, dated December 13, 1967, Part IVC of which prescribed the functions of the Finance Office within a newly established Department of General Administration. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. Functions of the Finance Office as stated in Part IVC of Organization Order No. 3 were transferred to the Director of the Department of Finance and Revenue by Commissioners Order No. 69-96, dated March 7, 1969. The collection functions of the Director of the Department of Finance and Revenue were transferred to the District of Columbia Treasurer by  47-316 on March 5, 1981. Department of Insurance abolished: See Historical and Statutory Notes following  31-201. For temporary delay until Jan. 1, 1999, of the applicability of D.C. Law 12-86, as stated in  203 of the Omnibus Regulatory Reform Amendment Act of 1998 (D.C. Law 12-86), see  502 of the Health Insurance Portability and Accountability Federal Law Conformity, Motor Vehicle Insurance, Regulatory Reform, and Consumer Law Temporary Amendment Act of 1998 (D.C. Law 12-154,  502). Section 601(b) of D.C. Law 12-154 provided that the act shall expire after 225 days of its having taken effect. For temporary delay of the provisions of  203 of the Omnibus Regulatory Reform Amendment Act of 1998 (D.C. Law 12-86), see  502 of the Health Insurance Portability and Accountability Federal Law Conformity Emergency Amendment Act of 1998 (D.C. Act 12-339, May 4, 1998, 45 DCR 2947). Section 2184 of D.C. Law 18-223 provided: Sunset. This subtitle shall expire on September 30, 2015.
 31206. Required annual reports of Commissioner  Contents. The Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking] shall report annually to the Mayor of the District, on or before the 31st day of March, the financial condition of each insurance company and association doing business in said District, as of the 31st day of December next preceding.  (Mar. 3, 1901, 31 Stat. 1292, ch. 854,  651; May 21, 1997, D.C. Law 11-268,  10(d), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-106. 1973 Ed.,  35-106. Section References This section is referenced in  31-3503. Cross References Hospital and medical services corporations, applicability of this section, see  31-3503. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  35-101. Change in Government This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 401 of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to a single Commissioner. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 31207. Required annual reports of Commissioner  Publication and distribution. After May 18, 1910, the annual reports of the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking] shall be printed and bound in 1 volume, and shall be ready for distribution not later than the 1st day of the next regular session of Congress thereafter.  (May 18, 1910, 36 Stat. 379, ch. 248,  1; May 21, 1997, D.C. Law 11-268,  10(e), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-107. 1973 Ed.,  35-107. Section References This section is referenced in  31-3503. Cross References Hospital and medical services corporations, applicability of this section, see  31-3503. Temporary Legislation  For temporary (225 days) tolling of deadlines under commercial insurance policies during a public health emergency, see  2 of Commercial Insurance Claim Tolling Temporary Act of 2021 (D.C. Law 24-19, July 29, 2021, 68 DCR 006023).   For temporary (225 days) tolling of deadlines under commercial insurance policies during a public health emergency, see  2 of Commercial Insurance Claim Tolling Emergency Act of 2021 (D.C. Act 24-82, May 25, 2021, 68 DCR 005821).   For temporary (225 days) tolling of deadlines under commercial insurance policies during a public health emergency, see  2 of Commercial Insurance Claim Tolling Congressional Review Emergency Act of 2020 (D.C. Act 23-427, Oct. 24, 2020, 67 DCR 12969).   For temporary (225 days) tolling of deadlines under commercial insurance policies during a public health emergency, see  2 of Commercial Insurance Claim Tolling Temporary Act of 2020 (D.C. Law 23-143, Oct. 20, 2020, 67 DCR 9912).   For temporary (225 days) tolling of deadlines under commercial insurance policies during a public health emergency, see  2 of Commercial Insurance Claim Tolling Emergency Act of 2020 (D.C. Act 23-343, July 27, 2020, 67 DCR 9379).  Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-201.
 31208. Capital requirements of companies or associations. It shall be the duty of the said Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking] to ascertain whether the capital required by law or the charter of each insurance company or association organized under the laws of the District of Columbia has been actually paid up in cash and is held by its board of directors subject to their control, according to the provisions of their charter, or has been invested in property worth not less than the full amount of the capital stock required by its charter; or, if a mutual company, that it has received and is in actual possession of securities, as the case may be, to the full extent of the value required by its charter; and the president and secretary of such company or association shall make a declaration under oath to said Commissioner, who is hereby empowered to administer oaths when hereby required, that the tangible assets exhibited to him represent bona fide the property of the company or association, which sworn declaration shall be filed and preserved in the office of said Commissioner; and any such officer swearing falsely in regard to any of the provisions hereof shall be deemed guilty of perjury and shall be subject to all the penalties prescribed by law in the District of Columbia for that crime.  (Mar. 3, 1901, 31 Stat. 1292, ch. 854,  652; May 21, 1997, D.C. Law 11-268,  10(d), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-108. 1973 Ed.,  35-108. Cross References Capital stock requirements, see  31-5202. Impairment of capital, see  31-5201. Inspection and examination of insurance companies, see  31-5201 and 31-5202. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-201.
 312001. Definitions. For the purposes of this chapter, the term: (1) Adjusted RBC Report means an RBC report that has been adjusted by the Commissioner in accordance with  31-2002(g). (2) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking. (3) Corrective order means an order issued by the Commissioner specifying corrective actions which the Commissioner has determined are required. (4) District means the District of Columbia. (5) Domestic insurer means any insurance company domiciled in the District. (6) Foreign insurer means any insurance company which is licensed to do business in the District, but is not domiciled in the District. (6A) "Fraternal benefit society" means any insurance company licensed under the Fraternal Benefit Societies Act of 1998, effective April 29, 1998 (D.C. Law 12-86; D.C. Official Code  31-5301 et seq.). (6B) "Insurer" means an insurance company covered by this chapter. The term "insurer" includes a fraternal benefit society. (7) Life or health insurer means any insurance company licensed to underwrite life or health insurance, or a licensed property and casualty insurer writing only accident and health insurance. (8) NAIC means the National Association of Insurance Commissioners. (9) Negative trend means, with respect to a life or health insurer, negative trend over a period of time, as determined in accordance with the Trend Test Calculation included in the RBC Instructions. (10) Property and casualty insurer means any insurance company licensed to underwrite property and casualty insurance, but does not include monoline mortgage guaranty insurers, financial guaranty insurers, and title insurers. (11) RBC means risk-based capital. (12) RBC Instructions means the RBC Report including risk-based capital instructions adopted by the NAIC, as such RBC Instructions may be amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC. (13) RBC Level means an insurers Company Action Level RBC, Regulatory Action Level RBC, Authorized Control Level RBC, or Mandatory Control Level RBC where: (A) Company Action Level RBC means, with respect to any insurer, the product of 2.0 and its Authorized Control Level RBC; (B) Regulatory Action Level RBC means the product of 1.5 and its Authorized Control Level RBC; (C) Authorized Control Level RBC means the number determined under the risk-based capital formula in accordance with the RBC Instructions; and (D) Mandatory Control Level RBC means the product of .70 and the Authorized Control Level RBC. (14) RBC Plan means a comprehensive financial plan containing the elements specified in  31-2003(b). If the Commissioner rejects the RBC Plan, and it is revised by the insurer, with or without the Commissioners recommendation, the plan shall be called the Revised RBC Plan. (15) RBC Report means the report required in  31-2002. (16) Total adjusted capital means the sum of: (A) An insurers statutory capital and surplus; and (B) Such other items, if any, as the RBC Instructions may provide. (17) State means any of the several states, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of Northern Mariana Islands.  (Apr. 9, 1997, D.C. Law 11-233,  2, 44 DCR 765; Oct. 3, 2001, D.C. Law 14-28,  2802, 48 DCR 6981; June 11, 2004, D.C. Law 15-166,  4(l)(1), 51 DCR 2817; Apr. 15, 2017, D.C. Law 21-278,  2(a), 64 DCR 963.)  Prior Codifications 1981 Ed.,  35-4601. Section References This section is referenced in  31-311.03. Effect of Amendments D.C. Law 14-28, in par. (1), substituted 31-2002(g) for 31-2002(c). D.C. Law 15-166, in par. (2), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance and Securities. Emergency Legislation For temporary (90 day) amendment of section, see  2602 of Fiscal Year 2002 Budget Support Emergency Act of 2001 (D.C. Act 14-124, August 3, 2001, 48 DCR 7861). For temporary (90 day) amendment of section, see  4(l)(1) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
 312002. RBC Reports. (a) Every domestic insurer shall, on or prior to each March 1 (filing date), prepare and submit to the Commissioner a report of its RBC Levels as of the end of the calendar year just ended, in a form and containing such information as is required by the RBC Instructions. In addition, every domestic insurer shall file its RBC Report: (1) With the NAIC in accordance with the RBC Instructions; and (2) With the commissioner in any state in which the insurer is authorized to do business, if the commissioner has notified the insurer of its request in writing, in which case the insurer shall file its RBC Report not later than the later of: (A) Fifteen days from the receipt of notice to file its RBC Report with that state; or (B) The filing date. (b) A life and health insurers RBC shall be determined in accordance with the formula set forth in the RBC Instructions. The formula shall take into account, and may be adjusted for the covariance between: (1) The risk with respect to the insurers assets; (2) The risk of adverse insurance experience with respect to the insurers liabilities and obligations; (3) The interest rate risk with respect to the insurers business; and (4) All other business risks and such other relevant risks as are set forth in the RBC Instructions; (c) Factors set forth in subsection (b)(1) through (4) of this section shall be determined in each case by applying the factors in the manner set forth in the RBC Instructions. (d) A property and casualty insurers RBC shall be determined in accordance with the formula set forth in the RBC Instructions. The formula shall take into account and may adjust for the covariance between: (1) Asset risk; (2) Credit risk; (3) Underwriting risk; and (4) All other business risks and such other relevant risks as are set forth in the RBC Instructions; (e) The factors set forth in subsection (d)(1) through (4) of this section shall be determined in each case by applying the factors in the manner set forth in the RBC Instructions. (f) An excess of capital over the amount produced by the risk-based capital requirements contained in this chapter and the formulas, schedules, and instructions referenced in this chapter is desirable in the business of insurance. Insurers should maintain capital above the RBC Levels required by this chapter. (g) If a domestic insurer files an RBC Report which in the judgment of the Commissioner is inaccurate, then the Commissioner shall adjust the RBC Report to correct the inaccuracy and shall notify the insurer of the adjustment. An RBC Report so adjusted is an Adjusted RBC Report. The notice shall contain a statement of the reason for the adjustment.  (Apr. 9, 1997, D.C. Law 11-233,  3, 44 DCR 765; Apr. 15, 2017, D.C. Law 21-278,  2(b), 64 DCR 963.)  Prior Codifications 1981 Ed.,  35-4602. Section References This section is referenced in  31-2001,  31-2010, and  31-3931.22.
 312003. Company Action Level Event. (a) For the purposes of this chapter, the term Company Action Level Event means any of the following events: (1) The filing of an RBC Report by an insurer which indicates that: (A) The insurers total adjusted capital is greater than or equal to its Regulatory Action Level RBC, but less than its Company Action Level RBC; (B) If a life or health insurer or fraternal benefit society, the insurer has total adjusted capital which is greater than or equal to its Company Action Level RBC, but less than the product of its Authorized Control Level RBC and 3.0 and has a negative trend; or (C) If a property and casualty insurer, the insurer has total adjusted capital which is greater than or equal to its Company Action Level RBC, but less than the product of its Authorized Control Level RBC and 3.0, and triggers the trend test determined in accordance with the trend test calculation included in the Property and Casualty RBC instructions; (2) The notification by the Commissioner to the insurer of an Adjusted RBC Report that indicates an event in paragraph (1) of this subsection, provided the insurer does not challenge the Adjusted RBC Report under  31-2007; or (3) If, pursuant to  31-2007, an insurer challenges an Adjusted RBC Report that indicates the event in paragraph (1) of this subsection, the notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected the insurers challenge. (b) In the event of a Company Action Level Event, the insurer shall prepare and submit to the Commissioner an RBC Plan which shall: (1) Identify the conditions which contribute to the Company Action Level Event; (2) Contain proposals of corrective actions which the insurer intends to take and would be expected to result in the elimination of the Company Action Level Event; (3) Provide projections of the insurers financial results in the current year and at least the 4 succeeding years, both in the absence of proposed corrective actions and giving effect to the proposed corrective actions, including projections of statutory operating income, net income, capital, or surplus. The projections for both new and renewal business might include separate projections for each major line of business and separately identify each significant income, expense, and benefit component; (4) Identify the key assumptions impacting the insurers projections and the sensitivity of the projections to the assumptions; and (5) Identify the quality of, and problems associated with, the insurers business, including, but not limited to, its assets, anticipated business growth and associated surplus strain, extraordinary exposure to risk, mix of business, and use of reinsurance, if any, in each case. (c) The RBC Plan shall be submitted to the Commissioner within 45 days of the Company Action Level Event; or if the insurer challenges an Adjusted RBC Report pursuant to  31-2007, within 45 days after notification to the insurer that the Commissioner has, after a hearing, rejected the insurers challenge. (d) Within 60 days after the submission by an insurer of an RBC Plan to the Commissioner, the Commissioner shall notify the insurer whether the RBC Plan shall be implemented or is, in the judgment of the Commissioner, unsatisfactory. If the Commissioner determines the RBC Plan is unsatisfactory, the notification to the insurer shall set forth the reasons for the determination, and may set forth proposed revisions which will render the RBC Plan satisfactory. Upon notification from the Commissioner, the insurer shall prepare a Revised RBC Plan, which may incorporate by reference any revisions proposed by the Commissioner, and shall submit the Revised RBC Plan to the Commissioner within 45 days after the notification from the Commissioner; or if the insurer challenges the notification from the Commissioner under  31-2007, within 45 days after a notification to the insurer that the Commissioner has, after a hearing, rejected the insurers challenge. (e) In the event of a notification by the Commissioner to an insurer that the insurers RBC Plan or Revised RBC Plan is unsatisfactory, the Commissioner may at the Commissioners discretion, subject to the insurers right to a hearing under  31-2007, specify in the notification that the notification constitutes a Regulatory Action Level Event as defined in  31-2004. (f) Every domestic insurer that files an RBC Plan or Revised RBC Plan with the Commissioner shall file a copy of the RBC Plan or Revised RBC Plan with the insurance commissioner in any state in which the insurer is authorized to do business if: (1) Such state has a RBC provision substantially similar to  31-2008(a); and (2) The insurance commissioner of that state has notified the insurer of its request for the filing in writing, in which case the insurer shall file a copy of the RBC Plan or Revised RBC Plan in that state no later than the later of: (A) Fifteen days after the receipt of notice to file a copy of its RBC Plan or Revised RBC Plan with the state; or (B) The date on which the RBC Plan or Revised RBC Plan is filed under  31-2003(c) and (d).  (Apr. 9, 1997, D.C. Law 11-233,  4, 44 DCR 765; Mar. 14, 2012, D.C. Law 19-103,  3, 59 DCR 432; Apr. 15, 2017, D.C. Law 21-278,  2(c), 64 DCR 963.)  Prior Codifications 1981 Ed.,  35-4603. Section References This section is referenced in  31-2001,  31-2004,  31-2013, and  31-3931.22. Effect of Amendments D.C. Law 19-103, in subsec. (a)(1), deleted and from the end of subpar. (A), substituted ; or  for a period the end of subpar. (B), and added subpar. (C).
 312004. Regulatory Action Level Event. (a) For the purposes of this chapter, the term Regulatory Action Level Event means, with respect to any insurer, any of the following events: (1) The filing of an RBC Report by the insurer which indicates that the insurers total adjusted capital is greater than or equal to its Authorized Control Level RBC, but less than its Regulatory Action Level RBC; (2) The notification by the Commissioner to an insurer of an Adjusted RBC Report that indicates the event in paragraph (1) of this subsection, provided the insurer does not challenge the Adjusted RBC Report under  31-2007; (3) If, pursuant to  31-2007, the insurer challenges an Adjusted RBC Report that indicates the event in paragraph (1) of this subsection, the notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected the insurers challenge; (4) The failure of the insurer to file an RBC Report by the filing date, unless the insurer has provided an explanation for such failure which is satisfactory to the Commissioner and has cured the failure within 10 days after the filing date; (5) The failure of the insurer to submit an RBC Plan to the Commissioner within the time period set forth in  31-2003(c); (6) Notification by the Commissioner to the insurer that: (A) The RBC Plan or Revised RBC Plan submitted by the insurer is, in the judgment of the Commissioner, unsatisfactory; and (B) Such notification constitutes a Regulatory Action Level Event with respect to the insurer, provided the insurer has not challenged the determination under  31-2007; (7) If, pursuant to  31-2007, the insurer challenges a determination by the Commissioner under paragraph (6) of this subsection, the notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected such challenge; (8) Notification by the Commissioner to the insurer that the insurer has failed to adhere to its RBC Plan or Revised RBC Plan, but only if such failure has a substantial adverse effect on the ability of the insurer to eliminate the Company Action Level Event in accordance with its RBC Plan or Revised RBC Plan and the Commissioner has so stated in the notification, provided the insurer has not challenged the determination under  31-2007; or (9) If, pursuant to  31-2007, the insurer challenges a determination by the Commissioner under paragraph (8) of this subsection, the notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected the challenge. (b) In the event of a Regulatory Action Level Event, the Commissioner shall: (1) Require the insurer to prepare and submit an RBC Plan or, if applicable, a Revised RBC Plan; (2) Perform such examination or analysis, as the Commissioner deems necessary, of the assets, liabilities, and operations of the insurer including a review of its RBC Plan or Revised RBC Plan; and (3) Subsequent to the examination or analysis, issue an order specifying such corrective actions as the Commissioner shall determine are required (Corrective Order). (c) In determining corrective actions, the Commissioner may take into account such factors as are deemed relevant with respect to the insurer based upon the Commissioners examination or analysis of the assets, liabilities, and operations of the insurer, including, but not limited to, the results of any sensitivity tests undertaken pursuant to the RBC Instructions. The RBC Plan or Revised RBC Plan shall be submitted: (1) Within 45 days after the occurrence of the Regulatory Action Level Event; (2) If the insurer challenges an Adjusted RBC Report pursuant to  31-2007 and the challenge is not frivolous in the judgment of the Commissioner, within 45 days after the notification to the insurer that the Commissioner has, after a hearing, rejected the insurers challenge; or (3) If the insurer challenges a Revised RBC Plan pursuant to  31-2007 and the challenge is not frivolous in the judgment of the Commissioner, within 45 days after the notification to the insurer that the Commissioner has, after a hearing, rejected the insurers challenge. (d) The Commissioner may retain actuaries and investment experts and other consultants as may be necessary in the judgment of the Commissioner to review the insurers RBC Plan or Revised RBC Plan, examine or analyze the assets, liabilities, and operations of the insurer, and formulate the Corrective Order with respect to the insurer. The fees, costs, and expenses relating to consultants shall be borne by the affected insurer or such other party as directed by the Commissioner.  (Apr. 9, 1997, D.C. Law 11-233,  5, 44 DCR 765.)  Prior Codifications 1981 Ed.,  35-4604. Section References This section is referenced in  31-2003,  31-2005, and  31-2013.
 312005. Authorized Control Level Event. (a) For the purposes of this chapter, the term Authorized Control Level Event means any of the following events: (1) The filing of an RBC Report by the insurer which indicates that the insurers total adjusted capital is greater than or equal to its Mandatory Control Level RBC, but less than its Authorized Control Level RBC; (2) The notification by the Commissioner to the insurer of an Adjusted RBC Report that indicates the event in paragraph (1) of this subsection, provided the insurer does not challenge the Adjusted RBC Report under  31-2007; (3) If, pursuant to  31-2007, the insurer challenges an Adjusted RBC Report that indicates the event in paragraph (1) of this subsection, notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected the insurers challenge; (4) The failure of the insurer to respond, in a manner satisfactory to the Commissioner, to a corrective order (provided the insurer has not challenged the corrective order under  31-2007); or (5) If the insurer has challenged a corrective order under  31-2007 and the Commissioner has, after a hearing, rejected the challenge or modified the Corrective Order, the failure of the insurer to respond, in a manner satisfactory to the Commissioner, to the corrective order subsequent to rejection or modification by the Commissioner. (b) In the event of an Authorized Control Level Event with respect to an insurer, the Commissioner shall: (1) Take such actions as are required under  31-2004 regarding an insurer with respect to which a Regulatory Action Level Event has occurred; or (2) If the Commissioner deems it to be in the best interests of the policyholders and creditors of the insurer and of the public, take such actions as are necessary to cause the insurer to be placed under regulatory control under Chapter 13 of this title. In the event the Commissioner takes such actions, the Authorized Control Level Event shall be deemed sufficient grounds for the Commissioner to take action under Chapter 13 of this title, and the Commissioner shall have the rights, powers, and duties with respect to the insurer as are set forth in Chapter 13 of this title. In the event the Commissioner takes actions under this paragraph pursuant to an Adjusted RBC Report, the insurer shall be entitled to such projections as are afforded to insurers under the provisions of Chapter 13 of this title pertaining to summary proceedings.  (Apr. 9, 1997, D.C. Law 11-233,  6, 44 DCR 765.)  Prior Codifications 1981 Ed.,  35-4605. Section References This section is referenced in  31-2013.
 312006. Mandatory Control Level Event. (a) For the purposes of this chapter, the term Mandatory Control Level Event means any of the following events: (1) The filing of an RBC Report which indicates that the insurers total adjusted capital is less than its Mandatory Control Level RBC; (2) Notification by the Commissioner to the insurer of an Adjusted RBC Report that indicates the event in paragraph (1) of this subsection, provided the insurer does not challenge the Adjusted RBC Report under  31-2007; or (3) If, pursuant to  31-2007, the insurer challenges an Adjusted RBC Report that indicates the event in paragraph (1) of this subsection, notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected the insurers challenge. (b) In the event of a Mandatory Control Level Event: (1) With respect to a life insurer or fraternal benefit society, the Commissioner shall take such actions as are necessary to place the insurer under regulatory control under Chapter 13 of this title. In that event, the Mandatory Control Level Event shall be deemed sufficient grounds for the Commissioner to take action under Chapter 13 of this title, and the Commissioner shall have the rights, powers, and duties with respect to the insurer as are set forth in Chapter 13 of this title. If the Commissioner takes actions pursuant to an Adjusted RBC Report, the insurer shall be entitled to the protections of Chapter 13 of this title pertaining to summary proceedings. Notwithstanding any of the foregoing, the Commissioner may forego action for up to 90 days after the Mandatory Control Level Event if the Commissioner finds there is a reasonable expectation that the Mandatory Control Level Event may be eliminated within the 90-day period. (2) With respect to a property and casualty insurer, the Commissioner shall take such actions as are necessary to place the insurer under regulatory control under Chapter 13 of this title, or, in the case of an insurer which is writing no business and which is running-off its existing business, may allow the insurer to continue its run-off under the supervision of the Commissioner. In either event, the Mandatory Control Level Event shall be deemed sufficient grounds for the Commissioner to take action under Chapter 13 of this title, and the Commissioner shall have the rights, powers and duties with respect to the insurer as are set forth in Chapter 13 of this title. If the Commissioner takes actions pursuant to an Adjusted RBC Report, the insurer shall be entitled to the protections of Chapter 13 of this title pertaining to summary proceedings. Notwithstanding any of the foregoing, the Commissioner may forego action for up to 90 days after the Mandatory Control Level Event if the Commissioner finds there is a reasonable expectation that the Mandatory Control Level Event may be eliminated within the 90-day period.  (Apr. 9, 1997, D.C. Law 11-233,  7, 44 DCR 765; Apr. 15, 2017, D.C. Law 21-278,  2(d), 64 DCR 963.)  Prior Codifications 1981 Ed.,  35-4606. Section References This section is referenced in  31-2013.
 312007. Hearings. (a) The insurer shall have a right to a hearing, at which the insurer may challenge any of the following determinations or actions by the Commissioner: (1) Notification to an insurer by the Commissioner of an Adjusted RBC Report; (2) Notification to an insurer by the Commissioner that: (A) The insurers RBC Plan or Revised RBC Plan is unsatisfactory; and (B) Such notification constitutes a Regulatory Action Level Event with respect to such insurer; (3) Notification to any insurer by the Commissioner that the insurer has failed to adhere to its RBC Plan or Revised RBC Plan and that such failure has a substantial adverse effect on the ability of the insurer to eliminate the Company Action Level Event with respect to the insurer in accordance with its RBC Plan or Revised RBC Plan; or (4) Notification to an insurer by the Commissioner of a Corrective Order with respect to the insurer. (b) The insurer shall notify the Commissioner of its request for a hearing within 5 days after the notification by the Commissioner under subsection (a) of this section. Upon receipt of the insurers request for a hearing, the Commissioner shall set a date for the hearing, which date shall be no less than 10 nor more than 30 days after the date of the insurers request.  (Apr. 9, 1997, D.C. Law 11-233,  8, 44 DCR 765.)  Prior Codifications 1981 Ed.,  35-4607. Section References This section is referenced in  31-2003,  31-2004,  31-2005, and  31-2006.
 312008. Confidentiality; prohibition on announcements; prohibition on use in ratemaking. (a) All RBC Reports (to the extent the information therein is not required to be set forth in a publicly available annual statement schedule) and RBC Plans (including the results or report of any examination or analysis of an insurer performed pursuant hereto and any Corrective Order issued by the Commissioner pursuant to examination or analysis) with respect to any domestic insurer or foreign insurer that are in the possession or control of the Department of Insurance, Securities, and Banking shall be confidential and privileged; shall not be subject to subchapter II of Chapter 5 of Title 2; shall not be subject to subpoena; and shall not be subject to discovery or admissible in evidence in a private civil action; provided, that the Commissioner may use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the Commissioners official duties. This information is also exempt from any applicable freedom of information law, public records law, public records disclosure law, or other similar statute. (a-1) The Commissioner or any person who received documents, materials, or other information while acting under the authority of the Commissioner shall not be permitted or required to testify in a private civil action concerning confidential documents, materials, or other information subject to subsection (a) of this section. (a-2) To assist in the performance of the Commissioners duties, the Commissioner: (1) May share documents, materials, or other information, including the confidential and privileged documents, materials, or other information subject to subsection (a) of this section, with other state, federal, and international regulatory agencies; with the National Association of Insurance Commissioners, including its affiliates and subsidiaries; and with state, federal and international law enforcement authorities; provided, that the recipient agrees, and has the legal authority, to maintain the confidentiality and privileged status of the documents, materials, or other information; (2) May receive documents, materials, or other information, including otherwise confidential and privileged documents, materials, or other information, from the National Association of Insurance Commissioners, and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or other information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or other information; or (3) May enter into agreements governing the sharing and use of information consistent with this section. (a-3) No waiver of an applicable privilege or claim of confidentiality in the documents, materials, or other information shall occur as a result of disclosure to the Commissioner under this section or as a result of sharing as authorized in subsection (a-2) of this section. Nothing in this section shall require an insurer to disclose documents, materials, or other information that is not otherwise required by law to be disclosed. (b) Except as otherwise required under the provisions of this chapter, the making, publishing, disseminating, circulating, or placing before the public, or causing, directly or indirectly to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio or television station, or in any other way, an advertisement, announcement, or statement containing an assertion, representation, or statement with regard to the RBC Levels of any insurer, or of any component derived in the calculation, by any insurer, agent, broker, or other person engaged in any manner in the insurance business would be misleading and is therefore prohibited; provided, however, that if any materially false statement with respect to the comparison regarding an insurers total adjusted capital to its RBC Levels (or any of them) or an inappropriate comparison of any other amount to the insurers RBC Levels is published in any written publication and the insurer is able to demonstrate to the Commissioner with substantial proof the falsity of such statement, or the inappropriateness, as the case may be, then the insurer may publish an announcement in a written publication if the sole purpose of the announcement is to rebut the materially false statement. (c) The RBC Instructions, RBC Reports, Adjusted RBC Reports, RBC Plans and Revised RBC Plans shall not be used by the Commissioner for ratemaking nor considered or introduced as evidence in any rate proceeding nor used by the Commissioner to calculate or derive any elements of an appropriate premium level or rate of return for any line of insurance which an insurer or any affiliate is authorized to write.  (Apr. 9, 1997, D.C. Law 11-233,  9, 44 DCR 765; Oct. 21, 2000, D.C. Law 13-191,  4, 47 DCR 7311; June 11, 2004, D.C. Law 15-166,  4(l)(2), 51 DCR 2817.)  Prior Codifications 1981 Ed.,  35-4608. Section References This section is referenced in  31-2003. Effect of Amendments D.C. Law 13-191 rewrote subsec. (a) and added subsecs. (a-1) to (a-3). Prior to amendment, subsec. (a) provided: (a) All RBC Reports (to the extent the information therein is not required to be set forth in a publicly available annual statement schedule) and RBC Plans (including the results or report of any examination or analysis of an insurer performed pursuant hereto and any Corrective Order issued by the Commissioner pursuant to examination or analysis) with respect to any domestic insurer or foreign insurer which are filed with the Commissioner constitute information that might be damaging to the insurer if made available to its competitors, and therefore shall be kept confidential by the Commissioner. This information shall not be made public or be subject to subpoena, other than by the Commissioner and then only for the purpose of enforcement actions taken by the Commissioner pursuant to this chapter or any other provision of the insurance laws of the District. This information is also exempt from any applicable freedom of information law, public records law, public records disclosure law, or other similar statute. D.C. Law 15-166, in subsec. (a), substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities Regulation. Emergency Legislation For temporary (90 day) amendment of section, see  4(l)(2) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
 312009. Supplemental provisions; rules; exemption. (a) The provisions of this chapter are supplemental to any other provisions of the laws of the District, and shall not preclude or limit any other powers or duties of the Commissioner under such laws, including, but not limited to, Chapter 13 and Chapter 21 of this title. (b) The Commissioner may adopt reasonable rules necessary for the implementation of this chapter. (c) The Commissioner may exempt from the application of this chapter any insurer which; (1) Writes direct business only in the District; (2) Writes direct annual premiums of $1 million or less; and (3) Assumes no reinsurance in excess of 5% of direct premium written.  (Apr. 9, 1997, D.C. Law 11-233,  10, 44 DCR 765.)  Prior Codifications 1981 Ed.,  35-4609.
 312010. Foreign Insurers. (a) Any foreign insurer, upon the written request of the Commissioner, shall submit to the Commissioner an RBC Report as of the end of the calendar year just ended on the later of: (1) The date an RBC Report would be required to be filed by a domestic insurer under this chapter; or (2) Fifteen days after the request is received by the foreign insurer. (b) Any foreign insurer shall, at the written request of the Commissioner, promptly submit to the Commissioner a copy of any RBC Plan that is filed with the commissioner of any other state. (c) In the event of a Company Action Level Event, Regulatory Action Level Event or Authorized Control Level Event, with respect to any foreign insurer as determined under the RBC statute applicable in the state of domicile of the insurer (or, if no RBC statute is in force in that state under the provisions of this chapter), if the insurance commissioner or similar authority of the state of domicile of the foreign insurer fails to require the foreign insurer to file an RBC Plan in the manner specified under that states RBC statute (or, if no RBC statute is in force in that state, under  31-2002), the Commissioner may require the foreign insurer to file an RBC Plan with the Commissioner. In such event, the failure of the foreign insurer to file an RBC Plan with the Commissioner shall be grounds to order the insurer to cease and desist from writing new insurance business in the District. (d) In the event of a Mandatory Control Level Event with respect to any foreign insurer, if no domiciliary receiver has been appointed with respect to the foreign insurer under the rehabilitation and liquidation statute applicable in the state of domicile of the foreign insurer, the Commissioner may make application to the Superior Court permitted under Chapter 13 of this title with respect to the liquidation of property of foreign insurers found in the District, and the occurrence of the Mandatory Control Level Event shall be considered adequate grounds for the application.  (Apr. 9, 1997, D.C. Law 11-233,  11, 44 DCR 765.)  Prior Codifications 1981 Ed.,  35-4610.
 312011. Immunity. There shall be no liability on the part of, and no cause of action shall arise against, the Commissioner or the Department of Insurance, Securities, and Banking or its employees or agents for any action taken by them in the performance of their powers and duties under this chapter.  (Apr. 9, 1997, D.C. Law 11-233,  12, 44 DCR 765; June 11, 2004, D.C. Law 15-166,  4(l)(3), 51 DCR 2817.)  Prior Codifications 1981 Ed.,  35-4611. Effect of Amendments D.C. Law 15-166 substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities Regulation. Emergency Legislation For temporary (90 day) amendment of section, see  4(l)(3) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
 312012. Notices. All notices by the Commissioner to an insurer which may result in regulatory action hereunder shall be effective upon dispatch if transmitted by registered or certified mail, or in the case of any other transmission shall be effective upon the insurers receipt of such notice.  (Apr. 9, 1997, D.C. Law 11-233,  13, 44 DCR 765.)  Prior Codifications 1981 Ed.,  35-4612.
 312013. Phase-in provision. (a) For RBC Reports required to be filed by life insurers with respect to 1993, the following requirements shall apply in lieu of the provisions of  31-2003, 31-2004, 31-2005, and 31-2006: (1) In the event of a Company Action Level Event with respect to a domestic insurer, the Commissioner shall take no regulatory action hereunder. (2) In the event of an Regulatory Action Level Event under  31-2004(a)(1), (2), or (3), the Commissioner shall take the actions required under  31-2003. (3) In the event of an Regulatory Action Level Event under  31-2004(a)(4), (5), (6), (7), (8), or (9) or an Authorized Control Level Event, the Commissioner shall take the actions required under  31-2004 with respect to the insurer. (4) In the event of a Mandatory Control Level Event with respect to an insurer, the Commissioner shall take the actions required under  31-2005 with respect to the insurer. (b) For RBC Reports required to be filed by property and casualty insurers with respect to 1994, the following requirements shall apply in lieu of the provisions of  31-2003, 31-2004, 31-2005, and 31-2006: (1) In the event of a Company Action Level Event with respect to a domestic insurer, the Commissioner shall take no regulatory action hereunder. (2) In the event of an Regulatory Action Level Event under  31-2004(a)(1), (2), or (3) the Commissioner shall take the actions required under  31-2003. (3) In the event of an Regulatory Action Level Event under  31-2004(a)(4), (5), (6), (7), (8), or (9) or an Authorized Control Level Event, the Commissioner shall take the actions required under  31-2004 with respect to the insurer. (4) In the event of a Mandatory Control Level Event with respect to an insurer, the Commissioner shall take the actions required under  31-2005 with respect to the insurer.  (Apr. 9, 1997, D.C. Law 11-233,  14, 44 DCR 765.)  Prior Codifications 1981 Ed.,  35-4613.
 312101. Standards for determining insurance companies in hazardous financial condition. (a) In order to determine whether the continued operation of any insurer transacting an insurance business in the District of Columbia might be deemed to be hazardous to the policyholders, creditors, or the general public, the Mayor may consider the following standards, either singly or in combination of 2 or more: (1) Adverse findings reported in financial condition and market conduct examination reports, audit reports, and actuarial opinions, reports or summaries; (2) The National Association of Insurance Commissioners Insurance Regulatory Information System and its other financial analysis solvency tools and reports; (3) Repealed. (4) Whether the insurer has made adequate provision, according to presently accepted actuarial standards of practice, for the anticipated cash flows required by the contractual obligations and related expenses of the insurer and related actuarial items, including the investment earnings on such assets and the considerations anticipated to be received and retained under such policies and contracts; (5) The ability of an assuming reinsurer to perform and whether the insurers reinsurance program provides sufficient protection for the companys remaining surplus after taking into account the insurers cash flow and the classes of business written as well as the financial condition of the assuming reinsurer; (6) The insurers operating loss in the last 12-month period or any shorter period of time, including, but not limited to, net capital gain or loss, change in nonadmitted assets, and cash dividends paid to shareholders, is greater than 50% of the insurers remaining surplus as regards policyholders in excess of the minimum required; (6A) Whether the insurers operating loss in the last 12-month period or any shorter period of time, excluding net capital gain, is greater than 20% of the insurers remaining surplus as regards policyholders in excess of the minimum required; (7) Whether a reinsurer, obligor, or an entity within the insurers insurance holding company system is insolvent, threatened with insolvency, or delinquent in payment of its monetary or other obligations, and which in the opinion of the Mayor may affect the solvency of the insurer; (8) Contingent liabilities, pledges, or guaranties which, either individually or collectively, involve a total amount which in the opinion of the Mayor may affect the solvency of the insurer; (9) Whether any controlling person of an insurer is delinquent in the transmitting to, or payment of, net premiums to such an insurer; (10) The age and collectibility of receivables; (11) Whether the management of an insurer, including officers, directors, or any other person who directly or indirectly controls the operation of the insurer, fails to possess and demonstrate the competence, fitness, and reputation deemed necessary to serve the insurer in such a position; (12) Whether management of an insurer has failed to respond to inquiries relative to the condition of the insurer or has furnished false and misleading information concerning an inquiry; (12A) Whether the insurer has failed to meet financial and holding company filing requirements in the absence of a reason satisfactory to the Mayor; (13) Whether management of an insurer either has filed any false or misleading sworn financial statement, has released any false or misleading financial statement to lending institutions or to the general public, has made a false or misleading entry, or has omitted an entry of material amount in the books of the insurer; (14) Whether the insurer has grown so rapidly and to such an extent that it lacks adequate financial and administrative capacity to meet its obligations in a timely manner; (15) Whether the company has experienced or will experience in the foreseeable future cash flow or liquidity problems; (16) Whether management has established reserves that do not comply with minimum standards established by state insurance laws, regulations, statutory accounting standards, sound actuarial principles, and standards of practice; (17) Whether management persistently engages in material under reserving that results in adverse development; (18) Whether transactions among affiliates, subsidiaries, or controlling persons for which the insurer receives assets or capital gains, or both, do not provide sufficient value, liquidity, or diversity to assure the insurers ability to meet its outstanding obligations as they mature; or (19) Any other finding determined by the Mayor to be hazardous to the insurers policyholders, creditors, or general public. (b) For the purposes of making a determination of an insurers financial condition under this chapter, the Mayor may: (1) Disregard any credit or amount receivable resulting from transactions with a reinsurer which is insolvent, impaired, or otherwise subject to a delinquency proceeding; (2) Make appropriate adjustments to asset values attributable to investments in or transactions with parents, subsidiaries, or affiliates; (3) Refuse to recognize the stated value of accounts receivable if the ability to collect receivables is highly speculative in view of the age of the account or the financial condition of the debtor; and (4) Increase the insurers liability in an amount equal to any contingent liability, pledge, or guarantee not otherwise included if there is a substantial risk that the insurer will be called upon to meet the obligation undertaken within the next 12-month period.  (Oct. 21, 1993, D.C. Law 10-43,  2, 40 DCR 6023; Mar. 11, 2015, D.C. Law 20-235,  4(a), 62 DCR 461.)  Prior Codifications 1981 Ed.,  35-3501. Section References This section is referenced in  31-311.03. Effect of Amendments The 2015 amendment by D.C. Law 20-234 rewrote (a)(1), (a)(4), and (a)(7); substituted other financial analysis solvency tools and reports for related reports in (a)(2); repealed (a)(3); added (a)(6A), (a)(12A), (a)(16), (a)(17), (a)(18), and (a)(19) and made related changes; and substituted insurer for company in (a)(15). Cross References Hospital and medical services corporation, applicability of this section, see  31-3503. Editor's Notes Mayor authorized to issue rules: Section 5 of D.C. Law 10-43 provided that the Mayor shall, pursuant to subchapter I of Chapter 15 of Title 1 [subchapter I of Chapter 5 of Title 2, 2001 Ed.], issue rules to implement the provisions of this chapter. Delegation of Authority Delegation of authority pursuant to D.C. Law 10-43, the Standards to Identify Insurance Companies Deemed to Be in Hazardous Financial Condition Act of 1993: See Mayors Order 94-54, March 7, 1994 ( 41 DCR 1433).
 312102. Corrective actions. (a) If the Mayor determines that the continued operation of the insurer licensed to transact business in the District of Columbia may be hazardous to its policyholders, creditors, or the general public, the Mayor may, upon his or her determination, issue an order requiring the insurer to: (1) Reduce the total amount of present and potential liability for policy benefits by reinsurance; (2) Reduce, suspend, or limit the volume of business being accepted or renewed; (3) Reduce general insurance and commission expenses by specified methods; (4) Increase the insurers capital and surplus; (5) Suspend or limit the declaration and payment of dividend by an insurer to its stockholders or to its policyholders; (6) File reports in a form acceptable to the Mayor concerning the market value of an insurers assets; (7) Limit or withdraw from certain investments or discontinue certain investment practices to the extent the Mayor deems necessary; (8) Document the adequacy of premium rates in relation to the risks insured; (9) File, in addition to regular annual statements, interim financial reports on the form adopted by the National Association of Insurance Commissioners or on a form promulgated by the Mayor; (10) Correct corporate governance practice deficiencies and adopt and utilize governance practices acceptable to the Mayor; (11) Provide a business plan to the Mayor in order to continue to transact business in the District; or (12) Notwithstanding any other provision of law limiting the frequency or amount of premium rate adjustments, adjust rates for any non-life insurance product written by the insurer that the Mayor considers necessary to improve the financial condition of the insurer. (a-1) For the purposes of making a determination of an insurers financial condition under this section, the Mayor may: (1) Disregard any credit or amount receivable resulting from transactions with a reinsurer that is insolvent, impaired, or otherwise subject to a delinquency proceeding; (2) Make appropriate adjustments including disallowance to asset values attributable to investments in or transactions with parents, subsidiaries, or affiliates consistent with the National Association of Insurance Commissioners Accounting Policies and Procedures Manual and District laws and regulations; (3) Refuse to recognize the stated value of accounts receivable if the ability to collect receivables is highly speculative in view of the age of the account or the financial condition of the debtor; and (4) Increase the insurers liability in an amount equal to any contingent liability, pledge, or guarantee not otherwise included if there is a substantial risk that the insurer will be called upon to meet the obligation undertaken within the next 12-month period. (b) If the insurer is a foreign insurer, the Mayors order under subsection (a) of this section may be limited to the extent provided by statute. (c) Any insurer subject to an order under subsection (a) of this section may request a hearing to review that order. The notice of hearing shall be served upon the insurer pursuant to  2-509. The notice of hearing shall state the time and place of hearing, and the conduct, condition, or ground upon which the Mayor based the order. Unless mutually agreed between the Mayor and the insurer, the hearing shall occur not less than 10 days nor more than 30 days after notice is served and shall be held in the District of Columbia. The Mayor shall hold all hearings under this section privately, unless the insurer requests a public hearing, in which case the hearing shall be public. (d) The procedures and remedies set forth in this chapter do not in any way supercede or limit the authority of the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking] to take over a company or to revoke or suspend its certificate of authority pursuant to Chapter 11 of this title, Chapter 25 of this title, or Chapter 43 of this title.  (Oct. 21, 1993, D.C. Law 10-43,  3, 40 DCR 6023; Apr. 26, 1994, D.C. Law 10-103,  7(a), 41 DCR 1005; May 21, 1997, D.C. Law 11-268,  10(ee), 44 DCR 1730; Mar. 11, 2015, D.C. Law 20-235,  4(b), 62 DCR 461.)  Prior Codifications 1981 Ed.,  35-3502. Effect of Amendments The 2015 amendment by D.C. Law 20-235 substituted its policyholders, creditors for the policyholders in the introductory language of (a); added (a)(10) through (a)(12) and made related changes; and added (a-1). Temporary Legislation For temporary (225 day) amendment of section, see  7(a) of Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17, 1994, law notification 41 DCR 1626).
 312103. Judicial review. Any order or decision of the Mayor shall be subject to review in accordance with  2-510, at the request of any person suffering a legal wrong or whose interests are adversely affected or aggrieved by the order or decision of the Mayor.  (Oct. 21, 1993, D.C. Law 10-43,  4, 40 DCR 6023.)  Prior Codifications 1981 Ed.,  35-3503. Cross References Hospital and medical services corporation, applicability of this section, see  31-3503.
 312201. Definitions. For the purposes of this chapter, the term: (1) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking. (1A) District means the District of Columbia. (2) Non-U.S. insurer means an insurer organized under the laws of a foreign country. (3) Repealed. (4) United States Branch or U.S. Branch means the business unit through which business is transacted within the United States by a non-U.S. insurer and the assets and liabilities of the insurer within the United States pertaining to such business.  (May 24, 1996, D.C. Law 11-128,  2, 43 DCR 1562; Mar. 24, 1998, D.C. Law 12-81,  45(a), 45 DCR 745; June 11, 2004, D.C. Law 15-166,  4(m), 51 DCR 2817.)  Prior Codifications 1981 Ed.,  35-4401. Effect of Amendments D.C. Law 15-166, in par. (1), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance and Securities. Emergency Legislation For temporary (90 day) amendment of section, see  4(m) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
 312202. Authorization of entry. (a) A non-U.S. insurer may use the District as a state of entry to transact insurance in the United States through a U.S. branch by: (1) Qualifying as an insurer licensed to do business in the District; and (2) Establishing a trust account, pursuant to a trust agreement approved by the Commissioner, with a U.S. bank approved by the Commissioner in an amount at least equal to the minimum capital and surplus required to be maintained by a domestic insurer licensed to do the same kind of insurance. (b) Before authorizing the entry through the District of a U.S. branch of any non-U.S. insurer, the Commissioner shall require the non-U.S. insurer, in addition to the requirements of  31-2204 and any other requirement of the insurance law, to submit: (1) A copy of its charter and by-laws, if any, currently in force, and such other documents necessary to show the kinds of business which it is empowered to do in its domiciliary jurisdiction, attested to as accurate and complete by the insurance supervisory official in its home jurisdiction, and a full statement, subscribed and affirmed as true under the penalties of perjury by 2 officers or equivalent responsible representatives in such manner as the Commissioner shall prescribe, of its financial conditions as of the close of its latest fiscal year, showing its assets, liabilities, income disbursements, business transacted, and other facts required to be shown in its annual statement, as reported to the insurance supervisory official in its home jurisdiction, and an English language translation, as necessary, of any of the documents required herein; and (2) To an examination of the insurers affairs at its principal office within the United States. However, the Commissioner may instead accept a report of the insurance supervisory official of the insurers home jurisdiction.  (May 24, 1996, D.C. Law 11-128,  3, 43 DCR 1562; Mar. 24, 1998, D.C. Law 12-81,  45(b), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-4402. Section References This section is referenced in  31-1371.01.
 312203. Maintenance of trust account. The assets in the trust account shall be known as trusteed assets and shall at all times be in an amount equal to the U.S. branchs reserves and other liabilities plus the minimum capital and surplus required to be maintained by a domestic insurer licensed to do the same kind of insurance.  (May 24, 1996, D.C. Law 11-128,  4, 43 DCR 1562.)  Prior Codifications 1981 Ed.,  35-4403. Section References This section is referenced in  31-2204 and  31-2306.
 312204. Requirements for trust agreement. (a) The deed of trust and all amendments thereto shall be authenticated in such form and manner as the Commissioner may prescribe and shall not be effective unless approved by the Commissioner upon a finding that: (1) A deed of trust or its amendments are sufficient in form and in conformity with law; (2) The trustee or trustees are eligible as such; and (3) The deed of trust is adequate to protect the interest of the beneficiaries of the trust. (b) If at any time the Commissioner finds, after reasonable notice and hearing, that the requisites for the approval no longer exist, the Commissioner may withdraw approval. (c) The Commissioner may from time to time approve modifications of, or variations in any deed of trust, which in the Commissioners judgment are not prejudicial to the interest of the people of the District or the United States policyholders and creditors of the U.S. Branch. (d) The deed of trust shall contain provisions which: (1) Vest legal title to trusteed assets in the trustees and their successors lawfully appointed; (2) Require that all assets deposited in the trust shall be continuously kept within the United States; (3) Provide for substitution of a new trustee or trustees in case of a vacancy by death, resignation, or otherwise, subject to the approval of the Commissioner; (4) Require that the trustee or trustees shall continuously maintain a record at all times sufficient to identify the assets of such fund; (5) Require that the trusteed assets shall consist of cash or investments eligible for investment of the funds of domestic insurers and accrued interest thereon if collectable by the trustee; (6) Require that the trust shall be for the exclusive benefit, security, and protection of the policyholders, or policyholders and creditors, of the U.S. Branch in the United States and that it shall be maintained as long as there is outstanding any liability of the non-U.S. insurer arising out of its insurance transactions in the United States; and (7) Provide, in substance, that no withdrawals of assets, other than income as specified in subsection (e) of this section shall be made or permitted by the trustee or trustees without the approval of the Commissioner except to: (A) Make deposits required by law in any state for the security or benefit of all policyholders, or policyholders and creditors, of the U.S. Branch in the United States; (B) Substitute other assets permitted by law and at least equal in value and quality to those withdrawn upon the specific written direction of the United States manager when duly empowered and acting pursuant to either general or specific written authority previously given or delegated by the board of directors; or (C) Transfer such assets to an official liquidator or rehabilitator pursuant to an order of a court of competent jurisdiction. (e) The deed of trust may provide that income, earnings, dividends, or interest accumulations of the assets of the fund may be paid over to the United States manager of the U.S. branch upon request, provided that the total trusteed assets shall not thereby be less than the amount required to be maintained pursuant to  31-2203. (f) Upon withdrawal of trusteed assets deposited in another state in which the insurer is authorized to do business, it shall be sufficient if the deed of trust requires similar written approval of the insurance supervising official of that state in lieu of approval of the Commissioner provided that the total trusteed assets shall not thereby be less than the amount required to be maintained pursuant to  31-2203. In all such cases, the U.S. Branch shall notify the Commissioner in writing of the nature and extent of the withdrawal. (g) The Commissioner may from time to time: (1) Make examinations of the trusteed assets of any authorized U.S. Branch at the insurers expense; and (2) Require the trustee or trustees to file a statement, in such form as the Commissioner may prescribe, certifying the assets of the trust fund and the amounts thereof. (h) Refusal or neglect of any trustee to comply with the requirements of this section shall be grounds for the revocation of the insurers license or the liquidation of its United States Branch.  (May 24, 1996, D.C. Law 11-128,  5, 43 DCR 1562; Mar. 24, 1998, D.C. Law 12-81,  45(c), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-4404. Section References This section is referenced in  31-2202,  31-2205, and  31-2306.
 312205. Reporting requirements for U.S. Branches of non-U.S. insurers. (a) In addition to other requirements of this chapter, every authorized U.S. Branch shall, not later than the first day of March in each year and 45 days after the end of each of the first 3 calendar-year quarters, file the following with the Commissioner and with the National Association of Insurance Commissioners (NAIC): (1) Annual and quarterly statements of the business transacted within the United States and the assets held by or for it within the United States for the protection of policy holders and creditors within the United States, and of the liabilities incurred against such assets. The forms shall not contain any statement in regard to its assets and business elsewhere. The statements shall be in the same format required of an insurer domiciled in the United States Branchs state of entry state and licensed to write the same kinds of insurance; and (2) A statement of trusteed surplus, in such form as the Commissioner may prescribe, as of the end of the same period covered by the statement filed pursuant to paragraph (1) of this subsection. The aggregate value of the insurers general state deposits and trusteed assets deposited with a trustee in compliance with  31-2204, plus accrued investment income thereon where such interest is collected by the states for trustees, less the aggregate net amount of all of its reserves and other liabilities in the United States as determined in accordance with this section, shall be known as its trusteed surplus in the United States. In determining the net amount of the U.S. Branchs liabilities in the United States to be reported in the statement of trusteed surplus, the U.S. Branch shall make adjustments to total liabilities reported on the accompanying annual or quarterly statements as follows: (A) Add back liabilities used to offset admitted assets reported in the accompanying quarterly or annual statement; and (B) Deduct: (i) Unearned premiums on agents balances or uncollected premiums not more than 90 days past due; (ii) Reinsurance on losses with authorized insurers, less unpaid reinsurance premiums; (iii) Reinsurance recoverable on paid losses from unauthorized insurers that are included as an asset in the annual statement, but only to the extent a liability for such unauthorized recoverables is included in the liabilities report in the trusteed surplus statement; (iv) Special state deposits held for the exclusive benefit of policyholders, or policyholders and creditors, of any particular state not exceeding net liabilities reports for that state; (v) Secured accrued retrospective premiums; (vi) If a life insurer, the amount of its policy loans to policyholders within the United States, not exceeding the amount of legal reserve required on each such policy, and the net amount of uncollected and deferred premiums; and (vii) Any other nontrusteed asset which the Commissioner determines secures liabilities in a substantially similar manner; and (3) Any additional information that the Commissioner may require relating to the total business or assets, or any portion thereof, of the non-U.S. insurer. (b) The annual statement and trusteed surplus statement shall be signed and verified by the United States manager, attorney-in-fact, or a duly empowered assistant United States manager of the U.S. Branch. The items of securities and other property held under trust deeds shall be certified in the trusteed surplus statement by the United States trustee or trustees. (c) Every report on examination of a U.S. Branch shall include a trusteed surplus statement as of the date of examination in addition to the general statement of the financial condition of the U.S. Branch.  (May 24, 1996, D.C. Law 11-128,  6, 43 DCR 1562; Mar. 24, 1998, D.C. Law 12-81,  45(d), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-4405.
 312206. Additional requirements for U.S. Branch license. (a) Before issuing any new or renewal license to any U.S. Branch, the Commissioner may require satisfactory proof, either in the non-U.S. insurers charter or by an agreement evidenced by a duly certified resolution of its board of directors, or otherwise as the Commissioner may require, that the insurer will not engage in any insurance business in contravention of the provisions of this chapter or not authorized by its charter. (b) The Commissioner shall issue a renewal license to any U.S. Branch if satisfied, by such proof as required, that the insurer is not delinquent with respect to any requirement imposed by this chapter and that its continuance in business in the District will not be hazardous or prejudicial to the best interest of the people of the District. (c) No U.S. Branch shall be licensed to do in the District any kind of insurance business, or any combination of kinds of insurance business, which are not permitted to be done by domestic insurers licensed under the provisions of this chapter. No U.S. Branch shall be authorized to do an insurance business in the District if it does anywhere within the United States any kind of business other than an insurance business and the business necessarily or properly incidental to the kinds of insurance business which it is authorized to do in the District. (d) Except as otherwise specifically provided, no U.S. Branch, entering through the District or another state, shall be or continue to be authorized to do an insurance business in the District if it fails to comply substantially with any requirement or limitation of this chapter applicable to similar domestic insurers hereafter organized, which in the judgment of the Commissioner is reasonably necessary to protect the interest of the policyholders. (e) No U.S. Branch that does outside of the District any kind or combination of kinds of insurance business not permitted to be done in the District by similar domestic insurers hereafter organized shall be or continue to be authorized to do an insurance business in the District, unless in the judgment of the Commissioner the doing of such kind or combination of kinds of insurance business will not be prejudicial to the best interest of the people of the District. (f) No U.S. Branch shall be, or continue to be, authorized to do an insurance business in the District if it fails to keep full and correct entries of its transactions, which shall at all times be open to the inspection of persons invested by law with the rights of inspection and be maintained in its principal office within the District.  (May 24, 1996, D.C. Law 11-128,  7, 43 DCR 1562; Mar. 24, 1998, D.C. Law 12-81,  45(e), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-4406.
 312207. Authority of the Commissioner. Whenever it appears to the Commissioner from any annual or quarterly statement, trusteed surplus statement, or any other report that a U.S. Branchs trusteed surplus is reduced below minimum capital and surplus required to be maintained by a domestic insurer licensed to transact the same kinds of insurance, the Commissioner may proceed against the insurer pursuant to the provisions of District law as an insurer whose condition is such that its further transaction of business in the United States will be hazardous to its policyholders, its creditors, or the public in the United States.  (May 24, 1996, D.C. Law 11-128,  8, 43 DCR 1562; Mar. 24, 1998, D.C. Law 12-81,  45(f), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-4407.
 312231.01. Definitions. For the purposes of this chapter, the term: (1) Agent or Broker means a person who solicits, negotiates, effects, procures, delivers, renews, continues, or binds policies of insurance for persons or risks residing, located, or to be performed in the District of Columbia. (2) Annuity contract means an agreement to make periodic payments in fixed dollar amounts under the terms of a contract for a stated period of time or for the life of the person specified in the contract. (3) Commissioner means the Commissioner of the Department of Insurance and Securities Regulation. (3A) Gender identity or expression shall have the same meaning as provided in  2-1401.02(12A). (4) Insurance business means the transaction of all matters pertaining to a contract of insurance, both before and after the effectuation of the contract, and all matters arising out of the contract or a claim thereunder. (5) Insurance policy or insurance contract means a contract of insurance, indemnity, medical, health, or hospital service; a health maintenance organization plan or coverage; a suretyship; or an annuity that is issued, proposed for issuance, or intended for issuance. (6) Insured means the party named on a policy or contract as the individual with legal rights to the benefits provided by the policy or contract. (7) Insurer means a person, interinsurer, Lloyds insurer, fraternal benefit society, health maintenance organization, or any other legal entity engaged in the business of insurance, including agents, brokers, and third-party administrators. Insurer shall also mean medical service plans and hospital service plans. (8) Person means any natural or artificial entity, including individuals, partnerships, associations, trusts, or corporations. (9) Unfair trade practices means the commission of any one or more of the acts prohibited by  31-2231.02 through 31-2231.21, or regulations promulgated hereunder, with such frequency to indicate a general business practice to engage in the proscribed conduct.  (Apr. 3, 2001, D.C. Law 13-265,  101, 48 DCR 1225; June 25, 2008, D.C. Law 17-177,  16(a), 55 DCR 3696.)  Section References This section is referenced in  31-3311.02. Effect of Amendments D.C. Law 17-177 added par. (3A).
 312231.02. General prohibition. (a) This chapter shall be construed to permit an administrative remedy only, and nothing in this chapter shall be construed to create or imply a private cause of action for a violation of this chapter. (b) This chapter shall not be construed to extinguish, limit, or otherwise impair any existing right in law or equity for conduct that is otherwise actionable.  (Apr. 3, 2001, D.C. Law 13-265,  102, 48 DCR 1225.)  Section References This section is referenced in  31-2231.01.
 312231.03. Misrepresentations and false advertising of insurance policies. No person shall make, issue, circulate, or cause to be made, issued or circulated, an estimate, illustration, circular or statement, sales presentation, omission, or comparison that: (1) Misrepresents the benefits, advantages, conditions, or terms of a policy; (2) Misrepresents the dividends or share of the surplus to be received on a policy; (3) Makes a false or misleading statement as to the dividends or share of surplus previously paid on a policy; (4) Is misleading or is a misrepresentation as to the financial condition of an insurer or as to the legal reserve system upon which a life insurer operates; (5) Uses a name or title of a policy or class of policies misrepresenting the true nature thereof; (6) Is a misrepresentation, including an intentional erroneous quotation of a premium rate for the purpose of inducing, or tending to induce, the purchase, lapse, forfeiture, exchange, conversion, or surrender of a policy; (7) Is a misrepresentation for the purpose of effecting a pledge or assignment of, or effecting a loan against, a policy; (8) Misrepresents a policy as being shares of stock; or (9) Uses a name which deceptively infers or suggests that it is an insurer if it is not an insurer.  (Apr. 3, 2001, D.C. Law 13-265,  103, 48 DCR 1225.) 
 312231.04. False information and advertising generally. No person shall make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication, or in a notice, circular, pamphlet, letter, or poster, or over a radio or television station, or in any other way, an advertisement, announcement, or statement containing an assertion, representation, or statement with respect to the business of insurance or with respect to an insurer in the conduct of its insurance business which is untrue, deceptive, or misleading.  (Apr. 3, 2001, D.C. Law 13-265,  104, 48 DCR 1225.) 
 312231.05. Defamation. No person shall make, publish, disseminate, or circulate, directly or indirectly, or aid, abet, or encourage the making, publishing, disseminating or circulating, of an oral or written statement or a pamphlet, circular, article, or literature, which is false with respect to, maliciously critical of, or derogatory to, the financial condition of an insurer and which is calculated to injure the insurer.  (Apr. 3, 2001, D.C. Law 13-265,  105, 48 DCR 1225.) 
 312231.06. Boycott, coercion, and intimidation. No person shall enter into an agreement to commit, or by a concerted action commit, an act of boycott, coercion, or intimidation resulting in, or tending to result in, unreasonable restraint of, or monopoly in, the business of insurance.  (Apr. 3, 2001, D.C. Law 13-265,  106, 48 DCR 1225.) 
 312231.07. Illegal dealing in premiums; excess charges for insurance. (a) Subject to the acceptance of the risk by the insurer, no person shall willfully collect a premium or charge for insurance which is not then provided, or is not in due course to be provided, by an insurance policy issued by an insurer. (b) No person shall willfully collect as a premium or charge for insurance a sum in excess of the premium or charge specified in the policy and applicable to such insurance in accordance with the classifications and rates as filed with and approved by the Commissioner. In a case where the classifications, premiums, or rates are not required to be filed and approved, the premium or charge shall not be in excess of that specified in the policy and fixed by the insurer. This subsection shall not prohibit a reasonable fee or charge for insurance premium payment plans, regardless of the number of installment payments involved.  (Apr. 3, 2001, D.C. Law 13-265,  107, 48 DCR 1225.) 
 312231.08. False statements and entries. (a) No person shall knowingly file with an insurance regulatory or other public official, knowingly make, publish, disseminate, circulate, or deliver to a person, or place before the public, or knowingly cause directly or indirectly to be made, published, disseminated, circulated, delivered to a person, or placed before the public, a false material statement of fact as to the financial condition of an insurer. (b) No person shall knowingly: (1) Make a false entry of a material fact in a book, report, or statement of an insurer; (2) With intent to deceive an agent of the Commissioner lawfully appointed to examine the insurers condition or any of its affairs, fail to make a true entry of any material fact pertaining to the business of an insurer in a book, report, or statement of the insurer; or (3) Make a false material statement to an insurance department official.  (Apr. 3, 2001, D.C. Law 13-265,  108, 48 DCR 1225.) 
 312231.09. Stock operations and advisory board contracts. No person, as an inducement to purchase insurance, shall issue or deliver, or permit its agents, officers, or employees to issue or deliver: (1) Agency company stock or other capital stock, benefit certificates, or shares in a common law corporation; (2) Securities; or (3) A special or advisory board contract or other contracts of any kind promising returns and profits.  (Apr. 3, 2001, D.C. Law 13-265,  109, 48 DCR 1225.) 
 312231.10. Failure to maintain marketing and performance records. No person shall fail to maintain its books, records, documents, and other business records in such order that data regarding complaints, claims, rating, underwriting, and marketing are not accessible and retrievable for examination by the Commissioner. Data for at least the current calendar year and the 2 preceding years shall be maintained.  (Apr. 3, 2001, D.C. Law 13-265,  110, 48 DCR 1225.) 
 312231.11. Unfair discrimination. (a) No person shall commit or permit any unfair discrimination between individuals of the same class and equal expectation of life in the rates charged for a life insurance policy or contract, in the dividends or other benefits payable thereon, or in any other of the terms and conditions of the policy or contract. (b) No person shall commit or permit any unfair discrimination between individuals of the same class and of essentially the same hazard in the amount of premium, fees, or rates charged for a policy or contract of accident or health insurance; in the benefits payable under a policy or contract of accident or health insurance; in any of the terms or conditions of the policy or contract of accident or health insurance; or in any other manner. This section shall not prohibit a fee or charge for insurance premium payment plans, regardless of the number of installments involved. (b-1) For the purposes of subsections (a) and (b) of this section, no person shall inquire, directly or indirectly, as to whether an insured or applicant is, or has been, the victim of an intrafamily offense, sexual assault, dating violence, or stalking, or make use of information as to an insured or applicants status as a victim of an intrafamily offense, sexual assault, dating violence, or stalking; provided, that this subsection shall not prohibit a person from asking about a medical condition or from using medical information to underwrite or to carry out its duties under a policy, even if the medical information is related to a medical condition that the person knows or has reason to know is related to an intrafamily offense, sexual assault, dating violence, or stalking, to the extent otherwise permitted under this chapter or applicable law. For purposes of this subsection, the term intrafamily offense shall have the same meaning as provided in  16-1001(8). (c) No person shall refuse to insure, refuse to continue to insure, or limit the amount of coverage available to an individual because of marital status, race, color, personal appearance, sexual orientation, gender identity or expression, matriculation, political affiliation, or an individuals status as a victim of an intrafamily offense, sexual assault, dating violence, or stalking. Nothing in this subsection shall prohibit an insurer from taking marital status into account for the purpose of defining persons eligible for dependent benefits or prohibit or limit the operation of fraternal benefit societies. For the purposes of this subsection, the term matriculation shall have the same meaning as in  2-1401.02(18). (d) No person shall terminate or modify coverage, or refuse to issue or refuse to renew, a property and casualty policy or a life, health, or annuity policy, solely because the applicant or insured, or an employee of either, is mentally or physically impaired. A termination, modification, or refusal shall be based on sound actuarial principles or related to actual or reasonably anticipated experience. This subsection shall not be interpreted to modify any other provision of law relating to the termination, modification, issuance, or renewal of an insurance policy or contract. (e) No person shall refuse to insure an individual solely because another insurer has refused to write a policy or has cancelled or has refused to renew an existing policy in which the individual was named an insured. This subsection shall not prevent the termination of an excess insurance policy on account of the failure of the insured to maintain any required underlying insurance.  (Apr. 3, 2001, D.C. Law 13-265,  111, 48 DCR 1225; Oct. 3, 2001, D.C. Law 14-28,  2702(a), 48 DCR 6981; June 25, 2008, D.C. Law 17-177,  16(b), 55 DCR 3696; Apr. 8, 2011, D.C. Law 18-360,  202(a), 58 DCR 896; Sept. 26, 2012, D.C. Law 19-171,  86, 59 DCR 6190.)  Section References This section is referenced in  31-2231.12 and  31-2231.24. Effect of Amendments D.C. Law 14-28 rewrote subsec. (c) which had read as follows: (c) No person shall refuse to insure, refuse to continue to insure, or limit the amount of coverage available to an individual because of the sex, marital status, race, religion, or national origin of the individual. Nothing in this subsection shall prohibit an insurer from taking marital status into account for the purpose of defining persons eligible for dependent benefits. Nothing in this section shall prohibit or limit the operation of fraternal benefit societies. D.C. Law 17-177, in subsec. (c), substituted sexual orientation, gender identity or expression for sexual orientation. D.C. Law 18-360, in subsec. (b), substituted health insurance for health insurance policy, policy or contract of accident or health insurance  for contract or policy, and policy or contract of health insurance for policy or contract; added subsec. (b-1); and, in subsec. (c), substituted political affiliation, or an individuals status as a victim of an intrafamily offense, sexual assault, dating violence, or stalking for or political affiliation. The 2012 amendment by D.C. Law 19-171 substituted accident or health insurance for the third occurrence of health insurance in (b). Emergency Legislation For temporary (90 day) amendment of section, see  2502(a) of Fiscal Year 2002 Budget Support Emergency Act of 2001 (D.C. Act 14-124, August 3, 2001, 48 DCR 7861). Editor's Notes Section 203 of D.C. Law 18-360 provided: Sec. 203. Application. This title shall apply to policies and certificates of insurance that are health benefit plans as defined under section 2(4) of the Health Insurance Coverage for Habilitative Services for Children Act of 2006, effective March 2, 2007 (D.C. Law 16-198; D.C. Official Code  31-3271(4)), that are issued 90 days after the effective date of this title. This title shall not apply to short-term limited duration health benefit plans.
 312231.12. Rebates: life, health, and annuities. (a) No person shall knowingly: (1) Permit, or offer to make, a policy or contract of life insurance, annuity, or accident and health insurance, or agreement as to such policy or contract, other than as plainly expressed in the policy or contract issued thereon; or (2) Pay, allow, give, or offer to pay, allow, or give, directly or indirectly as inducement to such policy or contract: (A) A rebate of premiums payable on the policy or contract; (B) A special favor or advantage in the dividends or other benefits thereon; or (C) A valuable consideration or inducement not specified in the contract. (b) No person shall directly or indirectly give, sell, purchase, or offer, or agree to give, sell, purchase, or offer as inducement to the policy or contract specified in subsection (a) of this section, or in connection therewith: (1) Stocks, bonds, or other securities of an insurance company or other corporation, association, or partnership; (2) Dividends or profits accrued or to accrue thereon; or (3) Anything of value not specified in the contract. (c) No person shall receive or accept as inducement to a policy or contract: (1) A rebate of premium payable on the policy or contract; (2) A special favor or advantage in the dividends or other benefits to accrue on the policy or contract; or (3) A valuable consideration or inducement not specified in the contract. (d) Section 31-2231.11 or this section shall not be construed to include within the definition of discrimination or rebates any of the following practices: (1) In the case of a contract of life insurance or life annuity, paying bonuses to policyholders or otherwise abating their premiums in whole or in part out of surplus accumulated from nonparticipating insurance; provided, that the bonuses or abatement of premiums shall be fair and equitable to policyholders and for the best interests of the company and its policyholders; (2) In the case of life insurance policies issued on the industrial debit, preauthorized check, bank draft, or similar plans, making allowance to policyholders who have continuously for a specified period made premium payments directly to an office of the insurer in an amount which fairly represents the saving in collection expenses; (3) Readjustment of the rate of premium for a group insurance policy based on the loss or expense experience thereunder at the end of the first or a subsequent policy year of insurance thereunder, which may be made retroactive only for the policy year; (4) Reduction of premium rates for policies of large amounts, but not exceeding savings in issuance and administration expenses reasonably attributable to the policies as compared with policies of similar plans issued in smaller amounts; (5) Issuing life or health insurance policies or annuity contracts on a salary savings or payroll deduction plan, or other distribution plan, at reduced rates reasonably commensurate with the savings made by the use of the plan; and (6) Issuance of health insurance policies which provide for increases in benefits to policyholders who maintain their policies continuously in force without lapse for specified periods. (e) Section 31-2231.11 or this section shall not be construed to include within the definition of securities an inducement to purchase insurance, the selling or offering for sale, contemporaneously with life insurance, mutual fund shares or face amount certificates of regulated investment companies under offerings registered with the United States Securities and Exchange Commission where the shares, the face amount certificates, or the insurance may be purchased independently of, and not contingent upon, purchase of the other, at the same price and upon similar terms and conditions as where purchased independently. (f) For the purposes of  31-2231.11 or this section, the term valuable consideration shall not include any educational materials, promotional materials, or articles of merchandise that cost less than $75, regardless of whether a policy or contract is purchased.  (Apr. 3, 2001, D.C. Law 13-265,  112, 48 DCR 1225; Feb. 22, 2019, D.C. Law 22-208,  2(a), 65 DCR 12369.)  Section References This section is referenced in  31-2231.13.
 312231.13. Unfair discrimination and rebates prohibited; property, casualty, and surety insurance. (a) No person offering property, casualty, or surety insurance, or an employee or representative thereof, shall pay, allow, or give, or offer to pay, allow, or give, directly or indirectly, as an inducement to insure, or after insurance has been effected, a rebate, discount, abatement, credit, or reduction of the premium named in a policy of insurance, or a special favor or advantage in the dividends or other benefits to accrue thereon, or a valuable consideration or inducement whatsoever, not specified or provided for in the policy, except to the extent provided for in an applicable filing with the Commissioner as allowed by law. (b) An insured named in a policy, or an employee of the insured, shall not knowingly receive, offer, or accept, directly or indirectly, a rebate, discount, abatement, credit, or reduction of premium, or a special favor or advantage or valuable consideration or inducement, as proscribed by subsection (a) of this section. (c) No insurer shall make or permit an unfair discrimination between insured property having like insuring or risk characteristics, in the premium or rates charged for insurance, in the dividends or other benefits payable thereon, or in any other of the terms and conditions of the insurance. (d) Notwithstanding any other provision in this section, an insurer shall not make or permit a differential in ratings, premium payments, or dividends based on the marital status, race, color, personal appearance, sexual orientation, gender identity or expression, matriculation, or political affiliation of an applicant or policy holder unless there is actuarial justification for the differential. For the purposes of this subsection, the term matriculation shall have the same meaning as in  2-1401.02(18). Nothing in this section shall limit or otherwise restrict any discount, rating, or credit program filed with the Commissioner. (e) Nothing in this section shall be construed as prohibiting the payment of commissions or other compensation to duly licensed agents or brokers or as prohibiting any insurer from allowing or returning to its participating policyholders, members or subscribers, lawful dividends, savings, or unabsorbed premium deposits. (f) No person shall commit or permit an unfair discrimination between individuals or risks of the same class and of essentially the same hazard by refusing to insure, refusing to renew, canceling, or limiting the amount of insurance coverage on a property or casualty risk solely because of the geographic location of the individual or risk, unless the action is for a sound business purpose that is not a mere pretext for unfair discrimination, or unless the refusal, cancellation, or limitation is required by law or regulatory mandate. (g) No person shall commit or permit an unfair discrimination between individuals or risks of the same class and of essentially the same hazard by refusing to insure, refusing to renew, canceling, or limiting the amount of insurance coverage on the residential property risk, or the personal property contained in a residential property risk, solely because of the age of the residential property. (h)(1) For purposes of  31-2231.12 or this section, the term valuable consideration shall not include any educational materials, promotional materials, or articles of merchandise that cost less than $75, regardless of whether a policy or contract is purchased. (2) For the purposes of this section, the term insurance shall include suretyship and the term policy shall include a bond. (3) This section shall not apply to wet marine and transportation insurance.  (Apr. 3, 2001, D.C. Law 13-265,  113, 48 DCR 1225; Oct. 3, 2001, D.C. Law 14-28,  2702(b), 48 DCR 6981; June 25, 2008, D.C. Law 17-177,  16(c), 55 DCR 3696; Feb. 22, 2019, D.C. Law 22-208,  2(b), 65 DCR 12369.)  Effect of Amendments D.C. Law 14-28 rewrote subsec. (d) which had read: (d) Notwithstanding any other provision in this section, an insurer shall not make or permit a differential in ratings, premium payments, or dividends based on the sex, physical handicap, or disability of an applicant or policyholder unless there is actuarial justification for the differential. D.C. Law 17-177, in subsec. (d), substituted sexual orientation, gender identity or expression for sexual orientation. Emergency Legislation For temporary (90 day) amendment section, see  2502(b) of Fiscal Year 2002 Budget Support Emergency Act of 2001 (D.C. Act 14-124, August 3, 2001, 48 DCR 7861).
 312231.14. Interlocking ownerships, management. (a) An insurer may retain, invest in, or acquire the whole or any part of the capital stock of any other insurer, or have a common management with another insurer, unless the retention, investment, acquisition, or common management is inconsistent with another provision of law, or, by reason thereof, the business of the insurers with the public is conducted in a manner which substantially lessens competition generally in the insurance business or tends to create a monopoly. (b) A person otherwise qualified may be a director of 2 or more insurers which are competitors unless the effect is to lessen substantially competition between insurers generally or tends materially to create a monopoly.  (Apr. 3, 2001, D.C. Law 13-265,  114, 48 DCR 1225.) 
 312231.15. Unfair financial planning practices; an insurance agent or broker. (a) No person shall hold himself or herself out, directly or indirectly, to the public as a financial planner, investment adviser, consultant, financial counselor, or any other specialist engaged in the business of giving financial planning or advice relating to investments, insurance, real estate, tax matters, or trust and estate matters if the person is in fact engaged only in the sale of insurance policies or contracts. (b)(1) No person shall engage in the business of financial planning without disclosing to the client before the execution of the agreement provided for in subsection (c) of this section or the solicitation of the sale of a product or service that: (A) He or she is also an insurance salesperson; and (B) A commission for the sale of an insurance product will be received in addition to a fee for financial planning, if it is the case. (2) The disclosure under this subsection may be made by including it in a disclosure document required by federal or state securities law. (c) All fees, other than commissions for financial planning by an insurance producer, shall be based upon a written agreement signed by the party to be charged in advance of the performance of the services under the agreement. A copy of the agreement shall be provided to the party to be charged at the time the agreement is signed by the party. The agreement shall specifically state: (1) The services for which the fee is to be charged; (2) The amount of the fee to be charged or the manner in which it will be determined; and (3) The client shall not be required to purchase an insurance product through the person furnishing the agreement. (d) The person furnishing the agreement shall retain a copy for at least 3 years after completion of services. A copy shall be available to the Commissioner upon request.  (Apr. 3, 2001, D.C. Law 13-265,  115, 48 DCR 1225.) 
 312231.16. Failure to provide claims history. (a) A property and casualty insurer shall provide the following loss information for the 3 previous policy years to the first named insured within 30 days of receipt of the first named insureds written request: (1) On all claims, the date and description of occurrence, and the total amount of payments; and (2) For any occurrence not included in paragraph (1) of this subsection, the date and description of the occurrence. (b) If the first named insured is requested by a prospective insurer to provide detailed loss information other than that required under subsection (a) of this section, the first named insured may mail or deliver a written request to the insurer for the additional information. No prospective insurer shall request more detailed loss information than is reasonably required to underwrite the same line or class of insurance. The insurer shall provide the information under subsection (a) of this section to the first named insured as soon as possible, but not later than 20 days after the receipt of the written request. Notwithstanding any other provision of this section, no insurer shall be required to provide loss reserve information, and no prospective insurer may refuse to insure an applicant, solely because the prospective insurer is unable to obtain loss reserve information. (c) The Commissioner may promulgate regulations to exclude the provision of the loss information as set forth in subsection (a) of this section for any line or class of insurance if it can be shown that the information is not needed for that line or class of insurance or if the provision of loss information is otherwise required by law. (d) Information provided under subsection (a) of this section shall not be subject to discovery by a party other than the insured, the insurer, and the prospective insurer.  (Apr. 3, 2001, D.C. Law 13-265,  116, 48 DCR 1225.) 
 312231.17. Unfair claim settlement practices. (a) No person shall commit or perform with such frequency as to indicate a general business practice any of the following: (1) Knowingly misrepresent pertinent facts or insurance policy provisions relating to the claim at issue; (2) Refuse to pay a claim for a reason that is arbitrary or capricious based on all available information; (3) Attempt to settle a claim on the basis of an application which is altered without notice to, or the knowledge or consent of, the insured; (4) Fail to include with a claim paid to an insured or beneficiary a statement setting forth the coverage under which payment is being made; (5) Fail to settle a claim promptly whenever liability is reasonably clear under one portion of a policy in order to influence settlements under other portions of the policy; or (6) Fail promptly upon request to provide a reasonable explanation of the basis for a denial of a claim. (b) No person shall commit or perform with such frequency as to indicate a general business practice any of the following: (1) Knowingly misrepresent pertinent facts or insurance policy provisions relating to coverage at issue; (2) Fail to acknowledge and act reasonably promptly upon communication with respect to claims arising under insurance policies; (3) Fail to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies; (4) Refuse to pay claims without conducting a reasonable investigation; (5) Fail to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed or after having completed its investigation related to the claims; (6) Not attempt in good faith to effectuate prompt, fair, and equitable settlement of claims submitted in which liability has become reasonably clear; (7) Compel insureds or beneficiaries to institute suits to recover amounts due under its policies by offering substantially less than the amounts ultimately recovered in actions brought by the insureds or beneficiaries; (8) Attempt to settle a claim for less than the amount to which a reasonable person would believe the insured or beneficiary was entitled by reference to written or printed advertising material accompanying or made part of an application or policy; (9) Attempt to settle claims on the basis of an application which was materially altered without notice to or knowledge or consent of the insured; (10) Make claims payments to an insured or beneficiary without indicating the coverage under which each payment is being made; (11) Make known to insureds or claimants of a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises of less than the amount awarded in arbitration; (12) Unreasonably delay the investigation or payment of claims by requiring both a formal proof of loss form and subsequent verification that would result in duplication of information and verification appearing in the formal proof of loss form; (13) Fail, in the case of claims denials or offers of compromise settlement, to promptly provide a reasonable and accurate explanation of the basis for such action; or (14) Make false or fraudulent statements or representations on, or relative to an application for, a policy, for the purpose of obtaining a fee, commission, money, or other benefit from a provider or individual person. (c) The Commissioner may impose a penalty of up to $1,000 for each violation of subsection (a) of this section or of a regulation promulgated under subsection (a) of this section. The Commissioner may impose a penalty for violations of subsection (b) of this section as provided in  31-4305,  31-2602.24 [repealed],  31-2502.03, and  31-1105.  (Apr. 3, 2001, D.C. Law 13-265,  117, 48 DCR 1225; Oct. 19, 2002, D.C. Law 14-213,  20(a), 49 DCR 8140.)  Effect of Amendments D.C. Law 14-213, in subsec. (c), validated a previously made technical correction.
 312231.18. Failure to maintain complaint handling procedures. An insurer shall maintain a complete record of all complaints which it has received since the date of its last examination as otherwise required in this chapter. The record shall indicate the total number of complaints, their classification by line of insurance, the nature of each complaint, the disposition of each complaint, and the time to process each complaint. For purposes of the section, the term complaint shall mean a written communication from a policyholder, subscriber, claimant, or insurance department primarily expressing a grievance.  (Apr. 3, 2001, D.C. Law 13-265,  118, 48 DCR 1225.) 
 312231.19. Misrepresentation in insurance application. (a) No person shall make false or fraudulent statements or representations on, or relative to, an application for an insurance policy for the purpose of obtaining a fee, commission, money, or other benefit from a provider or individual person. (b) No person shall cause to be presented a false or fraudulent claim, or proof in support of a claim, for the payment of the loss upon a contract of insurance or prepare, make, or subscribe a false or fraudulent account, certificate, affidavit, proof of loss, or other document or writing with the intent that it may be presented or used in support of a false or fraudulent claim.  (Apr. 3, 2001, D.C. Law 13-265,  119, 48 DCR 1225.) 
 312231.20. Favored agent or insurer; coercion of debtors. (a) No person shall require, as a condition to the lending of money or extension of credit, or a renewal thereof, that the person to whom the money or credit is extended, or whose obligation a creditor is to acquire or finance, negotiate an insurance policy or renewal thereof through a particular insurer or group of insurers or agent, broker, or group of agents or brokers. (b) No person who lends money or extends credit shall: (1) Solicit insurance for the protection of real property after a person indicates interest in securing a first mortgage credit extension until the person has received a commitment in writing from the lender as to a loan or credit extension; (2) Unreasonably reject an insurance policy provided by a borrower for the protection of property securing a credit or lien. A rejection shall not be unreasonable if it is based on reasonable standards and uniformly applied relating to the extent of coverage required and the financial soundness and the services of an insurer. The standards shall not discriminate against a particular type of insurer or reject a policy because it contains coverage in addition to that required in the credit transaction; (3) Require, directly or indirectly, that a debtor, borrower, mortgagor, purchaser, insurer, broker, or agent pay a separate charge or consideration in connection with the handling of an insurance policy required as security for a loan on real estate or pay a separate charge or consideration of any kind for substituting the insurance policy of one insurer for that of another. This prohibition shall not include the interest which may be charged on premium loans or premium advancements in accordance with the terms of the security instrument; (4) Use or disclose, without the prior written consent of the borrower, mortgagor, or purchaser taken at a time other than the making of the loan or extension of credit, information relative to an insurance policy which is required by the credit transaction for the purpose of replacing the insurance; or (5) Require a procedure or condition of duly licensed agents, brokers, or insurers not customarily required of agents, brokers, or insurers affiliated, or in any way connected, with the person who lends money or extends credit. (c) A person who lends money or extends credit and who solicits insurance on real and personal property shall explain to the borrower in writing that the insurance related to the credit extension may be purchased from an insurer or agent of the borrowers choice, subject only to the lenders right to reject a given insurer or agent as provided in subsection (b)(2) of this section. Compliance with disclosures as to insurance required by truth-in-lending laws or comparable state laws shall constitute compliance with this subsection. (d) The Commissioner may examine and investigate those insurance-related activities of a person or insurer that the Commissioner believes may be in violation of this section. A affected person may submit to the Commissioner a complaint or material pertinent to the enforcement of this section. (e) Nothing herein shall prevent a person who lends money or extends credit from placing insurance on real or personal property if the mortgagor, borrower, or purchaser has failed to provide required insurance in accordance with the terms of the loan or credit document. (f) Nothing contained in this section shall apply to credit life or credit accident and health insurance.  (Apr. 3, 2001, D.C. Law 13-265,  120, 48 DCR 1225.) 
 312231.20a. Prohibition on offsetting short-term disability benefits.  *NOTE: This section includes amendments by emergency legislation that will expire on January 23, 2023. To view the text of this section after the expiration of all emergency and temporary legislation affecting this section, click this link: Permanent Version.*  (a) No insurer may offset or reduce benefits or income available to an eligible individual under an individual or group policy for temporary or short-term disability insurance based on estimated or actual benefits the eligible individual may or does receive under subchapter IV of Chapter 5 of Title 32, regardless of the jurisdiction in which the policy was issued, executed, written, or delivered. (b) Subsection (a) of this section shall not apply to the actions of a self-insured employer or to the actions of an insurer to the extent the insurer is acting on behalf of a self-insured employer as a third-party administrator for the self-insured employer. (c) For the purposes of this section, the term: (1) "Eligible individual" shall have the same meaning as provided in  32-541.01(6). (2) "Self-insured employer" shall have the same meaning as provided in  32-541.01(19A).  (Apr. 3, 2001, D.C. Law 13-265,  120a; as added Nov. 13, 2021, D.C. Law 24-45,  4067, 68 DCR 010163; Oct. 25, 2022, D.C. Act 24-594,  3, 0 DCR 0.)  Emergency Legislation  For temporary (90 days) amendment of this section, see  3 of Short-Term Disability Insurance Benefit Protection Clarification Congressional Review Emergency Amendment Act of 2022 (D.C. Act 24-594, Oct. 25, 2022, 0 DCR 0).   For temporary (90 days) amendment of this section, see  3(b) of Short-term Disability Insurance Benefit Protection Clarification Emergency Amendment Act of 2022 (D.C. Act 24-542, July 27, 2022, 0 DCR 0).   For temporary (90 days) creation of this section, see  4067 of Fiscal Year 2022 Budget Support Emergency Act of 2021 (D.C. Act 24-159, Aug. 23, 2021, 68 DCR 008602).   For temporary (90 days) creation of this section, see  3 of Short-term Disability Insurance Benefit Protection Emergency Amendment Act of 2021 (D.C. Act 24-90, May 26, 2021, 68 DCR 005853).  Temporary Legislation  For temporary (225 days) creation of this section, see  3 of Short-term Disability Insurance Benefit Protection Temporary Amendment Act of 2021 (D.C. Law 24-18, July 29, 2021, 68 DCR 006100). 
 312231.21. Twisting prohibited. No person shall make or issue, or cause to be made or issued, a written or oral statement misrepresenting or making incomplete comparisons as to the terms, conditions, or benefits contained in a policy for the purpose of inducing or attempting or tending to induce the policyholder to lapse, forfeit, surrender, retain, exchange, or convert an insurance policy.  (Apr. 3, 2001, D.C. Law 13-265,  121, 48 DCR 1225.) 
 312231.22. Powers of the Commissioner; cease and desist orders. (a) The Commissioner may examine and investigate the affairs of a person engaged in the business of insurance in the District of Columbia to determine whether the person has been or is engaged in an unfair trade practice, an unfair method of competition, or an unfair or deceptive action practice under this chapter. The Commissioner may suspend or revoke the license or certificate of authority for a person that violates this chapter or a rule or regulation adopted under this chapter, or fails to comply with an order of the Commissioner. (b)(1) The Commissioner may enforce this chapter, or any rules and regulations adopted under this chapter, by issuing an order: (A) To cease and desist from the violation and further similar violations; and (B) Requiring the violator to correct the violation, including the restitution of money or property to a person aggrieved by the violation. (2) If a violator fails to comply with an order issued under paragraph (1) of this subsection, the Commissioner may impose a civil penalty of up to $1,000 for each violation from which the violator failed to cease and desist or which the violator failed to correct. (c) The Commissioner may request the Corporation Counsel of the District of Columbia [Attorney General for the District of Columbia] (Corporation Counsel) take appropriate action in the Superior Court of the District of Columbia (Superior Court) for the enforcement of an order issued under this section. The Corporation Counsel may also seek, and the Superior Court may order or decree, damages and other relief allowed by law, including restitution. In an action brought by the Corporation Counsel under this section, the Corporation Counsel may be awarded attorneys fees and costs. (d) In determining the amount of financial penalty to be imposed under subsection (b) of this section, the Commissioner shall consider the following: (1) The seriousness of the violation; (2) The good faith of the violator; (3) The violators history of previous violations; (4) The deleterious effect of the violation on the public and the insurance industry; (5) The assets of the violator; and (6) Any other factor relevant to the determination of the financial penalty.  (Apr. 3, 2001, D.C. Law 13-265,  122, 48 DCR 1225.)  Section References This section is referenced in  31-2231.23 and  31-2231.24.
 312231.23. Hearings. (a) Before the Commissioner takes an action under  31-2231.22, the Commissioner shall provide the person alleged to have violated this chapter an opportunity for a hearing. (b) Notice of the hearing shall be given, and the hearing shall be held, in accordance with  2-509 and 2-510. (c) The hearing notice shall be served at the persons principal place of business by certified mail, return receipt requested, at least 30 days before the hearing. (d) The Commissioner may administer oaths or affirmations, examine and cross-examine witnesses, receive oral and documentary evidence, and shall have the power to subpoena witnesses, compel their attendance, and require the production of books, papers, records, correspondence, or other documents deemed relevant to the matter at issue. (e) In the case of a refusal of a person to comply with any subpoena issued or to testify with respect to any matter upon which the person may be lawfully interrogated, the Superior Court, on application of the Commissioner, may issue an order requiring the person to comply with the subpoena or to testify.  (Apr. 3, 2001, D.C. Law 13-265,  123, 48 DCR 1225.)  Section References This section is referenced in  31-2231.24.
 312231.24. Judicial review. If, after any hearing under  31-2231.23, the Commissioner does not find a violation of this chapter, an aggrieved person may, within 60 days after the decision has been issued, or later in connection with  31-2231.11(a), (b), or (b-1) upon a showing of good cause by a victim of an intrafamily offense, sexual assault, dating violence, or stalking, appeal the decision of the Commissioner to the District of Columbia Court of Appeals. In addition, any person subject to an order of the Commissioner under  31-2231.22 may obtain a review of the order by filing in the District of Columbia Court of Appeals, within 60 days after the order has been issued, a written petition requesting that the order of the Commissioner be set aside. Except as provided above for the time for filing an appeal, appeals shall be made in accordance with  2-510.  (Apr. 3, 2001, D.C. Law 13-265,  124, 48 DCR 1225; Apr. 8, 2011, D.C. Law 18-360,  202(b), 58 DCR 896.)  Effect of Amendments D.C. Law 18-360 substituted issued, or later in connection with  31-2231.11(a), (b), or (b-1) upon a showing of good cause by a victim of an intrafamily offense, sexual assault, dating violence, or stalking, appeal for issued, appeal. Editor's Notes Section 203 of D.C. Law 18-360 provided: Sec. 203. Application. This title shall apply to policies and certificates of insurance that are health benefit plans as defined under section 2(4) of the Health Insurance Coverage for Habilitative Services for Children Act of 2006, effective March 2, 2007 (D.C. Law 16-198; D.C. Official Code  31-3271(4)), that are issued 90 days after the effective date of this title. This title shall not apply to short-term limited duration health benefit plans.
 312231.25. Regulations. The Commissioner may, in accordance with  2-505, promulgate reasonable rules, regulations, or orders as are necessary or appropriate to carry out and effectuate the provisions of this chapter.  (Apr. 3, 2001, D.C. Law 13-265,  125, 48 DCR 1225.) 
 312301. Definitions. For purposes of this chapter, the term: (1) Domestication means the reorganization under this chapter of the United States branch of a Non-U.S. insurer whereby a domestic or foreign insurer acquires all the business and assets and assumes all the liabilities of the branch. (2) Domestic insurer means a stock insurance company incorporated under the laws of the District of Columbia. (3) Foreign insurer means a stock insurance company incorporated under the laws of any other state of the United States. (4) Non-U.S. insurer means a stock insurance company organized under the laws of a foreign country. (5) United States branch means the business unit through which business is transacted within the United States by a Non-U.S. insurer and the assets and liabilities of the insurer within the United States pertaining to such business.  (Oct. 21, 2000, D.C. Law 13-194,  2, 47 DCR 7427.) 
 312302. Domestication permitted. (a)(1) Upon compliance with this chapter, a Non-U.S. insurer which is authorized to use the District of Columbia (District) as a state of entry to transact insurance business through its United States branch and which owns beneficially, directly or indirectly, all outstanding shares of a domestic insurer or of a foreign insurer qualified and licensed in the District to write all the kinds of insurance for which the United States branch is qualified and licensed, may domesticate its United States branch by entering into a written domestication agreement with such domestic or foreign insurer providing for the acquisition of the business and assets, and the assumption of all liabilities, of the United States branch, by the domestic or foreign insurer for no consideration, except for (A) such assumption of liabilities, and (B) additional consideration payable by the issuance of shares of the acquiring insurer. (2) The domestication shall be subject to prior written approval by the Commissioner if the acquiring insurer is a domestic insurer or by the chief insurance regulatory official of the state of organization if it is a foreign insurer. (3) The domestication shall be subject to final approval by the Commissioner if the acquiring insurer is a domestic insurer or by the chief insurance regulatory official of the state of organization if it is a foreign insurer. (b) Any shares of the acquiring insurer, or voting trust certificates therefor, held among the trusteed assets of the United States branch or held in a trust created by the Non-U.S. insurer of which the Non-U.S. insurer is a beneficiary shall be deemed to be shares held beneficially, but indirectly, by the Non-U.S. insurer. (c) The acquiring insurer may be licensed to engage in the insurance business in the District either before entering into the domestication agreement or, if the Commissioner approves, effective with consummation of the domestication agreement in accordance with  31-2306. (d) This chapter shall not be construed to (1) authorize an insurance company to do any kind of insurance business not authorized by its charter, or (2) authorize a foreign or Non-U.S. insurer to do any kind of insurance business in the District not authorized by its license or certificate of authority to do business in the District.  (Oct. 21, 2000, D.C. Law 13-194,  3, 47 DCR 7427.)  Section References This section is referenced in  31-2303 and  31-2305.
 312303. Prior written approval of domestication agreement. An acquisition of assets and assumption of liabilities under  31-2302(a) shall be initiated by filing with the Commissioner, for prior written approval as required by  31-2302(a)(2), a copy of the domestication agreement, executed by the Non-U.S. insurer and the acquiring insurer, in a form satisfactory to (1) the Commissioner if the acquiring insurer is a domestic insurer, or (2) both the Commissioner and the chief insurance regulatory official of the state of organization if the acquiring insurer is a foreign insurer. If he is satisfied that the domestication agreement complies with this chapter and that the interests of policyholders and creditors of the United States branch are not materially adversely affected, the Commissioner may approve the domestication agreement, subject to a subsequent review and final approval as required under  31-2302(a)(3) and 6 [ 31-2305].  (Oct. 21, 2000, D.C. Law 13-194,  4, 47 DCR 7427.) 
 312304. Authorization and execution of domestication agreement. (a) A domestication agreement shall be authorized, adopted, approved, executed, and acknowledged by the Non-U.S. insurer under the laws of the country where it is organized. (b) A domestication agreement shall also be approved, adopted, and authorized by the acquiring insurers board of directors, executed by its president or any vice president, and attested by its secretary or assistant secretary under its corporate seal, or, in the case of a foreign insurer, as otherwise provided in the laws of the state of its organization.  (Oct. 21, 2000, D.C. Law 13-194,  5, 47 DCR 7427.) 
 312305. Final approval by Commissioner. (a) The following shall be submitted to the Commissioner for final approval of the domestication agreement as required under  31-2302(a)(3): (1) An executed counterpart of the domestication agreement; (2) Certified copies of the corporate proceedings of the acquiring insurer and the Non-U.S. insurer approving, adopting, and authorizing the execution of the domestication agreement; (3) A certification by an officer of the United States branch that the domestication agreement satisfies the requirements of this chapter; and (4) In the case of a foreign insurer, the written approval of the chief insurance regulatory official of the state in which the foreign insurer is organized. (b) If he is satisfied that the domestication agreement complies with this chapter, that all the required documents have been submitted, and that the interests of policyholders and creditors of the United States branch are not materially adversely affected, the Commissioner may approve, as required under  31-2302(a)(3), the domestication agreement.  (Oct. 21, 2000, D.C. Law 13-194,  6, 47 DCR 7427.)  Section References This section is referenced in  31-2303 and  31-2306.
 312306. Consummation of domestication agreement; transfer of deposits; withdrawal of trusteed assets. (a)(1) The domestication of the United States branch shall be effective upon the final approval of the Commissioner of the domestication agreement under  31-2305 (consummation). (2)(A) All assets of the United States branch, including all its rights and property, shall be deemed transferred to, and vested in, the acquiring insurer and the acquiring insurer shall be deemed to have assumed all liabilities of the United States branch. (B) All deposits of the United States branch held by commissioners, state officers, or other state regulatory agencies under state laws, shall be deemed held as security for the full performance by the acquiring insurer of its assumption as direct liabilities of all of the liabilities to policyholders and creditors within the United States of the United States branch, and the deposits shall be deemed admitted assets of the acquiring insurer and reported as such in its annual financial statements and other reports required to be filed by it in the District. (3) Upon the ultimate release by a state officer or agency of deposits described in paragraph (2)(B) of this subsection, the securities and cash released shall be delivered and paid over to the acquiring insurer as the lawful successor in interest to the United States branch. (b) Contemporaneously with the consummation of the domestication, notwithstanding  31-2203 and 31-2204, the Commissioner shall: (1) Transfer to the acquiring insurers account the securities deposited by the United States branch in compliance with this chapter; and (2) Consent to the withdrawal from the trust by the trustee of the trusteed assets deposited by the United States branch in compliance with this chapter and the transfer and delivery to the acquiring insurer of all assets held by the trustee; provided, that if a United States branch is domesticated into a foreign insurer, the Commissioner, unless otherwise satisfied that the interests of policyholders of in force business and of creditors on outstanding claims are protected, may defer consent to the withdrawal of so much of the trusteed assets as in the Commissioners judgment is reasonably required to protect such interests as of the date of domestication, and shall consent to their withdrawal from time to time as such interests expire.  (Oct. 21, 2000, D.C. Law 13-194,  7, 47 DCR 7427.)  Section References This section is referenced in  31-2302.
 312307. Regulations. The Commissioner may, in accordance with  2-505, promulgate rules, regulations, and orders as are necessary or appropriate to carry out the provisions of this chapter. The Council may approve or disapprove any rules, regulations, or orders promulgated by the Commissioner within 30 days after the date transmitted to the Council. If no action is taken by the Council, the rules, regulations, or orders shall be deemed to be approved.  (Oct. 21, 2000, D.C. Law 13-194,  8, 47 DCR 7427.) 
 312351.01. Definitions. For the purposes of this chapter, the term: (1) "Administrator" means the person who is responsible for the administration of the service contracts or the service contracts plan or responsible for submissions required by this chapter. (2) "Commissioner" means the Commissioner of the Department of Insurance, Securities, and Banking, as established by subchapter I of Chapter 1 of this title. (3) "Consumer" means a natural person who buys, other than for purposes of resale, any property that is distributed in commerce and that is normally used for personal, family, or household purposes and not for business or research purposes. (4) "Maintenance agreement" means a contract of limited duration that provides for scheduled maintenance only and does not include repair or replacement. (5) "Motor Vehicle Manufacturer" means a person that: (A) Manufactures or produces motor vehicles and sells motor vehicles under its own name or label; (B) Is a wholly owned subsidiary of the person who manufactures or produces motor vehicles; (C) Is a corporation that owns 100% of the person who manufactures or produces motor vehicles; (D) Does not manufacture or produce motor vehicles, but sells motor vehicles under the trade name or label of another person who manufactures or produces motor vehicles; (E) Manufactures or produces motor vehicles and sells such motor vehicles under the trade name or label of another person who manufactures or produces motor vehicles; or (F) Does not manufacture or produce motor vehicles but, pursuant to a written contract, licenses the use of its trade name or label to another person who manufactures or produces motor vehicles that sells motor vehicles under the licensor's trade name or label. (6) "Premium" means the consideration paid to an insurer for a reimbursement insurance policy. (7) "Provider" means a person that is contractually obligated to the service contract holder under the terms of the service contract. (8) "Provider fee" means the consideration paid for a service contract. (9) "Reimbursement insurance policy" means a policy of insurance issued to a provider to either provide reimbursement to the provider under the terms of the insured service contracts issued or sold by the provider or, in the event of the provider's non-performance, to pay on behalf of the provider all covered contractual obligations incurred by the provider under the terms of the insured service contracts issued or sold by the provider. (10)(A) "Service contract" means a contract or agreement for a separately stated consideration for any duration to perform the repair, replacement, or maintenance of property or indemnification for service repair, replacement, or maintenance for the operational or structural failure of any motor vehicle or residential or other property due to a defect in materials, workmanship, accidental damage from handling, or normal wear and tear, or to indemnify for the same, including towing, rental, and emergency road service and road hazard protection, and which may provide for the service repair, replacement, or maintenance of property for damage resulting from power surges or interruption. The term "service contract" includes a contract or agreement sold for a separately stated consideration for a specific duration that provides for: (i) The repair or replacement or indemnification for the repair or replacement of a motor vehicle for the operational or structural failure of one or more parts or systems of the motor vehicle brought about by the failure of an additive product to perform as represented; (ii) The repair or replacement of tires or wheels on a motor vehicle damaged as a result of coming into contact with road hazards, including potholes, rocks, wood debris, metal parts, glass, plastic, curbs, or composite scrap; (iii) The removal of dents, dings, or creases on a motor vehicle that can be repaired using the process of paintless dent removal without affecting the existing paint finish and without replacing vehicle body panels or sanding, bonding, or painting; (iv) The repair of chips or cracks in or the replacement of motor vehicle windshields as a result of damage caused by road hazards; (v) The repair of damage to the interior components of a motor vehicle caused by wear and tear but which expressly excludes the replacement of any part or component of a motor vehicle's interior; (vi) The replacement of a motor vehicle key or key-fob in the event that the key or key-fob becomes inoperable or is lost or stolen; or (vii) Other services or products that may be approved by the Commissioner. (B) The term "service contract" does not include insurance as regulated under subchapter I of Chapter 1 of this title, except as addressed in  31-2351.10. (11) "Service contract holder" or "contract holder" means a person who is the purchaser or holder of a service contract. (12) "Warranty" means a warranty made solely by the manufacturer, importer, or seller of property or services without consideration that is not negotiated or separated from the sale of the product and is incidental to the sale of the product that guarantees indemnity for defective parts, mechanical or electrical breakdown, labor, or remedial measures, such as repair or replacement of the property or repetition of services.  (Feb. 22, 2019, D.C. Law 22-216,  2, 65 DCR 12963.) 
 312351.02. Scope. (a) The following are exempt from this chapter: (1) Warranties; (2) Maintenance agreements; (3) Warranties, service contracts, or maintenance agreements offered by public utilities on their transmission devices to the extent they are regulated by the Public Service Commission; (4) Service contracts sold or offered for sale to persons other than consumers; and (5) Service contracts on tangible property where the tangible property for which the service contract is sold has a purchase price of $100 or less, exclusive of sales tax. (b) Motor vehicle manufacturer's service contracts on the motor vehicle manufacturer's products need only comply with  31-2351.03(h)(1), 31-2351.04(a), 31-2351.05(d) through (l), 31-2351.06, and 31-2351.10, as applicable. Motor vehicle manufacturers are exempt from the registration requirement of  31-2351.03(d). (c) The types of agreements referred to in this section and service contracts governed pursuant to this chapter are not insurance.  (Feb. 22, 2019, D.C. Law 22-216,  3, 65 DCR 12963.) 
 312351.03. Requirements for doing business. (a) A provider may, but shall not be required to, appoint an administrator or other designee to be responsible for any or all of the administration of service contracts and compliance with this chapter. (b) Service contracts shall not be issued, sold, or offered for sale unless the provider has: (1) Provided a receipt for, or other written evidence of, the purchase of the service contract to the contract holder; and (2) Provided a copy of the service contract to the service contract holder within a reasonable period of time from the date of purchase. (c)(1) A provider shall provide a consumer with a complete sample copy of the service contract terms and conditions before the time of sale upon a request by the consumer. (2) A provider shall be in compliance with this subsection by providing the consumer with a complete sample copy of the terms and conditions or by directing the consumer to a website containing a complete sample of the terms and conditions of the service contract. (d)(1) Each provider of a service contract sold in the District shall: (A) File a registration with the Commissioner that includes the provider's name, full corporate address, telephone number, and contact person; and (B) Designate a person in the District for service of process. (2) A provider shall pay to the Commissioner a fee in the amount of $200 upon initial registration and every year thereafter. (3) A provider shall update its registration by written notification to the Commissioner when material changes occur in the registration on file. (e) To assure the faithful performance of a provider's obligations to its contract holders, each provider shall be responsible for complying with the requirements of one of the following 3 paragraphs: (1) Insure all service contracts under a reimbursement insurance policy issued by an insurer licensed, registered, or otherwise authorized to do business in the District, and: (A) At the time the policy is filed with the Commissioner, and continuously thereafter: (i) Maintain surplus as to policyholders and paid-in capital of at least $15 million; and (ii) Annually file copies of the insurer's financial statements, its National Association of Insurance Commissioners ("NAIC") annual statement, and the actuarial certification required by and filed in the insurer's state of domicile; or (B) At the time the policy is filed with the Commissioner, and continuously thereafter: (i) Maintain surplus as to policyholders and paid-in capital of less than $15 million but at least $10 million; (ii) Demonstrate to the satisfaction of the Commissioner that the company maintains a ratio of net written premiums, wherever written, to surplus as to policyholders and paid-in capital of not greater than 3 to 1; and (iii) Annually file copies of the insurer's audited financial statements, its NAIC annual statement, and the actuarial certification required by and filed in the insurer's state of domicile; (2)(A) Maintain a funded reserve account for its obligations under its contracts issued and outstanding in the District; provided, that reserves shall not be less than 40% of gross consideration received, less claims paid, on the sale of the service contract for all in-force contracts; provided further, that such funded reserve account shall be subject to examination and review by the Commissioner; and (B) Place in trust with the Commissioner a financial security deposit, having a value of not less than 5% of the gross consideration received, less claims paid, on the sale of the service contract for all service contracts issued and in force, but not less than $25,000, consisting of one of the following: (i) A surety bond issued by an authorized surety; (ii) Securities of the type eligible for deposit by authorized insurers in the District; (iii) Cash; (iv) A letter of credit issued by a qualified financial institution; or (v) Another form of security prescribed by regulation issued by the Mayor or Commissioner; or (3)(A) Maintain, or together with its parent company maintain, a net worth or stockholders' equity of $100 million; and (B)(i) Upon request, provide the Commissioner with a copy of the provider's, or the provider's parent company's, most recent Form 10-K or Form 20-F filed with the Securities and Exchange Commission ("SEC") within the last calendar year, or, if the company does not file with the SEC, a copy of the company's audited financial statement that shows a net worth of the provider or its parent company of at least $100 million. (ii) If the provider's parent company's Form 10-K, Form 20-F, or audited financial statement is filed to meet the provider's financial stability requirement, then the parent company shall agree to guarantee the obligations of the provider relating to service contracts sold by the provider in the District. (f) Except for the requirements specified in subsections (d) and (e) of this section, no other financial security requirements shall be required by the Commissioner for service contract providers. (g)(1)(A) Service contracts shall require the provider to permit the service contract holder to return the service contract within 30 days of the date the service contract was mailed to the service contract holder, or the date of delivery if the service contract is delivered to the service contract holder at the time of sale, or within a longer time period permitted under the service contract. (B) Upon return of the service contract to the provider within the applicable time period, if no claim has been made under the service contract prior to its return to the provider, the service contract shall be void and the provider shall refund to the service contract holder, or credit the account of the service contract holder, with the full purchase price of the service contract. (C) The right to void the service contract provided by this subsection shall not be transferable and shall apply only to the original service contract purchaser and only if no claim has been made prior to its return to the provider. (D) A 10% penalty per month shall be added to a refund that is not paid or credited within 45 days after return of the service contract to the provider. (2)(A) Subsequent to the time period specified in paragraph (1) of this subsection or if a claim has been made under the service contract within that time period, a service contract holder may cancel the service contract and the provider shall refund to the contract holder 100% of the unearned pro rata provider fee, less any claims paid and administrative fee charged, as authorized by subparagraph (B) of this paragraph. (B) A reasonable administrative fee may be charged by the provider not to exceed 10% of the gross provider fee paid by the service contract holder. (h)(1) Provider fees collected on service contracts shall not be subject to premium taxes. (2) Premiums for reimbursement insurance policies shall be subject to applicable taxes. (i) Except for the registration requirements in subsection (d)(1) of this section, providers and related service contract sellers, administrators, and other persons marketing, selling, or offering to sell service contracts shall be exempt from any licensing requirements of the District.  (Feb. 22, 2019, D.C. Law 22-216,  4, 65 DCR 12963.) 
 312351.04. Required disclosures  reimbursement insurance policy. (a) Reimbursement insurance policies insuring service contracts issued, sold, or offered for sale shall state that the insurer that issued the reimbursement insurance policy shall reimburse or pay on behalf of the provider any covered sums the provider is obligated to pay or, in the event of the provider's non-performance, shall provide the service that the provider is legally obligated to perform according to the provider's contractual obligations under the service contracts issued or sold by the provider. (b) If covered service is not provided by the service contract provider within 60 days of proof of loss by the service contract holder, the contract holder shall be entitled to apply directly to the reimbursement insurance company.  (Feb. 22, 2019, D.C. Law 22-216,  5, 65 DCR 12963.) 
 312351.05. Required disclosure  service contracts. (a) Service contracts marketed, sold, offered for sale, issued, or made or proposed to be made, or administered in the District shall be written, printed, or typed in eight-point type size, or larger and shall disclose the requirements set forth in this section, as applicable. (b)(1) Service contracts insured under a reimbursement insurance policy pursuant to  31-2351.03(e)(1) shall contain a statement that reads in substantially the following form: "Obligations of the provider under this service contract are insured under a service contract reimbursement insurance policy.". (2) The service contract shall also state the name and address of the insurer. (c) Service contracts not insured under a reimbursement insurance policy pursuant to  31-2351.03(e)(1) shall contain a statement that reads in substantially the following form: "Obligations of the provider under this service contract are backed by the full faith and credit of the provider.". (d) Service contracts shall state the name and address of the provider and shall identify the administrator, if different from the provider, the service contract seller, and the service contract holder to the extent that the name of the service contract holder has been furnished by the service contract holder. The identities of these parties are not required to be preprinted on the service contract and may be added to the service contract at the time of sale. (e) Service contracts shall state the total purchase price and the terms under which the service contract is sold. The purchase price is not required to be pre-printed on the service contract and may be negotiated at the time of sale with the service contract holder. (f) Service contracts shall state the existence of any deductible amount. (g) Service contracts shall specify the merchandise and services to be provided and any limitations, exceptions, or exclusions. (h) Service contracts covering motor vehicles shall state whether the use of non-original manufacturers' parts is allowed. (i) Service contracts shall state any restrictions governing the transferability of the service contract. (j)(1) Service contracts shall state the terms, restrictions, and conditions governing cancellation of the service contract prior to the termination or expiration date of the service contract by either the provider or the service contract holder. (2) The provider of the service contract shall mail a written notice to the contract holder at the last known address of the service contract holder contained in the records of the provider at least 5 days before cancellation by the provider; except, that prior notice shall not be required if the reason for cancellation is nonpayment of the provider fee, a material misrepresentation by the service contract holder to the provider, or a substantial breach of duties by the service contract holder relating to the covered product or its use. (3)(A) The notice required by this subsection shall state the effective date of the cancellation and the reason for the cancellation. (B) If a service contract is cancelled by the provider for a reason other than nonpayment of the provider fee, the provider shall refund to the contract holder 100% of the unearned pro rata provider fee, less any claims paid. (C) A reasonable administrative fee may be charged by the provider not to exceed 10% of the gross provider fee paid by the service contract holder. (k) Service contracts shall set forth all of the obligations and duties of the service contract holder, such as the duty to protect against any further damage and any requirement to follow an owner's manual. (l) Service contracts shall state whether or not the service contract provides for or excludes consequential damages or pre-existing conditions. Service contracts may, but shall not be required to, cover damage resulting from rust, corrosion, or damage caused by a non-covered part or system.  (Feb. 22, 2019, D.C. Law 22-216,  6, 65 DCR 12963.) 
 312351.06. Prohibited acts. (a)(1) A provider shall not use in its name the words insurance, casualty, surety, mutual, or any other words descriptive of the insurance, casualty, or surety business, or a name deceptively similar to the name or description of any insurance, casualty, or surety organization, or to the name of any other provider. The word "guaranty" or similar word may be used by a provider. (2) This section shall not apply to a company that was using any of the prohibited language in its name prior to 180 days after February 22, 2019; provided, that a company using the prohibited language in its name shall include in its service contracts a statement that reads in substantially the following form: "This agreement is not an insurance contract.". (b) A provider or its representative shall not in its service contracts or literature make, permit, or cause to be made any false or misleading statement or deliberately omit any material statement that would be considered misleading if omitted. (c) A person, such as a bank, savings and loan association, lending institution, manufacturer, or seller of any product, shall not require the purchase of a service contract as a condition of a loan or a condition for the sale of any property. (d) A motor vehicle service contract provider or its representative shall not, directly or indirectly, represent in any manner, whether by written solicitation or telemarketing, a false, deceptive, or misleading statement with respect to: (1) The provider's affiliation with a motor vehicle manufacturer; (2) The provider's possession of information regarding a motor vehicle owner's current motor vehicle manufacturer's original equipment warranty; (3) The expiration of a motor vehicle owner's current motor vehicle manufacturer's original equipment warranty; or (4) A requirement that a motor vehicle owner register for a new motor vehicle service contract with the provider in order to maintain coverage under the motor vehicle owner's current motor vehicle service contract or manufacturer's original equipment warranty. (e)(1) A provider or a seller shall not include an automatic renewal provision within a service contract offered in the District unless the provider or seller: (A) In the case of in-person or online sales, discloses the terms of the automatic renewal provision in a clear and conspicuous manner in visual proximity to the request for consent to the automatic renewal provision and the consumer consents to the terms of the automatic renewal provision through the consumer's signature or electronic acknowledgment; or (B) In the case of telephonic sales, on a recorded call, which shall be made available to the Department of Insurance, Securities, and Banking at its request, discloses the terms of the automatic renewal provision in a clear and conspicuous manner in temporal proximity to the request for consent to the automatic renewal provision and the consumer consents to the terms of the automatic renewal provision. (2) For the purposes of this subsection, "automatic renewal provision" means a provision under which a service contract is renewed for a specified period of more than one month if the renewal causes the service contract to be in effect more than 6 months after the day of the initiation of the service contract and such renewal is effective unless the consumer gives notice to the provider or administrator of the consumer's intention to terminate the service contract.  (Feb. 22, 2019, D.C. Law 22-216,  7, 65 DCR 12963.) 
 312351.07. Record keeping requirements. (a) A provider must keep accurate accounts, books, and records concerning transactions regulated under this chapter and shall include: (1) A copy of each type of service contract sold; (2) The name and address of each service contract holder to the extent that the name and address have been furnished by the service contract holder; (3) For automobile or new property retail sales, a list of the locations where service contracts are marketed, sold, or offered for sale; and (4) Written claims files that shall contain, at a minimum, the dates and description of claims related to the service contracts. (b) Except as provided in subsection (d) of this section, the provider shall retain all records required to be maintained by this section for at least one year after the specified period of coverage has expired. (c) The records required under this chapter may be, but shall not be required to be, maintained on a computer disk or other record-keeping technology; provided, that if the records are maintained in other than hard copy, the records shall be capable of duplication to legible hard copy at the request of the Commissioner. (d) A provider discontinuing business in the District shall maintain its records until it furnishes the Commissioner satisfactory proof that it has discharged all obligations to contract holders in the District.  (Feb. 22, 2019, D.C. Law 22-216,  8, 65 DCR 12963.) 
 312351.08. Cancellation of reimbursement insurance policy. An insurer that issued a reimbursement insurance policy shall not terminate the policy until a notice of termination in accordance with  31-404, has been mailed or delivered to the Commissioner. The termination of a reimbursement insurance policy shall not reduce the issuer's responsibility for service contracts issued by providers prior to the date of the termination.  (Feb. 22, 2019, D.C. Law 22-216,  9, 65 DCR 12963.) 
 312351.09. Obligation of reimbursement insurance policy insurers. (a) Insurers issuing reimbursement insurance to providers are deemed to have received the premiums for the insurance upon the payment of provider fees by consumers for service contracts issued by the insured providers. (b) This chapter shall not prevent or limit the right of an insurer that issued a reimbursement insurance policy to seek indemnification or subrogation against a provider if the issuer pays or is obligated to pay the service contract holder sums that the provider was obligated to pay pursuant to the provisions of the service contract.  (Feb. 22, 2019, D.C. Law 22-216,  10, 65 DCR 12963.) 
 312351.10. Enforcement provisions. (a) The Commissioner may conduct examinations of providers, administrators, insurers, or other persons to enforce the provisions of this chapter and protect service contract holders in the District. Upon request of the Commissioner, the provider shall make all accounts, books, and records concerning a service contract sold by the provider available to the Commissioner that the Commissioner considers necessary to enable the Commissioner to reasonably determine compliance or noncompliance with this chapter. (b)(1) The Commissioner may take action that is necessary or appropriate to enforce the provisions of this chapter and regulations and orders issued pursuant to this chapter, and to protect service contract holders in the District. (2) If a provider has violated this chapter or a regulation or order issued pursuant to this chapter, the Commissioner may issue an order, or any combination of the following, that: (A) Orders the provider to cease and desist from committing the violation; (B) Prohibits the provider from selling or offering for sale service contracts in violation of this chapter or a regulation or order issued pursuant to this chapter; or (C) Imposes a civil penalty on the provider. (c)(1) A person aggrieved by a Commissioner's order issued pursuant to this subsection may request a hearing before the Commissioner; provided, that the request for a hearing shall be filed with the Commissioner within 20 days after the effective date of the Commissioner's order. (2) If a hearing is timely requested, the order at issue shall be suspended until completion of the hearing and a final decision of the Commissioner. (3)(A) At the hearing, the burden shall be on the Commissioner to show why the order issued pursuant to this subsection is justified. (B) The hearing shall be conducted according to the rules established in Subtitle A of Chapter 38 of Title 26 of the District of Columbia Municipal Rules (26 DCMR A3800 et seq.). (d) The Commissioner may bring an action in any court of competent jurisdiction for an injunction or other appropriate relief for a violation of this chapter or a regulation or order issued pursuant to this chapter. An action filed under this section may also seek restitution on behalf of a person aggrieved by a violation of this chapter or a regulation or order issued pursuant to this chapter. (e)(1) A person who is found to have violated this chapter or a regulation or order issued pursuant to this chapter may be assessed a civil penalty in an amount determined by the Commissioner of not more than $500 per violation and no more than $10,000 in the aggregate for all violations of a similar nature. (2) For purposes of this subsection, violations are of a similar nature if the violation consists of the same or similar course of conduct, action, or practice.  (Feb. 22, 2019, D.C. Law 22-216,  11, 65 DCR 12963.) 
 312351.11. Provider's conditional right to continue doing business. A person engaged in the service contract business, as a provider or otherwise, in the District on or before the applicability date of this chapter that submits an application for registration as a provider pursuant to this chapter within 30 days after the Commissioner makes the application available, may continue to engage in business as a provider in the District until final agency action is taken by the Commissioner regarding the registration application and all rights to administrative judicial review have been exhausted or expired.  (Feb. 22, 2019, D.C. Law 22-216,  12, 65 DCR 12963.) 
 312351.12. Rules. The Mayor, pursuant to Chapter 5 of Title 2, may issue rules to implement the provisions of this chapter.  (Feb. 22, 2019, D.C. Law 22-216,  13, 65 DCR 12963.) 
 312351.13. Applicability. This chapter shall apply 180 days after February 22, 2019.  (Feb. 22, 2019, D.C. Law 22-216,  14, 65 DCR 12963.)  Emergency Legislation  For temporary (90 days) creation of Subtitle II-B of this title, see title I of Appraisal Management Company Regulation Congressional Review Emergency Act of 2020 (D.C. Act 23-425, Oct. 7, 2020, 67 DCR 12837).   For temporary (90 days) creation of Subtitle II-B of this title, see title I of Appraisal Management Company Regulation Emergency Act of 2020 (D.C. Act 23-341, July 27, 2020, 67 DCR 9357).   For temporary (90 days) creation of Subtitle II-B of this title, see title I of Appraisal Management Company Regulation Congressional Review Emergency Act of 2019 (D.C. Act 23-144, Oct. 29, 2019, 66 DCR 14331).  Temporary Legislation  For temporary (225 days) creation of Subtitle II-B of this title, see title I of Appraisal Management Company Regulation Temporary Act of 2019 (D.C. Law 23-29, Nov. 26, 2019, 66 DCR 13124). 
 312361.01. Definitions.  For purposes of this chapter, the term: (1) "Affiliate" means any company that controls, is controlled by, or is under common control of another company. (2) "AMC National Registry" means the registry of state-registered appraisal management companies and federally regulated appraisal management companies maintained by the Appraisal Subcommittee. (3) "Appraisal Foundation" means the Appraisal Foundation established on November 30, 1987, as a not-for-profit corporation under the laws of Illinois. (4) "Appraisal management company" means a person, not including a department or division of an entity that provides appraisal management services only to that entity, that: (A)(i) Provides appraisal management services to creditors or to secondary mortgage market participants, including affiliates; or (ii) Provides appraisal management services in connection with valuing a consumer's principal dwelling as security for a consumer credit transaction or incorporating such transactions into securitizations; and (B) At any time in a 12-calendar month period oversees an appraiser panel of more than 15 state-certified or state-licensed appraisers in a state or 25 or more state-certified or state-licensed appraisers in 2 or more states, as described in  31-2361.03. (5) "Appraisal management services" means one or more of the following: (A) Recruiting, selecting, and retaining appraisers; (B) Contracting with state-certified or state-licensed appraisers to perform appraisal assignments; (C) Managing the process of having an appraisal performed, including providing administrative services such as receiving appraisal orders and appraisal reports, submitting completed appraisal reports to creditors and secondary market participants, collecting fees from creditors and secondary market participants for services provided, and paying appraisers for services performed; and (D) Reviewing and verifying the work of appraisers. (6)(A) "Appraisal panel" means a network, list, or roster of licensed or certified appraisers approved by an appraisal management company to perform appraisals as independent contractors for the appraisal management company. (B) Appraisers on an appraiser panel include both appraisers accepted by the appraisal management company for consideration for future appraisal assignments in covered transactions or for secondary mortgage market participants in connection with covered transactions, and appraisers engaged by the appraisal management company to perform one or more appraisals in covered transactions or for secondary mortgage market participants in connection with covered transactions. (C) An appraiser is an independent contractor or if the appraiser is treated as an independent contractor by the appraisal management company for purposes of federal income taxation. (7) "Appraisal review" means the act or process of developing and communicating an opinion about the quality of another appraiser's work that was performed as part of an appraisal assignment and is related to the appraiser's data collection, analysis, opinions, conclusions, estimate of value, or compliance with the uniform standards of professional appraisal practice. This term does not include: (A) A general examination for grammatical, typographical, or other similar errors; or (B) A general examination for completeness, including regulatory or client requirements as specified in the agreement process that does not communicate an opinion of value. (8) "Appraisal Subcommittee" means the Appraisal Subcommittee of the Federal Financial Institutions Examination Council. (9) "Consumer credit" means credit offered or extended to a consumer primarily for personal, family, or household purposes. (10) "Controlling person" means: (A) An officer, director, or owner of greater than a 10% interest of a corporation, partnership, or other business entity seeking to act as an appraisal management company; (B) An individual employed, appointed, or authorized by an appraisal management company that has the authority to enter a contractual relationship with other persons for the performance of services requiring registration as an appraisal management company and has the authority to enter agreements with appraisers for the performance of appraisals; or (C) An individual who possesses, directly or indirectly, the power to direct or cause the direction of the management of policies of an appraisal management company. (11) "Covered transaction" means any consumer credit transaction secured by the consumer's principal dwelling. (12) "Creditor" means a person who regularly extends consumer credit that is subject to a finance charge or is payable by written agreement in more than 4 installments (not including a down payment), and to whom the obligation is initially payable, either on the face of the note or contract, or by agreement when there is no note or contract. A person regularly extends consumer credit if, in any 12-month period, the person originates more than one credit extension for transactions secured by a dwelling. (13) "Department" means the Department of Insurance, Securities, and Banking. (14) "Dwelling" means a residential structure that contains one to 4 units, regardless of whether that structure is attached to real property. The term includes an individual condominium unit, cooperative unit, mobile home, and trailer, if it is used as a residence. (15) "Federal financial institutions regulatory agency" includes the Consumer Financial Protection Bureau, the Federal Housing Finance Agency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the National Credit Union Administration. (16) "Federally regulated appraisal management company" means an appraisal management company that is owned and controlled by an insured depository institution, as defined in section 3(c)(2) of the Federal Deposit Insurance Act, approved September 21, 1950 (64 Stat. 873; 12 U.S.C.  1813(c)(2)), and regulated by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, or the National Credit Union Administration. (17) "Federally regulated transaction regulations" means regulations established by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, or the National Credit Union Administration, pursuant to sections 1112, 1113, and 1114 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, approved August 9, 1989 (103 Stat. 183; 12 U.S.C.  3341-3343). (18) "Federally related transaction" means any real-estate-related financial transaction that involves an insured depository institution regulated by the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, or National Credit Union Administration and that requires the services of an appraiser under the interagency appraisal rules. (19) "Person" means a natural person or an organization, including a corporation, partnership, proprietorship, association, cooperative, estate, trust, or government unit. (20) "Principal dwelling" means the primary residence of a consumer. For purposes of this chapter, a consumer may only have one principal dwelling. A vacation or other second home shall not be considered a principal dwelling. However, if a consumer buys or builds a new dwelling that will become the consumer's primary residence within one year or upon completion of the construction, the new residence shall be considered the principal dwelling for purposes of this chapter. (21) "Real-estate-related financial transaction" means any transaction involving the sale, lease, purchase, investment in, or exchange of real property, including interests in property or the financing thereof, the refinancing of real property or interests in real property, or the use of real property or interests in property as security for a loan or investment, including mortgage-backed securities. (22) "Secondary mortgage market participant" means a guarantor or insurer of mortgage-backed securities, or an underwriter or issuer of mortgage-backed securities. The term includes an individual investor in a mortgage-backed security only if that investor also serves in the capacity of a guarantor, insurer, underwriter, or issuer for the mortgage-backed security. (23) "State" includes the District of Columbia. [(24)] "Uniform Standards of Professional Appraisal Practice" or "USPAP" means the appraisal standards as promulgated by the Appraisal Standards Board of the Appraisal Foundation.  (Mar. 16, 2021, D.C. Law 23-206,  101, 68 DCR 00057.)  Emergency Legislation  For temporary (90 days) creation of this section, see  101 of Appraisal Management Company Regulation Emergency Act of 2019 (D.C. Act 23-110, July 31, 2019, 66 DCR 178).  Temporary Legislation  For temporary (225 days) creation of this section, see  101 of Appraisal Management Company Regulation Temporary Act of 2020 (D.C. Law 23-140, Oct. 20, 2020, 67 DCR 9891). 
 312361.02. Administration. (a) The Department shall have the authority to adopt rules that are reasonably necessary to establish an appraisal management company licensing program and implement, administer, and enforce the provisions set forth in this chapter. (b) The Department shall charge appraisal management companies operating in the District reasonable fees to administer this chapter. The Department's fees shall be established by rule. (c) The Department shall perform the following functions: (1) Review and approve or deny an appraisal management company's application for initial registration in the District; (2) Periodically review and renew or review and deny an appraisal management company's registration; (3) Examine the books and records of an appraisal management company operating in the District and require the appraisal management company to submit reports, information, and documents; (4) Verify that the appraisers on the appraiser panel of an appraisal management company operating in the District hold valid District certifications or licenses, as applicable; (5) Conduct investigations of appraisal management companies operating in the District to assess potential violations of applicable appraisal-related laws, regulations, or orders; and (6) Report an appraisal management company's violation of applicable appraisal- related laws, regulations, or orders, as well as disciplinary and enforcement actions and other relevant information about the operations of an appraisal management company operating in the District. (d) The Department shall impose requirements on appraisal management companies operating in the District that are not owned and controlled by an insured depository institution and not regulated by a federal financial institutions regulatory agency to: (1) Register with and be subject to supervision by the Department; (2) Engage only state-certified or state-licensed appraisers for federally related transactions in conformity with any federally regulated transaction regulations; (3) Establish and comply with processes and controls reasonably designed to ensure that the appraisal management company, in engaging an appraiser, selects an appraiser who is independent of the transaction and who has the requisite education, expertise, and experience necessary to competently complete the appraisal assignment for the particular market and property type; (4) Direct appraisers to perform assignments in accordance with Uniform Standards of Professional Appraisal Practice; and (5) Establish and comply with processes and controls reasonably designed to ensure that the appraisal management company conducts its appraisal management services in accordance with the requirements of section 129E(a)-(i) of the Truth in Lending Act, approved July 21, 2010 (124 Stat. 2187; 15 U.S.C.  1639e(a)-(i)), and regulations thereunder. (e) The Department shall maintain a list of the appraisal management companies that are registered in the District. (f) The Department shall issue a unique registration number to each appraisal management company that is registered in the District pursuant to regulations or guidance promulgated by the Department. (g) The Department shall require an appraisal management company registered in the District to place its registration number on engagement documents utilized by the appraisal management company to procure appraisal services in the District.  (Mar. 16, 2021, D.C. Law 23-206,  102, 68 DCR 00057.)  Emergency Legislation  For temporary (90 days) creation of this section, see  102 of Appraisal Management Company Regulation Emergency Act of 2019 (D.C. Act 23-110, July 31, 2019, 66 DCR 178).  Temporary Legislation  For temporary (225 days) creation of this section, see  102 of Appraisal Management Company Regulation Temporary Act of 2020 (D.C. Law 23-140, Oct. 20, 2020, 67 DCR 9891). 
 312361.03. Appraisal panel size and calculation. (a) For purposes of determining whether a person is an appraisal management company within the meaning of  31-2361.01(4), an appraiser is deemed part of an appraiser panel as of the earliest date on which the person overseeing the appraisal panel: (1) Accepts the appraiser for consideration for future appraisal assignments in covered transactions or for secondary mortgage market participants in connection with covered transactions; or (2) Engages the appraiser to perform one or more appraisals on behalf of a creditor for covered transactions or secondary mortgage market participant in connection with covered transactions. (b) An appraiser who is deemed part of an appraiser panel pursuant to subsection (a) of this section is deemed to remain on the panel until the date on which the person overseeing the appraisal panel: (1) Sends written notice to the appraiser removing the appraiser from the appraiser panel, with an explanation of its action; or (2) Receives written notice from the appraiser asking to be removed from the appraiser panel or notice of the death or incapacity of the appraiser. (c) If an appraiser is removed from an appraiser panel pursuant to subsection (b)(2) of this section, but the person overseeing the appraisal panel subsequently accepts the appraiser for consideration for future assignments or engages the appraiser at any time during the 12 months after the appraiser's removal, the removal will be deemed not to have occurred, and the appraiser will be deemed to have been part of the appraiser panel without interruption.  (Mar. 16, 2021, D.C. Law 23-206,  103, 68 DCR 00057.)  Emergency Legislation  For temporary (90 days) creation of this section, see  103 of Appraisal Management Company Regulation Emergency Act of 2019 (D.C. Act 23-110, July 31, 2019, 66 DCR 178).  Temporary Legislation  For temporary (225 days) creation of this section, see  103 of Appraisal Management Company Regulation Temporary Act of 2020 (D.C. Law 23-140, Oct. 20, 2020, 67 DCR 9891). 
 312361.04. Registration. (a) It shall be unlawful for a person to directly or indirectly engage or to attempt to engage in business as an appraisal management company in the District, or to advertise or hold itself out as engaging in or conducting business as an appraisal management company in the District without first obtaining a registration issued by the Department. (b) An applicant for registration as an appraisal management company in the District shall submit to the Department an application on forms prescribed by the Department and pay a fee established by the Department. The forms shall require information necessary to determine eligibility for registration. (c) Upon registration of an appraisal management company in the District, the Department may require a surety bond of not more than $25,000.  (Mar. 16, 2021, D.C. Law 23-206,  104, 68 DCR 00057.)  Emergency Legislation  For temporary (90 days) creation of this section, see  104 of Appraisal Management Company Regulation Emergency Act of 2019 (D.C. Act 23-110, July 31, 2019, 66 DCR 178).  Temporary Legislation  For temporary (225 days) creation of this section, see  104 of Appraisal Management Company Regulation Temporary Act of 2020 (D.C. Law 23-140, Oct. 20, 2020, 67 DCR 9891). 
 312361.05. Reporting requirements. (a) The Department shall collect from each appraisal management company registered or seeking to be registered in the District the information and fees that the Department requires to be submitted to it pursuant to regulations or guidance promulgated by the Department. (b) A federally regulated appraisal management company operating in the District must report to the Department the information required to be submitted by the District to the Appraisal Subcommittee, pursuant to the Appraisal Subcommittee's policies regarding the determination of the appraisal management company AMC National Registry fee. These reporting requirements will be set forth by the Department by rule, and shall include: (1) A report to the Department on a form prescribed by the Department of intent to operate in the District of Columbia; and (2)(A) Information related to whether the appraisal management company is owned in whole or in part, directly or indirectly, by any person who has had an appraiser license or certificate refused, denied, canceled, surrendered in lieu of revocation, or revoked in any state for a substantive cause, as determined by the Appraisal Subcommittee; and (B) If a person has had such action taken on his or her appraisal license, information related to whether the license was revoked for a substantive cause and whether it has been reinstated by the state or states in which the appraiser was licensed or certified.  (Mar. 16, 2021, D.C. Law 23-206,  105, 68 DCR 00057.)  Emergency Legislation  For temporary (90 days) creation of this section, see  105 of Appraisal Management Company Regulation Emergency Act of 2019 (D.C. Act 23-110, July 31, 2019, 66 DCR 178).  Temporary Legislation  For temporary (225 days) creation of this section, see  105 of Appraisal Management Company Regulation Temporary Act of 2020 (D.C. Law 23-140, Oct. 20, 2020, 67 DCR 9891). 
 312361.06. Appraisal management company requirements. (a) An appraisal management company operating in the District shall meet the following requirements at all times: (1) At the time of applying for registration or renewing registration in the District, the appraisal management company shall designate one of its controlling persons to serve as the main contact for all communication between the Department and the company. The designated controlling person shall: (A) Remain in good standing in the District and in any other state that has issued the controlling person an appraiser license or certification; except, that, nothing in this chapter shall require that a designated controlling person hold or continue to hold an appraiser license or certification in any jurisdiction; (B) Never have had an appraiser license or certification in the District or any other state refused, denied, canceled, revoked, or surrendered in lieu of a pending disciplinary proceeding in any jurisdiction and not subsequently reinstated or granted; and (C) Be of good moral character; (2) Before or at the time of placing an assignment to appraise real property in the District with an appraiser on the appraiser panel of the appraisal management company, the appraisal management company shall verify that the appraiser receiving the assignment holds an appraiser license or certification in good standing in the District; (3) Any employee of or independent contractor to the appraisal management company who performs an appraisal review for a property located in the District must be a certified or licensed appraiser in good standing in the District; and (4) An appraisal management company registered in the District shall place its registration number on engagement documents utilized by the appraisal management company to procure appraisal services in the District of Columbia. (b) An appraisal management company that has a reasonable basis to believe an appraiser has materially failed to comply with applicable laws or rules or has materially violated the USPAP shall refer the matter to the Department in conformance with applicable federal laws and regulations.  (Mar. 16, 2021, D.C. Law 23-206,  106, 68 DCR 00057.)  Emergency Legislation  For temporary (90 days) creation of this section, see  106 of Appraisal Management Company Regulation Emergency Act of 2019 (D.C. Act 23-110, July 31, 2019, 66 DCR 178).  Temporary Legislation  For temporary (225 days) creation of this section, see  106 of Appraisal Management Company Regulation Temporary Act of 2020 (D.C. Law 23-140, Oct. 20, 2020, 67 DCR 9891). 
 312361.07. Verification of licensure or certification. (a) An appraisal management company registered in the District may not enter into any contract or agreement with an appraiser for the performance of appraisals in the District unless the company verifies that the appraiser is licensed or certified in good standing in the District. (b) An appraisal management company seeking to be registered or to renew a registration in the District shall certify to the Department on a form prescribed by the Department that the company has a system and process in place to verify that an individual being added to the appraiser panel of the company for appraisal services holds an appraiser license or certification in good standing in the District.  (Mar. 16, 2021, D.C. Law 23-206,  107, 68 DCR 00057.)  Emergency Legislation  For temporary (90 days) creation of this section, see  107 of Appraisal Management Company Regulation Emergency Act of 2019 (D.C. Act 23-110, July 31, 2019, 66 DCR 178).  Temporary Legislation  For temporary (225 days) creation of this section, see  107 of Appraisal Management Company Regulation Temporary Act of 2020 (D.C. Law 23-140, Oct. 20, 2020, 67 DCR 9891). 
 312361.08. Retention of records. (a) Each appraisal management company seeking to be registered or to renew an existing registration in the District shall certify to the Department on a form prescribed by the Department that the company maintains a detailed record of each service request that the company receives for appraisals of real property located in the District. (b) An appraisal management company registered in the District shall retain all records required to be maintained under this chapter for at least 5 years after the file is submitted to the appraisal management company or for at least 2 years after final disposition of any related judicial proceeding of which the appraisal management company is provided notice, whichever period expires later. (c) All records required to be maintained by the registered appraisal management company shall be made available for inspection by the Department on reasonable notice to the appraisal management company.  (Mar. 16, 2021, D.C. Law 23-206,  108, 68 DCR 00057.)  Emergency Legislation  For temporary (90 days) creation of this section, see  108 of Appraisal Management Company Regulation Emergency Act of 2019 (D.C. Act 23-110, July 31, 2019, 66 DCR 178).  Temporary Legislation  For temporary (225 days) creation of this section, see  108 of Appraisal Management Company Regulation Temporary Act of 2020 (D.C. Law 23-140, Oct. 20, 2020, 67 DCR 9891). 
 312361.09. Payment to appraisers. (a) An appraisal management company shall, except in bona fide cases of breach of contract or substandard performance of services, make payment to an independent appraiser for the completion of an appraisal or valuation assignment no later than 45 days after the date on which the appraiser transmits or otherwise provides the completed appraisal or valuation assignment to the company or its assignee unless a mutually agreed-upon alternate arrangement previously has been established. (b) An appraisal management company seeking to be registered or to renew an existing registration in the District shall certify that the company will require appraisals to be conducted independently as required by the appraisal independence standards under section 129E of the Truth in Lending Act, approved July 21, 2010 (124 Stat. 2187; 15 U.S.C.  1639e), including the requirement that a customary and reasonable fee be paid to an independent appraiser who completes an appraisal in connection with a consumer credit transaction secured by a principal dwelling.  (Mar. 16, 2021, D.C. Law 23-206,  109, 68 DCR 00057.)  Emergency Legislation  For temporary (90 days) creation of this section, see  109 of Appraisal Management Company Regulation Emergency Act of 2019 (D.C. Act 23-110, July 31, 2019, 66 DCR 178).  Temporary Legislation  For temporary (225 days) creation of this section, see  109 of Appraisal Management Company Regulation Temporary Act of 2020 (D.C. Law 23-140, Oct. 20, 2020, 67 DCR 9891). 
 312361.10. Prohibited conduct.  A violation of this section may constitute grounds for discipline against an appraisal management company registered in the District. However, nothing in this chapter shall prevent an appraisal management company from requesting that an appraiser provide additional information about the basis for a valuation, correct objective factual errors in an appraisal report, or consider additional appropriate property information. No employee, director, officer, agent, independent contractor, or other third party acting on behalf of an appraisal management company may do any of the following: (1) Procure or attempt to procure a registration or renewal by knowingly making a false statement, submitting false information, or refusing to provide complete information in response to a question in an application for registration or renewal; (2) Willfully violate this chapter or rules of the Department pertaining to this chapter; (3) Improperly influence or attempt to improperly influence the development, reporting, result, or review of an appraisal through intimidation, coercion, extortion, bribery, or any other manner, including: (A) Withholding payment for appraisal services; (B) Threatening to exclude an appraiser from future work or threatening to demote or terminate the appraiser in order to improperly obtain a desired result; (C) Conditioning payment of an appraisal fee upon the opinion, conclusion, or valuation to be reached by the appraiser; or (D) Requesting that an appraiser report a predetermined opinion, conclusion, or valuation, or the desired valuation of any person or entity; (4) Alter, amend, or change an appraisal report submitted by an appraiser without the appraiser's knowledge and written consent; (5) Except within the first 90 days after an independent appraiser is added to an appraiser panel, remove an independent appraiser from an appraiser panel without prior written notice to the appraiser, with the prior written notice including evidence of the following, if applicable: (A) The appraiser's illegal conduct; (B) A violation of USPAP, this chapter, or the rules adopted by the Department pursuant to this chapter; (C) Improper or unprofessional conduct; or (D) Substandard performance or other substantive deficiencies; (6) Require an appraiser to sign any indemnification agreement that would require the appraiser to defend and hold harmless the appraisal management company or any of its agents or employees for any liability, damage, loss, or claim arising out of the services performed by the appraisal management company or its agents, employees, or independent contractors and not the services performed by the appraiser; (7) Prohibit lawful communications between the appraiser and any other person whom the appraiser, in the appraiser's professional judgment, believes possesses information that would be relevant; (8) Fail to timely respond to any subpoena or any other request for information; (9) Fail to timely obey an administrative order of the Department; or (10) Fail to fully cooperate in any investigation.  (Mar. 16, 2021, D.C. Law 23-206,  110, 68 DCR 00057.)  Emergency Legislation  For temporary (90 days) creation of this section, see  110 of Appraisal Management Company Regulation Emergency Act of 2019 (D.C. Act 23-110, July 31, 2019, 66 DCR 178).  Temporary Legislation  For temporary (225 days) creation of this section, see  110 of Appraisal Management Company Regulation Temporary Act of 2020 (D.C. Law 23-140, Oct. 20, 2020, 67 DCR 9891). 
 312361.11. Disciplinary proceedings. The Department may deny, suspend, or revoke the registration of an appraisal management company, impose a monetary penalty of an amount not to exceed $5,000 per violation, issue a letter of reprimand, refuse to issue or renew the registration of an appraisal management company, or take other disciplinary action against an appraisal management company when an appraisal management company engages in conduct prohibited under  31-2361.10.  (Mar. 16, 2021, D.C. Law 23-206,  111, 68 DCR 00057.)  Emergency Legislation  For temporary (90 days) creation of this section, see  111 of Appraisal Management Company Regulation Emergency Act of 2019 (D.C. Act 23-110, July 31, 2019, 66 DCR 178).  Temporary Legislation  For temporary (225 days) creation of this section, see  111 of Appraisal Management Company Regulation Temporary Act of 2020 (D.C. Law 23-140, Oct. 20, 2020, 67 DCR 9891). 
 312361.12. Criminal history checks. The Department shall require a controlling person or persons to submit to a criminal history record check. All costs associated with obtaining a background check shall be the responsibility of the appraisal management company.  (Mar. 16, 2021, D.C. Law 23-206,  112, 68 DCR 00057.)  Emergency Legislation  For temporary (90 days) creation of this section, see  112 of Appraisal Management Company Regulation Emergency Act of 2019 (D.C. Act 23-110, July 31, 2019, 66 DCR 178).  Temporary Legislation  For temporary (225 days) creation of this section, see  112 of Appraisal Management Company Regulation Temporary Act of 2020 (D.C. Law 23-140, Oct. 20, 2020, 67 DCR 9891). 
 312401. Findings; purpose. (a) Findings.  The Council of the District of Columbia finds that: (1) Motorists, motor vehicle passengers, and pedestrians in the District are not adequately protected, by current law and practice, from the consequences of motor vehicle accidents. (2) If a person suffers personal injuries because of an accident involving a motor vehicle in the District, he or she is unlikely to recover the amount of his or her actual losses because: (A) Approximately 50% of the victims do not satisfy the prerequisites to compensation under the present law; (B) Approximately 40% of the operators in the District do not maintain any motor vehicle insurance or have other financial resources sufficient to pay losses; (C) The average motor vehicle insurance policy in the District will pay only up to $10,000 for the personal injuries of any 1 victim, a sum that is insufficient to compensate adequately a victim with serious injuries; and (D) Satisfaction of the prerequisites to compensation under the present law is time-consuming and expensive to policyholders because a victim must establish that the accident was the fault of another person; that the person injured was free from contributory fault; and that the injuries suffered were the natural and probable consequences of the accident. (3) Far greater protection to victims of motor vehicle accidents is available at a lower price than that afforded for coverage currently available. (4) The purchase of this better insurance protection should be compulsory because of the great potential of a motor vehicle to cause personal injury. (b) Purpose.  It is the purpose of this chapter to provide adequate protection for victims who are injured in the District or who are injured while riding in motor vehicles registered or operated in the District.  (Sept. 18, 1982, D.C. Law 4-155,  2, 29 DCR 3491.)  Prior Codifications 1981 Ed.,  35-2101. Section References This section is referenced in  47-2829,  47-2862, and  50-314. Delegation of Authority Delegation of authority pursuant to Law 6-96, see Mayors Order 86-186, October 17, 1986.
 312402. Definitions. As used in this chapter: (1) The term accident means an untoward and unforeseen occurrence arising out of the maintenance or use of: (A) A motor vehicle; (B) A vehicle operated or designed for operation upon a highway by power other than muscular power with respect only to any pedestrian or any occupant of that vehicle other than the owner or operator of that vehicle; or (C) Any other vehicle covered by the insurance coverages required by  31-2406. (2) Repealed. (3) The term beneficiary means a person who is named in a policy of personal injury protection insurance as a person who is entitled to the benefits of personal injury protection insurance. (4) The term Department means the Department of Motor Vehicles established pursuant to  50-901. (5) The term Director means the Director of the Department or the Directors designee. (6) The term District means the District of Columbia. (7) The term highway means the entire width between the boundary lines of every publicly maintained way, when any part thereof is open to the use of the public for purposes of vehicular or pedestrian travel. (8) The term individual means a natural person. (9) The term injury means bodily harm to an individual that is sustained in an accident, and any illness, disease, or death resulting from that bodily harm. (9A) Insurance Identification Card means a document issued by an insurer as proof of insurance for a motor vehicle that lists the name of the insurer, the policy number, the name of the insured, the period of coverage for the insurance, and the make, model, and vehicle identification number. (10) The term insured means a named insured or any other person insured in an insurance policy, with the exception of those persons specifically excluded by endorsement on the insurance policy. (11) The term insurer means any person, company, or professional association licensed in the District of Columbia that provides motor vehicle liability protection or any self-insurer. (12) The term license means a license or permit to operate a motor vehicle issued under the laws of the District. The term license includes a drivers license; a temporary or learners permit; the privilege of any person to drive a motor vehicle whether or not such person holds a valid license issued by the District government; the privilege conferred upon a nonresident by the laws of the District pertaining to the operation by a nonresident of a motor vehicle; or any other license issued under authority delegated to the Director. (13) The term loss means economic detriment incurred as a result of an accident resulting in injury, consisting of and limited to medical and rehabilitation expenses, work loss inclusive of replacement services loss, and death benefits. The term loss does not include noneconomic loss. (14) The term maintenance or use with respect to a motor vehicle means any activity involving or related to the operation of or transportation by a motor vehicle, including occupying, entering into, alighting from, repairing, or servicing. The term maintenance or use does not include conduct within the course of a business of repairing, servicing, or otherwise maintaining motor vehicles unless the conduct is off the business premises or unless it is conduct in the course of loading or unloading a motor vehicle. (15) The term Mayor means the Mayor of the District of Columbia or the Mayors designee. (16) The term motorcycle means a motor vehicle that has a seat or saddle for the use of the operator and is designed to travel on no more than 3 wheels in contact with the ground. The term motorcycle does not include a 3-wheeled motor vehicle with a cab and windshield tractor, a motor-driven cycle, or a motorized bicycle unless operated at speeds in excess of 30 miles per hour. (17) The term "motor vehicle" means any device propelled by an internal- combustion engine, electricity, or steam. The term "motor vehicle" shall not include traction engines used exclusively for drawing vehicles in fields, road rollers, vehicles propelled only upon rails and tracks, personal mobility devices, as the term is defined in  50-2201.02(13), electric mobility devices, as the term is defined in  50-2201.02(6A), motorized bicycles, as the term is defined in  50-2201.02(11A), or a battery-operated wheelchair when operated by a person with a disability. (18) The term named insured means the person identified in the declaration of the insurance policy. (19) The term noneconomic loss means pain, suffering, inconvenience, physical or mental impairment, and other nonpecuniary damage recoverable under the tort law applicable to injury arising out of the maintenance or use of a motor vehicle. (20) The term operator means a person who drives or is in actual physical control of a motor vehicle or who is exercising control over or steering a motor vehicle being pushed or towed by a motor vehicle. (21) The term owner means any person, corporation, firm, agency, association, organization, or federal, state, or local government agency or other authority or other entity having the property or title to a vehicle or bicycle used or operated in the District; any registrant of a vehicle used or operated in the District; or any person, corporation, firm, agency, association, organization, or federal, state, or local government agency or authority or other entity in the business of renting or leasing vehicles or bicycles to be used or operated in the District. (22) The term passenger vehicle means any vehicle other than one registered as a commercial vehicle or for livery, rental, sightseeing, or taxi purposes. (23) The term person means any natural person, firm, copartnership, association, government, government agency, or instrumentality. (24) The term personal injury protection means the benefits provided pursuant to  31-2404. (25) The term registration certificate means a certificate or its duplicate issued by the Director to a registrant, containing any or all of the information that appeared on his or her application for registration, the number of the owners identification tags issued to the registrant for use on the vehicle described on the card and other information as the Director may determine, or a registration certificate or its duplicate, issued by the Director to a new car dealer, or used car dealer, containing any or all of the information that appeared on his or her application for dealers identification tags, the number of the dealers identification tags issued to the new car dealer or used car dealer for use as provided by 18 DCMR and any other information the Director may require. (26) The term self-insurer means any person having received a certificate of self-insurance issued by the Mayor pursuant to  50-1301.79. (27) The term stacking means a legal procedure wherein the limits of liability applicable to a single motor vehicle liability policy of insurance are added to the limits of liability of all motor vehicles which may be insured by 1 motor vehicle liability policy of insurance involved in 1 accident. (28) The term state means any state, territory, or possession of the United States or any possession or territory of Canada. The term state includes the District of Columbia. (29) The term Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking or the Commissioners designee. (30) The term survivor means an individual identified in the wrongful death statute of the District, as one entitled to receive benefits by reason of the death of a victim. (31) The term taxicab means any public vehicle for hire having a seating capacity of less than 8 passengers, exclusive of the driver, except ambulances, funeral cars, vehicles used exclusively for sightseeing purposes, or vehicles for which the rate is fixed solely by the hour. (32) The term trailer means a vehicle with or without motor power intended to be used for carrying property or persons and drawn or intended to be drawn by a motor vehicle, whether such vehicle without motor power carries the weight of the property or persons wholly on its own structure or whether a part of such weight rests upon or is carried by a motor vehicle. (32A) The term underinsured motor vehicle means an insured motor vehicle where the limits on 3rd-party personal liability or property damage coverage under the insurance required by  31-2406 are insufficient to pay the loss up to the limit of uninsured motor vehicle coverage as requested by the insured. (33) The term vehicle means a motor vehicle; a trailer; or an appliance moved over a highway on wheels or traction tread including draft animals and beasts of burden. (34) The terms victim and motor vehicle accident victim mean an individual who sustains injury as a result of an accident.  (Sept. 18, 1982, D.C. Law 4-155,  3, 29 DCR 3491; Mar. 15, 1985, D.C. Law 5-176,  2, 32 DCR 748; Mar. 4, 1986, D.C. Law 6-96,  2(a), 32 DCR 7245; May 21, 1997, D.C. Law 11-268,  10(v), 44 DCR 1730; Mar. 26, 1999, D.C. Law 12-184,  2, 45 DCR 7796; Apr. 27, 2001, D.C. Law 13-289,  101(a), 48 DCR 2057; Mar. 25, 2003, D.C. Law 14-235,  2, 49 DCR 9788; Mar. 13, 2004, D.C. Law 15-105,  90(a), 51 DCR 881; June 11, 2004, D.C. Law 15-166, 4(n), 51 DCR 2817; June 8, 2006, D.C. Law 16-117,  201(a), 53 DCR 2548; Mar. 6, 2007, D.C. Law 16-224,  201, 53 DCR 10225; Apr. 27, 2013, D.C. Law 19-290,  2(a), 60 DCR 2343; Mar. 16, 2021, D.C. Law 23-203,  201, 67 DCR 13886.)  Prior Codifications 1981 Ed.,  35-2102. Effect of Amendments D.C. Law 13-289 repealed par. (2) and rewrote par. (4). Pars. (2) and (4) had read: (2) The term Administration Fund means the fund established by  31-2408. (4) The term Department means the District of Columbia Department of Transportation, established by Reorganization Plan No. 2 of 1975. D.C. Law 14-235 rewrote par. (17) that had read as follows: (17) The term motor vehicle means any device propelled by an internal-combustion engine, electricity, or steam, including any non-operational vehicle that is being restored or repaired. The term motor vehicle does not include traction engines used exclusively for drawing vehicles in fields, road rollers, vehicles propelled only upon rails and tracks, and battery-operated wheelchairs when operated by a handicapped person at speeds not exceeding 10 miles per hour. D.C. Law 15-105, in par. (17), validated a previously made technical correction. D.C. Law 15-166, in par. (29), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance and Securities, established by Reorganization Order No. 43, dated June 23, 1953, D.C. Law 16-117 added par. (9A). D.C. Law 16-224, in par. (17), revived the provisions of D.C. Law 14-235 that expired on October 1, 2005, and substituted personal mobility devices, as defined by  50-2201.02(12), or a battery-operated wheelchair when operated by a person with a disability for electric personal assistive mobility devices, as defined by  50-2201.02(12), and battery-operated wheelchairs when operated by a handicapped person at speeds not exceeding 10 miles per hour. D.C. Law 16-305, in par. (17), purported to substitute person with a disability for handicapped person. The 2013 amendment by D.C. Law 19-290 rewrote (16) and (17). Expiration of Law Expiration of Law 14-235 Section 14 of D.C. Law 14-235 provided that the act shall expire on October 1, 2005. Emergency Legislation For temporary (90 day) amendment of section, see  4(n) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). For temporary (90 day) amendment of section, see  2 of Motor Vehicle Definition Electric Personal Assistive Mobility Device Exemption Emergency Amendment Act of 2005 (D.C. Act 16-237, December 22, 2005, 53 DCR 249). For temporary (90 day) amendment of section, see  2 of Motor Vehicle Definition Electric Personal Assistive Mobility Device Exemption Congressional Review Emergency Amendment Act of 2006 (D.C. Act 16-323, March 23, 2006, 53 DCR 2567). For temporary (90 day) amendment of section, see  201 of Personal Mobility Device Emergency Amendment Act of 2006 (D.C. Act 16-528, December 4, 2006, 53 DCR 9826). Temporary Legislation For temporary (225 day) amendment of section, see  2 of Motor Vehicle Definition Electric Personal Assistive Mobility Device Exemption Temporary Amendment Act of 2006 (D.C. Law 16-85, April 4, 2006, law notification 53 DCR 3344). Transfer of Functions The functions of the Department of Transportation were transferred to the Department of Public Works by Reorganization Plan No. 4 of 1983, effective March 1, 1984. Editor's Notes Department of Insurance abolished: The Department of Insurance, including the Superintendent, was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. Reorganization Order No. 43, dated June 23, 1953, as amended, established, under the direction and control of a Commissioner, a Department of Insurance headed by a Superintendent. The Order provided for the organization of the Department, abolished the previously existing Department of Insurance, and provided that all functions and positions of the previous Department would be transferred to the new Department of Insurance, including the duties, powers, and authorities of all officers and employees; and that all personnel, property, records and unexpended balances relating to the functions and positions transferred would also be transferred to the new Department. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. The functions of the Superintendent of Insurance were transferred to the Department of Consumer and Regulatory Affairs by Reorganization Plan No. 1 of 1983, effective March 31, 1983. Pursuant to the provisions of D.C. Law 11-268, the Department of Insurance and Securities Regulation was established and the duties of the Superintendent of Insurance and the Insurance Administration were assumed by the Commissioner of Insurance and Securities, and the Insurance Administration in the Department of Consumer and Regulatory Affairs was abolished.
 312403.01. Pre-litigation discovery of insurance. (a) After a claimant makes a written claim for compensation or damages concerning a vehicle accident, and provides the documents described in subsection (b) or (c) of this section to an insurer, the claimant shall be entitled to obtain from the insurer documentation of the applicable limits of coverage in any insurance agreement under which the insurer may be liable to: (1) Satisfy all or part of the claim; or (2) Indemnify or reimburse for payments made to satisfy the claim. (b) For a claimant to obtain the documentation described in subsection (a) of this section from the insurer, the claimant shall provide the following, in writing, to the insurer: (1) The date of the vehicle accident; (2) The name and last known address of the alleged tortfeasor; (3) A copy of the vehicle accident report, if any; (4) The insurers claim number, if available; (5) The claimants health care bills and documentation of the claimants loss of income, if any, resulting from the vehicle accident; and (6) The records of health care treatment for the claimants injuries caused by the vehicle accident. (c) If the claim is brought by the estate of an individual or a beneficiary of the individual, whose death resulted from a vehicle accident, the insurer must provide the documentation described in subsection (a) of this section if the claimant provides the following, in writing, to the insurer: (1) The date of the vehicle accident; (2) The name and last known address of the alleged tortfeasor; (3) A copy of the vehicle accident report, if any; (4) The insurers claim number, if available; (5) A copy of the decedents death certificate issued in the District of Columbia or another jurisdiction; (6) A copy of the letters of administration issued to appoint the personal representative of the decedents estate in the District of Columbia or a substantially similar document issued by another jurisdiction; (7) The name of each beneficiary of the decedent, if known; (8) The relationship to the decedent of each known beneficiary of the decedent; (9) The health care bills for health care treatment, if any, of the decedent resulting from the vehicle accident; and (10) The records of health care treatment for injuries to the decedent caused by the vehicle accident. (d) After receipt of the documents pursuant to either subsection (b) or (c) of this section, the insurer shall respond in writing within 30 days of receipt of the request issued pursuant to subsection (a) of this section and shall disclose the limits of coverage, of all policies, regardless of whether the insurer contests the applicability of the policy to the claim. (e) Disclosure of documentation required under this section shall not constitute: (1) An admission that the asserted claim is subject to the applicable agreement between the insurer and the alleged tortfeasor; or (2) A waiver of any term or condition of the applicable agreement between the insurer and the alleged tortfeasor or any right of the insurer, including any potential defense concerning coverage or liability. (f) An insurer, and the employees and agents of an insurer, may not be civilly or criminally liable for disclosure of the required documentation. (g) Information concerning the insurance policy is not, by reason of disclosure pursuant to this section, admissible as evidence at trial. (h) For the purposes of this section, the term vehicle accident includes accidents involving bicyclists.  (Sept. 18, 1982, D.C. Law 4-155,  4a; as added Apr. 23, 2013, D.C. Law 19-281,  2, 60 DCR 2129.) 
 312403. Required insurance. (a) Residents of District.  Each owner of a motor vehicle which is required to be registered or for which a reciprocity sticker is required in the District shall maintain insurance required by  31-2406. This insurance shall be in effect continuously during the motor vehicles period of registration or reciprocity. (b) Nonresidents of District owning or operating motor vehicles in District.  (1) A person who is not a resident of the District who owns a motor vehicle shall not operate the motor vehicle, or permit the motor vehicle to be operated in the District, unless insurance required by  31-2406 is provided and maintained during the time that the motor vehicle is present in the District. (2) The Director shall require adequate proof of insurance as required by this section for nonresident owners or operators prior to the return of motor vehicles immobilized by the Department to the nonresident owners or operators. (c) Form.  (1) Any policy of motor vehicle insurance which is represented or sold as providing, pursuant to this chapter or pursuant to the coverage required by Chapter 13 of Title 50, security covering a motor vehicle or required insurance shall be deemed to provide insurance for payment of the benefits required by this chapter. (2) The insurance required by this section may be provided under a valid policy of insurance issued by an insurer authorized to transact business in the District or by any other method approved by the Commissioner. (d) Administration of requirement.  (1)(A) Every person applying to register a motor vehicle in the District or applying for a reciprocity sticker for a motor vehicle in the District shall certify to the Director, on a form supplied by the Director, that the insurance required by this chapter is in effect with respect to that motor vehicle. (B) The Director may request an insurer to verify any information provided pursuant to subparagraph (A) of this paragraph. The insurer shall accurately respond to the Directors request within 10 business days. (C) The Director may request that the person who has certified to the Director pursuant to subparagraph (A) of this paragraph submit proof, within 15 business days, that the required insurance is in effect. (2)(A) The Director shall suspend the reciprocity sticker or vehicle registration certificate issued to the owner of a motor vehicle if the required insurance is not in effect with respect to the motor vehicle. The suspension shall take effect 30 days after service by regular mail of a notice of proposed suspension, unless the person provides proof that he or she has an effective motor vehicle insurance policy and has paid all applicable fines. The person shall also be advised that the fine established pursuant to  31-2413(b)(2) shall be imposed unless, within the 30 day period, the person proves that the required insurance was maintained during the registration or reciprocity period. The suspension shall remain in effect until the person appears at the Department with proof of an effective motor vehicle insurance policy and pays a reinstatement fee and the applicable fine. (i)-(iii)Repealed. (iv) If a persons registration certificate has been suspended as provided for in this subsection, the registration certificate shall not be transferred and the motor vehicle with respect to which the registration certificate was issued shall not be registered in any other name until the Director is satisfied that the transfer of the registration certificate is in good faith and not for the purpose or with the effect of defeating the purposes of this chapter. (v) Nothing in this section shall affect the rights of any conditional vendor, chattel mortgagee or lessor of the motor vehicle. (vi) The Director shall suspend or revoke the registration certificate of any motor vehicle transferred in violation of the provisions of this section. (vii) Decisions of the Director shall be subject to review by the Mayor. Orders and decisions of the board of review shall be appealable pursuant to  2-510. For the purposes of this sub-subparagraph, the phrase review by the Mayor shall mean a review by any board of review established by the Mayor pursuant to this chapter to review the order or act of any agent of the Mayor. (B) A motor vehicle with respect to which the registration certificate or reciprocity sticker is suspended under this paragraph may be immobilized by the Department or the Metropolitan Police Department until the insurance required by this section is in effect. (C) The registration certificate or reciprocity sticker and the tags of any motor vehicle, the registration or reciprocity of which is suspended under this paragraph, shall be recovered whenever possible. (3)(A) The Director shall require all insurers authorized to sell motor vehicle insurance in the District to furnish to the Department notice of motor vehicle insurance cancellations within 30 days after the effective date of cancellation. Upon receipt of a notice of cancellation concerning a motor vehicle insurance policy on a vehicle registered in the District, the Director shall notify the person in whose name the vehicle is registered that the Director will revoke or cancel the registration of the vehicle pursuant to law. (B) The insurers shall provide information and cooperate in prosecutions under  31-2413. (C) The insurers shall cooperate with, assist, and advise the Director with respect to the detection of persons who have applied for or obtained registration certificate or reciprocity stickers for motor vehicles in the District without first obtaining the insurance, or who cancel or otherwise terminate insurance subsequent to the issuance of a registration certificate or reciprocity stickers. (4)(A) Repealed. (B) Payments from the Administration Fund shall be made for the benefit of the Commissioner and for the benefit of the Department but no payments shall be made for costs incurred by either the Department or the Commissioner prior to September 18, 1982, or which would probably have been incurred if this chapter had not been enacted. (5)(A) On the first day of each month, an insurer authorized to sell motor vehicle insurance in the District shall furnish to the Director the following records pertaining to each vehicle insured by it in the District: (i) The owners full name and address; (ii) The insurance policy number or binder number; (iii) The commencement date of the motor vehicle insurance policy; (iv) The expiration or termination date of the motor vehicle insurance policy; (v) The operators license number, if known; (vi) The corresponding vehicle identification number, if known; and (vii) Other relevant information the Director may require. (B) The records required by this paragraph shall be submitted or transmitted in electronic files and in compliance with procedures established by the Department. (C) In lieu of requiring insurers to satisfy the requirements of subparagraph (A) of this paragraph, the Director may allow insurers to verify insurance through an online insurance verification system.  (Sept. 18, 1982, D.C. Law 4-155,  4, 29 DCR 3491; Mar. 14, 1985, D.C. Law 5-159,  13(a), 32 DCR 30; Mar. 4, 1986, D.C. Law 6-96,  2(b), 32 DCR 7245; May 21, 1997, D.C. Law 11-268,  10(v), 44 DCR 1730; Apr. 27, 2001, D.C. Law 13-289,  101(b), 48 DCR 2057; Oct. 23, 2012, D.C. Law 19-186,  2, 59 DCR 10147.)  Prior Codifications 1981 Ed.,  35-2103. Section References This section is referenced in  31-2413. Effect of Amendments D.C. Law 13-289, in subsec. (d), par. (2)(A), rewrote the introductory paragraph, repealed sub-subpars. (i) through (iii), and deleted or revoked following has been suspended in sub-subpar. (iv); and repealed subsec. (d), par. (4)(A). Subsec. (d), par. (2)(A), introductory paragraph and sub-subpars (i) through (iii), and subsec. (d), par. (4)(A) had read: (2)(A) The Director shall suspend or revoke the license, reciprocity sticker, or registration certificate issued to the owner or operator of a motor vehicle who has been convicted of a violation of this chapter, or who knowingly operates or knowingly permits the operation of an uninsured motor vehicle, or who falsely certifies to the Director that a motor vehicle is an insured motor vehicle, or who knowingly provides the Director with false or inaccurate information as requested by the Director pursuant to this chapter. (i) Whenever a license, reciprocity sticker, or registration certificate has been revoked or suspended under the provisions of this subsection the reasons therefor shall be set forth in the order of revocation or suspension. The order shall take effect 5 days after service or notice on the person whose license, reciprocity sticker, or registration certificate is revoked or suspended unless the person shall have filed with the Director, within the 5-day period, written application for a hearing; provided, that application to the Director for a hearing shall not operate as a stay of the order of the Director when the order has been issued revoking or suspending a reciprocity sticker or registration certificate. The hearing by the Director shall only cover the issues of whether a policy motor vehicle of insurance has been issued to the person and had been in effect on the day the order of revocation or suspension was issued and whether the person provided the Director with false or inaccurate information. (ii) If, following the hearing provided for in this subsection, the Director shall sustain the order of revocation or suspension, the order shall become effective immediately. (iii) Where the registration certificate, license, or reciprocity sticker has been revoked, no new registration certificate, license, or reciprocity sticker shall be issued to the person for 6 months after the effective date of the order of revocation; provided, that no new registration certificate or reciprocity sticker shall be issued to the person until the motor vehicle is an insured motor vehicle. (4)(A) The reasonable costs incurred by the District government in administering and enforcing the requirements of this section and  31-2413 shall be paid from the Administration Fund. The 2012 amendment by D.C. Law 19-186 added (d)(5). Cross References Violations, penalties, and adjudications under this chapter, see  31-2413. Transfer of Functions See Historical and Statutory Notes following  35-2102. Editor's Notes Subsection (d)(2)(A)(i) is set forth exactly as enacted by D.C. Law 4-155. The reference in the last sentence of that subsection to policy motor vehicle of insurance should probably be motor vehicle policy of insurance, given the context.
 312404. Personal injury protection. (a) In general.  (1) In addition to insurance required to be provided by an insurer under  31-2406, each insurer shall offer to each person required to have insurance under this chapter optional personal injury protection insurance as set forth in this section. Personal injury protection shall provide coverage for victims for injuries arising from accidents resulting from the operation or use of a motor vehicle by the insured or use of the insured motor vehicle within or outside the District. It shall provide benefits for medical and rehabilitation expenses, work loss, and funeral benefits as set forth in this section. Personal injury protection benefits are applicable only to a victim who is an insured or an occupant of the insureds vehicle or of a vehicle which the insured is driving. (2) An insured may obtain, solely at his or her option, any 1 or any combination of the 3 coverages for the benefits set forth in this section. (3) A self-insurer shall state on the application for self insurance whether the self-insurer is providing personal injury protection benefits as part of the motor vehicle insurance provided for the vehicles owned by the self-insurer. (b) Payment without regard to fault.  The benefits set forth in this section with respect to personal injury protection shall be provided without regard to, and irrespective of, negligence, freedom from negligence, fault, or freedom from fault on the part of any person. (c) Medical and rehabilitation expenses.  (1) Personal injury protection benefits shall be paid for each victim for that victims medical and rehabilitation expenses consisting of all reasonable charges incurred for reasonably necessary products, services, and accommodations for the victims care, recovery, or rehabilitation. (2) Except when the victim requires special or intensive care, the medical and rehabilitation expenses paid by personal injury protection insurance shall not include charges for a hospital room which are in excess of a reasonable and necessary charge for semiprivate accommodations. (3) Nothing in this section shall prohibit payment as medical and rehabilitation expenses of any nonmedical remedial treatment rendered in accordance with a recognized religious method of healing. (4) No payment shall be made under this subsection unless the provider of the product, service, or accommodation involved is licensed or approved and complies with any applicable laws or regulations pertinent thereto. (5) The maximum benefits payable pursuant to this subsection for any victim shall not be less than $50,000. Insurers providing personal injury protection coverage shall provide insurance package optionals with medical and rehabilitation coverage of $50,000 and $100,000 for each victim. (d) Work loss.  (1) Personal injury protection benefits shall be paid pursuant to this subsection to each victim for that victims work loss occurring during his or her life consisting of: (A) Loss of income for work which a victim would have performed after the date of the accident if he or she had not been injured in the accident (not including any expected reduction in the amount payable by that victim for purposes of federal and District income taxation, which amount shall be presumed to be 20% of the amount otherwise payable unless the victim can show a different income taxation effect); and (B) Replacement services loss for expenses which a victim reasonably incurred in obtaining ordinary and necessary services in lieu of those that the victim would have performed for personal or family benefit (but not for income) during the first 3 years after the date of the accident if he or she had not been injured in the accident. (2) The maximum benefits payable for work loss for the victim for any 1 accident shall not be less than $12,000. Insurers shall provide insurance options with work loss coverages of at least $12,000 and $24,000. (3) Benefits payable for work loss do not include any loss incurred after the date of a victims death, if the victim dies for any reason. (e) Funeral benefits.  Personal injury protection benefits shall be paid to the survivors of each victim as funeral and funeral-related benefits. The benefits payable pursuant to this subsection for funeral and funeral-related benefits for any 1 victim shall be actual costs up to $4,000.  (Sept. 18, 1982, D.C. Law 4-155,  5, 29 DCR 3491; Mar. 4, 1986, D.C. Law 6-96,  2(c), 32 DCR 7245.)  Prior Codifications 1981 Ed.,  35-2104. Section References This section is referenced in  31-2402,  31-2405,  31-2406, and  31-2413.
 312405. Lawsuit restriction and opportunity for arbitration under optional insurance. (a) A victim shall notify the personal injury protection insurer within 60 days of an accident of the victims election to receive personal injury protection benefits. (b) A victim who elects to receive personal injury protection benefits may maintain a civil action based on liability of another person only if: (1) The injury directly results in substantial permanent scarring or disfigurement, substantial and medically demonstrable permanent impairment which has significantly affected the ability of the victim to perform his or her professional activities or usual and customary daily activities, or a medically demonstrable impairment that prevents the victim from performing all or substantially all of the material acts and duties that constitute his or her usual and customary daily activities for more than 180 continuous days; or (2) The medical and rehabilitation expenses of a victim or work loss of a victim exceeds the amount of personal injury protection benefits available. (c) Nothing in subsection (b) of this section shall prevent the survivors of a victim whose death arises out of the maintenance or use of a motor vehicle from maintaining a civil action based on the liability of another person for the loss and noneconomic loss resulting from the victims death regardless of whether the victim had previous to his or her death elected to receive personal injury protection benefits. (d) The insurer must notify any identifiable victim in writing of the 60-day election period. (e) The 60-day election period may be extended upon the mutual written agreement of the victim and the insurer. (f) If a victim is incapacitated or in some other way unable to make the election, it may be made by the next closest relative, or if there is no relative, an individual taking responsibility for the victims affairs. (g) If the covered victim fails to make an election within the 60-day period, the mandatory liability insurance coverage applies. (h) Except as provided in subsection (i) of this section, any person having a claim under the mandatory insurance required in  31-2406 or the optional insurance offered pursuant to  31-2404 may request that the claim be resolved by arbitration before the Board of Consumer Claims Arbitration for the District of Columbia, established by  50-503. If the other party or parties to the action consent, the Board may hear and decide the matter. Arbitration of these claims shall be binding. (i) Insurers shall arbitrate and settle all disputed claims made for automobile physical damage between them in accordance with the terms of the Nationwide Intercompany Arbitration Agreement (Agreement) as adopted and from time to time amended by its members, and the rules promulgated pursuant to the Agreement, unless the parties mutually agree, on a per case basis, to use another arbitration forum, in which case the claim shall be arbitrated in that alternate forum. Mandatory arbitration of disputed claims shall be limited solely to the issues of liability and damages. Every automobile liability or physical damage insurer doing business in the District of Columbia shall be a member of the Nationwide Intercompany Arbitration Agreement sponsored by the Committee on Insurance Arbitration.  (Sept. 18, 1982, D.C. Law 4-155,  6, 29 DCR 3491; Mar. 4, 1986, D.C. Law 6-96,  2(d), 32 DCR 7245; Sept. 20, 1996, D.C. Law 11-160,  2(a), 43 DCR 3722.)  Prior Codifications 1981 Ed.,  35-2105. Section References This section is referenced in  31-2411 and  50-503. Cross References Board of Consumer Claims Arbitration, see  50-503. Editor's Notes Report by Commissioner of Insurance and Securities: Section 5 of D.C. Law 11-160 provided that Within two years of September 20, 1996, the Commissioner of Insurance and Securities shall prepare and submit to the Council of the District of Columbia for its review a report on the impact of this act on the private passenger motor vehicle insurance market or any part thereof, the funding for the Office of Insurance, the District of Columbia insurance premium tax, the number of insurers doing business in the District, and the number of insurers domiciled in the District of Columbia. In preparing such report, the Commissioner may request from specific private passenger motor vehicle insurers doing business in the District, or from all such insurers, reasonable and pertinent information. Information which is proprietary to any affected insurer shall be treated as confidential by the Commissioner, but may be used in the aggregate with other information from other affected insurers for statistical or other reporting purposes.
 312406. Availability of required and optional insurance and benefits. (a) In general.  (1)(A) After consultation with insurers authorized to sell motor vehicle insurance in the District, the Commissioner shall from time to time approve, with any reasonable modifications, a reasonable plan or plans to assure the availability, to all owners of motor vehicles, of the insurance required to be maintained and of the insurance required to be offered by this chapter. The plan shall provide for suitable apportionment, by the manager or committee designated to operate the plan, among insurers of applicants for any of the insurance who are unable to obtain insurance reasonably through ordinary methods. (B) When a plan has been approved by the Commissioner, all insurers authorized to sell motor vehicle insurance in the District shall subscribe thereto, cooperate therewith, and participate therein; provided, however, that no insurer shall be required to quote plan rates to applicants for voluntary insurance or to seek waivers from the plan before selling such voluntary insurance. (C) Any applicant for a policy, any named beneficiary or insured under a policy issued pursuant to the plan, and any insurer may appeal to the Commissioner from any decision of the manager or committee designated to operate the plan. (D) Each insurer selling motor vehicle insurance in the District shall be required to offer insurance which shall provide at least all minimum benefits required by this chapter with respect to: (i) property damage liability; (ii) third-party personal liability; and (iii) uninsured motorist protection. In addition, each insurer shall offer optional personal injury protection insurance required by  31-2404 and underinsured motor vehicle coverage as required by this section. Taxicab insurers and self-insurers shall be exempt from the requirement to offer optional personal injury protection insurance. Taxicab insurers and self-insurers shall also be exempt from the requirements of  31-2404 that they offer uninsured motorist protection and underinsured motor vehicle coverage. (2) Each insurer selling motor vehicle insurance in the District shall make the insurance policy understandable to policyholders. Each insurance company shall provide to policy holders at least annually the following information: (A) A listing of each type of coverage available; and (B) An explanation of the mandatory insurance and required options created under this chapter. (2A) For policies issued or reissued after January 1, 2007, insurers shall be required to provide at least 2 copies of an Insurance Identification Card to the policyholder of the vehicle registered in the District of Columbia. The Insurance Identification Card, or an electronic image of an Insurance Identification Card that can be displayed on a cellular telephone or other portable electronic device, must be carried in the insured motor vehicle for production upon demand. The insurer shall provide additional copies of the Insurance Identification card upon request of the insured. (3) Repealed. (4) Repealed. (5) No insurer authorized to sell motor vehicle insurance in the District shall increase the rates charged an insured on account of an accident unless it is first determined that the accident was caused by the fault of the insured. (b) Property damage insurance.  Property damage insurance shall provide that any liability to an insured to pay for property damage to any vehicle or other property not owned or controlled by the insured, in accordance with applicable law, shall be paid by the applicable insurer up to an amount requested by the named insured. The minimum amount of property damage liability insurance coverage that a named insured shall purchase is $10,000 for property damage in any 1 accident. (c) Third-party personal liability.  Third-party personal liability coverage shall provide that any liability of an insured to pay for injury arising from an accident within or outside the District of Columbia, in accordance with applicable law, shall be paid by the insurer up to the amount established in the policy. The minimum amount of 3rd-party personal liability coverage that an insured shall purchase shall be $25,000 per person injured in any 1 accident and $50,000 for all persons injured in any 1 accident. (c-1) Underinsured motor vehicle coverage.  Underinsured motor vehicle coverage is for the protection of an insured who is legally entitled to recover damages from the owner or operator of an underinsured motor vehicle. Each insurer shall offer, except for the operation of motorcycles and motor-driven cycles, optional underinsured motor vehicle coverage in amounts up to the amounts of the uninsured motorist coverage as requested by the insured. Once an insured has rejected this underinsured motor vehicle coverage the insurer does not have to reoffer it. The insurer shall not be required to obtain or maintain written rejections of the underinsured motor vehicle coverage. The benefits provided by the underinsured motor vehicle coverage shall be subject to the same provisions as denials or exclusions of coverages, insolvency, subrogation, and set-off as provided in the uninsured motorist coverage. Nothing in this section shall prohibit the inclusion of underinsured motor vehicle coverage in any uninsured motor vehicle coverage provided in compliance with this chapter. Insurance that includes underinsured motor vehicle coverage may include terms and conditions that preclude stacking of underinsured motor vehicle coverage. (d) Repealed. (e) Repealed. (f) Mandatory uninsured motorist protection.  (1) For the purposes of this subsection, the term uninsured motor vehicle means a motor vehicle which: (A) Is a motor vehicle which is not insured by a motor vehicle liability policy applicable to the accident; (B) Is covered by a motor vehicle liability policy of insurance but the insurer denies coverage for any reason or becomes the subject of insolvency proceedings in any jurisdiction; or (C) Is a motor vehicle which causes bodily injury or property damage and whose owner or operator cannot be identified. (2) Each insurer selling motor vehicle insurance in the District with respect to any motor vehicle registered or principally garaged in the District shall include coverage for bodily injury or death in amounts of $25,000 per person injured in any 1 accident, or $50,000 for all persons injured in any 1 accident, and coverage for property damage in an amount of $5,000 for property damage in any 1 accident for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles. (3) Any payments for property damage made pursuant to this subsection shall be subject to a deductible amount of $200. (4) The named insured may require the issuance of coverage for bodily injury or death and property damage in accordance with a schedule of optional higher amounts up to the amount of $100,000 per person injured in any 1 accident or $300,000 for all persons injured in any 1 accident, and up to $25,000 for property damages for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles. (5) To the extent of any payment made to any person by the insurer under the coverage required by this section and subject to the terms and conditions of the coverage, the insurer is entitled to the proceeds of any settlement or judgment resulting from the exercise of any rights of recovery of any person against any other person legally responsible for the bodily injury or death for which the payment is made, including any amount recoverable from an insurer which is or becomes the subject of an insolvency proceeding through such proceedings or in any other lawful manner. (6) No insurer shall attempt to recover any amount against the insured of an insurer which is or becomes the subject of insolvency proceedings. (7) Any motor vehicle policy of insurance may include terms and conditions that preclude stacking of uninsured motor vehicle coverages. (g) Prohibitions.  A victim is prohibited from claiming personal injury protection benefits under this chapter, other than to compensate for any deductible, if the victim is eligible for compensation for the loss covered by personal injury protection from another insurer or another insurance coverage, unless the victim has exhausted benefits offered by the insurer or insurance coverage. (h) Additional reporting obligations.  The Director may require a person whose drivers license or registration was revoked to obtain insurance coverage that includes additional reporting obligations, including SR 22 insurance coverage, prior to the issuance or reinstatement of a drivers license or registration, or both.  (Sept. 18, 1982, D.C. Law 4-155,  7, 29 DCR 3491; Mar. 4, 1986, D.C. Law 6-96,  2(e), 32 DCR 7245; Feb. 24, 1987, D.C. Law 6-192,  19, 33 DCR 7836; Sept. 20, 1996, D.C. Law 11-160,  2(b), 43 DCR 3722; May 21, 1997, D.C. Law 11-268,  10(v), 44 DCR 1730; June 8, 2006, D.C. Law 16-117, 201(b), 53 DCR 2548; Mar. 14, 2007, D.C. Law 16-279,  101, 54 DCR 903; Mar. 25, 2009, D.C. Law 17-353,  197(a), 246, 56 DCR 1117; Apr. 27, 2013, D.C. Law 19-290,  2(b), 60 DCR 2343; Mar. 13, 2019, D.C. Law 22-239,  2(a), 66 DCR 597.)  Prior Codifications 1981 Ed.,  35-2106. Section References This section is referenced in  5-114.01,  31-2402,  31-2403,  31-2404,  31-2405, and  31-2411. Effect of Amendments D.C. Law 16-117 added par. (a)(2A). D.C. Law 16-279 added subsec. (h). D.C. Law 17-353, in subsec. (f)(1)(B), substituted insurer denies coverage for insured denies coverage; and validated previously made technical corrections in subsec. (h). The 2013 amendment by D.C. Law 19-290 substituted motorcycles and motor-driven cycles for motorcycles in (c-1). Editor's Notes Report of the Commissioner of Insurance and Securities: Section 5 of D.C. Law 11-160 provided: Within two years of September 20, 1996, the Commissioner of Insurance and Securities shall prepare and submit to the Council of the District of Columbia for its review a report on the impact of this act on the private passenger motor vehicle insurance market or any part thereof, the funding for the Office of Insurance, the District of Columbia insurance premium tax, the number of insurers doing business in the District, and the number of insurers domiciled in the District of Columbia. In preparing such report, the Commissioner may request from specific private passenger motor vehicle insurers doing business in the District, or from all such insurers, reasonable and pertinent information. Information which is proprietary to any affected insurer shall be treated as confidential by the Commissioner, but may be used in the aggregate with other information from other affected insurers for statistical or other reporting purposes. Department of Insurance abolished: See Historical and Statutory Notes following  31-2402.
 312407.01. Notice of proposed settlement for policy limits to underinsured motorist coverage carrier; waiver of subrogation; time limits. (a) When a tortfeasors insurer offers to pay its full policy limits of coverage for bodily injury or death to a claimant, conditioned upon the claimants insurer waiving its rights of subrogation against the tortfeasor, the claimant or the tortfeasors insurer shall give to the claimants insurer notice in writing that an offer to settle for policy limits has been made by the tortfeasors insurer. (b) The written notice shall be sent by certified mail, return receipt requested, to the claimants insurer, and shall include the following information: (1) Any one of the following: (A) The name and address of the claimant; (B) The claim number created by the claimants insurer for the vehicle accident; or (C) The policy number of the claimants insurer; (2) The name of the tortfeasor; (3) The name of the tortfeasors insurer and the policy number for the tortfeasors insurance policy under which an offer to settle for policy limits has been made; (4) A statement that the tortfeasors insurer has offered to settle with the claimant for policy limits; and (5) A statement that under the law the claimants insurer has 60 days to either: (A) Preserve its subrogation rights against the tortfeasor by providing written notice of its intention to do so and by paying to the claimant an amount equal to the policy limits that have been offered to the claimant by the tortfeasors insurer; or (B) Allow the claimant to accept the settlement offer from the torfeasors insurer and execute appropriate releases. (c)(1) The claimants insurer is considered to have fully waived its right of subrogation against the tortfeasor, unless within 60 days from receipt of the notice described in subsection (b) of this section, the claimants insurer sends, by certified mail, return receipt requested, to the claimant and to the tortfeasors insurer written notice that it does not waive its rights of subrogation against the tortfeasor. (2) The notice of claimants insurer is not effective unless the notice to the claimant is accompanied by payment to the claimant of an amount equal to the policy limits offered by the tortfeasors insurer. (3)(A) If the claimants insurer fails to send the notice provided for in paragraph (1) of this subsection and fails to pay the sum required by paragraph (2) of this subsection within the 60-day time period, the claimants insurer is considered to have waived its subrogation rights against the tortfeasor, and the claimant may consummate the settlement. (B) Any consent to settle or waiver of subrogation by the claimants insurer may not be construed to limit the right of the claimants insurer to raise any issue or defense relating to liability and damages in an action against the claimants insurer and does not constitute an admission by the claimants insurer as to any issue, claim, or defense raised in an action against the claimants insurer. (d) If the claimants insurer gives notice and tenders payment to the claimant as provided for in subsection (c) of this section, the claimants insurer is and remains subrogated to the rights of the claimant as to the tortfeasor to the extent of any and all sums paid by the claimants insurer to the claimant. The payment by the claimants insurer of the amount equal to the policy limits offered by the tortfeasors insurer shall not serve in any way to waive, change, or increase the amount of the claimants underinsured motorist coverage beyond the underlying underinsured motorist coverage policy limits. (e) For the purposes of this section, the term: (1) Claimant means the victim having underinsured motorist coverage as provided in   31-2406(c-1) or survivors of the victim. (2) Claimants insurer means the company providing underinsured motorist coverage to the claimant. (3) Tortfeasor means the owner or operator of an underinsured motor vehicle who causes injury or damage.  (Sept. 18, 1982, D.C. Law 4-155,  8a; as added July 15, 2014, D.C. Law 20-120,  2, 61 DCR 5677.) 
 312407. Priorities for the payment of personal injury protection benefits. (a) The insurer responsible for the payment of personal injury protection benefits shall be determined in accordance with, and in the order of, priorities set forth in this section. The insurer liable to pay benefits is: (1) The insurer providing personal injury protection insurance under which the victim is the named insured; or (2) The insurer providing personal injury protection with respect to the motor vehicle in which, at the time of the accident, the victim is present. (b) If 2 or more obligations to pay personal injury protection benefits apply equally to an injury, the insurer against which the claim is asserted first shall process and pay the claim as if wholly responsible, subject to subsequent contribution pro rata from any other insurer for the amount of benefits paid and for the cost of processing the claim.  (Sept. 18, 1982, D.C. Law 4-155,  8, 29 DCR 3491; Mar. 4, 1986, D.C. Law 6-96,  2(f), 32 DCR 7245.)  Prior Codifications 1981 Ed.,  35-2107.
 312408.01. Uninsured Motorist Fund. (a) A fund is established in the District, to be known as the Uninsured Motorist Fund (Fund), for the purpose of awarding compensation to a victim of an accident who sustains injury therefrom and would not otherwise be compensated for his or her loss. Assessment shall be made, on a fair and equitable basis, among all insurers in accordance with projections of the District government as to costs required for reasonable funding and administration of the Fund. The Fund shall be classified by the Mayor pursuant to  47-375. The Fund shall be administered by the Mayor. (1) All compensation awarded under this section shall be paid from the monies in the Fund. (2) Monies in the Fund shall consist of, and there shall be deposited in the District of Columbia treasury to the credit of the Fund, monies received pursuant to subsection (a) of this section. (b) A victim is eligible for compensation under this section subject to the following conditions: (1) The accident upon which the claim is based was reported to the Mayor not more than 45 days after the accident occurred, except that this requirement may be waived for good cause shown. (2) The victim files a claim on a form supplied by the Mayor and submits all required information and documents within 180 days after the accident, except that this requirement may be extended for good cause shown or if the victim is still undergoing medical treatment for injuries relating to the accident. (3) The victim has suffered loss in an amount exceeding $100 as a result of the accident upon which the claim is based. (4) The victim shall be eligible if the only identifiable insurer or insurers, who would otherwise be obligated to compensate the victim, are financially unable to fulfill their obligations. (c) The victim shall not be eligible if the victim is at fault, is an insured, owns a registered motor vehicle, or operated a motor vehicle in the accident upon which the claim is based. (d) Claims shall be processed and maintained in the order of their filing. (e) The amounts of compensation awarded shall be equal to the amount of the victims loss, decreased by all amounts received by or available to the victim from collateral sources. No compensation shall be awarded pursuant to this section in an amount exceeding $100,000 in medical and rehabilitative expenses, $24,000 in wage loss, and $4,000 in funeral expenses. No final award of compensation shall be made unless the Fund contains sufficient monies to pay the award. (f) In addition to the amount of compensation awarded to a successful claimant, a reasonable fee may be awarded for any professional assistance required in connection with any claim under this section. The fee may not exceed 10% of the amount of the claimants award or $1,000, whichever is less. (g)(1) Nothing in this section shall deprive the claimant or the claimants successors in interest of the right to recover damages from the negligent party. (2) The District of Columbia shall be subrogated to the claimants right against the negligent party to the extent of any compensation awarded under this section. The District of Columbia may initiate a suit against the negligent party for damages. The District of Columbia shall be notified by the plaintiff of the institution of any suit against the negligent party for damages. The District of Columbia shall have a lien on any recovery made from such a suit. All monies recovered through subrogation shall be deposited in the District of Columbia treasury to the credit of the Uninsured Motorist Fund. (h) Any agreement by a person to waive, release, or commute his or her rights under this section is void. Compensation awarded under this section is exempt from execution, attachment, or other remedy for recovery or collection of debt, except for expenses resulting from injury or death which is the basis for the claim. (i) Any person who knowingly submits false information in support of a claim under this section or knowingly suppresses relevant information concerning a claim under this section shall be guilty of a misdemeanor and, upon conviction, shall be fined not more than $2,000 or imprisoned for not more than 1 year, or both. A person convicted of an offense under this subsection shall forfeit any compensation under this section and shall reimburse and repay to the District of Columbia any compensation received pursuant to this section. (j)(1) The Mayor shall administer the provisions of this section, and shall issue rules necessary to carry out the provisions and purposes of this section. (2) The Mayor shall report annually to the Council of the District of Columbia on the status and activities of the Uninsured Motorist Fund. The report shall include, but is not limited to, the following information: Total number of claims filed, the number of claims approved and the amount of each award, the number of claims denied, the number of cases in which the claimant used professional assistance, the cumulative total of professional fees paid, the number of cases pending, and the future liability of the Uninsured Motorist Fund.  (Sept. 18, 1982, D.C. Law 4-155,  9a; as added Mar. 4, 1986, D.C. Law 6-96,  2(h), 32 DCR 7245.)  Prior Codifications 1981 Ed.,  35-2114.
 312408. Administration Fund. [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-40,  13(a), 40 DCR 6009.)  Prior Codifications 1981 Ed.,  35-2108.
 312409. Consumer protection. (a) Grounds for cancellation of policy.  No insurer shall cancel a policy except: (1) For refusal or failure of the insured to pay a premium due under the terms of the policy of motor vehicle insurance; (2) Where the motor vehicle registration certificate of the insured has been suspended or revoked during the period of the policy of motor vehicle insurance; or (3) Where the license of an insured has been suspended or revoked during the period of a policy of motor vehicle insurance, the insurance shall not provide coverage for such insured during the period of suspension or revocation. (b) Notice required of cancellation of or refusal to renew policy.  (1) No cancellation or refusal to renew by an insurer of a policy of motor vehicle insurance shall be effective unless the insurer has delivered or mailed to the named insured, at his or her last known address, a written notice of intent to cancel or refusal to renew. The required notice shall be provided to the named insured at least 30 days prior to the effective date of cancellation, or in the case of nonrenewal, 30 days prior to the end of the policy period. The notice shall contain a statement: (A) Of the specific reasons relied upon by the insurer as the basis of cancellation or refusal to renew; (B) Advising the named insured of his or her right to request, in writing, within 15 days of receipt of the notice, that the Commissioner review the action of the insurer in cancelling or refusing to renew the policy of the insured; (C) Advising the insured of the possible availability of other insurance which may be obtained through his or her agent, through another insurer, or through the District of Columbia Automobile Insurance Plan; and (D) That the motor vehicle registration or reciprocity sticker of the vehicle shall be suspended or revoked for failure to maintain required insurance. (2)(A) Or, in the case of a refusal or failure of the insured to pay a premium due under the terms of the policy, the notice shall be provided to the insured not less than 15 days prior to the effective date of the cancellation, or in the event of a cancellation or nonrenewal for refusal or failure or an insured to pay a premium due under the terms of the policy, within 15 days of receipt of the notice. (B) The provisions of subparagraph (A) of this paragraph may take effect when the Director of the Department of Motor Vehicles certifies, as published in the District of Columbia Register, that the automated systems and procedures of the Department reasonably permits implementation of this change, but not later than October 1, 2002. Insurance companies shall file with the Commissioner by June 30, 2004, a report on the industry-wide economic impact, if any, of this section on the insurance premium downpayment for purchasing automobile coverage to residents of the District of Columbia with a goal of contributing to an overall reduction in the premium downpayment of 10% from the date of the implementation of subsection (b) of this section. The Commissioner shall issue a report to the Council on the overall industry reduction in the insurance premium payment on or before September 1, 2004. In the event the industry-wide insurance premium downpayment reduction is less than 10%, the report shall state the reasons why the decrease is less than the goal. (c) Proof of mailing notice.  Proof of mailing of the notice of cancellation, or of intention not to renew, to the named insured by post office receipt secured or certified mail at the address shown in the policy or to the named insureds last known address, shall be sufficient proof of notice. (d) Consequences of failure to provide required notice.  Despite failure of the named insured to make timely payment of the renewal premium, failure by the insurer to provide the notice required by this section shall result in the insurer being required: (1) To provide coverage for any claim which would have been covered under the policy, if a claim arises within 45 days after the date within which the named insured discovers or should have discovered that his or her policy has not been renewed; and (2) To renew the policy upon tender of payment; provided, that tender is made within 15 days after the date the named insured discovers, or should have discovered, that his or her policy has not been renewed. (e) Prohibited discrimination.  No insurer, other than a self-insurer, shall fail or refuse to issue a policy of motor vehicle insurance to an applicant, fail or refuse to renew a policy of motor vehicle insurance, or cancel a policy of motor vehicle insurance for any reason provided in Unit A of Chapter 14 of Title 2. (f) Prohibited inquiries concerning prior cancellation or nonrenewals.  No applicant for a policy of motor vehicle insurance, as a condition precedent to obtaining a policy or renewing a policy, shall be required to disclose whether he, she, or any person reasonably expected to operate the applicants motor vehicle has ever had an insurance policy cancelled or nonrenewed; provided, however, that at the time of application an applicant may be required to disclose his or her experience as an operator of a motor vehicle for a past period of not more than 3 years, and that of any person reasonably expected to operate the motor vehicle. (g) Refusal to accept brokerage business.  An insurer or agent that accepts brokerage business and rejects the business of a broker shall provide the Mayor and the broker, upon the request of the broker, the reasons in writing for such rejection. (h) Policies in effect less than 60 days.  The restrictions on cancellation contained in this section shall not be effective with respect to any policy which shall have been in force for 60 days or less if the policy is not a renewal policy. (i) Appeal procedure.  (1)(A) If the insured disputes the validity of a purported cancellation or nonrenewal, the insured may send, within 15 days of receipt of the notice of intent to cancel or not to renew, written notification to the Commissioner of the reasons the insured believes the action by the insurer is invalid. The Commissioner shall, upon receipt, immediately send the insurer a copy of the notification; or (B) In the event of a cancellation or nonrenewal for refusal or failure of an insured to pay a premium due under the terms of the policy, within 15 days of receipt of the notice of intent to cancel or not to renew. (C) The provisions of subparagraph (A) of this paragraph may take effect when the Director of the Department of Motor Vehicles certifies, as published in the District of Columbia Register, that the automated systems and procedures of the Department reasonably permits implementation of this change, but not later than October 1, 2002. Insurance companies shall file with the Commissioner by June 30, 2004, a report on the industry-wide economic impact, if any, of this section on the insurance premium downpayment for purchasing automobile coverage to residents of the District of Columbia with a goal of contributing to an overall reduction in the premium downpayment of 10% from the date of the implementation of subsection (b) of this section. The Commissioner shall issue a report to the Council on the overall industry reduction in the insurance premium payment on or before September 1, 2004. In the event the industry-wide insurance premium downpayment reduction is less than 10%, the report shall state the reasons why the decrease is less than the goal. (2) Unless the matter referred to in paragraph (1) of this subsection has been settled, the Commissioner shall determine, within 45 days calendar days, whether the cancellation or nonrenewal was authorized under the terms of this section and shall notify immediately the insured and the insurer in writing of the decision. (3) If the Commissioner determines that a policy was improperly cancelled or not renewed, the policy in question shall be considered to be in effect and to have been in effect from the period of notification of cancellation or nonrenewal. If the Commissioner determines that a policy was properly cancelled or not renewed, the policy in question shall be considered to be cancelled or not renewed as of the cancellation or nonrenewal date given in the notice sent by the insurer pursuant to this section or as of the date of determination by the Commissioner, whichever is later. The insured shall pay any portion of the required premium or cost to the insurer for the insurance coverage in effect and provided by the insurer for which the insured has not paid. (4) Decisions of the Commissioner shall be appealable pursuant to subchapter I of Chapter 5 of Title 2. (j) Immunity.  There shall be no liability on the part of and no cause of action of any nature shall arise against any employee of the District government, any insurer, its authorized representatives, its agents, its employees, or any firm, person, or corporation who, in good faith: (1) Furnishes to the named insured information as to reasons for cancellation or nonrenewal; (2) Makes any statement in any written notice of cancellation or renewal; (3) Makes any other communication, oral or written, specifying the reasons for cancellation or nonrenewal; (4) Provides information pertaining to the insured; or (5) Makes statements or submits evidence at any hearing conducted in connection therewith. An insurer may request the disclosure for a period exceeding 3 years for the sole purpose of providing a discount on the premium or cost of the motor vehicle insurance at the request of the insured. (k) Other rights.  The rights provided by this chapter shall be in addition to and shall not prejudice any other rights the named insured may have at common law or otherwise. (l) Terms more favorable; prohibition of waiving rights.  A policy may provide terms more favorable to named insureds than are required by this chapter, but no policy shall contain any provisions which waives any of the requirements of this chapter. (m) Consumers right to information.  A copy of the provisions of this section shall be provided, in writing, by the insurer to the named insured at the time of the initial purchase of insurance, or in the case of insurance renewal, provided, in writing, to the named insured by the insurer at the time of the 1st renewal after September 18, 1982. (n) Nondiscrimination against persons not previously insured.  No insurer shall refuse to insure, refuse to continue to insure, limit coverage available to, or charge a disadvantageous rate to any person seeking to obtain insurance required by this chapter because that person had not been previously insured. This provision shall not apply if the applicant was required by law to maintain automobile insurance coverage and failed to do so. An insurer may require reasonable proof that the applicant did not fail to maintain this coverage. The insurer is not required to accept the mere lack of a conviction or citation for failure to maintain this coverage as proof of maintenance of coverage. (o) Insurer to provide settlement.  Each insurer shall, at the time of renewal or denial of a motor vehicle insurance policy, provide to an applicant a statement which provides the following information: (1) If requested by the policyholder, the cost of the minimum package of insurance required by this chapter; and (2) In the case of a denial, specific reasons for the denial.  (Sept. 18, 1982, D.C. Law 4-155,  10, 29 DCR 3491; Mar. 4, 1986, D.C. Law 6-96,  2(i), 32 DCR 7245; Sept. 20, 1996, D.C. Law 11-160,  2(c), 43 DCR 3722; May 21, 1997, D.C. Law 11-268,  10(v), 44 DCR 1730; Apr. 13, 1999, D.C. Law 12-209,  401, 45 DCR 8433; Apr. 27, 2001, D.C. Law 13-289,  101(c), 48 DCR 2057.)  Prior Codifications 1981 Ed.,  35-2109. Section References This section is referenced in  31-2411. Effect of Amendments D.C. Law 13-289 rewrote subsecs. (b) and (i)(1) which had read: (b) Notice required of cancellation of or refusal to renew policy. No cancellation or refusal to renew by an insurer of a policy of motor vehicle insurance shall be effective unless the insurer has delivered or mailed to the named insured, at his or her last known address, a written notice of intent to cancel or refusal to renew. The required notice shall be provided to the named insured at least 30 days prior to the effective date of cancellation, or in the case of nonrenewal, 30 days prior to the end of the policy period. The notice shall contain the following: (1) A statement of the specific reason or reasons relied upon by the insurer as the basis of cancellation or refusal to renew; (2) A statement advising the named insured of his or her right to request, in writing, within 15 days of receipt of the notice, that the Commissioner review the action of the insurer in cancelling or refusing to renew the policy of such insured; (3) A statement advising the insured of the possible availability of other insurance which may be obtained through his or her agent, through another insurer, or through the District of Columbia Automobile Insurance Plan; and (4) A statement that the motor vehicle registration of the vehicle will be cancelled or revoked for failure to maintain required insurance. (1) If the insured disputes the validity of a purported cancellation or nonrenewal, the insured may, within 15 days of receipt of the notice of intent to cancel or not to renew, send written notification to the Commissioner of the reasons the insured believes the action by the insurer is invalid. The Commissioner shall, upon receipt, immediately send the insurer a copy of the notification. Emergency Legislation For temporary amendment of section, see  13 of the Reciprocal Insurance Company Conversion Emergency Amendment Act of 1998 (D.C. Act 12-298, March 4, 1998, 45 DCR 1775). For temporary amendment of section, see  501 of the Health Insurance Portability and Accountability Federal Law Conformity Emergency Amendment Act of 1998 (D.C. Act 12-339, May 4, 1998, 45 DCR 2947), and  501 of the Health Insurance Portability and Accountability Federal Law Conformity, Motor Vehicle Insurance, Regulatory Reform, and Consumer Law Congressional Review Emergency Amendment Act of 1998 (D.C. Act 12-429, August 6, 1998, 45 DCR 5890). Temporary Legislation For temporary (225 day) amendment to section, see  501 of Health Insurance Portability and Accountability Federal Law Conformity, Motor Vehicle Insurance, Regulatory Reform, and Consumer Law Temporary Amendment Act of 1998 (D.C. Law 12-154, September 18, 1998, law notification 45 DCR 6951). Editor's Notes Near the middle of paragraph (2) of subsection (i), the phrase 45 days calendar days is set forth exactly as enacted by D.C. Law 6-96. Report of the Commissioner of Insurance and Securities: Section 5 of D.C. Law 11-160 provided that Within two years of September 20, 1996, the Commissioner of Insurance and Securities shall prepare and submit to the Council of the District of Columbia for its review a report on the impact of this act on the private passenger motor vehicle insurance market or any part thereof, the funding for the Office of Insurance, the District of Columbia insurance premium tax, the number of insurers doing business in the District, and the number of insurers domiciled in the District of Columbia. In preparing such report, the Commissioner may request from specific private passenger motor vehicle insurers doing business in the District, or from all such insurers, reasonable and pertinent information. Information which is proprietary to any affected insurer shall be treated as confidential by the Commissioner, but may be used in the aggregate with other information from other affected insurers for statistical or other reporting purposes. Department of Insurance abolished: See Historical and Statutory Notes following  31-2402.
 312410. Special provisions. (a) Election of deductible.  An insurer offering to provide personal injury protection insurance in the District may offer, at appropriately reduced premium rates, a deductible of a specified dollar amount up to the amount prescribed by the Mayor, upon the recommendation of the Commissioner. This deductible may be applicable to all or any specified type of personal injury protection benefit, except that it may not be made applicable to any medical, paramedical, ambulance, or hospital services furnished to a victim on an emergency basis during the 72 hours immediately following an accident. (b) Subtraction of certain other benefits.  All benefits (less reasonably incurred collection costs) that an individual receives or may receive, with respect to an injury, from: (1) Repealed; (2) Workers compensation; (3) Temporary nonoccupational disability insurance that is required by a state or the District government; and (4) Repealed; shall be subtracted in calculating personal injury protection benefits unless the law authorizing or providing for those benefits makes them secondary to or duplicative of personal injury protection benefits. (c) Penalty for overdue payment of personal injury protection benefits.  (1) All personal injury protection benefits are payable as loss accrues, subject to receipt by the applicable insurer of reasonable proof of the fact and amount of loss sustained. If personal injury protection benefits are not paid within 30 days after receipt of such proof, the payment is overdue. (2) An overdue payment of personal injury protection benefits bears interest at the prime rate of interest generally prevailing in the District on the date upon which such payment is first overdue per annum from the date upon which such payment is first overdue. (3) For purposes of this subsection, payment is made on the date a draft or other valid commercial instrument is placed in the United States mail in a properly addressed and posted envelope or on the date of delivery thereof, whichever is applicable. (d) Assignment of rights to future benefits.  An agreement for the assignment of a right to any personal injury protection benefits payable in the future is void. (e) Payment of attorneys fees.  (1) An attorney may receive a reasonable fee for advising and representing a claimant in an action for personal injury protection benefits which are overdue. The fee shall be paid by the applicable insurer in addition to the amount of the personal injury protection benefits which are overdue and the penalty under subsection (c) of this section if a court finds that the insurer did not promptly pay the amount due. (2) An insurer may be allowed, by a court, an award of a reasonable sum for a fee for its attorney for the legal cost of defending against a claim that is or was fraudulent in some significant respect. The award may be treated as an offset against the amount of any personal injury protection benefits then or thereafter owing by that insurer to the person making that claim. (f) Primacy of personal injury protection.  Repealed.  (Sept. 18, 1982, D.C. Law 4-155,  11, 29 DCR 3491; Mar. 14, 1985, D.C. Law 5-159,  13(b), 32 DCR 30; Mar. 4, 1986, D.C. Law 6-96,  2(j), 32 DCR 7245; May 21, 1997, D.C. Law 11-268,  10(v), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  32(a), 45 DCR 745; Apr. 20, 1999, D.C. Law 12-264, 37, 46 DCR 2118.)  Prior Codifications 1981 Ed.,  35-2110. Section References This section is referenced in  31-2411. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2402.
 312411. Miscellaneous provisions. (a) Statute of limitations.  (1) Except as otherwise provided in this subsection, a civil action for the recovery of any personal injury protection benefits payable under this chapter shall be commenced not later than 3 years after the date of the injury giving rise to entitlement to such benefits. (2) If an appropriate written notice setting forth the name and address of the victim and the time, place, and nature of the injury is given to the insurer or any of its authorized agents reasonably promptly after the date of the accident resulting in the injury, a civil action may be commenced at any time within 3 years after the date such a notice is given by a person claiming to be entitled to personal injury protection benefits or by a person acting on behalf of a victim. If the applicable insurer makes any payment of benefits for personal injury protection with respect to a particular victim and injury, then a civil action may be commenced at any time within 3 years after the most recent payment. (b) Physical or mental examination of victim.  (1) If a persons physical or mental condition is material to any claim that has been made or that may be made for personal injury protection benefits, the person involved shall submit to physical or mental examination by physicians, in accordance with provisions of the policy of insurance pursuant to which a claim has been or may be made. A policy of insurance providing for payment of the benefits required for personal injury protection may include reasonable provisions for physical and mental examination of persons claiming any such benefits. (2)(A) If requested by the person examined, a copy of every written report concerning an examination under this subsection which is made by an examining physician shall be delivered or mailed to such person without charge. (B) At least 1 report shall set forth in detail the findings and conclusions of the examining physicians. (C) Upon request and delivery or mailing, the party causing a person to be examined under this subsection may request the person examined to furnish its representative with a copy of every written report available to that person concerning any examination which is relevant to that persons claim for personal injury protection benefits. (D) An applicable insurer may request a person claiming personal injury protection benefits to submit the name and address of each physician, medical-care facility, hospital, clinic, rehabilitation center, nursing facility, or other person or institution that has diagnosed or treated the victim for or with respect to the injury claimed and any relevant past injury, as a prerequisite to the payment of benefits under this chapter. (E) A person shall authorize an insurer to inspect and copy records relevant to such a claim which are prepared or maintained by any physician, hospital, clinic, rehabilitation center, nursing facility, or other person or institution. (3) A court may make any order which is just in case a person refuses to comply with any provision of paragraph (1) or (2) of this subsection, except that an order shall not be entered directing the arrest of a person for disobeying an order to submit to a physical or mental examination. (4) Nothing contained in this subsection shall preclude a victim from obtaining treatment by the victims own physician. (c) Good-faith mistake.  (1) Payment of personal injury protection benefits by an insurer in good faith to or for the benefit of a person believed to be entitled thereto discharges the insurer from its obligation to the extent of the amount of such payment, unless such insurer has been notified in writing prior to the payment of the claim of some other person. (2) If there is doubt about the proper person to receive the benefits involved or the proper apportionment to be made among the persons entitled to benefits or about whether an item of medical or rehabilitation expense was reasonably necessary or whether the charge for an item is reasonable, the insurer, the claimant, or any other interested person may apply to the Superior Court of the District of Columbia for an appropriate order. If an application is made by an insurer before the benefit claimed is overdue, the provisions of  31-2410(c) and (e) are not applicable with respect to the amount. (d) Subrogation.  (1) An insurer shall have a right of reimbursement from any other insurer, based upon a determination of fault, for any personal injury protection benefits paid or obligated to be paid by that insurer as a result of an accident that involved 2 or more motor vehicles, at least 1 of which was of a type other than a passenger motor vehicle. (2) An insurer which has paid or become obligated to pay personal injury protection benefits in any case not covered by paragraph (1) of this subsection may agree to receive a right of reimbursement from any other insurer with respect to some or all of those benefits. (3) Entitlement to reimbursement and the amount of any reimbursement under this subsection shall be determined by agreement between any insurers who are involved under paragraph (1) of this subsection or who agree under paragraph (2) of this subsection. If the insurers fail to reach agreement as to entitlement or amount or both, these issues shall be determined by intercompany arbitration in accordance with any applicable agreement between the insurers involved under procedures established by the Commissioner. The determination of any right of reimbursement under this subsection shall not be affected by the provisions of  31-2405. (e) Waiver for taxicabs.  (1) Taxicabs shall be waived from the mandatory minimum insurance requirements of  31-2406 (except for the provisions of  31-2409) for 2 years from March 4, 1986. The Mayor shall gradually increase minimum liability insurance requirements for taxicabs during the waiver period, after hearings held in accordance with  2-509. (2) The rate of increase will be determined by the Mayor based upon evidence submitted to the Mayor on the reasonableness of the insurance rate and liability limit increase in relation to the need to preserve the economic viability of the taxi industry. (3) The Mayor shall impose the liability limits and rate increases on an annual basis. (4) Two years from March 4, 1986, the owners and operators of taxis shall be required to obtain mandatory insurance as set forth in  31-2406. (5) Nothing in this section shall preclude the owner or operator of a taxi from carrying insurance greater than the required minimum or from carrying at his or her option personal injury protection benefits. (f) Rulemaking.  The Mayor, the Director, or the Commissioner, or each of them, may, in accordance with  2-509, issue rules to expeditiously and economically administer this chapter.  (Sept. 18, 1982, D.C. Law 4-155,  12, 29 DCR 3491; Mar. 4, 1986, D.C. Law 6-96,  2(k), 32 DCR 7245; May 21, 1997, D.C. Law 11-268,  10, 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  32(b), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-2111. Transfer of Functions See Historical and Statutory Notes following  31-2402. Editor's Notes Exemption of taxicabs from certain provisions of Law 4-155: See Mayors Order 83-176, June 30, 1983.
 312412. Temporary Motor Vehicle Insurance Review Commission. [Expired] Expired. Prior Codifications 1981 Ed.,  35-2112. Editor's Notes Expiration of Temporary Motor Vehicle Insurance Review Commission: Pursuant to subsection (i) of former  35-2112 1981 Ed., the Temporary Motor Vehicle Insurance Review Commission was to expire 3 years after March 4, 1986. The Temporary Motor Vehicle Insurance Review Commission is deemed to have expired on March 4, 1989.
 312413. Penalties; adjudications. (a) A person is guilty of an offense if that person: (1) Makes any false material statement with respect to his or her compliance with the obligation to maintain required insurance; (2) Is the owner of a motor vehicle that is required to be registered or obtain a reciprocity sticker in the District and required insurance is not in effect with respect to that motor vehicle; (3) Is the owner of a motor vehicle and operates or permits that motor vehicle to be operated in the District without required insurance being in effect with respect to that motor vehicle; (4) Repealed. (5) Operates a motor vehicle as to which the certificate of registration or reciprocity sticker has been suspended pursuant to  31-2403(d)(2); (6) Fails or refuses to return or give a registration certificate, reciprocity sticker, or tags to the Department, an authorized agent of the Department, or to a law-enforcement officer; (7) Fails or refuses to present an Insurance Identification Card, its equivalent in another state, or other evidence establishing that required insurance is in effect with respect to a motor vehicle operated by that person upon demand by a law-enforcement officer; or (8) Violates any other provision of this chapter. (a-1) A violation of subsection (a)(7) of this section shall create a rebuttable presumption of a violation of subsection (a)(3) of this section. (a-2)(1) For the purposes of subsection (a)(7) of this section, the term "Insurance Identification Card" includes an electronic image of an Insurance Identification Card that is displayed on a cellular telephone or other portable electronic device. (2)(A) The presentation of an electronic image of an Insurance Identification Card on a cellular telephone or other portable electronic device shall not constitute consent for a law enforcement officer to access any other content on the cellular telephone or other portable electronic device. (B) A law enforcement officer presented with an electronic image of an Insurance Identification Card on a cellular telephone or other portable electronic device shall be immune from liability for damage to or loss of the cellular telephone or other portable electronic device; provided, that no immunity shall extend to recklessness or intentional misconduct. (b)(1)(A) A person who commits an offense under subsection (a)(3) of this section shall be subject to both the regulatory scheme established in  31-2403(d)(2) and to a civil fine of $500, or a license suspension for up to 30 days, or both, for the first offense, and an increase of 50% of the civil fine for the second and each subsequent offense, or a license suspension for up to 60 days, or both, pursuant to  50-2301.04 and 50-2301.05. (B) A motor vehicle owner or operator shall be permitted to contest by mail or in person the charge of operating or permitting to be operated a motor vehicle without required insurance being in effect with respect to that motor vehicle pursuant to subsection (a)(3) of this section. For the purposes of contesting the charge, the owner or operator shall be permitted to present as evidence establishing that the required insurance was in effect with respect to the motor vehicle any of the following: (i) An Insurance Identification Card; (ii) An insurance policy; (iii) Any other evidence that constitutes reasonable proof that the required insurance was in effect; or (iv) Copies of any documents described in sub-subparagraphs (i) through (iii) of this subparagraph. (C) Unless the hearing examiner has reasonable doubt about the veracity of the evidence presented pursuant to subparagraph (B)(i) and (ii) of this paragraph, submission of either shall be sufficient to dismiss the charge of operating or permitting to be operated a motor vehicle without required insurance being in effect with respect to that motor vehicle pursuant to subsection (a)(3) of this section. (2)(A) In addition to the regulatory scheme established in  31-2403(d)(2) for a person who commits an offense under subsection (a)(2) of this section a civil fine of $150 shall be assessed for each vehicle without the required insurance for a period of 1 to 30 days, and increasing to $7 for each day thereafter, not to exceed a total of $2,500 for each violation pursuant to  31-2404(d)(2)(A) [sic]. All or part of any penalty may be waived by the Director upon submission or proof that the vehicle was not operated during the corresponding time period. (B) A person shall not be subject to a fine pursuant to this paragraph if the person believed, in good faith, that the person contracted for the required insurance coverage with a company which subsequently went out of business or otherwise failed to comply with this law. (3) A person who commits an offense under subsection (a)(7) of this section shall be subject both to the regulatory scheme established in  31-2403(d)(2) and to a civil fine of $30. (c) In addition to the penalties provided in subsection (b)(1) of this section, a person who commits an offense under subsection (a)(1), (5), (6), or (8) of this section shall upon conviction also be subject to imprisonment for not more than 30 days for the 1st offense, and imprisonment for not more than 90 days for the 2nd and subsequent offenses. (d) All fines paid for violations of subsection (a) of this section shall be placed in the General Fund of the District of Columbia.  (Sept. 18, 1982, D.C. Law 4-155,  15, 29 DCR 3491; Mar. 10, 1983, D.C. Law 4-199,  3, 30 DCR 119; Sept. 27, 1985, D.C. Law 6-38,  2, 32 DCR 4307; Mar. 4, 1986, D.C. Law 6-96,  2(m), 32 DCR 7245; Mar. 23, 1995, D.C. Law 10-253,  103, 42 DCR 721; Sept. 26, 1995, D.C. Law 11-52,  103, 42 DCR 3684; Apr. 27, 2001, D.C. Law 13-289,  101(d), 48 DCR 2057; June 8, 2006, D.C. Law 16-117,  201(c), 53 DCR 2548; Mar. 14, 2007, D.C. Law 16-279,  204, 54 DCR 903; July 18, 2008, D.C. Law 17-197,  10(b), 55 DCR 6277; Sept. 14, 2011, D.C. Law 19-21,  9050(b), 58 DCR 6226; Mar. 13, 2019, D.C. Law 22-239,  2(b), 66 DCR 597.)  Prior Codifications 1981 Ed.,  35-2113. Section References This section is referenced in  5-114.02,  31-2403,  50-2201.03, and  50-2302.05. Effect of Amendments D.C. Law 13-289 rewrote subsec. (b), par. (2)(A) which had read: (2)(A) In addition to being subject to the regulatory scheme established in  31-2403(d)(2), for a person who commits an offense under subsection (a)(2) of this section a civil fine of $500 for the 1st violation and $1000 for the 2nd and subsequent violations, with applicable penalties and fees, may be imposed pursuant to Chapter 23 of Title 50. D.C. Law 16-117, in par. (a)(3) deleted knowingly preceding operates; repealed par. (a)(4); in par. (a)(7), substituted an Insurance Identification Card, its equivalent in another state, or other evidence establishing for evidence; added subsec. (a-1), subpars. (b)(1)(B) and (b)(1)(C), and par. (b)(3); and rewrote and designated the existing text of par. (b)(1) as subpar. (b)(1)(A). D.C. Law 16-279, in subsec. (b)(2)(A), added a sentence to the end of the subparagraph relating to the waiver of all or part of any penalty. D.C. Law 17-197 added subsec. (d). D.C. Law 19-21, in subsec. (d), substituted General Fund of the District of Columbia for Motor Vehicle Theft Prevention Fund established by  3-1356. Cross References Hearing examiners and traffic adjudication, see  50-2301.04. Monetary sanctions and traffic adjudication, see  50-2301.05. Unauthorized use of motor vehicles, see  22-3215. Emergency Legislation For temporary amendment of section, see  103 of the Omnibus Budget Support Congressional Review Emergency Act of 1995 (D.C. Act 11-124, July 27, 1995, 42 DCR 4160). Temporary Legislation For temporary (225 day) amendment of section, see  103 of Multiyear Budget Spending Reduction and Support Temporary Act of 1995 (D.C. Law 10-253, March 23, 1995, law notification 42 DCR 1652).
 312501.01. Short title. This chapter shall be known as the Fire and Casualty Act.  (Oct. 9, 1940, 54 Stat. 1063, ch. 792, ch. I,  1.)  Prior Codifications 1981 Ed.,  35-1501. 1973 Ed.,  35-1301. Section References This section is referenced in  31-5031.01,  31-5031.02, and  31-5031.24.
 312501.02. Applicability of chapter. All fire, marine, and casualty insurance companies now or hereafter incorporated or formed in the District or authorized to do business in the District, all brokers and all agents and other representatives of such companies shall, to the extent hereinafter provided, be subject to this chapter; provided, that this chapter shall not affect the business of life and title insurance, and shall not affect the right or authority of any solvent company to make contracts of fidelity or surety, and shall not affect a plan under which any person provides pension benefits to his employees.  (Oct. 9, 1940, 54 Stat. 1064, ch. 792, ch. I,  2.)  Prior Codifications 1981 Ed.,  35-1502. 1973 Ed.,  35-1302.
 312501.03. Definitions. In this chapter, unless the context otherwise requires: (1) District means District of Columbia. (2) Mayor means the Mayor of the District of Columbia. (3) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking or the officer or officers, agency or agencies succeeding to his functions under Reorganization Plan No. 5 of 1952. (4) Department means the Department of Insurance of the District of Columbia. (5) Company means an insurance, surety, or indemnity company, and shall be deemed to include a corporation, company, partnership, association, individual, or aggregation of individuals engaging in or proposing or attempting to engage in any kind of insurance, surety, or indemnity business, including the exchanging of reciprocal or interinsurance contracts between individuals, partnerships, and corporations. (6) Authorized company means a company which has authority from the Commissioner to do business in the District as provided under  31-2502.02. (7) Unauthorized company means a company which does not have authority from the Commissioner to do business in the District as provided under  31-2502.02. (8) Domestic company means a company incorporated or organized under the laws of the District. (9) Foreign company means a company incorporated or organized under the laws of any state of the United States. (10) Alien company means a company incorporated or organized under the laws of any country other than the United States. (11) Reciprocal includes interinsurance exchange. (12) Person includes individuals, corporations, associations, exchanges, and partnerships. (13) Personal pronouns include all genders; the singular includes the plural and the plural includes the singular. (14) Policy means an insurance policy or contract, including contracts of fidelity and surety, and includes any contract wherein 1 party called the company, for a consideration, undertakes to pay money or its equivalent, or to do an act valuable to any other party, upon the happening of the hazard or peril insured against whereby the party insured suffers loss or injury or is subjected to legal liability. (15) Officer, when used to refer to officer of the company, includes an attorney-in-fact. (16) Policy-writing agent means any person who is not a salaried employee of a company, and whose residence or principal place of business is located in the District, and who is authorized in writing by any company authorized to transact business in the District to countersign policies and to solicit, negotiate, or effect contracts of insurance, surety, or indemnity for such company in the District. (17) Soliciting agent means any person who is not a salaried employee of a company and whose residence or principal place of business is located in the District, and who is authorized by a company having authority to transact business in the District, or by a policy-writing agent, to solicit in the District contracts of insurance, surety, or indemnity in behalf of such company or agent. (18) Broker means any person who for a consideration acts or aids in any manner in the solicitation or negotiation on behalf of the assured of contracts of insurance, surety, or indemnity. (19) Salaried company employee means any person regularly employed by an authorized company, and who is paid a regular wage or salary to perform certain duties and functions authorized by such company. For the purposes of this chapter the term salaried company employee shall not include employees engaged solely in office duties or in the inspection, rating, or classifying of risks or in the supervision of agents, or any employee not engaged in the solicitation or writing of policies, or officers of companies or associations engaged in the performance of their usual and customary executive duties. (20) Surplus means the excess of admitted assets over liabilities and capital in the case of a company with capital stock, and the excess of admitted assets over liabilities in the case of a company without capital stock. (21) Liabilities means all debts due or to become due, contingent or otherwise, of which the company has knowledge, and includes the reserves required by this chapter. (22) Admitted assets includes the investments authorized or permitted pursuant to the National Association of Insurance Commissioners Accounting Practices Manual.  (Oct. 9, 1940, 54 Stat. 1064, ch. 792, ch. I,  3; June 30, 1953, 67 Stat. 120, ch. 168; Feb. 27, 1996, D.C. Law 11-90,  9(a), 42 DCR 7155; May 21, 1997, D.C. Law 11-268,  10(r)(1), 44 DCR 1730; Apr. 13, 2005, D.C. Law 15-354,  47, 52 DCR 2638.)  Prior Codifications 1981 Ed.,  35-1503. 1973 Ed.,  35-1303. Section References This section is referenced in  22-3225.01 and  31-701. Effect of Amendments D.C. Law 15-354, in par. (3), substituted of the Department of Insurance, Securities, and Banking for of Insurance and Securities. Cross References Additional definition of company, see  31-2502.39. Emergency Legislation For temporary amendment of section, see  10(a) of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and  9(a) of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844). Temporary Legislation For temporary (225 day) amendment of section, see  9(a) of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305). Editor's Notes Department of Insurance abolished: The Department of Insurance, including the Superintendent, was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. Reorganization Order No. 43, dated June 23, 1953, as amended, established, under the direction and control of a Commissioner, a Department of Insurance headed by a Superintendent. The Order provided for the organization of the Department, abolished the previously existing Department of Insurance, and provided that all functions and positions of the previous Department would be transferred to the new Department of Insurance, including the duties, powers, and authorities of all officers and employees; and that all personnel, property, records and unexpended balances relating to the functions and positions transferred would also be transferred to the new Department. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. The functions of the Superintendent of Insurance were transferred to the Department of Consumer and Regulatory Affairs by Reorganization Plan No. 1 of 1983, effective March 31, 1983. Pursuant to the provisions of D.C. Law 11-268, the Department of Insurance and Securities Regulation was established and the duties of the Superintendent of Insurance and the Insurance Administration were assumed by the Commissioner of Insurance and Securities and the Insurance Administration in the Department of Consumer and Regulatory Affairs was abolished. Change in Government This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 401 of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to a single Commissioner. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 312502.01. Records of Commissioner; rules and regulations. (a) The office of the Commissioner shall be a public office, and the records, books, and papers thereof on file therein shall be public records of the District, except as the Commissioner for good reason may decide otherwise, or except as it may be provided otherwise herein. (b) The Commissioner may, in accordance with  2-505, promulgate reasonable rules and regulations as are necessary to implement the provisions of this chapter.  (Oct. 9, 1940, 54 Stat. 1066, ch. 792, ch. II,  1; May 21, 1997, D.C. Law 11-268,  10(r)(2), 44 DCR 1730; Apr. 5, 2005, D.C. Law 15-292,  2, 52 DCR 1463; Mar. 2, 2007, D.C. Law 16-191,  53, 53 DCR 6794.)  Prior Codifications 1981 Ed.,  35-1504. 1973 Ed.,  35-1304. Effect of Amendments D.C. Law 15-292 rewrote subsec. (b) which had read: (b) The Council of the District of Columbia shall have authority to make, and the Commissioner shall have the authority to enforce, such reasonable rules and regulations as may be necessary in making effective the provisions of this chapter, but such rules and regulations shall not be contrary to nor inconsistent with the provisions of this chapter. D.C. Law 16-191 validated a previously made technical correction in (b). Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03. Change in Government This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 402(277) of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to the District of Columbia Council, subject to the right of the Commissioner as provided in  406 of the Plan. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 312502.02. Certificate of authority to do business  Issuance or renewal. (a) The Commissioner shall issue a certificate of authority to a company when it shall have complied with the requirements of the laws of the District so as to be entitled to do business therein. The Commissioner may, however, satisfy himself by such investigation as he may consider proper or necessary that the company is duly qualified under the laws of the District to transact business therein, and may refuse to issue or renew the certificate to a company if the issuance or renewal of the certificate would adversely affect the public interest. In each case, the certificate shall be issued under the seal of the Commissioner authorizing and empowering the company to transact the kind of business specified in the certificate, and the certificate shall expire on the 30th day of April next succeeding the date of its issuance. (b) Repealed. (c) No company shall transact any business in or from the District until it shall have received a certificate of authority as authorized by this section, and no company shall transact any business not specified in the certificate of authority. No domestic mutual company shall transact any business in the District until it has bona fide applications for insurance covering not less than 200 separate risks in not less than 20 policies to be issued to not less than 20 members, and has received the cash premium therefor, and has a surplus of not less than the amount provided under  31-2502.12 and 31-2502.13.  (Oct. 9, 1940, 54 Stat. 1066, ch. 792, ch. II,  2; May 21, 1997, D.C. Law 11-268,  10(r)(2), 44 DCR 1730; Oct. 21, 2000, D.C. Law 13-190,  3(a), 47 DCR 7261; Oct. 1, 2002, D.C. Law 14-190,  603(a), 49 DCR 6968; Mar. 8, 2007, D.C. Law 16-232,  202(a), 54 DCR 368.)  Prior Codifications 1981 Ed.,  35-1505. 1973 Ed.,  35-1305. Section References This section is referenced in  31-301,  31-1501,  31-2501.03,  31-2502.15, and  31-2502.20. Effect of Amendments D.C. Law 13-190 inserted after the third sentence the new fourth and fifth sentences. D.C. Law 14-190 rewrote the section which had read as follows: It shall be the duty of the Commissioner to issue a certificate of authority to a company when it shall have complied with the requirements of the laws of the District so as to be entitled to do business therein. The Commissioner may, however, satisfy himself by such investigation as he may deem proper or necessary that such company is duly qualified under the laws of the District to transact business therein, and may refuse to issue or renew any such certificate to a company if the issuance or renewal of such certificate would adversely affect the public interest. In each case the certificate shall be issued under the seal of the Commissioner authorizing and empowering the company to transact the kind or kinds of business specified in the certificate, and each such certificate shall be made to expire on the 30th day of April next succeeding the date of its issuance. A company may, at its own option and expense, submit a statement from an independent organization acceptable to the Commissioner, attesting that it meets all the requirements of the laws and regulations of the District and is qualified to transact the business for which it seeks a certificate of authority. The statement shall be signed, under oath, by an officer or principal of the independent organization and shall be considered prima facie evidence by the Commissioner that the company is entitled to do business in the District, subject to (1) an investigation and review, and (2) the Commissioners authority to revoke or suspend a certificate of authority as provided in this chapter. No company shall transact any business in or from the District until it shall have received a certificate of authority as authorized by this section, and no company shall transact any business not specified in such certificate of authority. No domestic mutual company shall transact any business in the District until it has bona fide applications for insurance covering not less than 200 separate risks in not less than 20 policies to be issued to not less than 20 members, and has received the cash premium therefor, and has a surplus of not less than the amount provided under  31-2502.12 and 31-2502.13. D.C. Law 16-232 repealed (b), which formerly read: (b) The Commissioner may, in accordance with  2-505, promulgate reasonable rules and regulations as are necessary to implement the provisions of this chapter. Cross References Authority of Council to regulate, modify, or eliminate license requirements and to promulgate regulations, see  47-2842, 47-2844. Issuance of certificate, see  31-2502.15. Emergency Legislation For temporary (90 day) amendment of section, see  603(a) of Fiscal Year 2003 Budget Support Emergency Act of 2002 (D.C. Act 14-453, July 23, 2002, 49 DCR 8026). Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03.
 312502.03. Certificate of authority to do business  Revocation or suspension. (a) The Commissioner shall have power to revoke or suspend the certificate of authority to transact business in the District of any company which has failed or refused to comply with any provision or requirement of this chapter, or which: (1) Is impaired in capital or surplus; (2) Is insolvent; (3) Is determined, pursuant to Chapter 21 of this title, to be in such condition that further transaction of business by the company will be hazardous to its policyholders, creditors, or the general public; (4) Has refused or neglected to pay a valid final judgment against such company within 30 days after such judgment shall have become final either by expiration without appeal within the time when such appeal might have been perfected, or by final affirmance on appeal; (5) Has violated any law of the District or has in the District violated its charter or exceeded its corporate powers; (6) Has refused to submit its books, papers, accounts, records, or affairs to the reasonable inspection or examination of the Commissioner, his deputies, or duly appointed examiners; (7) Has an officer who has refused upon reasonable demand to be examined under oath touching its affairs; (8) Fails to file with the Commissioner a copy of an amendment to its charter or articles of association within 30 days after the effective date of such amendment; (9) Has had its corporate existence dissolved or its certificate of authority revoked in the state in which it was organized; (10) Has had all its risks reinsured in their entirety in another company, without prior approval of the Commissioner; (11) Has made, issued, circulated, or caused to be issued or circulated any estimate, illustration, circular, or statement of any sort misrepresenting either its status or the terms of any policy issued or to be issued by it, or the benefits or advantages promised thereby, or the dividends or shares of the surplus to be received thereon, or has used any name or title of any policy or class of policies misrepresenting the true nature thereof; (12) Has filed, caused to be filed, or failed to prevent the filing of, a statement on its behalf from an independent organization attesting to its qualifications to transact business in the District for which it sought and received a certificate of authority if it knew, or should have known, that the statement was based on false, misleading, or incomplete information; or (13) Has filed, caused to be filed, or failed to prevent the filing of a statement on its behalf from a corporate officer attesting to its qualifications to transact business in the District for which it sought and received a certificate of authority if it knew, or should have known, that the statement was based on false, misleading, or incomplete information. (b) The Commissioner shall not revoke or suspend the certificate of authority of any company until he has given the company not less than 30 days notice of the proposed revocation or suspension and of the grounds alleged therefor, and has afforded the company an opportunity for a full hearing; provided, that if the Commissioner shall find upon examination that the further transaction of business by the company would be hazardous to the public or to the policyholders or creditors of the company in the District, he may suspend such authority without giving notice as herein required; provided further, that in lieu of revoking or suspending the certificate of authority of any company for causes enumerated in this section after hearing as herein provided, the Commissioner may subject such company to a penalty of not more than $10,000 for any violation, or not more than $25,000 for intentional violations, when in his judgment he finds that public interest would be best served by the continued operation of the company. The amount of any such penalty shall be paid by the company through the office of the Commissioner to the Collector of Taxes, District of Columbia. At any hearing provided by this section, the Commissioner shall have authority to administer oaths to witnesses. Anyone testifying falsely after having been administered such an oath shall be subject to the penalties of perjury. Civil fines, penalties, and fees may be imposed as alternative sanctions for any infraction of the provisions of this chapter, or any rules or regulations issued under the authority of this chapter, pursuant to Chapter 18 of Title 2. Adjudication of any infraction of this chapter shall be pursuant to Chapter 18 of Title 2.  (Oct. 9, 1940, 54 Stat. 1066, ch. 792, ch. II,  3; Apr. 22, 1944, 58 Stat. 192, ch. 173,  1; Feb. 22, 1958, 72 Stat. 21, Pub. L. 85-334,  4; Mar. 14, 1985, D.C. Law 5-160,  2(a), 32 DCR 39; Oct. 5, 1985, D.C. Law 6-42,  447(a), 32 DCR 4450; Mar. 8, 1991, D.C. Law 8-237,  2(r)(1), 38 DCR 314; Apr. 26, 1994, D.C. Law 10-103,  7(b), 41 DCR 1005; May 21, 1997, D.C. Law 11-268,  10(r)(2), 44 DCR 1730; Oct. 21, 2000, D.C. Law 13-190,  3(b), 47 DCR 7261; Oct. 1, 2002, D.C. Law 14-190,  603(b), 49 DCR 6968; Mar. 13, 2004, D.C. Law 15-105,  65, 51 DCR 881.)  Prior Codifications 1981 Ed.,  35-1506. 1973 Ed.,  35-1306. Section References This section is referenced in  31-305,  31-1403,  31-1608,  31-2231.17,  31-2709, and  31-5111. Effect of Amendments D.C. Law 13-190 added par. (12) to subsec. (a). D.C. Law 14-190, in subsec. (a), made nonsubstantive changes to pars. (11) and (12), and added par. (13). D.C. Law 15-105, in par. (12) of subsec. (a), validated a previously made technical correction. Cross References Administrative procedure, see  2-501 et seq. Annual audited financial reports, qualified independent certified public accountants, proceedings to determine qualification, see  31-305. Credit life, accident, and health insurance violations, proceedings, see  31-5111. Examinations, violations, conduct of proceedings, see  31-1403. General penalties for violation of insurance laws, see  31-2502.42. Regulation of casualty and other insurance rates, violations, see  31-2709. Violation of provisions applicable to more than one kind of insurance, suspension or revocation of license or certificate, see  31-1608. Emergency Legislation For temporary (90 day) amendment of section, see  603(b) of Fiscal Year 2003 Budget Support Emergency Act of 2002 (D.C. Act 14-453, July 23, 2002, 49 DCR 8026). Temporary Legislation For temporary (225 day) amendment of section, see  7(b) of Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17, 1994, law notification 41 DCR 1626). Editor's Notes Office of Collector of Taxes abolished: The Office of the Collector of Taxes was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. All functions of the Office of the Collector of Taxes including the functions of all officers, employees, and subordinate agencies were transferred to the Director, Department of General Administration by Reorganization Order No. 3, dated August 28, 1952. Reorganization Order No. 20, dated November 10, 1952, transferred the functions of the Collector of Taxes to the Finance Office. The same Order provided for the Office of the Collector of Taxes headed by a Collector in the Finance Office, and abolished the previously existing Office of the Collector of Taxes. Reorganization Order No. 20 was superseded and replaced by Organization Order No. 121, dated December 12, 1957, which provided that the Finance Office (consisting of the Office of the Finance Officer, Property Tax Division, Revenue Division, Treasury Division, Accounting Division, and Data Processing Division) would continue under the direction and control of the Director of General Administration, and that the Treasury Division would perform the function of collecting revenues of the District of Columbia and depositing the same with the Treasurer of the United States. Organization Order No. 121, was revoked by Organization Order No. 3, dated December 13, 1967, Part IVC of which prescribed the functions of the Finance Office within a newly established Department of General Administration. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. Functions of the Finance Office as stated in Part IVC of Organization Order No. 3 were transferred to the Director of the Department of Finance and Revenue by Commissioners Order No. 69-96, dated March 7, 1969. The collection functions of the Director of the Department of Finance and Revenue were transferred to the District of Columbia Treasurer by  47-316 on March 5, 1981. Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03.
 312502.04. Cessation of business. If a company shall cease to do business in the District, it shall thereupon make report to the Commissioner of the taxable premiums collected which have not been reported prior to the date of the cessation of business, and shall forthwith pay to the Collector of Taxes of the District, through the Commissioner, a tax thereon computed according to law. If a company fails or refuses to make such a report or to pay the tax imposed upon it as required by law, it shall be liable to the District for the amount of such taxes, plus a penalty of 8 per centum per month for each month or part thereof during which such taxes remain unpaid.  (Oct. 9, 1940, 54 Stat. 1067, ch. 792, ch. II,  4; May 21, 1997, D.C. Law 11-268,  10(r)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-1507. 1973 Ed.,  35-1307. Cross References Exemption of marine insurance from operation of general tax laws, see  47-2608. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03. Office of Collector of Taxes abolished: See Historical and Statutory Notes following  31-2502.03.
 312502.05. Receivership proceedings. [Repealed] Repealed.  (Oct. 15, 1993, D.C. Law 10-35,  59(b), 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-1508 to 35-1510. Temporary Legislation For temporary (225 day) amendment of section, see  7(b) of Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17, 1994, law notification 41 DCR 1626). Editor's Notes D.C. Law 10-76 and D.C. Law 10-103 purported to amend former  35-1508 1981 Ed. by rewriting (a)(1)(D). D.C. Law 10-103,  7(b) ( 41 DCR 1005), eff. April 26, 1994, subsequent to its repeal, amended former  35-1508(a)(1)(D) 1981 Ed. to read: (D) Is determined, pursuant to the Standards to Identify Insurance Companies Deemed to be in Hazardous Financial Condition Act of 1993, to be in such condition that further transaction of business by the company will be hazardous to its policyholders, creditors, or the general public;
 312502.06. Receivership proceedings; insolvency; impairment. [Repealed] Repealed.  (Oct. 15, 1993, D.C. Law 10-35,  59(b), 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-1508 to 35-1510. Temporary Legislation For temporary (225 day) amendment of section, see  7(b) of Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17, 1994, law notification 41 DCR 1626). Editor's Notes D.C. Law 10-76 and D.C. Law 10-103 purported to amend former  35-1508 [1981 Ed.] by rewriting (a)(1)(D). D.C. Law 10-103,  7(b) ( 41 DCR 1005), eff. April 26, 1994, subsequent to its repeal, amended former  35-1508(a)(1)(D) [1981 Ed.] to read: (D) Is determined, pursuant to the Standards to Identify Insurance Companies Deemed to be in Hazardous Financial Condition Act of 1993, to be in such condition that further transaction of business by the company will be hazardous to its policyholders, creditors, or the general public;
 312502.07. Receivership proceedings; insolvency; impairment. [Repealed] Repealed.  (Oct. 15, 1993, D.C. Law 10-35,  59(b), 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-1508 to 35-1510. Temporary Legislation For temporary (225 day) amendment of section, see  7(b) of Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17, 1994, law notification 41 DCR 1626). Editor's Notes D.C. Law 10-76 and D.C. Law 10-103 purported to amend former  35-1508 [1981 Ed.] by rewriting (a)(1)(D). D.C. Law 10-103,  7(b) ( 41 DCR 1005), eff. April 26, 1994, subsequent to its repeal, amended former  35-1508(a)(1)(D) [1981 Ed.] to read: (D) Is determined, pursuant to the Standards to Identify Insurance Companies Deemed to be in Hazardous Financial Condition Act of 1993, to be in such condition that further transaction of business by the company will be hazardous to its policyholders, creditors, or the general public;
 312502.08. Required annual financial statements. [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-42,  7(c), 40 DCR 6020.)  Prior Codifications 1981 Ed.,  35-1511.
 312502.09. Making or publishing material false statements. Any director, officer, agent, or employee of any company who subscribes to, makes or concurs in making or publishing any annual or other statement required by law, knowing the same to contain any material statement which is false, shall be fined not more than $5,000 or imprisoned for not more than 5 years, or both.  (Oct. 9, 1940, 54 Stat. 1069, ch. 792, ch. II,  9.)  Prior Codifications 1981 Ed.,  35-1512. 1973 Ed.,  35-1312.
 312502.10. Examinations by Superintendent; violations; acceptance of reports in lieu of examinations. [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-49,  9(c), 40 DCR 6110.)  Prior Codifications 1981 Ed.,  35-1513.
 312502.11. Kinds of insurance authorized. Any company authorized to do business in the District may, when empowered by its charter, make all or any 1 or more of the kinds of insurance and reinsurance comprised in either or both of the following classes, subject to and in accordance with the provisions of this chapter: (1) Fire and marine.  On houses, buildings, and all other kinds of property against loss, damage, or damages by fire, lightning, or storm; to insure against loss or damage by water to any goods or premises arising from the breakage or leakage of sprinklers or water pipes; and to make all kinds of insurance against loss of or damage to goods, merchandise, or other property caused by fire, risks of transportation, or navigation, the action of the elements or adverse manifestations of nature, as well as all and every risk or peril to which the subject of insurance may be exposed, against which it is not contrary to public policy to insure, including every insurable interest therein or in the use thereof, or profit or income therefrom, or legal liability therefor, but not to include injury to the person nor loss caused by breach of trust; and (2) Casualty.  (A) Upon the health of persons, or against injury, disablement, or death of persons resulting from traveling or general accidents by land or water, and against liability of the assured for injuries to employees or other persons; (B) Against liability of the assured for loss or destruction of or damage to property; (C) Upon the lives of domestic animals; (D) Against loss of or damage to glass and its appurtenances; (E) Against loss of or damage to any property resulting from the explosion of or injury to any boiler, heater, unfired pressure vessel, pipes, or containers connected therewith, any engine, turbine, compressor, pump, or wheel or any apparatus generating, transmitting or using electricity, or any other machine or apparatus connected with or operated by any of the previously named boilers, vessels, or machines; and including the incidental power to make inspections of and to issue certificates of inspection upon, any such boilers, apparatus, and machinery, whether insured or otherwise; (F) Against loss by burglary or theft, or both, and against loss of or damage to moneys and securities; (G) To guarantee and indemnify merchants, traders, and those engaged in business and giving credit, from loss and damage by reason of giving and extending credit to their customers and those dealing with them; (H) Against loss or damage by water or other fluid or substance to any property resulting from the breakage or leakage of sprinklers or water pipes; and (I) To insure against any other casualty risk which may lawfully be the subject of insurance, and which it is not contrary to public policy to insure; provided, that this section shall not be construed as having any effect whatever upon the right or authority of any solvent company to make contracts of fidelity or surety.  (Oct. 9, 1940, 54 Stat. 1069, ch. 792, ch. II,  11; Mar. 24, 1998, D.C. Law 12-81,  29(a), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-1514. 1973 Ed.,  35-1314. Cross References Employees Compensation Act, insurance under, see  31-5205. Prohibition against wagering policies, see  31-2601.01.
 312502.12. Limitations on exposure to risks or hazards. No company other than a mutual or reciprocal company doing business in the District shall expose itself to any loss on any one risk or hazard, whether located in the District or outside of the District, to an amount exceeding 10% of the sum of its capital stock and surplus. No mutual or reciprocal company shall expose itself to any loss on any one risk or hazard, whether located in the District or outside of the District, to an amount exceeding 10% of its surplus. No portion of any such risk or hazard which shall have been reinsured in a company authorized to do business in the District shall be included in determining limitation of risk; provided, that the provisions of this section shall not apply to the insurance of workmens compensation, employers liability, marine, or inland marine risks.  (Oct. 9, 1940, 54 Stat. 1070, ch. 792, ch. II,  12; Apr. 26, 1994, D.C. Law 10-103,  3, 41 DCR 1005; Mar. 8, 2007, D.C. Law 16-232,  202(b), 54 DCR 368.)  Prior Codifications 1981 Ed.,  35-1515. 1973 Ed.,  35-1315. Section References This section is referenced in  31-2502.02 and  31-3931.06. Effect of Amendments D.C. Law 16-232 substituted any one risk or hazard, whether located in the District or outside of the District for any 1 risk or hazard in the District. Cross References Capital and surplus requirements for foreign and alien companies, see  31-2502.22. Limitation of risk for companies operating on Lloyds plan, see  31-2502.20a. Temporary Legislation For temporary (225 day) amendment of section, see  3 of Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17, 1994, law notification 41 DCR 1626). Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03.
 312502.13. Minimum capital and surplus requirements. Every stock company authorized to do business in the District shall have and shall at all times maintain a paid-up capital stock of not less than $300,000, and a surplus of not less than $300,000. Every domestic mutual company and every domestic reciprocal company shall have and shall at all times maintain a surplus of not less than $300,000 and every foreign or alien mutual company and every foreign or alien reciprocal company shall have and shall at all times maintain a surplus of not less than $400,000.  (Oct. 9, 1940, 54 Stat. 1070, ch. 792, ch. II,  13; Apr. 16, 1966, 80 Stat. 121, Pub. L. 89-399,  1(b); Aug. 14, 1973, 87 Stat. 304, Pub. L. 93-89, title IV,  401.)  Prior Codifications 1981 Ed.,  35-1516. 1973 Ed.,  35-1316. Section References This section is referenced in  26-1301,  31-308, and  31-2502.02. Cross References Independent certified public accountant, report demonstrating minimum capital and surplus requirement, see  31-308. Security, guarantee, indemnity, loan, and mortgage business, capital stock, see  26-1301. Surplus required for operation under Lloyds plan, see  31-2502.20a.
 312502.14. Applicability of provisions to existing companies. No company shall be exempt from the provisions of this chapter by reason of its having been incorporated in the District or elsewhere prior to the effective date of this chapter, except that, in the case of companies authorized in the District on October 9, 1940, and continuously thereafter without any increase of authority, the minimum capital and surplus required of a stock company, and the minimum surplus required of a mutual or reciprocal company, or of a Lloyds organization, by the laws of the District heretofore applicable shall not be increased by this chapter, and provided also that in the case of such continuously authorized companies the provisions of  31-2502.24 relating to the names of companies, and the provisions of  31-2502.25 relating to the amount of surplus necessary to the issuance of policies having no provision for contingent liability, shall not be applicable.  (Oct. 9, 1940, 54 Stat. 1070, ch. 792, ch. II,  14; Aug. 14, 1973, 87 Stat. 304, Pub. L. 93-89, title IV,  401; Feb. 23, 1980, D.C. Law 3-52,  4, 27 DCR 26.)  Prior Codifications 1981 Ed.,  35-1517. 1973 Ed.,  35-1317. Section References This section is referenced in  31-2502.24 and  31-2502.25. References in Text The effective date of this chapter, referred to near the beginning of the section, means the effective date of the Act of October 9, 1940. Section 48 of such Act provided that the Act would become effective 30 days after October 9, 1940.
 312502.15. Formation of domestic companies. Any domestic stock, mutual, or reciprocal company desiring to transact business in the District shall, after complying with the general laws of the District governing the formation of companies or corporations, file with the Commissioner copies of its articles of incorporation, bylaws, charter, proposed forms of policies, and such other information as may be necessary to manifest and explain the organization, objects, and purposes of the company, and to satisfy the Commissioner that such company has complied with the laws of the District regarding the formation of companies. Thereafter, upon application made to the Commissioner upon such forms as the Commissioner shall prescribe, the Commissioner, subject to the provisions of  31-2502.02, shall issue to the company a certificate of authority to transact business in the District.  (Oct. 9, 1940, 54 Stat. 1071, ch. 792, ch. II,  15; May 21, 1997, D.C. Law 11-268,  10(r)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-1518. 1973 Ed.,  35-1318. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03.
 312502.16. Acquisition, use and disposition of real estate by domestic companies. [Repealed] Repealed.  (Oct. 9, 1940, 54 Stat. 1071, ch. 792, ch. II,  16; May 21, 1997, D.C. Law 11-268,  10, 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  29(b), 45 DCR 745; Apr. 11, 2003, D.C. Law 14-297,  401(a), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1519. 1973 Ed.,  35-1319. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03.
 312502.17. Power of domestic mutual companies to borrow or assume liability. A domestic mutual company may borrow or assume liability for the repayment of a sum of money sufficient to defray the reasonable expenses of its organization or to enable it to comply with any requirement of law or as a surplus fund upon agreement which shall first be submitted to and approved by the Commissioner that such loan or advance with interest at a rate not exceeding 6% per annum shall be repaid only with the approval of the Commissioner whenever in his judgment the company shall be in possession of sufficient surplus in excess of a surplus equal to the amount required by this chapter. Any such loan or advance shall not form a part of the legal liabilities of the company, but until such loan or advance has been repaid all statements published by such company or filed with the Commissioner shall show the amount thereof then remaining unpaid.  (Oct. 9, 1940, 54 Stat. 1071, ch. 792, ch. II,  17; May 21, 1997, D.C. Law 11-268,  10(r)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-1520. 1973 Ed.,  35-1320. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03.
 312502.18. Investment of funds by domestic companies. [Repealed] Repealed.  (Oct. 9, 1940, 54 Stat. 1072, ch. 792, ch. II,  18; July 19, 1954, 68 Stat. 494, ch. 546,  1; Oct. 3, 1962, 76 Stat. 715, Pub. L. 87-739,  2; Oct. 30, 1981, D.C. Law 4-50,  3, 28 DCR 4258; Mar. 9, 1983, D.C. Law 4-174,  3, 29 DCR 5753; June 13, 1990, D.C. Law 8-141,  3, 37 DCR 2654; Apr. 11, 2003, D.C. Law 14-297,  401(a), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1521. 1973 Ed.,  35-1321. Editor's Notes Home Owners Loan Corporation abolished: The Home Owners Loan Corporation, referred to in paragraph (9) of subsection (a), was dissolved by order of the Secretary of the Home Loan Bank Board, effective February 3, 1954, pursuant to the Act of June 30, 1953, 67 Stat. 121.
 312502.19. Exclusive agency contracts of domestic companies. No domestic company authorized to do an insurance business in the District shall have or make any contract with any person whereby such person is granted the exclusive right or privilege to solicit, procure, write, produce, or manage the entire insurance business of such company, or to collect premiums therefor, unless such contract is filed with and approved in writing by the Commissioner. The Commissioner shall not approve any such contract which: (1) Subjects the company to excessive charges for expenses or commissions; or (2) Gives to such person the right to manage any of the affairs of such company or the exclusive right to solicit, procure, write, or produce the entire insurance business for such company, or to collect the premiums therefor for such unreasonable period as may jeopardize the interests or security of the companys policyholders.  (Oct. 9, 1940, 54 Stat. 1073, ch. 792, ch. II,  19; May 21, 1997, D.C. Law 11-268,  10(r)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-1522. 1973 Ed.,  35-1322. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03.
 312502.20. Authority to transact business  Foreign or alien companies. Upon complying with the provisions of this chapter, a foreign or alien company organized as a stock, mutual, or reciprocal company, or as a Lloyds organization, but not otherwise, may be authorized by certificate of authority to transact in the District the kind or kinds of business which a domestic company similarly organized may be authorized to transact under this chapter. Such certificate of authority shall be issued as provided under  31-2502.02. The issuance of a certificate of authority to a Lloyds organization shall be subject to the provisions of  31-2502.20a. Any company chartered by special act of the legislature of its state of domicile prior to the effective date of this chapter, as provided in  48 of this act, as a company without capital stock but doing business exclusively on the stock plan and maintaining at all times a surplus of not less than $300,000 shall, in the administration of this chapter, be considered as a stock company.  (Oct. 9, 1940, 54 Stat. 1073, ch. 792, ch. II,  20; June 27, 1960, 74 Stat. 222, Pub. L. 85-526,  1.)  Prior Codifications 1981 Ed.,  35-1523. 1973 Ed.,  35-1323. References in Text Section 48 of this act, referred to in the last sentence of this section, means  48 of the Act of October 9, 1940, which provided that such Act would be effective 30 days after October 9, 1940.
 312502.20a. Authority to transact business  Lloyds organizations. Individuals and aggregations of individuals transacting an insurance business upon the plan known as Lloyds whereby the individual underwriters become liable severally for specified proportions of the whole amount insured by a policy, heretofore organized under the laws of a state of the United States, or of a foreign government, may be authorized to transact business in the District, upon the following conditions: (1) They shall comply with and be subject to the same terms, conditions, and provisions as are imposed by this chapter upon foreign stock insurance companies, except as provided in the next succeeding paragraph and except that the maximum amount of insurance to be assumed by an individual underwriter upon any single risk for each kind of insurance shall not exceed 10% of the value of the cash and securities deposited in trust by such underwriter, plus the share of admitted assets other than underwriters deposits of such Lloyds belonging to such underwriter, less the share of liabilities and reserves of such Lloyds allocable to such underwriter, but in no event shall it exceed 10 per centum of the value of cash or securities deposited in trust by such underwriter; (2) They shall have and shall at all times maintain surpluses of not less than $300,000 in the aggregate and shall at all times have on deposit with an insurance department of a state of the United States, or with a bank or trust company designated by such insurance department, for the benefit of all policyholders within the United States the sum of at least $350,000 in cash or in securities such as are required for the investment of the assets of insurance companies authorized to do business in the District: Provided, that they shall not be required to establish or maintain such a deposit if they have on deposit in the hands of a bank or trust company in the United States as trustee cash deposits or securities issued by the United States worth not less than $2,000,000 in the aggregate and held in trust for the benefit of all policyholders in the United States; (3) They shall file with the Commissioner an authenticated copy of their powers of attorney and an authenticated copy of the trust agreement, or other agreement under which deposits made by underwriters are held; (4) They shall notify the Commissioner forthwith of any amendments to their powers of attorney, deposit agreement, or other documents underlying their organization, by filing with the Commissioner an authenticated copy of such document as amended; (5) They shall notify the Commissioner forthwith of any change in their names or change of attorney-in-fact, or change of address of their attorney-in-fact; (6) In the case of an alien Lloyds, their annual statement shall embrace only their condition and transactions in the United States, and may be verified by the oath of their resident manager or other person or persons having proper authority; and (7) There shall be filed with the Commissioner by the attorney-in-fact at the time of filing the annual statement, or more often if the Commissioner requires, a statement verified by the appropriate official of such Lloyds, setting forth: (A) The names and addresses of all the underwriters of such Lloyds; (B) A description of the cash and securities deposited in trust by each underwriter; (C) The maximum amount of insurance assumed by each underwriter upon any single risk or each kind of insurance; and (D) That the maximum amount of insurance assumed upon any single risk for each kind of insurance by any individual underwriter does not exceed the limitation provided for in paragraph (1) of this section.  (Oct. 9, 1940, 54 Stat. 1073, ch. 792, ch. II,  20a; May 21, 1997, D.C. Law 11-268,  10(r)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-1524. 1973 Ed.,  35-1324. Section References This section is referenced in  31-2502.20. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03.
 312502.21. Procurement of certificate of authority by foreign or alien companies  Application forms. A foreign or alien company, in order to procure a certificate of authority to transact business in the District, shall make application therefor to the Commissioner on forms prescribed and furnished by the Commissioner. Such forms shall be executed for the company, by its president or vice-president, or executive officer corresponding thereto, and verified by such officer, and if a corporation the corporate seal shall be thereto affixed, attested by its secretary or other proper officer.  (Oct. 9, 1940, 54 Stat. 1074, ch. 792, ch. II,  21; May 21, 1997, D.C. Law 11-268,  10(r)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-1525. 1973 Ed.,  35-1325. Section References This section is referenced in  31-5326. Cross References Foreign or alien fraternal benefit society, admission, see  31-5326. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03.
 312502.22. Procurement of certificate of authority by foreign or alien companies  Delivery of certain documents to Commissioner; required showings; authorized examinations. A foreign or alien company shall deliver to the Commissioner: (1) an application of the company for a certificate of authority: (2) a copy of its articles of incorporation or articles of association and amendments thereto, duly certified by the proper officer of the state or country under whose laws the company is organized or incorporated, or if reciprocal, the power of attorney of the attorney-in-fact; (3) if an alien company, a copy of the appointment and authority of its United States manager, certified by a proper officer of the company; (4) a copy of its bylaws and regulations; (5) forms of contracts and policies it proposes to issue in the District, and forms of the applications therefor, if any; (6) proof of compliance with the service of process provisions of  31-202; (7) a statement of its financial condition and business as of the end of the preceding calendar year, complying as to form and verification with the requirements of this chapter for annual statements, or financial statement as of such later date as the Commissioner may require; (8) a copy of the last report of examination, certified to by an insurance commissioner or other proper supervisory official; and (9) a certificate from the proper official of the state or country wherein it is incorporated or organized, that it is duly incorporated or organized and is authorized to write the kind or kinds of insurance which it proposes to write in the District. Before a certificate of authority to transact business in the District is issued to a foreign or alien company, such company shall satisfy the Commissioner that: (1) the company is duly organized under the laws of the state or country under whose laws it professes to be organized and is authorized to do the business it is transacting or proposes to transact; (2) its name is not the same as, or so deceptively similar to, the name of any domestic company, or the name of any department of the federal government or existing corporation authorized to transact business in the District as to mislead the public or cause confusion; (3) if a stock company, it has a paid-up capital and surplus at least equal to the capital and surplus required by this chapter or if a mutual company or reciprocal, it has a surplus and provision for contingent liability of policyholders at least equal to the surplus and provision for contingent liability of policyholders required by this chapter; and (4) its funds are invested in accordance with the laws of its domicil, and in securities or property which afford a degree of financial security substantially equal to that required for similar domestic companies. Before issuing a certificate of authority to a foreign or alien company, the Commissioner may cause an examination to be made of the condition and affairs of such company.  (Oct. 9, 1940, 54 Stat. 1074, ch. 792, ch. II,  22; Mar. 21, 1995, D.C. Law 10-233,  6, 42 DCR 24; Apr. 18, 1996, D.C. Law 11-110,  38, 43 DCR 530; Apr. 9, 1997, D.C. Law 11-255,  39, 44 DCR 1271; May 21, 1997, D.C. Law 11-268,  10(r)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-1526. 1973 Ed.,  35-1326. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03.
 312502.23. Service of process upon foreign or alien companies. [Repealed] Repealed.  (Mar. 21, 1995, D.C. Law 10-233,  12, 42 DCR 24.)  Prior Codifications 1981 Ed.,  35-1527.
 312502.24. Names or designations used by mutual companies and reciprocal or interinsurance exchanges. Except as otherwise provided in  31-2502.14, no mutual company shall be authorized to transact business in the District unless the name of such company shall include the word mutual, and no reciprocal or interinsurance exchange shall be authorized to transact business in the District unless the name or designation under which reciprocal or interinsurance contracts are to be exchanged shall include the words reciprocal or interinsurance exchange, or be supplemented by the following words immediately below the name or designation under which such contracts are exchanged: A reciprocal or an interinsurance exchange.  (Oct. 9, 1940, 54 Stat. 1076, ch. 792, ch. II,  24.)  Prior Codifications 1981 Ed.,  35-1528. 1973 Ed.,  35-1328. Section References This section is referenced in  31-2502.14.
 312502.25. Premiums of mutual companies. The maximum premium shall be expressed in the policy of a mutual company, and it may be solely a cash premium, or may be a cash premium and an additional contingent premium, which contingent premium shall be not less than the cash premium, but no mutual company, except as otherwise provided in  31-2502.14, shall issue any policy for a cash premium without an additional contingent premium until and unless it possesses a surplus of not less than $600,000.  (Oct. 9, 1940, 54 Stat. 1076, ch. 792, ch. II,  25; Aug. 14, 1973, 87 Stat. 305, Pub. L. 93-89, title IV,  401.)  Prior Codifications 1981 Ed.,  35-1529. 1973 Ed.,  35-1329. Section References This section is referenced in  31-2502.14.
 312502.26. Company reserves. [Repealed] Repealed.  (Oct. 9, 1940, 54 Stat. 1076, ch. 792, ch. II,  26; Apr. 11, 2003, D.C. Law 14-297,  401(a), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1530. 1973 Ed.,  35-1330.
 312502.26a. Actuarial opinion of reserves. (a) Every property and casualty insurance company doing business in the District, unless otherwise exempted by the Commissioner, shall annually submit the opinion of an actuary appointed by the company entitled Statement of Actuarial Opinion. The opinion shall be prepared and filed in accordance with the appropriate National Association of Insurance Commissioners Property and Casualty Annual Statement Instructions. (b)(1) Every property and casualty insurance company domiciled in the District that is required to submit a Statement of Actuarial Opinion shall annually submit a summary entitled Actuarial Opinion Summary, written by the actuary appointed by the company. The Actuarial Opinion Summary shall be prepared and filed in accordance with the appropriate National Association of Insurance Commissioners Property and Casualty Annual Statement Instructions and shall be a document supporting the Statement of Actuarial Opinion required by subsection (a) of this section. (2) A company licensed but not domiciled in the District shall provide the Actuarial Opinion Summary upon request. (c)(1) A report entitled Actuarial Report and underlying workpapers as required by the appropriate National Association of Insurance Commissioners Property and Casualty Annual Statement Instructions shall be prepared to support each Statement of Actuarial Opinion. (2) If the company fails to provide a supporting Actuarial Report or workpapers at the request of the Commissioner or the Commissioner determines that the supporting Actuarial Report or workpapers provided by the company have been improperly prepared or are otherwise unacceptable, the Commissioner may engage a qualified actuary at the expense of the company to review the Statement of Actuarial Opinion and the basis for the opinion and prepare the supporting Actuarial Report or workpapers. (d) The actuary appointed by the company shall not be liable for damages to any person other than the insurance company and the Commissioner for any act, error, omission, decision, or conduct with respect to the actuarys opinion, except in cases of fraud, willful misconduct, or gross negligence on the part of the actuary.  (Oct. 9, 1940, 54 Stat. 1076, ch. 792, ch. II,  26a; as added Mar. 20, 2009, D.C. Law 17-289,  2, 55 DCR 12619.)  Section References This section is referenced in  31-3931.13.
 312502.26b. Confidentiality of actuarial opinions, summaries, reports, and workpapers. (a) The Statement of Actuarial Opinion shall be provided with the annual financial statement required by  31-1901, in accordance with the appropriate National Association of Insurance Commissioners Property and Casualty Annual Statement Instructions and shall be a public document. (b)(1) An Actuarial Report, underlying workpapers, or Actuarial Opinion Summary in the possession or control of the Commissioner, and any other material provided by the company to the Commissioner in connection with the Actuarial Report, workpapers, or Actuarial Opinion Summary, shall not be subject to subchapter II of Chapter 5 of Title 2, except a subpoena issued pursuant to: (A) A civil action or an administrative proceeding in which insurance premium rates are an issue; or (B) Oversight by the Council or the federal government. (2) This section shall not limit the Commissioners authority to: (A) Release the documents to the Actuarial Board for Counseling and Discipline if the material is required for the purpose of professional disciplinary proceedings and the Actuarial Board for Counseling and Discipline establishes procedures satisfactory to the Commissioner for preserving the confidentiality of the documents; or (B) Use the documents, materials, or other information in furtherance of any regulatory or legal action brought as part of the Commissioners official duties. (c) The Commissioner or any person who received documents, materials, or other information while acting under the authority of the Commissioner shall not be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to subsection (b) of this section. (d) To assist in the performance of the Commissioners duties, the Commissioner may: (1) Share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to subsection (b) of this section with other state, federal, and international regulatory agencies, with the National Association of Insurance Commissioners and its affiliates and subsidiaries, and with state, federal, and international law enforcement authorities; provided, that the recipient agrees to maintain the confidentiality and privileged status of the document, material, or other information and has the authority to maintain confidentiality; (2) Receive documents, materials, or information, including otherwise confidential and privileged documents, materials, or information, from the National Association of Insurance Commissioners and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information; and (3) Enter into agreements governing sharing and use of information consistent with subsections (b) through (d) of this section. (e) No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information shall occur as a result of disclosure to the Commissioner under this section or as a result of sharing as authorized in subsection (d) of this section.  (Oct. 9, 1940, 54 Stat. 1076, ch. 792, ch. II,  26b; as added Mar. 20, 2009, D.C. Law 17-289,  2, 55 DCR 12619.)  Section References This section is referenced in  31-3931.13.
 312502.27. Filing and approval of policy forms. The Commissioner may require that all policy forms used by every company covering risks in the District be filed with the Commissioner. The Commissioner shall have authority to disapprove, within 60 days after the date of the receipt of a filing, the use in the District of any policy form which is inequitable, or does not comply with the requirement of the law of the District. If a policy form is not disapproved for use within the 60-day period described above, the Commissioner may not disapprove it for use unless it does not comply with the requirements of the law of the District.  (Oct. 9, 1940, 54 Stat. 1076, ch. 792, ch. II,  27; Feb. 27, 1996, D.C. Law 11-90,  9(b), 42 DCR 7155; Sept. 20, 1996, D.C. Law 11-160,  3, 43 DCR 3722; May 21, 1997, D.C. Law 11-268,  10(r)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-1531. 1973 Ed.,  35-1331. Emergency Legislation For temporary amendment of section, see  10(b) of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and  9(b) of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844). Temporary Legislation For temporary (225 day) amendment of section, see  9(b) of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305). Editor's Notes Report by Commissioner of Insurance and Securities: Section 5 of D.C. Law 11-160 provided that Within two years of September 20, 1996, the Commissioner of Insurance and Securities shall prepare and submit to the Council of the District of Columbia for its review a report on the impact of this act on the private passenger motor vehicle insurance market or any part thereof, the funding for the Office of Insurance, the District of Columbia insurance premium tax, the number of insurers doing business in the District, and the number of insurers domiciled in the District of Columbia. In preparing such report, the Commissioner may request from specific private passenger motor vehicle insurers doing business in the District, or from all such insurers, reasonable and pertinent information. Information which is proprietary to any affected insurer shall be treated as confidential by the Commissioner, but may be used in the aggregate with other information from other affected insurers for statistical or other reporting purposes. Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03.
 312502.28. Rate and form filing requirements for accident and health policies. The Commissioner may require that the provisions and conditions contained in any policy of insurance against loss or damage from sickness or bodily injury or death of the insured by accident issued by, and the rate-making and filing obligations of, any company authorized by this chapter to transact business in the District be made to conform to the requirements prescribed under  31-4712.  (Oct. 9, 1940, 54 Stat. 1076, ch. 792, ch. II,  28; May 21, 1997, D.C. Law 11-268,  10(r)(2), 44 DCR 1730; Apr. 8, 2011, D.C. Law 18-360,  501, 58 DCR 896; Sept. 26, 2012, D.C. Law 19-171,  87, 59 DCR 6190.)  Prior Codifications 1981 Ed.,  35-1532. 1973 Ed.,  35-1332. Effect of Amendments D.C. Law 18-360, in the section heading, substituted Rate and form filing requirements for for Required provisions in; and substituted issued by, and the rate-making and filing obligations of, for issued by. The 2012 amendment by D.C. Law 19-171 made a technical correction to D.C. Law 18-360 which did not affect this section as codified. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03.
 312502.28a. Flood insurance notice requirements for the provision of homeowners and renters insurance. (a) Within 90 days of September 19, 2013, a company authorized to sell or negotiate homeowners or renters insurance in the District of Columbia shall provide a written notice that states that a standard homeowners or renters insurance policy does not cover losses from flood to: (1) An applicant at the time of application for a homeowners or renters insurance policy; (2) A policyholder at the time of each renewal of a homeowners or renters insurance policy, to accompany the renewal notice; and (3) On a one-time basis, a policyholder of a homeowners or renters insurance policy; provided, that a company shall not be required to provide the one-time notice to an existing policyholder if the renewal of that policyholders policy comes due within 90 days of the date the company began issuing the notices required by this subsection. (b) The statement shall: (1) Be on a separate form; (2) Be titled, in at least 12-point type, Flood Coverage Not Included in the Standard Homeowners or Renters Insurance Policy; and (3) Contain, at a minimum, the following information in at least 12 point type: (A) Advise the applicant that flood insurance may be available for an additional premium and that a claim under a flood insurance policy may be adjusted and paid on a different basis than a claim under a homeowners or renters insurance policy; (B) Advise the applicant that a separate application must be completed to purchase flood insurance; (C) State that flood insurance may be available through the National Flood Insurance Program or other sources; (D) Provide the applicant with the contact information for the National Flood Insurance Program; (E) Advise the applicant to consult with the National Flood Insurance Program, the District Department of the Environment, the District Department of Insurance, Securities, and Banking, or the applicants mortgage lender about the risks of flooding and the potential costs and benefits of flood insurance; and (F) Advise the applicant that the statement shall not be considered a replacement for the terms of the insurance policy, shall not have the effect of altering the coverage afforded by the policy, shall not confer new or additional rights beyond those expressly provided for in the policy, and is only provided as guidance to the homeowner in understanding the terms of the insurance policy. (c) If an application is made by telephone, the insurer is deemed to be in compliance with this section if, within 7 calendar days after the date of application, the insurer sends by mail the notice to the insured. (d) If an application is made using the Internet, the insurer is deemed to be in compliance with this section if the insurer provides the notice to the applicant in a stand-alone format, similar to the notice requirements in subsection (b)(1), (2), and (3) of this section, before the submission of the application. (e) The insurers failure to provide notice as required under this section does not create a private right of action.  (Oct. 9, 1940, 54 Stat. 1066, ch. 792, ch. II,  28a; as added Sept. 19, 2013, D.C. Law 20-18,  2, 60 DCR 9843.)  Effect of Amendments The 2013 amendment by D.C. Law 20-18 added this section.
 312502.28b. Sewer-line backup insurance notice requirements for the provision of homeowners and renters insurance. (a) Within 90 days of September 19, 2013, a company authorized to sell or negotiate homeowners or renters insurance in the District of Columbia shall provide a written notice that states that a standard homeowners or renters insurance policy does not cover losses from sewer-line back up to: (1) An applicant at the time of application for a homeowners or renters insurance policy; (2) A policyholder at the time of each renewal of a homeowners or renters insurance policy, to accompany the renewal notice; and (3) On a one-time basis, a policyholder of a homeowners or renters insurance policy; provided, that a company shall not be required to provide the one-time notice to an existing policyholder if the renewal of that policyholders policy comes due within 90 days of the date the company began issuing the notices required by this subsection. (b) The statement shall: (1) Be on a separate form; (2) Be titled, in at least 12-point type, Sewer-line Backup Coverage Not Included in the Standard Homeowners or Renters Insurance Policy; and (3) Contain, at a minimum, the following information, in at least 12-point type: (A) Advise the applicant that sewer-line backup insurance may be available for an additional premium and that a claim under a sewer-line backup insurance policy may be adjusted and paid on a different basis than a claim under a homeowners or renters insurance policy; (B) Advise the applicant that a separate application must be completed to purchase sewer-line backup insurance; (C) Advise the applicant to consult with the District Department of Insurance, Securities, and Banking or the applicants mortgage lender about the risks of sewer- line backup and the potential costs and benefits of sewer-line backup insurance; and (D) Advise the applicant that the statement shall not be considered a replacement for the terms of the insurance policy, shall not have the effect of altering the coverage afforded by the policy, shall not confer new or additional rights beyond those expressly provided for in the policy, and is only provided as guidance to the homeowner in understanding the terms of the insurance policy. (c) If an application is made by telephone, the insurer is deemed to be in compliance with this section if, within 7 calendar days after the date of application, the insurer sends by mail the notice to the insured. (d) If an application is made using the Internet, the insurer is deemed to be in compliance with this section if the insurer provides the notice to the applicant in a stand-alone format, similar to the notice requirements in subsection (b)(1), (2), and (3) of this section, before the submission of the application. (e) The insurers failure to provide notice as required under this section does not create a private right of action.  (Oct. 9, 1940, 54 Stat. 1066, ch. 792, ch. II,  28b; as added Sept. 19, 2013, D.C. Law 20-18,  2, 60 DCR 9843.)  Effect of Amendments The 2013 amendment by D.C. Law 20-18 added this section.
 312502.29. Discriminations prohibited. Discrimination between individual risks of the same class or hazard in the amount of premiums or rates charged for any policy, or in the benefits or amount of insurance payable thereon, or in any of the terms or conditions of such policy, or in any other manner whatsoever, is prohibited, and the Commissioner is empowered after investigation to order removed at such time and in such manner as he shall specify any such discrimination which his investigation may reveal.  (Oct. 9, 1940, 54 Stat. 1077, ch. 792, ch. II,  29; May 21, 1997, D.C. Law 11-268,  10(r)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-1533. 1973 Ed.,  35-1333. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03.
 312502.30. Powers of agents, salaried employees and brokers. [Repealed] Repealed.  (April 9, 1997, D.C. Law 11-227,  16(c), 44 DCR 140.)  Prior Codifications 1981 Ed.,  35-1534. Editor's Notes D.C. Law 11-268,  10(r)(2) ( 44 DCR 1730), eff. May 21, 1997, amends this section subsequent to repeal.
 312502.31. Compensation of unlicensed persons prohibited. No company, policy-writing agent, soliciting agent, broker, or salaried employee shall pay any money or commission or brokerage or give or allow any valuable consideration to any person for or because of service in the District in negotiating or effecting a policy on any person, property, business activity, or insurable interest in the District, unless said person is duly licensed in conformity with this chapter as a broker or as an agent or salaried employee of the company issuing the policy. This section shall not apply to contracts of reinsurance, and shall not apply to persons and kinds of insurance exempted under  31-2502.38.  (Oct. 9, 1940, 54 Stat. 1077, ch. 792, ch. II,  31.)  Prior Codifications 1981 Ed.,  35-1535. 1973 Ed.,  35-1335.
 312502.32. Procedure for obtaining licenses [Repealed] Repealed.  (April 9, 1997, D.C. Law 11-227,  16(c), 44 DCR 140.)  Prior Codifications 1981 Ed.,  35-1536 to 35-1541. Editor's Notes D.C. Law 11-268,  10(r)(2) ( 44 DCR 1730), eff. May 21, 1997, amends former  35-1536, 35-1538, 35-1539, and 35-1540 1981 Ed. subsequent to repeal.
 312502.33. Effective dates [Repealed] Repealed.  (April 9, 1997, D.C. Law 11-227,  16(c), 44 DCR 140.)  Prior Codifications 1981 Ed.,  35-1536 to 35-1541. Editor's Notes D.C. Law 11-268,  10(r)(2) ( 44 DCR 1730), eff. May 21, 1997, amends former  35-1536, 35-1538, 35-1539, and 35-1540 1981 Ed. subsequent to repeal.
 312502.34. Temporary transfer of licenses [Repealed] Repealed.  (April 9, 1997, D.C. Law 11-227,  16(c), 44 DCR 140.)  Prior Codifications 1981 Ed.,  35-1536 to 35-1541. Editor's Notes D.C. Law 11-268,  10(r)(2) ( 44 DCR 1730), eff. May 21, 1997, amends former  35-1536, 35-1538, 35-1539, and 35-1540 1981 Ed. subsequent to repeal.
 312502.35. Renewal of licenses [Repealed] Repealed.  (April 9, 1997, D.C. Law 11-227,  16(c), 44 DCR 140.)  Prior Codifications 1981 Ed.,  35-1536 to 35-1541. Editor's Notes D.C. Law 11-268,  10(r)(2) ( 44 DCR 1730), eff. May 21, 1997, amends former  35-1536, 35-1538, 35-1539, and 35-1540 1981 Ed. subsequent to repeal.
 312502.36. Revocation and suspension of licenses [Repealed] Repealed.  (April 9, 1997, D.C. Law 11-227,  16(c), 44 DCR 140.)  Prior Codifications 1981 Ed.,  35-1536 to 35-1541. Editor's Notes D.C. Law 11-268,  10(r)(2) ( 44 DCR 1730), eff. May 21, 1997, amends former  35-1536, 35-1538, 35-1539, and 35-1540 1981 Ed. subsequent to repeal.
 312502.37. Unauthorized solicitation or representation [Repealed] Repealed.  (April 9, 1997, D.C. Law 11-227,  16(c), 44 DCR 140.)  Prior Codifications 1981 Ed.,  35-1536 to 35-1541. Editor's Notes D.C. Law 11-268,  10(r)(2) ( 44 DCR 1730), eff. May 21, 1997, amends former  35-1536, 35-1538, 35-1539, and 35-1540 1981 Ed. subsequent to repeal.
 312502.38. Exceptions to licensing provisions. The provisions of this chapter relating to the licensing of policy-writing agents, soliciting agents, salaried company employees, and brokers shall not apply to the sale of personal accident insurance in the ticket offices of railroad companies or other common carriers, or in the offices of travel bureaus, nor to the business of ocean marine insurance, nor to insurance covering the property of railroad companies and other common carriers engaged in interstate commerce.  (Oct. 9, 1940, 54 Stat. 1080, ch. 792, ch. II,  38; Feb. 22, 1958, 72 Stat. 26, Pub. L. 85-334,  9.)  Prior Codifications 1981 Ed.,  35-1542. 1973 Ed.,  35-1342. Section References This section is referenced in  31-2502.31.
 312502.39. Persons not to act for unauthorized companies. Except as provided in  31-2502.40, no person shall act as agent in the District for any company which is not authorized to do business in the District, nor shall any person directly or indirectly negotiate for or solicit applications for policies of, or for membership in, any company which is not authorized to do business in the District. The term company as used in this section shall include any association, society, company, corporation, joint-stock company, individual, partnership, trustee, or receiver engaged in the business of assuming risks of insurance, surety, or indemnity, and any Lloyds organization, assessment, or cooperative fire company, or any reciprocal or interinsurance exchange and any company, association, or society, whether organized for profit or not, conducting a business, including any of the principles or features of insurance, surety, or indemnity. Any person who violates any provision of this section upon conviction shall be fined not less than $100 nor more than $1,000 for each offense, or be imprisoned for not more than 12 months, or both, and any such person shall be personally liable to any resident of the District having claim against any such unauthorized company under any policy which said person has solicited or negotiated, or has aided in soliciting or negotiating; provided, that the provisions of this section shall not apply to any person who negotiates with an unauthorized company for policies covering his own property or interests, nor shall the provisions of this section apply to the officers, agents, or representatives of any company which is in process of organization under the laws of the District, and which is authorized temporarily to solicit or secure memberships or applications for policies for the purpose of completing such organization. Prosecutions for violations of this section shall be upon information filed in the Superior Court of the District of Columbia by the Corporation Counsel or any of his assistants.  (Oct. 9, 1940, 54 Stat. 1080, ch. 792, ch. II,  39; Feb. 22, 1958, 72 Stat. 26, Pub. L. 85-334,  10; July 8, 1963, 77 Stat. 77, Pub. L. 88-60,  1; July 29, 1970, 84 Stat. 570, Pub. L. 91-358, title I,  155(a).)  Prior Codifications 1981 Ed.,  35-1543. 1973 Ed.,  35-1343. Section References This section is referenced in  31-231 and  31-1131.08.
 312502.40. License to procure policies from unauthorized companies. (a) Any person may be licensed as a surplus lines insurance producer under Chapter 11A of this title to procure policies from companies which are not authorized to do business in the District where such person is, after diligent effort, unable to procure policies to cover the kind or kinds of business required from companies duly authorized to transact business in the District. Each agent or broker so licensed shall pay to the Collector of Taxes, through the Commissioner, on February 1st and August 1st of each year, a sum equal to 2 per centum of the amount of the gross premiums upon all kinds of policies procured by him during the immediately preceding 6 months period ending December 31st and June 30th, respectively, and, in default of such payment, the Commissioner, through the Corporation Counsel, may bring suit to recover the same. Each agent or broker so licensed to procure policies from unauthorized companies shall execute and file with the Department on or before the 10th day of each month an affidavit covering the transactions of the previous calendar month, setting forth: (1) The description and location of the insured property or risk, and the name of the assured; (2) The amount insured in the policy or contract; (3) The gross premiums charged thereon; (4) The name of the company whose policy or contract is issued, and the kind or kinds of business effected; and (5) That said agent or broker after diligent effort was unable to procure the policies or contracts required to protect the property or risk described in the affidavit from companies duly authorized to transact business in the District. (b) Each agent or broker so licensed to procure policies from unauthorized companies shall keep a separate account of the business transacted thereunder, which shall be open at all times to the inspection of the Commissioner. The license provided for in this section may be revoked or renewal thereof refused for failure to pay the tax or to file the affidavit specified herein, or if the agent or broker procured policies from unauthorized companies without exercising diligent effort to secure the required business in duly authorized companies, or if the agent or broker procured policies from unauthorized companies whose standards of solvency and management do not meet the requirements necessary for the protection of the policyholders, or if the agent or broker has placed with any unauthorized company any risk which could be placed with an authorized company except for abnormal provisions of the policy, or if the agent or broker has procured from an unauthorized company any policy which covers a risk of a class generally covered in the District by authorized companies and which authorized companies would cover at a rate not higher than that charged by authorized companies on other District risks of the same class. (c)(1) Each agent or broker engaged by the District of Columbia government to procure insurance on its behalf shall be exempt from the requirement, as set forth in subsection (a) of this section, to pay the 2 per centum of the amount of the gross premiums upon all kinds of policies procured by the agent or broker on behalf of the District of Columbia government. (2) To claim this exemption, the agent or broker shall include a statement identifying, for each item enumerated in the affidavit required by subsection (a) of this section, the portion allocated to policies procured on behalf of the District of Columbia government. (3) The exemption provided in this subsection shall not be construed to exempt any agent or broker from any other requirement imposed by this section.  (Oct. 9, 1940, 54 Stat. 1080, ch. 792, ch. II,  40; Apr. 22, 1944, 58 Stat. 192, ch. 173,  4; May 21, 1997, D.C. Law 11-268,  10(r)(2), 44 DCR 1730; May 13, 2008, D.C. Law 17-155,  3, 55 DCR 3683; Oct. 8, 2016, D.C. Law 21-160,  1033, 63 DCR 10775.)  Prior Codifications 1981 Ed.,  35-1544. 1973 Ed.,  35-1344. Section References This section is referenced in  31-231,  31-1131.07,  31-1131.08, and  31-2502.39. Effect of Amendments D.C. Law 17-155, in subsec. (a), substituted A person may be licensed as a surplus lines insurance producer under Chapter 11A of this title, for Any agent or broker licensed in the District may, upon payment of a license fee, as provided under  31-2502.41, be licensed. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03. Office of Collector of Taxes abolished: See Historical and Statutory Notes following  31-2502.03.
 312502.41. License fees. (a) Annual fees to be paid through the Commissioner to the District of Columbia for licenses issued under this chapter shall include a $250 annual renewal fee for registration and certification for Risk Retention and Purchasing Groups and any other fee established pursuant to subsection (e) of this section. (b) Repealed. (c) Repealed. (d) Repealed. (e) The Commissioner may promulgate rules to establish and amend all producer and license fees.  (Oct. 9, 1940, 54 Stat. 1081, ch. 792, ch. II,  41; Feb. 23, 1980, D.C. Law 3-52,  6, 27 DCR 26; June 14, 1994, D.C. Law 10-128,  403(a), 41 DCR 2096; Apr. 18, 1996, D.C. Law 11-110,  61(a), 43 DCR 530; May 21, 1997, D.C. Law 11-268,  10(r)(2), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  29(c), 45 DCR 745; Mar. 8, 2007, D.C. Law 16-232,  202(c), 54 DCR 368.)  Prior Codifications 1981 Ed.,  35-1545. 1973 Ed.,  35-1345. Effect of Amendments D.C. Law 16-232 rewrote subsecs. (a) and (e), and repealed subsec. (b) to (d). Cross References Refund of fees when license refused, see  47-1318. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2501.03.
 312502.42. Violations of provisions. (a) Any person who violates any of the provisions of this chapter, or fails to comply with any duty imposed upon such person by any of the provisions of this chapter, for which violation or failure no penalty is elsewhere provided by this chapter, or by the laws of the District, shall, upon conviction thereof, be fined for each offense not exceeding $1,000 or be imprisoned for not more than 12 months, or both. Prosecutions authorized by this section shall be upon information filed in the Superior Court of the District of Columbia by the Corporation Counsel or any of his assistants. (b) Civil fines, penalties, and fees may be imposed as alternative sanctions for any infraction of the provisions of this chapter, or any rules or regulations issued under the authority of this chapter, pursuant to Chapter 18 of Title 2. Adjudication of any infraction of this chapter shall be pursuant to Chapter 18 of Title 2.  (Oct. 9, 1940, 54 Stat. 1082, ch. 792, ch. II,  43; Apr. 1, 1942, 56 Stat. 190, ch. 207,  1; July 8, 1963, 77 Stat. 77, Pub. L. 88-60,  1; July 29, 1970, 84 Stat. 570, Pub. L. 91-358, title I,  155(a); Oct. 5, 1985, D.C. Law 6-42,  447(c), 32 DCR 4450; Mar. 8, 1991, D.C. Law 8-237,  2(r)(3), 38 DCR 314.)  Prior Codifications 1981 Ed.,  35-1546. 1973 Ed.,  35-1347. Section References This section is referenced in  31-1103 and  31-5111. Cross References Violation of credit life, accident, and health insurance provisions, penalties, see  31-5111.
 312502.43. Appeals from Commissioner to Mayor [Repealed] Repealed.  (April 9, 1997, D.C. Law 11-227,  16(c), 44 DCR 140.)  Prior Codifications 1981 Ed.,  35-1547 to 35-1549. Editor's Notes Former  35-1547 1981 Ed. was also amended by D.C. Law 11-268,  10(r)(2), eff. May 21, 1997. D.C. Law 11-268 amended former  35-1547 1981 Ed. by substituting Commissioner for Superintendent in the first sentence. D.C. Law 11-268,  10(r)(2) ( 44 DCR 1730), eff. May 21, 1997, amends  35-1547 1981 Ed. subsequent to repeal.
 312502.44. Court proceedings [Repealed] Repealed.  (April 9, 1997, D.C. Law 11-227,  16(c), 44 DCR 140.)  Prior Codifications 1981 Ed.,  35-1547 to 35-1549. Editor's Notes Former  35-1547 1981 Ed. was also amended by D.C. Law 11-268,  10(r)(2), eff. May 21, 1997. D.C. Law 11-268 amended former  35-1547 1981 Ed. by substituting Commissioner for Superintendent in the first sentence. D.C. Law 11-268,  10(r)(2) ( 44 DCR 1730), eff. May 21, 1997, amends  35-1547 1981 Ed. subsequent to repeal.
 312502.45. Severability [Repealed] Repealed.  (April 9, 1997, D.C. Law 11-227,  16(c), 44 DCR 140.)  Prior Codifications 1981 Ed.,  35-1547 to 35-1549. Editor's Notes Former  35-1547 1981 Ed. was also amended by D.C. Law 11-268,  10(r)(2), eff. May 21, 1997. D.C. Law 11-268 amended former  35-1547 1981 Ed. by substituting Commissioner for Superintendent in the first sentence. D.C. Law 11-268,  10(r)(2) ( 44 DCR 1730), eff. May 21, 1997, amends  35-1547 1981 Ed. subsequent to repeal.
 312601.01. Kinds of insurance prohibited. No insurance shall be made by any person or persons, bodies politic or corporate, on any ship or ships, or on any goods, merchandise, or effects laden or to be laden on board of any ship or ships, interest or no interest, or without further proof of interest than the policy, or by way of gaming or wagering or without benefit of salvage to the insurer; and every such insurance shall be null and void to all intents and purposes.  (Mar. 3, 1901, 31 Stat. 1294, ch. 854,  656.)  Prior Codifications 1981 Ed.,  35-1432. 1973 Ed.,  35-1133.
 312602.01. Definitions. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 401, ch. 93, title II,  1; May 21, 1997, D.C. Law 11-268,  10(q), 44 DCR 1730; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1401. 1973 Ed.,  35-1101. Emergency Legislation For temporary (90 day) amendment of section, see  4(o) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). Editor's Notes D.C. Law 15-166,  4(o), purported to amend this section that was previously repealed by D.C. Law 14-297, therefore, the amendment was ineffective. Department of Insurance abolished: The Department of Insurance, including the Superintendent, was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. Reorganization Order No. 43, dated June 23, 1953, as amended, established, under the direction and control of a Commissioner, a Department of Insurance headed by a Superintendent. The Order provided for the organization of the Department, abolished the previously existing Department of Insurance, and provided that all functions and positions of the previous Department would be transferred to the new Department of Insurance, including the duties, powers, and authorities of all officers and employees; and that all personnel, property, records and unexpended balances relating to the functions and positions transferred would also be transferred to the new Department. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. The functions of the Superintendent of Insurance were transferred to the Department of Consumer and Regulatory Affairs by Reorganization Plan No. 1 of 1983, effective March 31, 1983. Pursuant to the provisions of D.C. Law 11-268, the Department of Insurance and Securities Regulation was established and the duties of the Superintendent of Insurance and the Insurance Administration were assumed by the Commissioner of Insurance and Securities and the Insurance Administration in the Department of Consumer and Regulatory Affairs was abolished.
 312602.02. Applicability of District insurance laws. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 402, ch. 93, title II,  2; May 21, 1997, D.C. Law 11-268,  10(q), 44 DCR 1730; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1402. 1973 Ed.,  35-1102. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2602.01.
 312602.03. Kinds of insurance authorized; reserves required; requirements for transacting business for stock companies and reinsurance corporations. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 402, ch. 93, title II,  3; May 21, 1997, D.C. Law 11-268,  10(q), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  28(a), 45 DCR 745; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1403. 1973 Ed.,  35-1103. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2602.01.
 312602.04. Organization and licensing requirements for domestic mutual companies. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 404, ch. 93, title II,  4; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1404. 1973 Ed.,  35-1104.
 312602.05. Requirements for transacting business for foreign companies. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 404, ch. 93, title II,  5; May 21, 1997, D.C. Law 11-268,  10(q), 44 DCR 1730; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1405. 1973 Ed.,  35-1105. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2602.01.
 312602.06. Reinsurance of risks. [Repealed] Repealed.  (Oct. 15, 1993, D.C. Law 10-36,  6(b); as added May 16, 1995, D.C. Law 10-255,  26(c), 41 DCR 5193; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1406.
 312602.07. Computation of unearned premiums. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 405, ch. 93, title IV,  7; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1407. 1973 Ed.,  35-1107.
 312602.08. Taxation of companiesTax on underwriting profitComputation of profit. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 405, ch. 93, title V,  8; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1408. 1973 Ed.,  35-1108.
 312602.09. Taxation of companiesTax on underwriting profitComputation and payment of tax. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 406, ch. 93, title V,  9; May 21, 1997, D.C. Law 11-268,  10(q), 44 DCR 1730; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1409. 1973 Ed.,  35-1109. Editor's Notes Office of Collector of Taxes abolished: The Office of the Collector of Taxes was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. All functions of the Office of the Collector of Taxes including the functions of all officers, employees, and subordinate agencies were transferred to the Director, Department of General Administration by Reorganization Order No. 3, dated August 28, 1952. Reorganization Order No. 20, dated November 10, 1952, transferred the functions of the Collector of Taxes to the Finance Office. The same Order provided for the Office of the Collector of Taxes headed by a Collector in the Finance Office, and abolished the previously existing Office of the Collector of Taxes. Reorganization Order No. 20 was superseded and replaced by Organization Order No. 121, dated December 12, 1957, which provided that the Finance Office (consisting of the Office of the Finance Officer, Property Tax Division, Revenue Division, Treasury Division, Accounting Division, and Data Processing Division) would continue under the direction and control of the Director of General Administration, and that the Treasury Division would perform the function of collecting revenues of the District of Columbia and depositing the same with the Treasurer of the United States. Organization Order No. 121 was revoked by Organization Order No. 3, December 13, 1967, Part IVC of which prescribed the functions of the Finance Office within a newly established Department of General Administration. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. Functions of the Finance Office as stated in Part IVC of Organization Order No. 3 were transferred to the Director of the Department of Finance and Revenue by Commissioners Order No. 69-96, dated March 7, 1969. The collection functions of the Director of the Department of Finance and Revenue were transferred to the District of Columbia Treasurer by  47-316 on March 5, 1981. Department of Insurance abolished: See Historical and Statutory Notes following  31-2602.01.
 312602.10. Taxation of companiesTax on average earnings on reserves for unpaid losses and unexpired premiums. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 407, ch. 93, title V,  10; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1410. 1973 Ed.,  35-1110.
 312602.11. Taxation of companiesTax on investment income from funds representing capital stock and surplus. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 408, ch. 93, title V,  11; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1411. 1973 Ed.,  35-1111.
 312602.12. Taxation of companiesComputation and payment of taxes on earnings and investment income. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 408, ch. 93, title V,  12; May 21, 1997, D.C. Law 11-268,  10(q), 44 DCR 1730; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1412. 1973 Ed.,  35-1112. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2602.01.
 312602.13. Single annual license fee. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 408, ch. 93, title V,  13; Apr. 20, 1999, D.C. Law 12-261,  2003(hh), 46 DCR 3142; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1413. 1973 Ed.,  35-1113. Editor's Notes Office of Collector of Taxes abolished: See Historical and Statutory Notes following  31-2602.09.
 312602.14. Cessation of business. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 408, ch. 93, title V,  14; May 21, 1997, D.C. Law 11-268,  10(q), 44 DCR 1730; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1414. 1973 Ed.,  35-1114. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2602.01.
 312602.15. Failure to make reports or pay taxes or fees. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 408, ch. 93, title V,  15; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1415. 1973 Ed.,  35-1115.
 312602.16. Exemption from District taxes or fees. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 409, ch. 93, title V,  16; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1416. 1973 Ed.,  35-1116. Editor's Notes United States Shipping Board abolished: By Executive Order No. 6166,  12, dated June 10, 1933, the United States Shipping Board was abolished and its functions, including those over and in respect to the United States Shipping Board Merchant Fleet Corporation, were transferred to the Department of Commerce. By  201 and 204 of the Act of June 29, 1936, 49 Stat. 1987, ch. 858, the United States Maritime Commission was created and the functions of the former United States Shipping Board, including those vested in the Department of Commerce by Executive Order No. 6166, were transferred thereto. The functions of the United States Maritime Commission were transferred to the Federal Maritime Board by Part I of Reorganization Plan No. 21 of 1950, 64 Stat. 1273. The functions of the Federal Maritime Board were transferred to the Federal Maritime Commission by  103 of Reorganization Plan No. 7 of 1961, 75 Stat. 840.
 312602.17. Payment of federal income taxes. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 409, ch. 93, title V,  17; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1417. 1973 Ed.,  35-1117.
 312602.18. Investment of capital, assets and surplus. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 409, ch. 93, title VI,  18; May 21, 1997, D.C. Law 11-268,  10(q), 44 DCR 1730; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1418. 1973 Ed.,  35-1118. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2602.01.
 312602.19. Acquisition, use and disposition of real estate by domestic companies. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 410, ch. 93, title VI,  19; May 21, 1997, D.C. Law 11-268,  10, 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  28(b), 45 DCR 745; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1419. 1973 Ed.,  35-1119. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2602.01.
 312602.20. Mergers or consolidations. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 410, ch. 93, title VII,  20; May 21, 1997, D.C. Law 11-268,  10(q), 44 DCR 1730; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1420. 1973 Ed.,  35-1120. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2602.01.
 312602.21. Establishment and maintenance of foreign agencies. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 411, ch. 93, title VIII,  21; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1421. 1973 Ed.,  35-1121.
 312602.22. Corporations engaged exclusively in writing insurance in foreign countries. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 411, ch. 93, title VIII,  22; May 21, 1997, D.C. Law 11-268,  10(q), 44 DCR 1730; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1422. 1973 Ed.,  35-1122. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2602.01.
 312602.23. Unauthorized transaction of insurance business. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 412, ch. 93, title IX,  23; May 21, 1997, D.C. Law 11-268,  10(q), 44 DCR 1730; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1423. 1973 Ed.,  35-1123. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2602.01.
 312602.24. License of agent or broker; issuance; revocation. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 412, ch. 93, title IX,  24; May 21, 1997, D.C. Law 11-268,  10(q), 44 DCR 1730; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1424. 1973 Ed.,  35-1124. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2602.01.
 312602.25. Licensees to maintain office and keep records; contents, inspection and confidentiality of records; violations. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 412, ch. 93, title IX,  25; Oct. 5, 1985, D.C. Law 6-42,  462, 32 DCR 4450; Mar. 8, 1991, D.C. Law 8-237,  2(u), 38 DCR 314; May 21, 1997, D.C. Law 11-268,  10(q), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  28(c), 45 DCR 745; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1425. 1973 Ed.,  35-1125. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2602.01.
 312602.26. Licensees to furnish bond. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 413, ch. 93, title IX,  26; May 21, 1997, D.C. Law 11-268,  10(q), 44 DCR 1730; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1426. 1973 Ed.,  35-1126. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2602.01.
 312602.27. Companies to keep classified records; violations. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 413, ch. 93, title X,  27; May 21, 1997, D.C. Law 11-268,  10(q), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  28(d), 45 DCR 745; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1427. 1973 Ed.,  35-1127. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2602.01.
 312602.28. Violations of provisions. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 414, ch. 93, title XI,  28; Mar. 8, 1991, D.C. Law 8-237,  2(u), 38 DCR 314; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1428. 1973 Ed.,  35-1128.
 312602.29. [Omitted]. Omitted.
 312602.30. Additional personnel and expenses for Insurance Department. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 414, ch. 93, title XII,  30; May 21, 1997, D.C. Law 11-268,  10(q), 44 DCR 1730; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1429. 1973 Ed.,  35-1130. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2602.01.
 312602.31. Severability. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 414, ch. 93, title XIII,  31; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1430. 1973 Ed.,  35-1131.
 312602.32. Right to amend or repeal chapter. [Repealed] Repealed.  (Mar. 4, 1922, 42 Stat. 414, ch. 93, title XIII,  32; Apr. 11, 2003, D.C. Law 14-297,  401(b), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-1431. 1973 Ed.,  35-1132.
 312701. Definitions. In this chapter, unless the context otherwise requires: (1) District means the District of Columbia. (2) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking. (3) Insurance includes (but is not limited to) fidelity, surety, and guaranty bonds. (4) Company means any insurer, whether stock, mutual, reciprocal, interinsurer, Lloyds, or any other form or group of insurers. (5) Policy means an insurance policy or contract as defined by Chapter 25 of this title. (6) Agent means and shall include any individual, copartnership, or corporation acting in the capacity of or licensed as a policy-writing agent, soliciting agent, or salaried company employee as defined by Chapter 25 of this title. (7) Exempt commercial risk means a person or entity which meets one of the following criteria: (A) Retains or employs a certified or qualified risk manager to negotiate insurance coverage; (B) Possesses a net worth in excess of $2 million; (C) Generates annual revenues in excess of $2 million; (D) Has at least 10 employees; (E) Pays annual aggregate country-wide standard insurance premiums in excess of $10,000; (F) Has total insured property value of at least $2 million; or (G) Is a nonprofit organization or public body generating annual budgeted expenditures of at least $5 million. (8) Medical malpractice insurer means an insurer licensed to underwrite medical malpractice insurance.  (May 20, 1948, 62 Stat. 242, ch. 324,  1; May 21, 1997, D.C. Law 11-268,  10(t), 44 DCR 1730; Apr. 3, 2001, D.C. Law 13-265,  201, 48 DCR 1225; May 5, 2001, D.C. Law 13-299,  2(a), 48 DCR 2211; June 25, 2002, D.C. Law 14-153,  2, 49 DCR 4257; June 11, 2004, D.C. Law 15-166,  4(p), 51 DCR 2817; Mar. 14, 2007, D.C. Law 16-263,  101(a), 54 DCR 807.)  Prior Codifications 1981 Ed.,  35-1701. 1973 Ed.,  35-1501. Effect of Amendments D.C. Law 13-265 amended the definition of exempt commercial risk. D.C. Law 13-299 added the definition of exempt commercial risk. D.C. Law 14-153 amended the definition of exempt commercial risk without any change. D.C. Law 15-166, in the definition of commissioner, substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance and Securities. D.C. Law 16-263 added par. (8). Emergency Legislation For temporary (90 day) amendment of section, see  2 of Insurance Economic Development Emergency Amendment Act of 2001 (D.C. Act 14-131, October 2, 2001, 48 DCR 9568). For temporary (90 day) amendment of section, see  2 of Insurance Economic Development Congressional Review Emergency Amendment Act of 2001 (D.C. Act 14-218, December 21, 2001, 49 DCR 393). For temporary (90 day) amendment of section, see  4(p) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). Temporary Legislation For temporary (225 day) amendment of section, see  2 of Insurance Economic Development Temporary Amendment Act of 2001 (D.C. Law 14-61, January 24, 2002, law notification 49 DCR 990). Editor's Notes Department of Insurance abolished: The Department of Insurance, including the Superintendent, was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. Reorganization Order No. 43, dated June 23, 1953, as amended, established, under the direction and control of a Commissioner, a Department of Insurance headed by a Superintendent. The Order provided for the organization of the Department, abolished the previously existing Department of Insurance, and provided that all functions and positions of the previous Department would be transferred to the new Department of Insurance, including the duties, powers, and authorities of all officers and employees; and that all personnel, property, records and unexpended balances relating to the functions and positions transferred would also be transferred to the new Department. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. The functions of the Superintendent of Insurance were transferred to the Department of Consumer and Regulatory Affairs by Reorganization Plan No. 1 of 1983, effective March 31, 1983. Pursuant to the provisions of D.C. Law 11-268, the Department of Insurance and Securities Regulation was established and the duties of the Superintendent of Insurance and the Insurance Administration were assumed by the Commissioner of Insurance and Securities and the Insurance Administration in the Department of Consumer and Regulatory Affairs was abolished. Section 3 of D.C. Law 14-153 provided: Section 2 shall apply as of May 15, 2001.
 312702. Applicability of chapter. This chapter shall apply to all forms of fire, casualty, motor vehicle, explosion, sprinkler leakage, and inland marine insurance in the District and to all forms of insurance within the scope of Chapter 25 of this title; provided, that this chapter shall not apply to reinsurance other than joint reinsurance to the extent provided in this chapter, and shall not apply to: (1) Insurance of vessels or craft, their cargoes, marine builders risks, marine protection and indemnity, or other risks commonly insured under marine, as distinguished from inland marine, insurance policies; (2) Title insurance; (3) Accident and health insurance; (4) Insurance against loss of or damage to aircraft or to liability, other than workmens compensation and employers liability, arising out of the ownership, maintenance, or use of aircraft; and (5) To insurance issued to self-insurers and insuring against loss in excess of at least $10,000 resulting from any 1 accident or event, except when rates therefor are made by a rating organization.  (May 20, 1948, 62 Stat. 242, ch. 324,  2; Oct. 21, 1993, D.C. Law 10-40,  14, 40 DCR 6009.)  Prior Codifications 1981 Ed.,  35-1702. 1973 Ed.,  35-1502.
 312703. Making of rates. (a) Rates for insurance within the scope of this chapter shall not be excessive, inadequate, or unfairly discriminatory. (b) Due consideration shall be given to past and prospective loss experience within and outside the District, to physical hazards, to safety and loss prevention factors, to underwriting practice and judgment, to catastrophe hazards, if any, to a reasonable margin for underwriting profit and contingencies; to dividends, savings, or unabsorbed premium deposits allowed or returned by companies to their policyholders, members, or subscribers; to past and prospective expenses both country-wide and those specially applicable to the District; to whether classification rates exist generally for the risks under consideration; to the rarity or peculiar characteristics of the risks; and to all other relevant factors within and outside the District. Due consideration shall be given to the net investment income (including the realized capital gains) on all cash and invested assets held against all unearned premium reserves and loss reserves of any nature. Unrealized capital gains or losses shall not be considered in the rate-making process. (c) Nothing in this section shall be taken to prohibit as unfairly discriminatory the establishment of classifications or modifications of classifications of risks based upon the size, expense, management, individual experience, location or dispersion of hazard, or any other reasonable considerations attributable to such risks provided such classifications and modifications apply to all risks under the same or substantially similar circumstances or conditions. (d) Nothing in this chapter shall be construed to require uniformity in insurance rates, classifications, rating plans, or practices. (e) Nothing in this chapter shall abridge or restrict the freedom of contract of companies, agents, brokers, or employees with reference to the commissions or salaries to be paid to such agents, brokers, or employees by companies. (f)(1) Every classification plan fixed, established, and promulgated by the Commissioner shall be so structured as to produce rates or premium charges which are adequate, not excessive, and not unfairly discriminatory. (2) Every final rate or premium charge proposed to be used by any motor vehicle insurer shall be filed with the Commissioner and shall be adequate, not excessive, and not unfairly discriminatory. A motor vehicle insurance rate may be held by the Commissioner to be excessive if the rate is unreasonably high for the insurance provided and is not actuarially justified based on the commonly accepted actuarial principles. In determining whether rates comply with standards under this subsection, due consideration shall be given for past and prospective loss experience within and outside the District, a reasonable margin for underwriting profit and contingencies, dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders or members or subscribers, past and prospective expenses, both countrywide and in the District, and investment income earned or realized by insurers both from their unearned premiums and from their loss reserve funds. If the Commissioner finds after a hearing that a rate is not in compliance with this subsection, he shall order that its use be discontinued for any policy issued or renewed after a date specified in the order and the order may prospectively provide for premium adjustment of any policy then in force. (f-1)(1)(A) Every final rate or premium charge proposed to be used by a medical malpractice insurer shall be filed with the Commissioner and shall be adequate, not excessive, and not unfairly discriminatory. A medical malpractice rate shall be excessive if the rate is unreasonably high for the insurance provided. In determining whether rates are adequate, not excessive, and not unfairly discriminatory, due consideration shall be given to: (i) Past and prospective loss experience within the District; (ii) A reasonable margin for underwriting profit and contingencies; (iii) Dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers; (iv) Past and prospective expenses in the District; (v) All investment income reasonably attributable to medical malpractice insurance in the District. (B) If District experience is not credible, the Commissioner may consider experience outside the District. The Commissioner shall promulgate rules setting forth the extent to which and the circumstances under which an insurer may rely on experience outside the District. (2) If a medical malpractice insurer wishes to change a rate, it shall file a complete rate application with the Commissioner. A complete rate application shall include all information, including all actuarial data, projections, and assumptions, that the medical malpractice insurer has relied on in calculating its proposed rates. All such information shall be made available when filed in accordance with subchapter II of Chapter 5 of Title 2. (3) The Commissioner shall notify the public of any application by a medical malpractice insurer for a rate change increase. The application shall be deemed approved 60 days after public notice unless the proposed rate change increase exceeds 10%. If the proposed rate change increase exceeds 10%, the Commissioner shall hold a hearing on the proposed change and shall issue an order approving, denying, or modifying the proposed change within 90 days after public notice of the proposed change. Any person shall have a right to testify in a hearing held by the Commissioner. The Commissioner shall promulgate rules governing the public hearing. (4) If the Commissioner finds, after a hearing, that a rate used by a medical malpractice insurer does not comply with this subsection, the Commissioner shall order the insurer to discontinue using the rate and to issue a refund to any policyholder who has paid the rate to the extent that the Commissioner has found it excessive. (g) No company, agent, or broker shall make, issue, or deliver, or knowingly permit the making, issuance, or delivery of any policy of insurance within the scope of this chapter contrary to pertinent filings which are in effect for the company as provided in this chapter, except that upon the written application of the insured stating his reasons therefor, filed with and approved by the Commissioner, a rate in excess of that provided by a filing otherwise applicable may be used on any specific risk. (h) Every insurer writing motor vehicle insurance in the District shall file with the Commissioner, in such form as he shall order, complete financial records showing the amount of profit on every line of motor vehicle insurance during the previous year. (i) The Office of the Peoples Counsel shall serve as advocate for consumers in rate hearings before the Commissioner and the costs associated with such advocacy shall be borne by the insurer or insurers requesting the rate hearing.  (May 20, 1948, 62 Stat. 243, ch. 324,  3; Sept. 18, 1982, D.C. Law 4-155, 14(a), 29 DCR 3491; Mar. 4, 1986, D.C. Law 6-96,  3, 32 DCR 7245; May 21, 1997, D.C. Law 11-268,  10(t), 44 DCR 1730; Sept. 20, 1996, D.C. Law 11-160,  4, 43 DCR 3722; Mar. 14, 2007, D.C. Law 16-263,  101(b), 54 DCR 807.)  Prior Codifications 1981 Ed.,  35-1703. 1973 Ed.,  35-1503. Section References This section is referenced in  31-2704. Effect of Amendments D.C. Law 16-263 added subsec. (f-1). Editor's Notes Report by Commissioner of Insurance and Securities: Section 5 of D.C. Law 11-160 provided that Within two years of September 20, 1996, the Commissioner of Insurance and Securities shall prepare and submit to the Council of the District of Columbia for its review a report on the impact of this act on the private passenger motor vehicle insurance market or any part thereof, the funding for the Office of Insurance, the District of Columbia insurance premium tax, the number of insurers doing business in the District, and the number of insurers domiciled in the District of Columbia. In preparing such report, the Commissioner may request from specific private passenger motor vehicle insurers doing business in the District, or from all such insurers, reasonable and pertinent information. Information which is proprietary to any affected insurer shall be treated as confidential by the Commissioner, but may be used in the aggregate with other information from other affected insurers for statistical or other reporting purposes. Department of Insurance abolished: See Historical and Statutory Notes following  35-2701.
 312704. Filing requirements of individual companies; adjustment of rates; removal of discriminations. (a) On and after July 1, 1948, every company shall file with the Commissioner, either directly or through a licensed rating organization of which it is a member or subscriber, except as to rates on inland marine risks which are not made by a rating organization and which by general custom of the business are not written according to manual rates or rating plans, all rates and rating plans, rules, and classifications which it uses or proposes to use in the District. (b) Whenever it shall be made to appear to the Commissioner, either from his own information or from complaint of any party alleging to be aggrieved thereby, that there are reasonable grounds to believe that the rates on any or on all risks or classes of risks or kinds of insurance within the scope of this chapter are not in accordance with the terms of this chapter, it shall be his duty, and he shall have the full power and authority, to investigate the necessity for an adjustment of any or all such rates. (c)(1) After an investigation of the rates, the Commissioner shall, before ordering an adjustment, hold a hearing upon not less than 10 days written notice specifying the matters to be considered at the hearing, to every company and rating organization which filed the rates; provided, that the Commissioner shall not be required to hold the hearing if he or she is advised by every such company and rating organization that they do not desire the hearing. The cost of the hearing shall be borne by the insurance company requesting the rate increase. If, after the hearing, the Commissioner determines that any or all of the rates are excessive or inadequate, he or she shall order an adjustment. Pending the investigation and order of the Commissioner, the rates shall be deemed to have been made in accordance with the terms of this chapter. (2)(A) An order of adjustment shall not affect any contract or policy made or issued prior to the effective date of the order unless: (i) The adjustment is substantial and exceeds the cost to the companies of making the adjustment; and (ii) The order is made after the prescribed investigation and hearing and within 30 days after the filing of rates affected. (B) An order of adjustment shall not affect an existing contract or policy other than: (i) A medical malpractice, workmens compensation, or automobile liability insurance policy required by law, order, rule, or regulation of a public authority; or (ii) A contract or policy of any type as to which the rates are not, by general custom of the business or because of rarity and peculiar characteristics, written according to normal classification or rating procedure. (d) In determining the necessity for an adjustment of rates, the Commissioner shall be bound by all of the provisions of  31-2703. (e) The Commissioner is further empowered to investigate and to order removed at such time and in such manner as he shall specify any unfair discrimination existing between individual risks or classes of risks.  (May 20, 1948, 62 Stat. 243, ch. 324,  4; May 21, 1997, D.C. Law 11-268,  10(t), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  30(a), 45 DCR 745; Mar. 14, 2007, D.C. Law 16-263,  101(c), 54 DCR 807.)  Prior Codifications 1981 Ed.,  35-1704. 1973 Ed.,  35-1504. Effect of Amendments D.C. Law 16-263 rewrote subsec. (c) which had read as follows: (c) After such an investigation of any such rates, the Commissioner shall, before ordering any appropriate adjustment thereof, hold a hearing upon not less than 10-days written notice specifying the matters to be considered at such hearing, to every company and rating organization which filed such rates, provided the Commissioner need not hold such hearing in the event he is advised by every such company and rating organization that they do not desire such hearing. If after such hearing the Commissioner determines that any or all of such rates are excessive or inadequate, he shall order appropriate adjustment thereof. Pending such investigation and order of the Commissioner, rates shall be deemed to have been made in accordance with the terms of this chapter. No order of adjustment shall affect any contract or policy made or issued prior to the effective date of such order unless: (1) the adjustment to be effected is substantial and exceeds the cost to the companies of making the adjustment; and (2) the order is made after the prescribed investigation and hearing and within 30 days after the filing of rates affected. In no event shall an order of adjustment affect an existing contract or policy other than one of workmens compensation or automobile liability insurance required by law, order, rule, or regulation of a public authority, or a contract or policy of any type as to which the rates are not, by general custom of the business or because of rarity and peculiar characteristics, written according to normal classification or rating procedure. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2701.
 312705. Cooperative and concerted action authorized. (a) Subject to the provisions of this chapter, 2 or more companies may cooperate or act in concert with each other: (1) As a rating organization, for the purpose of making rates, rating plans, or rating systems. No company shall be deemed to be a rating organization; (2) As an advisory organization, for the purpose of preparing policy forms, making underwriting rules, surveys, or inspections incident to but not including the making of rates, rating plans, or rating systems, or collecting and furnishing to companies or rating organizations loss or expense statistics or other statistical data, and acting in an advisory as distinguished from a rate making capacity; (3) As a group or fleet of companies operating under the same general management and control, for the purpose of conducting a complete insurance service; (4) As a group, association, or other organization for the purpose of joint underwriting or joint reinsurance, or of equitable apportionment and proper rating of insurance which may be afforded applicants who are in good faith entitled to but who are unable to procure such insurance through ordinary methods. (b) No company shall be required by this chapter to be a member or subscriber of any rating organization.  (May 20, 1948, 62 Stat. 244, ch. 324,  5.)  Prior Codifications 1981 Ed.,  35-1705. 1973 Ed.,  35-1505.
 312706. Filing requirements of organizations of companies; unfair practices; supervision of rating organizations. [Repealed] Repealed.  (May 20, 1948, 62 Stat. 245, ch. 324,  6; Mar. 21, 1995, D.C. Law 10-233,  7, 42 DCR 24; Apr. 18, 1996, D.C. Law 11-110,  39, 43 DCR 530; Apr. 9, 1997,D.C. Law 11-255,  40, 44 DCR 1271; May 21, 1997, D.C. Law 11-268,  10(t), 44DCR 1730; Apr. 20, 1999, D.C. Law 12-261,  2003(jj), 46 DCR 3142; Apr. 3, 2001, D.C. Law 13-265,  126(c), 48 DCR 1225; redesignated  303, Oct. 19, 2002, D.C. Law 14-213,  20(b), 49 DCR 8140.)  Prior Codifications 1981 Ed.,  35-1706. 1973 Ed.,  35-1506. Emergency Legislation For purported temporary (90 day) amendment of section, see  3(x) of Streamlining Regulation Emergency Act of 2003 (D.C. Act 15-145, August 11, 2003, 50 DCR 6896). Editor's Notes D.C. Act 15-145,  3(x) and D.C. Law 15-38,  3(x), purported to amend subsec. (c)(5) of this section previously repealed by D.C. Law 14-213. Office of Collector of Taxes abolished: The Office of the Collector of Taxes was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. All functions of the Office of the Collector of Taxes including the functions of all officers, employees, and subordinate agencies were transferred to the Director, Department of General Administration by Reorganization Order No. 3, dated August 28, 1952. Reorganization Order No. 20, dated November 10, 1952, transferred the functions of the Collector of Taxes to the Finance Office. The same Order provided for the Office of the Collector of Taxes headed by a Collector in the Finance Office, and abolished the previously existing Office of the Collector of Taxes. Reorganization Order No. 20 was superseded and replaced by Organization Order No. 121, dated December 12, 1957, which provided that the Finance Office (consisting of the Office of the Finance Officer, Property Tax Division, Revenue Division, Treasury Division, Accounting Division, and Data Processing Division) would continue under the direction and control of the Director of General Administration, and that the Treasury Division would perform the function of collecting revenues of the District of Columbia and depositing the same with the Treasurer of the United States. Organization Order No. 121, was revoked by Organization Order No. 3, dated December 13, 1967, Part IVC of which prescribed the functions of the Finance Office within a newly established Department of General Administration. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. Functions of the Finance Office as stated in Part IVC of Organization Order No. 3 were transferred to the Director of the Department of Finance and Revenue by Commissioners Order No. 69-96, dated March 7, 1969. The collection functions of the Director of the Department of Finance and Revenue were transferred to the District of Columbia Treasurer by  47-316 on March 5, 1981. Department of Insurance abolished: See Historical and Statutory Notes following  31-2701.
 312707. Information to be furnished to insured or Commissioner; grievance procedure. (a) Every rating organization and every company which makes its own rates shall, within a reasonable time after receiving written request therefor and upon payment of such reasonable charge as it may make, furnish to any insured affected by a rate made by it, or to the authorized representative of such insured, all pertinent information as to such rate. (b) Every rating organization and every company which makes its own rates shall provide within the District reasonable means whereby any person aggrieved by the application of its rating system may be heard, in person or by his authorized representative, on his written request to revise the manner in which such rating system has been applied in connection with the insurance afforded him. If the rating organization or company fails to grant or reject such request within 30 days after it is made, the applicant may proceed in the same manner as if his application had been rejected. Any party affected by the action of such rating organization or such company on such request may, within 30 days after written notice of such action, appeal to the Commissioner, who, after a hearing held upon not less than 10 days written notice to the appellant and to such rating organization or company, may affirm or reverse such action. (c) No company, agent, broker, or rating organization may willfully withhold required information from or give false or misleading information to the Commissioner. (d) No company, agent, or broker shall fail to furnish to an insured any policy or comparable evidence of insurance to which the insured is entitled.  (May 20, 1948, 62 Stat. 246, ch. 324,  7; May 21, 1997, D.C. Law 11-268,  10(t), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-1707. 1973 Ed.,  35-1507. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2701.
 312708. Additional powers and duties of Commissioner. (a) In addition to any powers hereinbefore expressly enumerated in this chapter, the Commissioner shall have full power and authority, and it shall be his duty, to enforce by regulations made and promulgated by the Council of the District of Columbia, by orders, or otherwise all and singular, the provisions of this chapter, and the full intent thereof. In particular he shall have the authority and power: (1) To examine all records of companies and rating organizations and to require any or every company, agent, broker, and rating organization to furnish under oath such information as he may deem necessary for the administration of this chapter. The expense of such examination shall be paid by the company or rating organization examined. In lieu of such examination the Commissioner may, in his discretion, accept a report of examination made by any other insurance supervisory authority; (2) The Council of the District of Columbia shall have the authority and power to make, and the Commissioner shall have the authority and power to enforce, such reasonable orders, rules, and regulations as may be necessary in making this chapter effective, but such orders, rules, and regulations shall not be contrary to or inconsistent with the provisions of this chapter; (3) To issue an order, after a full hearing to all parties in interest, requiring any group, association, or organization of companies and the members thereof to cease and desist from any unfair or unreasonable practice. (b) The Commissioner may designate 1 or more rating organizations or other agencies to assist him in gathering statistical data and in making such compilations thereof as may be necessary for the proper administration of this chapter. Such compilations shall be made available, subject to reasonable rules promulgated by the Council of the District of Columbia, to companies and rating organizations. (c) The Commissioner shall have no authority at any hearing to compel the attendance of witnesses and he shall not be required to adhere to formal rules of pleading or evidence. At the request of a party or parties in interest made prior to any hearing, he shall administer oaths to witnesses and shall permit such party or parties, at the cost and expense of one who so requests, to have made a record of the hearing, which record upon request of such party or parties the Commissioner shall certify.  (May 20, 1948, 62 Stat. 246, ch. 324,  8; May 21, 1997, D.C. Law 11-268,  10(t), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-1708. 1973 Ed.,  35-1508. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2701. Change in Government This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 402(279) of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to the District of Columbia Council, subject to the right of the Commissioner as provided in  406 of the Plan. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 312709. Violations. Any company, broker, or agent guilty of violating any of the provisions of this chapter or any order, rule, or regulation issued pursuant to this chapter shall be subject to the provisions of  31-2502.03 and 31-2502.36 [repealed], respectively.  (May 20, 1948, 62 Stat. 247, ch. 324,  9.)  Prior Codifications 1981 Ed.,  35-1709. 1973 Ed.,  35-1509.
 312710. Judicial proceedings to contest actions of Commissioner. Any person, firm or corporation aggrieved by any order, ruling, proceeding, or action of the Commissioner may contest the validity of such order, ruling, proceeding, or action in any court of competent jurisdiction by appeal or through any other appropriate proceedings, as provided under  31-2502.44 [repealed].  (May 20, 1948, 62 Stat. 247, ch. 324,  10; May 21, 1997, D.C. Law 11-268, 10, 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  30(b), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-1710. 1973 Ed.,  35-1510. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-2701.
 312711. [Omitted]
 312712. [Omitted]
 312713. [Omitted]
 312714. Exemptions and limitations. (a) An insurer shall not be required to file with, or to receive approval from, the Commissioner, for rates and policy forms used in the insurance of exempt commercial risks. (b) The filing and review exemption set forth in subsection (a) of this section shall not apply to workers compensation and employers liability policies and rates. (c)(1) All policies issued under this chapter shall contain a notice to the insured that the rate and policy form are not subject to the filing, review, and approval requirements of the Commissioner. (2) An insurer providing a policy under this chapter shall, at the time of entering into the policy agreement and annually thereafter, on a form to be prescribed by the Commissioner, which form clearly sets forth the standards of this chapter; the right of the policyholder to obtain regulatory review under this chapter; the effects of the waiver of the regulatory review; and any other information the Commissioner considers useful; and obtain a written certification signed by the policyholder certifying that the policyholder: (A) Employs a certified or qualified risk manager or placed the business through a licensed insurance producer or otherwise meets the criteria of an exempt commercial risk; (B) Is aware that the policy being purchased is not subject to initial regulatory review or approval of rates and forms; and (C) Agrees to the use of the exempt rates and forms by its insurer. (3) The policyholder certification shall be filed with, and retained by, the insurance company issuing coverage to the policyholder. An insurer issuing policies under this section shall provide the number of exempt policyholders annually to the Commissioner. (d) If any provision of this section conflicts with any other law in the District, this section shall govern.  (May 20, 1948, 62 Stat. 242, ch. 324,  14; as added May 5, 2001, D.C. Law 13-299,  2(b), 48 DCR 2211; Oct. 19, 2002, D.C. Law 14-213,  21, 49 DCR 8140.)  Effect of Amendments D.C. Law 14-213 validated a previously made technical change in directory language of D.C. Law 13-299 which required no change in text.
 312801. Definitions. For the purposes of this chapter, the term: (1) Ancillary services means standard medical procedures that are reasonably necessary for the diagnosis and treatment of a patient. (2) Emergency services means: (A) Health care services furnished in the emergency department of a hospital for the treatment of a medical emergency; (B) Ancillary services routinely available to the emergency department of a hospital for the treatment of a medical emergency; and (C) Emergency medical services transportation. (3) Medical emergency means the sudden onset or sudden worsening of a medical condition that manifests itself by symptoms of sufficient severity, including severe pain, that the absence of immediate medical attention could reasonably be expected by a prudent lay person, who possesses an average knowledge of health and medicine, to result in: (A) Placing the patients health in serious jeopardy; (B) Serious impairment to bodily functions; or (C) Serious dysfunction of any bodily organ or part.  (Sept. 11, 1998, D.C. Law 12-145,  2, 45 DCR 3785.)  Prior Codifications 1981 Ed.,  35-4801.
 312802. Covered services. (a)(1) All health insurers, hospitals or medical services corporations, and health maintenance organizations shall reimburse for emergency services that are due to a medical emergency. (2) Reimbursement for pre-hospital medical care and transport delivered pursuant to paragraph (1) of this subsection by the Fire and Emergency Medical Services Department ("Department") or a third party contracted by the District to provide such services pursuant to  5-401(b), shall be at the fee rate authorized by the Council pursuant to  5-416(a). (3) This subsection shall not apply to any group health plan or multiple employer welfare arrangement to the extent the plan or arrangement is not subject to state insurance regulation under section 514 of the Employee Retirement Income Security Act of 1974, approved September 2, 1974 (88 Stat. 897; 29 U.S.C.  1144). (b) A hospital emergency department or emergency medical service transporter shall provide a health insurer, hospital or medical services corporation, or health maintenance organization with any claim for reimbursement of services, and information on the presenting symptoms of the insured as well as the services provided. (c) A health insurer, hospital or medical services corporation, or health maintenance organization shall consider both the presenting symptoms and the services provided in processing a claim for reimbursement of emergency services. (d) A health insurer, hospital or medical services corporation, or health maintenance organization may not deny reimbursement, except for co-payments, deductibles, and co-insurance, for the provision of emergency services that are due to a medical emergency solely because the member failed to obtain pre-authorization for emergency services from the health insurer, hospital or medical services corporation, or health maintenance organization.  (Sept. 11, 1998, D.C. Law 12-145,  3, 45 DCR 3785; Dec. 13, 2017, D.C. Law 22-33,  3022, 64 DCR 7652.)  Prior Codifications 1981 Ed.,  35-4802. Applicability Section 3024 of D.C. Law 22-33 provided that the amendments made to this section by section 3022 of D.C. Law 22-33 shall apply to all health benefit plans issued or renewed in the District 90 or more days after December 13, 2017.  Emergency Legislation  For temporary (90 days) amendment of this section, see  3022 of Fiscal Year 2018 Budget Support Congressional Review Emergency Act of 2017 (D.C. Act 22-167, Oct. 24, 2017, 64 DCR 10802).   For temporary (90 days) amendment of this section, see  3022 of Fiscal Year 2018 Budget Support Emergency Act of 2017 (D.C. Act 22-104, July 20, 2017, 64 DCR 7032). 
 312803. Emergency department HIV screening. (a) For the purposes of this section, the term. (1) Health benefit plan, health insurer, and insured shall have the same meanings as provided in  31-3001. (2) HIV screening test shall mean the testing for the human immunodeficiency virus or any other identified causative agent of the acquired immune deficiency syndrome by: (A) Conducting a rapid-result test by means of the swabbing of a patients gums, finger-prick blood test, or other suitable rapid-result test; and (B) If the result is positive, conducting an additional blood test for submission to a laboratory to confirm the results of the rapid-result test. (b) A health benefit plan shall reimburse the cost of a voluntary HIV screening test performed on its insured while the insured is receiving emergency medical services, other than HIV screening, at a hospital emergency department, whether or not the HIV screening test is necessary for the treatment of the medical emergency which caused the insured to seek emergency services. (c) The benefits mandated by subsection (b) of this section shall: (1) Include at least one annual emergency department HIV screening test; (2) Reimburse the costs of administering such a test, all laboratory expenses to analyze the test, and the costs of communicating to the patient the results of the test and any applicable follow-up instructions for obtaining health care and supportive services; and (3) Not be subject to any annual or coinsurance deductible or any co-payment other than the co-payment that the insured would have to pay for the applicable hospital emergency department visit. (d) A representative of the emergency department of a hospital that provides emergency department HIV screening shall advise any patient between 13 and 64 years of age: (1) That unless a patient, or in the case of a minor, the patients parent, legal guardian, or other person authorized to make health care decisions for the minor, chooses to withhold consent, an HIV screening test will be performed at the time he or she receives emergency medical treatment; (2) That, if the patient is covered by a health benefit plan issued by a health insurer, the cost of at least one annual emergency department HIV screening test is a covered benefit; (3) That the test results are confidential, except that a positive test result will be reported to the Department of Health for statistical and public health purposes; and (4) In the case of a positive test result, where the patient may obtain appropriate health care and supportive services. (e) A health insurer shall not: (1) Require an insured or applicant for insurance to pay a higher deductible, copayment, or coinsurance, require a longer waiting period, or impose any other condition for coverage of benefits solely because an insured or applicant for insurance used the benefits covered by this section; (2) Refuse to issue a health benefit plan solely because an applicant may use the benefits covered by this section; or (3) Cancel or refuse to renew a health benefit plan solely because an insured has used the benefits covered by this section. (f) The Mayor, pursuant to subchapter I of Chapter 5 of Title 2, may issue rules to implement the provisions of this section.  (Sept. 11, 1998, D.C. Law 12-145,  3a; as added Mar. 21, 2009, D.C. Law 17-316,  2, 56 DCR 206.) 
 312901. Definitions. For the purposes of this subchapter, the term: (1) Baseline mammogram means a screening mammogram that is used as a comparison for future examinations. (2) Screening mammogram means a low dose x-ray used to visualize the internal structure of the breast. (3) Cytologic screening means a pap test to detect cervical cancer through the simple microscopic examination of cells scraped from the surface of the cervix. (4) Health benefit plan means any accident and health insurance policy or certificate, hospital and medical services corporation contract, health maintenance organization subscriber contract, plan provided by a multiple employer welfare arrangement, or plan provided by another benefit arrangement. The term health benefit plan does not mean accident only, credit, or disability insurance; coverage of Medicare services or federal employee health plans, pursuant to contracts with the United States government; Medicare supplemental or long-term care insurance; dental only or vision only insurance; specified disease insurance; hospital confinement indemnity coverage; limited benefit health coverage; coverage issued as a supplement to liability insurance, insurance arising out of a workers compensation or similar law; automobile medical payment insurance; medical expense and loss of income benefits; or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance.  (Mar. 7, 1991, D.C. Law 8-225,  2, 38 DCR 217; June 18, 2003, D.C. Law 14-312,  401(a), 50 DCR 306.)  Prior Codifications 1981 Ed.,  35-2401. Effect of Amendments D.C. Law 14-312 rewrote par. (4) which had read as follows: (4) Health insurance policy means any health insurance policy that provides for the payment of indemnity on account of sickness and is offered by Group Hospitalization and Medical Services, Incorporated, a health insurance company, a health self-insured, an insurance purchasing trust, or any health maintenance organization that offers insurance benefits or health plans in the District of Columbia (District). The term health insurance policy shall not include a hospital indemnity policy, a disability insurance policy, an accident only policy, or a student accident policy.
 312902. Payable benefits. (a) Any individual or group health benefit plan, including Medicaid, shall provide health insurance benefits to cover: (1) A baseline mammogram for women, including a 3-D mammogram; (2) An annual screening mammogram for women, including a 3-D mammogram; and (3) Adjuvant breast cancer screening, including magnetic resonance imaging, ultrasound screening, or molecular breast imaging of the breast, if: (A) A mammogram demonstrates a Class C or Class D breast density classification; or (B) A woman is believed to be at an increased risk for cancer due to family history or prior personal history of breast cancer, positive genetic testing, or other indications of an increased risk for cancer as determined by a woman's physician or advanced practice registered nurse. (b) Any individual or group health benefit plan, including Medicaid, shall provide health insurance benefits to cover: (1) Annual cervical cytologic screening for women; and (2) Cervical cytologic screening for women upon certification by an attending physician that the test is medically necessary. (c) Benefits provided in accordance with this section shall not be subject to an annual or coinsurance deductible. (d) Benefits provided in accordance with this section shall not be subject to a co-payment except when an enrollee or subscriber elects to have a baseline mammogram, annual screening mammogram, annual cervical cytologic screening, and a cervical cytologic screening certified by an attending physician as being necessary, performed by an out-of-network provider in a preferred provider plan. (e) Co-payments and coinsurance may be applicable to the enrollees or subscribers office visit. (f) Subsections (d) and (e) of this section shall apply: (1) To any insurance policy or subscriber contract delivered or issued for delivery in the District more than 120 days after April 5, 2005; and (2) To any insurance policy or subscriber contract renewed, amended, or reissued 120 days after April 5, 2005. (g) For the purposes of this section, the term "breast density classification" means the 4 levels of breast density identified in the Breast Imaging Reporting and Data System established by the American College of Radiology, which are: (1) Class A, indicating fatty breast tissue; (2) Class B, indicating scattered fibroglandular breast tissue; (3) Class C, indicating heterogeneously dense breast tissue with fibrous and glandular tissue that are evenly distributed throughout the breast; and (4) Class D, indicating extremely dense breast tissue.  (Mar. 7, 1991, D.C. Law 8-225,  3, 38 DCR 217; June 18, 2003, D.C. Law 14-312,  401(b), 50 DCR 306; Apr. 5, 2005, D.C. Law 15-291,  2, 52 DCR 1457; Apr. 7, 2006, D.C. Law 16-91,  106, 52 DCR 10637; Mar. 22, 2019, D.C. Law 22-261,  201, 66 DCR 1373.)  Prior Codifications 1981 Ed.,  35-2402. Effect of Amendments D.C. Law 14-312, in subsecs. (a) and (b), substituted health benefit plan for health insurance policy or service. D.C. Law 15-291 added subsecs. (d), (e), and (f). D.C. Law 16-91 made a technical correction that resulted in no change in text.
 312903. Applicability. The requirements of this subchapter shall apply: (1) To any health benefit plan delivered or issued for delivery in the District more than 120 days after March 7, 1991; and (2) To any health benefit plan renewed, amended, or reissued 120 days after March 7, 1991.  (Mar. 7, 1991, D.C. Law 8-225,  4, 38 DCR 217; June 18, 2003, D.C. Law 14-312,  401(c), 50 DCR 306.)  Prior Codifications 1981 Ed.,  35-2403. Effect of Amendments D.C. Law 14-312, in pars. (1) and (2), substituted health benefit plan for insurance policy or subscriber contract.
 312931. Coverage. (a) Every individual and group health insurance policy or service, including Medicaid, shall provide coverage for colorectal cancer screening for policyholders residing in the District of Columbia. (b) The screening shall be in compliance with American Cancer Society colorectal cancer screening guidelines. (c) As American Cancer Society colorectal cancer screening guidelines are updated, every individual and group health insurance policy of service, including Medicaid, shall update their colorectal cancer screening benefits to comply with the American Cancer Society guidelines.  (Apr. 13, 2002, D.C. Law 14-100,  2, 49 DCR 1008.) 
 312951. Definitions. For the purposes of this subchapter, the term: (1) Commissioner means the Commissioner of the Department of Insurance and Securities Regulation. (2) Health benefits plan means any accident and health insurance policy or certificate, hospital and medical services corporation contract, health maintenance organization subscriber contract, plan provided by a multiple employer welfare arrangement, or plan provided by another benefit arrangement. The term health benefit plan does not mean accident only, credit, or disability insurance; coverage of Medicare services or federal employee health plans, pursuant to contracts with the United States government; Medicare supplemental or long-term care insurance; dental only or vision only insurance; specified disease insurance; hospital confinement indemnity coverage; limited benefit health coverage; coverage issued as a supplement to liability insurance, insurance arising out of a workers compensation or similar law; automobile medical payment insurance; medical expense and loss of income benefits; or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance. (3) Health insurer means any person that provides one or more health benefit plans or insurance in the District of Columbia, including an insurer, a hospital and medical services corporation, a fraternal benefit society, a health maintenance organization, a multiple employer welfare arrangement, or any other person providing a plan of health insurance subject to the authority of the Commissioner.  (Mar. 25, 2003, D.C. Law 14-233,  2, 49 DCR 9772.) 
 312952. Coverage for prostate cancer screening. (a) Each individual and group health benefits plan issued or renewed in the District of Columbia shall provide coverage for prostate cancer screening in accordance with the latest screening guidelines issued by the American Cancer Society for the ages, family histories, and frequencies referenced in such guidelines. (b) The coverage provided under this section shall not be more restrictive than or separate from coverage provided from any other illness, condition, or disorder for purposes of determining deductibles, benefit year or lifetime durational limits, benefit year or lifetime dollar limits, lifetime episodes or treatment limits, copayment and coinsurance factors, and benefit year maximum for deductibles and copayments and coinsurance factors.  (Mar. 25, 2003, D.C. Law 14-233,  3, 49 DCR 9772.) 
 312953. Applicability. This subchapter shall apply to all individual and group health benefits plans issued or renewed on or after 120 days after March 25, 2003.  (Mar. 25, 2003, D.C. Law 14-233,  4, 49 DCR 9772.) 
 312954. Regulations. The Commissioner may issue rules and regulations necessary to implement the provisions of this subchapter.  (Mar. 25, 2003, D.C. Law 14-233,  5, 49 DCR 9772.) 
 312991. Closed claim analysis. (a) Within 180 days of march 14, 2007, the Mayor shall submit legislation to the Council for the establishment of a database of closed obstetrician/gynecologist malpractice claims reports to be submitted by providers of medical malpractice insurance. (b) The legislation shall include a plan which shall: (A) Contain provisions to identify trends and develop recommendations for preventative action for adverse Obstetrician/Gynecologist events; (B) Ensure dissemination of best practices among Obstetrician/Gynecologist practitioners and facilities and shall include provisions for ensuring the implementation of these practices; and (C) Include provisions to study recommendations based on closed Obstetrician/Gynecologist malpractice claims in other jurisdictions.  (Mar. 14, 2007, D.C. Law 16-263,  402, 54 DCR 807.) 
 312993.01. Definitions. For the purposes of this chapter, the term: (1) Approved clinical trial means: (A) A clinical research study or clinical investigation approved or funded in full or in part by one or more of the following: (i) The National Institutes of Health; (ii) The Centers for Disease Control and Prevention; (iii) The Agency for Health Care Research and Quality; (iv) The Centers for Medicare and Medicaid Services; (v) A bona fide clinical trial cooperative group, including the National Cancer Institute Clinical Trials Cooperative Group, the National Cancer Institute Community Clinical Oncology Program, the AIDS Clinical Trials Group, and the Community Programs for Clinical Research in AIDS; or (vi) The Department of Defense, the Department of Veterans Affairs, or the Department of Energy, or a qualified nongovernmental research entity to which the National Cancer Institute has awarded a support grant; (B) A study or investigation approved by the Food and Drug Administration (FDA), including those conducted under an investigational new drug or device application reviewed by the FDA; or (C) An investigation or study approved by an Institutional Review Board registered with the Department of Health and Human Services that is associated with an institution that has a federal-wide assurance approved by the Department of Health and Human Services specifying compliance with 45 C.F.R. Part 46. (2) Health benefit plan means any accident and health insurance policy or certificate, hospital and medical services corporation contract, health maintenance organization subscriber contract, plan provided by a multiple employer welfare arrangement, or plan provided by another benefit arrangement. The term health benefit plan shall not include accident-only, credit, or disability insurance; coverage of Medicare services or federal employee health plans, pursuant to contracts with the United States government; Medicare supplemental or long-term care insurance; dental-only or vision-only insurance; specified disease insurance; hospital confinement indemnity coverage; limited benefit health coverage; coverage issued as a supplement to liability insurance, insurance arising out of a workers compensation or similar law; automobile medical payment insurance; medical expense and loss of income benefits; or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance. (3) Health insurer means: (A) Any person that provides one or more health benefit plans or insurance in the District, including an insurer, a hospital and medical services corporation, a fraternal benefit society, a health maintenance organization, a multiple employer welfare arrangement, or any other person providing a plan of health insurance subject to the authority of the Commissioner; (B) A provider service organization; (C) The District of Columbia Medicaid agency; (D) Other governmental medical assistance programs, including their contracted insurers, whether providing services on a managed care or fee-for-service basis; (E) The Districts childrens health insurance program; or (F) Any other plans covering public employees. (4) Qualified individual means: (A)(i) An individual who is a policyholder, subscriber, insured, certificate holder, or enrollee of a health benefit plan; (ii) A beneficiary of a District of Columbia public health program; or (iii) A covered dependent of a policyholder, subscriber, insured, certificate holder, or enrollee; and (B) Who meets the following conditions: (i) The individual is eligible to participate in an approved clinical trial; and (ii) The approved clinical trial is undertaken for the purposes of the prevention, early detection, treatment, or monitoring of cancer, chronic disease, or life-threatening illness. (5)(A) Routine patient care costs means: (i) Items, drugs, and services that are typically provided absent a clinical trial; (ii) Items, drugs, and services required solely for the provision of the investigational item or service (such as the administration of a non-covered chemotherapeutic agent), the clinically appropriate monitoring of the effects of the item or service, or the prevention of complications; and (iii) Items, drugs, and services needed for reasonable and necessary care arising from the provision of an investigational item or service, including the diagnosis or treatment of complications. (B) Routine patient care costs shall not include: (i) The cost of tests or measurements conducted primarily for the purpose of the clinical trial involved or items, drugs, or services provided solely to satisfy data collection and analysis needs; or (ii) Items, drugs, or services customarily provided by the research sponsors free of charge for any qualified individual enrolled in the trial.  (June 5, 2008, D.C. Law 17-166,  2, 55 DCR 5174.) 
 312993.02. Covered trials. (a) A health insurer shall not limit or deny coverage, or impose additional conditions on the payment for the coverage, of routine patient care costs of items, drugs, and services furnished to a qualified individual in connection with participation in an approved clinical trial. A health insurer shall not be required to pay for costs of items, services, or drugs that are customarily provided by the sponsors of an approved clinical trial. (b) In the case of health care services provided by a participating provider, the payment rate shall be at the network negotiated rate, based on the members plan design. In case of a non-participating provider, the payment shall be at the rate that the members plan would otherwise pay to a non-participating provider for the same services, less any applicable co-payments and deductibles.  (June 5, 2008, D.C. Law 17-166,  3, 55 DCR 5174.) 
 312993.03. Right to file grievance. This chapter shall not limit, prohibit, or modify a qualified individuals right to: (1) File a grievance and use an independent review process, if available; or (2) Use the independent medical review system.  (June 5, 2008, D.C. Law 17-166,  4, 55 DCR 5174.) 
 312995.01. Definitions. For the purposes of this chapter, the term: (1) Group health plan means an employee welfare plan (as defined in section 3(1) of the Employee Retirement Income Security Act of 1974, approved September 2, 1974 (88 Stat. 829; 29 U.S.C.  1002(1)), to the extent that the plan provides medical care and includes items and services paid for as medical care to employees or their dependents (as defined under the terms of the plan) directly or through insurance, reimbursement, or otherwise. (2) Health insurance coverage means benefits consisting of medical care (provided directly, through insurance or reimbursement, or otherwise and includes items and services paid for as medical care) under any hospital or medical service policy or certificate, hospital, or medical service plan contract, or health maintenance organization contract offered by a health insurer. (3) Health insurer means any person that provides one or more health benefit plans or insurance in the District, including an insurer, a hospital and medical services corporation, a fraternal benefit society, a health maintenance organization, a multiple employer welfare arrangement, or any other person providing a plan of health insurance subject to the authority of the Commissioner of the Department of Insurance, Securities, and Banking. (4) Individual health plan means a plan offering health insurance coverage offered to individuals other than in connection with a group health plan.  (Dec. 17, 2009, D.C. Law 18-98,  2, 56 DCR 8530.) 
 312995.02. Chemotherapy pill coverage. (a) An individual health plan or group health plan, and a health insurer offering health insurance coverage that provides coverage for prescription drugs, shall provide health insurance coverage for prescribed, orally administered anticancer medication used to kill or slow the growth of cancerous cells and the person receiving such prescribed medication shall have the option of having it dispensed at any appropriately licensed pharmacy. (b) The health insurance coverage provided under this section shall be on a basis no less favorable than coverage provided for intravenously administered or injected cancer medications, for purposes of determining deductibles, benefit year or lifetime durational limits, benefit year or lifetime dollar limits, lifetime episodes or treatment limits, copayment and coinsurance factors, and benefit year maximum for deductibles and copayments and coinsurance factors.  (Dec. 17, 2009, D.C. Law 18-98,  3, 56 DCR 8530.) 
 312995.03. Applicability to group health plans. This chapter shall apply to group health plans for years beginning on or after December 17, 2009.  (Dec. 17, 2009, D.C. Law 18-98,  4, 56 DCR 8530.) 
 312996.01. Definitions. For the purposes of this chapter, the term: (1) Dependent child means an insureds child by blood or by law who: (A) Is under 26 years of age; (B) Has no dependent of his own; (C) Is enrolled as a full-time student at an accredited public or private institution of higher education; and (D) Is not provided coverage, or eligible to receive coverage, as a named subscriber, insured, enrollee, or covered person under any other group health plan or individual health plan, or entitled to benefits under Title XVIII of the Social Security Act, approved July 30, 1965 (Pub. L. No. 89-871; 42 U.S.C.  1395 et seq.), at the time dependent coverage pursuant to this chapter begins. (2) Group health plan means an employee welfare plan (as defined in section 3 (1) of the Employee Retirement Income Security Act of 1974, approved September 2, 1974 (88 Stat. 829; 29 U.S.C.  1002(1)), to the extent that the plan provides medical care and includes items and services paid for as medical care to employees or their dependents (as defined under the terms of the plan) directly or through insurance, reimbursement, or otherwise. (3) Health insurance coverage means benefits consisting of medical care (provided directly, through insurance or reimbursement, or otherwise and includes items and services paid for as medical care) under any hospital or medical service policy or certificate, hospital or medical service plan contract, or health maintenance organization contract offered by a health insurer. (4) Health insurer means any person that provides one or more health benefit plans or insurance in the District, including an insurer, a hospital and medical services corporation, a fraternal benefit society, a health maintenance organization, a multiple employer welfare arrangement, or any other person providing a plan of health insurance subject to the authority of the Commissioner.  (Oct. 26, 2010, D.C. Law 18-252,  2, 57 DCR 8064.)  Emergency Legislation For temporary (90 day) addition, see  2 of Health Insurance for Dependents Emergency Act of 2010 (D.C. Act 18-384, April 29, Temporary Legislation Section 2 of D.C. Law 18-203 added a section to read as follows: Sec. 2. Definitions. For the purposes of this act, the term: (1) Dependent child means an insureds child by blood or by law who: (A) Is under 26 years of age; (B) Is unmarried; (C) Has no dependent of his own; (D) Is a resident of the District of Columbia or is enrolled as a full-time student at an accredited public or private institution of higher education; and (E) Is not provided coverage, or eligible to receive coverage, as a named subscriber, insured, enrollee, or covered person under any other group health plan or individual health plan, or entitled to benefits under Title XVIII of the Social Security Act, approved July 30, 1965 (Pub. L. 89-871; 42 U.S.C. 1395 et seq.), at the time dependent coverage pursuant to this act begins. (2) Group health plan means an employee welfare plan (as defined in section 3 (1) of the Employee Retirement Income Security Act of 1974, approved September 2, 1974 (88 Stat. 829; 29 U.S.C.  1002(1)), to the extent that the plan provides medical care and includes items and services paid for as medical care to employees or their dependents (as defined under the terms of the plan) directly or through insurance, reimbursement, or otherwise. (3) Health insurance coverage means benefits consisting of medical care (provided directly, through insurance or reimbursement, or otherwise and includes items and services paid for as medical care) under any hospital or medical service policy or certificate, hospital, or medical service plan contract, or health maintenance organization contract offered by a health insurer. (4) Health insurer means any person that provides one or more health benefit plans or insurance in the District, including an insurer, a hospital and medical services corporation, a fraternal benefit society, a health maintenance organization, a multiple employer welfare arrangement, or any other person providing a plan of health insurance subject to the authority of the Commissioner of Insurance, Securities, and Banking. Section 6(b) of D.C. Law 18-203 provided that the act shall expire after 225 days of its having taken effect.
 312996.02. Dependent child coverage. (a) A group health plan or an individual health plan, and a health insurer offering health insurance coverage that provides coverage for dependent children, that delivers, issues for delivery, amends, or renews a health insurance policy in the District of Columbia shall make health insurance coverage available and, if requested by the policyholder, extend coverage to any dependent child of a policyholder until the dependent child is no longer a dependent child. (b) The health insurance coverage shall provide: (1) The same health insurance coverage benefits to a dependent child that are available to any other covered dependent; and (2) Health insurance coverage benefits to a dependent child at the same rate or premium applicable to any other covered dependent. (c) Nothing in this chapter shall be construed to require: (1) Coverage for services provided to a dependent before October 26, 2010; or (2) That an employer or other group policyholder pay all or part of the cost of coverage for a dependent as provided pursuant to this section.  (Oct. 26, 2010, D.C. Law 18-252,  3, 57 DCR 8064.)  Emergency Legislation For temporary (90 day) addition, see  3 of Health Insurance for Dependents Emergency Act of 2010 (D.C. Act 18-384, April 29, Temporary Legislation Section 3 of D.C. Law 18-203 added a section to read as follows: Sec. 3. Dependent child coverage. (a) A group health plan or an individual health plan, and a health insurer offering health insurance coverage that provides coverage for dependent children, that delivers, issues for delivery, amends, or renews a health insurance policy in the District of Columbia shall make health insurance coverage available and, if requested by the policyholder, extend health insurance coverage to any dependent child of a policyholder until the dependent child is no longer a dependent child. (b) The health insurance coverage shall provide: (1) The same health insurance coverage benefits to a dependent child that are available to any other covered dependent; and (2) Health insurance coverage benefits to a dependent child at the same rate or premium applicable to any other covered dependent. (c) Nothing in this act shall be construed to require: (1) Coverage for services provided to a dependent before the effective date of this act; or (2) That an employer or other group policyholder pay all or part of the cost of coverage for a dependent as provided pursuant to this section. Section 6(b) of D.C. Law 18-203 provided that the act shall expire after 225 days of its having taken effect.
 312996.03. Limitations on other coverage. This chapter shall not limit or alter any right to dependent coverage or to the continuation of coverage that is otherwise provided for in the District of Columbia.  (Oct. 26, 2010, D.C. Law 18-252,  4, 57 DCR 8064.)  Emergency Legislation For temporary (90 day) addition, see  4 of Health Insurance for Dependents Emergency Act of 2010 (D.C. Act 18-384, April 29, 2010, 57 DCR 3835). Temporary Legislation Section 4 of D.C. Law 18-203 added a section to read as follows: Sec. 4. Limitations on other coverage. This act shall not limit or alter any right to dependent coverage or to the continuation of coverage that is otherwise provided for in the District of Columbia. Section 6(b) of D.C. Law 18-203 provided that the act shall expire after 225 days of its having taken effect.
 31231. Unauthorized entities. No person shall act as an insurer, or engage in any other activity, directly or indirectly, which is regulated in acts codified in Chapters 1 through 55 of this title unless performed within the scope of a certificate of authority issued by the Commissioner as provided by this chapter. The prohibitions in this chapter shall not apply to persons or entities engaging in activity pursuant to  31-2502.39 and 31-2502.40.  (Mar. 8, 2007, D.C. Law 16-232,  102, 54 DCR 368.)  Section References This section is referenced in  31-232.
 31232. Aiding or assisting unauthorized activity. No person shall aid or assist another person in unauthorized activity proscribed by  31-231, including selling, soliciting, or negotiating for applications, policies, memberships, or other business.  (Mar. 8, 2007, D.C. Law 16-232,  103, 54 DCR 368.) 
 31233. Investigations and administrative and judicial enforcement. (a) The Commissioner may make public or private investigations inside or outside of the District as he considers necessary to determine whether a person has violated, or is about to violate, any provision of this chapter, or any rule or order hereunder, to aid in the enforcement of this chapter, or to aid in the prescribing of rules and forms to implement this chapter. (b) If the Commissioner determines that a person has engaged, is engaging, or is about to engage in any activity prohibited by this chapter or any rule or order adopted under this chapter, and that immediate action against such person is in the public interest, the Commissioner may issue a summary order directing the person to cease and desist from engaging in such activity; provided, that the summary cease and desist order shall give the person: (1) Notice of the opportunity for a hearing before the Commissioner to determine whether the summary cease and desist order should be vacated, modified, or entered as final, and that the hearing shall be conducted according to the rules for contested cases set forth in Chapter 38 of Title 26 of the District of Columbia Municipal Regulations; and (2) Notice that the summary cease and desist order will be entered as final if the person does not request a hearing within 15 days of service of the order as provided in Chapter 5 of Title 2. (c) If the Commissioner determines after a hearing, unless the right to a hearing is waived, that a person has engaged in any activity prohibited by this chapter or any rule or order adopted under this chapter, the Commissioner may, in addition to any other action in which he is authorized: (1) Issue a cease and desist order against the person; (2) Bar the person from engaging in the business of insurance; (3) Issue an order against the person imposing a civil fine not exceeding the greater of $10,000 per day of violation or twice the amount of money received by reason of the violation; (4) Issue an order for restitution and any other actual loss or damage incurred by other persons; and (5) Issue an order for payment of costs of the proceedings and reasonable expenses of any investigation. (d) A person aggrieved by the Commissioners order may appeal to the District of Columbia Court of Appeals pursuant to Chapter 5 of Title 2. (e) The Commissioner may request the Office of the Attorney General to seek judicial enforcement of any Commissioners Order entered against such person as provided in this chapter. (f) Administrative and judicial enforcement instituted by the Commissioner or the Office of the Attorney General under this chapter shall not bar governmental actions pursuant to other provisions of law, including criminal investigation and prosecution. (g) For purposes of an investigation or proceeding under this chapter, the Commissioner may administer oaths and affirmations, subpoena witnesses and compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records which the Commissioner deems relevant or material to the inquiry. (h) In case of contumacy by, or refusal to obey a subpoena issued to, a person, the Superior Court of the District of Columbia, upon application by the Commissioner, may issue to the person an order requiring the person to appear before the Commissioner to produce documentary evidence, or to give evidence touching the matter under investigation or in question. Failure to obey the order of the court may be punished as a contempt of court. (i) Persons damaged by any activity prohibited by this chapter shall have a private cause of action for damages, including attorneys fees, and any other remedies provided by law.  (Mar. 8, 2007, D.C. Law 16-232,  104, 54 DCR 368.) 
 31301. Definitions. For the purposes of this chapter, the term: (1) Accountant or independent certified public accountant means an independent certified public accountant or accounting firm in good standing with the American Institute of Certified Public Accountants and in all states in which they are licensed to practice; for Canadian and British companies, it means a Canadian-chartered or British-chartered accountant. (1A) Affiliate or affiliated person means an individual or entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the individual or entity. (1B) Audit committee means a committee established by the board of directors of an entity for the purpose of overseeing the accounting and financial reporting processes of an insurer or group of insurers, the internal audit function of an insurer or group of insurers if applicable, and external audits of financial statements of the insurer or group of insurers. The audit committee of any entity that controls a group of insurers may be deemed to be the audit committee for one or more of the controlled insurers for the purposes of this chapter at the election of the controlling person pursuant to  31-311.01(e). If an audit committee is not designated by the insurer, the insurers entire board of directors shall constitute the audit committee. (2) Audited financial report means and includes those items specified in  31-303. (2A) Indemnification means an agreement of indemnity or a release from liability if the intent or effect is to shift or limit in any manner the potential liability of the person or firm for failure to adhere to applicable auditing or professional standards, whether or not resulting in part from knowing of other misrepresentations made by the insurer or its representatives. (3) Insurer means a licensed insurer or authorized company which has authority from the Mayor [now Commissioner] to do business in the District of Columbia as provided under  31-2502.02 and 31-4304. (3A) Group of insurers means those licensed insurers included in the reporting requirements of subchapter I of Chapter 7 of this title [ 31-701 et seq.], or a set of insurers as identified by management for the purpose of assessing the effectiveness of internal control over financial reporting. (3B) "Internal audit function" means a person or persons that provide independent, objective, and reasonable assurance designed to add value and improve an organization's operations and accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. (3C) Internal control over financial reporting means a process effected by an entitys board of directors, management, and other personnel designed to provide reasonable assurance regarding the reliability of the financial statements, including compliance with  31-303(2) through (7), and includes such other policies and procedures that: (A) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the acquisition and disposition of assets; (B) Provide reasonable assurance that: (i) Transactions are recorded as necessary to permit preparation of the financial statements; or (ii) Receipts and expenditures are made only in accordance with management and director authorization; and (C) Provide reasonable assurance regarding: (i) Prevention or timely detection of unauthorized acquisitions; or (ii) The use or disposition of assets that could have a material effect on the financial statements. (4) NAIC means the National Association of Insurance Commissioners. (5) SEC means the United States Securities and Exchange Commission. (6) Section 404 means  404 of the Sarbanes-Oxley Act of 2002, approved July 30, 2002 (116 Stat. 745; 15 U.S.C.  7201 et seq.), and the rules and regulations promulgated thereunder. (7) Section 404 Report means managements report on internal control over financial reporting as defined by the SEC and the related attestation report of the independent certified public accountant. (8) SOX Compliant Entity means an entity that is required to be compliant with or is voluntarily compliant with: (A) Section 10A(h) of the Securities Exchange Act of 1934, approved June 6, 1934 (105 Stat. 762; 15 U.S.C.  78j-l(h)) (preapproval requirements); (B) Section 10A(m)(3) of the Securities Exchange Act of 1934, approved December 22, 1995 (109 Stat. 762; 15 U.S.C.  78j-l(m)(3)) (audit committee independence requirements); and (C) The internal control over financial reporting requirements of Section 404 and 17 C.F.R.  229.308 (Item 308 of SEC Regulation S-K).  (Oct. 21, 1993, D.C. Law 10-48,  2, 40 DCR 6102; Mar. 12, 2011, D.C. Law 18-317,  2(a), 57 DCR 12418; Apr. 11, 2019, D.C. Law 22-292,  301(a), 66 DCR 1691.)  Prior Codifications 1981 Ed.,  35-3201. Section References This section is referenced in  31-314 and  31-3931.13. Effect of Amendments D.C. Law 18-317 added pars. (1A), (1B), (2A), (3A), (3B), and (5) to (8). Applicability  Section 401 of D.C. Law 22-292 provided that the changes made to this section by D.C. Law 22-292 shall apply to all insurance policies issued or renewed in the District 90 days after April 11, 2019.  Emergency Legislation For temporary (90 day) amendment of section, see  2(a) of Annual Financing Reporting Modernization Emergency Amendment Act of 2010 (D.C. Act 18-665, December 28, 2010, 58 DCR 80). For temporary (90 day) amendment of section, see  2(a) of Annual Financial Reporting Modernization Congressional Review Emergency Amendment Act of 2011 (D.C. Act 19-30, March 15, 2011, 58 DCR 2591). Editor's Notes Mayor authorized to issue rules: Section 16 of D.C. Law 10-48 provided that the Mayor shall, pursuant to subchapter I of Chapter 15 of Title 1 [subchapter I of Chapter 5 of Title 2, 2001 Ed.], issue rules to implement the provisions of this chapter. Delegation of Authority Delegation of authority pursuant to D.C. Law 10-48, the Annual Audited Financial Reports Act of 1993, see Mayors Order 94-54, March 7, 1994 ( 41 DCR 1433).
 31302. General requirements for filing audited financial reports and audit committee appointments; extensions. (a) All insurers shall have an annual audit prepared by an independent certified public accountant and shall file an audited financial report with the Mayor on or before June 1st for the year ended December 31st immediately preceding. The Mayor may require an insurer to file an audited financial report earlier than June 1st with 90 days advance notice to the insurer. (b) Extensions of the June 1st filing date may be granted by the Mayor for 30-day periods upon showing by the insurer and its independent certified public accountant the reasons for requesting the extension and determination by the Mayor of good cause for an extension. The request for extension must be submitted in writing not less than 10 days prior to the due date in sufficient detail to permit the Mayor to make an informed decision with respect to the requested extension. (c) If an extension is granted in accordance with the provisions in subsection (b) of this section, an extension for the same 30-day period shall be granted for the filing of a managements report of internal control over financial reporting. (d) An insurer required to file an annual audited financial report pursuant to this chapter shall establish an audit committee. If the insurer is controlled by a controlling person or entity, the audit committee of the controlling entity, in compliance with  31-311.01(e), may serve as the audit committee for the subject insurer for purposes of this chapter.  (Oct. 21, 1993, D.C. Law 10-48,  3, 40 DCR 6102; Mar. 12, 2011, D.C. Law 18-317,  2(b), 57 DCR 12418.)  Prior Codifications 1981 Ed.,  35-3202. Section References This section is referenced in  31-313 and  31-314. Effect of Amendments D.C. Law 18-317 rewrote the section heading, which had read as follows: Filing and extensions for filing of annual audited financial reports.; and added subsecs. (c) and (d). Emergency Legislation For temporary (90 day) amendment of section, see  2(b) of Annual Financing Reporting Modernization Emergency Amendment Act of 2010 (D.C. Act 18-665, December 28, 2010, 58 DCR 80). For temporary (90 day) amendment of section, see  2(b) of Annual Financial Reporting Modernization Congressional Review Emergency Amendment Act of 2011 (D.C. Act 19-30, March 15, 2011, 58 DCR 2591).
 31303. Contents of annual audited financial report. The annual audited financial report shall report the financial position of the insurer as of the end of the most recent calendar year and the results of its operations, cash flow, and changes in capital and surplus for the year then ended in conformity with statutory accounting practices prescribed, or otherwise permitted, by the jurisdiction where it is domiciled. The annual audited financial report shall include the following: (1) Report of an independent certified public accountant; (2) Balance sheet reporting admitted assets, liabilities, capital, and surplus; (3) Statement of operations; (4) Statement of cash flows; (5) Statement of changes in capital and surplus; (6) Notes to the financial statements, which shall: (A) Be those required by the appropriate NAIC annual statement instructions and the NAIC Accounting Practices and Procedures Manual; and (B) Include a reconciliation of differences, if any, between the audited statutory financial statement and the annual statement filed pursuant to Chapter 19 of this title [ 31-1901 et seq.], and a written description of the nature of these differences; and (7) The financial statements included in the audited financial report shall be prepared in a form and using language and groupings substantially the same as the relevant sections of the annual statement of the insurer filed with the Mayor, and the financial statement shall be comparative, presenting the amounts as of December 31st of the current year and the amounts as of the immediately preceding December 31st. However, in the first year in which an insurer is required to file an audited financial report, the comparative data may be omitted.  (Oct. 21, 1993, D.C. Law 10-48,  4, 40 DCR 6102; Feb. 27, 1996, D.C. Law 11-90,  5(a), 42 DCR 7155; Mar. 27, 2003, D.C. Law 14-255,  2, 50 DCR 236; Mar. 12, 2011, D.C. Law 18-317,  2(c), 57 DCR 12418.)  Prior Codifications 1981 Ed.,  35-3203. Section References This section is referenced in  31-301 and  31-307. Effect of Amendments D.C. Law 14-255 rewrote par. (6) which had read: (6) Notes to financial statements, including notes required by the appropriate NAIC annual statement instructions and any other notes required by generally accepted accounting principles. The notes shall also include: (A) A reconciliation of differences, if any, between the audited statements to be filed with the Mayor and the NAIC annual statement filed pursuant to the insurance laws of the District of Columbia; and (B) A summary of ownership and relationships of the insurer and all affiliated companies; and D.C. Law 18-317, in the lead-in text, substituted jurisdiction where it is domiciled for Mayor; and rewrote par. (6), which formerly read: (6) Notes to the financial statements, including notes required by the appropriate NAICs annual statement instructions, shall include a reconciliation of differences, if any, between the audited financial report and the annual financial statement filed on March 1st with the Mayor, with a written description of the nature of the differences; and Emergency Legislation For temporary amendment of section, see  6(a) of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and  5(a) of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844). Temporary Legislation For temporary (225 day) amendment of section, see  5(a) of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305).
 31304. Designation of independent certified public accountant. (a) Each insurer required by this chapter to file an annual audited financial report, within 60 days after becoming subject to the requirement, shall register in writing with the Mayor the name and address of the independent certified public accountant or accounting firm retained to conduct the required annual audit. Insurers not retaining an independent certified public accountant on October 21, 1993, shall register the name and address of their retained certified public accountant not less than 6 months before the date when the first audited financial report is to be filed. (b) The insurer shall obtain a letter from the accountant, and file a copy with the Mayor, stating that the accountant is aware of the provisions of the insurance laws and rules of the District of Columbia that relate to accounting and financial matters, and affirming that he or she will express his or her opinion on the financial statements in terms of their conformity to the statutory accounting practices prescribed or otherwise permitted by the jurisdiction where it is domiciled, specifying any exceptions he or she believes appropriate. (c) If an accountant who was the accountant for the immediately preceding filed audited financial report is dismissed or resigns, the insurer shall, within 5 business days, notify the Mayor of this event. The insurer shall, within 10 business days of the above notification, also furnish the Mayor with a separate letter stating whether in the 24 months preceding the event there were any disagreements with the former accountant on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of the former accountant, would have caused him or her to make reference to the subject matter of the disagreement in connection with his or her opinion. The disagreements required to be reported in response to this subsection include both those resolved to the former accountants satisfaction and those not resolved to the former accountants satisfaction. Disagreements contemplated by this section are those that occur at the decision-making level, that is between personnel of the insurer responsible for presentation of its financial statements and personnel of the accounting firm responsible for rendering its report. The insurer shall also request in writing that the former accountant furnish a letter addressed to the insurer stating whether the accountant agrees with the statements contained in the insurers letter, and, if not, stating the reasons that he does not agree. The insurer shall furnish the responsive letter from the former accountant to the Mayor together with its own.  (Oct. 21, 1993, D.C. Law 10-48,  5, 40 DCR 6102; Mar. 12, 2011, D.C. Law 18-317,  2(d), 57 DCR 12418.)  Prior Codifications 1981 Ed.,  35-3204. Section References This section is referenced in  31-313. Effect of Amendments D.C. Law 18-317, in subsec. (b), substituted by the jurisdiction where it is domiciled for by the Mayor. Emergency Legislation For temporary (90 day) amendment of section, see  2(d) of Annual Financing Reporting Modernization Emergency Amendment Act of 2010 (D.C. Act 18-665, December 28, 2010, 58 DCR 80). For temporary (90 day) amendment of section, see  2(d) of Annual Financial Reporting Modernization Congressional Review Emergency Amendment Act of 2011 (D.C. Act 19-30, March 15, 2011, 58 DCR 2591).
 31305. Qualifications of independent certified public accountant. (a) The Mayor shall not recognize a person or firm as a qualified independent certified public accountant if the person or firm: (1)(A) Is not in good standing with the American Institute of Certified Public Accountants in all jurisdictions in which the accountant is licensed to practice; or (B) For a Canadian or British company, is not a chartered accountant; or (2) Has either directly or indirectly entered into an agreement of indemnity or release from liability with respect to the audit of the insurer. (b) Except as otherwise provided herein, an independent certified public accountant shall be recognized as qualified as long as he or she conforms to the standards of his or her profession, as contained in the Code of Professional Ethics of the American Institute of Certified Public Accountants, Chapter 15 [repealed] of Title 3, and rules promulgated by the District of Columbia Board of Accountancy. (b-1) A qualified independent certified public accountant may enter into an agreement with an insurer to have disputes relating to an audit resolved by mediation or arbitration; provided, that in the event of a delinquency proceeding commenced against the insurer under Chapter 13 of this title [ 31-1301 et seq.], the mediation or arbitration provision shall operate at the option of the statutory successor. (c)(1) The lead or coordinating audit partner having primary responsibility for the audit shall not act in that capacity for more than 5 consecutive years. A lead or coordinating auditor shall be disqualified from acting in that or a similar capacity for the same company or its insurance subsidiaries or affiliates for a period of 5 consecutive years. An insurer may make application to the Mayor for relief from the above rotation requirement on the basis of unusual circumstances. Any application shall be made at least 30 days before the end of the calendar year. The Mayor may consider the following factors in determining if the relief should be granted: (A) The number of partners, the expertise of the partners, or the number of insurance clients in the currently registered firm; (B) The premium volume of the insurer: or (C) The number of jurisdictions in which the insurer transacts business. (2) The insurer shall file, with its annual statement filing, the approval for relief from subsection (c)(1) of this section with the jurisdictions in which it holds a license or does business and the NAIC. If a nondomestic jurisdiction accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic format acceptable to the NAIC. (d) The Mayor shall not recognize as a qualified independent certified public accountant, nor accept any annual audited financial report prepared, in whole or in part, by any natural person who: (1) Has been convicted of fraud, bribery, a violation of the Racketeer Influenced and Corrupt Organizations Act, approved October 15, 1970 (84 Stat. 941; 18 U.S.C.  1961 et seq.), or any dishonest conduct or practices under federal or state law; (2) Has been found to have violated the insurance laws of the District of Columbia with respect to any previous reports submitted under this chapter; or (3) Has demonstrated a pattern or practice of failing to detect or disclose material information in previous reports filed under this chapter. (e) The Mayor, as provided in  31-2502.03 and 31-4305, may hold a hearing to determine whether an independent public accountant is qualified and, considering the evidence presented, may rule that the accountant is not qualified for purposes of expressing his or her opinion on the financial statements in the annual audited financial report made pursuant to this chapter and require the insurer to replace the accountant with another whose relationship with the insurer is qualified within the meaning of this chapter. (f)(1) The Mayor shall not recognize as a qualified independent certified public accountant, or accept an annual audited financial report, prepared in whole or in part by an independent certified public accountant, who provides to an insurer, contemporaneously with the audit, the following non-audit services: (A) Bookkeeping or other services related to the accounting records or financial statements of the insurer; (B) Financial information systems design and implementation; (C) Appraisal or valuation services, fairness opinions, or contribution-in-kind reports; (D)(i) Actuarially-oriented advisory services involving the determination of amounts recorded in the financial statements. (ii) The accountant may assist an insurer in understanding the methods, assumptions, and inputs used in the determination of amounts recorded in the financial statement only if it is reasonable to conclude that the services provided will not be subject to audit procedures during an audit of the insurers financial statements. An accountants actuary may also issue an actuarial opinion or certification of an insurers reserves if the following conditions have been met: (I) The accountant or the accountants actuary has not performed any management functions or made any management decisions; (II) The insurer has competent personnel or engages a third-party actuary to estimate the reserves for which management takes responsibility; and (III) The accountants actuary tests the reasonableness of the reserves after the insurers management has determined the amount of the reserves; (E) Internal audit outsourcing services; (F) Management functions or human resources; (G) Broker or dealer, investment adviser, or investment banking services; (H) Legal services or expert services unrelated to the audit; or (I) Any other services that the Mayor determines, by rule, are impermissible. (2) The principles of independence with respect to services provided by the qualified independent certified public accountant are predicated on 3 basic principles: the accountant cannot function in the role of management; the accountant cannot audit its own work; and the accountant cannot serve in an advocacy role for the insurer. A violation of one or more of these principles shall impair the accountants independence. (g) An insurer having direct written and assumed premiums of less than $100 million in any calendar year may request an exemption from subsection (f)(1) of this section. The insurer shall file with the Mayor a written statement explaining why the insurer should be exempt. If the Mayor finds, upon review of the statement, that compliance with subsection (f)(1) of this section would constitute a financial or organizational hardship on the insurer, an exemption may be granted. (h) A qualified independent certified public accountant who performs the audit may engage in other non-audit services, including tax services, that are not described in or do not conflict with subsection (f) of this section, if the audit committee provides advance approval in accordance with subsection (i) of this section. (i) All auditing services and non-audit services provided to an insurer by a qualified independent certified public accountant shall be preapproved by the audit committee. The preapproval requirement shall be waived with respect to non-audit services if: (1) The insurer is a SOX Compliant Entity or a direct or indirect wholly-owned subsidiary of a SOX Compliant Entity; or (2)(A) The aggregate amount of all such non-audit services provided to the insurer constitutes no more than 5% of the total amount of fees paid by the insurer to its qualified independent certified public accountant during the fiscal year in which the non-audit services are provided; (B) The services were not recognized by the insurer at the time of the engagement to be non-audit services; and (C) The provision of services is promptly brought to the attention of the audit committee and approved prior to the completion of the audit by the audit committee or by one or more members of the audit committee who are the members of the board of directors to whom authority to grant such approvals has been delegated by the audit committee. (j) The audit committee may delegate to one or more designated members of the audit committee the authority to grant the preapproval required by subsection (i) of this section. Any decision by a member or members to whom authority has been delegated to preapprove certain audit and non-audit services shall be formally presented to the full audit committee at its next regularly scheduled meeting. (k)(1) The Mayor shall not recognize an independent certified public accountant as qualified for a particular insurer if a member of the board, president, chief executive officer, controller, chief financial officer, chief accounting officer, or any person serving in an equivalent position for that insurer was employed by the independent certified public accountant and participated in the audit of the insurer during the one-year period preceding the date the most current statutory opinion is due. This paragraph shall apply only to partners and senior managers involved in the audit. An insurer may make application to the Mayor for relief from the requirement of this paragraph on the basis of good cause. (2) The insurer shall file, with its annual statement filing, any approval for relief obtained pursuant to paragraph (1) of this subsection with the jurisdictions in which it holds a license or does business and with the NAIC. If a nondomestic jurisdiction accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic format acceptable to the NAIC.  (Oct. 21, 1993, D.C. Law 10-48,  6, 40 DCR 6102; Feb. 27, 1996, D.C. Law 11-90,  5(b), 5(c), 42 DCR 7155; Mar. 12, 2011, D.C. Law 18-317,  2(e), 57 DCR 12418; Sept. 26, 2012, D.C. Law 19-171,  84, 59 DCR 6190.)  Prior Codifications 1981 Ed.,  35-3205. Section References This section is referenced in  31-310 and  31-312. Effect of Amendments D.C. Law 18-317 rewrote subsecs. (a) and (c); in subsec. (e), substituted an independent public accountant for a certified public accountant; and added subsecs. (f) to (k). The 2012 amendment by D.C. Law 19-171 deleted that preceding is not in (a)(1)(B). Emergency Legislation For temporary amendment of section, see  6(b) and (c) of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and  5(b) and (c) of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844). For temporary (90 day) amendment of section, see  2(e) of Annual Financing Reporting Modernization Emergency Amendment Act of 2010 (D.C. Act 18-665, December 28, 2010, 58 DCR 80). For temporary (90 day) addition of section, see  3 of Annual Financing Reporting Modernization Emergency Amendment Act of 2010 (D.C. Act 18-665, December 28, 2010, 58 DCR 80). For temporary (90 day) addition of section, see  3 of Annual Financial Reporting Modernization Congressional Review Emergency Amendment Act of 2011 (D.C. Act 19-30, March 15, 2011, 58 DCR 2591). For temporary (90 day) amendment of section, see  2(e) of Annual Financial Reporting Modernization Congressional Review Emergency Amendment Act of 2011 (D.C. Act 19-30, March 15, 2011, 58 DCR 2591). Temporary Legislation For temporary (225 day) amendment of section, see  5(b), (c) of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305). Editor's Notes Section 3 of D.C. Law 18-317 provided: Sec. 3. Applicability. Section 2(e)(3) shall apply to audits of the year beginning January 1, 2010, and thereafter.
 31306. Consolidated or combined audits. An insurer may make written application to the Mayor for approval to file audited consolidated or combined financial statements in lieu of separate annual audited financial statements if the insurer is part of a group of insurance companies which utilizes a pooling or 100% reinsurance agreement that affects the solvency and integrity of the insurers reserves and the insurer cedes all of its direct and assumed business to the pool. In these cases, a column consolidating or combining worksheet shall be filed with the report, as follows: (1) Amounts shown on the consolidated or combined audited financial report shall be shown on the worksheet. (2) Amounts for each insurer subject to this section shall be stated separately. (3) Noninsurance operations may be shown on the worksheet on a combined or individual basis. (4) Explanations of consolidating and eliminating entries shall be included. (5) A reconciliation shall be included of any differences between the amounts shown in the individual insurer columns of the worksheet and comparable amounts shown on the annual statements of the insurers.  (Oct. 21, 1993, D.C. Law 10-48,  7, 40 DCR 6102.)  Prior Codifications 1981 Ed.,  35-3206.
 31307. Scope of audit and report of independent certified public accountant. Financial statements furnished pursuant to  31-303 shall be examined by an independent certified public accountant. In accordance with AU section 319 of the Professional Standards of the American Institute of Certified Public Accountants, Consideration of Internal Control in a Financial Statement Audit, the independent certified public accountant shall obtain a sufficient understanding of the insurers internal controls to ensure that the audit plan is effective. To the extent required by AU section 319, for those insurers required to file a managements report of internal control over financial reporting pursuant to  31-311.03, the independent certified public accountant shall consider the most recently available management reports in planning and performing the audit of the statutory financial statements. The audit of the insurers financial statements shall be conducted in accordance with generally accepted auditing standards. Consideration shall also be given to such other procedures illustrated in the Financial Condition Examiners Handbook promulgated by the NAIC as the independent certified public accountant deems necessary.  (Oct. 21, 1993, D.C. Law 10-48,  8, 40 DCR 6102; Feb. 27, 1996, D.C. Law 11-90,  5(d), 42 DCR 7155; Mar. 12, 2011, D.C. Law 18-317,  2(f), 57 DCR 12418.)  Prior Codifications 1981 Ed.,  35-3207. Effect of Amendments D.C. Law 18-317 substituted audit for examination; added the second and third sentences; and substituted consideration shall for consideration should. Emergency Legislation For temporary amendment of section, see  6(d) of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and  5(d) of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844). For temporary (90 day) amendment of section, see  2(f) of Annual Financing Reporting Modernization Emergency Amendment Act of 2010 (D.C. Act 18-665, December 28, 2010, 58 DCR 80). For temporary (90 day) amendment of section, see  2(f) of Annual Financial Reporting Modernization Congressional Review Emergency Amendment Act of 2011 (D.C. Act 19-30, March 15, 2011, 58 DCR 2591). Temporary Legislation For temporary (225 day) amendment of section, see  5(d) of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305).
 31308. Notification of adverse financial condition. (a)(1) The insurer required to furnish the annual audited financial report shall require the independent certified public accountant to report, in writing, within 5 business days to the board of directors or its audit committee any determination by the independent certified public accountant that, as of the balance sheet date currently under audit, the insurer: (A) Has materially misstated its financial condition as reported to the Mayor; (B) Does not meet the minimum capital and surplus requirement pursuant to  31-2502.13 and  31-4408; or (C) Does not meet the minimum net worth requirements of  31-3412. (2) An insurer who has received a report pursuant to this subsection shall forward a copy of the report to the Mayor within 5 business days of receipt of the report and shall provide the independent certified public accountant making the report with evidence of the report being furnished to the Mayor. If the independent certified public accountant fails to receive the evidence within the required 5-business-day period, the independent certified public accountant shall furnish to the Mayor a copy of its report within the next 5 business days. (b) No independent certified public accountant shall be liable in any manner to any person for any statement made in connection with subsection (a) of this section if the statement is made in good faith in compliance with subsection (a) of this section. (c) If the accountant, subsequent to the date of the audited financial report filed pursuant to this chapter, becomes aware of facts which might have affected his report, the accountant shall take action prescribed in Volume 1, Section AU 561 of the Professional Standards of the American Institute of Certified Public Accountants.  (Oct. 21, 1993, D.C. Law 10-48,  9, 40 DCR 6102; Feb. 27, 1996, D.C. Law 11-90,  5(e), 42 DCR 7155; Mar. 12, 2011, D.C. Law 18-317,  2(g), 57 DCR 12418.)  Prior Codifications 1981 Ed.,  35-3208. Section References This section is referenced in  31-314. Effect of Amendments D.C. Law 18-317 rewrote subsec. (a); and, in subsec. (b), substituted independent certified public for independent public. Prior to amendment, subsec. (a) read as follows: (a) The insurer required to furnish the annual audited financial report shall require the independent certified public accountant to report, in writing, within 5 business days to the board of directors or its audit committee any determination by the independent certified public accountant that the insurer has materially misstated its financial condition as reported to the Mayor as of the balance sheet date currently under examination, or that the insurer does not meet the minimum capital and surplus requirement pursuant to  31-2502.13 and 31-4408, as of that date. An insurer who has received a report pursuant to this subsection shall forward a copy of the report to the Mayor within 5 business days of receipt of the report and shall provide the independent certified public accountant making the report with evidence of the report being furnished to the Mayor. If the independent certified public accountant fails to receive the evidence within the required 5-business-day period, the independent certified public accountant shall furnish to the Mayor a copy of its report within the next 5 business days. Emergency Legislation For temporary amendment of section, see  6(e) of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and  5(e) of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844). Temporary Legislation For temporary (225 day) amendment of section, see  5(e) of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305).
 31309. Communication of internal control related matters noted in audit. (a) In addition to the annual audited financial report, an insurer shall furnish the Mayor with a written communication regarding any unremediated material weaknesses in its internal controls over financial reporting noted during the audit. If no unremediated material weaknesses were noted during the audit, the insurer shall submit a written communication stating this fact to the Mayor. The communication shall be prepared by the independent certified public accountant within 60 days after the filing of the annual audited financial report and shall contain a description of any unremediated material weakness, as of December 31 immediately preceding, in the insurers internal control over financial reporting noted by the accountant during the course of their audit of the financial statements. (b) The insurer shall provide a description of the remedial actions taken or those being proposed to correct unremediated material weaknesses if the actions are not described in the independent certified public accountants communication to the insurer.  (Oct. 21, 1993, D.C. Law 10-48,  10, 40 DCR 6102; Mar. 12, 2011, D.C. Law 18-317,  2(h), 57 DCR 12418.)  Prior Codifications 1981 Ed.,  35-3209. Section References This section is referenced in  31-311.03 and  31-314. Effect of Amendments D.C. Law 18-317 rewrote the section, which formerly read: In addition to the annual audited financial statements, each insurer shall furnish the Mayor with a written report prepared by the accountant describing significant deficiencies in the insurers internal control structure noted by the accountant during the audit. SAS No. 60, Communication of Internal Control Structure Matters Noted in an Audit (AU section 325 of the Professional Standards of the American Institute of Certified Public Accountants) requires an accountant to communicate significant deficiencies, known as reportable conditions, noted during a financial statement audit to the appropriate parties within an entity. No report shall be issued if the accountant does not identify significant deficiencies. If significant deficiencies are noted, the written report shall be filed annually by the insurer with the Mayor within 60 days after the filing of the annual audited financial statements. The insurer is required to provide a description of remedial actions taken or proposed to correct significant deficiencies, if the actions are not described in the accountants report. Emergency Legislation For temporary (90 day) amendment of section, see  2(h) of Annual Financing Reporting Modernization Emergency Amendment Act of 2010 (D.C. Act 18-665, December 28, 2010, 58 DCR 80). For temporary (90 day) amendment of section, see  2(h) of Annual Financial Reporting Modernization Congressional Review Emergency Amendment Act of 2011 (D.C. Act 19-30, March 15, 2011, 58 DCR 2591).
 31310. Accountants letter of qualifications. The accountant shall furnish the insurer in connection with, and for inclusion in, the filing of the annual audited financial report, a letter stating that: (1) The accountant is independent with respect to the insurer and conforms to the standards of his or her profession as contained in the Code of Professional Ethics and pronouncements of the American Institute of Certified Public Accountants and the rules of the District of Columbia Board of Accountancy. (2) The background and experience of the accountant in general is listed, and the experience in audits of insurers of the staff assigned to the engagement and whether each is an independent certified public accountant. Nothing within this chapter shall be construed as prohibiting the accountant from utilizing the staff he or she deems appropriate where use is consistent with the standards prescribed by generally accepted auditing standards. (3) The accountant understands the annual audited financial report and his or her opinion thereon will be filed in compliance with this chapter and that the Mayor will be relying on this information in the monitoring and regulation of the financial position of insurers. (4) The accountant consents to the requirements of  31-311 and that the accountant consents and agrees to make available for review by the Mayor, his or her designee or his or her appointed agent, the workpapers, as defined in  31-311. (5) The accountant is properly licensed by an appropriate state licensing authority and is a member in good standing in the American Institute of Certified Public Accountants. (6) The accountant is in compliance with the requirements of  31-305.  (Oct. 21, 1993, D.C. Law 10-48,  11, 40 DCR 6102; Feb. 27, 1996, D.C. Law 11-90,  5(f), 42 DCR 7155.)  Prior Codifications 1981 Ed.,  35-3210. Section References This section is referenced in  31-314. Emergency Legislation For temporary amendment of section, see  6(f) of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and  5(f) of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844). Temporary Legislation For temporary (225 day) amendment of section, see  5(f) of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305).
 31311.01. Requirements for audit committees. (a) The audit committee shall be directly responsible for the appointment, compensation, and oversight of any accountant, including the resolution of disagreements between management and the accountant regarding annual financial reporting required by this chapter. Each accountant shall report directly to the audit committee. (b) Each member of the audit committee shall be a member of the board of directors of the insurer or a member of the board of directors of an entity elected pursuant to subsection (e) of this section. (b-1) The audit committee of an insurer or group of insurers shall be responsible for overseeing the insurer's internal audit function and granting the person or persons performing the function suitable authority and resources to fulfill their responsibilities if required by  31-311.01a. (c) To be considered independent for purposes of this section, a member of the audit committee shall not, except in his or her capacity as a member of the audit committee, the board of directors, or any other board committee, accept any consulting, advisory, or other compensatory fee from the entity, or be an affiliated person of the entity or any subsidiary thereof; provided, that if board participation by otherwise non-independent members is legally required, such members may participate on the audit committee and be designated as independent for audit committee purposes unless they are an officer or employee of the insurer or one of its affiliates. (d) If a member of the audit committee ceases to be independent for reasons outside the members reasonable control, the member, upon notice to the Mayor, may remain an audit committee member until the earlier of the next annual meeting or one year from the occurrence of the event causing the member to be no longer independent. (e) Prior to exercising the election of designating an audit committee pursuant to this chapter, the ultimate controlling person shall provide written notice to the Mayor. The written notice shall be made timely prior to the issuance of the statutory audit report and include a description of the basis for the election. An insurer may change its election by providing written notice to the Mayor with a description of the basis for the change. The election shall remain in effect until rescinded. (f)(1) The audit committee shall require the accountant performing an audit pursuant to this chapter to report timely to the audit committee, in accordance with the requirements of SAS 61, Communication with Audit Committees, or its successor, the following: (A) All significant accounting policies and material permitted practices; (B) All material alternative treatments of financial information within statutory accounting principles that have been discussed with management of the insurer, the ramifications of the use of the alternative disclosures, and the treatment preferred by the accountant; and (C) Any other material written communication between the accountant and the management of the insurer, including any management letter or schedule of unadjusted differences. (2) If an insurer is a member of an insurance holding company system, the reports required by paragraph (1) of this subsection may be provided to the audit committee on an aggregate basis for the insurers in the holding company system; provided, that any substantial differences among insurers in the system are identified to the audit committee. (g) The following criteria shall apply for determining the required proportion of independent audit committee members: (1) If, during the prior calendar year, direct written and assumed premiums do not exceed $300 million, there shall be no minimum requirement. (2) If, during the prior calendar year, direct written and assumed premiums exceed $300 million, but do not exceed $500 million, 50% or more of members shall be independent. (3) If, during the prior calendar year, direct written and assumed premiums exceed $500 million, 75% or more of its members shall be independent. (h) An insurer with direct written and assumed premiums of less than $500 million, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, may make application to the Mayor for an exemption from this section based on hardship. An insurer that has been granted an exemption pursuant to this section shall file such approval, together with its annual statement filing, with the states in which it holds a license or does business and the NAIC. If the nondomestic state accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic format acceptable to the NAIC. (i) Prior calendar year direct written and assumed premiums shall be the combined total of direct premiums and assumed premiums from non-affiliates for the reporting entities. (j) This section shall not apply to: (1) Foreign or alien insurers licensed in the District; or (2) An insurer that is a SOX Compliant Entity or a direct or indirect wholly-owned subsidiary of a SOX Compliant Entity.  (Oct. 21, 1993, D.C. Law 10-48,  12a; as added Mar. 12, 2011, D.C. Law 18-317,  2(j), 57 DCR 12418; Apr. 11, 2019, D.C. Law 22-292,  301(b), 66 DCR 1691.)  Section References This section is referenced in  31-301,  31-302, and  31-312. Applicability  Section 401 of D.C. Law 22-292 provided that the changes made to this section by D.C. Law 22-292 shall apply to all insurance policies issued or renewed in the District 90 days after April 11, 2019. 
 31311.01a. Internal audit function requirements. (a) An insurer shall be exempt from the requirements of this section if: (1) The insurer has annual direct written and unaffiliated assumed premium, including international direct and assumed premium but excluding premium reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $500 million; and (2) If the insurer is a member of a group of insurers, the group has annual direct written and unaffiliated assumed premium including international direct and assumed premium, but excluding premium reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $1 billion. (b) The insurer or group of insurers shall establish an internal audit function providing independent, objective, and reasonable assurance to the audit committee and insurer management regarding the insurer's governance, risk management, and internal controls. This assurance shall be provided by performing general and specific audits, reviews, and tests and by employing other techniques considered necessary to protect assets, evaluate control effectiveness and efficiency, and evaluate compliance with policies and regulations. (c)(1) To ensure that internal auditors remain objective, the internal audit function shall be organizationally independent. The internal audit function will not defer ultimate judgment on audit matters to others and shall appoint an individual to head the Internal audit function who will have direct and unrestricted access to the board of directors. (2) Organizational independence shall not preclude dual-reporting relationships. (d) The head of the internal audit function shall report to the audit committee regularly, but no less than annually, on the periodic audit plan, factors that may adversely impact the Internal audit function's independence or effectiveness, material findings from completed audits, and the appropriateness of corrective actions implemented by management as a result of audit findings. (e) If an insurer is a member of an insurance holding company system or included in a group of insurers, the insurer may satisfy the Internal audit function requirements set forth in this section at the ultimate controlling parent level, an intermediate holding company level, or the individual legal entity level.  (Oct. 21, 1993, D.C. Law 10-48,  12a-1; as added Apr. 11, 2019, D.C. Law 22-292,  301(c), 66 DCR 1691.)  Applicability  Section 401 of D.C. Law 22-292 provided that this section, as created by D.C. Law 22-292, shall apply to all insurance policies issued or renewed in the District 90 days after April 11, 2019. 
 31311.02. Conduct of insurer in connection with the preparation of required reports and documents. (a) A director or officer of an insurer shall not, in connection with any audit, review, or communication required under this chapter, directly or indirectly: (1) Make, or cause to be made, a materially false or misleading statements [sic] to an accountant; or (2) Omit to state, or cause another person to omit to state, any material fact necessary to make a statement made to an accountant, in light of the circumstances under which they were made, not misleading. (b)(1) A director or officer of an insurer, or any other person acting under the direction thereof, shall not, directly or indirectly, take any action to coerce, manipulate, mislead, or fraudulently influence any accountant engaged in the performance of an audit pursuant to this chapter if the person knew or should have known that the action, if successful, could result in rendering the insurers financial statements materially misleading. (2) For the purposes of this subsection, actions that could result in rendering the insurers financial statements materially misleading include actions causing the accountant to: (A) Issue or reissue a report on an insurers financial statements that is not warranted under the circumstances due to material violations of statutory accounting principles, generally accepted auditing standards, or other professional or regulatory standards; (B) Not perform audit, review, or other procedures required by generally accepted auditing standards or other professional standards; (C) Not withdraw an issued report; or (D) Not communicate matters to an insurers audit committee.  (Oct. 21, 1993, D.C. Law 10-48,  12b; as added Mar. 12, 2011, D.C. Law 18-317,  2(j), 57 DCR 12418.) 
 31311.03. Managements report of internal control over financial reporting. (a) An insurer required to file an audited financial report pursuant to this chapter that has annual direct written and assumed premiums of at least $500 million, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, shall prepare a managements report of the insurers or group of insurers internal control over financial reporting. The report shall be filed with the Mayor along with the communication of internal control related matters noted in an audit described in  31-309. A managements report of internal control over financial reporting shall be made as of December 31 immediately preceding the date of the report. (b) Notwithstanding subsection (a) of this section, the Mayor may require an insurer to file a managements report of internal control over financial reporting if the insurer: (1) Is in any RBC level event as provided in Chapter 20 of this title [ 31-2001 et seq.], and Chapter 34A of this title [ 31-3451.01 et seq.]; or (2) Meets one or more of the standards of an insurer deemed to be in hazardous financial condition as provided in Chapter 21 of this title [ 31-2101 et seq.]. (c)(1) An insurer or a group of insurers that is (A) directly subject to Section 404; (B) part of a holding company system whose parent is directly subject to Section 404; (C) not directly subject to Section 404, but is a SOX Compliant Entity; or (D) a member of a holding company system whose parent is not directly subject to Section 404 but is a SOX Compliant Entity, may file its, or its parents, Section 404 Report and an addendum that complies with the requirements of this section; provided, that those internal controls of the insurer or group of insurers having a material impact on the preparation of the insurers or group of insurers audited statutory financial statements were included in the scope of the Section 404 Report. (2) An addendum filed with a Section 404 Report shall be an affirmative statement by management that no material processes were excluded in the scope of the Section 404 Report. If there are internal controls of the insurer or group of insurers that have a material impact on the preparation of the insurers or group of insurers audited statutory financial statements that were not included in the scope of the Section 404 Report, the insurer or group of insurers shall file: (A) A report pursuant to this section; or (B) A Section 404 Report and a report pursuant to this section that addresses those internal controls not covered by the Section 404 Report. (d) A managements report of internal control over financial reporting shall include: (1) A statement that management is responsible for establishing and maintaining adequate internal control over financial reporting; (2) A statement that management has established internal control over financial reporting and an assertion as to whether, to the best of managements knowledge and belief, after diligent inquiry, the internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements prepared in accordance with statutory accounting principles; (3) A statement describing the framework or processes by which management evaluates the effectiveness of its internal control over financial reporting; (4) A statement describing the scope of work that is included and whether any internal controls were excluded; (5)(A) Disclosure of any unremediated material weaknesses in the internal control over financial reporting identified by management as of December 31 immediately preceding the date of the report. (B) Management shall not be permitted to conclude that the internal control over financial reporting is effective if there is one or more unremediated material weaknesses in its internal control over financial reporting; (6) A statement regarding the inherent limitations of internal control systems; and (7) Signatures of the chief executive officer and the chief financial officer, or the equivalents thereof. (e) Management shall document and make available during the course of any financial condition examination the basis upon which its assertions offered pursuant to this section are made. Management may base its assertions, in part, on its review, monitoring, and testing of internal controls undertaken in the normal course of its activities. (f) Management shall have discretion as to the nature of the internal control framework used, and the nature and extent of documentation, to make its assertions in a cost effective manner and, as such, may include assembly of or reference to existing documentation. (g) A managements report on internal control over financial reporting filed with the Mayor pursuant to this section, including any supporting documentation submitted in support thereof, shall be kept confidential.  (Oct. 21, 1993, D.C. Law 10-48,  12c; as added Mar. 12, 2011, D.C. Law 18-317,  2(j), 57 DCR 12418.)  Section References This section is referenced in  31-307 and  31-312.
 31311. Definition, availability, and maintenance of independent certified public accountant workpapers. (a) For purposes of this section, the term workpapers are the records kept by the independent certified public accountant of the procedures followed, the tests performed, the information obtained, and the conclusions reached pertinent to his or her audit of the financial statements of an insurer. Workpapers, accordingly, may include audit planning documentation, work programs, analyses, memoranda, letters of confirmation and representation, abstracts of company documents, and schedules or commentaries prepared or obtained by the independent certified public accountant in the course of his or her audit of the financial statements of an insurer and which support his or her opinion thereof. (b) Every insurer required to file an audited financial report pursuant to this chapter shall require the accountant to make available for review by the Mayors examiners all workpapers prepared in the conduct of his or her audit and any communications related to the audit between the accountant and the insurer, at the offices of the insurer, or at any other reasonable place designated by the Mayor. The insurer shall require that the accountant retain the audit workpapers and communications until the Mayor has filed a report on examination covering the period of the audit but no longer than 7 years from the date of the audit report. (c) The Mayor may make and retain photocopies of pertinent audit workpapers. The review by the Mayors examiners shall be considered investigations and all working papers and communications obtained during the course of the investigations shall be afforded the same confidentiality as other examination workpapers generated by the Mayor.  (Oct. 21, 1993, D.C. Law 10-48,  12, 40 DCR 6102; Mar. 12, 2011, D.C. Law 18-317,  2(i), 57 DCR 12418.)  Prior Codifications 1981 Ed.,  35-3211. Section References This section is referenced in  31-310. Effect of Amendments D.C. Law 18-317, in the section heading, substituted independent certified for certified; in subsec. (a), substituted For the purposes of this section, the term for For the purposes of this chapter, the term; and, in subsec. (a) and the second sentence of subsec. (b), substituted audit for examination. Emergency Legislation For temporary (90 day) amendment of section, see  2(i) of Annual Financing Reporting Modernization Emergency Amendment Act of 2010 (D.C. Act 18-665, December 28, 2010, 58 DCR 80). For temporary (90 day) addition of sections, see  2(j) of Annual Financing Reporting Modernization Emergency Amendment Act of 2010 (D.C. Act 18-665, December 28, 2010, 58 DCR 80). For temporary (90 day) amendment of section, see  2(i) of Annual Financial Reporting Modernization Congressional Review Emergency Amendment Act of 2011 (D.C. Act 19-30, March 15, 2011, 58 DCR 2591). For temporary (90 day) addition of sections, see  2(j) of Annual Financial Reporting Modernization Congressional Review Emergency Amendment Act of 2011 (D.C. Act 19-30, March 15, 2011, 58 DCR 2591).
 31312. Exemptions and effective dates. (a) Upon written application of any insurer, the Mayor may grant an exemption from compliance with this chapter if the Mayor finds, upon review of the application, that compliance with this chapter would constitute a financial or organizational hardship upon the insurer and the public interest would not be unduly compromised by the exemption. An exemption may be granted at any time, and from time to time for a specified period or periods. Within 10 days from a denial of an insurers written request for an exemption from this chapter, the insurer may request in writing a hearing on its application for an exemption. The hearing shall be held in accordance with those rules pertaining to administrative hearing procedures as the Mayor may prescribe. (b) Domestic insurers retaining a certified public accountant on October 21, 1993 who qualify as independent shall comply with this chapter for the year ending December 31, 1993, and each year thereafter, unless the Mayor permits otherwise. (c) Domestic insurers not retaining a certified public accountant, who qualifies as independent, on October 21, 1993, shall meet the following schedule for compliance unless the Mayor permits otherwise: (1) As of December 31, 2009, file with the Mayor: (A) Report of independent certified public accountant; (B) Audited balance sheet; and (C) Notes to audited balance sheet. (2) For the year ending December 31, 1993, and each year thereafter, these insurers shall file with the Mayor all reports and communications required by this chapter. (d) Foreign insurers shall comply with this chapter for the year ending December 31, 1993, and each year thereafter, unless the Mayor permits otherwise. (e) Section 31-311.01 shall apply as of January 1, 2010. An insurer or group of insurers that was not required to have independent audit committee members or only a majority of independent audit committee members because their total written and assumed premiums were below the stated threshold levels provided in  31-311.01(g) for a given year shall have one calendar year to comply with the independence requirements following the year the threshold is exceeded. An insurer that becomes subject to the independence requirements of this chapter as a result of a business combination shall have one calendar year following the date of acquisition or combination to comply with the independence requirements. (f) Section 31-305(g) through (k) and 31-311.03 shall apply as of the reporting period ending December 31, 2010, and each year thereafter. An insurer or group of insurers that is not required to file a report pursuant to  31-311.03, but subsequently becomes subject to the reporting requirements, shall have 2 calendar years following the year the threshold is exceeded to file a report. An insurer acquired in a business combination shall have 2 calendar years following the date of acquisition or combination to comply with the reporting requirements. (g) An insurer or group of insurers that was exempt from  31-311.01a but no longer qualifies for the exemption shall have one year from the reporting year the threshold is exceeded to comply with this chapter.  (Oct. 21, 1993, D.C. Law 10-48,  13, 40 DCR 6102; Mar. 12, 2011, D.C. Law 18-317,  2(k), 57 DCR 12418; Apr. 11, 2019, D.C. Law 22-292,  301(d), 66 DCR 1691.)  Prior Codifications 1981 Ed.,  35-3212. Effect of Amendments D.C. Law 18-317, in subsec. (c)(1), substituted December 31, 2009 for December 31, 1993; in subsec. (c)(2), substituted reports and communications required for reports required; and added subsecs. (e) and (f). Applicability  Section 401 of D.C. Law 22-292 provided that the changes made to this section by D.C. Law 22-292 shall apply to all insurance policies issued or renewed in the District 90 days after April 11, 2019.  Emergency Legislation For temporary (90 day) amendment of section, see  2(k) of Annual Financing Reporting Modernization Emergency Amendment Act of 2010 (D.C. Act 18-665, December 28, 2010, 58 DCR 80). For temporary (90 day) amendment of section, see  2(k) of Annual Financial Reporting Modernization Congressional Review Emergency Amendment Act of 2011 (D.C. Act 19-30, March 15, 2011, 58 DCR 2591).
 31313. Canadian and British companies. (a) In the case of Canadian and British insurers, the annual audited financial report shall be defined as the annual statement of total business on the form filed by these companies with their domiciliary supervision authority duly audited by an independent chartered accountant. (b) For Canadian and British insurers, the letter required in  31-304 shall state that the accountant is aware of the requirements relating to the annual audited statement filed with the Mayor pursuant to  31-302 and shall affirm that the opinion expressed is in conformity with these requirements.  (Oct. 21, 1993, D.C. Law 10-48,  14, 40 DCR 6102; May 16, 1995, D.C. Law 10-255,  31, 41 DCR 5193.)  Prior Codifications 1981 Ed.,  35-3213.
 31314. Applicability. (a) Every insurer, as defined in  31-301, shall be subject to this chapter. Insurers having direct premiums written in the District of Columbia of less than $1,000,000 in any calendar year and having less than 1,000 policyholders or certificateholders of directly written policies nationwide at the end of any calendar year shall be exempt from this chapter for that year, unless the Mayor makes a specific finding that compliance is necessary for the Mayor to carry out statutory responsibilities, except that insurers having assumed premiums pursuant to contracts or treaties of reinsurance of $1,000,000 or more will not be so exempt. (b) Foreign or alien insurers filing audited financial reports in another state pursuant to the other states requirement of audited financial reports which has been found by the Mayor to be substantially similar to the requirements of this chapter are exempt from this chapter if: (1) A copy of the audited financial report, report on significant deficiencies in internal controls, and the accountants letter of qualifications which are filed with the other states are filed with the Mayor in accordance with the filing dates specified in  31-302, 31-309, and 31-310, respectively. Canadian insurers may submit accounts reports as filed with the Canadian Dominion Department of Insurance. (2) A copy of any notification of adverse financial condition report filed with the other states is filed with the Mayor within the time specified in  31-308. (c) This chapter shall not prohibit, preclude, or in any way limit the Mayor from ordering, conducting, or performing examinations of insurers under the rules and the practices and procedures of the District of Columbia.  (Oct. 21, 1993, D.C. Law 10-48,  15, 40 DCR 6102.)  Prior Codifications 1981 Ed.,  35-3214. Section References This section is referenced in  31-3931.13.
 313001. Definitions. For the purposes of this chapter, the term: (1) Health benefit plan means an accident and health insurance policy or certificate, hospital and medical services corporation contract, health maintenance organization subscriber contract, plan provided by a multiple employer welfare arrangement, or plan provided by another benefit arrangement. The term health benefit plan shall not mean accident only, credit, or disability insurance; coverage of medicare services or federal employee health plans under contracts with the United States Government; medicare supplement or long-term care insurance; specified disease insurance; hospital confinement indemnity coverage; limited benefit health coverage; coverage issued as a supplement to liability insurance; insurance arising out of a workers compensation or similar law; automobile medical payment insurance; medical expense and loss of income benefits; or insurance under which benefits are payable with or without regard to fault and which is statutorily required to be contained in a liability insurance policy or equivalent self-insurance. (2) Health insurer means a person that provides one or more health benefit plans or insurance in the District of Columbia, including an insurer, a hospital and medical services corporation, a fraternal benefit society, a health maintenance organization, a multiple employer welfare arrangement, or any other person providing a plan of health insurance subject to the authority of the Commissioner of the Department of Insurance, Securities, and Banking. (3) Insured means a person covered by a health benefit plan.  (Oct. 21, 2000, D.C. Law 13-175,  2, 47 DCR 6832; June 11, 2004, D.C. Law 15-166,  4(q), 51 DCR 2817.)  Section References This section is referenced in  31-2803 and  31-3161. Effect of Amendments D.C. Law 15-166, in par. (2), substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities Regulation. Emergency Legislation For temporary (90 day) amendment of section, see  4(q) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
 313002. Payable benefits. A health benefit plan shall provide coverage for the equipment, supplies, and other outpatient self-management training and education, including medical nutritional therapy, for the treatment of insulin-dependent diabetes, insulin-using diabetes, gestational diabetes, and non-insulin using diabetes if prescribed by a health care professional legally authorized to prescribe such item.  (Oct. 21, 2000, D.C. Law 13-175,  3, 47 DCR 6832.) 
 313003. Nondiscrimination. No health insurer shall: (1) Require an insured to pay a higher deductible, copayment, or coinsurance; require a longer waiting period; or impose any other condition for coverage of any of the benefits set forth in this chapter other than is required for other benefits covered by the insureds health benefit plan; (2) Refuse to issue a health benefit plan solely because an applicant may use any of the benefits covered by this chapter; (3) Cancel a health benefit plan solely because an insured has used any of the benefits covered by this chapter; (4) Offer to pay any type of material inducement or financial incentive to an insured to discourage the insured from using any of the benefits covered by this chapter; or (5) Offer to pay any type of financial or other material incentive to a health care provider to deny, reduce, withhold, limit, or delay to an insured any of the benefits covered by this chapter.  (Oct. 21, 2000, D.C. Law 13-175,  4, 47 DCR 6832.) 
 313004. Applicability. (a) The requirements of this chapter shall apply to all health benefit plans issued, delivered, renewed, or reissued on the 91st day after October 21, 2000. (b) All health benefit plans other than the health benefit plans specified in subsection (a) of this section shall comply with the requirements of this chapter within 180 days after the date specified in subsection (a) of this section.  (Oct. 21, 2000, D.C. Law 13-175,  5, 47 DCR 6832.) 
 313011. Conditions for discontinuance of class of health insurance policies. (a) If an insurer decides to discontinue a particular class of group, or blanket policy of, hospital, surgical, or medical expense insurance offered in the small or large group market, the policy of the class may be discontinued by the insurer only if: (1) The insurer requests in such form as designated by the Commissioner of the Department of Insurance, Securities, and Banking (Commissioner) that the Commissioner approve the discontinuance, and the insurer receives the approval; provided, that the Commissioner shall: (A) No sooner than 60 days after receipt of the request, grant the approval only if he or she determines that the discontinuance of the coverage of this class by the insurer is not with the intent, or as a pretext, to discontinue the coverage of any policyholder or any insured due to the claims experience or any health status-related factor relating to any policyholder or insured covered by any such policy; and (B) Make the determination only after examining and taking into consideration the claim histories and premium rates for each policy in the class, historical profits and losses for the class of policies, comments from policyholders or others submitted to the Commissioner within 30 days after receipt of any such request, and any other information or analysis the Commissioner demands or considers relevant; (2) The insurer, no later than the date that the request to the Commissioner under paragraph (2) of this subsection is made, provides written notice to each policyholder of this class in such market (and to all participants and beneficiaries covered under the coverage) of: (A) The request; (B) The earliest possible date that the Commissioner might approve the request; (C) The earliest possible date that the coverage could be discontinued; and (D) A statement written in plain English of the obligations of the insurer and the rights of policyholders; and (3) The insurer, upon approval by the Commissioner of any such request: (A) Provides written notice to each policyholder provided coverage of the class in the market (and to all participants and beneficiaries covered under the coverage) of the discontinuance at least 90 days prior to the date of discontinuance of the coverage; (B) Offers to each policyholder of this class in the market, the option to purchase all (or, in the case of the large group market, any) other hospital, surgical, and medical expense coverage currently being offered by the insurer to a group in the market; and (C) In exercising the option to discontinue coverage of the class and in offering the option of coverage under another class, acts uniformly without regard to the claims experience of those policyholders or any health status-related factor relating to any insureds covered, or new insureds who may become eligible, for the coverage. (b) If an insurer discontinues a particular class of group, or blanket policy of, hospital, surgical, or medical expense insurance offered in the small or large group market, other than where the Commissioner authorizes the discontinuance, the insurer shall be liable to the former holder or beneficiary of such policy, or to his or her estate, for compensatory damages arising from the discontinuance, plus costs and reasonable attorneys fees, in an action which shall be commenced no later than 3 years after the date of the discontinuance. In any such action, the court may grant such injunctive relief as the court may consider proper. (c) If major medical insurance or insurance providing major medical type benefits is discontinued, the Commissioner shall order that an extended benefit shall be provided during total disability, with respect to the sickness, injury, or pregnancy which caused the disability, of at least 18 months subsequent to the discontinuance of the insurance unless similar coverage is afforded for the total disability under another group plan.  (Apr. 8, 2011, D.C. Law 18-360,  402, 58 DCR 896.) 
 313012. Rules. The Mayor, pursuant to subchapter I of Chapter 5 of Title 2 [ 2-501 et seq.], shall issue rules to implement the provisions of this chapter.  (Apr. 8, 2011, D.C. Law 18-360,  403, 58 DCR 896.) 
 313013. Application. This chapter shall apply to policies and certificates of insurance that are health benefit plans as defined under  31-3271(4) that are issued 90 days after April 8, 2011. This chapter shall not apply to short-term limited duration health benefit plans.  (Apr. 8, 2011, D.C. Law 18-360,  404, 58 DCR 896.) 
 313101. Definitions. For the purposes of this chapter, the term: (1) Alcohol abuse means any pattern of pathological use of alcohol that causes impairment in social or occupational functioning, or that produces physiological dependency evidenced by physical tolerance or by physical symptoms when it is withdrawn. (1A) Advanced practice registered nurse means a person licensed as a registered nurse and certified as an advanced practice registered nurse pursuant to the District of Columbia Health Occupations Revisions Act of 1985 Amendment Act of 1994 or by the state or territory where the person practices as an advanced practice registered nurse. (2) Clinically significant means sufficient to impair substantially a persons judgment, behavior, capacity to recognize, or ability to cope with the ordinary demands of life. (2A) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking. (3) Council means the Council of the District of Columbia. (4) Covered benefits means the health-care services or treatment available to: (A) An insured party under a health benefits plan or certificate for which the health insurer will pay part or all of the cost;, or (B) A member of a health maintenance organization as part of the membership contract. (5) District means the District of Columbia. (6) Drug abuse means any pattern of pathological use of a drug that causes impairment in social or occupational functioning, or that produces physiological dependency evidenced by physical tolerance or by physical symptoms when it is withdrawn. (6A) Health benefits plan means any accident and health insurance policy or certificate, hospital and medical services corporation contract, health maintenance organization subscriber contract, plan provided by another benefit arrangement. The term health benefit plan does not mean accident only, credit, or disability insurance; coverage of Medicare services or federal employee health plans, pursuant to contracts with the United States government; Medicare supplemental or long-term care insurance; dental only or vision only insurance; specified disease insurance; hospital confinement indemnity coverage; limited benefit health coverage; coverage issued as a supplement to liability insurance, insurance arising out of a workers compensation or similar law; automobile medical payment insurance; medical expense and loss of income benefits; or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance. (6B) Health insurer means any person that provides one or more health benefit plans or insurance in the District of Columbia, including an insurer, a hospital and medical services corporation, a fraternal benefit society, a health maintenance organization, a multiple employer welfare arrangement, or any other person providing a plan of health insurance subject to the authority of the Commissioner. (7) Health maintenance organization or HMO means any person that undertakes to provide or arrange for the delivery of basic health care services to enrollees on a prepaid basis, except for enrollees responsibility for co-payments and deductibles, and qualifies as a health maintenance organization under Chapter 34 of Title 31. (8) Hospital means a facility licensed as a hospital by the District or by any state or territory of the United States or operated by the District, any state or territory, or the United States. (8A) Individual market means the market for health insurance coverage offered to individuals other than in connection with a group health plan. (9) Inpatient services means therapeutic services that are medically or psychologically necessary and that are provided in a hospital or a nonhospital residential facility to patients admitted to the hospital or nonhospital residential facility. (10) Repealed. (10A)(A)(i) Except as provided in sub-subparagraph (ii) of this subparagraph, large employer means, in connection with a group health plan with respect to a calendar year and a plan year, a single employer that employed an average of at least 51 employees on business days during the preceding calendar year and at least 2 employees on the first day of the plan year. (ii) Beginning in calendar year 2016 and for each succeeding year, large employer means, in connection with a group health plan with respect to a calendar year and a plan year, a single employer that employed an average of at least 101 employees on business days during the preceding calendar year and at least 2 employees on the first day of the plan year. (B) For the purposes of this paragraph: (i) All persons treated as a single employer under section 414(b), (c), (m), or (o) of the Internal Revenue Code of 1986, approved October 22, 1986 (100 Stat. 2085; 26 U.S.C.  414(b), (c), (m), or (o)), shall be treated as a single employer; (ii) An employer and any predecessor employer shall be treated as a single employer; (iii) All employees shall be counted, including part-time employees and employees who are not eligible for health benefit coverage through the employer; and (iv) If an employer was not in existence throughout the preceding calendar year, the determination of whether that employer is a large employer shall be based on the average number of employees that the employer is reasonably expected to employ in the current calendar year. (10B) Large group market means the health insurance market under which individuals obtain health insurance coverage (directly or through any arrangement) on behalf of themselves and their dependents through a group health plan maintained by a large employer. (10C) Managed care system means a method that a health insurer uses to review and preauthorize a treatment plan that a health care practitioner develops for a covered person using a variety of cost containment methods to control utilization, quality and claims. (11) Mayor means the Mayor of the District of Columbia. (11A) Medical or surgical benefits means benefits with respect to medical or surgical services as defined under the terms of the plan or coverage, but does not include mental health benefits. (12) Medically or psychologically necessary means essential for the treatment of drug abuse, alcohol abuse, or mental illness, as determined by a physician, psychologist, or social worker. (12A) Mental health benefits means benefits with respect to mental health services, as defined under the terms of the plan or coverage, but does not include benefits with respect to treatment of substance abuse or chemical dependency. (13) Mental illness means any psychiatric disease identified in the most recent edition of the International Classification of Diseases or of the American Psychiatric Association Diagnostic and Statistical Manual. (14) Nonhospital residential facility means a facility certified by the District or by any state or territory of the United States as a qualified nonhospital provider of treatment for drug abuse, alcohol abuse, mental illness, or any combination of these, in a residential setting. The term nonhospital residential facility includes any facility operated by the District, any state or territory, or the United States to provide these services in a residential setting. (15) Outpatient services means therapeutic services that are medically or psychologically necessary and that are provided to a patient according to an individualized treatment plan that does not require the patients admission to a hospital or a nonhospital residential facility. The term outpatient services refers to services that may be provided in a hospital, a nonhospital residential facility, an outpatient treatment facility, or the office of a licensed physician, psychologist, or social worker. (16) Outpatient treatment facility means a clinic, counseling center, or other similar location that is certified by the District or by any state or territory as a qualified provider of outpatient services for the treatment of drug abuse, alcohol abuse, or mental illness. The term outpatient treatment facility includes any facility operated by the District, any state or territory, or the United States to provide these services on an outpatient basis. (17) Peer review means a system based on written procedures and formally established within the professions of medicine or any of its specialties, psychology, or social work in which a committee of licensed practitioners of the profession reviews another practitioners diagnosis and treatment in a specific case and reaches conclusions and recommendations concerning the accuracy of the diagnosis, and the necessity, appropriateness, and effectiveness of the treatment provided and proposed by the practitioner compared to alternative treatments. For the purposes of  31-3110, the term peer review shall also mean the professional utilization procedure or any similar procedure employed by health maintenance organizations. (18) Physician means a person licensed to practice medicine by the District pursuant to the District of Columbia Health Occupations Revision Act of 1985 or by the state or territory where the person practices medicine. (19) Psychologist means a person licensed to practice psychology by the District pursuant to the District of Columbia Health Occupations Revision Act of 1985 or by the state or territory where the person practices psychology. (19A)(A)(i) Except as provided in sub-subparagraph (ii) of this subparagraph, small employer means a single employer that employed an average of not more than 50 employees during the preceding calendar year. (ii) Beginning in calendar year 2016 and for each succeeding year, small employer means a single employer that employed an average of not more than 100 employees during the preceding calendar year. (B) For the purposes of this paragraph: (i) All persons treated as a single employer under section 414(b), (c), (m), or (o) of the Internal Revenue Code of 1986, approved October 22, 1986 (100 Stat. 2085; 26 U.S.C.  414(b), (c), (m), or (o)), shall be treated as a single employer; (ii) An employer and any predecessor employer shall be treated as a single employer; (iii) All employees shall be counted, including part-time employees and employees who are not eligible for health benefit coverage through the employer; (iv) If an employer was not in existence throughout the preceding calendar year, the determination of whether that employer is a small employer shall be based on the average number of employees that the employer is reasonably expected to employ in the current calendar year. (19B) Small group market means the health insurance market under which individuals obtain health insurance coverage (directly or through any arrangement) on behalf of themselves and their dependents through a group health plan maintained by a small employer. (20) Social worker means a person licensed as an independent clinical social worker by the District pursuant to  3-1208.04, or who is licensed to practice social work with authority to engage in the independent practice of psychotherapy by the state or territory where the person practices social work. (21) Repealed. (22) Supplemental benefit means health insurance coverage provided by the District to its employees in addition to the coverage provided through the Federal Employees Health Benefits Plan pursuant to  1-621.01.  (Feb. 28, 1987, D.C. Law 6-195,  2, 34 DCR 491; Mar. 23, 1995, D.C. Law 10-247,  3, 42 DCR 457; May 21, 1997, D.C. Law 11-268,  10(w), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  33, 45 DCR 745; Oct. 21, 2000, D.C. Law 13-178,  2(a), 47 DCR 6844; June 18, 2003, D.C. Law 14-312,  501, 50 DCR 306; June 11, 2004, D.C. Law 15-166,  4(r), 51 DCR 2817; Mar. 8, 2007, D.C. Law 16-242,  2(a), 54 DCR 601; May 2, 2015, D.C. Law 20-265,  102, 62 DCR 1529.)  Prior Codifications 1981 Ed.,  35-2301. Effect of Amendments D.C. Law 13-178 added definitions contained in pars. (8A), (10A), (11A), (12A), (19A) and (19B). D.C. Law 14-312 rewrote par. (7) which had read as follows: (7) Health maintenance organization means a public or private organization that is a qualifying health maintenance organization under federal regulations, or has been determined to be a health maintenance organization pursuant to regulations adopted by the State Health Planning and Development Agency of the District. D.C. Law 15-166, in par. (2A), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance and Securities. D.C. Law 16-242 rewrote par. (4); added pars. (6A), (6B), and (10C); and repealed par. (10). The 2015 amendment by D.C. Law 20-265 rewrote (10A) and (19A). Emergency Legislation For temporary amendment of section, see  2(a) of the Drug Abuse, Alcohol Abuse, and Mental Illness Insurance Coverage Emergency Amendment Act of 1998 (D.C. Act 12-274, February 19, 1998, 45 DCR 1526), and  2(a) of the Drug Abuse, Alcohol Abuse, and Mental Illness Insurance Coverage Second Emergency Amendment Act of 1998 (D.C. Act 12-546, December 18, 1998, 46 DCR 497). For temporary amendment of section see  6(a) of the Vendor Payment and Drug Abuse, Alcohol Abuse, and Mental Illness Coverage Emergency Amendment Act of 1998 (D.C. Act 12-396, Sept. 16, 1998, 45 DCR 6952). For temporary (90 day) amendment of section, see  4(r) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). Temporary Legislation For temporary (225 day) amendment of section, see  2(a) of Drug Abuse, Alcohol Abuse, and Mental Illness Insurance Coverage Temporary Amendment Act of 1998 (D.C. Law 12-108, May 8, 1998, law notification 45 DCR 3259). For temporary (225 day) amendment of section, see  2 to 4 of the Vendor Payment and Drug Abuse, Alcohol Abuse, and Mental Illness Coverage Temporary Act of 1998 (D.C. Law 12-181, March 26, 1999, law notification 46 DCR 3407). References in Text The District of Columbia Health Occupations Revision Act of 1985, referred to in paragraphs (18) and (19), is D.C. Law 6-99. The District of Columbia Health Occupations Revision Act of 1985 Amendment Act of 1994, referred to in (1A), is D.C. Law 10-247, which is codified primarily throughout Title 3, Chapter 12. Editor's Notes Department of Insurance abolished: The Department of Insurance, including the Superintendent, was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. Reorganization Order No. 43, dated June 23, 1953, as amended, established, under the direction and control of a Commissioner, a Department of Insurance headed by a Superintendent. The Order provided for the organization of the Department, abolished the previously existing Department of Insurance, and provided that all functions and positions of the previous Department would be transferred to the new Department of Insurance, including the duties, powers, and authorities of all officers and employees; and that all personnel, property, records and unexpended balances relating to the functions and positions transferred would also be transferred to the new Department. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. The functions of the Superintendent of Insurance were transferred to the Department of Consumer and Regulatory Affairs by Reorganization Plan No. 1 of 1983, effective March 31, 1983. Pursuant to the provisions of D.C. Law 11-268, the Department of Insurance and Securities Regulation was established and the duties of the Superintendent of Insurance and the Insurance Administration were assumed by the Commissioner of Insurance and Securities, and the Insurance Administration in the Department of Consumer and Regulatory Affairs was abolished.
 313102. Coverage. (a) Except as described in subsection (b) of this section, each health insurer that offers individual or group health plans or certificates issued or delivered in the District to an employer or individual shall provide coverage for the medical and psychological treatment of drug abuse, alcohol abuse, and mental illness. (b) The requirements of this chapter shall not apply to dread disease policies, student policies, nursing home policies, and home health care policies. (c) Covered benefits for drug abuse, alcohol abuse, and mental illness in insurance policies and contracts subject to this chapter shall be limited to inpatient, residential, and outpatient services certified as necessary by a physician, psychologist, advanced practice registered nurse, or social worker. (d) Before an insured party may qualify to receive benefits under this chapter, a physician, psychologist, advanced practice registered nurse, or social worker shall certify that the individual has a drug addiction or an alcohol addiction or a mental illness and prescribe appropriate treatment, which may include referral to other treatment providers. (e) All drug abuse, alcohol abuse, and mental illness treatment or services eligible for health insurance coverage shall be subject to peer review procedures. These procedures may be initiated by a health insurer in the course of reviewing claims for payment. (f) Repealed. (g) All individual health benefit plans or certificates shall offer coverage for the medical and psychological treatment of drug abuse, alcohol abuse, and mental illness. Coverage shall be offered for at least the minimum levels set forth in  31-3103 and 31-3104. (h) Group health benefit plans or certificates that are the result of collective bargaining between a legally-certified union and the employer shall be required to include coverage for inpatient and outpatient treatment of drug abuse, alcohol abuse, and mental illness. The minimum levels of coverage set forth in  31-3103 and 31-3104 shall not apply to those group health benefit plans or certificates until 5 years from February 28, 1987, unless the Mayor requests the Council to extend the exemption to a time certain and the Council, by resolution, approves the extension. (i) If a large group health benefit plan offers a participant or beneficiary 2 or more benefit package options under the plan, the requirements of this chapter shall be applied separately to each option. (j) A health insurer may require that substance abuse and mental illness insurance coverage shall be provided through a managed care system.  (Feb. 28, 1987, D.C. Law 6-195,  3, 34 DCR 491; Apr. 30, 1988, D.C. Law 7-104,  21, 35 DCR 147; Mar. 16, 1993, D.C. Law 9-192,  2(a), (b), 39 DCR 9007; Mar. 23, 1995, D.C. Law 10-247,  3, 42 DCR 457; Oct. 21, 2000, D.C. Law 13-178,  2(b), 47 DCR 6844; Mar. 8, 2007, D.C. Law 16-242,  2(b), 54 DCR 601; Apr. 24, 2007, D.C. Law 16-305,  42, 53 DCR 6198.)  Prior Codifications 1981 Ed.,  35-2302. Section References This section is referenced in  31-3103,  31-3104, and  31-3110. Effect of Amendments D.C. Law 13-178 added subsec. (i). D.C. Law 16-242 rewrote subsecs. (a) and (b); in subsec. (e), substituted a health insurer for an insurer; repealed subsec. (f); in subsec. (g), substituted health benefit plans or certificates for subscriber contracts or policies; in subsec. (h), substituted health benefit plans or certificates for health insurance policies or contracts; in subsec. (i), substituted health benefit plan for health plan; and added subsec. (j). D.C. Law 16-305, in subsec. (d), substituted has a drug addiction or an alcohol addiction or a mental illness for is suffering from drug abuse, alcohol abuse, or mental illness. Emergency Legislation For temporary amendment of section, see  2(b) of the Drug Abuse, Alcohol Abuse, and Mental Illness Insurance Coverage Emergency Amendment Act of 1998 (D.C. Act 12-274, February 19, 1998, 45 DCR 1526), and  2(b) of the Drug Abuse, Alcohol Abuse, and Mental Illness Insurance Coverage Second Emergency Amendment Act of 1998 (D.C. Act 12-546, December 18, 1998, 46 DCR 497). Temporary Legislation For temporary (225 day) amendment of section, see  2(b) of Drug Abuse, Alcohol Abuse, and Mental Illness Insurance Coverage Temporary Amendment Act of 1998 (D.C. Law 12-108, May 8, 1998, law notification 45 DCR 3259).
 313103. Drug abuse and alcohol abuse benefits. (a) Covered benefits for services set forth in this section shall be limited to coverage of treatment of clinically significant substance use disorders identified in the most recent edition of the International Classification of Diseases or of the Diagnostic and Statistical Manual of the American Psychiatric Association. (b)(1) The process whereby a person who is intoxicated by or dependent on drugs or alcohol or both is assisted through the period of time necessary to eliminate the intoxicating agent from the body, while keeping the physiological risk to the patient at a minimum, shall be a covered benefit. (2) Treatment under this subsection shall be covered pursuant to  31-3102 for a minimum of 12 days annually. (c)(1) Additional treatment as a covered benefit under this chapter shall be provided by a hospital, a nonhospital residential facility, an outpatient treatment facility, a physician, a psychologist, an advanced practice registered nurse, or a social worker, and shall include inpatient services, outpatient services, or any combination of these, certified as necessary by a physician, psychologist, advanced practice registered nurse, or social worker. (2) Treatment under this subsection shall be covered pursuant to  31-3102 for a minimum of 60 days per year for inpatient or residential care in a hospital or nonhospital residential facility and at a minimum rate of 75% for the first 40 outpatient visits per year and at a minimum rate of 60% for any outpatient visits thereafter for that year. (d) Treatment regimens which include psychiatric, psychological, and other prescribed interventions shall be a covered benefit. (e)(1) A group or individual health benefit plan, other than a long-term care policy, disability income policy, or supplemental policy covering a specified disease or other limited benefit unrelated to medical expenses, that is delivered, issued for delivery, or renewed in the District of Columbia shall not exclude the payment of benefits as set forth in the certificate of coverage for illnesses, injuries, or conditions sustained by an insured person because the insured was intoxicated or under the influence of any narcotic. This subsection shall not preclude a health insurer from excluding coverage for an insured individual for any illness, injury, or condition that is the direct result of the commission of a felony by the insured person. (2) The Mayor may promulgate rules and regulations as are necessary or appropriate to carry out the provisions of this subsection.  (Feb. 28, 1987, D.C. Law 6-195,  4, 34 DCR 491; Mar. 23, 1995, D.C. Law 10-247,  3, 42 DCR 457; Mar. 8, 2007, D.C. Law 16-242,  2(c), 54 DCR 601; Mar. 8, 2007, D.C. Law 16-247,  3, 54 DCR 620.)  Prior Codifications 1981 Ed.,  35-2303. Section References This section is referenced in  31-3102,  31-3106, and  31-3110. Effect of Amendments D.C. Law 16-242 rewrote subsec. (c)(2) which had read as follows: (2) Treatment under this subsection shall be covered pursuant to  31-3102 for a minimum of 28 days per year for inpatient or residential care in a hospital or nonhospital residential facility, and for a minimum of 30 outpatient visits per year. D.C. Law 16-247 added subsec. (e). Editor's Notes Section 4 of D.C. Law 16-247 provided: This act shall apply to all individual and group health benefit plans delivered, issued for delivery, or renewed on the first day of the month beginning on or after 90 days after the effective date of this act.
 313104. Mental illness benefits. (a) Covered benefits for services set forth in this section shall be limited to coverage of treatment of clinically significant mental illnesses identified in the most recent edition of the International Classification of Diseases or of the Diagnostic and Statistical Manual of the American Psychiatric Association. (b) Treatment under this section shall be covered pursuant to  31-3102 for a minimum of 60 days per year for inpatient or residential care in a hospital or nonhospital residential facility, and at a minimum rate of 75% for the first 40 outpatient visits per year and at a minimum rate of 60% for any outpatient visits thereafter for that year.  (Feb. 28, 1987, D.C. Law 6-195,  5, 34 DCR 491; Mar. 8, 2007, D.C. Law 16-242,  2(d), 54 DCR 601.)  Prior Codifications 1981 Ed.,  35-2304. Section References This section is referenced in  31-3102,  31-3105,  31-3106, and  31-3110. Effect of Amendments D.C. Law 16-242, in subsec. (b), substituted 60 days for 45 days.
 313105. Exemptions. (a) Methods of determining levels of payment or reimbursement for services, or for the type of facility charge eligible for payment or reimbursement under this chapter, and shall be consistent with those for physical illnesses in general and shall take into consideration usual, customary, and reasonable charges for those services. Except as otherwise provided in  31-3104, deductible or copayment plans, and limits on total amounts payable to an individual in a calendar year or lifetime payment limits, may be applied; provided, that the inpatient and outpatient benefits set forth in  31-3104 shall be provided for health plans issued in the individual market and small group market with a lifetime payment limit of not less than $80,000 or 1/3 of the lifetime maximum for physical illness, whichever is greater; provided further, that for health plans issued in the large group market, the inpatient and outpatient benefits set forth in  31-3104 shall be applied with the same lifetime and annual limits for medical, surgical, and mental benefits. (b) If the cost of complying with the mental health benefits provisions of subsection (a) of this section for large group markets result in at least a 1% increase in the cost of the plan, the group health plan (or health benefit plan or certificate offered in connection with a group health plan) shall be exempt from complying with those mental health benefits parity provisions. (c) If a group health plan is exempt from complying with the mental health benefits parity provisions under subsection (b) of this section, it shall comply with the individual and small group market requirements. (d) Nothing in this section shall be construed as requiring health maintenance organizations to provide a greater level of covered benefits than the level required of health insurers. (e) Repealed.  (Feb. 28, 1987, D.C. Law 6-195,  6, 34 DCR 491; Mar. 16, 1993, D.C. Law 9-192,  2(c), 39 DCR 9007; Oct. 21, 2000, D.C. Law 13-178,  2(c), 47 DCR 6844; Mar. 8, 2007, D.C. Law 16-232,  203, 54 DCR 368; Mar. 8, 2007, D.C. Law 16-242,  2(e), 54 DCR 601.)  Prior Codifications 1981 Ed.,  35-2305. Effect of Amendments D.C. Law 13-178 rewrote this section. D.C. Law 16-232, repealed subsec. (e), which formerly read: (e) The mental parity provisions in this section shall not apply to benefits for services furnished after September 29, 2001, unless these provisions are re-enacted. D.C. Law 16-242, in subsec. (b), substituted health benefit plan or certificate for health insurance; and, in subsec. (d), substituted health insurers for insurers. Emergency Legislation For temporary amendment of section, see  2(c) and (d) of the Drug Abuse, Alcohol Abuse, and Mental Illness Insurance Coverage Emergency Amendment Act of 1998 (D.C. Act 12-274, February 19, 1998, 45 DCR 1526). For temporary repeal of section, see  2(c) of the Drug Abuse, Alcohol Abuse, and Mental Illness Insurance Coverage Second Emergency Amendment Act of 1998 (D.C. Act 12-546, December 24, 1998, 45 DCR 497). For temporary addition of  35-2305.1 1981 Ed., see  2(d) of the Drug Abuse, Alcohol Abuse, and Mental Illness Insurance Coverage Second Emergency Amendment Act of 1998 (D.C. Act 12-546, December 18, 1998, 46 DCR 497). Temporary Legislation For temporary (225 day) repeal of section, see  2(c) of Drug Abuse, Alcohol Abuse, and Mental Illness Insurance Coverage Temporary Amendment Act of 1998 (D.C. Law 12-108, May 8, 1998, law notification 46 DCR 3259). For temporary (225 day) addition, see  2(d) of Drug Abuse, Alcohol Abuse, and Mental Illness Insurance Coverage Temporary Amendment Act of 1998 (D.C. Law 12-108, May 8, 1998, law notification 46 DCR ). Section 2(d) of D.C. Law 12-108 was amended by D.C. Law 12-264,  38, April 20, 1999, 46 DCR 2118. Editor's Notes Because of the prior expiration of certain provisions of this section required by subsection (e) of this section, section 203(a) of D.C. Law 16-232 provided that subsections (a) through (d) are hereby revived.
 313106. Certification of nonhospital residential facilities and outpatient treatment facilities. (a) The Mayor shall certify qualifying nonhospital residential facilities and outpatient treatment facilities in the District in accordance with rules issued pursuant to  31-3111. (b) Each certification issued by the Mayor shall state whether the facility is certified as a provider of treatment for drug abuse, alcohol abuse, mental illness, or a combination of these that shall be specified. (c) To qualify for certification, a nonhospital residential facility or outpatient treatment facility shall demonstrate that: (1) It offers an organized program for the treatment of drug abuse, alcohol abuse, mental illness, or any combination of these; (2) It operates under the day-to-day supervision of an individual with demonstrable training and experience in the treatment of drug abuse, alcohol abuse, or mental illness; (3) It employs sufficient numbers of professional staff members to deliver adequately the services offered to its patient caseload; and (4) It offers and has the capacity to provide services for the durations specified in  31-3103 and 31-3104. (d) Nothing in this section shall be construed as superseding the requirements of chapter 5 of Title 44. (e) Any certification issued pursuant to this section shall be issued as a Public Health: Human Services Facility endorsement to a basic business license under the basic business license system as set forth in subchapter I-A of Chapter 28 of Title 47.  (Feb. 28, 1987, D.C. Law 6-195,  7, 34 DCR 491; Apr. 20, 1999, D.C. Law 12-261,  2003(kk), 46 DCR 3142; Oct. 28, 2003, D.C. Law 15-38,  3(y), 50 DCR 6913.)  Prior Codifications 1981 Ed.,  35-2306. Section References This section is referenced in  44-1204. Effect of Amendments D.C. Law 15-38, in subsec. (e), substituted Public Health: Human Services Facility endorsement to a basic business license under the basic for Class A Public Health: Human Services Facility endorsement to a master business license under the master. Cross References Substance abuse treatment certification requirements, see  44-1204. Emergency Legislation For temporary (90 day) amendment of section, see  3(y) of Streamlining Regulation Emergency Act of 2003 (D.C. Act 15-145, August 11, 2003, 50 DCR 6896). Delegation of Authority Delegation of authority pursuant to D.C. Law 6-195, Drug Abuse, Alcohol Abuse, and Mental Illness Insurance Act of 1986., see Mayors Order 88-50, February 25, 1988.
 313107. Preservation of certain benefits. Nothing in this chapter shall serve to diminish the benefits of any insured person or prevent the offering or acceptance of benefits that exceed the minimum benefits required by this chapter.  (Feb. 28, 1987, D.C. Law 6-195,  8, 34 DCR 491.)  Prior Codifications 1981 Ed.,  35-2307.
 313108. Notification of coverage and benefits. All individual and group health benefit plans shall contain statements, in easily readable type and in easily understandable language, approved by the Commissioner, to inform policyholders and beneficiaries of the coverage and benefits provided or offered pursuant to this chapter.  (Feb. 28, 1987, D.C. Law 6-195,  9, 34 DCR 491; May 21, 1997, D.C. Law 11-268,  10(w), 44 DCR 1730; Mar. 8, 2007, D.C. Law 16-242,  2(f), 54 DCR 601.)  Prior Codifications 1981 Ed.,  35-2308. Section References This section is referenced in  31-3110. Effect of Amendments D.C. Law 16-242 substituted health benefit plans for health insurance policies.
 313109. Filing and rate requirements. (a)(1) Notwithstanding the provisions of any other law, any health insurer that issues health benefits plan or certificates in the District shall file with the Commissioner all rates and rating plans, rules, and classifications that it proposes to use in providing or offering the coverage required by this chapter. (2) Each health insurer shall initially file the documents required by this section no later than 120 days after the effective date of rules issued pursuant to  31-3111 and shall thereafter file any changes in rates and rating plans, rules, and classifications related to the coverage required by this chapter in a timely manner in accordance with rules issued by the Commissioner. (3) The Commissioner shall make the documents filed pursuant to this section available for public inspection during normal business hours. (b)(1) The rates and charges filed pursuant to subsection (a) of this section shall be subject to review by the Commissioner for a period of 90 calendar days from the date of filing. If after 90 days the Commissioner has not made a final determination on the final rates or charges proposed, the health insurer may begin charging the proposed rate. The rates and charges shall remain in effect unless and until, in accordance with the provisions of this section, changed by the health insurer or disapproved by the Commissioner. (2) Except as otherwise provided in  31-3110(d)(2), rates and charges for the coverage required by this chapter shall not be excessive and shall be reasonably related to the cost of providing the coverage based on the following factors: (A) Past and prospective experience within the covered group, or within the geographic region of the District or other regions, concerning the proportion of beneficiaries who use the coverage and the average duration of use; (B) Usual, customary, and reasonable charges by providers of treatment for drug abuse, alcohol abuse, and mental illness within the District or other regions; and (C) Past and prospective experience within the covered group, or within the geographic region of the District or other regions, concerning claims filed or services required for physical diseases and disorders by beneficiaries who obtain treatment for drug abuse, alcohol abuse, or mental illness or whose household includes an individual who has obtained treatment for drug abuse, alcohol abuse, or mental illness. (3) Rates and charges for the coverage required by this chapter may include a reasonable margin for underwriting profit and contingencies. (c)(1) The Commissioner shall review all rates and rating plans, rules, and classifications filed pursuant to this section to determine compliance with this chapter. (2) The Commissioner may, following a hearing pursuant to  2-509, order adjustments in rates and rating plans, rules, and classifications that the Commissioner determines to be excessive or otherwise not in compliance with this chapter. The Commissioner may order the insurer to refund to its policyholders a sum equal to the amount of the rate or charge determined to be excessive. (d) Nothing in this section shall be construed to require uniformity in rates, classifications, rating plans, or charges.  (Feb. 28, 1987, D.C. Law 6-195,  10, 34 DCR 491; May 21, 1997, D.C. Law 11-268,  10(w), 44 DCR 1730; Mar. 8, 2007, D.C. Law 16-242,  2(g), 54 DCR 601.)  Prior Codifications 1981 Ed.,  35-2309. Section References This section is referenced in  31-3110. Effect of Amendments D.C. Law 16-242, in subsecs. (a)(1), (a)(2), and (b)(1), substituted health insurer for insurer; and, in subsec. (a)(1), substituted health benefits plan or certificates for health insurance policies or contracts. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-3101.
 313110. Health maintenance organizations. (a) The requirements of this chapter shall apply to health maintenance organizations 5 years from February 28, 1987, unless the Mayor requests the Council to extend the exemption to a time certain and the Council, by resolution, approves the extension. (b) Upon becoming subject to the requirements of this chapter, each health maintenance organization shall: (1) Provide to its members the coverage and benefits required by  31-3102, 31-3103, and 31-3104; (2) Ensure that deductible or copayment plans, durational limits, and methods of determination adopted with respect to coverage of the benefits required by  31-3102, 31-3103, and 31-3104 result in coverage that is determined by the Commissioner to be at least equivalent in actuarial value to the average actuarial value of the plans provided by the health insurer with the largest number of enrollees in the District; and (3) Provide the notification of coverage and benefits required by  31-3108. (c) Each health maintenance organization may provide the treatment required by  31-3103 and 31-3104 directly by its staff or by referring its members to a hospital or other treatment facility that provides those services under a contract or agreement with the health maintenance organization. Nothing in this chapter shall require the alteration of any terms and conditions of the health maintenance organization membership contract relating to prior approval by the health maintenance organization for treatment provided to its members by other treatment facilities. (d)(1) Each health maintenance organization, within 120 days after becoming subject to the requirements of this chapter, shall file with the Commissioner the membership contracts it proposes to use, identifying its charges for all services and the portion of charges attributable to the services required by this chapter. (2) The provisions of  31-3109, except for subsection (b)(2) of this section, shall apply thereafter to the membership contracts and charges filed and implemented by health maintenance organizations. Rates and charges for the coverage required by this chapter shall not be excessive and shall be reasonably related to the cost of providing the coverage.  (Feb. 28, 1987, D.C. Law 6-195,  11, 34 DCR 491; May 21, 1997, D.C. Law 11-268,  10(w), 44 DCR 1730; Mar. 8, 2007, D.C. Law 16-242,  2(h), 54 DCR 601.)  Prior Codifications 1981 Ed.,  35-2310. Section References This section is referenced in  31-3101,  31-3109, and  31-3111. Effect of Amendments D.C. Law 16-242, in subsec. (b)(2), substituted health insurer for insurer.
 313111. Duties of Mayor. (a) The Mayor shall, within 120 days from February 28, 1987, issue rules to implement all sections of this chapter except  31-3110. The Mayor shall issue rules to implement  31-3110 no later than 5 years from February 28, 1987. (b) The Mayor shall provide the coverage and benefits set forth in this chapter to employees of the District and their dependents who are insured through the District of Columbia Employees Health Benefits Program. For District employees and their dependents who are insured through the Federal Employees Health Benefits Program, the Mayor shall provide supplemental coverage and benefits that comply with the requirements of this chapter no later than February 28, 1994.  (Feb. 28, 1987, D.C. Law 6-195,  12, 34 DCR 491; Mar. 16, 1993, D.C. Law 9-192,  2(d), 39 DCR 9007.)  Prior Codifications 1981 Ed.,  35-2311. Section References This section is referenced in  31-3106 and  31-3109. Delegation of Authority Delegation of authority pursuant to D.C. Law 6-195, Drug Abuse, Alcohol Abuse, and Mental Illness Insurance Act of 1986., see Mayors Order 88-50, February 25, 1988.
 313112. Excluded programs. This chapter shall not be applicable to the District of Columbia Alliance Program, Medicaid Program, and Post-1987 District of Columbia Employees Health Insurance Benefits Plan.  (Feb. 28, 1987, D.C. Law 6-195,  12a; as added Mar. 8, 2007, D.C. Law 16-242,  2(i), 54 DCR 601.)  Editor's Notes Section 3 of D.C. Law 16-242 provided: Section 2 shall apply to all individual and group health benefit plans issued or renewed on the first day of the month beginning on or after 90 days after the effective date of this act.
 313131. Definitions. For the purposes of this chapter, the term: (1) Clean claim means a claim that has no material defect or impropriety, including any lack of reasonably required substantiating documentation, which substantially prevents timely payment from being made on the claim or with respect to a health insurer that has failed timely to notify the person submitting the claim of any such defect or impropriety in accordance with  31-3132. For the purposes of this paragraph, the term material defect means an imperfection in the submission of a claim consisting in the omission of information that is essential to process the claim in accordance with the health plans published claim filing requirements. The requirements for electronic claim submissions shall be consistent with regulations promulgated by Secretary of Health and Human Services pursuant to section 1173 of the Social Security Act, approved August 14, 1935 (110 Stat. 2024; 42 U.S.C.  1320d-2). (2) Coding guidelines means those standards or procedures used or applied by a payor to determine the most accurate and appropriate code or codes for payment by the payor for a service. (3) Commissioner means the Commissioner of the Department of Insurance and Securities Regulation. (4) Health benefits plan means any accident and health insurance policy or certificate, hospital and medical services corporation contract, health maintenance organization subscriber contract, plan provided by a multiple employer welfare arrangement, or plan provided by another benefit arrangement. The term health benefit plan does not mean accident only, credit, or disability insurance; coverage of Medicare services or federal employee health plans, pursuant to contracts with the United States government; Medicare supplemental or long-term care insurance; dental only or vision only insurance; specified disease insurance; hospital confinement indemnity coverage; limited benefit health coverage; coverage issued as a supplement to liability insurance, insurance arising out of a workers compensation or similar law; automobile medical payment insurance; medical expense and loss of income benefits; or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance. (5) Health insurer means any person that provides one or more health benefit plans or insurance in the District of Columbia, including an insurer, a hospital and medical services corporation, a fraternal benefit society, a health maintenance organization, a multiple employer welfare arrangement, or any other person providing a plan of health insurance subject to the authority of the Commissioner. (6) Person means an enrollee or subscriber in a health benefit plan, provider, or physician. (7) Provider means a health care practitioner, group of health care practitioners, or other entity licensed, certified, or otherwise authorized by law to provide hospital, physician, or other heath care services. (8) Provider panel means the providers that contract either directly, or through a subcontracting entity, with a health insurer to provide health care services to the health insurers enrollees under the health insurers health benefit plan. The term provider panel shall not include an arrangement in which any provider may participate solely by contracting with the health insurer to provide health care services at a discounted fee-for-service rate.  (July 23, 2002, D.C. Law 14-176,  2, 49 DCR 5086.)  Section References This section is referenced in  31-3861.
 313132. Prompt payment. (a) For covered services rendered to its members, a health insurer shall reimburse any person entitled to reimbursement under the health benefits plan within 30 days after the receipt of a clean claim. (b) If a health insurer fails to comply with subsection (a) of this section, the health insurer shall pay interest beginning on the 31st day after the receipt of the claim if the claim remains unpaid after 30 days. A formal claim by the person filing the original claim shall not be required. (c) The interest payable shall be at a monthly rate of: (1) One and one-half percent from the 31st day through the 60th day; (2) Two percent from the 61st day through the 120th day; and (3) Two and one-half percent after the 120th day. (d) This section shall not apply to claims if the health insurer: (1) Notifies the person submitting the claim within 30 days after the receipt of the claim that the legitimacy of the claim or the appropriate amount of reimbursement is in dispute; (2) States, in writing, to the person the specific reasons why the legitimacy of the claim, a portion of the claim, or the appropriate amount of reimbursement is in dispute; and (3) Pays any undisputed portion of the claim within 30 days of the receipt of the claim. (e) The health insurer shall process the disputed portion of the claim within 30 days after receipt of all reasonable and necessary documentation. (f) If a health insurer fails to comply with the requirements of subsection (e) of this section, it shall pay interest at the rates set forth in subsection (c) of this section beginning on the 31st day after the filing of the receipt of the documentation as provided in subsection (e) of this section. (g) A health insurer shall allow a provider a minimum of 180 days from the date a covered service is rendered or the date of inpatient discharge to submit a claim for reimbursement for the service. (h) There shall be a rebuttable presumption that a claim has been received by a health insurer: (1) Within 5 business days from the date the provider or person entitled to reimbursement placed the claim in the United States mail; (2) Within 24 hours if the claim was submitted by the provider or providers agent electronically and was not returned to the provider by a claims clearinghouse or returned to the provider by the insurer if submitted directly to the health insurer; or (3) On the date recorded by the courier if the claim was delivered by courier. (i) Each health insurer shall provide a manual or other document that sets forth the claims submission procedures to all contracting providers at the time of contracting and 30 days prior to any changes in the procedure. (j) A health insurer shall maintain a written or electronic record of the date of receipt of a claim. The person submitting the claim shall be entitled to inspect the record on request and to rely on that record or on any other admissible evidence as proof of the fact of receipt of the claim, including electronic or facsimile confirmation of receipt of a claim. (k) A health insurer shall not be in violation of this chapter if its failure to pay a claim in accordance with the time periods provided in this chapter is caused: (1) In material part by the person submitting the claim; or (2) By impossibility due to matters beyond the health insurers reasonable control, such as an act of God, insurrection, strike, fire, or power outages. (l) This section shall not apply to claims for which payment has been or will be made directly to health care providers pursuant to a negotiated reimbursement arrangement requiring uniform or periodic interim payments to be applied against the health insurers obligation on such claims.  (July 23, 2002, D.C. Law 14-176,  3, 49 DCR 5086.)  Section References This section is referenced in  31-3131 and  31-3138.
 313133. Retroactive denial of reimbursement. (a) A health insurer may only retroactively deny reimbursement to a health care provider: (1) For services subject to coordination of benefits with another health insurer during the 18-month period after the date that the health insurer paid the health care provider; or (2) Except as provided in paragraph (1) of this subsection, during the 6-month period after the date that the health insurer paid the health care provider. (b)(1) A health insurer that retroactively denies reimbursement to a health care provider under subsection (a)(1) of this section shall provide the health care provider with a written statement specifying the basis for the retroactive denial. If the retroactive denial of reimbursement results from coordination of benefits, the written statement shall provide the name and address of the entity acknowledging responsibility for payment of the denied claim. (2) This subsection shall not apply if a health insurer retroactively denies reimbursement to a health care provider because: (A) The information submitted to the health insurer was fraudulent; (B) The information submitted to the health insurer was improperly coded and the health insurer has provided to the health care provider sufficient information regarding the coding guidelines used by the health insurer at least 30 days prior to the date the services subject to the retroactive denial were rendered; or (C) The claim submitted to the health insurer was a duplicate claim. (3) Information submitted to the health insurer may be considered to be improperly coded under paragraph (1) of this subsection if the information submitted to the health insurer by the health care provider: (A) Uses codes that do not conform with the coding guidelines used by the health insurer applicable as of the date that services were rendered; or (B) Does not otherwise conform with the contractual obligations of the health care provider to the health insurer applicable as of the date that services were rendered. (c) If a health insurer retroactively denies reimbursement for services as a result of coordination of benefits, the health care provider shall have 180 days after the date of denial, unless the health insurer permits a longer time period, to submit a claim for reimbursement for the service to the health insurer responsible for payment. (d) A health insurer that retroactively denies reimbursement to a health care provider under this section shall provide the health care provider with a written statement specifying the basis for the retroactive denial. (e) This section shall not apply to an adjustment to reimbursement made as part of an annual contracted reconciliation of a risk-sharing arrangement.  (July 23, 2002, D.C. Law 14-176,  4, 49 DCR 5086.)  Section References This section is referenced in  31-3138.
 313134. Provider panels. (a) Except for Medicaid and Medicare provider panels, if a provider panel contract between a provider and a health insurer, or other entity that provides hospital, physician, or other health care services to a health insurer, require a provider, as a condition of participating in one of the health insurers or other entitys provider panels, to participate in any other provider panel owned or operated by the health insurer or other entity, the contract shall contain a provision permitting the provider to refuse participation in one or more of the other provider panels at the time the contract is executed or renewed. The status of a physician as a member of, or as being eligible for, other existing or new provider panels shall not be adversely affected by the exercise of the right to refuse participation. (b) If a provider elects to terminate participation on a provider panel of a health insurer or entity that provides hospital, physicians, or health services to a health insurer, the provider shall: (1) Notify the health insurer at least 90 days before termination; and (2) For at least 90 days after the date of notice of termination, continue to furnish health care services to an enrollee of a health insurer for whom the provider was responsible for the delivery of health care services prior to the notice of termination.  (July 23, 2002, D.C. Law 14-176,  5, 49 DCR 5086.)  Section References This section is referenced in  31-3138.
 313135. Claims payment report. A health insurer shall include with its annual report filed with the Commissioner a claims payment report to include the: (1) Number of claims received in the previous calendar year; (2) Number of claims denied in the previous calendar year; (3) Number of claims paid: (A) In the previous calendar year; (B) In 30 days; (C) In 60 days; (D) In 120 days; and (E) In more than 120 days; and (4) Average number of days to pay a claim submitted in the previous calendar year.  (July 23, 2002, D.C. Law 14-176,  6, 49 DCR 5086.)  Section References This section is referenced in  31-3138.
 313136. Penalties. An action by a health insurer that establishes a pattern or practice of repeated violation of this chapter, as determined by the Commissioner, shall constitute a violation as provided in Chapter 22A of this title.  (July 23, 2002, D.C. Law 14-176,  7, 49 DCR 5086.) 
 313137. Rules and regulations. The Commissioner may adopt rules and regulations as necessary to implement this chapter.  (July 23, 2002, D.C. Law 14-176,  8, 49 DCR 5086.) 
 313138. Applicability. (a) This chapter shall apply to any individual and group health benefits plan issued or renewed in the District of Columbia. Health insurers shall comply with this chapter on the earlier of October 16, 2002, or the effective date of the claims payment standards in section 1173 of the Social Security Act, approved August 14, 1935 (110 Stat. 2024; 42 U.S.C.  1320d-2). (b) Section 31-3132 shall apply to claims received on or after October 16, 2002. (c) Section 31-3133 shall apply to retroactive denials made on or after October 16, 2002. (d) Section 31-3134 shall apply to any contract issued or renewed on or after October 16, 2002. (e) Section 31-3135 shall apply to claims data collected beginning with the first full calendar year following July 23, 2002. A health insurer shall include this data in the annual report filed with the Commissioner beginning on March 15, 2004.  (July 23, 2002, D.C. Law 14-176,  9, 49 DCR 5086.) 
 313151. Definitions. For the purposes of this chapter, the term: (1) Application means a carriers application pursuant to this chapter for approval to voluntarily withdraw from the District of Columbia health insurance market. (2) Carrier means any person or organization subject to the authority of the Commissioner that provides one or more health benefit plans in the District of Columbia, and includes an insurer, a hospital and medical services corporation, a fraternal benefit society, a health maintenance organization, or multiple employer welfare arrangement. (3) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking. (4) Health benefit plan means any accident and health insurance policy or certificate, hospital and medical services corporation contract, health maintenance organization subscriber contract, a plan provided by a multiple employer welfare arrangement, or a plan provided by another benefit arrangement. The term health benefit plan does not mean accident only, credit, or disability insurance; coverage of Medicare services or federal employee health plans, pursuant to contracts with the United States government; Medicare supplement or long-term care insurance; dental only or vision only insurance; specified disease insurance; hospital confinement indemnity coverage; limited benefit health coverage; coverage issued as a supplement to liability insurance; insurance arising out of a workers compensation or similar law; automobile medical payment insurance; medical expense and loss of income benefits; or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance. (5) HIPAA means the Health Insurance Portability and Accountability Act of 1996, approved August 21, 1996 (110 Stat. 1936; scattered sections of the United States Code). (6) Medicare means the health insurance program established pursuant to the Health Insurance for the Aged Act, approved July 30, 1965 (79 Stat. 290; 42 U.S.C.  401 et seq.). (7) Withdraw means the full cessation of underwriting insurance policies, including the nonrenewal of existing insurance policies, relative to any line of business or any subgroup thereof, including individual accounts.  (Apr. 12, 2005, D.C. Law 15-328,  2, 52 DCR 1459.) 
 313152. Procedures for voluntary withdrawal by carriers. (a) A carrier shall give the Commissioner written notice, prior to notifying the members of the health benefit plan, of its intent to discontinue the offering of all health benefit plans in the District of Columbia and shall submit to the Commissioner an application with the following information: (1) The name of the carrier; (2) The name, address, telephone number, and facsimile number of the carriers representative responsible for the activities pertaining to withdrawing from the District of Columbia health insurance market; (3) A specific description of the reasons the carrier is withdrawing its health benefit plans from the District of Columbia health insurance market; (4) A statement of the number of in-force policies affected by the withdrawal; (5) A copy of the nonrenewal notice, which complies with HIPAA, that the carrier will send to its enrollees and dependents once its application is approved; and (6) Any other information or documentation that the Commissioner considers relevant and appropriate in connection with the carrier ceasing to offer a health benefit plan in the District of Columbia. (b) The carrier shall obtain prior approval of its application from the Commissioner before it commences to voluntarily withdraw from the District of Columbia health insurance market. (c) The Commissioner shall complete his or her review of the application submitted by the carrier to withdraw from the District of Columbia health insurance market within 60 days after receipt of all requested documentation. (d) To ensure that health care services will be available and accessible to all group and nongroup policyholders of a withdrawing carrier, the Commissioner may allocate the group and nongroup contracts among other carriers in a similar manner as provided in  31-3414. (e) The Commissioner may condition his or her approval of the carriers application upon the terms and conditions as are necessary for the protection of the carriers policyholders, its creditors, or the public interest.  (Apr. 12, 2005, D.C. Law 15-328,  3, 52 DCR 1459.) 
 313153. Judicial review; mandamus. (a) Any carrier aggrieved by any act, determination, rule, regulation, or order or any other action of the Commissioner pursuant to this chapter, and which was the subject of a contested case, may appeal to the District of Columbia Court of Appeals, in accordance with  2-510. (b) The filing of an appeal pursuant to this section shall not stay the application of any rule, regulation, order, or other action of the Commissioner to the appealing party unless the court, after giving the appealing party notice and an opportunity to be heard, determines that failure to grant the stay would be detrimental to the interest of policyholders, shareholders, creditors, or the public. (c) Any carrier aggrieved by any failure of the Commissioner to act or make a determination required by this chapter may petition the Superior Court of the District of Columbia for a writ in the nature of a mandamus or a peremptory mandamus directing the Commissioner to act or make the determination forthwith.  (Apr. 12, 2005, D.C. Law 15-328,  4, 52 DCR 1459.) 
 313154. Regulations. The Commissioner may promulgate rules and regulations necessary to implement the provisions of this chapter, including provisions for the disposal of books of business.  (Apr. 12, 2005, D.C. Law 15-328,  5, 52 DCR 1459.) 
 313161. Prohibition on gender-based discrimination in rate making. (a) For the purposes of this section, the term health benefit plan shall have the same meaning as provided in  31-3001(1). (b) An individual health benefit plan offered, sold, issued, or renewed to a District resident shall not have a premium rate, or any other underwriting decision, determined through a method that is in any way based upon the gender or sex of a person covered under the health benefit plan. (c) Each individual health benefit plan offered, sold, issued, or renewed in the District shall provide hospitalization benefits for childbirth to the same extent as benefits provided in the policy for any covered illness. In addition to the provisions of this subsection and subsection (c) of this section, if a mother is required to remain hospitalized after childbirth for medical reasons and the mother requests that the newborn remain in the hospital, the individual health benefit plan shall pay the cost of additional hospitalization for the newborn for up to 4 days. (d) Each individual health benefit plan offered, sold, issued, or renewed in the District shall provide coverage for the cost of inpatient hospitalization services for a mother and newborn child for a minimum of: (1) Forty-eight hours of inpatient hospitalization care after an uncomplicated vaginal delivery; and (2) Ninety-six hours of inpatient hospitalization care after an uncomplicated cesarean section. (e) A mother may request a shorter length of stay than that provided in subsection (c) of this section if the mother decides, in consultation with the mothers attending provider, that less time is needed for recovery. (f)(1) For a mother and newborn child who have a shorter hospital stay than that provided under subsection (c) of this section, the individual health benefit plan shall provide coverage for: (A) One home visit scheduled to occur within 24 hours after hospital discharge; and (B) An additional home visit if prescribed by the mothers attending provider. (2) For a mother and newborn child who remain in the hospital for at least the length of time provided under subsection (c) of this section, the individual health benefit plan shall provide coverage for a home visit if prescribed by the mothers attending provider. (3) A home visit under paragraph (1) or (2) of this subsection shall: (A) Be provided in accordance with generally accepted standards of nursing practice for home care of a mother and newborn child; (B) Be provided by a registered nurse with at least one year of experience in maternal and child health nursing or community health nursing with an emphasis on maternal and child health; and (C) Include any services required by the mothers attending provider.  (Apr. 8, 2011, D.C. Law 18-360,  302, 58 DCR 896.) 
 313162. Rules. The Mayor, pursuant to subchapter I of Chapter 5 of Title 2 [ 2-501 et seq.], shall issue rules to implement the provisions of this chapter.  (Apr. 8, 2011, D.C. Law 18-360,  303, 58 DCR 896.) 
 313163. Application. This chapter shall apply to policies and certificates of insurance that are health benefit plans as defined under  31-3271(4) that are issued 90 days after April 8, 2011. This chapter shall not apply to short-term limited duration health benefit plans.  (Apr. 8, 2011, D.C. Law 18-360,  304, 58 DCR 896.) 
 313171.01. Definitions. (1) American Health Benefit Exchange means an entity established pursuant to  31-3171.04, and section 1311(b) of the Federal Act. (2) Authority means the District of Columbia Health Benefit Exchange Authority established by  31-3171.02. (3) Commissioner means the Commissioner of the Department of Insurance, Securities and Banking, as established by  31-102. (3A) Direct gross receipts means all policy and membership fees and net premium receipts or consideration received in a calendar year on all health insurance carrier risks originating in or from the District of Columbia. (4) Federal Act means the Patient Protection and Affordable Care Act, approved March 23, 2010 (124 Stat. 119; 42 U.S.C.  18001, note), as amended by the Health Care and Education Reconciliation Act of 2010 approved March 30, 2010 (124 Stat. 1029; 42 U.S.C.  1305, note), and any amendments, regulations, or guidance issued pursuant to the Federal Act. (5)(A) Health benefit plan means a policy, contract, certificate, or agreement offered or issued by a health carrier to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services. (B) The term health benefit plan does not include: (i) Coverage only for accident or disability income insurance, or any combination thereof; (ii) Liability insurance, including general liability insurance and automobile liability insurance; (iii) Coverage issued as a supplement to liability insurance; (iv) Workers' compensation or similar insurance; (v) Automobile medical payment insurance; (vi) Credit-only insurance; (vii) Coverage for on-site medical clinics; or (viii) Other similar insurance coverage, specified in federal regulations issued pursuant to the Health Insurance Portability and Accountability Act of 1996, approved August 21, 1996 (110 Stat. 1936; 42 U.S.C.  201, note) (HIPAA), under which benefits for health care services are secondary or incidental to other insurance benefits. (C) The term health benefit plan does not include the following benefits if they are provided under a separate policy, certificate of insurance, or contract of insurance, or are otherwise not an integral part of the plan: (i) Limited scope dental or vision benefits; (ii) Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof; or (iii) Other similar, limited benefits specified in federal regulations issued pursuant to HIPAA. (D) The term health benefit plan does not include the following benefits if the benefits are provided under a separate policy, certificate of insurance, or contract of insurance, and there is no coordination between the provision of the benefits and any exclusion of benefits under any group health plan maintained by the same plan sponsor, and the benefits are paid with respect to an event without regard to whether benefits are provided with respect to such an event under any group health plan maintained by the same plan sponsor: (i) Coverage only for a specified disease or illness; or (ii) Hospital indemnity or other fixed indemnity insurance. (E) The term health benefit plan does not include the following if offered as a separate policy, certificate of insurance, or contract of insurance: (i) A Medicare supplemental policy as defined in section 1882(g)(1) of the Social Security Act (42 U.S.C.  1395ss(g)(1)); (ii) Coverage supplemental to the coverage provided under 10 U.S.C.  1071 et seq.; or (iii) Similar supplemental coverage provided to coverage under a group health plan. (6) Health carrier means an entity subject to the insurance laws and regulations of the District that contracts, or offers to contract, to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services, including: (A) An accident and sickness insurance company; (B) A health maintenance organization; (C) A hospital and medical services corporation; or (D) Any other entity providing a health benefit plan. (7) Health professional shall have the same meaning as provided in  3-1201.01(8). (8) Internal Revenue Code of 1986 means the Internal Revenue Code of 1986, approved August 16, 1954 (100 Stat. 2095; 26 U.S.C.  1 et seq.). (8A) Metal level means the bronze, silver, gold, and platinum levels of coverage as defined in section 1302(d)(1) of the Federal Act. (8B) Navigator refers to the entities described in section 1311(i) of the Federal Act. (8C) Net premium receipts or consideration received means gross premiums or consideration received less the sum of premiums received for reinsurance assumed and premiums or consideration returned on policies or contracts canceled or not taken. (9) PHSA means the Public Health Service Act, approved July 1, 1944 (58 Stat. 682; 42 U.S.C.  201 et seq.). (10) Qualified dental plan means a limited-scope dental plan that has been certified in accordance with  31-3171.09. (11) Qualified employer means a small employer that elects to make its full-time employees eligible for one or more qualified health plans offered through the Small Business Health Options Program Exchange (SHOP Exchange), and, at the option of the employer, some or all of its part-time employees; provided, that the employer: (A) Has its principal place of business in the District and elects to provide coverage through the SHOP Exchange to all of its eligible employees, wherever employed; or (B) Elects to provide coverage through the SHOP Exchange to all of its eligible employees who are principally employed in the District. (12) Qualified health plan means a health benefit plan that has a certification validating that the plan meets the criteria for certification described in section 1311(c) of the Federal Act and  31-3171.09. (13) Qualified individual means an individual, including a minor, who: (A) Is seeking to enroll in a qualified health plan offered to individuals through the Authority; (B) Resides in the District; (C) At the time of enrollment, is not incarcerated, other than incarceration pending the disposition of charges; and (D) Is, and is reasonably expected to be, for the entire period for which enrollment is sought, a citizen or national of the United States or an alien lawfully present in the United States. (14) Secretary means the Secretary of the United States Department of Health and Human Services. (15) SHOP Exchange means a Small Business Health Options Program Exchange established pursuant to  31-3171.04, and section 1311(b) of the Federal Act. (16)(A) Small employer means a single employer that employed an average of not more than 50 employees during the preceding calendar year. (B) For the purposes of this paragraph: (i) All persons treated as a single employer under section 414(b), (c), (m), or (o) of the Internal Revenue Code of 1986 (26 U.S.C.  414(b), (c), (m), or (o)) shall be treated as a single employer. (ii) An employer and any predecessor employer shall be treated as a single employer. (iii) All employees shall be counted, including part-time employees and employees who are not eligible for health benefit coverage through the employer. (iv) If an employer was not in existence throughout the preceding calendar year, the determination of whether that employer is a small employer shall be based on the average number of employees that employer is reasonably expected to employ in the current calendar year. (v) An employer that makes enrollment in qualified health plans available to its employees through the SHOP Exchange and would cease to be a small employer by reason of an increase in the number of its employees shall continue to be treated as a small employer for purposes of this chapter as long as it continuously makes enrollment through the SHOP Exchange available to its employees. (17) Social Security Act means the Social Security Act, approved August 14, 1935 (49 Stat. 620; 42 U.S.C.  301 et seq.), as amended. (18) Standardized plan means a plan with defined benefits and cost sharing as determined by the executive board for the Authority.  (March 2, 2012, D.C. Law 19-94,  2, 59 DCR 213; July 16, 2014, D.C. Law 20-123,  2(a), 61 DCR 5379; June 23, 2015, D.C. Law 21-13,  2(a), 62 DCR 5946.)  Effect of Amendments The 2014 amendment by D.C. Law 20-123 added (8A), (8B), and (18). The 2015 amendment by D.C. Law 21-13 added (3A) and (8C). Emergency Legislation For temporary (90 days) amendment of this section, see  2(a) of the Better Prices, Better Quality, Better Choices for Health Coverage Emergency Act of 2013 (D.C. Act 20-87, June 19, 2013, 60 DCR 9542, 20 DCSTAT 1446). For temporary (90 days) amendment of this section, see  2(a) and 3 of the Better Prices, Better Quality, Better Choices for Health Coverage Congressional Review Emergency Amendment Act of 2013 (D.C. Act 20-170, September 26, 2013, 60 DCR 14742). For temporary (90 days) amendment of this section, see  2(a) of the Health Benefit Exchange Authority Financial Sustainability Emergency Amendment Act of 2014, (D.C. Act 20-329, May 22, 2014, 61 DCR 5363). For temporary (90 days) amendment of this section, see  2(a) of the Better Prices, Better Quality, Better Choices for Health Coverage Emergency Amendment Act of 2014, (D.C. Act 20-335, May 22, 2014, 61 DCR 5375). For temporary (90 days) amendment of this section, see  2(a) of the Health Benefit Exchange Authority Financial Sustainability Congressional Review Emergency Amendment Act of 2014 (D.C. Act 20-395, July 29, 2014, 61 DCR 8078). For temporary (90 days) amendment of this section, see  2(a) of the Health Benefit Exchange Authority Financial Sustainability Emergency Amendment Act of 2015 (D.C. Act 21-17, Mar. 26, 2015, 62 DCR 3853, 21 DCSTAT 849). Temporary Legislation For temporary (225 days) amendment of this section, see  2(a) of the Better Prices, Better Quality, Better Choices for Health Coverage Temporary Amendment Act of 2013 (D.C. Law 20-22, October 3, 2013, 60 DCR 10880). For temporary (225 days) amendment of this section, see  2(a) of the Health Benefit Exchange Authority Financial Sustainability Temporary Amendment Act of 2014 (D.C. Law 20-133, Aug. 8, 2014, 61 DCR 6340). For temporary (225 days) amendment of this section, see  2(a) of the Health Benefit Exchange Authority Financial Sustainability Temporary Amendment Act of 2015 (D.C. Law 21-5, June 4, 2015, 62 DCR 4560).
 313171.02. Establishment and purpose. (a) There is established, as an independent authority of the District government, the District of Columbia Health Benefit Exchange Authority. The Authority shall be an instrumentality, created to effectuate the purposes stated in this chapter, that shall have a legal existence separate from the District government. (b) The purposes of the Authority shall be to: (1) Enable individuals and small employers to find affordable and easier-to-understand health insurance; (2) Facilitate the purchase and sale of qualified health plans; (3) Assist small employers in facilitating the enrollment of their employees in qualified health plans; (4) Reduce the number of uninsured; (5) Provide a transparent marketplace for health benefit plans; (6) Educate consumers; and (7) Assist individuals and groups to access programs, premium assistance tax credits, and cost-sharing reductions.  (Mar. 2, 2012, D.C. Law 19-94,  3, 59 DCR 213.)  Section References This section is referenced in  31-3171.01.
 313171.03. District of Columbia Health Benefit Exchange Authority Fund. (a) There is established as a nonlapsing fund the District of Columbia Health Benefit Exchange Authority Fund (Fund), which shall be administered by the Authority in accordance with generally accepted accounting principles and which shall be used solely for the purposes set forth in this chapter and the costs of administering this chapter. (b) The Fund shall consist of: (1) Any user fees, licensing fees, or other assessments collected by the Authority; (2) Income from investments made on behalf of the Fund; (3) Interest on money in the Fund; (4) Money collected by the executive board as a result of a legal or other action; (5) Donations; (6) Grants; (7) All general revenue funds appropriated by a line item in the budget submitted pursuant to  1-204.46, and authorized by Congress for the purposes of the Authority; and (8) Any other money from any other source accepted for the benefit of the Fund. (c) All revenues, income from investments, proceeds, and other monies, from whatever source derived, that are collected or received by the Authority shall be deposited into the Fund. All funds deposited into the Fund, and any interest earned on those funds, shall not revert to the unrestricted fund balance of the General Fund of the District of Columbia at the end of a fiscal year, or at any other time, but shall be continually available for the uses and purposes set forth in this chapter without regard to fiscal year limitation, subject to authorization by Congress. (d) The Chief Financial Officer shall invest the money of the Fund in the same manner as other District money may be invested. (e)(1) The Authority is authorized to charge, through rulemaking: (A) User fees; (B) Licensing fees; and (C) Other assessments on health carriers selling qualified dental plans or qualified health plans in the District, including qualified health plans and qualified dental plans sold outside the exchanges. (2) User fees, licensing fees, or other assessments authorized shall not exceed reasonable projections regarding the amount necessary to support the operations of the Authority. (3) The assessment on health carriers pursuant to subsection (f) of this section shall be a tax and licensing and regulatory fee for purposes of 45 CFR  158.221(c) and 158.161(b). (f)(1) The Authority shall annually assess, through a Notice of Assessment, each health carrier doing business in the District with direct gross receipts of $50,000 or greater in the preceding calendar year an amount based on a percentage of its direct gross receipts for the preceding calendar year. These assessments shall be deposited in the Fund. (2) The Authority shall adjust the assessment rate in each assessable year. The amount assessed shall not exceed reasonable projections regarding the amount necessary to support the operations of the Authority. (3) Each health carrier shall pay to the Authority the amount stated in the Notice of Assessment within 30 business days after the date of the Notice of Assessment. (4) Failure to pay the assessment in accordance with paragraph (3) of this subsection shall subject the health carrier to  31-1204.  (Mar. 2, 2012, D.C. Law 19-94,  4, 59 DCR 213; Feb. 26, 2015, D.C. Law 20-155,  5083, 61 DCR 9990; June 23, 2015, D.C. Law 21-13,  2(b), 62 DCR 5946.)  Effect of Amendments The 2015 amendment by D.C. Law 20-155 added (e)(3). The 2015 amendment by D.C. Law 21-13 added (f). Emergency Legislation For temporary (90 days) amendment of this section, see  2(b) of the Health Benefit Exchange Authority Financial Sustainability Emergency Amendment Act of 2014, (D.C. Act 20-329, May 22, 2014, 61 DCR 5363). For temporary (90 days) amendment of this section, see   2(b) of the Health Benefit Exchange Authority Financial Sustainability Congressional Review Emergency Amendment Act of 2014 (D.C. Act 20-395, July 29, 2014, 61 DCR 8078). For temporary (90 days) amendment of this section, see  5083 of the Fiscal Year 2015 Budget Support Emergency Act of 2014 (D.C. Act 20-377, July 14, 2014, 61 DCR 7598, 20 STAT 3696). For temporary (90 days) amendment of this section, see  5083 of the Fiscal Year 2015 Budget Support Congressional Review Emergency Act of 2014 (D.C. Act 20-449, October 10, 2014, 61 DCR 10915, 20 STAT 4188). For temporary (90 days) amendment of this section, see  5083 of the Fiscal Year 2015 Budget Support Second Congressional Review Emergency Act of 2014 (D.C. Act 20-566, January 9, 2015, 62 DCR 884, 21 STAT 541). For temporary (90 days) amendment of this section, see  2(b) of the Health Benefit Exchange Authority Financial Sustainability Emergency Amendment Act of 2015 (D.C. Act 21-17, Mar. 26, 2015, 62 DCR 3853, 21 DCSTAT 849). Temporary Legislation For temporary (225 days) amendment of this section, see  2(b) of the Health Benefit Exchange Authority Financial Sustainability Temporary Amendment Act of 2014 (D.C. Law 20-133, Aug. 8, 2014, 61 DCR 6340). For temporary (225 days) amendment of this section, see  2(b) of the Health Benefit Exchange Authority Financial Sustainability Temporary Amendment Act of 2015 (D.C. Law 21-5, June 4, 2015, 62 DCR 4560).
 313171.04. Authority duties and powers. (a) The Authority shall: (1) Establish the American Health Benefit Exchange to assist qualified individuals in the District with enrollment in qualified health plans; (2) Establish a SHOP Exchange through which qualified employers may access coverage for their employees and shall enable any qualified employer to specify a level of coverage so that any of its employees may enroll in any qualified health plan offered through the SHOP Exchange at the specified level of coverage; (3) Certify plans as qualified health plans as set forth in  31-3171.09 and make such plans available to qualified individuals and qualified employers, as required by the Federal Act, with effective dates on January 1, 2014; provided, that the Authority shall not make available any health benefit plan that is not a qualified health plan. (4) Have independent personnel authority to hire, retain, and terminate personnel as appropriate to perform the functions of the Authority consistent with Chapter 6 of Title 1 [ l-601.01 et seq.], including establishing compensation and reimbursement consistent with the Districts wage grade and non-wage grade schedules; (5) Have procurement authority independent of the Office of Contracting and Procurement, and shall not be subject to Chapter 3A of Title 2 [ 2-352.01 et seq.]; except, that  2-352.02(a), (b), (c), and (e) shall apply. (6) Publish the average costs of licensing, regulatory fees, and any other payments required by the Authority, and the administrative costs of the Authority, on a website that is publically accessible, to educate consumers on these costs. This information shall include information on monies lost to waste, fraud, and abuse; (7) Implement procedures for certification, recertification, and decertification, consistent with guidelines developed by the Secretary under section 1311(c) of the Federal Act and of this chapter, of health benefit plans as qualified health plans; (8) Provide for the operation of a toll-free telephone hotline to respond to requests for assistance, utilizing staff who are trained to provide assistance in a culturally and linguistically appropriate manner; (9) Provide for enrollment periods, as provided under section 1311(c)(6) of the Federal Act; (10) Maintain a publically accessible website, through which enrollees and prospective enrollees of qualified health plans and dental plans may obtain standardized comparative information, including on health plan quality and performance, for such plans; (11) Assign a rating to each qualified health plan offered through the exchanges in accordance with the criteria developed by the Secretary under section 1311(c)(3) of the Federal Act, and determine each qualified health plans level of coverage in accordance with regulations issued by the Secretary under section 1302(d)(2)(A) of the Federal Act; (12) Use a standardized format for presenting health benefit options in the exchanges, including the use of the uniform outline of coverage established under section 2715 of the PHSA; (13) Conduct eligibility determinations, in accordance with section 1413 of the Federal Act for the Medicaid program under title XIX of the Social Security Act, the Childrens Health Insurance Program under title XXI of the Social Security Act, or any other applicable District program pursuant to the policies and procedures established by the Department of Health Care Finance; (14) Establish and make available, through a website that is publicly available, a calculator to determine the actual cost of coverage after application of any premium tax credit under section 36B of the Internal Revenue Code of 1986 and any cost-sharing reduction under section 1402 of the Federal Act, and, if feasible, which is designed to provide consumers with information on out-of-pocket costs for in-network and out-of-network services, taking into account any cost-sharing reductions; (15) Grant a certification, subject to section 1411 of the Federal Act, attesting that, for purposes of the individual responsibility penalty under section 5000A of the Internal Revenue Code of 1986, an individual is exempt from the individual responsibility requirement or from the penalty imposed by that section because: (A) There is no affordable qualified health plan available through the exchanges, or the individuals employer, covering the individual; or (B) The individual meets the requirements for another exemption from the individual responsibility requirement or penalty; (16) Transfer to the Secretary of the United States Department of the Treasury the following: (A) A list of the individuals who are issued a certification under paragraph (15) of this subsection, including the name and taxpayer identification number of each individual; (B) The name and taxpayer identification number of each individual who was an employee of an employer who was determined to be eligible for the premium tax credit under section 36B of the Internal Revenue Code of 1986 because the employer: (i) Did not provide minimum essential coverage; or (ii) Provided the minimum essential coverage, but it was determined under section 36B(c)(2)(C) of the Internal Revenue Code of 1986 to either be unaffordable to the employee or did not provide the required minimum actuarial value; and (C) The name and taxpayer identification number of: (i) Each individual who notifies the Authority under section 1411(b)(4) of the Federal Act that he or she has changed employers; and (ii) Each individual who ceases coverage under a qualified health plan during a plan year and the effective date of the cessation; (17) Provide to each employer the name of each employee of the employer described in paragraph (16)(B) of this subsection who ceases coverage under a qualified health plan during a plan year and the effective date of the cessation; (18) Perform the duties required of the Authority by the Secretary, or the Secretary of the United States Department of the Treasury, related to determining eligibility for: (A) Premium tax credits; (B) Reduced cost-sharing; or (C) Individual responsibility requirement exemptions; (19) Select entities qualified to serve as Navigators in accordance with section 1311(i) of the Federal Act, and standards developed by the Secretary, and award grants to enable Navigators to: (A) Conduct public education activities to raise awareness of the availability of qualified health plans and qualified dental plans; (B) Distribute fair and impartial information concerning enrollment in qualified health plans and qualified dental plans, and the availability of premium tax credits under section 36B of the Internal Revenue Code of 1986 and cost-sharing reductions under section 1402 of the Federal Act; (C) Facilitate enrollment in qualified health plans and qualified dental plans; (D) Provide referrals to an office of health insurance consumer assistance or health insurance ombudsman, including the Office of Health Care Ombudsman and Bill of Rights, or any other appropriate District agency, for any enrollee with a grievance or question regarding his or her health benefit plan, coverage, or a determination under that plan or coverage; and (E) Provide information in a manner that is culturally and linguistically appropriate to the needs of the population being served by the exchanges; (20) Review the rate of premium growth within and outside the exchanges and consider the information in developing recommendations on whether to continue limiting qualified employer status to small employers; (21) Consult with stakeholders relevant to carrying out the activities required under this chapter, including: (A) Educated health care consumers who are enrollees in qualified health plans or qualified dental plans; (B) Individuals and entities with experience in facilitating enrollment in qualified health plans or dental plans; (C) Representatives of small businesses and self-employed individuals; (D) The Department of Health Care Finance; (E) Individuals who have experience enrolling difficult-to-reach populations in public insurance programs; (F) Public health experts; (G) Health care providers; and (H) Office of Health Care Ombudsman and Bill of Rights; (22) Meet the following financial integrity requirements: (A) Keep an accurate accounting of all activities, receipts, and expenditures and annually submit to the Secretary, Mayor, Council, and the Commissioner a report of the accountings; (B) Fully cooperate with any investigation conducted by the Secretary pursuant to the Secretarys authority under the Federal Act; (C) Allow the Secretary, in coordination with the Inspector General of the United States Department of Health and Human Services, to: (i) Investigate the affairs of the Authority; (ii) Examine the properties and records of the Authority; and (iii) Require periodic reports in relation to the activities undertaken by the Authority; and (D) In carrying out its activities under this chapter, not use any funds intended for the administrative and operational expenses of the Authority for: (i) Staff retreats; (ii) Promotional giveaways; (iii) Excessive executive compensation; or (iv) Promotion of federal or District legislative and regulatory modifications not contemplated under the Federal Act; and (23) Administer the hardship and affordability exemptions under Chapter 51 of Title 47. (b) In addition to certifying qualified health plans, the Authority shall allow a health carrier to offer a plan that provides limited scope dental benefits meeting the requirements of section 9832(c)(2)(A) of the Internal Revenue Code of 1986 through the exchanges, either separately or in conjunction with a qualified health plan, if the plan provides pediatric dental benefits meeting the requirements of section 1302(b)(1)(J) of the Federal Act. (c) Neither the Authority nor a health carrier offering qualified health plans through the exchanges may charge an individual a fee or penalty for termination of coverage if the individual enrolls in another type of minimum essential coverage because the individual has become newly eligible for that coverage or because the individuals employer-sponsored coverage has become unaffordable under the standards of section 36B(c)(2)(C) of the Internal Revenue Code of 1986. (d) The operations of the Authority are subject to the provisions of this chapter whether the operations are performed directly by the Authority or through an entity under a contract with the Authority.  (Mar. 2, 2012, D.C. Law 19-94,  5, 59 DCR 213; Mar. 14, 2014, D.C. Law 20-94,  3(a), 61 DCR 963; Oct. 30, 2018, D.C. Law 22-168,  5003(a), 65 DCR 9388.)  Section References This section is referenced in  31-3171.01 and  31-3171.09. Effect of Amendments The 2014 amendment by D.C. Law 20-94 substituted and shall not be subject to Chapter 3A of Title 2 for consistent with Chapter 3A of Title 2 in (a)(5). Expiration of Law Section 2 of D.C. Law 23-223 provided that  2(a)(2), (3), and (4) of the act shall expire on September 30, 2023.  Section 1012 of D.C. Law 22-168 provided that  2(a)(2), (3), and (4) and 3(a) of the act shall expire on September 30, 2023.  The second section designated as Section 3 of D.C. Law 20-94 provided that  2(a)(2), 2(a)(3), 2(a)(4) and 3(a) of the act shall expire at the end of fiscal year 2018 [September 30, 2018]. Emergency Legislation  For temporary (90 days) amendment of this section, see  5003(a) of Fiscal Year 2019 Budget Support Congressional Review Emergency Act of 2018 (D.C. Act 22-458, Oct. 3, 2018, 65 DCR 11212).   For temporary (90 days) epiration of law, see  1012 of Fiscal Year 2019 Budget Support Congressional Review Emergency Act of 2018 (D.C. Act 22-458, Oct. 3, 2018, 65 DCR 11212).   For temporary (90 days) amendment of this section, see  5003(a) of Fiscal Year 2019 Budget Support Emergency Act of 2018 (D.C. Act 22-434, July 30, 2018, 65 DCR 8200).   For temporary (90 days) epiration of law, see  1012 of Fiscal Year 2019 Budget Support Emergency Act of 2018 (D.C. Act 22-434, July 30, 2018, 65 DCR 8200).  For temporary (90 days) amendment of this section, see  2 of the Health Benefit Exchange Authority Establishment Emergency Amendment Act of 2013 (D.C. Act 20-49, April 15, 2013, 60 DCR 6337, 20 DCSTAT 1355). For temporary (90 days) amendment of this section, see  2 of the Health Benefit Exchange Authority Establishment Congressional Review Emergency Act of 2013 (D.C. Act 20-125, July 26, 2013, 60 DCR 11136, 20 DCSTAT 1821). For temporary (90 days) amendment of this section, see  3(a) of the Procurement Practices Reform Exemption Emergency Amendment Act of 2014 (D.C. Act 20-282, February 20, 2014, 61 DCR 1576). Temporary Legislation For temporary (225 days) amendment of this section, see  2 of the Health Benefit Exchange Authority Establishment Temporary Amendment Act of 2013 (D.C. Law 20-11, July 13, 2013, 60 DCR 7236, 20 DCSTAT 1757).
 313171.05. Executive board establishment and membership. (a) There is established an executive board to govern the Authority consisting of: (1) Seven voting members, who shall be residents of the District of Columbia, appointed by the Mayor, with the advice and consent of the Council pursuant to  1-523.01(f). (2) Four nonvoting, ex-officio members, or their designees, who shall be the: (A) Director of the Department of Health Care Finance; (B) Commissioner of the Department of Insurance, Securities and Banking; (C) Director of the Department of Health; and (D) Director of the Department of Human Services. (b)(1) Members of the executive board, other than an ex-officio member, shall be appointed for a term of 4 years, except that for the initial appointments: (A) Two shall be for a term of 2 years; (B) One shall be for a term of 3 years; (C) Two shall be for a term of 4 years; and (D) Two shall be for a term of 5 years. (2)(A) A member of the executive board may continue to serve until his or her successor has been approved by the Council and appointed by the Mayor. (B) Vacancies shall be filled by Mayoral appointment for the unexpired term in the same manner of the original appointment. (C) A member of the executive board, upon findings by the Mayor, may be removed for incompetence, misconduct, or failure to perform the duties of the position. (c)(1) Each person appointed to the executive board as a voting member shall have demonstrated and acknowledged expertise in at least 2 of the following areas: (A) Individual or small employer health care coverage; (B) Health benefits plan administration; (C) Health care finance; (D) Administering a public or private health care delivery system; (E) Purchasing health plan coverage; (F) Prior experience in commercial insurance management; (G) Actuarial analysis; (H) Health care economics; (I) Human services administration; (J) Health care consumer interest advocacy; (K) Public health programs; or (L) Enrolling individuals into health benefit plans. (2) The Mayor shall consider the expertise of each of the members of the executive board and attempt to make appointments so that the executive boards composition reflects a diversity of expertise. (3) At least one voting member of the executive board shall have demonstrated knowledge in health care consumer interest advocacy. (d) Each member of the executive board shall have the responsibility and duty to meet the requirements of this chapter, the Federal Act, and all applicable District and federal laws and regulations, to serve the public interest of the individuals and small businesses seeking health care coverage through the exchanges, and to ensure the operational effectiveness and fiscal solvency of the Authority. (e) The executive board shall elect a chairperson on an annual basis. (f) Executive board members shall receive no compensation for their services but shall receive actual and necessary expenses incurred in the performance of their official duties. (g) The Mayor shall nominate a majority of the executive board members within 90 days of March 2, 2012.  (Mar. 2, 2012, D.C. Law 19-94,  6, 59 DCR 213.) 
 313171.06. Powers and duties of executive board. (a) Subject to any limitations under this chapter, or other applicable law, the executive board shall have all the powers necessary to carry out the functions authorized by the Federal Act and consistent with the purposes of the Authority. (b) The enumeration of specific powers in this chapter is not intended to restrict the executive boards power to take any lawful action that it determines is necessary to carry out the functions authorized by the Federal Act and is consistent with the purposes of the Authority. (c) In addition to the powers set forth elsewhere in this chapter, the executive board may: (1) Adopt and alter an official seal; (2) Sue, be sued, plead, and be impleaded; (3) Adopt bylaws, rules, and policies; (4) Maintain an office in the District at a place designated by the executive board; (5) Enter into any agreements or contracts and execute the instruments necessary to manage its affairs and to carry out the purposes of this chapter; (6) Apply for and receive grants, contracts, or other public or private funding; and (7) Do all things necessary in conformity with the law to exercise the powers granted by this chapter. (d)(1) To carry out the purposes of this chapter or perform any of its functions under this chapter, the executive board may contract or enter into memoranda of understanding with eligible entities, including the: (A) Department of Health Care Finance; (B) Department of Human Services; (C) Department of Insurance, Securities and Banking; (D) Insurance producers and third-party administrators registered in the District; and (E) Any other entities that have experience in individual and small group public and private health insurance plans or in facilitating enrollment in those plans. (2) The executive board shall ensure that any entity under a contract with the Authority complies with the provisions of this chapter when performing services on behalf of the Authority that are subject to this chapter. (e)(1) The executive board may enter into information-sharing agreements with federal agencies, District agencies, agencies of one or more states, and other state health insurance exchanges to carry out the provisions of this chapter. (2) An information-sharing agreement entered into under paragraph (1) of this subsection shall: (A) Include adequate protections with respect to the confidentiality of information; and (B) Comply with all District and federal laws and regulations. (f) The executive board shall adopt written policies and procedures, which shall be made publicly accessible on the Authoritys website and published in the District of Columbia Register, governing all procurements of the Authority. (g) The executive board may limit the number of plans offered in the exchanges using selective criteria or contracting; provided, that individuals and employers have an adequate number and selection of choices. (h) The executive board may merge the exchanges for individual coverage within the American Health Benefits Exchange and the SHOP Exchange if a merger is considered by the Authority to be in the best interest of the District.  (Mar. 2, 2012, D.C. Law 19-94,  7, 59 DCR 213; Mar. 14, 2014, D.C. Law 20-94,  3(b), 61 DCR 963.)  Effect of Amendments The 2014 amendment by D.C. Law 20-94 substituted policies and procedures, which shall be made publicly accessible on the Authoritys website and published in the District of Columbia Register for policies and procedures in (f). Emergency Legislation For temporary (90 days) amendment of this section, see  3(b) of the Procurement Practices Reform Exemption Emergency Amendment Act of 2014 (D.C. Act 20-282, February 20, 2014, 61 DCR 1576).
 313171.07. Advisory board. (a) In addition to the executive board, there shall be a standing advisory board consisting of 9 members, who shall be residents of the District. (b) The executive board may create additional advisory boards as it considers appropriate. (c) The executive board shall solicit the recommendations of, and consult with, the advisory boards on: (1) Insurance standards; (2) Covered benefits; (3) Premiums; (4) Plan certification; (5) Internet technology system development; and (6) Any other policy or operational issues, within the executive boards discretion. (d) The executive board shall: (1) Select the members of the advisory boards; (2) Establish the terms of the members; (3) Ensure that at least one member of the standing advisory board demonstrates expertise as a health insurance broker or agent; (4) Appoint the chair of the standing advisory board; (5) Determine the residency requirement of any additional advisory board created; and (6) Appoint the chair of any additional advisory boards created. (e)(1) An advisory board member may continue to serve until the appointment of his or her successor. (2) Vacancies shall be filled by appointment by the executive board for the unexpired term of the appointees predecessor. (f) Each person appointed to an advisory board shall have demonstrated and acknowledged expertise on issues related to at least one of the following groups: (1) Health professionals; (2) Health insurance consumers; (3) Disease and demographic-specific advocacy groups; (4) Commercial sector health plans; (5) Public sector health plans; (6) Health insurance brokers; (7) Health care consumer interest advocacy; (8) Health care foundations; (9) Exchange consumers; or (10) Such other interests considered necessary.  (Mar. 2, 2012, D.C. Law 19-94,  8, 59 DCR 213.) 
 313171.08. Executive director and Authority staff. (a) The executive board shall hire an executive director within 60 days of a majority of executive board members being confirmed to organize, administer, and manage the operations of the Authority. (1) The executive director shall not be an employee in the career service and shall serve at the pleasure of the executive board. (2) The executive director shall become a resident of the District within 180 days of the date of hire. (b) The executive board shall determine the appropriate compensation for the executive director; provided, that the executive directors compensation shall not exceed the maximum allowable salary in the District of Columbia Excepted Service salary schedule. (c) Under the direction of the executive board, the executive director shall; (1) Be the chief administrative officer of the Authority; (2) Direct, administer, and manage the operations of the Authority; and (3) Perform all duties necessary to comply with and carry out the provisions of this chapter, other District laws and regulations, and the Federal Act. (d)(1) The executive director may employ and retain staff for the Authority. (2) The executive director may retain as independent contractors or employees, and set compensation for: (A) Attorneys; (B) Financial consultants; and (C) Other professionals or consultants necessary to carry out the planning, development, and operations of the Authority and the provisions of this chapter. (3) Employee compensation shall not exceed the maximum allowable salary in the District of Columbia Excepted Service salary schedule. (e) Except as otherwise provided in this chapter, an employee or independent contractor of the Authority shall not be subject to any law, regulation or Mayors Order governing District government compensation, including furloughs, pay cuts, or any other general fund cost-saving measure.  (Mar. 2, 2012, D.C. Law 19-94,  9, 59 DCR 213.) 
 313171.09. Health benefit plan certification. (a) To be certified as a qualified health plan, a health benefit plan shall, at a minimum: (1) Provide the essential health benefits package described in section 1302(a) of the Federal Act; except, that the plan is not required to provide essential benefits that duplicate the minimum benefits of qualified dental plans, as provided in subsection (e) of this section, if: (A) The Authority has determined that at least one qualified dental plan is available to supplement the plans coverage; and (B) The health carrier makes prominent disclosure at the time it offers the plan, in a form approved by the Authority, that the plan does not provide the full range of essential pediatric dental benefits and that qualified dental plans providing those benefits and other dental benefits not covered by the plan are offered through the exchanges; (2) Obtain prior approval of premium rates and contract language from the Commissioner; (3) Provide at least a bronze level of coverage, as determined by  31-3171.04(a)(11), unless the plan is certified as a qualified catastrophic plan, meets the requirements of section 1302(e) of the Federal Act, and will only be offered to individuals eligible for catastrophic coverage; (4) Ensure that the cost-sharing requirements of the plan do not exceed the limits established under section 1302(c)(1) of the Federal Act, and if the plan is offered through the SHOP Exchange, the plans deductible does not exceed the limits established under section 1302(c)(2) of the Federal Act; (5) Be offered by a health carrier that: (A) Is licensed and in good standing to offer health insurance coverage in the District; (B)(i) Offers at least one qualified health plan at the bronze level, at least one qualified health plan at the silver level, and at least one qualified health plan at the gold level through each component of the Authority in which the health carrier participates; (ii) For the purposes of this subparagraph, the term component refers to the SHOP Exchange and the exchange for individual coverage within the American Health Benefit Exchange; (C) Charges the same premium rate for each qualified health plan without regard to whether the plan is offered through the exchanges and without regard to whether the plan is offered directly from the health carrier or through an insurance producer; (D) Does not charge any cancellation fees or penalties in violation of  31-3171.04(c); (E) Complies with the regulations established by the Secretary under section 1311(d) of the Federal Act and any other requirements as the Authority may establish; (F) Provides accurate attestations as required in the initial certification process; (G) Offers one or more standardized plans that meet the criteria developed by the executive board for the Authority, at each metal level in which the carrier is participating, in addition to other plans the carrier may offer; and (H) Offers plans subject to the meaningful difference standard, as defined in section 4(ii) of Chapter 1 of the Affordable Exchanges Guidance, dated March 1, 2013, by the Centers for Consumer Information and Insurance Oversight at the Centers for Medicare and Medicaid Services in the U.S. Department of Health and Human Services, or as may be defined by the executive board for the Authority; (6) Meet the requirements of certification pursuant to the authority provided in this chapter and by the Secretary under section 1311(c) of the Federal Act, and rules promulgated pursuant to this chapter or the Federal Act, which include: (A) Minimum standards in the areas of marketing practices; (B) Network adequacy; (C) Essential community providers in underserved areas; (D) Accreditation; (E) Quality improvement; (F) Uniform enrollment forms and descriptions of coverage; and (G) Information on quality measures for health benefit plan performance; (7) Be determined by the Authority that making the plan available through the exchanges is in the interest of qualified individuals and qualified employers; (8) Comply with section 512 of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, approved October 3, 2008 (Pub. L. No. 110-343; 122 Stat. 3881), as applied to the Federal Act, including covering behavioral health inpatient and outpatient services for mental health and substance use disorders without day or visit limitations; (9) Provide a drug formulary that includes, at a minimum, the greater of either the number of drugs listed in each category and class found in the District's base-benchmark plan formulary, or the minimum number of drugs, by category and class, as established by the Center for Consumer Information and Insurance Oversight in the Centers for Medicare and Medicaid Services at the U.S. Department of Health and Human Services; and (10) Provide benefits identical to the essential health benefits benchmark plan, as defined in federal regulations promulgated pursuant to section 1302(a) of the Federal Act, as defined by the District without benefit substitution. (b) The Authority shall not withhold certification from a health benefit plan: (1) On the basis that the plan is a fee-for-service plan; (2) Through the imposition of premium price controls by the Authority; (3) On the basis that the health benefit plan provides treatments necessary to prevent patients deaths in circumstances the Authority determines are inappropriate or too costly; or (4) On the basis of the number of qualified health plans being offered. (c) The Authority shall require each health carrier seeking certification of a plan as a qualified health plan to: (1) Submit a justification for any premium increase before implementation of that increase, and prominently post the information on its publically accessible website; (2)(A) Make available to the public, in the format described in subparagraph (B) of this paragraph, and submit to the Authority, the Secretary, and the Commissioner, accurate and timely disclosure of the following: (i) Claims payment policies and practices; (ii) Periodic financial disclosures; (iii) Data on enrollment; (iv) Data on disenrollment; (v) Data on the number of claims that are denied; (vi) Data on rating practices; (vii) Information on cost-sharing and payments with respect to any out-of-network coverage; (viii) Information on enrollee and participant rights under title I of the Federal Act; and (ix) Other information as determined appropriate by the Secretary. (B) The information required in subparagraph (A) of this paragraph shall be provided in plain language, as that term is defined in section 1311(e)(3)(B) of the Federal Act; (3) Permit individuals to learn, in a timely manner upon the request of the individual, the amount of cost-sharing, including deductibles, copayments, and coinsurance, under the individuals plan or coverage that the individual would be responsible for paying with respect to the furnishing of a specific item or service by a participating provider and make this information available to the individual through a website that is publically accessible, and through other means for individuals without access to the Internet; and (4) Promptly notify affected individuals of price and benefit changes, or other changes in circumstances that could materially impact enrollment or coverage. (d) The Authority shall not exempt any health carrier seeking certification as a qualified health plan, regardless of the type or size of the health carrier, from District licensure or solvency requirements, and shall apply the criteria of this section in a manner that assures a level playing field between or among health carriers participating in the exchanges. (e)(1) The provisions of this chapter that are applicable to qualified health plans shall also apply, to the extent relevant, to qualified dental plans except as modified in accordance with the provisions of paragraphs (2), (3) and (4) of this subsection or by regulations adopted by the Authority. (2) The health carrier shall be licensed to offer dental coverage, but need not be licensed to offer other health benefits. (3) The plan shall be limited to dental and oral health benefits, without substantially duplicating the benefits typically offered by health benefit plans without dental coverage and shall include, at a minimum, the essential pediatric dental benefits prescribed by the Secretary pursuant to section 1302(b)(1)(J) of the Federal Act, and such other dental benefits as the Authority or the Secretary may specify by regulation. (4) Health carriers may jointly offer a comprehensive plan through the exchanges in which the dental benefits are provided by a health carrier through a qualified dental plan and the other benefits are provided by a health carrier through a qualified health plan; provided, that the plans are priced separately and are also made available for purchase separately at the same price. (f) The Authority shall take the information required by subsection (c)(1) of this section, along with the information and the recommendations provided to the Authority by the Commissioner under section 2794(b) of the PHSA, into consideration when determining whether to allow the health carrier to make plans available through the exchanges. (g) A qualified health plan may provide additional services that are not in the essential health benefits package required in subsection (a)(1) of this section, if the services are eligible for claims submission and reimbursement. (h) For the purposes of the essential health benefits benchmark plan, as defined in federal regulations promulgated pursuant to section 1302(a) of the Federal Act, the term habilitative services includes health care services that help a person keep, learn, or improve skills and functioning for daily living, including applied behavioral analysis for the treatment of autism spectrum disorder.  (Mar. 2, 2012, D.C. Law 19-94,  10, 59 DCR 213; July 16, 2014, D.C. Law 20-123,  2(b), 61 DCR 5379.)  Section References This section is referenced in  31-3171.01 and  31-3171.04. Effect of Amendments The 2014 amendment by D.C. Law 20-123 added at least one qualified health plan at the bronze level, in (a)(5)(B)(i); deleted and at the end of (a)(5)(D); added (a)(5)(F), (a)(5)(G), and (a)(5)(H); made minor stylistic changes in (a)(6) and (a)(7); added (a)(8), (a)(9), and (a)(10); made minor stylistic changes in (b)(2) and (b)(3); and added (b)(4), (g), and (h). Emergency Legislation For temporary (90 days) amendment of this section, see  2(b) of the Better Prices, Better Quality, Better Choices for Health Coverage Emergency Act of 2013 (D.C. Act 20-87, June 19, 2013, 60 DCR 9542, 20 DCSTAT 1446). For temporary (90 days) addition of D.C. Law 19-94,  10a, see  2(c) and 3 of the Better Prices, Better Quality, Better Choices for Health Coverage Congressional Review Emergency Amendment Act of 2013 (D.C. Act 20-170, September 26, 2013, 60 DCR 14742). For temporary (90 days) amendment of section, see  2(b) of the Better Prices, Better Quality, Better Choices for Health Coverage Emergency Amendment Act of 2014, (D.C. Act 20-335, May 22, 2014, 61 DCR 5375). Temporary Legislation For temporary (225 days) addition of D.C. Law 19-94,  10a, concerning distribution of individual and small group health benefit plans, see  2(c) of the Better Prices, Better Quality, Better Choices for Health Coverage Temporary Amendment Act of 2013 (D.C. Law 20-22, October 3, 2013, 60 DCR 10880). For temporary (225 days) addition of D.C. Law 19-94,  10b, concerning sale, solicitation, and negotiation by insurance producers, see 2(c) of the Better Prices, Better Quality, Better Choices for Health Coverage Temporary Amendment Act of 2013 (D.C. Law 20-22, October 3, 2013, 60 DCR 10880). For temporary (225 days) amendment of this section, see  2(b) of the Better Prices, Better Quality, Better Choices for Health Coverage Temporary Amendment Act of 2013 (D.C. Law 20-22, October 3, 2013, 60 DCR 10880).
 313171.09a. Distribution of individual and small group health benefit plans. (a) A carrier that offers individual or small group health benefit plans shall offer such plans solely through the American Health Benefit Exchange, as established pursuant to  313171.04(a), subject to the following transition provisions: (1) Individual health benefit plans with plan years beginning on or after January 1, 2014, shall be offered solely through the American Health Benefit Exchange; (2) On or after January 1, 2014, small group health benefit plans offered to any small business that was not insured as of December 31, 2013, shall be offered and issued solely through the American Health Benefit Exchange; (3) Small group health benefit plans offered to or renewed by any small business that was insured as of December 31, 2013, may be issued or renewed during calendar year 2014 through existing distribution channels with the same carrier or a new carrier, except that such plans shall meet the qualifications for certification of a qualified health plan as provided in  31-3171.09; and (4) Unless the Council acts by October 1, 2014 to change the date that all small group health plans shall be offered, issued, or renewed through the American Health Benefit Exchange, on or after January 1, 2015, all small group health benefit plans shall be offered and issued or renewed solely through the American Health Benefit Exchange. (b) The requirements of this section shall not apply to grandfathered health plans as defined in section 1251 of the Federal Act.  (Mar. 2, 2012, D.C. Law 19-94,  10a; as added July 16, 2014, D.C. Law 20-123,  2(c), 61 DCR 5379.)  Emergency Legislation For temporary (90 days) addition of this section, see  2(c) of the Better Prices, Better Quality, Better Choices for Health Coverage Emergency Amendment Act of 2013 (D.C. Act 20-87, June 19, 2013, 60 DCR 9542, 20 DCSTAT 1446). For temporary (90 days) addition of this section, see  2(c) and 3 of the Better Prices, Better Quality, Better Choices for Health Coverage Congressional Review Emergency Amendment Act of 2013 (D.C. Act 20-170, September 26, 2013, 60 DCR 14742). For temporary (90 days) addition of this section, see  2(c) of the Better Prices, Better Quality, Better Choices for Health Coverage Emergency Amendment Act of 2014 (D.C. Act 20-335, May 22, 2014, 61 DCR 5375). Temporary Legislation For temporary (225 days) addition of this section, see  2(c) of the Better Prices, Better Quality, Better Choices for Health Coverage Temporary Amendment Act of 2013 (D.C. Law 20-22, October 3, 2013, 60 DCR 10880).
 313171.09b. Sale, solicitation, and negotiation by insurance producers. (a) An insurance producer that is licensed in the District and authorized by the Commissioner to sell, solicit, or negotiate health insurance pursuant to Chapter 11A of Title 31 [ 31-1131.02 et seq.], may sell any qualified health plan offered in the American Health Benefit Exchange, after satisfactorily completing training developed and provided by the Authority. (b) An insurance producer shall be compensated directly by a health carrier for the sale of a qualified health plan offered in the American Health Benefit Exchange.  (Mar. 2, 2012, D.C. Law 19-94,  10b; as added July 16, 2014, D.C. Law 20-123,  2(c), 61 DCR 5379.)  Emergency Legislation For temporary (90 days) addition of section, see  2(c) of the Better Prices, Better Quality, Better Choices for Health Coverage Emergency Amendment Act of 2013 (D.C. Act 20-87, June 19, 2013, 60 DCR 9542, 20 DCSTAT 1446). For temporary (90 days) addition of section, see  2(a) and 3 of the Better Prices, Better Quality, Better Choices for Health Coverage Congressional Review Emergency Amendment Act of 2013 (D.C. Act 20-170, September 26, 2013, 60 DCR 14742). For temporary (90 days) addition of section, see  2(c) of the Better Prices, Better Quality, Better Choices for Health Coverage Emergency Amendment Act of 2014, (D.C. Act 20-335, May 22, 2014, 61 DCR 5375). Temporary Legislation For temporary (225 days) addition of section, see  2(c) of the Better Prices, Better Quality, Better Choices for Health Coverage Temporary Amendment Act of 2013 (D.C. Law 20-22, October 3, 2013, 60 DCR 10880).
 313171.10. Conflicts of interest. (a)(1) A member of the executive board or of the staff of the Authority shall not be employed by, a consultant to, a member of the board of directors of, affiliated with, or otherwise a representative of, a health carrier or other insurer, an agent or broker, a health professional, or a health care facility or health clinic while serving on the board or on the staff of the Authority. (2) A member of the executive board or of the staff of the Authority shall not be a member, a board member, or an employee of a trade association of health carriers, health facilities, health clinics, or health professionals while serving on the board or on the staff of the Authority. (3) A member of the executive board or of the staff of the Authority shall not be a health professional unless he or she receives no compensation for rendering services as a health professional and does not have an ownership interest in a professional health care practice. (b) No member of the executive board or of the staff of the Authority shall, for one year after the end of the members service on the board or employment by the Authority, accept employment with any health carrier that offers a qualified health benefit plan through the exchanges. (c) No member of the executive board shall make, participate in making, or in any way attempt to use his or her official position to influence the making of any decision that he or she knows or has reason to know will have a reasonably foreseeable material financial effect, distinguishable from its effect on the public generally, on him or her or a member of his or her immediate family, or on either of the following: (1) Any source of income, other than gifts and other than loans by a commercial lending institution in the regular course of business on terms available to the public without regard to official status, aggregating $250 or more in value provided to, received by, or promised to the member within 12 months prior to the time when the decision is made. (2) Any business entity in which the member is a director, officer, partner, trustee, or employee, or holds any position of management.  (Mar. 2, 2012, D.C. Law 19-94,  11, 59 DCR 213.) 
 313171.11. Open meetings. The executive and advisory boards shall be subject to subchapter IV of Chapter 5 of Title 2 [ 2-571 et seq.]; except, that the executive board may hold closed sessions when considering matters related to litigation, personnel, contracting, or rates.  (Mar. 2, 2012, D.C. Law 19-94,  12, 59 DCR 213.) 
 313171.12. Limitation of liability. There shall not be any liability, in a private capacity, on the part of the executive or advisory board members, or any officer, or employee of the executive or advisory board, for or on account of any act performed or obligation entered into in an official capacity when done in good faith, without intent to defraud, and in connection with the administration, management, or conduct of this chapter or affairs related to this chapter.  (Mar. 2, 2012, D.C. Law 19-94,  13, 59 DCR 213.) 
 313171.13. Relation to other laws. (a) Nothing in this chapter, and no action taken by the Authority pursuant to this chapter, shall be construed to preempt or supersede the authority of the Commissioner to regulate the business of insurance within the District. Except as expressly provided to the contrary in this chapter, all health carriers offering qualified health plans and qualified dental plans in the District shall comply fully with all applicable health insurance laws of the District and regulations adopted and orders issued by the Commissioner. (b) Nothing in this chapter, and no action taken by the Authority pursuant to this chapter, shall be construed to preempt or supersede the authority of the Department of Health Care Finance, as the single state agency, to establish policy and enforce the rules and regulations governing Titles XIX and XXI of the Social Security Act and other health-care programs under its jurisdiction.  (Mar. 2, 2012, D.C. Law 19-94,  14, 59 DCR 213.) 
 313171.14. Powers of the Mayor. Notwithstanding any other provision of this chapter, all powers and authority vested by this chapter in the Authority shall remain with the Mayor until: (1) A majority of members of the executive board have been confirmed by the Council; and (2) The executive board has hired an executive director.  (Mar. 2, 2012, D.C. Law 19-94,  15, 59 DCR 213.) 
 313171.15. Dissolution of the Authority. Upon dissolution, liquidation, or other termination of the Authority: (1) All rights and properties of the Authority shall pass to and be vested in the District, subject to the rights of lien holders and other creditors; (2) Any net earnings of the Authority, beyond that necessary for retirement of any indebtedness or to implement a public purpose or program of the District authorized under this chapter, shall not inure to the benefit of any person other than the District; (3) The expenditure of any net earnings shall be restricted to costs related to the direct delivery of health care to residents of the District.  (Mar. 2, 2012, D.C. Law 19-94,  16, 59 DCR 213.) 
 313171.16. Implementation and reports. (a) The executive board shall: (1) Study, in consultation with the advisory boards established under this chapter and with other stakeholders: (A) The feasibility and desirability of the Authority engaging in: (i) Selective contracting, either through competitive bidding or a negotiation process similar to that used by large employers, to reduce health care costs and improve quality-of-care by certifying only those health benefit plans that meet certain requirements, such as: (I) Promoting patient-centered medical homes; (II) Adopting electronic health records; (III) Meeting minimum outcome standards; (IV) Implementing payment reforms to reduce medical errors and preventable hospitalizations; (V) Reducing disparities; (VI) Ensuring adequate reimbursements; (VII) Enrolling high-risk members and underserved populations; (VIII) Managing chronic conditions and promoting healthy consumer lifestyles; (IX) Value-based insurance design; (X) Adhering to transparency guidelines; and (XI) Uniform price and quality reporting; (ii) Multistate contracting; and (iii) Entering into a regional exchange; (B) The rules under which health benefit plans should be offered inside and outside the exchanges in order to mitigate adverse selection and encourage enrollment in the exchanges, including: (i) Whether any benefits should be required of qualified health plans beyond those mandated by the Federal Act, and whether any such additional benefits should be required of health benefit plans offered outside the exchanges; (ii) Whether health carriers offering health benefit plans outside the exchanges should be required to offer either all the same health benefit plans inside the exchanges or, alternatively, at least one health benefit plan inside the exchanges; (iii) Whether managed care organizations with Health Choice contracts should be required to offer products inside the exchanges; (iv) Whether health carriers offering health benefit plans inside the exchanges should be required to also participate in the District medical assistance program; and (v) Which provisions applicable to qualified health plans should be made applicable to qualified dental plans; (C) The design and operation of the Authoritys Navigator program and any other appropriate consumer-assistance mechanisms, including: (i) How the Navigator program could utilize, interact with, or complement private-sector resources, including insurance producers; (ii) The infrastructure of the existing private sector health insurance distribution system in the District to determine whether private sector resources may be available and suitable for use by the Authority; (iii) The effect the exchanges may have on private sector employment in the health insurance distribution system in the District; (iv) What functions, in addition to those required by the Federal Act, should be performed by Navigators; (v) What training and expertise should be required of Navigators, and whether different markets and populations require Navigators with different qualifications; (vi) How Navigators should be retained and compensated, and how disparities between Navigator compensation and the compensation of insurance producers outside the exchanges can be minimized or avoided; (vii) How to ensure that Navigators provide information in a manner culturally, linguistically, and otherwise appropriate to the needs of the diverse populations served by the Authority, and that Navigators have the capacity to meet these needs; and (viii) What other means of consumer assistance may be appropriate and feasible, and how they should be designed and implemented; (D) The design and function of the SHOP Exchange beyond the requirements of the Federal Act, to promote quality, affordability, and portability, including: (i) Whether it should be a defined contribution/employee choice model or whether employers should choose the qualified health plan to offer their employees; (ii) Whether the current individual and small group markets should be merged; and (iii) Whether the SHOP Exchange should be made available to employers with 50 to 100 employees prior to 2016, as authorized by the Federal Act; (E) How the Authority will ensure financial integrity in compliance with the Federal Act, including: (i) A recommended plan for the budget of the Authority; (ii) The user fees, licensing fees, or other assessments that should be imposed by the Authority to fund its operations, including what type of user fee cap or other methodology would be appropriate to ensure that the income of the Authority comports with the expenditures of the Authority; and (iii) A recommended plan for how to prevent fraud, waste, and abuse; and (F) How the Authority should conduct its public relations and advertising campaign, including what type of solicitation, if any, of individual consumers or employers, would be desirable and appropriate; and (2) Report its findings under paragraph (1) of this subsection to the Mayor, Council, and public within 180 days of March 2, 2012. (b)(1) The executive board shall prepare a plan that identifies how the Authority will be financially self-sustaining by January 1, 2015. (2) The plan, which shall be certified by an independent actuary as actuarially sound, shall be submitted to the Mayor and Council not later than December 15, 2013.  (Mar. 2, 2012, D.C. Law 19-94,  17, 59 DCR 213.) 
 313171.17. Rules. (a) The Authority, pursuant to subchapter I of Chapter 5 of Title 2 [ 2-501 et seq.], shall issue rules to implement the provisions of this chapter and as authorized by  47-5109. (b) The Authority shall submit all proposed rules adopted by the Authority to the Council for a 30-day period of review, excluding Saturdays, Sundays, legal holidays, and days of Council recess. If the Council does not approve or disapprove the proposed rules, in whole or in part, by resolution, within this 30-day review period, the proposed rules shall be deemed approved. (c) Regulations promulgated under this section shall not conflict with or prevent the application of regulations promulgated by the Secretary under the Federal Act.  (Mar. 2, 2012, D.C. Law 19-94,  18, 59 DCR 213; Oct. 30, 2018, D.C. Law 22-168,  5003(b), 65 DCR 9388.)  Emergency Legislation  For temporary (90 days) amendment of this section, see  5003(b) of Fiscal Year 2019 Budget Support Congressional Review Emergency Act of 2018 (D.C. Act 22-458, Oct. 3, 2018, 65 DCR 11212).   For temporary (90 days) amendment of this section, see  5003(b) of Fiscal Year 2019 Budget Support Emergency Act of 2018 (D.C. Act 22-434, July 30, 2018, 65 DCR 8200). 
 313171.18. Applicability. [Repealed] Repealed.  (Mar. 2, 2012, D.C. Law 19-94,  19, 59 DCR 213; Sept. 20, 2012, D.C. Law 19-168,  7015, 59 DCR 8025; Dec. 13, 2017, D.C. Law 22-33,  7005, 64 DCR 7652.)  Effect of Amendments The 2012 amendment by D.C. Law 19-168 rewrote the section. Emergency Legislation  For temporary (90 days) repeal of this section, see  7005 of Fiscal Year 2018 Budget Support Congressional Review Emergency Act of 2017 (D.C. Act 22-167, Oct. 24, 2017, 64 DCR 10802).   For temporary (90 days) repeal of this section, see  7005 of Fiscal Year 2018 Budget Support Emergency Act of 2017 (D.C. Act 22-104, July 20, 2017, 64 DCR 7032).  For temporary (90 day) amendment of section, see  7015 of Fiscal Year 2013 Budget Support Emergency Act of 2012 (D.C. Act 19-383, June 19, 2012, 59 DCR 7764). For temporary (90 day) amendment of section, see  7015 of Fiscal Year 2013 Budget Support Congressional Review Emergency Act of 2012 (D.C. Act 19-413, July 25, 2012, 59 DCR 9290). Editor's Notes Section 7016 of D.C. Law 19-168 provided that  7015 of the act shall apply as of June 19, 2012.
 313175.01. Definitions. For the purposes of this chapter, the term: (1) "Benefits" means the health care services covered by a health insurer under a health benefits plan. (2) "Department" means the Department of Insurance, Securities, and Banking. (3) "Health benefits plan" shall have the same meaning as provided in  31-3131(4). (4) "Health insurer" shall have the same meaning as provided in  31-3131(5). (5) "In-network" means providers or health care facilities that have entered into a contract or agreement with a health insurer pursuant to which such entities are obligated to provide benefits to individuals enrolled with the health insurer's health benefits plan. (6) "Market conduct examination" means an examination conducted by the Department to evaluate the practices and operations of a health insurer. (7) "Medicaid" means the medical assistance programs authorized by Title XIX of the Social Security Act, approved July 30, 1965 (79 Stat. 343; 42 U.S.C.  1396 et seq.), and by  1-307.02, and administered by the Department of Health Care Finance. (8) "Medication-assisted treatment" means the use of opioid addiction treatment medication to treat substance use disorders. (9) "Mental health condition" means any condition or disorder involving mental illness that falls under any of the diagnostic categories listed in the mental disorders section of the current edition of the International Classification of Diseases or that is listed in the most recent edition of the Diagnostic and Statistical Manual of Mental Disorders of the American Psychiatric Association. (10) "MHPAEA" means and includes the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, approved October 3, 2008 (Pub. L. No. 110-343; 122 Stat. 3881), and any federal guidance or regulations implementing MHPAEA, including 45 C.F.R  146.136, 147.136, 147.160, and 156.115(a)(3). (11) "Non-quantitative treatment limitation" means limitations imposed by a health insurer on the scope or duration of mental health condition and substance use disorder benefits for treatment, including: (A) Medical management standards limiting or excluding benefits based on medical necessity, medical appropriateness, or whether the treatment is experimental or investigative; (B) Formulary design for prescription drugs; (C) For health benefit plans with multiple network tiers, such as preferred providers and participating providers, network tier design; (D) Standards for provider admission to participate in a network, including reimbursement rates; (E) Health benefits plan methods for determining usual, customary, and reasonable charges; (F) Refusal to pay for higher-cost therapies until it can be shown that a lower-cost therapy is not effective, including fail-first policies or step therapy protocols; (G) Exclusions based on the failure to complete a course of treatment; (H) Restrictions based on geographic location, facility type, provider specialty, and other criteria that limit the scope or duration of benefits for services provided under the health benefits plan or coverage; (I) In and out-of-network geographic limitations; (J) Standards for providing access to out-of-network providers; (K) Limitations on inpatient services for situations where the participant is a threat to self or others; (L) Exclusions for court-ordered and involuntary holds; (M) Experimental treatment limitations; (N) Service coding; (O) Exclusions for services provided by clinical social workers; and (P) Network adequacy. (12) "Out-of-network" means providers or health care facilities who have not entered into a contract or agreement with a health insurer pursuant to which such entities are obligated to provide benefits to individuals enrolled with the health insurer's health benefits plan. (13) "Prescriber" shall have the same meaning as provided in  48-841.02(3). (14) "Prior authorization" means the process of obtaining prior approval from a health insurer for the provision of prescribed procedures, services, or medications. (15) "Provider" shall have the same meaning as provided in  31-3131(7). (16) "Step therapy" shall have the same meaning as provided in  48-855.01(12). (17) "Substance use disorder" means a problematic pattern of substance use leading to clinically significant impairment or distress, as manifested by symptoms identified in the most recent edition of the Diagnostic and Statistical Manual of Mental Disorders of the American Psychiatric Association.  (Mar. 13, 2019, D.C. Law 22-242,  2, 66 DCR 930.) 
 313175.02. Compliance and enforcement. (a) All health insurers offering health benefits plans, including Medicaid, in the District that provide mental health condition and substance use disorder benefits, shall comply with the requirements of MHPAEA. (b) The Department shall enforce the requirements of this chapter by: (1) Ensuring compliance by health insurers; (2) Detecting, evaluating, and responding to complaints regarding any potential or actual violations of MHPAEA; (3) Developing, maintaining, and regularly reviewing a publicly-available consumer complaint log recording any potential or actual violations of MHPAEA; and (4) Performing market conduct examinations of health insurers health benefits plans, including a review of any non-quantitative treatment limitations.  (Mar. 13, 2019, D.C. Law 22-242,  3, 66 DCR 930.) 
 313175.03. Reporting requirements. (a) Beginning October 1, 2019, and on an annual basis thereafter, health insurers shall submit a report to the Department containing the following information: (1)(A) The frequency with which the health insurers health benefits plan required: (i) Prior authorization for all prescribed procedures, services, or medications for mental health condition and substance use disorder benefits during the prior calendar year; and (ii) Prior authorization for all prescribed procedures, services, or medications for medical and surgical benefits during the prior calendar year. (B) Health insurers shall submit the information required pursuant to paragraph (1)(A) of this subsection separately for inpatient in-network benefits, inpatient out of-network benefits, outpatient in-network benefits, inpatient out-of-network benefits, outpatient in-network benefits, outpatient out-of-network benefits, emergency care benefits, and prescription drug benefits. Frequency shall be expressed as a percentage, with the total prescribed procedures, services, or medications within each classification of benefits as the denominator and the overall number of times prior authorization was required for any prescribed procedures, services, or medications within each corresponding classification of benefits as the numerator. (2) A description of the process used to develop and select medical necessity criteria for mental health condition and substance use disorder benefits; (3) An identification of all non-quantitative treatment limitations that are applied to benefits provided for mental health conditions and substance use disorders; (4) An analysis of the medical necessity criteria described in paragraph (2) of this subsection, and each non-quantitative treatment limitation identified pursuant to paragraph (3) of this subsection, that shall include: (A) An identification of the factors used to determine whether a non-quantitative treatment limitation shall apply to the provision of a benefit, including any factors that were considered but rejected; (B) An identification of the specific evidentiary standards that were relied upon and used to design any non-quantitative treatment limitations; (C) An identification and description of the methodology used to determine that the processes and strategies used to design each non-quantitative treatment limitation, as written, for mental health condition and substance use disorder benefits are comparable to and no more stringent than the processes and strategies used to design each non-quantitative treatment limitation, as written, for medical and surgical benefits; (D) An identification and description of the methodology used to determine that the processes and strategies used to apply each non-quantitative treatment limitation, in operation, for mental health condition and substance use disorder benefits are comparable to and no more stringent than the processes or strategies used to apply each non-quantitative treatment limitation, in operation, for medical and surgical benefits; and (E) A disclosure of the specific findings and conclusions reached by the health insurer indicating that it is in compliance with the requirements of this chapter. (5) The rates of, and reasons for, denial of claims for inpatient in-network, inpatient out-of-network, outpatient in-network, outpatient out-of-network, prescription drugs, and emergency care mental health condition and substance use disorder benefits during the prior calendar year, compared to the rates of and reasons for denial of claims in those same classifications of benefits for medical and surgical services during the prior calendar year; (6) A certification that the health insurer has completed a comprehensive review of the administrative practices of its health benefits plan for the prior calendar year to verify compliance with the requirements of this chapter; and (7) Any other information requested by the Commissioner of the Department. (b) By October 1, 2019, and annually thereafter, the Department shall issue a report to the Council in non-technical, readily understandable language, that shall: (1) Specify the methodologies used by the Department to verify compliance with the requirements of this chapter; (2) Identify the market conduct examinations conducted by the Department during the preceding year, including: (A) The number of market conduct examinations initiated and completed; (B) The benefit classifications assessed by each market conduct examination; (C) The subject matter of each market conduct examination; and (D) A summary of the basis for the final decision rendered in each market conduct examination; (3) A description of any educational or corrective actions the Department took to ensure health insurer compliance with the requirements of this chapter; and (4) A description of the Department's efforts to educate the public regarding mental health condition and substance use disorder protections under MHPAEA and this chapter.  (Mar. 13, 2019, D.C. Law 22-242,  4, 66 DCR 930.) 
 313175.04. Non-quantitative treatment limitations. A health insurer shall not impose a non-quantitative treatment limitation with respect to a mental health condition or substance use disorder for any classification of benefits unless, under the terms of the health benefits plan, as written and in operation, any processes, strategies, evidentiary standards or other factors used in applying the non-quantitative treatment limitation to mental health or substance use disorder benefits in the classification are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in applying the non-quantitative treatment limitation with respect to medical or surgical benefits in the same classification.  (Mar. 13, 2019, D.C. Law 22-242,  5, 66 DCR 930.) 
 313175.05. Medicaid coverage for medication-assisted treatment. Medicaid shall provide coverage for medication-assisted treatment prescribed for the treatment of substance use disorders; provided, that medication assisted treatment covered in accordance with this section shall not be subject to: (1) Utilization control, other than those processes specified by the American Society of Addiction Medicine; (2) Prior authorization; (3) Step therapy; or (4) Lifetime restriction limits.  (Mar. 13, 2019, D.C. Law 22-242,  6, 66 DCR 930.) 
 313175.06. Rules. The Mayor, pursuant to subchapter I of Chapter 5 of Title 2, may issue rules to implement the provisions of this chapter.  (Mar. 13, 2019, D.C. Law 22-242,  7, 66 DCR 930.) 
 313201. Standardized uniform health insurance claims forms. (a) The HCFA 1500 and UB 92 claims forms, or their successor forms as they may be amended from time to time, shall serve as the official health insurance claims forms of the District of Columbia for hospitals and other medical providers and governmental agencies, and such forms shall be used and exclusively accepted by all insurers, including health maintenance organizations and other forms of managed care, transacting health insurance, providing medical insurance through a personal automobile policy, workers compensation, or otherwise providing coverage for medical services, and by all hospitals, medical providers, and government agencies in the District of Columbia that require insurance claim forms for their records. (b) The claims forms specified in subsection (a) of this section may be modified as necessary to accommodate the transmission and administration of claims by electronic means.  (Feb. 27, 1996, D.C. Law 11-89,  2, 42 DCR 7153.)  Prior Codifications 1981 Ed.,  35-2331.
 313231. Definitions. For the purposes of this subchapter, the term: (1) Health benefit plan means any accident and health insurance policy or certificate, hospital and medical services corporation contract, health maintenance organization subscriber contract, plan provided by a multiple employer welfare arrangement, or plan provided by another benefit arrangement. The term health benefit plan does not mean accident only, credit, or disability insurance; coverage of Medicare services or federal employee health plans, pursuant to contracts with the United States government; Medicare supplemental or long-term care insurance; dental only or vision only insurance; specified disease insurance; hospital confinement indemnity coverage; limited benefit health coverage; coverage issued as a supplement to liability insurance, insurance arising out of a workers compensation or similar law; automobile medical payment insurance; medical expense and loss of income benefits; or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance. (2) Health insurer means any person that provides one or more health benefit plans or insurance in the District of Columbia, including an insurer, a hospital and medical services corporation, a fraternal benefit society, a health maintenance organization, a multiple employer welfare arrangement, or any other person providing a plan of health insurance subject to the authority of the Commissioner. (3) Commissioner means the Commissioner of the Department of Insurance and Securities Regulation.  (April 13, 2002, D.C. Law 14-97,  2, 49 DCR 994.) 
 313232. Uniform consultation referral forms. (a) This subchapter shall apply to all health insurers that issue or deliver individual or group health benefit plans in the District of Columbia. (b) All health insurers that require the insured to have a written referral to receive consultation services shall use the uniform consultation referral form adopted by the Commissioner as the sole instrument for referrals for consultation services. (c) The uniform consultation referral form shall be properly completed by the health care provider that refers the insured for consultation services.  (April 13, 2002, D.C. Law 14-97,  3, 49 DCR 994.) 
 313233. Regulations. (a) The Commissioner shall promulgate regulations to implement the provisions of this subchapter. The regulations shall include a uniform consultation referral form for use by health insurers that require enrollees or subscribers to have a written referral to receive consultation services. (b) The Commissioner may waive the requirements of regulations adopted under subsection (a) of this section for the use of uniform consultation referral forms for an entity that uses the forms solely for internal purposes.  (April 13, 2002, D.C. Law 14-97,  4, 49 DCR 994.)  Section References This section is referenced in  31-3234.
 313234. Applicability. This subchapter shall apply to health insurers beginning with referrals issued 120 days after the promulgation of final regulations under  31-3233.  (April 13, 2002, D.C. Law 14-97,  5, 49 DCR 994.) 
 313251. Definitions. For the purposes of this subchapter, the term: (1) Commissioner means Commissioner of the Department of Insurance and Securities Regulation. (2) Credentialing intermediary means a person to whom a health insurer has delegated credentialing or recredentialing authority and responsibility. (3) Health benefit plan means any accident and health insurance policy or certificate, hospital and medical services corporation contract, health maintenance organization subscriber contract, plan provided by a multiple employer welfare arrangement, or plan provided by another benefit arrangement. The term health benefit plan does not mean accident only, credit, or disability insurance; coverage of Medicare services or federal employee health plans, pursuant to contracts with the United States government; Medicare supplemental or long-term care insurance; dental only or vision only insurance; specified disease insurance; hospital confinement indemnity coverage; limited benefit health coverage; coverage issued as a supplement to liability insurance, insurance arising out of a workers compensation or similar law; automobile medical payment insurance; medical expense and loss of income benefits; or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance. (4) Health care provider means: (A) An individual who is licensed, certified, or otherwise authorized to provide health care services by the District of Columbia for a practice set forth under  3-1201.02; or (B) An agency, organization, facility, or distinct part of any of them, licensed under subchapter I of Chapter 5 of Title 44. (5) Health insurer means any person that provides one or more health benefit plans or insurance in the District of Columbia, including an insurer, a hospital and medical services corporation, a fraternal benefit society, a health maintenance organization, a multiple employer welfare arrangement, or any other person providing a plan of health insurance subject to the authority of the Commissioner. (6) Provider panel means providers that contract with a health insurer to provide health care services to the enrollees under a health benefit plan of the health insurer. (7) Uniform credentialing form means the form designed by the Commissioner, by regulation, for use by a health insurer or its credentialing intermediary for credentialing and re-credentialing of a health care provider for participation on a provider panel.  (Apr. 13, 2002, D.C. Law 14-96,  101, 49 DCR 991.)  Section References This section is referenced in  31-3255.
 313252. Application for becoming credentialed. (a) A health insurer or its credentialing intermediary shall accept the uniform credentialing form as the sole application for a health care provider to become credentialed or recredentialed for a provider panel of the health insurer. (b) A health insurer or its credentialing intermediary shall make the uniform credentialing form available to any health care provider that is to be credentialed or re-credentialed by the health insurer or credentialing intermediary.  (Apr. 13, 2002, D.C. Law 14-96,  102, 49 DCR 991.) 
 313253. Penalties. The Commissioner may impose a penalty not to exceed $500 against any health insurer for each violation of this subchapter by the health insurer or its credentialing intermediary.  (Apr. 13, 2002, D.C. Law 14-96,  103, 49 DCR 991.) 
 313254. Regulations. The Commissioner shall promulgate rules and regulations to implement the provisions of this subchapter.  (Apr. 13, 2002, D.C. Law 14-96,  104, 49 DCR 991.)  Section References This section is referenced in  31-3255.
 313255. Applicability. This subchapter shall apply, 120 days after the promulgation of the final regulations pursuant to  31-3254, to health insurers, as defined in  31-3251(5), and any agency, organization, facility, or distinct part thereof, licensed pursuant to subchapter I of Chapter 5 of Title 44.  (Apr. 13, 2002, D.C. Law 14-96,  105, 49 DCR 991.) 
 313271. Definitions. For the purposes of this chapter, the term: (1)(A) Adverse decision means a utilization review determination by a private review agent, a carrier, or a health care provider acting on behalf of a carrier that: (i) A proposed or delivered health care service covered under the members contract is or was not medically necessary, appropriate, or efficient; (ii) May result in noncoverage of the health care service; and (iii) Does not include a decision concerning a subscribers status as a member. (B) A determination denying a request for habilitative services or denying payment for habilitative services because a condition or disease is not a congenital or genetic birth defect is an adverse decision. (2) Congenital or genetic birth defect means a defect existing at or from birth, including a hereditary defect. The term congenital or genetic birth defect includes: (A) Autism or an autism spectrum disorder; and (B) Cerebral palsy. (3) Habilitative services means services, including occupational therapy, physical therapy, and speech therapy, for the treatment of a child with a congenital or genetic birth defect to enhance the childs ability to function. (4)(A) Health benefit plan means any accident and health insurance policy or certificate, hospital and medical services corporation contract, health maintenance organization subscriber contract, plan provided by a multiple employer welfare arrangement, or plan provided by another benefit arrangement. (B) The term health benefit plan does not mean accident only, credit, or disability insurance; coverage of Medicare services or federal employee health plans, pursuant to contracts with the United States government; Medicare supplemental or long-term care insurance; dental only or vision only insurance; specified disease insurance; hospital confinement indemnity coverage; limited benefit health coverage; coverage issued as a supplement to liability insurance, insurance arising out of a workers compensation or similar law; automobile medical payment insurance; medical expense and loss of income benefits; or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance. (5) Health insurer means any person that provides one or more health benefit plans or insurance in the District of Columbia, including an insurer, a hospital and medical services corporation, a fraternal benefit society, a health maintenance organization, a multiple employer welfare arrangement, or any other person providing a plan of health insurance subject to the authority of the Commissioner. (6) Managed care system means a method that a health insurer uses to review and preauthorize a treatment plan that a health care practitioner develops for a covered person using a variety of cost containment methods to control utilization, quality, and claims.  (Mar. 2, 2007, D.C. Law 16-198,  2, 53 DCR 8829.)  Section References This section is referenced in  31-3013,  31-3163, and  31-3311.10.
 313272. Coverage, notice, applicability, and regulations. (a) A health insurer shall: (1) Provide coverage of habilitative services for children under the age of 21 years and may do so through a managed care system; (2) Not be required to provide reimbursement for habilitative services actually delivered through early intervention or school services; and (3) Provide notice to its insureds and enrollees about the coverage required under this chapter. (b) The coverage shall not be more restrictive than coverage provided for any other illness, condition, or disorder for purposes of determining deductibles, benefit year or lifetime durational limits, benefit year or lifetime dollar limits, lifetime episodes or treatment limits, copayment and coinsuance factors, and benefit year maximum for deductibles and copayments and coinsurance factors. (c) The Commissioner may issue rules and regulations necessary to implement the provisions of this chapter. (d) This chapter shall apply to all individual and group health benefit plans issued or renewed on the first day of the month beginning on or after 90 days following March 2, 2007.  (Mar. 2, 2007, D.C. Law 16-198,  3, 53 DCR 8829.) 
 313301.01. Definitions. For the purposes of this chapter, the term: (1) Affiliation period means a period which, under the terms of the health insurance coverage offered by a health maintenance organization, must expire before the health insurance coverage becomes effective. The health maintenance organization is not required to provide health care services or benefits during such period and no premium shall be charged to the participant or beneficiary for any coverage during the period. Such period shall begin on the enrollment date. An affiliation period under a plan shall run concurrently with any waiting period under the plan. (2) Beneficiary has the meaning given such term under section 3(8) of the Employee Retirement Income Security Act of 1974, approved September 2, 1974 (88 Stat. 834; 29 U.S.C.  1002(8)). (3) Bona fide association means, with respect to health insurance coverage offered in the District of Columbia, an association which: (A) Has been actively in existence for at least 5 years; (B) Has been formed and maintained in good faith for purposes other than obtaining insurance; (C) Does not condition membership in the association on any health status-related factor relating to an individual (including an employee of an employer or a dependent of an employee); (D) Makes health insurance coverage offered through the association available to all members regardless of any health status-related factor relating to such members (or individuals eligible for coverage through a member); (E) Does not make health insurance coverage offered through the association available other than in connection with a member of the association; (E-i) Is domiciled and has its principal offices within the District; (E-ii) Does not expand its membership based on geography; and (F) Meets such additional requirements as may be imposed by the Commissioner by rule. (4) Certification means a written certification of the period of creditable coverage applicable to an individual. (5) Church plan has the meaning given such term under section 3(33) of the Employee Retirement Income Security Act of 1974, approved September 2, 1974 (88 Stat. 838; 29 U.S.C.  1002(33)). (6) COBRA continuation provision means any of the following: (A) Section 3011(a) of the Internal Revenue Code of 1986, approved November 10, 1988 (102 Stat. 3616; 26 U.S.C.  4980B), other than subsection (f)(1) of such section insofar as it relates to pediatric vaccines; (B) Part 6 of subtitle B of title I of the Employee Retirement Income Security Act of 1974, approved April 7, 1986 (100 Stat. 227; 29 U.S.C.  1161 et seq.), other than section 609 of such Act; or (C) Title XXII of the Public Health Service Act, approved July 1, 1994 (100 Stat. 232; 42 U.S.C.   300bb-1 et seq.). (7) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking. (8)(A) Creditable coverage means, with respect to an individual, coverage of the individual under any of the following: (i) A group health plan; (ii) Health insurance coverage; (iii) Part A or B of title XVIII of the Social Security Act, approved July 30, 1965 (79 Stat. 291; 42 U.S.C.  1395c et seq. or 42 U.S.C.   1395j et seq., respectively); (iv) Title XIX of the Social Security Act, approved July 30, 1965 (79 Stat. 343; 42 U.S.C.  1396 et seq.), other than coverage consisting solely of benefits under section 1928; (v) Chapter 55 of Title 10, United States Code (10 U.S.C.  1071 et seq.); (vi) A medical care program of the Indian Health Service or of a tribal organization; (vii) A state health benefits risk pool; (viii) A health plan offered under Chapter 89 of Title 5, United States Code (5 U.S.C.  8901 et seq.); (ix) A public health plan (as defined in regulations); or (x) A health benefit plan under section 5(e) of the Peace Corps Act, approved September 22, 1961 (75 Stat. 614; 22 U.S.C.  2504(e)). (B) Creditable coverage does not include coverage consisting solely of coverage of excepted benefits. (9) Dependent means the spouse or child of an eligible employee, subject to the applicable terms of the policy, contract, or plan covering the eligible employee. (9A) Domestic partnership shall have the same meaning as provided in  32-701(4). (10) Eligible employee means an employee who works for a small group employer on a full-time basis, has a normal work week of 30 or more hours, has satisfied applicable waiting period requirements, and is not a part-time, temporary, or substitute employee. (11) Eligible individual means an individual: (A)(i) For whom, as of the date on which the individual seeks individual coverage under this chapter, the aggregate of the periods of creditable coverage is 18 or more months, and (ii) whose most recent prior creditable coverage was under a group health plan, governmental plan, church plan, or health insurance coverage offered in connection with any such plan; (B) Who is not eligible for coverage under (i) a group health plan, (ii) part A or part B of title XVIII of the Social Security Act, or (iii) a state plan under title XIX of the Social Security Act, approved July 30, 1965 (79 Stat. 343; 42 U.S.C.  1396 et seq.), or any successor program, and does not have other health insurance coverage; (C) With respect to whom the most recent coverage within the coverage period described in subparagraph (A) of this paragraph was not terminated based on a factor described in  31-3302.05(b) relating to nonpayment of premiums or fraud; (D) If the individual had been offered the option of continuation coverage under a COBRA continuation provision or under a similar state program, who elected such coverage; and (E) Who, if the individual elected such continuation coverage, has exhausted such continuation coverage under such provision or program. (12) Employer has the meaning given such term under section 3(5) of the Employee Retirement Income Security Act of 1974, approved September 12, 1974 (88 Stat. 834; 29 U.S.C.  1002(5)), as such section and its implementing regulations were in effect on December 15, 2017, except that such term shall include only employers of 2 or more employees. (13) Enrollment date means, with respect to an eligible individual covered under a group health plan or health insurance coverage, the date of enrollment of the eligible individual in the plan or coverage or, if earlier, the first day of the waiting period for such enrollment. (14) Established geographic service area means the District of Columbia. (15) Excepted benefits means benefits under one or more of the following: (A) Benefits not subject to the requirements of this chapter include: (i) Coverage only for accident, or disability income insurance, or any combination thereof; (ii) Coverage issued as a supplement to liability insurance; (iii) Liability insurance, including general liability insurance and automobile liability insurance; (iv) Workers compensation or similar insurance; (v) Medical expense and loss of income benefits; (vi) Credit-only insurance; (vii) Coverage for on-site medical clinics; and (viii) Other similar insurance coverage, as specified in regulations, under which benefits for medical care are secondary or incidental to other insurance benefits; (B) Benefits not subject to the requirements of this chapter if offered separately include: (i) Limited scope dental or vision benefits so long as the benefits are offered in a manner not inconsistent with applicable federal law; (ii) Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof; and (iii) Other similar, limited benefit plans as specified in regulations; (C) Benefits not subject to the requirements of this chapter if offered as independent, non-coordinated benefits, supplemental to minimum essential coverage include: (i) Coverage only for a specified disease or illness; and (ii) Hospital indemnity or other fixed indemnity insurance; and (D) Benefits not subject to the requirements of this chapter if offered as a separate insurance policy include: (i) Medicare supplemental health insurance (as defined under section 1882(g)(1) of the Social Security Act, approved June 9, 1980 (72 Stat. 1445; 42 U.S.C.  1395ss(g)(1)); (ii) Coverage supplemental to the coverage provided under Chapter 55 of Title 10, United States Code (10 U.S.C.  1071et seq.); and  et seq.  (iii) Similar supplemental coverage provided under a group health plan. (E) The term excepted benefits does not include any combination of benefits described in subparagraphs (A)(i), B(i), (C)(i) or (C)(ii) of this paragraph. (16) Federal governmental plan means a governmental plan established or maintained for its employees by the government of the United States or by an agency or instrumentality of such government. (17) Governmental plan has the meaning given such term under section 3(32) of the Employee Retirement Income Security Act of 1974, approved September 2, 1974 (88 Stat. 837; 29 U.S.C.  1002(32)) and any federal governmental plan. (18) Group health insurance coverage means health insurance coverage offered in connection with a group health plan. (19) Group health plan means an employee welfare benefit plan (as defined in section 3(1) of the Employee Retirement Income Security Act of 1974 (29 U.S.C.  1002(1)), as such section and its implementing regulations were in effect on December 15, 2017, to the extent that the plan provides medical care and includes items and services paid for as medical care to employees or their dependents (as defined under the terms of the plan) directly or through insurance, reimbursement, or otherwise. (19A) Health Benefit Exchange Authority Establishment Act means Chapter 31D of this title [ 31-3171.01 et seq.]. (20) Health benefit plan means any accident and health insurance policy or certificate, hospital and medical services corporation contract, health maintenance organization subscriber contract, plan provided by a multiple employer welfare arrangement, or plan provided by another benefit arrangement. The term health benefit plan does not mean accident only, credit, or disability insurance; coverage of Medicare services or federal employee health plans, pursuant to contracts with the United States government; Medicare supplement or long-term care insurance; dental only or vision only insurance; specified disease insurance; hospital confinement indemnity coverage; limited benefit health coverage; coverage issued as a supplement to liability insurance; insurance arising out of a workers compensation or similar law; automobile medical payment insurance; medical expense and loss of income benefits; or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance. (21) Health insurance coverage means benefits consisting of medical care (provided directly, through insurance or reimbursement, or otherwise and includes items and services paid for as medical care) under any hospital or medical service policy or certificate, hospital, or medical service plan contract, or health maintenance organization contract offered by a health insurer. (22) Health insurer means any person that provides one or more health benefit plans or insurance in the District of Columbia, including an insurer, a hospital and medical services corporation, a fraternal benefit society, a health maintenance organization, a multiple employer welfare arrangement, or any other person providing a plan of health insurance subject to the authority of the Commissioner. (23) Health maintenance organization means: (A) A federally qualified health maintenance organization; (B) An organization recognized under the laws of the District of Columbia as a health maintenance organization; or (C) A similar organization regulated under the laws of the District of Columbia for solvency in the same manner and to the same extent as such a health maintenance organization. (24) Health status-related factor means the following in relation to the individual or a dependent eligible for coverage under a group health plan or health insurance coverage offered by a health insurer: (A) Health status; (B) Medical condition (including both physical and mental illnesses); (C) Claims experience; (D) Receipt of health care; (E) Medical history; (F) Genetic information; (G) Evidence of insurability (including conditions arising out of acts of domestic violence); or (H) Disability. (25) High level policy form means a policy or plan under which the actuarial value of the benefit under the coverage is: (A) At least 15% greater than the actuarial value of the low level policy form coverage offered by the carrier in the District of Columbia; and (B) At least 100%, but not greater than 120%, of the weighted average. (26) Individual health insurance coverage means health insurance coverage offered to individuals in the individual market, which includes a health benefit plan provided to individuals through a trust arrangement, association, or other discretionary group that is not an employer plan, but does not include coverage defined as excepted benefits. The term individual health insurance coverage does not include short-term limited duration coverage. (27) Individual market means the market for health insurance coverage offered to individuals other than in connection with a group health plan. (28) Initial enrollment period means a period of at least 30 days. (29)(A)(i) Except as provided in sub-subparagraph (ii) of this subparagraph, large employer means, in connection with a group health plan with respect to a calendar year and a plan year, a single employer that employed an average of at least 51 employees on business days during the preceding calendar year and at least 2 employees on the first day of the plan year. (ii) Beginning in calendar year 2016 and for each succeeding year, large employer means, in connection with a group health plan with respect to a calendar year and a plan year, a single employer that employed an average of at least 101 employees on business days during the preceding calendar year and at least 2 employees on the first day of the plan year. (B) For the purposes of this paragraph: (i) All persons treated as a single employer under section 414(b), (c), (m), or (o) of the Internal Revenue Code of 1986, approved October 22, 1986 (100 Stat. 2085; 26 U.S.C.  414(b), (c), (m), or (o)), shall be treated as a single employer; (ii) An employer and any predecessor employer shall be treated as a single employer; (iii) All employees shall be counted, including part-time employees and employees who are not eligible for health benefit coverage through the employer; and (iv) If an employer was not in existence throughout the preceding calendar year, the determination of whether that employer is a large employer shall be based on the average number of employees that the employer is reasonably expected to employ in the current calendar year. (30) Large group market means the health insurance market under which individuals obtain health insurance coverage (directly or through any arrangement) on behalf of themselves (and their dependents) through a group health plan maintained by a large employer or through a health insurer. (31) Late enrollee means an eligible employee or dependent who requests enrollment in a group health benefit plan after the initial enrollment period provided under the terms of the group health benefit plan, or a participant or beneficiary who enrolls under the plan other than during (i) the first period in which the individual is eligible to enroll under the plan, or (ii) a special enrollment period as required pursuant to this statute. An eligible employee or dependent shall not be considered a late enrollee if all of the conditions set forth below in subparagraphs (A) through (D) of this paragraph are met, or one of the conditions set forth below in subparagraphs (E) or (F) of this paragraph is met: (A) The individual was covered under a public or private health benefit plan at the time the individual was eligible to enroll; (B) The individual certified at the time of initial enrollment that coverage under another health benefit plan was the reason for declining enrollment; (C) The individual has lost coverage under a public or private health benefit plan as a result of termination of employment or employment status eligibility, the termination of the other plans entire group coverage, death of a spouse, or divorce; (D) The individual requests enrollment within 30 days after termination of coverage provided under a public or private health benefit plan; (E) The individual is employed by a small employer that offers multiple health benefit plans and the individual elects a different plan offered by that small employer during an open enrollment period; or (F) A court has ordered that coverage be provided for a spouse or minor child under a covered employees health benefit plan, the minor is eligible for coverage and is a dependent, and the request for enrollment is made within 30 days after issuance of such court order. However, such individual may be considered a late enrollee for benefit riders or enhanced coverage levels not covered under the enrollees prior plan. (32) Low level policy form means a policy or plan under which the actuarial value of the benefit under the coverage is at least 85%, but not greater than 100%, of the weighted average. (33) Medical care means amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body. (34) Network plan means health insurance coverage of a health insurer under which the financing and delivery of medical care (including items and services paid for as medical care) are provided, in whole or in part, through a defined set of providers under contract with the health insurer. (35) Nonfederal governmental plan means a governmental plan that is not a federal governmental plan. (36) Participant has the meaning given such term under section 3(7) of the Employee Retirement Income Security Act of 1974, approved September 2, 1974 (88 Stat. 834; 29 U.S.C.  1002(7)). (37) Placed for adoption, placement, or being placed for adoption, in connection with any placement for adoption of a child with any person, means the assumption and retention by such person of a legal obligation for total or partial support of such child in anticipation of adoption of such child. The childs placement with such person terminates upon the termination of such legal obligation. (38) Plan sponsor has the meaning given such term under section 3(16)(B) of the Employee Retirement Income Security Act of 1974, approved September 2, 1974 (88 Stat. 835; 29 U.S.C.  1002(16)(B)). (39) Preexisting condition exclusion means, with respect to coverage, a limitation or exclusion of benefits relating to a condition based on the fact that the condition was present before the first day of coverage, whether or not any medical advice, diagnosis, care, or treatment was recommended or received before that day. Genetic information shall not be treated as a preexisting condition in the absence of a diagnosis of the condition related to such information. (40) Preexisting conditions provision means a provision in a health benefit plan that limits, denies, or excludes benefits for an enrollee for expenses or services related to a preexisting condition. (41) Premium means all moneys paid by a small employer and eligible employees as a condition of coverage from a health insurer, including fees and other contributions associated with the health benefit plan. (42)(A)(i) Except as provided in sub-subparagraph (ii) of this subparagraph, small employer means a single employer that employed an average of not more than 50 employees during the preceding calendar year. (ii) Beginning in calendar year 2016 and for each succeeding year, small employer means a single employer that employed an average of not more than 100 employees during the preceding calendar year. (B) For the purposes of this paragraph: (i) All persons treated as a single employer under section 414(b), (c), (m), or (o) of the Internal Revenue Code of 1986, approved October 22, 1986 (100 Stat. 2085; 26 U.S.C.  414(b), (c), (m), or (o)), shall be treated as a single employer; (ii) An employer and any predecessor employer shall be treated as a single employer; (iii) All employees shall be counted, including part-time employees and employees who are not eligible for health benefit coverage through the employer; and (iv) If an employer was not in existence throughout the preceding calendar year, the determination of whether that employer is a small employer shall be based on the average number of employees that the employer is reasonably expected to employ in the current calendar year. (43) State means each of the several states, and the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands. (44) Waiting period means, with respect to a group health plan or health insurance coverage provided by a health insurer and an individual who is a potential participant or beneficiary in the plan, the period that must pass with respect to the individual before the individual is eligible to be covered for benefits under the terms of the plan. (45)(A) Weighted average means the average actuarial value of the benefits provided by: (i) All the health insurance coverages issued (as elected by the health insurer) either by that health insurer or by all health insurers in the District of Columbia in the individual market during the previous calendar year (not including coverage issued under this section), weighted by enrollment for the different coverages; or (ii) All the health insurance coverages issued by all health insurers in the District of Columbia in the individual market, if the data are available, during the previous calendar year, weighted by enrollment for the different coverages. (B) The term weighted average does not include coverages issued pursuant to  31-3302.01(d)(1). (C) The health insurer shall elect biennially, as provided in  31-3302.01(d)(3), whether to calculate the weighted average using the methodology in subparagraph (A)(i) or (ii) of this paragraph.  (Apr. 13, 1999, D.C. Law 12-209,  101, 45 DCR 8433; June 11, 2004, D.C. Law 15-166,  4(s)(1), 51 DCR 2817; Sept. 12, 2008, D.C. Law 17-231,  27(a), 55 DCR 6758; May 2, 2015, D.C. Law 20-265,  103, 62 DCR 1529; Mar. 22, 2019, D.C. Law 22-266,  2(a), 66 DCR 1423.)  Prior Codifications 1981 Ed.,  35-1021. Section References This section is referenced in  7-851 and  31-3302.01. Effect of Amendments D.C. Law 15-166, in par. (7), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of the Department of Insurance and Securities Regulation. D.C. Law 17-231 added par. (9A). The 2015 amendment by D.C. Law 20-265 rewrote (15), (26), (29), and (42); and added (19A). Emergency Legislation  For temporary (90 days) amendment of this section, see  2(a) of Health Insurance Marketplace Improvement Emergency Amendment Act of 2018 (D.C. Act 22-526, Dec. 10, 2018, 65 DCR 13424).  For temporary addition of chapter, see  101-314 of the Health Insurance Portability and Accountability Federal Law Conformity Emergency Act of 1997 (D.C. Act 12-96, July 2, 1997, 44 DCR 4000),  101-314 of the Health Insurance Portability and Accountability Federal Law Conformity Congressional Recess Emergency Act of 1997 (D.C. Act 12-151, September 29, 1997, 44 DCR 5769), and  101-314 of the Health Insurance Portability and Accountability Federal Law Conformity Emergency Amendment Act of 1998 (D.C. Act 12-339, May 4, 1998, 45 DCR 2947). For temporary addition of chapter, see  101-314 of the Health Insurance Portability and Accountability Federal Law Conformity, Motor Vehicle Insurance, Regulatory Reform, and Consumer Law Congressional Review Emergency Amendment Act of 1998 (D.C. Act 12-429, August 6, 1998, 45 DCR 5890). For temporary (90 day) amendment of section, see  4(s)(1) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). For temporary (90 day) workers compensation and health insurance and portability and accountability approval requirement, see  1122 of Fiscal Year 2005 Budget Support Emergency Act of 2004 (D.C. Act 15-486, August 2, 2004, 51 DCR 8236). For temporary (90 day) workers compensation and health insurance and portability and accountability approval requirement, see  1122 of Fiscal Year 2005 Budget Support Congressional Review Emergency Act of 2004 (D.C. Act 15-594, October 26, 2004, 51 DCR 11725. Temporary Legislation  For temporary (225 days) amendment of this section, see  2(a) of Health Insurance Marketplace Improvement Temporary Amendment Act of 2018 (D.C. Law 22-251, Mar. 15, 2019, 66 DCR 975).  Sections 101 through 314 of D.C. Law 12-27 and D.C. Law 12-154 enacted  35-1021 through 35-1044, comprising Chapter 10A of Title 35 (1981 Ed.). Short Title Short title of subtitle L of title I of Law 15-205: Section 1121 of D.C. Law 15-205 provided that subtitle L of title I of the act may be cited as the Workers Compensation and Health Insurance Portability and Accountability Approval Requirement Act of 2004. Editor's Notes Section 1122 of D.C. Law 15-205 provided: No funds shall be expended relating to the Health Insurance Portability and Accountability Act, approved August 21, 1996 (104 Pub. L. No. 191; 110 Stat. 1936), and the District's Workers' Compensation administration without affirmative approval of the expenditure by the Council.
 313302.01. Guaranteed availability of individual health insurance coverage to certain individuals with prior group coverage. (a) This subchapter applies only to those health insurers that offer individual health insurance coverage in the District of Columbia. Nothing in this subchapter shall require health insurers participating only in the group health insurance market to offer individual health insurance coverage. (b) A health insurer may not offer any individual health benefit plans in the District of Columbia unless the health insurer offers, and actively markets, the policies required by this section. (c) Unless a health insurer makes an election under subsection (d)(2) of this section, the health insurer may not: (1) Decline to offer coverage to, or deny enrollment of, an eligible individual; or (2) Impose any preexisting condition provision on an eligible individual. (d)(1) A health insurer that makes an election under paragraph (2) of this subsection may choose to offer at least 2 different policy forms, both of which are designed for, made generally available to, actively marketed to, and enroll both eligible individuals and other individuals. Policy forms that have different cost-sharing arrangements or different riders shall be considered to be different policy forms. (2) No later than July 1, 1997, a health insurer that intends to offer 2 policy forms shall submit in writing to the Commissioner both: (A) An election whether to offer (i) a high level and low level policy form, each of which includes benefits substantially similar to other individual health insurance coverage offered by the health insurer in the District of Columbia, or (ii) policy forms with the largest and next to largest premium volume of all policy forms offered by the health insurer in the District of Columbia; and (B) An election as to which methodology the health insurer will use to determine the weighted average valuation as defined in  31-3301.01(45). (3) An election made under this section shall be binding for a 2-year period. After the initial 2-year period, and for each subsequent 2-year period, a health insurer shall again make the elections required by this section. (4) An election shall be made on a form and in a manner required by the Commissioner. (5) The actuarial value of benefits provided under individual health insurance coverage shall be calculated based on a standardized population and a set of standardized utilization and cost factors. (6) A health insurer shall submit any information the Commissioner may require to support and justify the health insurers calculations of actuarial values. (7) A health insurer shall issue the individual health benefit plan elected under this section to any eligible individual. (8) A health insurer shall not impose any pre-existing condition provision on an eligible individual.  (Apr. 13, 1999, D.C. Law 12-209,  201, 45 DCR 8433.)  Prior Codifications 1981 Ed.,  35-1022. Section References This section is referenced in  31-3301.01. Emergency Legislation See notes to  31-3301.01. Temporary Legislation See Historical and Statutory Notes following  31-3301.01.
 313302.02. Special rules for network plans. (a) A health insurer that offers health insurance coverage in the individual market may: (1) Limit the individuals who may be enrolled under such coverage to those who live, reside, or work within the service area for such network plan; and (2) Within the service area of such plan, deny such coverage to such individuals if the health insurer has demonstrated to the Commissioner that: (A) It will not have the capacity to deliver services adequately to additional individual enrollees because of its obligations to existing group contract holders, enrollees, and enrollees covered under individual contracts; and (B) It is applying this section uniformly to individuals without regard to any health status-related factor of such individuals and without regard to whether the individuals are eligible individuals. (b) A health insurer, upon denying health insurance coverage in the District of Columbia in accordance with subsection (a)(2) of this section, may not offer coverage in the individual market within such service area for a period of 180 days after such coverage is denied.  (Apr. 13, 1999, D.C. Law 12-209,  202, 45 DCR 8433.)  Prior Codifications 1981 Ed.,  35-1023. Emergency Legislation See notes to  31-3301.01. Temporary Legislation See Historical and Statutory Notes following  31-3301.01.
 313302.03. Application of financial capacity limits. (a) A health insurer may deny health insurance coverage in the individual market to an eligible individual if the health insurer has demonstrated to the satisfaction of the Commissioner that: (1) It does not have the financial reserves necessary to underwrite additional coverage; and (2) It is applying this section uniformly to all individuals in the individual market in the District of Columbia consistent with the laws of the District of Columbia and without regard to any health status-related factor of such individuals and without regard to whether the individuals are eligible individuals. (b) A health insurer, upon denying individual health insurance coverage in the District of Columbia in accordance with subsection (a) of this section, may not offer such coverage in the individual market within the District of Columbia for a period of 180 days after the date such coverage is denied or until the health insurer has demonstrated to the satisfaction of the Commissioner that the health insurer has sufficient financial reserves to underwrite additional coverage, whichever is later.  (Apr. 13, 1999, D.C. Law 12-209,  203, 45 DCR 8433.)  Prior Codifications 1981 Ed.,  35-1024. Emergency Legislation See notes to  31-3301.01. Temporary Legislation See Historical and Statutory Notes following  31-3301.01.
 313302.04. Market requirements. (a) The provisions of this chapter shall not be construed to require that a health insurer offering health insurance coverage only in connection with group health plans or through one or more bona fide associations, or both, offer such health insurance coverage in the individual market. (b) A health insurer offering health insurance coverage in connection with group health plans under this subchapter shall not be deemed to be a health insurer offering individual health insurance coverage solely because such issuer offers a conversion policy. (c) A health insurer offering individual health insurance coverage solely because such insurer offers any insurance coverage for children as a participant in a pilot program relating to insurance coverage for children shall not be deemed to be a health insurer offering individual health insurance coverage.  (Apr. 13, 1999, D.C. Law 12-209,  204, 45 DCR 8433.)  Prior Codifications 1981 Ed.,  35-1025. Emergency Legislation See notes to  31-3301.01. Temporary Legislation See Historical and Statutory Notes following  31-3301.01.
 313302.05. Renewability of individual health insurance coverage. (a) Except as provided in this section, a health insurer that provides individual health insurance coverage shall renew or continue in force such coverage at the option of the individual. (b) A health insurer may nonrenew or discontinue health insurance coverage of an individual in the individual market based on one or more of the following: (1) The individual has failed to pay premiums or contributions in accordance with the terms of the health insurance coverage or the issuer has not received timely premium payments; (2) The individual has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the coverage; (3) The insurer is ceasing to offer coverage in the individual market in accordance with this chapter; (4) In the case of a health insurer that offers health insurance coverage in the individual market through a network plan, the individual no longer resides, lives, or works in the service area, or in an area for which the health insurer is authorized to do business, but only if such coverage is terminated under this section uniformly without regard to any health status-related factor of covered individuals; or (5) In the case of health insurance coverage that is made available in the individual market only through one or more bona fide associations, the membership of the individual in the association (on the basis of which the coverage is provided) ceases, but only if such coverage is terminated under this section uniformly without regard to any health status-related factor of covered individuals. (c) Requirements for uniform termination of coverage.  (1) Discontinuance of a particular type of health insurance coverage.  Discontinuance of a particular type of health insurance coverage.  In any case in which a health insurer decides to discontinue offering a particular type of health insurance coverage offered in the individual market, coverage of such type may be discontinued by the health insurer only if: (i) The health insurer provides notice to each covered individual provided coverage of this type in such market of such discontinuation at least 90 days prior to the date of the discontinuation of such coverage; (ii) The health insurer offers to each individual in the individual market provided coverage of this type the option to purchase any other individual health insurance coverage currently being marketed by the health insurer for individuals in such market; and (iii) In exercising the option to discontinue coverage of this type, and in offering the option of coverage under this subsection, the health insurer acts uniformly without regard to any health status-related factor of enrolled individuals or individuals who may become eligible for such coverage. (2) Discontinuance of all coverage.  Discontinuance of all coverage.  (A) Subject to paragraph (1)(iii) of this subsection, in any case in which a health insurer elects to discontinue offering all health insurance coverage in the individual market in the District of Columbia, health insurance coverage may be discontinued by the health insurer only if: (i) The health insurer provides notice to the Commissioner and to each individual of such discontinuation at least 180 days prior to the date of the expiration of such coverage, and (ii) All health insurance issued or delivered for issuance in the District of Columbia in such market is discontinued and coverage under such health insurance coverage in such market is not renewed. (B) In the case of discontinuation under paragraph (1) of this subsection in the individual market, the health insurer may not provide for the issuance of any health insurance coverage in the individual market in the District of Columbia during the 5-year period beginning on the date of the discontinuation of the last health insurance coverage not so renewed. (d) At the time of coverage renewal, a health insurer may modify the health insurance coverage for a policy form offered to individuals in the individual market so long as such modification is consistent with the laws of the District of Columbia and effective on a uniform basis among all individuals with that policy form. (e) In applying this section in the case of health insurance coverage that is made available by health insurers in the individual market to individuals only through one or more associations, a reference to an individual is deemed to include a reference to such an association of which the individual is a member.  (Apr. 13, 1999, D.C. Law 12-209,  205, 45 DCR 8433.)  Prior Codifications 1981 Ed.,  35-1026. Section References This section is referenced in  31-3301.01. Emergency Legislation See notes to  31-3301.01. Temporary Legislation See Historical and Statutory Notes following  31-3301.01.
 313302.06. Fair market provision. The provisions of  31-3303.07(j) shall apply to health insurance coverage offered by a health insurer in the individual market in the same manner as they apply to health insurance coverage offered by a health insurer in connection with a group health plan in the small or large group market.  (Apr. 13, 1999, D.C. Law 12-209,  206, 45 DCR 8433.)  Prior Codifications 1981 Ed.,  35-1027. Emergency Legislation  For temporary (90 days) creation of new  31-3302.06a, see  2(b) of Health Insurance Marketplace Improvement Emergency Amendment Act of 2018 (D.C. Act 22-526, Dec. 10, 2018, 65 DCR 13424).  See notes to  31-3301.01. Temporary Legislation  For temporary (225 days) creation of new  31-3302.06a, see  2(b) of Health Insurance Marketplace Improvement Temporary Amendment Act of 2018 (D.C. Law 22-251, Mar. 15, 2019, 66 DCR 975).  See Historical and Statutory Notes following  31-3301.01.
 313302.06a. Application to multiple employer welfare arrangements. The individual market requirements of this subchapter shall apply to a health benefit plan offered by a multiple employer welfare arrangement, including an association or any other entity, if the plan covers an individual in the District who is not an employee or dependent of a participating employer.  (Apr. 13, 1999, D.C. Law 12-209,  206a; as added Mar. 22, 2019, D.C. Law 22-266,  2(b), 66 DCR 1423.) 
 313302.07. Regulations establishing standards. (a) The Commissioner may adopt regulations to enable him or her to establish and administer such standards relating to the provisions of this chapter as may be necessary to (i) implement the requirements of this chapter, and (ii) assure that the District of Columbias regulation of health insurers is not preempted pursuant to the Health Insurance Portability and Accountability Act of 1996, approved August 21, 1996 (P.L. 104-191; 110 Stat. 1936). (b) The Commissioner may revise or amend such regulations and may increase the scope of the regulations to the extent necessary to maintain federal approval of the District of Columbias program for regulation of health insurers pursuant to the requirements established by the United States Department of Health and Human Services. (b-1) The Commissioner may issue rules to establish and administer such standards relating to the provisions of this chapter as may be necessary to improve access and affordability of health insurance in the District and to maintain the requirements of the Patient Protection and Affordable Care Act, approved March 23, 2010 (124 Stat. 111; 42 U.S.C.  18001, note). (c) The Commissioner shall annually advise the Committee on Consumer and Regulatory Affairs, or such other Council committee or committees having subject matter jurisdiction over health insurance, of revisions and amendments made pursuant to subsection (b) of this section.  (Apr. 13, 1999, D.C. Law 12-209,  207, 45 DCR 8433; Mar. 22, 2019, D.C. Law 22-266,  2(c), 66 DCR 1423.)  Prior Codifications 1981 Ed.,  35-1028. Emergency Legislation  For temporary (90 days) amendment of this section, see  2(c) of Health Insurance Marketplace Improvement Emergency Amendment Act of 2018 (D.C. Act 22-526, Dec. 10, 2018, 65 DCR 13424).  See notes to  31-3301.01. Temporary Legislation  For temporary (225 days) amendment of this section, see  2(c) of Health Insurance Marketplace Improvement Temporary Amendment Act of 2018 (D.C. Law 22-251, Mar. 15, 2019, 66 DCR 975).  See Historical and Statutory Notes following  31-3301.01.
 313302.08. Applicability. Unless otherwise specifically provided in this chapter, the provisions of this subchapter shall apply to individual health benefit plans issued or renewed on or after January 1, 1998.  (Apr. 13, 1999, D.C. Law 12-209,  208, 45 DCR 8433.)  Prior Codifications 1981 Ed.,  35-1029. Emergency Legislation See notes to  31-3301.01. Temporary Legislation See Historical and Statutory Notes following  31-3301.01.
 313302.09. Construction. Nothing in this subchapter shall be construed to: (1) Restrict the amount of the premium rates that an issuer may charge an individual for health insurance coverage provided in the individual market; or (2) Prevent a health insurer offering health insurance coverage in the individual market from establishing premium discounts or rebates or modifying otherwise applicable copayments or deductibles in return for adherence to programs of health promotion and disease prevention.  (Apr. 13, 1999, D.C. Law 12-209,  209, 45 DCR 8433.)  Prior Codifications 1981 Ed.,  35-1030. Emergency Legislation See notes to  31-3301.01. Temporary Legislation See Historical and Statutory Notes following  31-3301.01.
 313303.01. Application of subchapter. (a) This subchapter applies to health insurers offering group health insurance coverage. Each insurer proposing to issue group accident and sickness insurance policies providing hospital, medical and surgical or major medical coverage on an expense incurred basis, each corporation providing group accident and sickness subscription contracts, and each health maintenance organization or multiple employer welfare arrangement providing health care plans for health care services that offers coverage to the group market in the District of Columbia shall be subject to the provisions of this subchapter if any of the following conditions are met: (1) Any portion of the premiums or benefits is paid by or on behalf of the employer; (2) The eligible employee or dependent is reimbursed, whether through wage adjustments or otherwise, by or on behalf of the employer, for any portion of the premium; or (3) The health benefit plan is treated by the employer or any of the covered individuals as part of a plan or program for the purpose of section 106, 125, or 162 of the United States Internal Revenue Code [26 U.S.C.  106, 26 U.S.C.  125, or 26 U.S.C.  162]. (b) Small group market requirements under this subchapter shall apply to a health benefit plan offered by a multiple employer welfare arrangement, including an association or any other entity, if the plan covers an employee of a small employer, as that term is defined in  31-3301.01(42), in the District.  (Apr. 13, 1999, D.C. Law 12-209,  301, 45 DCR 8433; Mar. 22, 2019, D.C. Law 22-266,  2(d), 66 DCR 1423.)  Prior Codifications 1981 Ed.,  35-1031. Emergency Legislation  For temporary (90 days) amendment of this section, see  2(d) of Health Insurance Marketplace Improvement Emergency Amendment Act of 2018 (D.C. Act 22-526, Dec. 10, 2018, 65 DCR 13424).  See notes to  31-3301.01. Temporary Legislation  For temporary (225 days) amendment of this section, see  2(d) of Health Insurance Marketplace Improvement Temporary Amendment Act of 2018 (D.C. Law 22-251, Mar. 15, 2019, 66 DCR 975).  See Historical and Statutory Notes following  31-3301.01. References in Text Sections 106, 125, and 162 of the United States Internal Revenue Code, referred to in (3), are 26 U.S.C.S.  106, 125, and 162.
 313303.02. Availability of health benefit plans to small employers. In order to ensure the broadest availability of health benefit plans to small employers, the Commissioner shall set market conduct and other requirements for health insurers, agents, and third-party administrators, including requirements relating to the following: (1) Registration with the Commissioner by each group health insurer offering group health insurance coverage of its intention to offer health insurance coverage in the small group market under this subchapter; (2) Publication by the Commissioner of a list of all health insurers who offer coverage in the small group market, including a potential requirement applicable to agents, third-party administrators, and health insurers that no health benefit plan may be sold to a small employer by a health insurer not identified as a health insurer in the small group market; (3) The availability of a broadly publicized telephone number for the Department of Insurance, Securities, and Banking for access by small employers to information concerning this subchapter; and (4) Methods concerning periodic demonstration by health insurers offering group health insurance coverage that they are marketing and issuing health benefit plans to small employers.  (Apr. 13, 1999, D.C. Law 12-209,  302, 45 DCR 8433; June 11, 2004, D.C. Law 15-166,  4(s)(2), 51 DCR 2817.)  Prior Codifications 1981 Ed.,  35-1032. Effect of Amendments D.C. Law 15-166, in par. (3), substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities Regulation. Emergency Legislation See notes to  31-3301.01. For temporary (90 day) amendment of section, see  4(s)(2) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). Temporary Legislation See Historical and Statutory Notes following  31-3301.01.
 313303.03. Renewability. (a) Every health insurer that offers health insurance coverage in the group market in the District of Columbia shall renew such coverage with respect to all insureds at the option of the employer except: (1) For nonpayment of the required premiums by the policyholder or contract holder, or where the health insurer has not received timely premium payments; (2) When the health insurer is ceasing to offer coverage in the small or large group market in accordance with paragraphs (9) and (10) of this subsection; (3) For fraud or misrepresentation by the employer with respect to their coverage; (4) With regard to coverage provided to an eligible employee, for fraud or misrepresentation by the employee with regard to his or her coverage; (5) For failure to comply with contribution and participation requirements defined by the health benefit plan; (6) For failure to comply with health benefit plan provisions that have been approved by the Commissioner; (7) When a health insurer offers health insurance coverage in the group market through a network plan and there is no longer an enrollee in connection with such plan who lives, resides, or works in the service area of the health insurer (or in the area for which the health insurer is authorized to do business), and, in the case of the group market, the health insurer would deny enrollment with respect to such plan under the provisions of paragraphs (9) and (10) of this subsection; (8) When health insurance coverage is made available in the group market only through one or more bona fide associations, the membership of an employer in the association (on the basis of which the coverage is provided) ceases, but only if such coverage is terminated under this section uniformly without regard to any health status related factor relating to any covered individual; (9) When a health insurer decides to discontinue offering a particular type of group health insurance coverage in the small or large group market in the District of Columbia, coverage of such type may be discontinued by the health insurer in accordance with the laws of the District of Columbia in such market only if the health insurer provides notice to each plan sponsor provided coverage of this type in such market (and participants and beneficiaries covered under such coverage) of such discontinuation at least 90 days prior to the date of the discontinuance; or (10)(A) In any case in which a health insurer elects to discontinue offering all health insurance coverage in the small or large group market in the District of Columbia, health insurance coverage may be discontinued by the health insurer only in accordance with the laws of the District of Columbia and if: (i) The health insurer provides notice to the Commissioner and to each plan sponsor (and participants and beneficiaries covered under such coverage) of such discontinuation at least 180 days prior to the date of the discontinuation of such coverage; and (ii) All health insurance issued or delivered for issuance in the District of Columbia in such market (or markets) are discontinued and coverage under such health insurance coverage in such market (or markets) is not renewed. (B) In the case of a discontinuation in the market, the health insurer may not provide for the issuance of any health insurance coverage in the market involved during the 5-year period beginning on the date of the discontinuance of the last health insurance coverage not so renewed. (b) At the time of coverage renewal, a health insurer may modify the health insurance coverage for a product offered to a group health plan in the large group market, or, in the small group market if, for coverage that is available in such market other than only through one or more bona fide associations, such modification is consistent with the law of the District of Columbia and effective on a uniform basis among health insurers with that product.  (Apr. 13, 1999, D.C. Law 12-209,  303, 45 DCR 8433.)  Prior Codifications 1981 Ed.,  35-1033. Emergency Legislation See notes to  31-3301.01. Temporary Legislation See Historical and Statutory Notes following  31-3301.01.
 313303.04. Reference to plan sponsor. In applying this subchapter in the case of health insurance coverage that is made available by a health insurer in the group market to employers only through one or more associations, a reference to plan sponsor is deemed, with respect to coverage provided to an employer member of the association, to include a reference to such employer.  (Apr. 13, 1999, D.C. Law 12-209,  304, 45 DCR 8433.)  Prior Codifications 1981 Ed.,  35-1034. Emergency Legislation See notes to  31-3301.01. Editor's Notes Temporary addition of chapter: See Historical and Statutory Notes following  31-3301.01.
 313303.05. Coverage. If coverage to the small or large employer market pursuant to this subchapter ceases to be written, administered, or otherwise provided, such coverage shall continue to be governed by this subchapter with respect to business conducted under this subchapter that was transacted prior to the effective date of termination and that remains in force.  (Apr. 13, 1999, D.C. Law 12-209,  305, 45 DCR 8433.)  Prior Codifications 1981 Ed.,  35-1035. Emergency Legislation See notes to  31-3301.01. Temporary Legislation See Historical and Statutory Notes following  31-3301.01.
 313303.06. Availability. (a) If coverage is offered to small employers under this subchapter, such coverage shall be offered and made available to every small employer that applies for such coverage. Participation in such plan shall be made available to all the eligible employees of a covered small employer and their dependents. No coverage may be offered to only certain eligible employees or their dependents and no employees or their dependents may be excluded or charged additional premiums because of health status. (b) No coverage offered under this subchapter shall exclude an employer based solely on the nature of the employers business. (c) Subsection (a) of this section shall not apply to health insurance coverage offered by a health insurer if such coverage is made available in the small group market only through one or more bona fide associations. (d) A health insurer that offers health insurance coverage in a small group market through a network plan may: (1) Limit the employees that may apply for such coverage to those eligible individuals who live, work, or reside in the service area for such network plan; or (2) Within the service area of such plan, deny such coverage to such employers if the health insurer has demonstrated, if required, to the satisfaction of the Commissioner that: (A) It will not have the capacity to deliver services adequately to enrollees of any additional groups because of its obligations to existing group contract holders and enrollees; and (B) It is applying this subdivision uniformly to all employers without regard to the claims experience of those employers and their employees (and their dependents) or any health status-related factors relating to such employees and dependents. (e) A health insurer, upon denying health insurance coverage in the District of Columbia in accordance with subsection (d)(2) of this section, may not offer coverage in the small group market within such service area for a period of 180 days after the date such coverage is denied. (f) A health insurer may deny health insurance coverage in the small group market if the health insurer has demonstrated, if required, to the satisfaction of the Commissioner that: (1) It does not have the financial reserves necessary to underwrite additional coverage; and (2) It is applying this subdivision uniformly to all employers in the small group market in the District of Columbia consistent with the laws of this District of Columbia and without regard to the claims experience of those employers and their employees (and their dependents) or any health status-related factor relating to such employees and dependents. (g)(1) No health insurer offering group health insurance coverage is required to offer coverage or accept applications pursuant to subsection (a) of this section if the Commissioner determines that acceptance of an application or applications would result in the health insurer being declared an impaired insurer. (2) A health insurer offering group health insurance coverage that does not offer coverage pursuant to subsection (f) of this section may not offer coverage to small employers until the Commissioner determines that the health insurer is no longer impaired. (h) A health insurer upon denying health insurance coverage in connection with group health plans in accordance with subsection (d) of this section in the District of Columbia may not offer coverage in connection with group health plans in the small group market for a period of 180 days after the date such coverage is denied or until the health insurer has demonstrated to the satisfaction of the Commissioner that the health insurer has sufficient financial reserves to underwrite additional coverage, whichever is later. (i)(1) Nothing in this chapter shall be construed to preclude a health insurer from establishing employer contribution rules or group participation rules in connection with a health benefit plan offered in the small group market. (2) As used in this subchapter, the term employer contribution rule means a requirement relating to the minimum level or amount of employer contribution toward the premium for enrollment of eligible individuals, and the term group participation rule means a requirement relating to the minimum number of eligible employees that must be enrolled in relation to a specified percentage or number of eligible employees. (3) Any employer contribution rule or group participation rule shall be applied uniformly among small employers without reference to the size of the small employer group, health status of the small employer group, or other factors. (j)(1) A group health plan or health insurer offering group health insurance coverage that fails to fairly market to small employers as required by this section may not offer coverage in the District of Columbia to new small employers until the later of 180 days after the unfair marketing has been identified and proven to the Commissioner or the date on which the health insurer submits, and the Commissioner approves, a plan to fairly market to the health insurers established geographic service area. (2) No health maintenance organization is required to offer coverage or accept applications pursuant to subsection (a) of this section in the case of any of the following: (A) To small employers where the policy would not be delivered or issued for delivery in the health maintenance organizations approved service areas; (B) To an employee where the employee does not reside or work within the health maintenance organizations approved service areas; or (C) Within an area where the health maintenance organization demonstrates to the satisfaction of the Commissioner that it will not have the capacity within that area and its network of providers to deliver services adequately to the enrollees of those groups because of its obligations to existing group contract holders and enrollees. (3) A health maintenance organization that does not offer coverage pursuant to this subsection may not offer coverage in the applicable area to new employer groups with more than 50 eligible employees until the later of 180 days after closure to new applications or the date on which the carrier health maintenance organization notifies the Commissioner that it has regained capacity to deliver services to small employers.  (Apr. 13, 1999, D.C. Law 12-209,  306, 45 DCR 8433.)  Prior Codifications 1981 Ed.,  35-1036. Emergency Legislation See notes to  31-3301.01. Temporary Legislation See Historical and Statutory Notes following  31-3301.01.
 313303.07. Limitation on preexisting condition exclusion period. (a) Subject to subsection (b) of this section, a health insurer offering group health insurance coverage may, with respect to a participant or beneficiary, impose a preexisting limitation only if (i) such exclusion relates to a condition (whether physical or mental), regardless of the cause of the condition, for which medical advice, diagnosis, care, or treatment was recommended or received within the 6-month period ending on the enrollment date, (ii) such exclusion extends for a period of not more than 12 months (or 18 months in the case of a late enrollee) after the enrollment date, and (iii) the period of any such preexisting condition exclusion is reduced by the aggregate of the periods of creditable coverage, if any, applicable to the participant or beneficiary as of the enrollment date. (b)(1) Subject to paragraph (4) of this subsection, a group health plan, and a health insurer offering health insurance coverage, may not impose any preexisting condition exclusion in the case of an individual who, as of the last day of the 30-day period beginning with the date of birth, is covered under creditable coverage. (2) Subject to paragraph (4) of this subsection, a group health plan, and a health insurer offering health insurance coverage, may not impose any preexisting condition exclusion in the case of a child who is adopted or placed for adoption before attaining 18 years of age and who, as of the last day of the 30-day period beginning on the date of the adoption or placement for adoption, is covered under creditable coverage. The previous sentence shall not apply to coverage before the date of such adoption or placement for adoption. (3) A group health plan, and health insurer offering health insurance coverage, may not impose any preexisting condition exclusion relating to pregnancy as a preexisting condition. (4) Paragraphs (1) and (2) of this subsection shall no longer apply to an individual after the end of the first 63-day period during all of which the individual was not covered under any creditable coverage. (c) A period of creditable coverage shall not be counted, with respect to enrollment of an individual under a health benefit plan, if, after such period and before the enrollment date, there was a 63-day period during all of which the individual was not covered under any creditable coverage. (d) For purposes of subsections (b)(4) and (c) of this section, any period that an individual is in a waiting period for any coverage under a group health plan (or for group health insurance coverage), or is in an affiliation period, shall not be taken into account in determining the continuous period under subsection (c) of this section. (e)(1) Except as otherwise provided under paragraph (2) of this subsection, a group health plan and a health insurer offering group health coverage shall count a period of creditable coverage without regard to the specific benefits covered during the period. (2) A group health plan, or a health insurer offering group health insurance coverage, may elect to count a period of creditable coverage based on coverage of benefits within each of several classes or categories of benefits rather than as provided under paragraph (1) of this subsection. Such election shall be made on a uniform basis for all participants and beneficiaries. Under such election a group health plan or health insurer shall count a period of creditable coverage with respect to any class or category of benefits if any level of benefits is covered within such class or category. (3) In the case of an election with respect to a group plan under paragraph (2) of this subsection (whether or not health insurance coverage is provided in connection with such plan), the plan shall: (A) Prominently state in any disclosure statements concerning the plan, and state to each enrollee at the time of enrollment under the plan, that the plan has made such election; and (B) Include in such statements a description of the effect of this election. (4) In the case of an election under paragraph (2) of this subsection with respect to health insurance coverage offered by a health insurer in the small or large group market, the health insurer shall: (A) Prominently state in any disclosure statements concerning the coverage, and to each employer at the time of the offer or sale of the coverage, that the health insurer has made such election; and (B) Include in such statements a description of the effect of such election. (f) Periods of creditable coverage with respect to an individual shall be established through presentation of certifications described in subsection (g) of this section or in such other manner as may be specified in federal regulations. (g) A health insurer offering group health insurance coverage shall provide for certification of the period of creditable coverage: (1) At the time an individual ceases to be covered under the plan or otherwise becomes covered under a COBRA continuation provision; (2) In the case of an individual becoming covered under a COBRA continuation provision, at the time the individual ceases to be covered under such provision; and (3) At the request, or on behalf of, an individual made not later than 24 months after the date of cessation of the coverage described in paragraphs (1) or (2) of this subsection, whichever is later. The certification under paragraph (1) of this subsection may be provided, to the extent practicable, at a time consistent with notices required under any applicable COBRA continuation provision. (h) In the case of an election described in subsection (e)(2) of this section by a group health insurer, if the group health plan or health insurer enrolls an individual for coverage under the plan and the individual provides a certification of coverage of the individual under subsection (f) of this section: (1) Upon request of such group health insurer, the entity which issued the certification provided by the individual shall promptly disclose to such requesting insurer information on coverage of classes and categories of health benefits available under such entitys plan or coverage; and (2) Such entity may charge the requesting group health plan or health insurer for the reasonable cost of disclosing such information. (i) A health insurer offering group health insurance coverage shall permit an employee who is eligible, but not enrolled, for coverage under the terms of the plan (or a dependent of such an employee if the dependent is eligible, but not enrolled, for coverage under such terms) to enroll for coverage as a late enrollee for coverage under the terms of the plan if each of the following conditions is met: (1) The employee or dependent was covered under a group health plan or had health insurance coverage at the time coverage was previously offered to the employee or dependent. (2) The employee stated in writing at such time that coverage under a group health plan or health insurance coverage was the reason for declining enrollment, but only if the plan sponsor or health insurer (if applicable) required such a statement at such time and provided the employee with notice of such requirement (and the consequences of such requirement) at such time. (3) The employees or dependents coverage described in paragraph (1) of this subsection: (i) was under a COBRA continuation provision and the coverage under such provision was exhausted; or (ii) was not under such a provision and either the coverage was terminated as a result of loss of eligibility for the coverage (including as a result of legal separation, divorce, death, termination of employment, or reduction in the number of hours of employment) or employer contributions towards such coverage were terminated. (4) Under the terms of the plan, the employee requests such enrollment not later than 30 days after the date of exhaustion of coverage described in paragraph (3)(i) of this subsection or termination of coverage or employer contribution described in paragraph (3)(ii) of this subsection. (j) A health insurer is deemed to make coverage available with respect to a dependent of an individual if: (1) The individual is a participant under the plan (or has met any waiting period applicable to becoming a participant under the plan and is eligible to be enrolled under the plan but for a failure to enroll during a previous enrollment period); and (2) A person becomes such a dependent of the individual through marriage, birth, or adoption or placement for adoption, the group health insurer shall provide for a dependent special enrollment period during which the person (or, if not otherwise enrolled, the individual) may also be enrolled under the plan as a dependent of the individual, and in the case of the birth or adoption of a child, the spouse of the individual may also be enrolled as a dependent of the individual if such spouse is otherwise eligible for coverage. (k) A dependent special enrollment period under subsection (j) of this section shall be a period of not less than 30 days and shall begin on the later of the date dependent coverage is made available, or the date of the marriage or domestic partnership, birth, or adoption or placement for adoption (as the case may be). (l) If an individual seeks to enroll a dependent during the first 30 days of such a dependent special enrollment period, the coverage of the dependent shall become effective: (1) In the case of marriage or domestic partnership, not later than the first day of the first month beginning after the date the completed request for enrollment is received; (2) In the case of a dependents birth, as of the date of such birth; or (3) In the case of a dependents adoption or placement for adoption, the date of such adoption or placement for adoption.  (Apr. 13, 1999, D.C. Law 12-209,  307, 45 DCR 8433; Sept. 12, 2008, D.C. Law 17-231,  27(b), 55 DCR 6758.)  Prior Codifications 1981 Ed.,  35-1037. Section References This section is referenced in  31-3302.06. Effect of Amendments D.C. Law 17-231, in subsecs. (k) and (l)(1), substituted marriage or domestic partnership for marriage. Emergency Legislation See notes to  31-3301.01. Temporary Legislation See Historical and Statutory Notes following  31-3301.01.
 313303.08. Disclosure of information. (a) Any health insurer offering health insurance coverage to a small employer shall make a reasonable disclosure of the availability of information to such an employer, as part of its solicitation and sales materials, and upon request of such an employer, information concerning: (1) The provisions of such coverage concerning the health insurers right to change premium rates and the factors that may affect changes in premium rates; (2) The provisions of such coverage relating to renewability of coverage; (3) The provisions of such coverage relating to any preexisting condition exclusion; and (4) The benefits and premiums available under all health insurance coverage for which the employer is qualified. (b) A health insurer is not required under this subchapter to disclose any information that is proprietary and trade secret information.  (Apr. 13, 1999, D.C. Law 12-209,  308, 45 DCR 8433.)  Prior Codifications 1981 Ed.,  35-1038. Emergency Legislation See notes to  31-3301.01. Temporary Legislation See Historical and Statutory Notes following  31-3301.01.
 313303.09. Eligibility to enroll. (a) A group health plan, and a health insurer offering group health insurance coverage, may not establish rules for eligibility (including continued eligibility) of any individual to enroll under the terms of the plan based on any of the health status-related factors. (b) The provisions of this section shall not be construed to: (1) Require a health insurer offering group health insurance coverage to provide particular benefits other than those provided under the terms of such plan or coverage; or (2) To prevent a health insurer offering group health insurance coverage from establishing limitations or restrictions on the amount, level, extent, or nature of the benefits or coverage for similarly situated individuals enrolled in the plan or coverage rules for eligibility to enroll under a plan which includes rules defining any applicable waiting periods for such enrollment. (c) A health insurer offering group health insurance coverage may not require an individual (as a condition of enrollment or continued enrollment under the plan) to pay a premium or contribution which is greater than such premium or contribution for a similarly situated individual enrolled in the plan on the basis of any health status related factor in relation to the individual or to an individual enrolled under the plan as a dependent of the individual. (d) Nothing in subsection (c) of this section shall be construed to restrict the amount that an employee may be charged for coverage under group health insurance coverage, or prevent a health insurer offering group health insurance coverage from establishing premium discounts or rebates or modifying otherwise applicable copayments or deductibles in return for adherence to programs of health promotion and disease prevention.  (Apr. 13, 1999, D.C. Law 12-209,  309, 45 DCR 8433.)  Prior Codifications 1981 Ed.,  35-1039. Emergency Legislation See notes to  31-3301.01. Temporary Legislation See Historical and Statutory Notes following  31-3301.01.
 313303.10. Exclusions. The provisions of this subchapter shall not apply to: (1) Any group health benefit plan for any plan year if, on the first day of such plan year, such plan has less than 2 participants who are current employees; or (2) Any health benefit plan for any of the excepted benefits.  (Apr. 13, 1999, D.C. Law 12-209,  310, 45 DCR 8433.)  Prior Codifications 1981 Ed.,  35-1040. Emergency Legislation See notes to  31-3301.01. Temporary Legislation See Historical and Statutory Notes following  31-3301.01.
 313303.11. Rules used to determine group size. (a) All employers treated as a single employer under subsection (b), (c), (m), or (o) of  414 of the Internal Revenue Code of 1986 (26 U.S.C.  414) shall be treated as one employer. (b) In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether such employer is a small or large group employer shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current calendar year. (c) Any reference in this section to an employer shall include a reference to any predecessor of such employer.  (Apr. 13, 1999, D.C. Law 12-209,  311, 45 DCR 8433.)  Prior Codifications 1981 Ed.,  35-1041. Emergency Legislation See notes to  31-3301.01. Temporary Legislation See Historical and Statutory Notes following  31-3301.01.
 313303.12. Affiliation period. (a) A health maintenance organization which does not impose any preexisting condition exclusion, with respect to any particular coverage option, may impose an affiliation period for such coverage option, but only if such period is applied uniformly without regard to any health status-related factors and such period does not exceed 2 months (or 3 months in the case of a late enrollee). (b) An affiliation period as described in subsection (a) of this section shall begin on the enrollment date. (c) An affiliation period under a plan shall run concurrently with any waiting period under the plan.  (Apr. 13, 1999, D.C. Law 12-209,  312, 45 DCR 8433.)  Prior Codifications 1981 Ed.,  35-1042. Emergency Legislation See notes to  31-3301.01. Temporary Legislation See Historical and Statutory Notes following  31-3301.01.
 313303.13. Alternative methods. A health maintenance organization may use alternative methods to an affiliation period to address adverse selection provided that they are approved by the Commissioner prior to their use.  (Apr. 13, 1999, D.C. Law 12-209,  313, 45 DCR 8433.)  Prior Codifications 1981 Ed.,  35-1043. Emergency Legislation  For temporary (90 days) creation of new  31-3303.13a through 31-3303.13d, see  2(e) of Health Insurance Marketplace Improvement Emergency Amendment Act of 2018 (D.C. Act 22-526, Dec. 10, 2018, 65 DCR 13424).  See notes to  31-3301.01. Temporary Legislation  For temporary (225 days) creation of new  31-3303.13a through 31-3303.13d, see  2(e) of Health Insurance Marketplace Improvement Temporary Amendment Act of 2018 (D.C. Law 22-251, Mar. 15, 2019, 66 DCR 975).  See Historical and Statutory Notes following  31-3301.01.
 313303.13a. Treatment of certain multiple employer welfare arrangements. The Commissioner may issue rules to create a grandfathered status with respect to any of the requirements of this chapter for multiple employer welfare arrangements that existed and operated in the District as of December 15, 2017, and comply with federal law and regulations applicable to multiple employer welfare arrangements as of December 15, 2017.  (Apr. 13, 1999, D.C. Law 12-209,  313a; as added Mar. 22, 2019, D.C. Law 22-266,  2(e), 66 DCR 1423.) 
 313303.13b. License requirement for non-District multiple employer welfare arrangements. No multiple employer welfare arrangement located outside of the District may conduct any business in the District, including marketing, offering, or issuing a health benefit plan to any individual or employer, unless licensed as an insurer, a hospital and medical services corporation, a fraternal benefit society, or a health maintenance organization.  (Apr. 13, 1999, D.C. Law 12-209,  313b; as added Mar. 22, 2019, D.C. Law 22-266,  2(e), 66 DCR 1423.) 
 313303.13c. Licensing requirement for certain multiple employer welfare arrangements. (a) A multiple employer welfare arrangement that is not fully insured, as described in subsection (c) of this section, shall not operate in the District or market, offer, or issue a health benefit plan to any individual or employer in the District without first meeting the requirements for, and becoming licensed as, an insurer, a hospital and medical services corporation, a fraternal benefit society, or a health maintenance organization. (b) The existence of contracts of reinsurance shall not be considered in determining whether a multiple employer welfare arrangement is fully insured. (c) For the purposes of this section, a multiple employer welfare arrangement is not fully insured unless the covered benefits it provides are: (1) Insured on a direct basis by an insurance company licensed to transact the business of insurance in District; or (2) Arranged for or provided on a direct basis by (A) A hospital and medical services corporation; (B) A fraternal benefit society; (C) A health maintenance organization licensed in the District; or (D) Any combination of these entities.  (Apr. 13, 1999, D.C. Law 12-209,  313c; as added Mar. 22, 2019, D.C. Law 22-266,  2(e), 66 DCR 1423.) 
 313303.13d. Short-term, limited-duration health insurance. (a) An insurer shall not provide short-term, limited-duration health insurance policies, certificates of coverage, or contracts unless the insurer obtains a certificate of authority from the Commissioner to offer health insurance. (b) An insurer offering for sale a short-term, limited-duration health insurance policy, certificate of coverage, or contract shall apply the same underwriting standards to all applicants for such coverage regardless of whether the applicant has previously been covered by a short-term, limited-duration health insurance policy, certificate of coverage, or contract. (c) A short-term, limited-duration health insurance policy, certificate of coverage, or contract shall not exclude from coverage as a pre-existing condition any medical or behavioral health condition for which an applicant sought treatment in the prior 12 months or for which an applicant is currently in an active course of treatment. An insurer shall not use underwriting related to such a condition to deny enrollment in short-term, limited-duration coverage to an applicant. (d) A short-term, limited-duration insurance policy, certificate of coverage, or contract shall terminate not more than 3 months after its effective date. (e) A short-term, limited-duration health insurance policy, certificate of coverage, or contract shall not be extended or renewed. The insurer shall not issue, directly or indirectly through an affiliate, a new short-term, limited-duration health insurance policy, certificate of coverage, or contract to an individual who had such a policy, certificate of coverage, or contract from the insurer within the preceding 9 months. (f) An insurer shall ensure that each policy, certificate of coverage, or contract for short-term, limited-duration health insurance and all application materials for enrollment in that coverage displays prominently, in at least 14-point type, a statement that the coverage does not constitute minimum essential coverage for the purposes of satisfying the individual responsibility requirement of  47-5102, and any other disclosures the Commissioner may require through rulemaking, including the types of benefits and consumer protections that are and are not included in the coverage. (g) A company offering for sale a short-term, limited-duration health insurance policy, certificate of coverage, or contract shall provide to the Commissioner any information the Commissioner requires by rulemaking.  (Apr. 13, 1999, D.C. Law 12-209,  313d; as added Mar. 22, 2019, D.C. Law 22-266,  2(e), 66 DCR 1423.) 
 313303.14. Applicability. Unless otherwise specifically provided in this chapter, the provisions of this subchapter shall apply to group health benefit plans issued or renewed after July 1, 1997.  (Apr. 13, 1999, D.C. Law 12-209,  314, 45 DCR 8433.)  Prior Codifications 1981 Ed.,  35-1044. Emergency Legislation See notes to  31-3301.01. Temporary Legislation See Historical and Statutory Notes following  31-3301.01.
 313311.01. Ratemaking principles and standards. (a) All insurance premium rates and fees shall be made in accordance with the principles and standards set forth in this section. Uniformity among insurers in matters within the scope of this section shall not be required or prohibited. (b) Due consideration shall be given to: (1) Past and prospective loss experience within and, if necessary for actuarial credibility, outside the District; (2) Conflagration and catastrophe hazards, if any; (3) Past and prospective expenses, both within and, if necessary for actuarial credibility, outside the District; (4) Underwriting profits; (5) Contingencies; (6) Investment income and reserve for losses as reported by the insurer in the insurers financial statements; (7) Dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to policyholders as reported by the insurer in the insurers financial statements; and (8) All other relevant factors within and, if necessary for actuarial credibility, outside the District. (c) Rates or fees shall not be excessive, inadequate, or unfairly discriminatory. In determining whether rates are excessive or unfairly discriminatory, the Commissioner may consider: (1) Historical and projected loss ratios, as described herein; (2) Any anticipated change in the number of enrollees if the proposed premium rate is approved; (3) Changes to cover benefits or health benefit plan design; and (4) Changes in the insurers health care cost and quality improvement efforts since the insurers last rate filing for the same category of health benefit plan. (d) The systems of expense provisions included in the rates or fees for use by an insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of the insurer or group of insurers with respect to a kind of insurance or with respect to a subdivision or combination of kinds of insurance for which separate expense provisions are applicable. (e) Except as provided for in subsection (f) of this section, for any rate filing, the carrier shall demonstrate that the product for which the rate is filed has a target medical loss ratio of 70% or greater for individual and small group policies and 75% or greater for large group policies. (f) The Commissioner, in the Commissioners discretion, may approve an exemption to the target medical loss ratio set forth in subsection (e) of this section, upon receipt of justification supporting the requested exemption and after a 30-day period of public notice. Justification for a medical loss ratio of less than 70% for individual and small group policies or less than 75% for large group policies shall be based upon the following factors: (1) Product design or cost sharing attributes; (2) Expected enrollment size; (3) Length of time in the market; (4) Claims pool credibility; and (5) Any other relevant matter.  (Apr. 8, 2011, D.C. Law 18-360,  102, 58 DCR 896; May 2, 2015, D.C. Law 20-265,  104(a), 62 DCR 1529.)  Effect of Amendments The 2015 amendment by D.C. Law 20-265 substituted Commissioner, in the Commissioner's discretion for Commissioner of the Department of Insurance, Securities, and Banking (Commissioner), in his or her discretion in (f).
 313311.02. Aggregate medical loss ratios; dividend; and rating bands. (a) For each calendar year, an insurer shall maintain an aggregate minimum medical loss ratio, as defined by rule, of 80% for individual policies, as defined by rule, 80% for small group policies, as defined by rule, and 85% for large group policies, as defined by rule. The medical loss ratio shall be defined by the Commissioner and shall be determined by rule in a manner and generally consistent with the same standards as the medical loss ratio defined in section 2718(b) of the Public Health Service Act, approved March 23, 2010 (124 Stat. 136; 42 U.S.C.  300gg-18(b)). No later than May 31st of each year, insurers shall file an annual report with the Commissioner, in a manner and on a form prescribed by Commissioner, indicating the medical loss ratio calculated for all policies and contracts written for the previous calendar year. (b) All filings of rates and rating schedules shall demonstrate that actual expected claims in relation to premiums comply with the requirements of this chapter when combined with actual experience to date. (c) In each case where the insurer fails to substantially comply with the medical loss ratio requirements set forth in subsection (a) of this section, the insurer shall issue a rebate for all policyholders in an amount determined in accordance with section 2718(b)(1)(B) of the Public Health Service Act, approved March 23, 2010 (124 Stat. 136; 42 U.S.C.  300gg-18(b)(1)(B). The annual report required by this section shall include the insurers calculation of the rebates and an explanation of the insurers plan to issue rebates. The instructions and format for calculating and reporting medical loss ratios and issuing rebates shall be prescribed by the Commissioner by rule. The Commissioner shall establish, by rule, procedures for the distribution of a rebate in the event of cancellation or termination by a policyholder. (d) A plan of individual or small group health insurance rates shall not include a standard rate for any age that is more than 300% of the standard rate for the age with the lowest rate in the same plan and the standard rate for any age shall not be more than 104% of the standard rate for the previous age. (e) An insurers failure to comply with the rebate requirements in subsection (c) of this section or rating band requirements set forth in subsection (d) of this section shall constitute an unfair or deceptive act or practice and shall be subject to the penalties in Chapter 22A of this title [ 31-2231.01 et seq.]. (f) The Commissioner may audit any insurer to assure compliance with this section. Insurers shall retain at their principal place of business information necessary for the Commissioner to perform compliance audits.  (Apr. 8, 2011, D.C. Law 18-360,  103, 58 DCR 896; Sept. 26, 2012, D.C. Law 19-171,  85(a), 59 DCR 6190.)  Effect of Amendments The 2012 amendment by D.C. Law 19-171 substituted this title for this act [translated as this chapter] in (b). References in Text This act, referred to in subsec. (b), is D.C. Law 18-360, the Reasonable Health Insurance Ratemaking and Health Care Reform Act of 2010.
 313311.03. Loss ratio disclosure. Policies, certificates, and marketing materials shall prominently display medical loss ratio disclosure, as defined by rule.  (Apr. 8, 2011, D.C. Law 18-360,  104, 58 DCR 896.) 
 313311.03a. Essential health benefits. (a) Consistent with federal law, the Commissioner, with the approval of the Executive Board of the Health Benefit Exchange Authority, shall, by rule, select the benchmark plan for the individual and small group market for purposes of establishing the essential health benefits in the District pursuant to section 1302 of the Affordable Care Act. (b) If the essential health benefits benchmark plan for the individual and small group market does not include all of the benefit categories specified by section 1302 of the Affordable Care Act, or a need exists to add additional benefits, the Commissioner, with the approval of the Executive Board of the Health Benefit Exchange Authority, may, by rule, supplement the benchmark plan benefits as needed so long as the benchmark plan meets the minimum requirements of section 1302 of the Affordable Care Act. (c)(1) A health plan offering the required essential health benefits for the individual and small group markets, other than a health plan offered through the federal basic health program or Medicaid, may not be offered in the District unless the Commissioner determines that it is substantially equal to the benchmark plan. (2) When making this determination, the Commissioner shall: (A) Ensure that the plan covers the essential health benefits categories specified in section 1302 of the Affordable Care Act; and (B) Consider whether the health plan has a benefit design that would create a risk of biased selection based on health status and whether the health plan contains meaningful scope and level of benefits in each of the 10 essential health benefit categories specified by section 1302 of Affordable Care Act. (d)(1) Except as provided in paragraph (2) of this subsection, notwithstanding any other provision of benefits mandated by District law, the benchmark plan adopted by the Commissioner shall be the benefits required in all health benefit plans offered in the individual and small group markets. (2) Grandfathered health plans, as defined in section 1251 of the Affordable Care Act, shall be exempt from complying with the requirements of the benchmark plan.  (April 8, 2011, D.C. Law 18-360,  104a; as added May 2, 2015, D.C. Law 20-265,  104(b), 62 DCR 1529.) 
 313311.03b. Underwriting ratemaking criteria. (a) To implement section 1201 of the Affordable Care Act, the Commissioner, with the approval of the Executive Board of the Health Benefit Exchange Authority, shall have the authority to establish by rule: (1) The geographic rating area for the District; (2) The age rating or curve; and (3) The rating for tobacco uses. (b) The Commissioners authority to implement subsection (a) of this section shall be accomplished in a manner that is not inconsistent with, or would prevent the application of, the Affordable Care Act and its implementing regulations. In exercising the authority under subsection (a) of this section, the Commissioner may provide consumer protections and benefits that exceed those provided in the Affordable Care Act. (c) Health insurers are required to merge their experience in the individual and group markets for purposes of setting health insurance rates.  (April 8, 2011, D.C. Law 18-360,  104b; as added May 2, 2015, D.C. Law 20-265,  104(b), 62 DCR 1529.) 
 313311.04. Annual rate filing requirement. All insurers subject to this chapter shall file annually its rates, rating schedule, and supporting documentation, including ratios of incurred losses to earned premiums by policy form or certificate form, for approval by the Commissioner. The supporting documentation shall demonstrate, in accordance with actuarial principles and standards, using reasonable assumptions, that the appropriate medical loss ratio standards can be expected to be met over the entire period for which rates are computed and that insurer is in compliance with the ratemaking principles of this chapter. If the data submitted does not confirm that the insurer has satisfied the requirements of this chapter, the Commissioner shall notify the insurer in writing of the deficiency within 30 business days of the date that the data is submitted. The insurer shall have 30 days after the date of the Commissioners notice to file amended rates that comply with this chapter. If the insurer fails to file amended rates within the 30-day period, the Commissioner shall order that the insurers filed rates for the nonconforming policies and certificates be reduced to an amount that would bring the rates into compliance with this chapter. Upon request of the insurer and before any order or notice issued pursuant to this section becomes final, the Commissioner shall hold a hearing upon not less than 10 business days written notice to the insurer specifying the matters to be considered at the hearing. The insurers failure to file amended rates within the specified time or the issuance of the Commissioners order amending the rates shall not preclude the insurer from filing an amendment of its rates at a later time.  (Apr. 8, 2011, D.C. Law 18-360,  105, 58 DCR 896.) 
 313311.05. Commissioners authority to rescind approved rates. (a) The Commissioner may, at any time, require any insurer subject to this chapter to demonstrate that its rates and method for setting rates are in compliance with this chapter, notwithstanding that the filings then in effect had previously been approved. Any rates previously approved by the Commissioner, but subsequently disapproved under this chapter, shall be considered disapproved on a prospective basis only from the date of the notice of disapproval, unless the insurer made a material misrepresentation in its contract form or rate filings, in which case the rates shall be deemed disapproved on a retroactive basis. (b) If, at any time subsequent to the approval of rates, the Commissioner finds that a filing does not meet the requirements of this chapter, the Commissioner shall issue an order to the insurer specifying why the filing fails to meet the requirements of this chapter, and, stating when, within a reasonable period thereafter, the filing shall be no longer effective. The order shall not affect any subscriber contract, group certificate, or other contract made or issued prior to the expiration of the period set forth in the order. The Commissioner may, prior to issuing the order and if requested by the insurer, hold a hearing upon not less than 10 business days written notice to the insurer specifying the matters to be considered at the hearing. (c) For violations of this chapter, the Commissioner may order any relief which is appropriate, including disapproving a rate and awarding interest.  (Apr. 8, 2011, D.C. Law 18-360,  106, 58 DCR 896; Sept. 26, 2012, D.C. Law 19-171,  85(b), 59 DCR 6190.)  Effect of Amendments The 2012 amendment by D.C. Law 19-171 substituted this title for this act [translated as this chapter] in (b). References in Text This act, referred to in subsec. (b), is D.C. Law 18-360, the Reasonable Health Insurance Ratemaking and Health Care Reform Act of 2010.
 313311.06. Post-claims underwriting and prior approval for rescission, cancellation, or limitation. (a) An insurer shall not rescind an enrollees plan or coverage once the enrollee is covered under the plan or coverage involved; provided, that this section shall not apply to a covered individual who has performed an act or practice that constitutes fraud or makes an intentional misrepresentation of material fact as prohibited by the terms of the plan or coverage. The plan or coverage shall not be cancelled without prior notice to the Commissioner as required by subsection (b) of this section and prior notice to the consumer and an opportunity to appeal as required by the Patient Protection and Affordable Care Act, approved March 23, 2010 (124 Stat. 109; scattered sections of the United States Code). (b) A health carrier shall provide at least 30 days advance written notice to each plan enrollee, or for individual health insurance coverage, primary subscriber, who would be affected by the proposed rescission of coverage before coverage under the plan may be rescinded in accordance with subsection (a) of this section regardless of, in the case of group or only to an individual within the group. The notice shall explain the reason for the rescission, procedures of appealing, and how to contact the Health Care Ombudsman and the Department of Insurance, Securities, and Banking for further information. (c) Prior to rescinding the enrollees plan or coverage, the insurer shall provide to the Commissioner documentation to support the rescission and the Commissioner shall have 5 business days following receipt of the proposed rescission and supporting documentation to review the documentation to determine if the insurer is complying with the requirements of subsection (a) of this section. The insurer may rescind the plan or coverage after the end of the 5-day period of review unless the Commissioner objects or disapproves the proposed rescission within the 5-day period.  (Apr. 8, 2011, D.C. Law 18-360,  107, 58 DCR 896.) 
 313311.07. Public records. The Commissioner shall, as soon as practicable, make all rate filings, including all supporting documentation, amended filings, and reports filed pursuant to this chapter, available for public inspection either at the Department of Insurance, Securities, and Banking or on its website.  (Apr. 8, 2011, D.C. Law 18-360,  108, 58 DCR 896.) 
 313311.08. Annual report and recommendations. On June 1, 2011, and every year thereafter, the Commissioner shall report to the Council any significant National Association of Insurance Commissioners adoptions related to health care reform, including medical loss ratios and loss ratio disclosure, and any recommendations if the District law differs.  (Apr. 8, 2011, D.C. Law 18-360,  109, 58 DCR 896.) 
 313311.09. Rules. The Mayor, pursuant to subchapter I of Chapter 5 of Title 2 [ 2-501 et seq.], shall issue rules to implement the provisions of this chapter.  (Apr. 8, 2011, D.C. Law 18-360,  110, 58 DCR 896.) 
 313311.10. Application. (a) This chapter shall apply to policies and certificates of insurance that are health benefit plans as defined under  31-3271(4) that are issued 90 days after April 8, 2011. This chapter shall not apply to short-term limited duration health benefit plans. (b) Small group market requirements under this chapter shall apply to a health benefit plan offered by a multiple employer welfare arrangement, including an association or any other entity, if the plan covers an employee of a small employer, as that term is defined in 31-3301.01(42), in the District. (c) Individual market requirements under this chapter shall apply to a health benefit plan offered by a multiple employer welfare arrangement, including an association or any other entity, if the plan covers an individual in the District who is not an employee or dependent of a participating employer.  (Apr. 8, 2011, D.C. Law 18-360,  111, 58 DCR 896; Mar. 22, 2019, D.C. Law 22-266,  3(a), 66 DCR 1423.)  Emergency Legislation  For temporary (90 days) amendment of this section, see  3(a) of Health Insurance Marketplace Improvement Emergency Amendment Act of 2018 (D.C. Act 22-526, Dec. 10, 2018, 65 DCR 13424).  Temporary Legislation  For temporary (225 days) amendment of this section, see  3(a) of Health Insurance Marketplace Improvement Temporary Amendment Act of 2018 (D.C. Law 22-251, Mar. 15, 2019, 66 DCR 975). 
 313311.11. Definitions. For the purposes of this chapter, the term: (1) Affordable Care Act means the Patient Protection and Affordable Care Act approved March 23, 2010 (124 Stat. 111; 42 U.S.C.  18001, note), as the law and its implementing regulations were in effect on December 15, 2017. (2) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking established by Chapter 1 of this title [ 31-101et seq.].  (April 8, 2011. D.C. Law 18-360,  112; as added May 2, 2015, D.C. Law 20-265,  104(c), 62 DCR 1529; Mar. 22, 2019, D.C. Law 22-266,  3(b), 66 DCR 1423.)  Emergency Legislation  For temporary (90 days) amendment of this section, see  3(b) of Health Insurance Marketplace Improvement Emergency Amendment Act of 2018 (D.C. Act 22-526, Dec. 10, 2018, 65 DCR 13424).  Temporary Legislation  For temporary (225 days) amendment of this section, see  3(b) of Health Insurance Marketplace Improvement Temporary Amendment Act of 2018 (D.C. Law 22-251, Mar. 15, 2019, 66 DCR 975). 
 313401. Definitions. For the purposes of this chapter, the term: (1) Administrative services provider contract means a contract entered into between a health maintenance organization and a contracting provider in which the contracting provider accepts payments for certain covered services provided to the enrollees of the health maintenance organization by external providers, and the contracting provider pays the external providers pursuant to a contract between the contracting provider and the health maintenance organization. (2) Agent means a person who solicits, negotiates, effects, procures, delivers, renews, or continues a contract for health maintenance organization membership, other than for himself, or a person who advertises or otherwise holds himself out to the public as such. Health maintenance organization agents shall not include salaried employees and officers of the HMO or its parents, subsidiaries or other corporations under common control with the HMO, whose principal duties do not include the negotiation or solicitation of enrollee contracts. (3) Basic health care services means preventive care, emergency care, inpatient and outpatient hospital and physician care, diagnostic laboratory and diagnostic and therapeutic radiological services, and services mandated under Chapter 29 of this title, Chapter 31 of this title, and Chapter 38 of this title. (4) Capitated basis means fixed per member per month payment or percentage of dues payment wherein the provider or an affiliation of providers assumes the full risk for the cost of contracted services without regard to the type, value, or frequency of services provided. For the purposes of this definition, the term capitated basis includes the cost associated with operating staff or group model facilities. (5) Carrier means a health maintenance organization, a licensed insurer, Group Hospitalization and Medical Services, Inc., or other entity responsible for payment of benefits or provision of services under a group or individual contract. (6) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking. (7) Contracting provider means a physician or other health care provider who enters into an administrative service provider contract with a health maintenance organization. (8) Copayment means either a dollar or percentage amount an enrollee must pay in order to receive a specific covered service which is not fully prepaid. (9) Covered services means health care services included in the health maintenance organizations evidence of coverage in accordance with the terms of the health maintenance organizations group or individual contract. (10) Deductible means the amount an enrollee is responsible to pay out-of-pocket before the health maintenance organization begins to pay the costs associated with treatment. (11) Director means the Director of the Department of Health, established by Reorganization Plan No. 4 of 1996. (12) District means the District of Columbia. (13) Enrollee means an individual who is covered by a health maintenance organization. (14) Enrollment fees means the payment charged by the health maintenance organization which shall be paid by an enrollee or by a group on behalf of enrollees for coverage in the health maintenance organization. (15) Evidence of coverage means a statement of the essential features and covered services of the health maintenance organization which is given to the enrollee by the health maintenance organization or by the group contract holder. (16) Extension of benefits means the continuation of coverage under a particular benefit provided under a contract following termination with respect to an enrollee who is hospitalized on the date of termination. (17) External provider means a health care provider, including a physician or hospital, that is not a contracting provider, or an employee, shareholder, or partner of a contracting provider. (18) Repealed. (19) Group contract means a contract issued and delivered in the District for health care services which by its terms limits eligibility to members of a specified group. The group contract may include coverage for dependents. (20) Group contract holder means the person to which the group contract has been issued. (21) Health maintenance organization or HMO means any person that undertakes to provide or arrange for the delivery of basic health care services to enrollees on a prepaid basis, except for enrollee responsibility for copayments and deductibles. (22) Health maintenance organization producers means any person who solicits, negotiates, effects, procures, delivers, renews, or continues a policy or contract for HMO membership or who takes or transmits a membership fee or premium for such a policy or contract, other than for himself, or a person who advertises or otherwise holds himself out to the public as such. (23) Hold harmless means an expressed or implied arrangement between a provider and a health maintenance organization by which the provider, or any representative of the provider, agrees not to collect or attempt to collect from any enrollee any money owed to the provider by the health maintenance organization or by a contracting provider, except for copayments and deductibles owed by the enrollee, or any payment or charges for health care services not covered under the evidence of coverage. (24) Individual contract means a contract delivered in the District for health care services issued to and covering an individual enrollee. The individual contract may include dependents of the enrollee. (25) Insolvent or insolvency means that the organization has been declared bankrupt and placed under an order of liquidation by a court of competent jurisdiction. (26) Mayor means the Mayor of the District of Columbia. (27) Net worth means the excess of total admitted assets over total liabilities, but the liabilities shall not include fully subordinated debt. (28) Participating provider means a provider who, under an express or implied contract with a health maintenance organization or with its contractor or subcontractor, has agreed to provide covered services to enrollees with an expectation of receiving payment, other than copayment or deductible, directly or indirectly from the health maintenance organization. (29) Person means any natural or artificial person, including, but not limited to, individuals, partnerships, associations, trusts, or corporations. (30) Point of service plan means a delivery system that permits an enrollee of a health maintenance organization to receive services outside the provider panel of the health maintenance organization under the terms and conditions of the enrollees contract with the health maintenance organization. (31) Primary care provider means a participating provider who the enrollee has selected or who has otherwise been assigned responsibility for the coordination of covered services to the enrollee. (32) Provider means any hospital or health professional licensed or authorized by reciprocity or endorsement to practice a health occupation by the District pursuant to Chapter 12 of Title 3, or any state. (33) Provider panel means a group of providers that have entered into a written provider service contract with an HMO to provide services under the HMOs health benefit plan. (34) Replacement coverage means the benefits provided by a succeeding carrier after termination of a members enrollment with the preceding carrier. (35) Uncovered expenditures means the cost to the health maintenance organization for covered services that are the obligation of the health maintenance organization for which an enrollee may also be liable in the event of the health maintenance organizations insolvency and for which no alternative arrangements have been made that are acceptable to the Commissioner.  (Apr. 9, 1997, D.C. Law 11-235,  2, 44 DCR 818; Mar. 24, 1998, D.C. Law 12-81,  46(a), 45 DCR 745; Apr. 27, 1999, D.C. Law 12-274,  501(a)(1), 46 DCR 1294; June 11, 2004, D.C. Law 15-166,  4(t), 51 DCR 2817.)  Prior Codifications 1981 Ed.,  35-4501. Effect of Amendments D.C. Law 15-166, in par. (6), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance and Securities. Emergency Legislation For temporary (90 day) amendment of section, see  4(t) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). For temporary (90 day) additions, see  101 to 106 of DC High Risk Pool Program Establishment Emergency Act of 2010 (D.C. Act 18-522, August 3, 2010, 57 DCR 8001). Temporary Legislation Section 101 to 106 of D.C. Law 18-271 added sections to read as follows: Sec. 101. Establishment of the DC High Risk Pool Program. (a) There is established the DC High Risk Pool Program (Program), which shall provide affordable health insurance benefits to eligible individuals. (b) The Program shall be: (1) Administered by the Department of Health Care Finance, established by the Department of Health Care Finance Establishment Act of 2007, effective February 27, 2008 (D.C. Law 17-109; D.C. Official Code  7-771.01 et seq.); (2) Funded through federal funds made available through the temporary high risk pool program, established by the Patient Protection and Affordable Care Act, approved March 23, 2010 (124 Stat. 119; 42 U.S.C.  18001) (federal act), and administered by the U.S. Department of Health and Human Services; (3) Subject to the availability of funding; and (4) Expire on December 31, 2013; provided, that federal requirements or contractual obligations between the District and the U.S. Department of Health and Human Services do not necessitate a different date. (c) Nothing in this section shall be construed to create or constitute an entitlement to health insurance or to health or medical benefits. Sec. 102. Program eligibility. An individual shall be eligible for the Program if the individual: (1) Is a District resident; (2) Is a United States citizen, or lawfully in the country; (3) Has not had creditable health coverage for the 6 months prior to applying for the Program; (4) Has one or more pre-existing conditions that have resulted in the inability to obtain commercial insurance coverage on the individual market; and (5) Is not eligible for public health-insurance benefits. Sec. 103. Program benefits. The Program shall provide comprehensive coverage for services that meet the requirements of the temporary high risk pool program, established by the federal act. Sec. 104. Affordability of coverage. Under the Program: (1) The premium levels charged to enrollees shall be no greater than 100% of the standard risk rate for each age group, with a variability no greater than 4-to-1 between any 2 age groups; (2) The out-of-pocket limit of coverage for cost-sharing for the required benefits shall not be greater than the applicable amount described in section 223(c)(2) of the Internal Revenue Code of 1986, approved December 8, 2003 (117 Stat. 2469; 26 U.S.C.  223(c)(2)), for the year involved; and (3) There shall not be any annual or lifetime dollar limits on any service, including prescription drugs. Sec. 105. Program implementation. To meet the deadline set by the U.S. Department of Health and Human Services, the Mayor is authorized to enter into a contract with a qualified insurer or hospital and medical services corporation licensed in the District. Sec. 106. Rules. The Mayor, pursuant to Title I of the District of Columbia Administrative Procedure Act, approved October 21, 1968 (82 Stat. 1204; D.C. Official Code  2-501 et seq.), shall issue rules to implement the provisions of this title. Section 302(b) of D.C. Law 18-271 provided that the act shall expire after 225 days of its having taken effect. Editor's Notes Application of D.C. Law 12-274: Section 501(b) of D.C. Law 12-274 provided that this section shall apply upon the promulgation of regulations pursuant to  32-574.1 44-304.01, (2001 Ed.).
 313402. Establishment of health maintenance organizations. (a) Any person may apply to the Commissioner for a certificate of authority to establish and operate a health maintenance organization in compliance with this chapter. No person shall establish or operate a health maintenance organization in the District without obtaining a certificate of authority under this chapter, except as provided for herein. Any person who shall establish and operate a health maintenance organization without obtaining a certificate of authority shall be prohibited from receiving a certificate of authority to do business as a health maintenance organization for a period not to exceed 5 years as determined by the Commissioner. All health maintenance organizations shall, as a condition of certification, agree to accept the risk for the provision of services rendered to enrollees on a prepaid basis except for enrollee responsibility for copayments or deductibles, or both. (b) A foreign corporation may qualify under this chapter subject to its registration to do business pursuant to this section and compliance with all provisions of this chapter and other applicable District laws. (c) All health maintenance organizations operating as health maintenance organizations in the District shall submit an application for a certificate of authority under subsection (d) of this section within 120 days after April 9, 1997. Each applicant may continue to operate until the Commissioner acts upon the application. In the event that an application is denied pursuant to  31-3403, the applicant shall thereafter be treated as a health maintenance organization whose certificate of authority has been revoked. Notwithstanding a revocation under this chapter, any contracts issued to groups or individuals residing in the District shall remain in effect with respect to a health maintenance organization which has a valid certificate of authority issued by the Maryland Insurance Division or Virginia Bureau of Insurance until the next renewal date or anniversary date of coverage of such contracts, or 120 days from the date the application is denied, whichever date shall occur later. (d) Each application for a certificate of authority shall be accompanied by a filing fee of $500, which shall be deposited in the Insurance Regulatory Trust Fund established by  31-1202, and shall be verified by an officer or authorized representative of the applicant, shall be in a form prescribed by the Commissioner, and shall set forth or be accompanied by the following: (1) A copy of the organizational documents of the applicant, such as the articles of incorporation, articles of association, partnership agreement, trust agreement, or other applicable documents, and all amendments thereto; (2) A copy of the bylaws, rules and regulations, or similar document, if any, regulating the conduct of the internal affairs of the applicant; (3) A list of the names, addresses, and official positions and biographical information, on forms acceptable to the Commissioner, of the persons who are to be responsible for the conduct of the affairs and day-to-day operations of the applicant, including all members of the board of directors, board of trustees, executive committee, or other governing board or committee, and the principal officers in the case of a corporation, or the partners or members in the case of partnership or association; (4) A sample of any contract form made, or to be made, between any class of providers and the health maintenance organization and a copy of any contract form made, or to be made, between third party administrators, marketing consultants, or persons listed in paragraph (3) of this subsection and the health maintenance organization; (5) A copy of the form of evidence of coverage to be issued to the enrollees; (6) A copy of the form of group contract, if any, which is to be issued to employers, unions, trustees, or other organizations; (7) Financial statements showing the applicants assets, liabilities, and sources of financial support, including both a copy of the applicants most recent certified financial statement and an unaudited current financial statement; (8)(A) A financial feasibility plan which includes detailed enrollment projections, the methodology for determining dues to be charged during the first 12 months of operations certified by an actuary, a projection of balance sheets, cash flow statements showing any capital expenditures, purchase and sale of investments and deposits with the District, and income and expense statements anticipated from the start of operations until the organization has had net income for at least 1 year, and a statement as to the sources of working capital as well as any other sources of funding. (B) The requirement of submitting a financial feasibility plan shall not apply to any person that holds an unencumbered certificate of authority to operate a health maintenance organization in Maryland or Virginia. (9) A power of attorney duly executed by the applicant, if not domiciled in the District, appointing the Commissioner, or his or her successors in office, and duly authorized deputies, as the true and lawful attorney of the applicant in and for the District upon whom all lawful process in any legal action or proceeding against the health maintenance organization on a cause of action arising in the District may be served; (10) A statement or map reasonably describing the geographical area or areas to be served; (11) A description of the internal grievance procedures to be utilized for the investigation and resolution of enrollee complaints and grievances; (12) A description of the proposed quality assurance program, including the formal organizational structure, methods for developing criteria, procedures for comprehensive evaluation of the quality of care rendered to enrollees, and processes to initiate corrective action and reevaluation when deficiencies in provider or organizational performance are identified; (13) A description of the procedures to be implemented to meet the protection against insolvency requirements in  31-3412; (14) A list of the names, addresses, and license numbers of all providers with which the health maintenance organization has agreements; (15) The method of determining the situs of each group contract; and (16) Such other information as the Commissioner may require to make the determinations required in  31-3403. (e)(1) The Commissioner may issue rules and regulations necessary for the proper administration of this chapter to require a health maintenance organization, subsequent to receiving its certificate of authority, to submit the information, modification, or amendments to the items described in subsection (d) of this section to the Commissioner, either for the Commissioners approval or for information only, prior to the effectuation of the modification or amendment, or to require the health maintenance organization to indicate the modifications to the Commissioner at the time of the next succeeding site visit or examination. (2) Any modification or amendment for which the Commissioners approval is required shall be deemed approved unless disapproved within 30 days, provided that the Commissioner may postpone the action for such additional time, not to exceed 30 days, as necessary for proper consideration.  (Apr. 9, 1997, D.C. Law 11-235,  3, 44 DCR 818; Mar. 27, 2003, D.C. Law 14-252,  2(a), 50 DCR 225.)  Prior Codifications 1981 Ed.,  35-4502. Effect of Amendments D.C. Law 14-252, in subsec. (a), added the third sentence. Editor's Notes Application of Law 14-252: Section 3 of D.C. Law 14-252 provided: This act shall not apply until the Commissioner gives written notice that all necessary rules and administrative procedures are in place to effect the provisions of this act.
 313403.01. Premium tax. (a) Effective January 1, 2009, all health maintenance organizations shall pay to the District of Columbia, for each calendar year, a sum of money as taxes equal to 2% of their policy and membership fees and net premium receipts or consideration received in such calendar year, excluding those fees, receipts, or consideration received pursuant to any federal employee health-benefit program or Medicare, on all policies or contracts in the District of Columbia. The premium tax shall be in lieu of all other taxes except: (1) Taxes upon real estate; and (2) Fees and charges provided for pursuant to this chapter. (b) The certificate of authority of any health maintenance organization may be revoked for failure to pay the required premium tax. (c) All revenues generated pursuant to this section shall be collected in a manner prescribed by the Mayor. (d) Any revenues generated from this section arising from contracts for services under the Districts Medicaid program, DC HealthCare Alliance program, or Healthy DC program shall be deposited in the Healthy DC and Health Care Expansion Fund, established by  31-3514.02. (e) Of all other revenues generated pursuant to this section, 75% shall be deposited in the Healthy DC and Health Care Expansion Fund and 25% shall be deposited in the General Fund of the District of Columbia. (f) For the purposes of this section, the term, health maintenance organization shall include prepaid health plans.  (Apr. 9, 1997, D.C. Law 11-235,  4a; as added Aug. 16, 2008, D.C. Law 17-219,  5054, 55 DCR 7598; Feb. 4, 2010, D.C. Law 18-104,  4(b), 56 DCR 9182; Sept. 24, 2010, D.C. Law 18-223,  5022, 57 DCR 6242.)  Section References This section is referenced in  31-3514.02. Effect of Amendments D.C. Law 18-104, in subsec. (a-1), substituted District Medicaid program, the Healthy DC Program, for District Medicaid program,. D.C. Law 18-223, in subsec. (a), deleted the District Medicaid Program, the Healthy DC Program, the DC HealthCare Alliance, following pursuant to; rewrote subsec. (d); and added subsecs. (e) and (f). Prior to amendment, subsec. (d) read as follows: (d) Seventy-five percent of the revenue generated pursuant to this section shall be deposited in the Healthy DC Fund, established by  31-3514.02. The remaining 25% shall be deposited in the General Fund of the District of Columbia. Emergency Legislation For temporary (90 day) amendment of section, see  4(b) of Hospital and Medical Services Corporation Regulatory Emergency Amendment Act of 2009 (D.C. Act 18-277, January 11, 2010, 57 DCR 935). For temporary (90 day) amendment of section, see  2 of Medicaid Resource Maximization Emergency Amendment Act of 2010 (D.C. Act 18-390, May 7, 2010, 57 DCR 4339). For temporary (90 day) amendment of section, see  5022 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542). Temporary Legislation Section 4(b) of D.C. Law 18-134 substituted District Medicaid program, the Healthy DC Program, for District Medicaid program,. Section 6(b) of D.C. Law 18-134 provided that the act shall expire after 225 days of its having taken effect. Section 2 of D.C. Law 18-205, in subsec. (a), deleted the District Medicaid Program, the Healthy DC Program, the DC HealthCare Alliance,; rewrote subsec. (d) to read as follows: (d) Any revenues generated from this section arising from contracts for services under the Districts Medicaid program, DC HealthCare Alliance program, or Healthy DC program shall be deposited in the Healthy DC and Health Care Expansion Fund, established by section 15b of the Hospital and Medical Services Corporation Regulatory Act of 1996, effective March 2, 2007 (D.C. Law 16-192; D.C. Official Code  31-3514.02).; and added subsecs. (e) and (f) to read as follows: (e) Of all other revenues generated pursuant to this section, 75% shall be deposited in the Healthy DC and Health Care Expansion Fund and 25% shall be deposited in the General Fund of the District of Columbia. (f) For the purposes of this section, the term, health maintenance organization shall include prepaid health plans.. Section 7(b) of D.C. Law 18-205 provided that the act shall expire after 225 days of its having taken effect. Short Title Short title: Section 5053 of D.C. Law 17-219 provided that subtitle U of title V of the act may be cited as the Healthy DC Revenue Amendment Act of 2008. Short title: Section 5021 of D.C. Law 18-223 provided that subtitle C of title IV of the act may be cited as the Medicaid Resource Maximization Amendment Act of 2010.
 313403. Issuance of certificate of authority. (a) Upon receipt of an application for issuance of a certificate of authority, the Commissioner, in consultation with the Director of the Department of Health, shall determine whether the applicant, with respect to the health care services to be provided, has complied with  31-3406. (b) Within 45 days of receipt of the application for issuance of a certificate of authority, the Commissioner, in consultation with the Director of the Department of Health, shall certify that the proposed health maintenance organization meets the requirements of  31-3406 or notify the applicant that it does not meet such requirements and specify in what respects it is deficient. (c) The Commissioner shall issue a certificate of authority to any person filing a completed application upon receiving the prescribed fees and upon the Commissioner being satisfied that: (1) The persons responsible for the conduct of the affairs of the applicant are competent, trustworthy, and possess good reputations; (2) Any deficiencies identified by the Commissioner have been corrected and the health maintenance organizations proposed plan of operation meets the requirements of  31-3406; (3) The health maintenance organization will effectively provide or arrange for basic health care services on a prepaid basis, through insurance or otherwise, except to the extent of reasonable requirements for copayments or deductibles, or both; and (4) The health maintenance organization is in compliance with  31-3412 and 31-3414. (d) A certificate of authority may be denied only after the Commissioner complies with the requirements of  31-3419. (e) The Commissioner, in carrying out his obligations under this chapter, may contract with qualified persons to make recommendations concerning the determinations required to be made by him. Recommendations may be accepted in full or in part by the Commissioner. (f) Repealed. (g) Repealed. (h) Each certificate of authority to do business in the District of Columbia shall renew on May 1 of each year following the date of its issuance unless it has been revoked or the renewal fee under subsection (h) of this section has not been paid. (i) The Commissioner may charge a renewal license fee to health maintenance organizations licensed to do business in the District of Columbia. The renewal fee shall be paid before April 2 of each renewal year. The fee shall be remitted in a manner prescribed by the Commissioner. (j) After receiving its certificate of authority, a health maintenance organization shall submit to the Commissioner information concerning any modification or amendment to its application for a certificate of authority or supporting documentation prior to the effectuation of the modification or amendment or provide this information or documentation to the Commissioner when the health maintenance organization files its annual report.  (Apr. 9, 1997, D.C. Law 11-235,  4, 44 DCR 818; Oct. 21, 2000, D.C. Law 13-190,  4(a), 47 DCR 7261; Oct. 1, 2002, D.C. Law 14-190,  604(a), 49 DCR 6968; Mar. 27, 2003, D.C. Law 14-252,  2(b), 50 DCR 225; Mar. 2, 2007, D.C. Law 16-191,  66, 134, 53 DCR 6794; Mar. 8, 2007, D.C. Law 16-232,  204(a), 54 DCR 368.)  Prior Codifications 1981 Ed.,  35-4503. Section References This section is referenced in  31-3402 and  31-3419. Effect of Amendments D.C. Law 13-190 added subsec. (f). D.C. Law 14-190 added subsec. (g). D.C. Law 14-252 added subsecs. (h), (i), and (j). D.C. Law 16-191 validated previously made technical corrections in the designations of subsecs. (h) to (j). D.C. Law 16-232 repealed subsecs. (f) and (g), which formerly read: (f) A health maintenance organization may, at its own option and expense, submit a statement from an independent organization acceptable to the Commissioner, attesting that it meets all the requirements of the laws and regulations of the District and is qualified to transact the business for which it seeks a certificate of authority. The statement shall be signed, under oath, by an officer or principal of the independent organization and shall be considered prima facie evidence by the Commissioner that the health maintenance organization is entitled to do business in the District, subject to (1) an investigation and review, and (2) the Commissioners authority to revoke or suspend a certificate of authority as provided in this chapter. (g) A health maintenance organization may, at its option, submit a certified copy of its current certificate of authority to do business from the jurisdiction where it is organized (home jurisdiction) and from the jurisdiction where it conducts its largest volume of business (largest volume jurisdiction), if different than its home jurisdiction, together with a statement by a corporate officer that it meets all the requirements of the laws and regulations of the District and is qualified to transact the business for which it seeks a certificate of authority; provided, that the health maintenance organizations home jurisdiction and largest volume jurisdiction have been determined by the Commissioner to have legal and regulatory requirements that meet or exceed those applicable to insurance companies under District law. The statement of the corporate officer shall be signed, under oath, and shall, together with certified copies of the health maintenance organizations certificates of authority, be considered prima facie evidence by the Commissioner that the health maintenance organization is entitled to do business in the District. Nothing in the preceding sentence shall limit the Commissioners authority to subject the applicant to investigation and review or to suspend a certificate of authority as provided in this chapter. As a condition of obtaining a certificate of authority to do business in the District of Columbia, the Commissioner may also require a health maintenance organization submitting a certificate of authority from an alien jurisdiction to submit a power of attorney and undertaking, in a form acceptable to the Commissioner, that provide that the health maintenance organization will not set up a defense to any claim, action, or proceeding brought against it arising from an insurance contract entered into in the District of Columbia, nor refuse to obey any lawful order of the Commissioner, or pay any fine or penalty imposed upon it by the Commissioner or any court of competent jurisdiction, on the ground that it is not subject to the laws of the United States of America or the District of Columbia. The Commissioner shall publish annually in the District of Columbia Register a list of foreign and alien jurisdictions that have been determined by the Commissioner as having legal and regulatory requirements that meet or exceed those applicable to insurance companies under District law. The Commissioner may at any time add or remove jurisdictions from the list and the additions and deletions shall be effective immediately until the next annual publication date. Emergency Legislation For temporary amendment of section, see  2 of the TANF and TANF-Related Medicaid Managed Care Program Emergency Amendment Act of 1998 (D.C. Act 12-311, March 26, 1998, 45 DCR 2124), and  2 of the TANF and TANF-Related Medicaid Managed Care Program Legislative Review Emergency Amendment Act of 1998 (D.C. Act 12-366, June 5, 1998, 45 DCR 4039). For temporary (90 day) amendment of section, see  604(a) of Fiscal Year 2003 Budget Support Emergency Act of 2002 (D.C. Act 14-453, July 23, 2002, 49 DCR 8026). Temporary Legislation For temporary (225 day) amendment of section, see  2 of TANF-Related Medicaid Managed Care Program Temporary Amendment Act of 1998 (D.C. Law 12-141, July 24, 1998, law notification 45 DCR 6512).
 313404. Powers of health maintenance organizations. (a) The powers of a health maintenance organization include, but are not limited to, the following: (1) The purchase, lease, construction, renovation, operation, or maintenance of hospitals, medical facilities, or both, and their ancillary equipment, and such property and equipment as may reasonably be required for its principal office or for such purposes as may be necessary in the transaction of the business of the organization; (2) Transactions between affiliated entities, including loans and the transfer of responsibility under all contracts (provider, enrollee, etc.) between affiliates or between the health maintenance organization and its parent; (3) The furnishing of health care services through providers, provider associations, or agents for providers which are under contract with or employed by the health maintenance organization; (4) The contracting with any person for the performance on its behalf of certain functions, such as marketing, enrollment, and administration; (5) The contracting with an insurance company, including Group Hospitalization and Medical Service, Inc., licensed in the District for the provision of insurance, indemnity, or reimbursement against the cost of covered services provided by the health maintenance organization or with optometry services, podiatry services, dental services, pharmaceutical service plans, and other entities authorized to do business in the District for the provision of supplemental health services; (6) The joint marketing of products with an insurance company authorized to do business in the District as long as the company that is offering each product is clearly identified; and (7) Entering into administrative service provider contracts with contracting providers whereby covered services are rendered to enrollees by external providers who have entered into contracts with the contracting provider. (b) A health maintenance organization shall file notice, with adequate supporting information, with the Commissioner prior to the exercise of any power granted in subsection (a)(1), (2), or (4) of this section which may affect the financial soundness of the health maintenance organization. The Commissioner shall disapprove such exercise of power only if the Commissioner determines it would substantially and adversely affect the financial soundness of the health maintenance organization and endanger its ability to meet its obligations. If the Commissioner does not disapprove within 30 days of the filing of the notice, the exercise of power shall be deemed approved. (c) The Commissioner may issue rules and regulations exempting those activities having a de minimis effect from the filing requirement of this subsection.  (Apr. 9, 1997, D.C. Law 11-235,  5, 44 DCR 818; Mar. 24, 1998, D.C. Law 12-81,  46(b), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-4504. Section References This section is referenced in  31-3411.
 313405. Fiduciary responsibilities. (a) Any director, officer, employee, or partner of a health maintenance organization who receives, collects, disburses, or invests funds in connection with the activities of such organization shall be responsible for such funds in a fiduciary relationship to the organization. (b) A health maintenance organization shall maintain in force a fidelity bond or fidelity insurance on such employees and officers, directors, and partners in an amount not less than $250,000 and not more than $5,000,000.  (Apr. 9, 1997, D.C. Law 11-235,  6, 44 DCR 818.)  Prior Codifications 1981 Ed.,  35-4505.
 313406. Quality assurance program. (a) A health maintenance organization shall establish procedures to assure that the health care services provided to enrollees shall be rendered under reasonable standards of quality of care consistent with prevailing professionally recognized standards of medical practice. Such procedures shall include mechanisms to assure availability, accessibility, and continuity of care. (b) A health maintenance organization shall have an ongoing internal quality assurance program to monitor and evaluate its health care services, including primary and specialist physician services, and ancillary and preventive health care services, across all institutional and noninstitutional settings. The program shall include, at a minimum, the following: (1) A written statement of goals and objectives which emphasizes improved health status in evaluating the quality of care rendered to enrollees; (2) A written quality assurance plan which describes the following: (A) The health maintenance organizations scope and purpose in quality assurance; (B) The organizational structure responsible for quality assurance activities; (C) Contractual arrangements, where appropriate, for delegation of quality assurance activities; (D) Confidentiality policies and procedures; (E) A system of ongoing evaluation activities; (F) A system of focused evaluation activities; (G) A system for credentialing providers and performing peer review activities; and (H) Duties and responsibilities of the designated physician responsible for the quality assurance activities; (3) A written statement describing the system on ongoing quality assurance activities including: (A) Problem assessment, identification, selection, and study; (B) Corrective action, monitoring, evaluation, and reassessment; and (C) Interpretation and analysis of patterns of care rendered to individual patients by individual providers; (4) A written statement describing the system focused quality assurance activities based on representative samples of the enrolled population which identifies method of topic selection, study, data collection, analysis, interpretation, and report format; and (5) Written plans for taking appropriate corrective action whenever, as determined by the quality assurance program, inappropriate or substandard services have been provided or services which should have been provided have not been provided. (c) The organization shall record proceedings of formal quality assurance program activities and maintain documentation in a confidential manner. Quality assurance program minutes shall be available to the Commissioner. (d) The organization shall ensure the use and maintenance of an adequate patient record system which will facilitate documentation and retrieval of clinical information for the purpose of the health maintenance organization evaluating continuity and coordination of patient care and assessing the quality of health and medical care provided to enrollees. (e) Enrollee clinical records shall be available to the Commissioner or an authorized designee for examination and review to ascertain compliance with this section, or as deemed necessary by the Commissioner. (f) The organization shall establish a mechanism for periodic reporting of quality assurance program activities to the governing body, providers, and appropriate staff. (g) If a quality assurance program has received approval in Maryland or Virginia, or if a quality assurance program has been approved by the D.C. Medicaid Program, it shall be deemed approved. (h) The following shall apply to health maintenance organizations, carriers, and providers: (1) No contract between a health maintenance organization and a provider shall prohibit, impede, or interfere in the discussions between a patient and a provider of medical treatment option including discussions regarding financial coverage of those treatment options. (2) A contract between a carrier and a provider shall permit and require the provider to discuss medical treatment options with the patient. (3) A health maintenance organization may not terminate or refuse to contract with a provider solely because the provider discussed medical treatment options with an enrollee. (i) The Commissioner may accept all or part of a quality assurance report and supporting documentation of an approved accrediting organization acceptable to the Commissioner to satisfy the review requirements under this section; provided, that such acceptance shall not preclude the Commissioner from performing the examination function. (j) The expense of the quality assurance examination shall be borne by the entity applying for the health maintenance organization certificate of authority or otherwise seeking to comply with this section.  (Apr. 9, 1997, D.C. Law 11-235,  7, 44 DCR 818; Mar. 27, 2003, D.C. Law 14-252,  2(c), 50 DCR 225.)  Prior Codifications 1981 Ed.,  35-4506. Section References This section is referenced in  31-3403 and  31-3426. Effect of Amendments D.C. Law 14-252 added subsecs. (i) and (j).
 313407. Requirements for group contract, individual contract, and evidence of coverage. (a) Every group and individual contract holder is entitled to a group or individual contract. (1) The contract shall not contain provisions or statements which are unjust, unfair, inequitable, misleading, deceptive, or which encourage misrepresentation. (2) The contract shall contain a clear statement of the following: (A) Name and address of the health maintenance organization; (B) Eligibility requirements; (C) Covered services within the service area; (D) Covered emergency care benefits and services; (E) Out of area covered benefits and services, if any; (F) Copayments, deductibles, or other out-of-pocket expenses; (G) Limitations and exclusions; (H) Enrollee termination; (I) Enrollee reinstatement, if any; (J) Claims procedures; (K) Repealed. (L) Continuation of coverage, if any; (M) Conversion; (N) Extension of benefits if any; (O) Coordination of benefits, if applicable; (P) Subrogation, if any; (Q) Description of the service area; (R) Entire contract provision; (S) Term of coverage; (T) Cancellation of group or individual contract holder; (U) Renewal; (V) Reinstatement of group or individual contract holder, if any; (W) Grace period; (X) Conformity with District of Columbia law; and (Y) Payment provisions. (3) An evidence of coverage may be filed as part of the group contract to describe the provisions required in paragraph (2)(A) through (Q) of this subsection. (b) In addition to the requirements of subsection (a)(2)(A) through (Y) of this section, an individual contract shall provide for a 10-day period to examine and return the contract and have the dues refunded. If services were received during the 10-day period and the person returns the contract to receive a refund of the dues paid, the person must pay for such services. (c) Every enrollee shall receive an evidence of coverage from the group contract holder or the health maintenance organization. (1) The evidence of coverage shall not contain provisions or statements which are unfair, unjust, inequitable, misleading, or deceptive. (2) The evidence of coverage shall contain a clear statement of the requirements in subsection (a)(2)(A) through (Q) of this section. (d) The Commissioner may adopt regulations establishing readability standards for individual contract, group contract, and evidence of coverage forms. (e) No group or individual contract, evidence of coverage, or amendment thereto shall be delivered or issued for delivery in the District unless its form has been filed with and approved by the Commissioner pursuant to subsections (f) and (g) of this section. (f) If an evidence of coverage issued pursuant to a contract issued in the District is intended for delivery in the District, the evidence of coverage must be submitted to and approved by the Commissioner in accordance with subsection (g) of this section. (1) If an evidence of coverage issued pursuant to a contract issued in Virginia or Maryland is intended for delivery in the District, the evidence of coverage shall be deemed approved if it has been filed and approved by the appropriate regulatory authority of Virginia or Maryland, as applicable. (2) If an evidence of coverage issued pursuant to a contract issued in another state, excepting Virginia and Maryland as described in paragraph (1) of this subsection, is intended for delivery in the District, the evidence of coverage must be submitted to and approved by the Commissioner in accordance with subsection (g) of this section. (g) Every form required by this section shall be filed with the Commissioner not less than 30 days prior to delivery or issue for delivery in the District. At any time during the initial 30-day period, the Commissioner may extend the period for review for an additional 30 days. Notice of an extension shall be in writing. At the end of the review period, the form is deemed approved if the Commissioner has taken no action. The filer shall notify the Commissioner in writing prior to using a form that is deemed approved. (1) At any time, after 30-days notice and for cause shown, the Commissioner may withdraw approval of any form effective at the end of the 30 days if the form would violate a statute or regulation of the District. For group and individual contracts and evidence of coverages which have already been issued and delivered, the effective date shall not occur until the next anniversary date of the group or individual contract unless the Commissioner requires that the effective date shall be earlier. In such case, the health maintenance organization may revise its dues and other terms contained in the contract or evidence of coverage to reflect any changes required as a result of the Commissioners withdrawal of approval. (2) When a filing is disapproved or approval of a form is withdrawn, the Commissioner shall give the health maintenance organization written notice of the reasons for disapproval and in the notice shall inform the health maintenance organization that within 30 days of receipt of the notice the health maintenance organization may request a hearing. A hearing will be conducted within 30 days after the Commissioner has received the request for a hearing. (h) The Commissioner may require the submission of any relevant information the Commissioner deems necessary in determining whether to approve or disapprove a filing made pursuant to this section.  (Apr. 9, 1997, D.C. Law 11-235,  8, 44 DCR 818; Apr. 27, 1999, D.C. Law 12-274,  501(a)(2), 46 DCR 1294.)  Prior Codifications 1981 Ed.,  35-4507. Section References This section is referenced in  31-3419. Editor's Notes Application of D.C. Law 12-274: Section 501(b) of D.C. Law 12-274 provided that this section shall apply upon the promulgation of regulations pursuant to  32-574.1 44-304.01, (2001 Ed.).
 313408.01. Compliance with other laws. Health maintenance organizations shall comply with the following laws: (1) Chapter 3 of this title; (2) Chapter 19 of this title; (3) Chapter 14 of this title; (4) Subchapter I of Chapter 7 of this title; (5) Chapter 21 of this title; and (6) The Reasonable Health Insurance Ratemaking Reform Act of 2010 [Chapters 30A, 31C, and 33A of this title].  (Apr. 9, 1997, D.C. Law 11-235,  9a; as added Mar. 27, 2003, D.C. Law 14-252,  2(d), 50 DCR 225; Apr. 8, 2011, D.C. Law 18-360,  502(a), 58 DCR 896.)  Effect of Amendments D.C. Law 18-360 deleted and from the end of par. (4), substituted ; and for a period the end of par. (5), and added par. (6). Editor's Notes Application of Law 14-252: Section 3 of D.C. Law 14-252 provided: This act shall not apply until the Commissioner gives written notice that all necessary rules and administrative procedures are in place to effect the provisions of this act.
 313408. Annual report. [Repealed] Repealed.  (Apr. 9, 1997, D.C. Law 11-235,  9, 44 DCR 818; Apr. 27, 1999, D.C. Law 12-274,  501(a)(3), 46 DCR 1294; Mar. 27, 2003, D.C. Law 14-252,  2(d), 50 DCR 225.)  Prior Codifications 1981 Ed.,  35-4508. Editor's Notes Application of D.C. Law 12-274: Section 501(b) of D.C. Law 12-274 provided that this section shall apply upon the promulgation of regulations pursuant to  32-574.1 44-304.01, (2001 Ed.).
 313409. Information to enrollees. (a) A health maintenance organization shall provide to its enrollees a list of providers, upon enrollment and re-enrollment. (b) Every health maintenance organization shall provide to its enrollees within 30 days notice of any material change in the operation of the organization that will affect them directly. (c) An enrollee must be notified in writing by a health maintenance organization of the termination of the primary care provider who provided health care services to that enrollee. A health maintenance organization shall provide assistance to the enrollee in transferring to another participating primary care provider. (d) A health maintenance organization shall provide to enrollees information on how services may be obtained, where additional information on access to services can be obtained, and a number where the enrollee can contact the HMO at no cost to the enrollee.  (Apr. 9, 1997, D.C. Law 11-235,  10, 44 DCR 818.)  Prior Codifications 1981 Ed.,  35-4509.
 313410. Grievance procedures [Repealed] Repealed.  (Apr. 9, 1997, D.C. Law 11-235,  11, 44 DCR 818; Apr. 27, 1999, D.C. Law 12-274,  501(a)(4), 46 DCR 1294.)  Prior Codifications 1981 Ed.,  35-4510. Section References This section is referenced in  31-3419. Editor's Notes Application of Law 12-274: Section 501(b) of D.C. Law 12-274 provided that this section shall apply upon the promulgation of regulations pursuant to  32-574.1 44-304.01, 2001 Ed. .
 313411. Investments. With the exception of investments made in accordance with  31-3404(a)(1), the funds of a health maintenance organization shall be invested in accordance with NAIC Health Maintenance Organization Investment Guidelines adopted by the Commissioner.  (Apr. 9, 1997, D.C. Law 11-235,  12, 44 DCR 818.)  Prior Codifications 1981 Ed.,  35-4511.
 313412. Protection against insolvency. (a) Net worth requirements.  (1) Before issuing any certificates of authority, the Commissioner shall require that the health maintenance organization have an initial net worth of $1,500,000 and shall thereafter maintain the minimum net worth required by paragraph (2) of this subsection. (2) Except as provided in paragraph (4) of this subsection, every health maintenance organization must maintain a minimum net worth equal to the greater of: (A) $1,000,000; (B) Two percent of annual dues revenues as reported on the most recent annual financial statement filed with the Commissioner on the first $150,000,000 of dues and 1% of annual dues on the dues in excess of $150,000,000; (C) An amount equal to the sum of 3 months uncovered health care expenditures as reported on the most recent financial statement filed with the Commissioner; or (D) An amount equal to the sum of: (i) Eight percent of annual health care expenditures except those paid on a capitated basis or managed hospital payment basis as reported on the most recent financial statement filed with the Commissioner; and (ii) Four percent of annual hospital expenditures paid on a managed hospital payment basis as reported on the most recent financial statement filed with the Commissioner. (2A) Repealed. (3) Repealed. (4) In determining net worth, no debt shall be considered fully subordinated unless the subordination clause is in a form acceptable to the Commissioner. Any interest obligation relating to the repayment of any subordinated debt must be similarly subordinated. (A) The interest expenses relating to the repayment of any fully subordinated debt shall be considered covered expenses. (B) Any debt incurred by a note meeting the requirements of this section, and otherwise acceptable to the Commissioner, shall not be considered a liability and shall be recorded as equity. (b) Deposit requirements.  (1) Unless otherwise provided below, each health maintenance organization shall deposit with the Commissioner or, at the discretion of the Commissioner, with any organization or trustee acceptable to the Commissioner through which a custodial or controlled account is utilized, cash, securities, or any combination of these or other measures that are acceptable to the Commissioner which at all times shall have a value of not less than $300,000. (2)(A) A health maintenance organization that is in operation on April 9, 1997 shall make a deposit equal to $150,000. (B) In the second year, the amount of the additional deposit for a health maintenance organization that is in operation on April 9, 1997 shall be equal to $150,000, for a total of $300,000. (3) The deposit shall be an admitted asset of the health maintenance organization in the determination of net worth. (4) All income from deposits shall be an asset of the organization. A health maintenance organization that has made a securities deposit may withdraw that deposit, or any part thereof, after making a substitute deposit of cash, securities, or any combination of these or other measures of equal amount and value. Any securities shall be approved by the Commissioner before being deposited or substituted. (5) The deposit shall be used to protect the interests of the health maintenance organizations enrollees and to assure continuation of covered services to enrollees of a health maintenance organization which is in rehabilitation or conservation. The Commissioner may use the deposit for administrative costs directly attributable to a receivership or liquidation. If a health maintenance organization is placed in receivership or liquidation, the deposit shall be an asset subject to the provisions of Chapter 13 of this title. (6) The Commissioner may reduce or eliminate the deposit requirement if a health maintenance organization deposits with the District treasurer, Commissioner, or other official body of the District or jurisdiction of domicile for the protection of all enrollees, wherever located, of such health maintenance organization, cash, acceptable securities, or surety, and delivers to the Commissioner a certificate to such effect, duly authenticated by the regulatory authority in the state of domicile or by the appropriate District official holding the deposit. (c) Liabilities.  Every health maintenance organization shall, when determining liabilities, include an amount estimated in the aggregate to provide for any unearned dues and for the payment of all claims for health care expenditures which have been incurred, whether reported or unreported, which are unpaid and for which such organization is or may be liable, and to provide for the expense of adjustment or settlement of such claims. Such liabilities may be computed in accordance with generally accepted accounting principles. (d) Hold harmless.  (1) Every contract between a health maintenance organization and a participating provider of health care services shall be in writing and shall set forth that in the event a health maintenance organization fails to pay for health care services as set forth in the contract, the enrollee shall not be liable to the provider for any sums owed by the health maintenance organization. (2) In the event that the participating provider contract has not been reduced to writing as required by this subsection or that the contract fails to contain the required prohibition, the participating provider shall not collect or attempt to collect from the enrollee sums owed by a health maintenance organization. (3) No participating provider, agent, trustee, or assignee thereof may maintain any action at law against an enrollee to collect sums owed by a health maintenance organization. (e) Continuation of benefits.  (1) The Commissioner shall require that each health maintenance organization have a plan for handling insolvency which allows for continuation of benefits for the duration of the contract period for which premiums have been paid and continuation of benefits to members who are confined on the date of insolvency in an inpatient facility until their discharge or expiration of benefits. (2) In considering the plan, the Commissioner may require: (A) Insurance to cover the expenses to be paid for continued benefits after an insolvency; (B) Provisions in provider contracts that obligate the provider to provide services for the duration of the period after a health maintenance organizations insolvency for which premium payment has been made and until the enrollees discharge from inpatient facilities; (C) Insolvency reserves; (D) Acceptable letters of credit; and (E) Any other arrangements to assure that benefits are continued as specified above. (f) Notice of termination.  An agreement to provide covered services between a provider and a health maintenance organization must require that if the provider terminates the agreement, the provider shall give the organization at least 60 days advance notice of termination.  (Apr. 9, 1997, D.C. Law 11-235,  13, 44 DCR 818; Mar. 24, 1998, D.C. Law 12-81,  46(c), 45 DCR 745; Mar. 27, 2003, D.C. Law 14-252,  2(f), 50 DCR 225; Nov. 5, 2013, D.C. Law 20-40,  7, 60 DCR 12304.)  Prior Codifications 1981 Ed.,  35-4512. Section References This section is referenced in  31-308,  31-3402,  31-3403,  31-3413, and  31-3419. Effect of Amendments D.C. Law 14-252, in subsec. (a)(2), substituted (2A), (3), and for (3) and; and added subsec. (a)(2A). The 2013 amendment by D.C. Law 20-40 substituted paragraph (4) for paragraphs (2A), (3), and (4) in (a)(2); and repealed (a)(2A) and (a)(3).
 313413. Uncovered expenditures insolvency deposit. (a) If at any time uncovered expenditures exceed 10% of total health care expenditures, a health maintenance organization shall place an uncovered expenditures insolvency deposit with the Commissioner, or with any organization or trustee acceptable to the Commissioner through which a custodial or controlled account is maintained, cash or securities that are acceptable to the Commissioner. The deposit shall at all times have a fair market value in an amount of 120% of the HMOs outstanding liability for uncovered expenditures for enrollees in the District, including incurred, but not reported claims, and shall be calculated as of the first day of the month and maintained for the remainder of the month. If a health maintenance organization is not otherwise required to file a quarterly report, it shall file a report within 45 days of the end of the calendar quarter with information sufficient to demonstrate compliance with this section. (b) The deposit required under this section is in addition to the deposit required under  31-3412 and is an admitted asset of a health maintenance organization in the determination of net worth. All income from deposits or trust accounts shall be assets of a health maintenance organization and may be withdrawn from the deposit or account quarterly with the approval of the Commissioner. (c)(1) A health maintenance organization that has made a deposit may withdraw that deposit or any part of the deposit if: (A) A substitute deposit of cash or securities of equal amount and value is made;.  (B) The fair market value exceeds the amount of the required deposit; or (C) The required deposit under subsection (a) of this section is reduced or eliminated. (2) Deposits, substitutions or withdrawals may be made only with the prior written approval of the Commissioner. (d) The deposit required under this section is in trust and may be used only as approved under this section. The Commissioner may use the deposit of an insolvent health maintenance organization for administrative costs associated with administering the deposit and payment claims of enrollees of the District for uncovered expenditures. Claims for uncovered expenditures shall be paid on a pro rata basis based on assets available to pay such ultimate liability for incurred expenditures. Partial distribution may be made pending final distribution. Any amount of the deposit remaining shall be paid into the liquidation or receivership of the health maintenance organization. (e) The Commissioner may by regulation prescribe the time, manner, and form for filing claims under subsection (d) of this section. (f) The Commissioner may by regulation or order require health maintenance organizations to file annual, quarterly, or more frequent reports as the Commissioner deems necessary to demonstrate compliance with this section. The Commissioner may require that the reports include liability for uncovered expenditures as well as an audit option.  (Apr. 9, 1997, D.C. Law 11-235,  14, 44 DCR 818.)  Prior Codifications 1981 Ed.,  35-4513.
 313414. Enrollment period; replacement coverage in the event of insolvency. (a) Enrollment period.  (1) In the event of the insolvency of a health maintenance organization, upon order of the Commissioner all other carriers that participated in the enrollment process with the insolvent health maintenance organization at a groups last regular enrollment period shall offer such groups enrollees of the insolvent health maintenance organization a 30-day enrollment period commencing upon the date of insolvency. Each carrier shall offer such enrollees of the insolvent health maintenance organization the same coverages and rates that it had offered to the enrollees of the group at its last regular enrollment period. (2) If no other carrier has been offered to groups enrolled in the insolvent health maintenance organization or if the Commissioner determines that the other health benefit plans lack sufficient health care delivery resources to assure that health care services will be available and accessible to all of the group enrollees of the insolvent health maintenance organization, then the Commissioner shall allocate equitably the insolvent health maintenance organizations group contracts for such groups among all health maintenance organizations which operate within a portion of the insolvent health maintenance organizations service area, taking into consideration the health care delivery resources of each health maintenance organization. Each health maintenance organization to which a group or groups are so allocated shall offer such group or groups the health maintenance organizations existing coverage which is most similar to each groups coverage with the insolvent health maintenance organization at rates determined in accordance with the successor health maintenance organizations existing rating methodology. (3) The Commissioner shall also allocate equitably the insolvent health maintenance organizations nongroup enrollees which are unable to obtain other coverage among all health maintenance organizations which operate within a portion of the insolvent health maintenance organizations service area, taking into consideration the health care delivery resources of each such health maintenance organization. Each health maintenance organization to which nongroup enrollees are allocated shall offer nongroup enrollees the health maintenance organizations existing coverage for individual or conversion coverage as determined by this type of coverage in the insolvent health maintenance organizations existing rating methodology. Successor health maintenance organizations which do not offer direct nongroup enrollment may aggregate all of the allocated nongroup enrollees into one group for rating and coverage purposes. (b) Replacement coverage.  (1) For the purposes of this subsection, the term discontinuance means the termination of the contract between the group contract holder and a health maintenance organization due to the insolvency of the health maintenance organization and does not refer to the termination of any agreement between any individual enrollee and the health maintenance organization. (2) Any carrier providing replacement coverage with respect to group hospital, medical or surgical expense or service benefits within a period of 60 days from the date of discontinuance of a prior health maintenance organization contract or policy providing such hospital, medical, or surgical expense or service benefits shall immediately cover all enrollees who were validly covered under the previous health maintenance organization contract or policy at the date of discontinuance and who would otherwise be eligible for coverage under the succeeding carriers contract, regardless of any provisions of the contract relating to active employment or hospital confinement or pregnancy. (3) Except to the extent benefits for the condition would have been reduced or excluded under the prior carriers contract or policy, no provision in a succeeding carriers contract of replacement coverage which would operate to reduce or exclude benefits on the basis that the condition giving rise to benefits preexisted the effective date of the succeeding carriers contract shall be applied with respect to those enrollees validly covered under the prior carriers contract or policy on the date of discontinuance.  (Apr. 9, 1997, D.C. Law 11-235,  15, 44 DCR 818.)  Prior Codifications 1981 Ed.,  35-4514. Section References This section is referenced in  31-3152,  31-3403, and  31-3430.
 313415. Filing requirements for rating information. (a) No fees may be used until either a schedule of enrollment fees or methodology for determining enrollment fees dues has been filed with and approved by the Commissioner. (b) Either a specific schedule of fees, or a methodology for determining fees, shall be established in accordance with actuarial principles for various categories of enrollees, provided that the enrollment fees applicable to an enrollee shall not be individually determined based on the status of an enrollees health. However, the fees shall not be excessive, inadequate, or unfairly discriminatory. A statement by a qualified actuary or other qualified person acceptable to the Commissioner as to the appropriateness of the use of the methodology, based on reasonable assumptions, shall accompany the filing along with adequate supporting information. A health maintenance organization filing a schedule of enrollment fees or methodology for determining enrollment fees pursuant to this section shall also comply with the Reasonable Health Insurance Ratemaking Reform Act of 2010 [Chapters 30A, 31C, and 33A of this title]. (c) The Commissioner shall approve the schedule of enrollment fees dues or methodology for determining enrollment fees if the requirements of subsection (b) of this section are met. If the Commissioner disapproves the filing, the Commissioner shall notify the health maintenance organization. In the notice, the Commissioner shall specify the reasons for disapproval. A hearing shall be held within 30 days after a request in writing by the person filing. If the Commissioner does not take action on the schedule or methodology within 30 days of the filing, it shall be deemed approved.  (Apr. 9, 1997, D.C. Law 11-235,  16, 44 DCR 818; Apr. 8, 2011, D.C. Law 18-360,  502(b), 58 DCR 896.)  Prior Codifications 1981 Ed.,  35-4515. Section References This section is referenced in  31-3419. Effect of Amendments D.C. Law 18-360, in subsec. (b), added the fourth sentence. Emergency Legislation For temporary (90 day) amendment of section, see  2 of Reasonable Health Insurance Premium Increase Emergency Amendment Act of 2010 (D.C. Act 18-328, March 18, 2010, 57 DCR 2546).
 313416. Regulation of health maintenance organization producers. (a) The Commissioner shall issue rules and regulations to provide for the licensing of health maintenance organization producers. The rules shall establish: (1) The requirements for licensure of resident health maintenance organization producers; (2) The conditions for entering into reciprocal agreements with other jurisdictions for the licensure of nonresident health maintenance organization producers; (3) Any examination, prelicensing, or continuing education requirements; (4) The requirements for registering and terminating the appointment of health maintenance organization producers; (5) Any requirements for registering any assumed names or office locations in which a health maintenance organization producer does business; (6) The conditions for health maintenance organization producer license renewal; (7) The grounds for denial, refusal, suspension, or revocation of a health maintenance organization producers license; (8) Any required fees for the licensing activities of health maintenance organization producers; and (9) Any other requirement or procedure and any form as may be reasonably necessary to provide for the effective administration of the licensing of health maintenance organization producers under this section. (b) The provisions of subsection (a) of this section shall not apply to the following: (1) Any regular salaried officer or employee of a health maintenance organization who devotes substantially all of his time to activities other than the taking or transmitting of applications or membership fees or premiums for health maintenance organization membership, or who receives no commission or other compensation directly dependent upon the business obtained and who does not solicit or accept from the public applications for health maintenance organization membership; (2) Employers or their officers or employees or the trustees of any employee benefit plan to the extent that such employers, officers, employees, or trustees are engaged in the administration or operation of any program of employee benefits involving the use of health maintenance organization memberships; provided, that such employers, officers, employees, or trustees are not in any manner compensated directly or indirectly by the health maintenance organization memberships; (3) Banks or their officers and employees to the extent that such banks, officers, and employees collect and remit charges, charging the same against accounts of depositors on the orders of such depositors; or, (4) Any person or the employee of any person who has contracted to provide administrative, management, or health care services to a health maintenance organization and who is compensated for those services by the payment of an amount calculated as a percentage of the revenues, net income or profits of the health maintenance organization, if that method of compensation is the sole basis for subjecting that person or the employee of the person to this chapter. (c) The Commissioner may, by rule, exempt certain classes of persons from the requirements of subsection (a) of this section if: (1) The functions they perform do not require special competence, trustworthiness or the regulatory surveillance made possible by licensing; or, (2) Other existing safeguards make regulation unnecessary.  (Apr. 9, 1997, D.C. Law 11-235,  17, 44 DCR 818.)  Prior Codifications 1981 Ed.,  35-4516.
 313417. Powers of insurance corporations. (a) An insurance company authorized to do business in the District may, either directly or through a subsidiary or affiliate, organize and operate a health maintenance organization under the provisions of this chapter. Notwithstanding any other provisions of law, any 2 or more such insurance companies, or subsidiaries or affiliates thereof, may jointly organize and operate a health maintenance organization. The business of insurance is deemed to include the providing of health care by a health maintenance organization owned or operated by an insurer or subsidiary thereof. (b) Notwithstanding any other provision of insurance laws, an insurer may contract with a health maintenance organization to provide insurance or similar protection against the cost of care provided through health maintenance organizations and to provide coverage in the event of the failure of a health maintenance organization to meet its obligations. (c) The enrollees of a health maintenance organization constitute a permissible group under such laws. Among other things, under such contracts the insurer may make benefit payments to health maintenance organizations for health care services rendered by providers.  (Apr. 9, 1997, D.C. Law 11-235,  18, 44 DCR 818; Mar. 24, 1998, D.C. Law 12-81,  46(d), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-4517.
 313418. Examinations. [Repealed] Repealed.  (Apr. 9, 1997, D.C. Law 11-235,  19, 44 DCR 818; Oct. 23, 1997, D.C. Law 12-32,  12(c), 44 DCR 4819; Mar. 27, 2003, D.C. Law 14-252,  2(g), 50 DCR 225.)  Prior Codifications 1981 Ed.,  35-4518.
 313419. Suspension or revocation of certificate of authority. (a) Any certificate of authority issued under this chapter may be suspended or revoked, and any application for a certificate of authority may be denied, if the Commissioner finds that any of the conditions listed below exist: (1) A health maintenance organization is operating significantly in contravention of its basic organizational document or in a manner inconsistent with this chapter. (2) A health maintenance organization issued an evidence of coverage or uses a schedule of charges for health care services which do not comply with the requirements of  31-3407 and 31-3415. (3) A health maintenance organization does not provide or arrange for basic health care services. (4) The Commissioner certifies that: (A) A health maintenance organization does not meet the requirements of  31-3403(b); or (B) A health maintenance organization is unable to fulfil its obligations to furnish health care services. (5) A health maintenance organization is no longer financially responsible and may reasonably be expected to be unable to meet its obligations to enrollees or prospective enrollees. (6) A health maintenance organization has failed to correct, within the time prescribed by subsection (c) of this section, any deficiency occurring due to such health maintenance organizations prescribed minimum net worth being impaired. (7) A health maintenance organization has failed to implement the grievance procedure required by  31-3410 in a reasonable manner to resolve valid complaints. (8) A health maintenance organization, or any person authorized to act on its behalf, has advertised or merchandised its services in an untrue, misrepresentative, misleading, deceptive, or unfair manner. (9) The continued operation of a health maintenance organization would be dangerous to its enrollees. (10) The health maintenance organization has otherwise failed substantially to comply with this chapter. (11) The health maintenance organization has filed, caused to be filed, or failed to prevent the filing of, a statement on its behalf from an independent organization attesting to its qualifications to transact business in the District for which it sought and received a certificate of authority if it knew, or should have known, that the statement was based on false, misleading, or incomplete information. (12) The health maintenance organization has filed, caused to be filed, or failed to prevent the filing of a statement on its behalf by a corporate officer attesting to its qualifications to transact business in the District for which it sought and received a certificate of authority if it knew, or should have known, that the statement was based on false, misleading, or incomplete information. (13) A health maintenance organization has violated a law of the District, has violated its charter, or has exceeded its corporate powers. (b) In addition to, or in lieu of suspension or revocation of a certificate of authority pursuant to this section, the applicant or health maintenance organization may be subject to an administrative penalty of up to $1000 a day for each cause for suspension or revocation. (c) The following shall pertain when insufficient net worth is maintained: (1) Whenever the Commissioner finds that the net worth maintained by any health maintenance organization subject to the provisions of this chapter is less than the minimum net worth required to be maintained by  31-3412, the Commissioner shall give written notice to the health maintenance organization of the amount of the deficiency and require: (A) Filing with the Commissioner a plan for correction of the deficiency acceptable to the Commissioner; and (B) Correction of the deficiency within a reasonable time, not to exceed 60 days, unless an extension of time is granted by the Commissioner. (2) Such a deficiency shall be deemed an impairment, and failure to correct the impairment in the prescribed time shall be grounds for suspension or revocation of the certificate of authority or for placing the health maintenance organization in conservation, rehabilitation, or liquidation. (3) Except for newborn children, other newly acquired dependents of existing enrollees, or other newly eligible individuals, or as otherwise allowed by the Commissioner, no health maintenance organization or person acting on its behalf may, directly or indirectly, renew, issue, or deliver any certificate, agreement, or contract of coverage in the District, for which a premium dues is charged or collected, when a health maintenance organization writing such coverage is impaired, and the fact of the impairment is known to the health maintenance organization or to the person. (4) The existence of an impairment, however, shall not prevent the issuance or renewal of a certificate, agreement, or contract when the enrollee exercises an option granted under the plan to obtain a new, renewed, or converted coverage. (d) A certificate of authority shall be suspended or revoked, or an application or a certificate of authority denied, or an administrative penalty imposed only after compliance with the requirements of this section. (1) Suspension or revocation of a certificate of authority, the denial of an application, or the imposition of an administrative penalty pursuant to this section shall be by written order and shall be sent to the health maintenance organization or applicant by certified or registered mail. The written order shall state the grounds, charges, or conduct on which suspension, revocation, or denial or administrative penalty is based. A health maintenance organization or applicant may in writing request a hearing within 30 days from the date of mailing of the order. If no written request is made, such order shall be final upon the expiration of the 30 days. (2) If a health maintenance organization or applicant requests a hearing pursuant to this section, the Commissioner shall issue a written notice of hearing and send it to the health maintenance organization or applicant by certified or registered mail. The notice shall include the following: (A) A specific time for the hearing, which may not be less than 20 days nor more than 30 days after mailing of the notice of hearing; and (B) A specific place for the hearing. (3) If a hearing is requested, the Commissioner or his designated representative shall be in attendance and shall participate in the proceedings. The recommendations and findings of the Commissioner in respect to matters relating to the quality of health care services provided in connection with any decision regarding denial, suspension, or revocation of a certificate of authority shall be conclusive and binding upon the Mayor. (4) After such a hearing, or upon failure of the health maintenance organization to appear at the hearing, the Commissioner shall take whatever action he or she deems necessary based on written findings and shall mail his or her decision to the health maintenance organization or applicant. The action of the Commissioner shall be subject to review under subchapter I of Chapter 5 of Title 2. (5) The provisions of the DCAPA shall apply to proceedings under this section. (6) When the certificate of authority of a health maintenance organization is suspended, the health maintenance organization shall not, during the period of such suspension, enroll any additional enrollees except newborn children, other newly acquired dependents of existing enrollees, or other newly eligible individuals, and shall not engage in any advertising or solicitation whatsoever. (7) When the certificate of authority of a health maintenance organization is revoked, such organization shall proceed, immediately following the effective date of the order or revocation, to wind up its affairs within the District, and shall conduct no further business within the District except as may be essential to the orderly conclusion of the affairs of such organization within the District. It shall engage in no further advertising or solicitation whatsoever within the District. The Commissioner may, by written order, permit such further operation of the organization as the Commissioner may find to be in the best interest of enrollees, to the end that enrollees will be afforded the greatest practical opportunity to obtain continuing health care coverage.  (Apr. 9, 1997, D.C. Law 11-235,  20, 44 DCR 818; Oct. 21, 2000, D.C. Law 13-190,  4(b), 47 DCR 7261; Oct. 1, 2002, D.C. Law 14-190,  604(b), 49 DCR 6968; Mar. 27, 2003, D.C. Law 14-252,  2(h), 50 DCR 225; Mar. 13, 2004, D.C. Law 15-105,  66, 51 DCR 881.)  Prior Codifications 1981 Ed.,  35-4519. Section References This section is referenced in  31-3403 and  31-3423. Effect of Amendments D.C. Law 13-190 added subsec. (a)(11). D.C. Law 14-190, in subsec. (a), added par. (12). D.C. Law 14-252, in subsec. (a), added par. (13). D.C. Law 15-105, in par. (13) of subsec. (a), validated a previously made technical correction. Emergency Legislation For temporary (90 day) amendment of section, see  604(b) of Fiscal Year 2003 Budget Support Emergency Act of 2002 (D.C. Act 14-453, July 23, 2002, 49 DCR 8026).
 313420. Rehabilitation, liquidation, or conservation of health maintenance organizations. (a) Any rehabilitation, liquidation, or conservation of a health maintenance organization shall be deemed to be the rehabilitation, liquidation, or conservation of an insurance company and shall be conducted under the supervision of the Commissioner pursuant to the law governing the rehabilitation, liquidation, or conservation of insurance companies. The Commissioner may apply for an order directing the Commissioner to rehabilitate, liquidate, or conserve a health maintenance organization upon any one or more grounds set forth in  31-1310 and 31-1315, or when in the Commissioners opinion the continued operation of a health maintenance organization would be hazardous either to the enrollees or to the people of the District. Enrollees shall have the same priority in the event of liquidation or rehabilitation as the law provides to policyholders of an insurer. (b) For the purposes of determining the priority of distribution of general assets, claims of enrollees and enrollees beneficiaries shall have the same priority as established by  31-1315, for policyholders and beneficiaries of insured of insurance companies. If an enrollee is liable to any provider for services provided pursuant to and covered by the health care plan, that liability shall have the status of an enrollee claim for distribution of general assets. (c) Any provider who is obligated by law or agreement to hold enrollees harmless from liability for services pursuant to and covered by a health care plan shall have a priority of distribution of the general assets immediately following that of enrollees and enrollees beneficiaries as described herein, and immediately preceding the priority of distribution assigned to general creditors.  (Apr. 9, 1997, D.C. Law 11-235,  21, 44 DCR 818; Mar. 8, 2007, D.C. Law 16-232,  204(b), 54 DCR 368.)  Prior Codifications 1981 Ed.,  35-4520. Effect of Amendments D.C. Law 16-232, in subsec. (c), substituted law for statute and inserted assigned to general creditors.
 313421. Summary orders and supervision. (a) Whenever the Commissioner determines that the financial condition of any health maintenance organization is such that its continued operation might be hazardous to its enrollees, creditors, or the general public, or that it has violated any provision of this chapter, the Commissioner may, after notice and hearing, order the health maintenance organization to take such action reasonably necessary to rectify the condition or violation, including, but not limited to, 1 or more of the following: (1) Reduce the total amount of present and potential liability for benefits by reinsurance or other method acceptable to the Commissioner; (2) Reduce the volume of new business being accepted; (3) Reduce expenses by specified methods; (4) Suspend or limit the writing of new business for a period of time; (5) Increase the health maintenance organizations capital and surplus by contribution; or (6) Take such other steps as the Commissioner may deem appropriate under the circumstances. (b) For the purposes of this section, a violation by a health maintenance organization of any law of the District to which the health maintenance organization is subject shall be deemed a violation of this chapter. (c) The Commissioner is authorized, by rules and regulations, to set uniform standards and criteria for early warning that the continued operation of any health maintenance organization might be hazardous to its enrollees, creditors, or the general public and to set standards for evaluating the financial condition of any health maintenance organization, which standards shall be consistent with the purpose expressed in subsection (a) of this section. (d) The remedies and measures available to the Commissioner under this section shall be in addition to, and not in lieu of, the remedies and measures available to the Commissioner under the provisions of Chapter 13 of this title.  (Apr. 9, 1997, D.C. Law 11-235,  22, 44 DCR 818.)  Prior Codifications 1981 Ed.,  35-4521.
 313422. Regulations. The Commissioner, within 120 days of April 9, 1997, shall issue rules and regulations necessary to implement the provisions of this chapter. To facilitate the timely issuance of rules and regulations, the Commissioner may contract out for the drafting of rules and regulations pursuant to emergency procurement provisions set forth in  2-354.05.  (Apr. 9, 1997, D.C. Law 11-235,  23, 44 DCR 818; Sept. 26, 2012, D.C. Law 19-171,  215, 59 DCR 6190.)  Prior Codifications 1981 Ed.,  35-4522. Effect of Amendments The 2012 amendment by D.C. Law 19-171 substituted set forth in  2-354.05 for set forth in  2-303.12.
 313423. Penalties and enforcement. (a) The Commissioner, after giving reasonable written notice of intent and providing a reasonable time within which the health maintenance organization may respond, in lieu of suspension or revocation of a certificate of authority under  31-3419, may levy an administrative penalty in an amount not to exceed $50,000 for any violation when, in the Commissioners judgment, the Commissioner finds that the public interest would be best served by the continued operation of the company. The Commissioner may increase this penalty by the amount which the Commissioner determines to be the damages suffered by enrollees or other members of the public. The amount of any penalty shall be paid by the health maintenance organization through the Office of the Commissioner to the District of Columbia Treasurer. Civil penalties may be imposed as alternative sanctions for any infraction of the provisions of District law or any rules or regulations issued which pertain to health maintenance organizations. (b)(1) If the Commissioner shall for any reason have cause to believe that any violation of this chapter has occurred or is threatened, the Commissioner may give notice to a health maintenance organization and to its representatives, or other persons who appear to be involved in such suspected violation, to arrange a conference with the alleged violators or their authorized representatives for the purpose of attempting to ascertain the facts relating to such suspected violation; and, in the event it appears that any violation has occurred or is threatened, to arrive at an adequate and effective means of correcting or preventing such violation. (2) Proceedings under this subsection shall not be governed by any formal procedural requirements and may be conducted in such manner as the Commissioner may deem appropriate under the circumstances. However, unless consented to by the health maintenance organization, no rule or order may result from a conference until the requirements of this section are satisfied. (c)(1) The Commissioner may issue an order directing a health maintenance organization or a representative of a health maintenance organization to cease and desist from engaging in any act or practice in violation of the provisions of this chapter. (2) Within 30 days after service of the cease and desist order, the respondent may request a hearing on the question of whether acts or practices in violation of this chapter have occurred. Such hearings shall be conducted pursuant to the DCAPA, and judicial review shall be available as provided by the DCAPA. (d) In the case of any violation of the provisions of this chapter, if the Commissioner elects not to issue a cease and desist order, or in the event of noncompliance with a cease and desist order issued pursuant to subsection (c) of this section, the Commissioner may institute a proceeding to obtain injunctive or other appropriate relief in the Superior Court of the District of Columbia. (e) Notwithstanding any other provisions of this chapter, if a health maintenance organization fails to comply with the net worth requirement of this chapter, the Commissioner may take appropriate action to assure that the continued operation of the health maintenance organization will not be hazardous to its enrollees.  (Apr. 9, 1997, D.C. Law 11-235,  25, 44 DCR 818; Mar. 27, 2003, D.C. Law 14-252,  2(i), 50 DCR 225.)  Prior Codifications 1981 Ed.,  35-4523. Effect of Amendments D.C. Law 14-252 rewrote subsec. (a) which had read as follows: (a) The Commissioner may, in lieu of suspension or revocation of a certificate of authority under  31-3419, levy an administrative penalty in an amount not less than $10,000 nor more than $50,000, if reasonable notice in writing is given of the intent to levy the penalty and the health maintenance organization has a reasonable time within which to remedy the defect in its operations which gave rise to the penalty citation. The Commissioner may augment this penalty by an amount equal to the sum that the Commissioner calculates to be the damages suffered by enrollees or other members of the public.
 313424. Statutory construction and relationship to other laws. (a) Except as otherwise provided in this chapter, provisions of insurance laws and provisions of hospital or medical service corporation laws shall not be applicable to any health maintenance organization granted a certificate of authority under this chapter. This provision shall not apply to an insurer or hospital or medical service corporation licensed and regulated pursuant to the insurance laws of the District except with respect to its health maintenance organization activities authorized and regulated pursuant to this chapter. (b) Solicitation of enrollees by a health maintenance organization granted a certificate of authority, or its representatives, shall not be construed to violate any provision of law relating to solicitation or advertising by health professionals. (c) Any health maintenance organization authorized under this chapter shall not be deemed to be practicing medicine and shall be exempt from the provisions set forth by the Board of Medicine relating to the practice of medicine.  (Apr. 9, 1997, D.C. Law 11-235,  26, 44 DCR 818.)  Prior Codifications 1981 Ed.,  35-4524.
 313425. Filings and reports as public documents. All applications, filings, and reports required under this chapter shall be treated as public documents, except those which are trade secrets or privileged or confidential quality assurance, commercial, and financial information, other than any annual financial statement that may be required under  31-3408 [repealed].  (Apr. 9, 1997, D.C. Law 11-235,  27, 44 DCR 818.)  Prior Codifications 1981 Ed.,  35-4525.
 313426. Confidentiality of medical information and limitation of liability. (a) Any data or information pertaining to the diagnosis, treatment, or health of any enrollee or applicant obtained from such person or from any provider by any health maintenance organization shall be held in confidence and shall not be disclosed to any person except to the extent that it may be necessary to carry out the purposes of this chapter: (1) When needed for the conduct of the health maintenance organizations business; (2) Upon the express consent of the enrollee or applicant; (3) Pursuant to statute or court order for the production of evidence or the discovery thereof; or (4) In the event of claim or litigation between such person and the health maintenance organization wherein such data or information is pertinent. (b) A health maintenance organization shall be entitled to claim any statutory privileges against such disclosure which the provider who furnished such information to the health maintenance organization is entitled to claim. (c) A person who, in good faith and without malice or negligence, takes any action or makes any decision or recommendation as a member, agent, or employee of a health care review committee, or who furnishes any records, information, or assistance to such a committee shall not be subject to liability for civil damages or any legal action in consequence of such action, nor shall the health maintenance organization which established such committee or the officers, directors, employees, or agents of such health maintenance organization be liable for the activities of any such person. This section shall not be construed to relieve any person of liability arising from treatment of a patient. (d)(1) The information considered by a health care review committee and the records of their actions and proceedings shall be confidential and not subject to subpoena or order to produce except in proceedings before the appropriate District of Columbia licensing or certifying agency, or in an appeal, if permitted, from the committees findings or recommendations. No member of a health care review committee, or officer, director or other member of the health maintenance organization or its staff engaged in assisting such committee, or any person assisting or furnishing information to such committee, may be subpoenaed to testify in any judicial or quasi-judicial proceeding if such subpoena is based solely on such activities. (2) Information considered by a health care review committee and the records of its action and proceedings which are used pursuant to this subsection by a state licensing or certifying agency or in appeal shall be kept confidential and shall be subject to the same provision concerning discovery and use in legal actions as are the original information and records in the possession and control of a health care review committee. (e) To fulfill its obligations under  31-3406, a health maintenance organization shall have access to treatment records and other information pertaining to the diagnosis, treatment, or health status of any enrollee.  (Apr. 9, 1997, D.C. Law 11-235,  28, 44 DCR 818.)  Prior Codifications 1981 Ed.,  35-4526. Section References This section is referenced in  4-1371.06 and  16-1054.
 313427. Acquisition of control of or merger of a health maintenance organization. (a) No person may make a tender for or a request or invitation for tenders of, or enter into an agreement to exchange securities for or acquire in the open market or otherwise, any voting security of a health maintenance organization, or enter into any other agreement if, after the consummation thereof, that person would, directly or indirectly (or by conversion or by exercise of any right to acquire), be in control of the health maintenance organization, and no person may enter into an agreement to merge or consolidate with or otherwise to acquire control of a health maintenance organization, unless, at the time any offer, request, or invitation is made or any agreement is entered into, or prior to the acquisition, unless, at the time any offer, request, or invitation is made or any agreement is entered into, or prior to the acquisition of the securities if no offer or agreement is involved, the person has filed with the Commissioner and has sent to the health maintenance organization the following information: (1) The name and address of each person by whom or on whose behalf the merger or other acquisition of control referred to herein is to be effected (hereinafter called acquiring party); and (A) If such person is an individual, his or her principal occupation and all offices and positions held during the past 5 years, and any conviction of crimes other than minor traffic violations during the past 10 years; or (B) If such person is not an individual, a report of the nature of its business operations during the past 5 years or for such lesser period as such person and any predecessors thereof shall have been in existence; an informative description of the business intended to be done by such person and such persons subsidiaries; and a list of all individuals who are or who have been selected to become directors or executive officers of such person, or who perform or will perform functions appropriate to such positions. Such list shall include for each such individual the information required by subparagraph (A) of this paragraph; (2) The source, nature, and amount of the consideration used, or to be used, in effecting the merger or other acquisition of control, a description of any transaction wherein funds were or are to be obtained for any such purpose, and the identity of persons furnishing such considerations; provided, that where a source of such consideration is a loan made in the lenders ordinary course of business, the identity of the lender shall remain confidential, if the person filing such statement so requests; (3) Fully audited financial information as to the earnings and financial condition of each acquiring party for the preceding 5 fiscal years of each such acquiring party (or for such lesser period as such acquiring party and any predecessors thereof shall have been in existence), and similar unaudited information as of a date not earlier than 90 days prior to the filing of the statement; (4) Any plans or proposals which each acquiring party may have to liquidate such health maintenance organizations, to sell its assets, or merge or consolidate it with any person; or to make any other material change in its business or corporate structure or management; (5) The number of shares of any security referred to herein which each acquiring party proposes to acquire and the terms of the offer, request, invitation, agreement, or acquisition referred to herein, and a statement as to the method by which the fairness of the proposal was arrived at; (6) The amount of each class of any security referred to herein which is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party; (7) A full description of any contracts, arrangements, or understandings with respect to any security referred to herein in which any acquiring party is involved, including, but not limited to, transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies. Such descriptions shall identify the persons with whom such contracts, arrangements, or understandings have been entered into; (8) A description of the purchase of any security referred to herein during the 12 calendar months preceding the filing of the statement, by any acquiring party, including the dates of purchase, names of the purchasers, and consideration paid or agreed to be paid therefor; (9) A description of any recommendations to purchase any security referred to herein made during the 12 calendar months preceding the filing of the statement, by any acquiring party, or by anyone based upon interviews or at the suggestion of such acquiring party; (10) Copies of all tender offers for, requests or invitations for tenders of exchange offers for, and agreements to acquire or exchange any securities referred to herein, and (if distributed) of additional soliciting material relating thereto; (11) The terms of any agreement, contract, or understanding made with any broker-dealer as to solicitation of securities referred to herein for tender, and the amount of any fees, commissions, or other compensation to be paid to broker-dealers with regard thereto; and (12) Such additional information as the Commissioner may by rule or regulation prescribe as necessary or appropriate for the protection of members and security holders of the health maintenance organization or in the public interest. (b) If the person required to file the statement referred to in this section is a partnership, limited partnership, syndicate, or other group, the Commissioner may require that the information called for by subsection (a)(1) through (8) of this section shall be given with respect to each partner of such partnership or limited partnership, each member of such syndicate or group, and each person who controls such partner or member. If any such partner, member, or person is a corporation or the person required to file the statement referred to herein is a corporation, the Commissioner may require that the information called for by subsection (a)(1) through (8) of this section shall be given with respect to such corporation, each officer and director of such corporation, and each person who is directly or indirectly the beneficial owner of more than 10% of the outstanding voting securities of such corporation. If any material change occurs in the facts set forth in the statement filed with the Commissioner and sent to such health maintenance organization pursuant to this section, an amendment setting forth such change, together with copies of all documents and other material relevant to such change, shall be filed with the Commissioner and sent to such insurer within 2 business days after the person learns of such change. Such insurer shall send such amendment to its shareholders.  (Apr. 9, 1997, D.C. Law 11-235,  29, 44 DCR 818; Mar. 24, 1998, D.C. Law 12-81,  46(e), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-4527.
 313428. Coordination of benefits. [Repealed] Repealed.  (Apr. 9, 1997, D.C. Law 11-235,  30, 44 DCR 818; Mar. 27, 2003, D.C. Law 14-252,  2(j), 50 DCR 225.)  Prior Codifications 1981 Ed.,  35-4528.
 313429. Point of service plan. (a) If an employer, association, or other private group arrangement offers health benefit plan coverage to employees or individuals only through a health maintenance organization, the health maintenance organization with which the employer, association, or other private group arrangement is contracting for the coverage shall offer, or contract with another carrier to offer, a point-of-service option to the employer, association, or other private group arrangement in conjunction with the health maintenance organization as an additional benefit for an employee or individual, at the employees or individuals option to accept or reject. (b) An employer, association, or other private group arrangement may require an employee or individual that accepts the additional coverage under a point-of-service option under subsection (a) of this section to pay a premium over the amount of the premium for the coverage offered by the health maintenance organization. (c) A health maintenance organization may impose different cost sharing provisions for the point-of-service option based on whether the service is provided through the provider panel of the health maintenance organization or outside the providers panel of the health maintenance organization. (d) The requirements of this section shall not apply to any subscriber contract current and in force on April 9, 1997 for the duration of that contract, but these requirements shall apply to any renewal or new subscriber contract issued subsequent to April 9, 1997. (e) The requirements of this section shall not apply to any subscriber contract issued in the individual market to a person who is not part of a contracted group of subscribers.  (Apr. 9, 1997, D.C. Law 11-235,  31, 44 DCR 818.)  Prior Codifications 1981 Ed.,  35-4529.
 313430. Insolvency protection; assessment. (a) When a health maintenance organization in the District is declared insolvent by a court of competent jurisdiction, the Commissioner may levy an assessment on health maintenance organizations doing business in the District to pay claims for uncovered expenditures for enrollees who are residents of the District and to provide continuation of coverage for enrollees not covered under  31-3414. The Commissioner may not assess in any one calendar year more than 2% of the aggregate premium written by each health maintenance organization in the District the prior calendar year. (b) The Commissioner may use funds obtained under subsection (a) of this section to pay claims for uncovered expenditures for enrollees of an insolvent health maintenance organization who are residents of the District, provide for continuation of coverage for enrollees who are residents of the District and are not covered under  31-3414, and administrative costs. The Commissioner may by regulation prescribe the time, manner, and form for filing claims under this section, or may require claims to be allowed by an ancillary receiver or the domestic liquidator or receiver. (c) A receiver or liquidator of an insolvent health maintenance organization shall allow a claim in the proceeding in an amount equal to administrative and uncovered expenditures paid under this section. (1) Any person receiving benefits under this section for uncovered expenditures is deemed to have assigned the rights under the covered health care plan certificates to the Commissioner to the extent of the benefits received. The Commissioner may require an assignment to it of such rights by a payee, enrollee, or beneficiary as a condition precedent to the receipt of any rights or benefits conferred by this section upon such person. The Commissioner is subrogated to these rights against the assets of any insolvent health maintenance organization held by a receiver or liquidator of another jurisdiction. (2) The assignment or subrogation rights of the Commissioner and allowed claim under this subsection have the same priority against the assets of any insolvent health maintenance organization held by a receiver or liquidator of another jurisdiction. (d) When assessed funds are unused following the completion of the liquidation of a health maintenance organization, the Commissioner will distribute on a pro rata basis any amounts received under subsection (a) of this section which are not de minimus to the health maintenance organizations which have been assessed under this section. (e) The aggregate coverage of uncovered expenditures under this section shall not exceed $300,000 with respect to any one individual. Continuation of coverage shall not continue for more than the lesser of 1 year after the health maintenance organization coverage is terminated by insolvency or the remaining term of the contract. The Commissioner may provide continuation of coverage on any reasonable basis, including, but not limited to, continuation of the health maintenance organization contract or substitution of indemnity coverage in a form determined by the Commissioner. (f) The Commissioner may waive an assessment of any health maintenance organization if it would be or is impaired or placed in financially hazardous condition. A health maintenance organization which fails to pay an assessment within 30 days after notice is subject to a civil forfeiture of not more than $1,000 per day or suspension or revocation of its certificate of authority, or both. Any action taken by the Commissioner in enforcing the provisions of this section may be appealed by the health maintenance organization in accordance with the DCAPA.  (Apr. 9, 1997, D.C. Law 11-235,  32, 44 DCR 818.)  Prior Codifications 1981 Ed.,  35-4530.
 313431. Principal office, books, records, and files of the health maintenance organization to be in the District. (a) Any health maintenance organization domiciled in the District or hereafter formed or organized in the District to engage in the health care business as a health maintenance organization shall maintain its principal office within the District, shall keep its books, records, and files in the District, and shall not remove from the District its principal office or its books, records, or files without first obtaining the written permission of the Commissioner; provided, that this section shall not apply to the books, records, and files of any branch office of a health maintenance organization, which books, records, and files relate solely to the business transacted by the branch office agency. (b) A health maintenance organization domiciled in the District which violates this section shall immediately forfeit its certificate of authority to do business in the District. (c) An officer, agent, or employee of a health maintenance organization which violates this section shall be guilty of a misdemeanor and, upon conviction, shall pay a fine of not less than $100 for each offense.  (Apr. 9, 1997, D.C. Law 11-235,  32a; as added Mar. 27, 2003, D.C. Law 14-252,  2(k), 50 DCR 225.)  Editor's Notes Application of Law 14-252: Section 3 of D.C. Law 14-252 provided: This act shall not apply until the Commissioner gives written notice that all necessary rules and administrative procedures are in place to effect the provisions of this act.
 313451.01. Definitions. For the purposes of this chapter, the term: (1) Adjusted RBC report means an RBC report which has been adjusted by the Commissioner in accordance with  31-3451.02(c). (2) Authorized Control Level Event means any of the following events: (A) The filing of an RBC report by the health organization that indicates that the health organizations total adjusted capital is at least equal to its Mandatory Control Level RBC, but less than its Authorized Control Level RBC; (B) The notification by the Commissioner to the health organization of an adjusted RBC report described in subparagraph (A) of this paragraph; provided, that the health organization does not challenge the adjusted RBC report under  31-3451.07; (C) If, under  31-3451.07, the health organization challenges an adjusted RBC report described in subparagraph (A) of this paragraph, notification by the Commissioner to the health organization that the Commissioner has, after a hearing, rejected the health organizations challenge; (D) The failure of the health organization to respond, in a manner satisfactory to the Commissioner, to a corrective order; provided, that the health organization has not challenged the corrective order under  31-3451.07; or (E) If the health organization has challenged a corrective order under  31-3451.07 and the Commissioner has, after a hearing, rejected the challenge or modified the corrective order, the failure of the health organization to respond, in a manner satisfactory to the Commissioner, to the corrective order subsequent to rejection or modification by the Commissioner. (3) Authorized Control Level RBC means the amount of capital required under the risk-based capital formula in accordance with the RBC Instructions. (4) Commissioner means Commissioner of the Department of Insurance and Securities Regulation. (5) Company Action Level Event means any of the following events: (A)(i) The filing of an RBC report by a health organization that indicates that the health organization's total adjusted capital is greater than or equal to its Regulatory Action Level RBC but less than its Company Action Level RBC; or (ii) A health organization has a total adjusted capital that is greater than or equal to its Company Action Level RBC but less than the product of its Authorized Control Level RBC and 3.0, and triggers the trend test determined in accordance with the trend test calculation included in the RBC instructions; (B) Notification by the Commissioner to the health organization of an adjusted RBC report described in subparagraph (A) of this paragraph; provided, that the health organization does not challenge the adjusted RBC report under  31-3451.07; or (C) If, under  31-3451.07, a health organization challenges an adjusted RBC report described in subparagraph (A) of this paragraph, the notification by the Commissioner to the health organization that the Commissioner has, after a hearing, rejected the health organizations challenge. (6) Company Action Level RBC means the Authorized Control Level RBC multiplied by a factor of 2. (7) Corrective order means an order issued by the Commissioner specifying corrective actions. (8) District means the District of Columbia. (9) Domestic health organization means a health organization domiciled in the District. (10) Foreign health organization means a health organization that is licensed to do business, but is not domiciled, in the District. (11) Health organization means a health maintenance organization, hospital and medical indemnity or service corporation, or other managed care organization licensed under Chapter 34 of this title or Chapter 35 of this title. The term health organization shall not include an organization that is licensed as either a life and health insurer or a property and casualty insurer and that is otherwise subject to either the life or property and casualty RBC requirements. (12) Mandatory Control Level Event means any of the following events: (A) The filing of an RBC report which indicates that the health organizations total adjusted capital is less than its Mandatory Control Level RBC; (B) Notification by the Commissioner to the health organization of an adjusted RBC report described in subparagraph (A) of this paragraph; provided, that the health organization does not challenge the adjusted RBC report under  31-3451.07; or (C) If, under  31-3451.07, the health organization challenges an adjusted RBC report described in subparagraph (A) of this paragraph, notification by the Commissioner to the health organization that the Commissioner has, after a hearing, rejected the health organizations challenge. (13) Mandatory Control Level RBC means the required Authorized Control Level RBC multiplied by a factor of 0.7. (14) NAIC means the National Association of Insurance Commissioners. (15) RBC instructions means the instructions for the RBC report, including risk-based capital instructions adopted by the NAIC, as these RBC instructions may be amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC. (16) RBC level means a health organizations Company Action Level RBC, Regulatory Action Level RBC, Authorized Control Level RBC, or Mandatory Control Level RBC. (17) RBC plan means a comprehensive financial plan containing the elements specified in  31-3451.03(a). (18) RBC report means the report required by  31-3451.02. (19) Regulatory Action Level Event means any of the following events: (A) The filing of an RBC report by the health organization that indicates that the health organizations total adjusted capital is at least equal to its Authorized Control Level RBC but less than its Regulatory Action Level RBC; (B) Notification by the Commissioner to a health organization of an adjusted RBC report that described in subparagraph (A) of this paragraph; provided, that the health organization does not challenge the adjusted RBC report under  31-3451.07; (C) If, under  31-3451.07, the health organization challenges an adjusted RBC report described in subparagraph (A) of this paragraph, the notification by the Commissioner to the health organization that the Commissioner has, after a hearing, rejected the health organizations challenge; (D) The failure of the health organization to file an RBC report by the filing date, unless the health organization has provided an explanation for the failure that is satisfactory to the Commissioner and has cured the failure within 10 days after the filing date; (E) The failure of the health organization to submit an RBC plan to the Commissioner within the time period set forth in  31-3451.03(b); (F) Notification by the Commissioner to the health organization stating that: (i) The RBC plan or revised RBC plan submitted by the health organization is, in the judgment of the Commissioner, unsatisfactory; and (ii) The notification constitutes a Regulatory Action Level Event with respect to the health organization; provided, that the health organization has not challenged the determination under  31-3451.07; (G) If, under  31-3451.07, the health organization challenges a determination by the Commissioner under subparagraph (F) of this paragraph, the notification by the Commissioner to the health organization that the Commissioner has, after a hearing, rejected the challenge; (H) Notification by the Commissioner to the health organization that the health organization has failed to adhere to its RBC plan or revised RBC plan; provided, that the failure has a substantial adverse effect on the ability of the health organization to eliminate the Company Action Level Event in accordance with its RBC plan or revised RBC plan and the Commissioner has so stated in the notification; provided further, that the health organization has not challenged the determination under  31-3451.07; or (I) If, under  31-3451.07, the health organization challenges a determination by the Commissioner under subparagraph (H) of this paragraph, the notification by the Commissioner to the health organization that the Commissioner has, after a hearing, rejected the challenge. (20) Regulatory Action Level RBC means the Authorized Control Level RBC multiplied by a factor of 1.5. (21) Revised RBC plan means, if the Commissioner rejects the RBC plan, the RBC plan as revised by the health organization, with or without the Commissioners consent. (22) Total adjusted capital means the sum of: (A) A health organizations statutory capital and surplus as determined in accordance with the statutory accounting applicable to the annual financial statements required to be filed; and (B) Such other items, if any, as the RBC instructions may require.  (June 18, 2003, D.C. Law 14-312,  101, 50 DCR 306; Apr. 13, 2005, D.C. Law 15-354,  45(a), 52 DCR 2638; Apr. 15, 2017, D.C. Law 21-278,  3(a), 64 DCR 963.)  Prior Codifications 2001 Ed.,  31-3851.01. Section References This section is referenced in  31-311.03 and  31-3451.13. Effect of Amendments D.C. Law 15-354, in par. (11), validated a previously made technical correction.
 313451.02. RBC reports. (a) A domestic health organization shall, prior to each March 2 (filing date), prepare and submit to the Commissioner a report of its RBC levels as of the end of the previous calendar year, in a form and containing such information as is required by the RBC instructions. In addition, a domestic health organization shall file its RBC report: (1) With the NAIC in accordance with the RBC instructions; and (2) With the insurance commissioner in any state in which the health organization is authorized to do business, if the insurance commissioner has notified the health organization of its request in writing, in which case the health organization shall file its RBC report not later than the later of: (A) Fifteen days after the receipt of notice to file its RBC report with that state; or (B) The filing date. (b) A health organization's RBC level shall be determined in accordance with the formula set forth in the RBC instructions. The formula shall apply and may be adjusted for the covariance between the following factors in the manner set forth in the RBC instructions: (1) Asset risk; (2) Credit risk; (3) Underwriting risk; and (4) All other business risks and such other relevant risks as are set forth in the RBC instructions. (c) If a domestic health organization files an RBC report that, in the judgment of the Commissioner, is inaccurate, the Commissioner shall adjust the RBC report to correct the inaccuracy and shall notify the health organization of the adjustment. The notice shall contain a statement of the reason for the adjustment.  (June 18, 2003, D.C. Law 14-312,  102, 50 DCR 306; Apr. 15, 2017, D.C. Law 21-278,  3(b), 64 DCR 963.)  Prior Codifications 2001 Ed.,  31-3851.02. Section References This section is referenced in  31-3451.01.
 313451.03. Company Action Level Event. (a) If a Company Action Level Event occurs, the health organization shall prepare and submit to the Commissioner an RBC plan that shall: (1) Identify the conditions that contributed to the Company Action Level Event; (2) Contain proposals of corrective actions that the health organization proposes to eliminate the Company Action Level Event; (3) Provide forecasts of the health organizations financial results in the current year and at least the 2 succeeding years, both in the absence of proposed corrective actions and giving effect to the proposed corrective actions, including projections of statutory balance sheets, operating income, net income, capital and surplus, and RBC levels; provided, that the forecasts for both new and renewal business may include separate forecasts for each major line of business and separately identify each significant income, expense, and benefit component; (4) Identify the key assumptions impacting the health organizations forecasts and the sensitivity of the forecasts to the assumptions; and (5) Identify the quality of, and problems associated with, the health organizations business, including its assets, anticipated business growth and associated surplus strain, extraordinary exposure to risk, mix of business, and use of reinsurance, if any. (b) The RBC plan shall be submitted: (1) Within 45 days of the Company Action Level Event other than if a company challenges an adjusted RBC report; or (2) If the health organization challenges an adjusted RBC report, within 45 days after notification to the health organization that the Commissioner has, after a hearing, rejected the health organizations challenge. (c) Within 60 days after the submission by a health organization of an RBC plan to the Commissioner, the Commissioner shall notify the health organization whether the RBC plan shall be implemented or is, in the judgment of the Commissioner, unsatisfactory. If the Commissioner determines the RBC plan is unsatisfactory, the notification to the health organization shall set forth the reasons for the determination and may set forth proposed revisions which will render the RBC plan satisfactory. Upon notification from the Commissioner, the health organization shall prepare a revised RBC plan, which may incorporate by reference any revisions proposed by the Commissioner, and shall submit the revised RBC plan to the Commissioner: (1) Within 45 days after the notification from the Commissioner; or (2) If the health organization challenges the notification from the Commissioner under  31-3451.07, within 45 days after a notification to the health organization that the Commissioner has, after a hearing, rejected the health organizations challenge. (d) If the Commissioner notifies a health organization that the health organizations RBC plan or revised RBC plan is unsatisfactory, the Commissioner may, at the Commissioners discretion, subject to the health organizations right to a hearing under  31-3451.07, specify in the notification that the notification constitutes a Regulatory Action Level Event. (e) A domestic health organization that files an RBC plan or revised RBC plan with the Commissioner shall file a copy of the RBC plan or revised RBC plan with the insurance commissioner in any state in which the health organization is authorized to do business if: (1) The state has a risk-based capital provision substantially similar to  31-3451.08(a); and (2) The insurance commissioner of that state has notified the health organization of its request for the filing in writing, in which case the health organization shall file a copy of the RBC plan or revised RBC plan in that state no later than the later of: (A) Fifteen days after the receipt of notice to file a copy of its RBC plan or revised RBC plan with the state; or (B) The date on which the RBC plan or revised RBC plan is filed under subsection (b) or (c) of this section.  (June 18, 2003, D.C. Law 14-312,  103, 50 DCR 306.)  Prior Codifications 2001 Ed.,  31-3851.03. Section References This section is referenced in  31-3451.01,  31-3451.09, and  31-3451.13.
 313451.04. Regulatory Action Level Event. (a) If a Regulatory Action Level Event occurs, the Commissioner shall: (1) Require the health organization to prepare and submit an RBC plan or, if applicable, a revised RBC plan; (2) Perform such examination or analysis as the Commissioner considers necessary of the assets, liabilities, and operations of the health organization, including a review of its RBC plan or revised RBC plan; and (3) Issue a corrective order. (b) In determining corrective action, the Commissioner may consider factors which include the results of any sensitivity tests undertaken under the RBC instructions. The RBC plan or revised RBC plan shall be submitted: (1) Within 45 days after the occurrence of the Regulatory Action Level Event; (2) If the health organization challenges an adjusted RBC report under  31-3451.07, and the challenge is not frivolous in the judgment of the Commissioner, within 45 days after the notification to the health organization that the Commissioner has, after a hearing, rejected the health organizations challenge; or (3) If the health organization challenges a revised RBC plan under  31-3451.07, and the challenge is not frivolous in the judgment of the Commissioner, within 45 days after the notification to the health organization that the Commissioner has, after a hearing, rejected the health organizations challenge. (c) The Commissioner may retain actuaries, investment experts, or other consultants as may be necessary in the judgment of the Commissioner to review the health organizations RBC plan or revised RBC plan, examine or analyze the assets, liabilities, and operations (including contractual relationships) of the health organization, and formulate the corrective order with respect to the health organization. The fees, costs, and expenses relating to the actuaries, investment experts, or consultants shall be borne by the affected health organization or such other party as directed by the Commissioner.  (June 18, 2003, D.C. Law 14-312,  104, 50 DCR 306.)  Prior Codifications 2001 Ed.,  31-3851.04. Section References This section is referenced in  31-3451.05 and  31-3451.13.
 313451.05. Authorized Control Level Event. (a) If an Authorized Control Level Event occurs, the Commissioner shall: (1) Take such actions as are required under  31-3451.04 with respect to a Regulatandy Action Level Event; and (2) If the Commissioner considers it to be in the best interests of the policyholders and creditors of the health organization and of the public, take such action as is necessary to cause the health organization to be placed under regulatory control under Chapter 34 of this title and Chapter 13 of this title. (b)(1) If the Commissioner takes action under subsection (a)(1) of this section pursuant to an adjusted RBC report, the health organization shall be entitled to the protections which are afforded to health organizations under Chapter 34 of this title and Chapter 13 of this title pertaining to summary proceedings. (2) If the Commissioner takes action under subsection (a)(2) of this section, the Authorized Control Level Event shall be sufficient for the Commissioner to take action under Chapter 34 of this title or Chapter 13 of this title. In such event, the Commissioner shall have the rights, powers, and duties with respect to the health organization as are set forth in Chapter 34 of this title and Chapter 13 of this title.  (June 18, 2003, D.C. Law 14-312,  105, 50 DCR 306; Apr. 13, 2005, D.C. Law 15-354,  45(b), 52 DCR 2638.)  Prior Codifications 2001 Ed.,  31-3851.05. Section References This section is referenced in  31-3451.13. Effect of Amendments D.C. Law 15-354, in pars. (1) and (2) of subsec. (a), substituted and for or.
 313451.06. Mandatory Control Level Event. (a) If a Mandatory Control Level Event occurs, the Commissioner shall take such action as is necessary to place the health organization under regulatory control under Chapter 34 of this title or Chapter 13 of this title. In such event, the Mandatory Control Level Event shall be sufficient reason for the Commissioner to take action under Chapter 34 of this title or Chapter 13 of this title. In such event, the Commissioner shall have the rights, powers, and duties with respect to the health organization as are set forth in Chapter 34 of this title and Chapter 13 of this title. (b) If the Commissioner takes action under subsection (a) of this section pursuant to an adjusted RBC report, the health organization shall be entitled to the protections of Chapter 34 of this title and Chapter 13 of this title pertaining to summary proceedings. (c) Notwithstanding the provisions of subsections (a) or (b) of this section, the Commissioner may forego action for up to 90 days after the Mandatory Control Level Event if the Commissioner finds there is a reasonable expectation that the Mandatory Control Level Event may be eliminated within the 90-day period.  (June 18, 2003, D.C. Law 14-312,  106, 50 DCR 306; Apr. 13, 2005, D.C. Law 15-354,  45(c), 52 DCR 2638.)  Prior Codifications 2001 Ed.,  31-3851.06. Section References This section is referenced in  31-3451.13. Effect of Amendments D.C. Law 15-354, in subsecs. (a) and (b), validated a previously made technical corrections.
 313451.07. Hearings. (a) A health organization may request a confidential department hearing, on a record, to challenge a determination or action if the Commissioner notifies it of the following: (1) An adjusted RBC report; (2)(A) The health organizations RBC plan or revised RBC plan is unsatisfactory; and (B) The notification constitutes a Regulatory Action Level Event; (3) The health organization has failed to adhere to its RBC plan or revised RBC plan and that the failure has a substantial adverse effect on the ability of the health organization to eliminate the Company Action Level Event in accordance with its RBC plan or revised RBC plan; or (4) A corrective order. (b) The health organization shall notify the Commissioner of its request for a hearing within 5 days after a notification described in subsection (a) of this section. Upon receipt of the health organizations request for a hearing, the Commissioner shall set a date for the hearing, which shall be no less than 10, or more than 30, days after the date of the health organizations request.  (June 18, 2003, D.C. Law 14-312,  107, 50 DCR 306.)  Prior Codifications 2001 Ed.,  31-3851.07. Section References This section is referenced in  31-3451.01,  31-3451.03, and  31-3451.04.
 313451.08. Confidentiality; prohibition on announcements; prohibition on use in rate making. (a) All RBC reports (to the extent the information is not required to be set forth in a publicly available annual statement schedule) and RBC plans (including the results or report of any examination or analysis of a health organization performed under this chapter and any corrective order issued by the Commissioner under examination or analysis) that are filed with the Commissioner shall be confidential and privileged, shall not be subject to subchapter II of Chapter 5 of Title 2, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in a private civil action; provided, that the Commissioner may use the documents, materials, or other information in furtherance of any regulatory or legal action brought as a part of the Commissioners official duties. (b) The Commissioner or any person who received documents, materials, or other information while acting under the authority of the Commissioner shall not be permitted or required to testify in a private civil action concerning any confidential documents, materials, or information subject to subsection (a) of this section. (c) To assist in the performance of the Commissioners duties under this chapter, the Commissioner may: (1) Share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to subsection (a) of this section, with District, state, federal, and international regulatory agencies, with the NAIC, and with District, state, federal, and international law enforcement authorities; provided, that the recipient agrees to maintain the confidentiality and privileged status of document, material, or other information; (2) Receive documents, materials, or information, including otherwise confidential and privileged documents, materials, or information, from the NAIC and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential and privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information; or (3) Enter into agreements governing sharing and use of the information consistent with this subsection. (d) No waiver of an existing privilege or claim of confidentiality in the documents, materials, or information shall occur as a result of sharing as authorized in subsection (c)(3) of this section. (e) Except as otherwise required under this chapter, the making, publishing, disseminating, circulating, or placing before the public, or causing, directly or indirectly to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over a radio or television station, or in any other way, an advertisement, announcement or statement containing an assertion, representation, or statement with regard to the RBC levels of any health organization, or of any component derived in the calculation, by any health organization, agent, broker, or other person engaged in any manner in the insurance business shall be prohibited; provided, that if any materially false statement with respect to the comparison regarding a health organizations total adjusted capital to its RBC levels (or any of them) or an inappropriate comparison of any other amount to the health organizations RBC levels is published in any written publication and the health organization is able to demonstrate to the Commissioner with substantial proof the falsity of the statement, or the inappropriateness, as the case may be, the health organization may publish an announcement in a written publication if the sole purpose of the announcement is to rebut the materially false statement. (f) The RBC instructions, RBC reports, adjusted RBC reports, RBC plans, and revised RBC plans shall only be used by the Commissioner in monitoring the solvency of health organizations and the need for possible corrective action and shall not be used by the Commissioner for ratemaking, or considered or introduced as evidence in any rate proceeding, nor used by the Commissioner to calculate or derive any elements of an appropriate premium level or rate of return for any line of insurance that a health organization or an affiliate is authorized to write.  (June 18, 2003, D.C. Law 14-312,  108, 50 DCR 306.)  Prior Codifications 2001 Ed.,  31-3851.08. Section References This section is referenced in  31-3451.03.
 313451.09. Foreign health organizations. (a)(1) A foreign health organization shall, upon the written request of the Commissioner, submit to the Commissioner an RBC report as of the end of the previous calendar year upon the later of: (A) The date that an RBC report would be required to be filed by a domestic health organization under this chapter; or (B) Fifteen days after the request is received by the foreign health organization. (2) A foreign health organization shall, at the written request of the Commissioner, promptly submit to the Commissioner a copy of any RBC plan that is filed with the insurance commissioner of any other state. (b) If (1) a Company Action Level Event, Regulatory Action Level Event, or Authorized Control Level Event occurs with respect to a foreign health organization as determined under the RBC statute applicable in the state of domicile of the health organization (or, if no RBC statute is in force in that state, under the provisions of this chapter), and (2) the Insurance Commissioner of the state of domicile of the foreign health organization fails to require the foreign health organization to file an RBC plan in the manner specified under that states RBC statute (or, if no RBC statute is in force in that state, under  31-3451.03), the Commissioner may require the foreign health organization to file an RBC plan with the Commissioner. In such event, the failure of the foreign health organization to file an RBC plan with the Commissioner shall be reason to order the health organization to cease and desist from writing new insurance business in the District. (c) If (1) a Mandatory Control Level Event occurs with respect to a foreign health organization, and (2) no domiciliary receiver has been appointed with respect to the foreign health organization under the rehabilitation and liquidation statute applicable in the state of domicile of the foreign health organization, the Commissioner may apply to the Superior Court of the District of Columbia as permitted under Chapter 34 of Title 31 or Chapter 13 of Title 31 with respect to the liquidation of property of foreign health organizations found in the District of Columbia. The occurrence of the Mandatory Control Level Event shall be considered adequate grounds for the application.  (June 18, 2003, D.C. Law 14-312,  109, 50 DCR 306.)  Prior Codifications 2001 Ed.,  31-3851.09.
 313451.10. Supplemental provisions; rules; exemption. (a) This chapter shall supplement the other provisions of the laws of the District and shall not preclude or limit any other powers or duties of the Commissioner under such laws, including Chapter 34 of this title and Chapter 13 of this title. (b) The Commissioner may promulgate regulations to implement this chapter. (c) The Commissioner may exempt from the application of this chapter a domestic health organization that: (1) Writes direct business only in the District; (2) Assumes no reinsurance in excess of 5% of direct premium written; and (3) Writes direct annual premiums for comprehensive medical business of $2 million or less.  (June 18, 2003, D.C. Law 14-312,  110, 50 DCR 306.)  Prior Codifications 2001 Ed.,  31-3851.10.
 313451.11. Immunity. The Commissioner, the Department of Insurance and Securities Regulation, or its employees or agents shall not be liable for any action taken by them in the performance of their powers and duties under this chapter.  (June 18, 2003, D.C. Law 14-312,  111, 50 DCR 306.)  Prior Codifications 2001 Ed.,  31-3851.11.
 313451.12. Notices. All notices by the Commissioner to a health organization that may result in regulatory action under this chapter shall be effective upon mailing if transmitted by registered or certified mail or, in the case of any other transmission, shall be effective upon the health organizations receipt of notice.  (June 18, 2003, D.C. Law 14-312,  112, 50 DCR 306.)  Prior Codifications 2001 Ed.,  31-3851.12.
 313451.13. Transition. For RBC reports required to be filed by health organizations with respect to 2002, the following requirements shall apply in lieu of the provisions of  31-3451.03, 31-3451.04, 31-3451.05, and 31-3451.06: (1) In the event of a Company Action Level Event with respect to a domestic health organization, the Commissioner shall take no regulatory action under this chapter. (2) In the event of a Regulatory Action Level Event as defined under  31-3451.01(19)(A) through (C), the Commissioner shall take the actions required under  31-3451.03. (3) In the event of a Regulatory Action Level Event as defined under  31-3451.01(19)(D) through (I), or an Authorized Control Level Event, the Commissioner shall take the action required under  31-3451.04 with respect to the health organization. (4) In the event of a Mandatory Control Level Event, the Commissioner shall take the action required under  31-3451.05.  (June 18, 2003, D.C. Law 14-312,  113, 50 DCR 306; Apr. 13, 2005, D.C. Law 15-354,  45(d), 52 DCR 2638.)  Prior Codifications 2001 Ed.,  31-3851.13. Effect of Amendments D.C. Law 15-354 validated previously made technical corrections.
 313461. Compliance with federal health reform. (a) Sections 1251, 1252, and 1304 of the Patient Protection and Affordable Care Act, approved March 23, 2010 (124 Stat. 119; 42 U.S.C.  18011, 18021, and 18024), and sections 2701 through 2709, 2711 through 2719A, and 2794 of the Public Health Service Act, approved July 1, 1944 (58 Stat. 682; 42 U.S.C.  300gg, 300gg-1, 300gg-2, 300gg-3, 300gg-4, 300gg-5, 300gg-6, 300gg-7, 300gg-8, 300gg-9, 300gg-11, 300gg-12, 300gg-13, 300gg-14, 300gg-15, 300gg-15A, 300gg-16, 300gg-17, 300gg-18, 300gg-19, 300gg-19A, and 300gg-94), (collectively "federal health acts") and any rules issued pursuant to the federal health acts, as the sections and implementing regulations were in effect on December 15, 2017, are incorporated by reference and shall apply to all insurers, hospital and medical services corporations, health maintenance organizations, and multiple employer welfare arrangements, including associations or any other entities providing a health benefit plan to a small employer, as that term is defined in  31-3301.01(42), or an individual, that deliver or issue for delivery individual or group health insurance policies, contracts, or certificates of coverage in the District. (b) The Commissioner of the Department of Insurance, Securities and Banking (Commissioner) has the authority to take action to enforce violations of subsection (a) of this section pursuant to the Commissioners authority under subchapter I of Chapter 1 of this title [ 31-101 et seq.]. (c) The Commissioner, pursuant to subchapter I of Chapter 5 of Title 2 [ 2-501et seq.], may issue rules to implement the provisions of this section.  (May 2, 2015, D.C. Law 20-265,  101, 62 DCR 1529; Mar. 22, 2019, D.C. Law 22-266,  4(a), 66 DCR 1423.)  Emergency Legislation  For temporary (90 days) creation of new  31-3462, see  4(b) of Health Insurance Marketplace Improvement Emergency Amendment Act of 2018 (D.C. Act 22-526, Dec. 10, 2018, 65 DCR 13424).   For temporary (90 days) amendment of this section, see  4(a) of Health Insurance Marketplace Improvement Emergency Amendment Act of 2018 (D.C. Act 22-526, Dec. 10, 2018, 65 DCR 13424).  Temporary Legislation  For temporary (225 days) creation of new  31-3462, see  4(b) of Health Insurance Marketplace Improvement Temporary Amendment Act of 2018 (D.C. Law 22-251, Mar. 15, 2019, 66 DCR 975).   For temporary (225 days) amendment of this section, see  4(a) of Health Insurance Marketplace Improvement Temporary Amendment Act of 2018 (D.C. Law 22-251, Mar. 15, 2019, 66 DCR 975). 
 313462. Applicability of federal health acts to multiple employer welfare arrangements. (a) Requirements in the federal health acts incorporated by reference in  31-3461(a) that apply to the small group market shall apply to health benefit plans offered by multiple employer welfare arrangements including associations or any other entity, if the plan covers an employee of a small employer, as that term is defined in  31-3301.01(42), in the District. (b) Requirements in the federal health acts incorporated by reference in  31-3461(a) that apply to insurers in the individual market shall apply to health benefit plans offered by multiple employer welfare arrangements, including associations or any other entities, if the plan covers an individual in the District who is not an employee or dependent of a participating employer.  (May 2, 2015, D.C. Law 20-265,  101a; as added Mar. 22, 2019, D.C. Law 22-266,  4(b), 66 DCR 1423.) 
 313501. Definitions. For the purposes of this chapter, the term: (1) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking. (1A) Community health reinvestment means expenditures that promote and safeguard the public health or that benefit current or future subscribers, including premium rate reductions. (1B) Contractholder means a person entering into a subscriber contract with a corporation. (2) Corporation means a nonstock, nonprofit corporation which is subject to regulation and licensing under this chapter and which offers subscriber contracts as part of a hospital service plan, a medical service plan, or both. (3) Domestic corporation means a corporation organized under the laws of the District, or formed or organized under an act of Congress. (3A) Healthy DC and Health Care Expansion Fund means the Healthy DC and Health Care Expansion Fund established by  31-3514.02. (4) Hospital service plan means a plan for providing hospital and related services by hospitals and others which entitles a subscriber to certain hospital and related services, or to benefits and indemnification for such services. (4A)(A)(i) Except as provided in sub-subparagraph (ii) of this subparagraph, large employer means, in connection with a group health plan with respect to a calendar year and a plan year, a single employer that employed an average of at least 51 employees on business days during the preceding calendar year and at least 2 employees on the first day of the plan year. (ii) Beginning in calendar year 2016 and for each succeeding year, large employer means, in connection with a group health plan with respect to a calendar year and a plan year, a single employer that employed an average of at least 101 employees on business days during the preceding calendar year and at least 2 employees on the first day of the plan year. (B) For the purposes of this paragraph: (i) All persons treated as a single employer under section 414(b), (c), (m), or (o) of the Internal Revenue Code of 1986, October 22, 1986 (100 Stat. 2085; 26 U.S.C.  414(b), (c), (m), or (o)), shall be treated as a single employer; (ii) An employer and any predecessor employer shall be treated as a single employer; (iii) All employees shall be counted, including part-time employees and employees who are not eligible for health benefit coverage through the employer; and (iv) If an employer was not in existence throughout the preceding calendar year, the determination of whether that employer is a large employer shall be based on the average number of employees that the employer is reasonably expected to employ in the current calendar year. (5) Mayor means the Mayor of the District of Columbia or the Mayors designated agent. (6) Medical service plan means a plan for providing medical services and related services by physicians and others which entitles a subscriber to certain medical and related services, or to benefits and indemnification for such services. (7) Plan means a hospital service plan, a medical service plan, or a combination of the two. (7A) Public-private partnership means a mutually acceptable written agreement between the Mayor and a hospital and medical services corporation that is certified by the Commissioner upon the execution and delivery of the agreement by the parties and which agreement: (A) Shall include the following provisions: (i) A $5 million annual payment to the Healthy DC Fund (or appropriate successor fund) by the hospital and medical services corporation to be used for subsidies that expand health insurance coverage for low-income District residents; (ii) A targeted city-wide health care initiative aimed at improving nutrition and increasing physical fitness among the Districts senior citizens, or another comparable health promotion program; (iii) A term not to exceed 5 years, subject to extension upon the mutual written agreement of the parties; (iv)(I)(aa) The maintenance and support of the existing District open enrollment program as it operated prior to the enactment of the Medical Insurance Empowerment Amendment Act of 2008, effective March 25, 2009 (D.C. Law 17-369; 56 DCR 1346) (open enrollment program), which program has an estimated average premium of $357 per member per month, and the enhancement of the open enrollment program by offering a new health maintenance organization product that includes comprehensive benefits with an average initial premium currently estimated at about $300 per member per month, which average may vary based upon age and family status, and subject to other reasonable adjustments, but with no adjustments for gender or pre-existing conditions. (bb) The annual premium rate of the existing open enrollment program shall not exceed 125% of the comparable medically underwritten product and shall be determined once every 12 months. The benefit package shall include, at a minimum, primary care services, specialist services, temporomandibular joint problems chiropractic services, mental health and addiction treatment, organ transplantation, treatment for morbid obesity, open heart surgery, and pharmaceutical benefits. (cc) The medical loss ratio to be utilized in rate filings and determinations shall not exceed 150%; (II) Under the open enrollment program pursuant to sub-sub-subparagraph (I) of this sub-subparagraph: (aa) Current members shall be permitted to maintain the option to continue their current open enrollment program coverage or opt for the new health maintenance organization product; (bb) New open enrollment members shall only be offered the new health maintenance organization product; and (cc) Total enrollment under subparagraph (A)(iv)(I) of this paragraph shall be capped at 2,500; (v) Participation in the open enrollment program (including the health maintenance organization product) may be limited to District residents, which shall be subject to periodic confirmation; and (vi)(I) A corporation shall prominently advertise the availability of the new open enrollment health maintenance organization product continuously on the Internet and at least quarterly in a newspaper of general circulation throughout the District. (II) The content and format of the advertising shall be filed with the Commissioner no less than 30 days before its appearance in a newspaper or on the Internet; (B) May include the following provisions: (i) Authority for the Commissioner to grant a hospital and medical services corporation reasonable relief from the requirements of the agreement, such as if federal or state health care reforms make the requirements unnecessary or redundant or if the corporation does not meet a financial performance or similar test as specified in the agreement; provided, that any relief granted shall not affect the certification of the agreement by the Commissioner or the status of the agreement as a public-private partnership for all purposes under this chapter; and (ii) Reasonable expiration and termination provisions; and (C) Shall be effective upon the certification of the Commissioner. (7B) RS Fund means the rate stabilization fund established by  31-3514(j). (7C)(A)(i) Except as provided in sub-subparagraph (ii) of this subparagraph, small employer means a single employer that employed an average of not more than 50 employees during the preceding calendar year. (ii) Beginning in calendar year 2016 and for each succeeding year, small employer means a single employer that employed an average of not more than 100 employees during the preceding calendar year. (B) For the purposes of this paragraph: (i) All persons treated as a single employer under section 414(b), (c), (m), or (o) of the Internal Revenue Code of 1986, October 22, 1986 (100 Stat. 2085; 26 U.S.C.  414(b), (c), (m), or (o)), shall be treated as a single employer; (ii) An employer and any predecessor employer shall be treated as a single employer; (iii) All employees shall be counted, including part-time employees and employees who are not eligible for health benefit coverage through the employer; and (iv) If an employer was not in existence throughout the preceding calendar year, the determination of whether that employer is a small employer shall be based on the average number of employees that the employer is reasonably expected to employ in the current calendar year. (8) Subscriber means any person entitled to benefits under the terms and conditions of a subscriber contract. (9) Subscriber contract means a written group or individual contract which is issued to a contractholder by a corporation which provides for subscriber participation in a hospital service plan, a medical service plan, or a combination of the two. (10) Subsidiary means an affiliate controlled by a corporation directly or indirectly through 1 or more intermediaries. (11) Surplus means the amount by which all admitted assets of the corporation exceed its liabilities, inclusive of the reserves required pursuant to  31-3509. (4A)(A)(i) Except as provided in sub-subparagraph (ii) of this subparagraph, large employer means, in connection with a group health plan with respect to a calendar year and a plan year, a single employer that employed an average of at least 51 employees on business days during the preceding calendar year and at least 2 employees on the first day of the plan year. (ii) Beginning in calendar year 2016 and for each succeeding year, large employer means, in connection with a group health plan with respect to a calendar year and a plan year, a single employer that employed an average of at least 101 employees on business days during the preceding calendar year and at least 2 employees on the first day of the plan year. (B) For the purposes of this paragraph: (i) All persons treated as a single employer under section 414(b), (c), (m), or (o) of the Internal Revenue Code of 1986, October 22, 1986 (100 Stat. 2085; 26 U.S.C.  414(b), (c), (m), or (o)), shall be treated as a single employer; (ii) An employer and any predecessor employer shall be treated as a single employer; (iii) All employees shall be counted, including part-time employees and employees who are not eligible for health benefit coverage through the employer; and (iv) If an employer was not in existence throughout the preceding calendar year, the determination of whether that employer is a large employer shall be based on the average number of employees that the employer is reasonably expected to employ in the current calendar year.  (Apr. 9, 1997, D.C. Law 11-245,  2, 44 DCR 1158; Mar. 2, 2007, D.C. Law 16-192,  5012(a), 53 DCR 6899; Mar. 25, 2009, D.C. Law 17-369,  2(a), 56 DCR 1346; Feb. 4, 2010, D.C. Law 18-104,  2(a), 56 DCR 9182; Sept. 24, 2010, D.C. Law 18-223,  5023(a), 57 DCR 6242; May 2, 2015, D.C. Law 20-265,  105(a), 62 DCR 1529.)  Prior Codifications 1981 Ed.,  35-4701. Effect of Amendments D.C. Law 16-192 added pars. (3A) and (7A). D.C. Law 17-369 redesignated former par. (1) as par. (1B); and added pars. (1) and (1A). D.C. Law 18-104 redesignated former par. (7A) as par. (7B); and added par. (7A). D.C. Law 18-223, in par. (3A), substituted Healthy DC and Health Care Expansion Fund for Healthy DC Fund both times it appears. The 2015 amendment by D.C. Law 20-265 added (4A) and (7C). Emergency Legislation For temporary (90 day) amendment of section, see  5012(a) of Fiscal Year 2007 Budget Support Emergency Act of 2006 (D.C. Act 16-477, August 8, 2006, 53 DCR 7068). For temporary (90 day) amendment of section, see  5012(a) of Fiscal Year 2007 Budget Support Congressional Review Emergency Act of 2006 (D.C. Act 16-499, October 23, 2006, 53 DCR 8845). For temporary (90 day) amendment of section, see  5012(a) of Fiscal Year 2007 Budget Support Congressional Review Emergency Act of 2007 (D.C. Act 17-1, January 16, 2007, 54 DCR 1165). For temporary (90 day) amendment of section, see  2(a) of Hospital and Medical Services Corporation Regulatory Emergency Amendment Act of 2009 (D.C. Act 18-277, January 11, 2010, 57 DCR 935). For temporary (90 day) amendment of section, see  3(a) of Medicaid Resource Maximization Emergency Amendment Act of 2010 (D.C. Act 18-390, May 7, 2010, 57 DCR 4339). For temporary (90 day) amendment of section, see  201(a) of DC High Risk Pool Program Establishment Emergency Act of 2010 (D.C. Act 18-522, August 3, 2010, 57 DCR 8001). For temporary (90 day) amendment of section, see  5023(a) of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542). Temporary Legislation Section 2(a) of D.C. Law 18-134 designated par. (7A) as par. (7B); and added par. (7A) to read as follows: (7A) Public-private partnership means a mutually acceptable written agreement between the Mayor and a hospital and medical services corporation that is certified by the Commissioner upon the execution and delivery of the agreement by the parties and which agreement: (A) Shall include the following provisions: (i) A $5 million annual payment to the Healthy DC Fund (or appropriate successor fund) by the hospital and medical services corporation to be used for subsidies that expand health insurance coverage for low-income District residents; (ii) A targeted city-wide health care initiative aimed at improving nutrition and increasing physical fitness among the Districts senior citizens, or another comparable health promotion program; (iii) A term not to exceed 5 years, subject to extension upon the mutual written agreement of the parties; (iv)(I)(aa) The maintenance and support of the existing District open enrollment program as it operated prior to the enactment of the Medical Insurance Empowerment Amendment Act of 2008, effective March 25, 2009 (D.C. Law 17-369; 56 DCR 1346) (open enrollment program), which program has an estimated average premium of $357 per member per month, and the enhancement of the open enrollment program by offering a new health maintenance organization product that includes comprehensive benefits with an average initial premium currently estimated at about $300 per member per month, which average may vary based upon age and family status, and subject to other reasonable adjustments, but with no adjustments for gender or pre-existing conditions. (bb) The annual premium rate of the existing open enrollment program shall not exceed 125% of the comparable medically underwritten product and shall be determined once every 12 months. The benefit package of the health maintenance organization product shall include, at a minimum, primary care services, specialist services, temporomandibular joint problems chiropractic services, mental health and addiction treatment, organ transplantation, treatment for morbid obesity, open heart surgery, and pharmaceutical benefits. (cc) The medical loss ratio of the health maintenance organization product to be utilized in rate filings and determinations shall not exceed 150%; (II) Under the open enrollment program pursuant to sub-sub-subparagraph (I) of this sub-subparagraph: (aa) Current members shall be permitted to maintain the option to continue their current open enrollment program coverage or opt for the new health maintenance organization product; (bb) New open enrollment members shall only be offered the new health maintenance organization product; and (cc) Total enrollment under subparagraph A)(iv)(I) of this paragraph shall be capped at 2,500; (v) Participation in the open enrollment program (including the health maintenance organization product) may be limited to District residents, which shall be subject to periodic confirmation; and (vi)(I) A corporation shall prominently advertise the availability of the new open enrollment health maintenance organization product continuously on the Internet and at least quarterly in a newspaper of general circulation throughout the District. (II) The content and format of the advertising shall be filed with the Commissioner no less than 30 days before its appearance in a newspaper or on the Internet; (B) May include the following provisions: (i) Authority for the Commissioner to grant a hospital and medical services corporation reasonable relief from the requirements of the agreement, such as if federal or state health care reforms make the requirements unnecessary or redundant or if the corporation does not meet a financial performance or similar test as specified in the agreement; provided, that any relief granted shall not affect the certification of the agreement by the Commissioner or the status of the agreement as a public-private partnership for all purposes under this act; and (ii) Reasonable expiration and termination provisions; and (C) Shall be effective upon the certification of the Commissioner.. Section 6(b) of D.C. Law 18-134 provided that the act shall expire after 225 days of its having taken effect. Section 3(a) of D.C. Law 18-205, in par. (3A), substituted Healthy DC and Health Care Expansion Fund for Healthy DC Fund both times it appears. Section 7(b) of D.C. Law 18-205 provided that the act shall expire after 225 days of its having taken effect. Section 201(a) of D.C. Law 18-271 amended subsec. (7A)(A)(v) to read as follows: (v) Participation in the open enrollment program (including the health maintenance organization product) may be limited to District residents who are ineligible for the DC High Risk Pool Program, as defined in the DC High Risk Pool Program Establishment Temporary Act of 2010, passed on 2nd reading on September 21, 2010 (Enrolled version of Bill 18-939). Participant eligibility shall be subject to periodic confirmation; and. Section 302(b) of D.C. Law 18-271 provided that the act shall expire after 225 days of its having taken effect. Short Title Short title: Section 5011 of D.C. Law 16-192 provided that subtitle B of title V of the act may be cited as the Hospital and Medical Services Corporation Regulatory Amendment Act of 2006.
 313502. Exclusivity of provisions. (a) Except as provided in subsection (b) of this section, a corporation organized under the laws of the District of Columbia, or any state, or chartered by act of the Congress of the United States and issuing subscriber contracts in the District of Columbia shall be governed by this chapter and shall be exempt from all other provisions of District of Columbia law governing insurance, except as specifically referred to herein. No insurance law hereafter enacted by the District of Columbia shall be deemed to apply to such a corporation unless it is specifically referred to therein or unless such law represents an amendment or replacement of an insurance law made applicable to such corporations pursuant to  31-3503. Any regulations promulgated by the Mayor to implement the provisions of any law made applicable to such a corporation by this chapter shall also apply to such a corporation. (b)(1) A conversion or management or service contract with a for-profit entity shall not be approved by the Corporation Counsel unless charitable assets, if any, have been adequately protected. In determining whether charitable assets have been adequately protected, the Corporation Counsel shall apply the standard enumerated in  44-603(c). (2) The Commissioner of the Department of Insurance, Securities, and Banking, in consultation with the Corporation Counsel, shall assess the for-profit entity the necessary or appropriate costs related to, and shall expend such amounts for, the review of the conversion or management or service contract with a for-profit entity. Such costs may include the costs of expert review, educating the public, or obtaining public comments. For purposes of costs assessed and expended under this paragraph, the provisions of Unit A of Chapter 3 of Title 2 shall not apply. (3) The provisions of  44-605 and 44-607 shall apply to any conversions or management or service contracts with a for-profit entity.  (Apr. 9, 1997, D.C. Law 11-245,  3, 44 DCR 1158; Oct. 23, 1997, D.C. Law 12-32,  12(b), 44 DCR 4819; Mar. 25, 2003, D.C. Law 14-236,  3, 49 DCR 10483; June 11, 2004, D.C. Law 15-166,  4(u)(1), 51 DCR 2817.)  Prior Codifications 1981 Ed.,  35-4702. Effect of Amendments D.C. Law 14-236, in subsec. (b)(2), added the last sentence. D.C. Law 15-166, in par. (2) of subsec. (b), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance and Securities. Cross References Healthcare entity conversion, see  44-601 et seq. Emergency Legislation For temporary (90 day) amendment of section, see  3 of Department of Insurance and Securities Regulation Procurement Emergency Act of 2002 (D.C. Act 14-314, March 26, 2002, 49 DCR 3451). For temporary (90 day) amendment of section, see  3 of Department of Insurance and Securities Regulation Procurement Congressional Review Emergency Act of 2003 (D.C. Act 15-9, January 27, 2003, 50 DCR 1478). For temporary (90 day) amendment of section, see  4(u)(1) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). Temporary Legislation For temporary (225 day) amendment of section, see  3 of Department of Insurance and Securities Regulation Procurement Temporary Act of 2002 (D.C. Law 14-159, June 25, 2002, law notification 49 DCR 6495). Delegation of Authority Delegation of authority pursuant to D.C. Law 11-245, the Hospital and Medical Services Corporation Regulatory Act of 1996, see Mayors Order 97-133, July 30, 1997 ( 44 DCR 4547).
 313503. Applicability of other provisions. (a) A corporation governed by this chapter shall also be subject to the following other provisions of District of Columbia insurance law, including any amendments or replacements thereof hereafter enacted: (1) Sections 31-201 [repealed], 31-202, and 31-206, referring to general provisions of insurance regulation; (2) Section 31-207, referring to general provisions of insurance regulation; (3) Sections 31-5203 and 31-5204, referring to delivery (with each policy issued) of a copy of the insureds application, and to the principal office, books, and records of insurance companies; (4) Chapter 16 of this title, referring to prohibition against discrimination in the provision of insurance on the basis of an AIDS test; (5) Chapter 42 of this title, referring to the applicability of, and definitions in, the Life Insurance Act; (6) Sections 31-4301, 31-4302, 31-4303, 31-4305, 31-4308 [repealed], 31-4309 [repealed], 31-4310(b), 31-4311 [repealed], 31-4312 through 31-4317, 31-4322 [repealed], 31-4324 through 31-4328 [repealed], and 31-4329 through 31-4332, governing, in part, fees chargeable to, certificates of authority for, publication of false statements by, and licensing of agents acting for life insurance companies; (7) Sections 31-4713 through 31-4715 [repealed], 31-4718 [repealed], and 31-4724 through 31-4730, referring, in part, to the prohibitions against discrimination, securities, operations, and policy provisions restricting access to optometrists and psychologists by life insurance companies; (8) Sections 31-4401 through 31-4404, 31-4406, 31-4407, 31-4409, 31-4427, 31-4429, 31-4430, 31-4435 [repealed], 31-4439, 31-4440, and 31-4443 through 31-4452, referring, in part, to articles of incorporation, election of officers, permissible investments, bookkeeping, and consolidation/merger of domestic life insurance companies; (9) Chapter 46 of this title, governing penalties for violations and severability with respect to the provisions cited in paragraphs 5 through 8 of this subsection; (10) Chapter 38 of this title, requiring that certain individual and group health insurance policies cover a newborn child from the moment of birth; (11) Chapter 54 of this title, creating the District of Columbia Life and Health Insurance Guarantee Association and authorizing it to assume, guarantee, and reinsure any policy issued by a member insurer which becomes potentially unable to fulfill its contractual obligations; (12) Chapter 31 of this title, requiring certain group and individual health insurance policies to provide coverage for the medical and psychological treatment of alcohol abuse, drug abuse, and mental illness; (13) Chapter 29 of this title, requiring a group or individual health insurance policy issued more than 120 days after March 7, 1991, to cover certain preventive cancer screens for women; (14) Chapter 37 of this title, authorizing the Mayor to issue regulations establishing specific standards for Medicare supplement insurance policies; (15) Chapter 12 of this title, establishing the Insurance Regulatory Trust Fund and requiring each insurer doing business in the District to deposit in the Fund a percentage amount to be used to defray expenses of the Insurance Administration; (16) Chapter 13 of this title, authorizing and regulating delinquency proceedings by the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking] in the Superior Court of the District of Columbia against certain insurers; (17) Chapter 15 of this title, establishing licensing and other requirements for managing general agents of certain insurers; (18) Chapter 18 of this title, establishing licensing and other requirements for the assumed reinsurance business; (19) Chapter 3 of this title, requiring insurers to file with the Mayor an accountant-prepared annual audit and other reports; (20) Chapter 5 of this title, governing the circumstances under which a domestic insurer may obtain a credit for reinsurance ceded to another insurer; (21) Chapter 19 of this title, governing an insurers filing with the Mayor and the National Association of Insurance Commissioners (NAIC) of an annual financial statement; (22) Chapter 21 of this title, establishing standards for determining whether the continued operation of any insurer transacting business in the District might be hazardous to creditors, the general public, or policyholders, and authorizing the Mayor to order certain corrective actions after making such a determination; (23) Chapter 14 of this title, governing examinations by the Mayor or any person subject to the Districts insurance laws; (24) Chapter 7 of this title, governing certain acquisition, investment, security issuance, and other activities in the insurance industry, requiring the registration of insurers that are part of an insurance holding company system, regulating transactions within such a system, regulating the management of domestic insurers in such a system, and authorizing the Mayor to conduct examinations of insurers that are part of such a system; (25) Chapter 49 of this title, requiring the submission to the Mayor of an annual opinion by a qualified actuary; (26) Chapter 26 of Title 47, requiring an annual license or certificate of authority from the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking] for each insurer doing business in the District, requiring the filing of an annual statement by each such insurer, and imposing a tax on each such insurers at-risk business in the District; (27) Chapter 20 of this title, requiring insurers to file with the Mayor annual risk-based capital reports; (28) The Reasonable Health Insurance Ratemaking Reform Act of 2010, [Chapters 30A, 31C, and 33A of this title] [D.C. Law 18-360]; and (29) Section 31-3461(a), making applicable sections 1251, 1252, and 1304 of the Patient Protection and Affordable Care Act, approved March 23, 2010 (124 Stat. 119; 42 U.S. C.  18011, 18021 and 18024), and sections 2701 through 2709, 2711 through 2719A, and 2794 of the Public Health Service Act, approved July 1, 1944 (58 Stat. 682; approved July 1, 1944 (58 Stat. 682; 42 U.S.C.  300gg, 300gg-1, 300gg-2, 300gg-3, 300gg-4, 300gg-5, 300gg-6, 300gg-7, 300gg-8, 300gg-9, 300gg-11, 300gg-12, 300gg-13, 300gg-14, 300gg-15, 300gg-15A, 300gg-16, 300gg-17, 300gg-18, 300gg-19, 300gg-19A, and 300gg-94 ), (collectively federal health acts) and any implementing rules issued pursuant to the federal health acts. (b) Reference in the provisions cited in subsection (a) of this section to insurers, companies, or similar terms shall be deemed to include reference to a corporation governed by this chapter.  (Apr. 9, 1997, D.C. Law 11-245,  4, 44 DCR 1158; Mar. 25, 2009, D.C. Law 17-369,  2(b), 56 DCR 1346; Apr. 8, 2011, D.C. Law 18-360,  503(a), 58 DCR 896; May 2, 2015, D.C. Law 20-265,  105(b), 62 DCR 1529.)  Prior Codifications 1981 Ed.,  35-4703. Section References This section is referenced in  31-3502,  31-3510, and  31-3518. Effect of Amendments D.C. Law 17-369, in subsec. (a), deleted ; and from the end of par. (25); substituted ; and for a period at the end of par. (26), and added par. (27). D.C. Law 18-360 deleted and from the end of par. (26); substituted ; and for a period the end of par. (27); and added par. (28). The 2015 amendment by D.C. Law 20-265 added (29) and made related changes.
 313504. Application for certificate of authority. (a) No corporation subject to the provisions of this chapter, whether organized pursuant to the laws of the District of Columbia, or of any state, or by act of the Congress of the United States, shall issue subscriber contracts until the Mayor has authorized it to do so by issuance of a certificate of authority. (b) Application for such certificate of authority shall be made on forms to be supplied by the Mayor containing such information as the Mayor shall deem necessary. Each application for such certificate of authority, including each application for renewal, shall contain payment of a fee of $200 to the District of Columbia, which shall be collected by the Commissioner of the Department of Insurance, Securities, and Banking and shall be accompanied by copies of the following documents, duly certified by an executive officer of such corporation: (1) Articles of incorporation, with all amendments thereto; (2) Bylaws, with all amendments thereto; (3) Each contract form executed or proposed to be executed by and between the corporation and any hospital, physician, or other medical service provider embodying the terms under which hospital and medical service is to be furnished to subscribers; (4) Each form of subscriber contract issued or proposed to be issued, together with a table of rates charged, or proposed to be charged, including actuarial justifications, to subscribers; (5) A financial statement of the corporation, which shall include the amount of each contribution paid or agreed to be paid to the corporation for working capital, the name or names of each contributor, and the terms of each contribution; (6) A risk-based capital report prepared in the manner prescribed by any risk-based capital (RBC) regulations for hospital and medical services corporations promulgated by the Mayor; (7) A list of the names and addresses and biographical information for the members of the board of directors, or board of trustees, and for the officers of the corporation; (8) A statement of the geographical area in which the corporation proposes to operate; and (9) Any other information or documents the Mayor deems necessary to assure compliance with this chapter. (c) In addition, if the applicant is a foreign corporation: (1) It shall provide the Mayor with an instrument authorizing service of process on the Mayor in accordance with  31-4323; (2) It shall satisfy the Mayor that the corporation is duly organized under the laws of the state under whose laws it professes to be organized, and is authorized to do the business it is transacting or proposes to transact; and (3) It shall satisfy the Mayor that its funds are invested in accordance with the laws of its domicile and in securities or property which afford a degree of financial security substantially equal to that required for a corporation organized under the laws of the District of Columbia, and that it has a surplus at least equal to that required to be maintained by corporations authorized to do business pursuant to the provisions of this chapter.  (Apr. 9, 1997, D.C. Law 11-245,  5, 44 DCR 1158; Mar. 24, 1998, D.C. Law 12-81,  47, 45 DCR 745; June 11, 2004, D.C. Law 15-166,  4(u)(2), 51 DCR 2817.)  Prior Codifications 1981 Ed.,  35-4704. Section References This section is referenced in  31-3505. Effect of Amendments D.C. Law 15-166, in subsec. (b), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance and Securities. Emergency Legislation For temporary (90 day) amendment of section, see  4(u)(2) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). References in Text Section 31-4323, referred to in subsection (c), was repealed March 21, 1995, by  12 of D.C. Law 10-233.
 313505.01. Community health reinvestment. A corporation shall engage in community health reinvestment to the maximum feasible extent consistent with financial soundness and efficiency.  (Apr. 9, 1997, D.C. Law 11-245,  6a; as added Mar. 25, 2009, D.C. Law 17-369,  2(c), 56 DCR 1346.)  Section References This section is referenced in  31-3506.
 313505. Requirements for issuance of certificate of authority. The Mayor shall issue a certificate of authority to each applicant upon the payment of the $200 fee provided for in  31-3504(b), and upon being satisfied that: (a) The applicant has been organized bona fide for the purpose of establishing, maintaining, and operating a hospital service plan, a medical service plan, or combination of the two; (b) Each contract executed, or proposed to be executed, by the applicant and any hospital, physician, or other medical provider for the furnishing of hospital or medical services to subscribers obligates, or will when executed obligate, each hospital, physician, or other similar service provider which is a party thereto to render the service to which each subscriber may be entitled under the terms and conditions of the various subscriber contracts issued, or proposed to be issued, by the applicant; (c) Each subscriber contract issued, or proposed to be issued, in the District of Columbia is in a form approved by the Mayor, and that the rate charged, or proposed to be charged, for each form of such contract is approved by the Mayor as not being excessive, inadequate, or unfairly discriminatory in relation to the services and benefits offered; provided, that rates for experience rated groups need not, in accordance with  31-3508(c), be filed with the Mayor; (d) The applicant has a surplus of an amount equal to or greater than that required under  31-3506, or the amount determined to be necessary pursuant to application of any risk-based capital regulations for hospital and medical services corporations promulgated by the Mayor; and (e) The applicant has: (1) Made provision for compliance with the open enrollment requirements of  31-3514, including the providing of other public services in the District; or (2) Has entered into a public-private partnership.  (Apr. 9, 1997, D.C. Law 11-245,  6, 44 DCR 1158; Feb. 4, 2010, D.C. Law 18-104,  2(b), 56 DCR 9182.)  Prior Codifications 1981 Ed.,  35-4705. Effect of Amendments D.C. Law 18-104 rewrote subsec. (e), which had read as follows: (e) The applicant has made provision for compliance with the open enrollment requirements of  31-3514, including the providing of other public services in the District of Columbia as required in  31-3514. Emergency Legislation For temporary (90 day) amendment of section, see  2(b) of Hospital and Medical Services Corporation Regulatory Emergency Amendment Act of 2009 (D.C. Act 18-277, January 11, 2010, 57 DCR 935). Temporary Legislation Section 2(b) of D.C. Law 18-134 amended subsec. (e) to read as follows: (e) The applicant has: (1) Made provision for compliance with the open enrollment requirements of section 15, including the providing of other public services in the District; or (2) Has entered into a public-private partnership.. Section 6(b) of D.C. Law 18-134 provided that the act shall expire after 225 days of its having taken effect.
 313506.01. Compliance and implementation of community health reinvestment obligations. (a) A corporation shall make available to the Commissioner such information as may be required to permit the Commissioner to verify the corporations community health reinvestment and, if appropriate, its compliance with its plan to dedicate excess surplus or to verify that the corporation is participating in a public-private partnership. When verifying the community health reinvestment or the corporations compliance with its plan, or when verifying the corporations participation in a public-private partnership the Commissioner may retain attorneys, appraisers, independent actuaries, independent certified public accountants, or other professionals, the cost of which shall be borne by the corporation. (b) In implementing the provisions of the Medical Insurance Empowerment Amendment Act of 2008 [D.C. Law 17-369], the Commissioner shall consider the interests and needs of the jurisdictions in the corporations service area.  (Apr. 9, 1997, D.C. Law 11-245,  7a; as added Mar. 25, 2009, D.C. Law 17-369,  2(e), 56 DCR 1346; Feb. 4, 2010, D.C. Law 18-104,  2(d), 56 DCR 9182.)  Effect of Amendments D.C. Law 18-104 rewrote subsec. (a), which had read as follows: (a) A corporation shall make available to the Commissioner such information as may be required to permit the Commissioner to verify the corporations community health reinvestment and, if appropriate, its compliance with its plan to dedicate excess surplus. When verifying the community health reinvestment or the corporations compliance with its plan, the Commissioner may retain attorneys, appraisers, independent actuaries, independent certified public accountants, or other professionals, the cost of which shall be borne by the corporation. Emergency Legislation For temporary (90 day) amendment of section, see  2(d) of Hospital and Medical Services Corporation Regulatory Emergency Amendment Act of 2009 (D.C. Act 18-277, January 11, 2010, 57 DCR 935). Temporary Legislation Section 2(d) of D.C. Law 18-134, in subsec. (a), substituted dedicate excess surplus or to verify that the corporation is participating in a public-private partnership for dedicate excess surplus and substituted or the corporations compliance with its plan, or when verifying the corporations participation in a public-private partnership for or the corporations compliance with its plan,. Section 6(b) of D.C. Law 18-134 provided that the act shall expire after 225 days of its having taken effect.
 313506. Surplus requirements. (a) At the time of issuance of a certificate of authority under this chapter and at all times thereafter until risk-based capital regulations for hospital and medical services corporations are promulgated, a corporation must possess surplus in an amount which is the greater of $5,000,000 or 8.0% of the total amount of premiums for insured risk received by the corporation in the preceding calendar year. The total amount of premiums for insured risk shall not include premiums collected for federal health benefit programs that have a separate reserve fund held by the federal government. (b) The surplus requirement of 8.0% shall be phased-in following April 9, 1997 as follows: (1) Year one  40% of the surplus requirement in subsection (a) of this section; (2) Year two  60% of the surplus requirement in subsection (a) of this section; (3) Year three  80% of the surplus requirement in subsection (a) of this section; and (4) Year four  100% of the surplus requirement in subsection (a) of this section. (c) The Mayor shall have the authority to require the differentiation of the corporations activities into risk and nonrisk business for the purpose of determining the corporations income that is derived from premiums for insured risk and from other sources. (d) Notwithstanding the provisions of subsection (a) of this section, at the time of issuance of a certificate of authority under this chapter and at all times thereafter, a corporation shall be subject to the provisions of any risk-based capital regulations for hospital and medical services corporations promulgated by the Mayor, and must maintain at all times such surplus as is determined to be necessary under those regulations. (e) The Commissioner may, on an annual basis, and shall, on a basis no less frequently than every 3 years, review the portion of the surplus of the corporation that is attributable to the District and may issue a determination as to whether the surplus is excessive. Any such review shall be undertaken in coordination with the other jurisdictions in which the corporation conducts business. The surplus may be considered excessive only if: (1) The surplus is greater than the appropriate risk-based capital requirements as determined by the Commissioner for the immediately preceding calendar year; and (2) After a hearing, the Commissioner determines that the surplus is unreasonably large and inconsistent with the corporations obligation under  31-3505.01. (f) In determining whether the surplus of the corporation that is attributable to the District is excessive, the Commissioner shall take into account all of the corporations financial obligations arising in connection with the conduct of the corporations insurance business, including premium tax paid and the corporations contribution to the open enrollment program required by  31-3514 and payments and expenditures pursuant to a public-private partnership. (g)(1) If the Commissioner determines that the surplus of the corporation is excessive, the Commissioner shall order the corporation to submit a plan for dedication of the excess to community health reinvestment in a fair and equitable manner. (2) A plan submitted pursuant to paragraph (1) of this subsection may consist entirely of expenditures for the benefit of current subscribers of the corporation. (h) When determining what surplus is attributable to the District and whether the surplus is excessive, the Commissioner may retain attorneys, appraisers, independent actuaries, independent certified public accountants, or other professionals, the cost of which shall be borne by the corporation. (i) If the Commissioner determines that the corporation failed to submit a plan as ordered under subsection (g) of this section within a reasonable period or failed to execute within a reasonable period a plan already submitted under subsection (g) of this section, the Commissioner shall deny for 12 months all premium rate increases for subscriber policies written in the District sought by the corporation pursuant to  31-3508 and may issue such orders as are necessary to enforce the purposes of this chapter. (j) The existence of a public-private partnership shall not preclude the Commissioners surplus evaluation of the corporation or diminish the Commissioners authority to issue directives to the corporation pursuant to the evaluation.  (Apr. 9, 1997, D.C. Law 11-245,  7, 44 DCR 1158; Mar. 25, 2009, D.C. Law 17-369,  2(d), 56 DCR 1346; Feb. 4, 2010, D.C. Law 18-104,  2(c), 56 DCR 9182; Sept. 26, 2012, D.C. Law 19-171,  88(a), 59 DCR 6190.)  Prior Codifications 1981 Ed.,  35-4706. Section References This section is referenced in  31-3505. Effect of Amendments D.C. Law 17-369 added subsecs. (e), (f), (g), (h), and (i). D.C. Law 18-104, in subsec. (e), substituted The Commissioner may, on an annual basis, and shall, on a basis no less frequently than every 3 years, review the portion of the surplus of the corporation that is attributable to the District and may issue a determination as to whether the surplus is excessive. Any such review shall be undertaken in coordination with the other jurisdictions in which the corporation conducts business. for Within 120 days after March 25, 2009, and annually thereafter, the Commissioner shall review the portion of the surplus of the corporation that is attributable to the District and shall issue a determination as to whether the surplus is excessive.; in subsec. (f), substituted  31-3514 and payments and expenditures pursuant to a public-private partnership for  31-3514; and added subsec. (j). The 2012 amendment by D.C. Law 19-171 substituted  31-3505.01 for  31-3505(a) in (e)(2). Emergency Legislation For temporary (90 day) amendment of section, see  2 of Medical Insurance Empowerment Surplus Review Emergency Act of 2009 (D.C. Act 18-153, July 28, 2009, 56 DCR 6342). For temporary (90 day) amendment of section, see  2 of Medical Insurance Empowerment Surplus Review Congressional Review Emergency Amendment Act of 2009 (D.C. Act 18-210, October 21, 2009, 56 DCR 8487). For temporary (90 day) amendment of section, see  2(c) of Hospital and Medical Services Corporation Regulatory Emergency Amendment Act of 2009 (D.C. Act 18-277, January 11, 2010, 57 DCR 935). Temporary Legislation Section 2 of D.C. Law 18-85, in subsec. (e), 180 days for 120 days. Section 5(b) of D.C. Law 18-85 provided that the act shall expire after 225 days of its having taken effect. Section 2(c) of D.C. Law 18-134, in subsec. (e), struck the first sentence and inserted The Commissioner may, on an annual basis, and shall, on a basis no less frequently than every 3 years, review the portion of the surplus of the corporation that is attributable to the District and may issue a determination as to whether the surplus is excessive. Any such review shall be undertaken in coordination with the other jurisdictions in which the corporation conducts business.; in subsec. (f), substituted section 15 and payments and expenditures pursuant to a public-private partnership for section 15; and added subsec. (j) to read as follows: (j) The existence of a public-private partnership shall not preclude the Commissioners surplus evaluation of the corporation or diminish the Commissioners authority to issue directives to the corporation pursuant to the evaluation.. Section 6(b) of D.C. Law 18-134 provided that the act shall expire after 225 days of its having taken effect.
 313507. Filing of provider contracts. (a) A corporation holding a certificate of authority under this chapter may enter into contracts with licensed hospitals, licensed physicians, and other duly licensed medical services providers. (b) A copy of each contract form that a corporation, referred to in subsection (a) of this section, has with licensed hospitals, licensed physicians, and other duly licensed medical services providers shall be filed with the Mayor.  (Apr. 9, 1997, D.C. Law 11-245,  8, 44 DCR 1158.)  Prior Codifications 1981 Ed.,  35-4707.
 313508. Filing of subscriber contract forms and rates. (a) Contract form filings.  (1) The form and content of all subscriber contracts between corporation and its contractholders issued in the District of Columbia, including any group certificates and any riders, endorsements, amendments, or other forms made a part of the subscriber contract, shall, at all times, be subject to the prior approval of the Mayor. (2) The Mayor shall disapprove a proposed form of subscriber contract if the form contains provisions which are unjust, unfair, inequitable, inadequate, misleading, or deceptive, which encourage misrepresentation of the coverage, or which are otherwise not in compliance with applicable provisions of this chapter. (3) Each subscriber contract, group certificate, or other contract form shall plainly state the services, benefits, and indemnification to which the subscriber is entitled as well as the services, benefits, and indemnification to which the subscriber is not entitled. (4) Each proposed form of a subscriber contract shall be on file for a waiting period of 60 days before it becomes effective. When, in the Mayors opinion, a filing is not accompanied by the information needed to support it and the Mayor does not have sufficient information to determine whether the filing meets the requirements of this section, a corporation shall be required to furnish the needed information. In such event the waiting period shall be suspended and shall recommence as of the date the information is furnished. Upon written application by the corporation, the Mayor may authorize a filing which the Mayor has reviewed to become effective before the expiration of the waiting period or any extension thereof, or at any later date. A filing shall be deemed approved unless disapproved by the Mayor within the waiting period or any extension thereof requested by the corporation. (b) Rate filings for individual subscriber contracts.  All rates for individual subscriber contracts issued in the District of Columbia shall be subject to the prior approval of the Mayor. Each proposed rate filing shall be on file for a waiting period of 60 days before it becomes effective. When, in the Mayors opinion, a rate filing is not accompanied by the information needed to support it and the Mayor does not have sufficient information to determine whether the rate filing meets the requirements of this section, a corporation shall be required to furnish the needed information. In such event, the waiting period shall be suspended and shall recommence as of the date the information is furnished. Upon written application by the corporation, the Mayor may authorize a rate filing which the Mayor has reviewed to become effective before the expiration of the waiting period or any extension thereof. A filing shall be deemed approved unless disapproved by the Mayor within the waiting period or any extension thereof requested by the corporation. All approved rate filings for individual subscriber contracts submitted in other jurisdictions shall be filed with the Mayor for information purposes only. (c) Rate filings for group subscriber contracts.  All rates for group subscriber contracts, other than experience rated groups, issued in the District of Columbia shall be filed with the Mayor no later than the date on which a corporation proposes to make such rates effective. The rate filing shall be subject to review and disapproval by the Mayor for a period of 60 days after the filing date. If not disapproved before the expiration of the review period or any extension thereof requested by the corporation, the filing shall be deemed approved. Any disapproval under this subsection shall be applied retrospectively to the date the corporation made such rates effective. Upon application by the corporation, the Mayor may affirmatively approve a filing prior to the end of the review period. All approved rate filings for group subscriber contracts, other than experience rated groups, submitted in other jurisdictions shall be filed with the Mayor for information purposes only. (d) Contract form and rate filings generally.  (1) Application for approval shall be made to the Mayor in the format, and with the information, that the Mayor requires. (2) The Mayor may, at any time, require any corporation issued a certificate of authority under this chapter to demonstrate that its filings, including the terms and provisions of its subscriber contract forms, its rates, and its method for setting rates, are in compliance with this section, notwithstanding that the filings then in effect had previously been approved by the Mayor. Any subscriber contract forms and rates previously approved by the Mayor, but subsequently disapproved under this section, shall be considered disapproved on a prospective basis only from the date of such notice of disapproval, unless the corporation made a material misrepresentation in its contract form or rate filings. (3) If at any time subsequent to the applicable waiting or review period provided for in this section, the Mayor finds that a filing does not meet the requirements of this section, the Mayor shall issue an order to the filer specifying in what respects the Mayor finds that the filing fails to meet the requirements of this section, and stating when, within a reasonable period thereafter, the filing shall be no longer effective. The order shall not affect any subscriber contract, group certificate, or other contract made or issued prior to the expiration of the period set forth in the order. However, the Mayor may, prior to issuing the order and if requested by the filer, hold a hearing upon not less than 10 days written notice to the filer specifying the matters to be considered at the hearing. (e) Rate filings generally.  (1) Rate filings shall be inclusive of all rates, rating plans, and other documents utilized by a corporation to determine rates. (2) Rates shall not be excessive, inadequate, or unfairly discriminatory in relation to the services and benefits offered. (3) In determining whether to disapprove a rate filing, the Mayor shall give due consideration to past and prospective loss experience within and outside the District of Columbia, to underwriting practice and judgment to the extent appropriate, to a reasonable margin for surplus needs, to past and prospective expenses both nationwide and within the District of Columbia, and to all other relevant factors within and outside the District of Columbia. In establishing the rates to be charged individuals with open enrollment subscriber contracts, including individual conversion subscriber contracts, the revenue which would have been otherwise collected by the District of Columbia government through the imposition of the 1% premium tax pursuant to  31-3514(j), but which a corporation has contributed to a Rate Stabilization Fund in accordance with  31-3514(j)(1), shall be credited by the corporation to the benefit of this class of subscribers in an amount which assures competitive rates. (4) A corporation filing a rate pursuant to this section shall also comply with the Reasonable Health Insurance Ratemaking Reform Act of 2010 [D.C. Law 18-360]. (f) Transition provision for contract forms and rates.  (1) As to any corporation heretofore existing and operating on April 9, 1997, and subject to  31-3523, all subscriber contracts, group certificates, and other contracts issued in the District of Columbia after April 9, 1997, shall be on forms that have been filed and approved under this chapter. The requirement of this section shall not affect the validity of subscriber contracts, group certificates, and other contracts issued in the District of Columbia by such a corporation which are outstanding on April 9, 1997, and have not previously been filed with and approved by the Mayor, but these contracts shall be replaced, at the next contract anniversary date following April 9, 1997, by forms filed and approved under this chapter. (2) As to any corporation heretofore existing and operating on April 9, 1997, and subject to  31-3523, all rates applied to subscriber contracts after April 9, 1997 shall be such rates as have been filed and approved under this chapter. The requirements of this section shall not affect the validity of rates applied to subscriber contracts issued by such a corporation which are outstanding on April 9, 1997, and have not previously been filed with and approved by the Mayor, but these rates shall be replaced, at the next contract anniversary date following April 9, 1997, by rates filed and approved under this chapter. (g) A corporation whose proposed form of subscriber contract or proposed contract rate has been disapproved by the Mayor may contest the Mayors action in accordance with the procedures of  31-3522.  (Apr. 9, 1997, D.C. Law 11-245,  9, 44 DCR 1158; Apr. 8, 2011, D.C. Law 18-360,  503(b), 58 DCR 896.)  Prior Codifications 1981 Ed.,  35-4708. Section References This section is referenced in  31-3505,  31-3506, and  31-3514. Effect of Amendments D.C. Law 18-360 added subsec. (e)(4). Emergency Legislation For temporary (90 day) amendment of section, see  3 of Reasonable Health Insurance Premium Increase Emergency Amendment Act of 2010 (D.C. Act 18-328, March 18, 2010, 57 DCR 2546).
 313509. Reserves. (a) Taking into consideration the nature of the policies issued by the corporation, a corporation shall establish and maintain pro rata gross unearned premium reserves, reserves for incurred but unpaid claims (both reported and unreported), reserves for expenses related to settlement of such claims, and other reserves as required for proper reporting of its financial condition or as required under the form of financial statements required of the corporation. (b) The reserves required under subsection (a) of this section constitute a liability of the corporation in a determination of its financial condition.  (Apr. 9, 1997, D.C. Law 11-245,  10, 44 DCR 1158.)  Prior Codifications 1981 Ed.,  35-4709. Section References This section is referenced in  31-3501.
 313510. Investments. Notwithstanding any provision of  31-4435 [repealed], as made applicable by  31-3503(8), and notwithstanding any other provision of this chapter: (1) Without the Mayors prior written consent, a corporations aggregate investments in real estate pursuant to  31-4435(d)(1)(A) through (F) [repealed], shall not at any time exceed 20% of the amount of the corporations admitted assets as reported on the corporations annual financial statement most recently filed with the Mayor. (2) A corporations investments in real estate pursuant to  31-4435(d)(1)(A) through (F) [repealed], shall in no event exceed the actual cost plus the capitalized value (less normal depreciation) of the permanent improvements. (3) For real estate owned by a corporation pursuant to  31-4435(d)(1)(A) [repealed] on April 9, 1997, the corporation may, as its option, determine admitted asset value in accordance with an appraisal most recently conducted prior to April 9, 1997; provided, that the appraisal is acceptable to the Mayor. The difference between the admitted asset value as so identified and the book value (equal to the historical cost, less the value of encumbrances and accumulated depreciation) shall be accounted for as an unrealized gain and credited to reserves and unassigned funds and shall be amortized and charged to reserves and unassigned funds. Thereafter, such real estate shall be valued, for purposes of the financial statements required by  31-1901, at such appraised value, less accumulated amortization, plus the capitalized value of permanent improvements, less normal depreciation. Normal depreciation on the capitalized value of permanent improvements shall be charged as an expense in the underwriting and investment exhibit to the corporations annual financial statement. (4) A corporation shall not invest in or otherwise acquire any affiliate or subsidiary, as those terms are defined in  31-701, except in accordance with the following: (A) The business of the affiliate or subsidiary must be directly related to the operation of the corporation or the administration of a health benefits program. (B)(i) The corporation must submit a statement of proposed action to the Mayor before the corporation: (I) Creates, invests in, or otherwise acquires any affiliate or subsidiary; or (II) Alters the legal structure, purpose, or ownership of the corporation or any affiliate or subsidiary of the corporation. (ii) The statement of proposed action required under this subparagraph shall be filed by the corporation not less than 30 days prior to the effective date of the proposed action. (iii) The statement of proposed action shall be deemed approved unless disapproved by the Mayor within the 30-day waiting period or any extension thereof requested by the corporation. (iv) The corporation shall not be required to submit a statement of proposed action to the Mayor under this subparagraph when the proposed action is required to be reported to the Mayor pursuant to Chapter 7 of this title.  (Apr. 9, 1997, D.C. Law 11-245,  11, 44 DCR 1158.)  Prior Codifications 1981 Ed.,  35-4710.
 313511. Surplus notes. (a) A domestic corporation may borrow or assume a liability for the repayment of a sum of money under a written agreement which provides that the loan or advance shall be repaid only out of surplus of the corporation in excess of such minimum surplus as is stipulated in and by the agreement and if the surplus of the corporation after such payment would meet or exceed the level of surplus the corporation is required to maintain by the Mayor under the laws or regulations of the District of Columbia. The rate of interest specified in such an agreement may be adjusted no more frequently than annually to provide for a rate not exceeding the one-year treasury bill rate plus 3% at the time of adjustment. At the time the loan or advance is made, the interest rate shall not exceed the one-year treasury bill rate plus 3% annum. (b) Subject to approval by the Mayor, the interest rate on all loans or advances existing on April 9, 1997 can be amended to the rate as permitted in this section with the mutual agreement of the corporation and the lender. (c) A domestic corporation shall, before entering into an agreement for a loan or advance permitted under this section, file with the Mayor a statement of the purpose of the loan or advance and a copy of the proposed agreement. The Mayor shall disapprove any proposed agreement for a loan or advance if the Mayor finds that the loan or advance is unnecessary or excessive for the purpose intended; that the terms of the agreement are not fair and equitable to the parties and to other lenders, if any, to the corporation; that the information so filed by the corporation is inadequate; or that the terms of the agreement are not otherwise in compliance with this section. (d) Any loan or advance to a domestic corporation shall be repaid by the corporation when, and to the extent, no longer reasonably necessary for the purpose originally intended; provided, that no repayment of such a loan or advance shall be made unless approved in advance by the Mayor. (e) Nothing in this section shall be construed to mean that a corporation may not borrow money otherwise than by a loan or advance, but the amount so borrowed with accrued interest thereon shall be carried by the corporation as a liability.  (Apr. 9, 1997, D.C. Law 11-245,  12, 44 DCR 1158.)  Prior Codifications 1981 Ed.,  35-4711.
 313512. Group subscriber contract standard provisions. No group subscriber contract shall be issued in the District of Columbia by a corporation unless it contains in substance the following provisions, or provisions which in the opinion of the Mayor are more favorable to the subscribers, or at least as favorable to the subscribers and more favorable to the group contractholder; except, that if any provision of this section is in whole or in part inapplicable to or inconsistent with the coverage provided by a particular form of contract, the corporation, with the approval of the Mayor, shall omit from such contract any inapplicable provision or part of a provision, and shall modify any inconsistent provision or part of the provision in such manner as to make the provision as contained in the contract consistent with the coverage provided by the contract: (1) A provision that the group contract holder is entitled to a grace period of the last day of the month for which the premium is due for the payment of any premium due except the first, during which grace period the contract shall continue in force, unless the group contract holder has given the corporation written notice of discontinuance in advance of the date of discontinuance and in accordance with the terms of the contract; except, that the contract may provide that the contract holder shall be liable to the corporation for the payment of a pro rata premium for the time the contract was in force during such grace period; (2) A provision that the validity of the contract shall not be contested except for nonpayment of premiums, fraudulent misstatements, noncompliance with contractual provisions and noncompliance with eligibility requirements after it has been in force for 2 years from its date of issue; (3) A provision that no statement made by any subscriber under the contract relating to insurability may be used in contesting the validity of the coverage with respect to which such statement was made after the subscribers coverage has been in force for a period of 2 years nor unless it is contained in a written instrument signed by the subscriber, except that this provision need not preclude the assertion at any time of defenses based upon the subscribers lack of eligibility for coverage under the contract or upon other provisions in the contract unrelated to insurability; (4) A provision that a copy of the application, if any, of the contractholder shall be attached to the contract when issued, that all statements made by the contractholder or by the subscriber shall be deemed representations and not warranties, and that no statement made by any subscriber may be used in any contest unless a copy of the instrument containing the statement is or has been furnished to such person or, in the event of the death or incapacity of the subscriber, to the individuals beneficiary or personal representative; (5) A provision setting forth the conditions, if any, under which the corporation reserves the right to require a person eligible for coverage to furnish evidence of individual insurability satisfactory to the corporation as a condition to part or all of the individuals coverage; (6) A provision that the corporation shall issue to the contractholder for delivery to each subscriber a certificate setting forth a statement as to the coverage to which that person is entitled, to whom benefits are payable, and a statement as to any family members or dependents coverage; (7) A provision that written notice of a claim must be given to the corporation within 15 months after the occurrence or commencement of the date of a service covered by the contract and that failure to give notice within such time shall not invalidate or reduce any claim if it is shown that the contractholder was legally incapacitated prior to the expiration of the 15-month claim filing period; (8) A provision that the corporation shall furnish to the subscriber under the contract, or to the contractholder for delivery to the subscriber, such forms as are usually furnished by it for filing a claim; and that if such forms are not furnished before the expiration of 20 days after the corporation received notice of any claim under the contract, the person making the claim shall be deemed to have complied with the claims filing requirements of the contract; (9) A provision that all benefits and indemnification payable under the contract must be paid not more than 60 days after receipt of all necessary information and documentation or proof; (10) A provision that the corporation has the right to examine the person for whom a claim is so filed under the contract as often as it may reasonably require during the pendency of the claim and also has the right to conduct an autopsy in case of death if doing so is not prohibited by law; (11) A provision that no action at law or in equity may be brought to recover on the contract before the expiration of 60 days from the date a claim has been filed in accordance with the claim filing requirements of the contract or after a period of 3 years from the last date on which a claim is required to be filed under the claim filing requirements of the contract; and (12) A provision that allows subscribers who leave such groups to convert, without evidence of insurability, to an individual subscriber contract providing an adequate level of coverage and in accordance with any standards the Mayor prescribes pursuant to  31-3514(g).  (Apr. 9, 1997, D.C. Law 11-245,  13, 44 DCR 1158; May 2, 2015, D.C. Law 20-265,  105(c), 62 DCR 1529.)  Prior Codifications 1981 Ed.,  35-4712. Effect of Amendments The 2015 amendment by D.C. Law 20-265 rewrote (1).
 313513. Reports. (a) In addition to the annual statement required by  31-1901, the Mayor: (1) May require each corporation to file on a quarterly or other basis any additional reports, exhibits, or statements the Mayor considers necessary to furnish all information concerning the condition, solvency, experience, transactions, or affairs of the corporation. The Mayor may establish deadlines for submitting any additional reports, exhibits, or statements and may require their verification by any officer or officers of the corporation the Mayor designates; and (2) Shall require each corporation to file annually, on or before June 1, a report, signed by 2 of its principal officers, showing: (A) The number of the District of Columbia contractholders and subscribers by the following type of contract or its equivalent: (i) Individual, open enrollment; (ii) Individual conversion subscribers; (iii) Group subscribers, as defined by regulation; (iv) Medigap and Medicare supplements; and (v) Associations; (B) Total subscriber income, benefit, and indemnification payments for the types of contracts listed in paragraph (1) of this subsection, with a specific breakdown by type of contract if requested by the Mayor; and (C) Expenditures for providing public services, in addition to open enrollment, in the District of Columbia.  (Apr. 9, 1997, D.C. Law 11-245,  14, 44 DCR 1158.)  Prior Codifications 1981 Ed.,  35-4713.
 313514.01. Tax and related payments. A corporation shall be subject to  47-2608.  (Apr. 9, 1997, D.C. Law 11-245,  15a; as added Mar. 2, 2007, D.C. Law 16-192,  5012(c), 53 DCR 6899.)  Section References This section is referenced in  31-3514.02.
 313514.02. Establishment of Healthy DC and Health Care Expansion Fund. (a) There is established as a nonlapsing fund the Healthy DC and Health Care Expansion Fund (Fund). All funds deposited into the Fund, and any interest earned on those funds, shall not revert to the unrestricted fund balance of the General Fund of the District of Columbia at the end of a fiscal year, or at any other time, but shall be continually available to support the Healthy DC Program, established by Chapter 6A of Title 4, and other medical assistance programs administered by the Department of Health Care Finance, without regard to fiscal year limitation, subject to authorization by Congress. (b) There shall be deposited into the Fund: (1) All tax revenue generated pursuant to  31-3514.01; (2) Any other local funds, including any fees, penalties, or other tax revenues required by District law, including the premium tax imposed on health maintenance organizations, as required by  31-3403.01. (3) Annual appropriations, if any; (4) Federal grant funds; (5) All fines and penalties collected pursuant to Chapter 6A of Title 4; and (6) Grants, gifts, or subsidies from public or private sources. (c) Notwithstanding subsection (a) of this section, for fiscal year 2010, up to $3.25 million from the Fund shall be utilized to support the following one-time allocations: (1) An amount of $2.5 million shall support a grant to an acute care pediatric hospital in the District for the purpose of supporting operational expenses associated with the new pediatric emergency facility located at the United Medical Center; and (2) Up to $750,000 to support operational expenses associated with the delivery of health care services at the D.C. Jail.  (Apr. 9, 1997, D.C. Law 11-245,  15b; as added Mar. 2, 2007, D.C. Law 16-192,  5012(c), 53 DCR 6899; Aug. 16, 2008, D.C. Law 17-219,  5050, 55 DCR 7598; Mar. 25, 2009, D.C. Law 17-353,  138, 56 DCR 1117; Mar. 3, 2010, D.C. Law 18-111,  5131, 57 DCR 181; Sept. 24, 2010, D.C. Law 18-223, 5023(c), 57 DCR 6242; Sept. 26, 2012, D.C. Law 19-171,  88(c), 59 DCR 6190.)  Section References This section is referenced in  4-632,  4-637,  31-3403.01,  31-3501,  31-3514,  47-368.06, and  47-2002. Effect of Amendments D.C. Law 17-219 rewrote the section. D.C. Law 17-353 validated a previously made technical correction. D.C. Law 18-111 added subsec. (c). D.C. Law 18-223, in the section heading, substituted Healthy DC and Health Care Expansion Fund for Healthy DC Fund; in subsec. (a), substituted Healthy DC and Health Care Expansion Fund (Fund) for Healthy DC Fund (Fund) and inserted , and other medical assistance programs administered by the Department of Health Care Finance,; and rewrote subsec. (b)(2), which had read as follows: (2) Any other local funds, including any fees, penalties, or other tax revenue required by District law, including a portion of the premium tax imposed on health maintenance organizations, as required by Chapter 34 of this title; The 2012 amendment by D.C. Law 19-171 validated a previously made technical correction in (c). Emergency Legislation For temporary (90 day) enactment, see  5012(c) of Fiscal Year 2007 Budget Support Congressional Review Emergency Act of 2007 (D.C. Act 17-1, January 16, 2007, 54 DCR 1165). For temporary (90 day) amendment of section, see  202 of Fiscal Year 2009 Balanced Budget Support Emergency Amendment Act of 2008 (D.C. Act 17-572, December 2, 2008, 55 DCR 12452). For temporary (90 day) amendment of section, see  202 of Fiscal Year 2009 Balanced Budget Support Congressional Review Emergency Amendment Act of 2009 (D.C. Act 18-13, February 23, 2009, 56 DCR 1920). For temporary (90 day) amendment of section, see  5131 of Fiscal Year 2010 Budget Support Second Emergency Act of 2009 (D.C. Act 18-207, October 15, 2009, 56 DCR 8234). For temporary (90 day) amendment of section, see  5131 of Fiscal Year Budget Support Congressional Review Emergency Amendment Act of 2009 (D.C. Act 18-260, January 4, 2010, 57 DCR 345). For temporary (90 day) amendment of section, see  2 of Healthy DC Equal Access Fund and Hospital Stabilization Emergency Amendment Act of 2009 (D.C. Act 18-310, February 18, 2010, 57 DCR 1635). For temporary (90 day) amendment of section, see  3(c) of Medicaid Resource Maximization Emergency Amendment Act of 2010 (D.C. Act 18-390, May 7, 2010, 57 DCR 4339). For temporary (90 day) amendment of section, see  5023(c) of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542). Temporary Legislation For temporary (225 day) amendment of section, see  202 of (D.C. Law 17-326, March 21, 2009, law notification 56 DCR 3037). Section 2 of D.C. Law 18-154, in subsec. (a), substituted , and any other purpose as set forth in this section, without regard for without regard; and added subsec. (c) to read as follows: (c)(1) Notwithstanding subsection (a) of this section, the Mayor is authorized to utilize, in fiscal year 2010, up to $5.9 million from the Fund to support the delivery of acute care services for uninsured or under-insured individuals at United Medical Center; provided, that: (A) An amount of $3 million be distributed by March 2, 2010; and (B) Up to $2.9 million be distributed, in equal monthly installments, beginning by March 15, 2010, and continuing through to September 30, 2010. (2) United Medical Center shall submit a quarterly report to the Mayor providing an accounting of any funds received pursuant to this subsection, including a detailed account of the acute care services that were provided. (3)(A) The Mayor shall seek to recoup any funds from United Medical Center that the Mayor determines were expended contrary to the authority granted by this subsection. (B) The Mayor may conduct an audit of the uncompensated acute care expenditures, if necessary, to verify that the funds were expended in accordance with this subsection. (4) The Department of Health Care Finance shall have grant-making authority for purposes of effectuating this subsection.. Section 8(b) of D.C. Law 18-154 provided that the act shall expire after 225 days of its having taken effect. Section 3(c) of D.C. Law 18-205, in the section heading, substituted Healthy DC and Health Care Expansion Fund for Healthy DC Fund; in subsec. (a), substituted Healthy DC and Health Care Expansion Fund (Fund) for Healthy DC Fund (Fund) and substituted  Title 4, and other medical assistance programs administered by the Department of Health Care Finance, without for Title 4 without; and rewrote subsec. (b)(2) to read as follows: (2) Any other local funds, including any fees, penalties, or other tax revenues required by District law, including the premium tax imposed on health maintenance organizations, as required by section 4a of the Health Maintenance Organization Act of 1996, effective August 16, 2008 (D.C. Law 17-219; D.C. Official Code  31-3403.01).. Section 7(b) of D.C. Law 18-205 provided that the act shall expire after 225 days of its having taken effect. Short Title Short title: Section 5049 of D.C. Law 17-219 provided that subtitle S of title V of the act may be cited as the Hospital and Medical Services Corporation Regulatory Act Amendment Act of 2008. Short title: Section 5130 of D.C. Law 18-111 provided that subtitle N of title V of the act may be cited as the Hospital and Medical Services Corporation Regulatory Amendment Act of 2009.
 313514. Open enrollment. [Repealed] Repealed.  (Apr. 9, 1997, D.C. Law 11-245,  15, 44 DCR 1158; June 11, 2004, D.C. Law 15-166,  4(u)(3), 51 DCR 2817; Mar. 2, 2007, D.C. Law 16-192,  5012(b), 53 DCR 6899; Mar. 25, 2009, D.C. Law 17-369,  2(f), 56 DCR 1346; Feb. 4, 2010, D.C. Law 18-104,  2(e), 56 DCR 9182; Sept. 24, 2010, D.C. Law 18-223,  5023(b), 57 DCR 6242; Sept. 26, 2012, D.C. Law 19-171,  88(b), 59 DCR 6190; May 2, 2015, D.C. Law 20-265,  105(d), 62 DCR 1529.)  Prior Codifications 1981 Ed.,  35-4714. Section References This section is referenced in  31-205,  31-3501,  31-3505,  31-3506,  31-3508,  31-3512, and  47-2608. Effect of Amendments D.C. Law 15-166, in par. (3) of subsec. (j), substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities Regulation both times it appears. D.C. Law 16-192 repealed subsec. (f) and rewrote subsecs. (j) and (k). D.C. Law 17-369, in subsec. (j)(2), substituted shall order annually an independent for may order an independent; rewrote subsec. (k); and added subsecs. (m), (n), and (o). D.C. Law 18-104 added subsecs. (p), (q) and (r). D.C. Law 18-223, in subsec. (j)(2), substituted Healthy DC and Health Care Expansion Fund for Healthy DC Fund. The 2012 amendment by D.C. Law 19-171 validated previously made technical corrections.
 313515. Conversion to a for-profit entity. A corporation issued a certificate of authority under this chapter shall not be converted into a stock corporation, partnership, limited liability company, or other business entity organized for profit.  (Apr. 9, 1997, D.C. Law 11-245,  16, 44 DCR 1158; Apr. 11, 2003, D.C. Law 14-297,  401(c), 50 DCR 330; Dec. 9, 2003, D.C. Law 15-56,  3(a), 50 DCR 9188; Mar. 25, 2009, D.C. Law 17-369,  2(g), 56 DCR 1346.)  Prior Codifications 1981 Ed.,  35-4715. Effect of Amendments D.C. Law 14-297 rewrote subsec. (b)(2) which had read as follows: (2) Fails to comply with  31-4405, 31-4410 through 31-4415, 31-4421, 31-4424, 31-4428, 31-4431, and 31-4441; D.C. Law 15-56, in subsec. (b), substituted company not involving a nonprofit hospital service plan or medical service plan unless for company unless, and added subsec. (b-1). D.C. Law 17-369 rewrote the section. Emergency Legislation For temporary (90 day) amendment of section, see  3(a) of Department of Insurance and Securities Regulation Merger Review Emergency Amendment Act of 2002 (D.C. Act 14-457, July 23, 2002, 48 DCR 8132). For temporary (90 day) amendment of section, see  3(a) of Department of Insurance and Securities Regulation Merger Review Congressional Review Emergency Amendment Act of 2002 (D.C. Act 14-513, October 23, 2002, 49 DCR 10475). For temporary (90 day) amendment of section, see  3(a) of Department of Insurance and Securities Regulation Merger Review Congressional Review Emergency Amendment Act of 2003 (D.C. Act 15-8, January 27, 2003, 50 DCR 1473). For temporary (90 day) amendment of section, see  3(a) of Department of Insurance and Securities Regulation Merger Review Emergency Amendment Act of 2003 (D.C. Act 15-205, October 24, 2003, 50 DCR 9845). For temporary (90 day) amendment of section, see  3(a) of Department of Insurance and Securities Regulation Merger Review Second Congressional Review Emergency Amendment Act of 2003 (D.C. Act 15-257, November 25, 2003, 50 DCR 11006). Temporary Legislation For temporary (225 day) amendment of section, see  3(a) of Department of Insurance and Securities Regulation Merger Review Temporary Amendment Act of 2002 (D.C. Law 14-217, March 25, 2003, law notification 50 DCR 2730).
 313516. Conversion to a mutual company. A corporation issued a certificate of authority under this chapter shall not be converted into a mutual insurance company.  (Apr. 9, 1997, D.C. Law 11-245,  17, 44 DCR 1158; Dec. 9, 2003, D.C. Law 15-56,  3(b), 50 DCR 9188; Mar. 25, 2009, D.C. Law 17-369,  2(h), 56 DCR 1346.)  Prior Codifications 1981 Ed.,  35-4716. Effect of Amendments D.C. Law 15-56, in subsec. (b), substituted company not involving a nonprofit hospital service plan or medical service plan unless for company unless, and added subsec. (b-1). D.C. Law 17-369 rewrote the section. Emergency Legislation For temporary (90 day) amendment of section, see  3(b) of Department of Insurance and Securities Regulation Merger Review Emergency Amendment Act of 2002 (D.C. Act 14-457, July 23, 2002, 48 DCR 8132). For temporary (90 day) amendment of section, see  3(b) of Department of Insurance and Securities Regulation Merger Review Congressional Review Emergency Amendment Act of 2002 (D.C. Act 14-513, October 23, 2002, 49 DCR 10475). For temporary (90 day) amendment of section, see  3(b) of Department of Insurance and Securities Regulation Merger Review Congressional Review Emergency Amendment Act of 2003 (D.C. Act 15-8, January 27, 2003, 50 DCR 1473). For temporary (90 day) amendment of section, see  3(b) of Department of Insurance and Securities Regulation Merger Review Emergency Amendment Act of 2003 (D.C. Act 15-205, October 24, 2003, 50 DCR 9845). For temporary (90 day) amendment of section, see  3(b) of Department of Insurance and Securities Regulation Merger Review Second Congressional Review Emergency Amendment Act of 2003 (D.C. Act 15-257, November 25, 2003, 50 DCR 11006). Temporary Legislation For temporary (225 day) amendment of section, see  3(b) of Department of Insurance and Securities Regulation Merger Review Temporary Amendment Act of 2002 (D.C. Law 14-217, March 25, 2003, law notification 50 DCR 2730).
 313517. Management contracts and service agreements. (a) Any management contract or service agreement which delegates to any person or organization all or part of a substantial management duty, function, or other form of control of a corporation, such as adjustment of claims, production of business, investment of assets, or general servicing of the corporations business, must be filed with the Mayor at least 30 days before the effective date of the contract or agreement. (b) This requirement in subsection (a) of this section shall not apply to personal services contracts of executives of a corporation. Nor shall that requirement apply to contracts by groups of affiliated companies for shared services, such as maintenance, security, purchasing, and the like, where costs to the individual member companies are charged on an actually incurred or pro rata basis, except that these contracts shall be in writing. (c) The Mayor shall disapprove any management contract or service agreement filed pursuant to subsection (a) of this section if, at any time, the Mayor finds one or more of the following: (1) That the service or management charges are based upon criteria unrelated either to the managed corporations profits or the reasonable, customary, and usual charges for such services, or are based on factors unrelated to the value of such services to the corporation; (2) That management personnel or other employees of the corporation are to perform functions and receive any remuneration therefor under the management contract or service agreement in addition to the compensation received by way of salary for their services directly from the corporation; (3) That the management contract or service agreement would transfer: (A) Substantial control of the corporation or the basic functions of the corporations management; or (B) Any of the powers vested in the board of directors or trustees by statute, the corporations articles of incorporation, or its bylaws; (4) That the management contract or service agreement contains provisions which would be clearly detrimental to the best interests of contractholders or subscribers of the corporation; or (5) That the officers, directors, or trustees of the contractor under the management contract or service agreement are of bad character or have been affiliated, directly or indirectly, through ownership, control, management, reinsurance transactions, or other insurance or business relations with any person or persons who have been involved in the improper manipulation of assets, accounts, or reinsurance. (d) If the Mayor disapproves any management contract or service agreement filed pursuant to subsection (a) of this section, written notice of the reason for such action shall be given to the corporation, which may contest the Mayors action in accordance with the procedures in  31-3522. (e) Any amendments to a management contract or service agreement shall be filed with the Mayor at least 30 days before they become effective. Any change in the officers, directors, or trustees of the contractor under a management contract or service agreement shall be reported to the Mayor within 10 days after such change occurs. Upon review of such amendments and changes, the Mayor may disapprove the management contract or service agreement in accordance with the provisions of subsections (c) and (d) of this section. (f) Any management contract or service agreement filed pursuant to subsection (a) of this section, and any amendment thereto, shall be deemed approved unless disapproved by the Mayor within 30 days after it is filed with the Mayor.  (Apr. 9, 1997, D.C. Law 11-245,  18, 44 DCR 1158.)  Prior Codifications 1981 Ed.,  35-4717.
 313518. Directors and trustees. Notwithstanding  31-706(c)(3), or any other provision of District of Columbia insurance law referenced in  31-3503, the following provisions shall apply to a domestic corporation issued a certificate of authority under this chapter: (1) The board of directors or trustees shall consist of not less than 5 nor more than 21 members, who shall be elected by a majority of the members of the board. The term of a director or trustee shall be not less than 1 year nor more than 3 years, and shall be specified in the corporations bylaws. (2) The directors or trustees of a domestic corporation shall at all times include subscriber representatives. (3) A majority of the board of directors or trustees shall at all times consist of members other than employees and officers of the corporation, or of any affiliate or subsidiary of the corporation. (4) Not less than one-third of the members of the board of directors or trustees shall be residents of the District of Columbia. (5) The articles of incorporation or bylaws of a domestic corporation shall state the number of directors or trustees necessary to constitute a quorum for conducting business at its meetings and the number of directors or trustees votes necessary to effect action on any matter presented for a vote of the board of directors or trustees. In regard to any matter involving conversion to a mutual or stock insurance company, or merger, consolidation, or other form of reorganization of the corporation, the affirmative vote of at least 80% of all directors or trustees shall be required to effect action by the board.  (Apr. 9, 1997, D.C. Law 11-245,  19, 44 DCR 1158.)  Prior Codifications 1981 Ed.,  35-4718.
 313519. Reports to directors and trustees. The officers or other management of a corporation issued a certificate of authority under this chapter shall report to its board of directors or trustees, no less often than quarterly, regarding any and all transactions or events that have, or are likely to have, a material impact on the operations or financial condition of the corporation.  (Apr. 9, 1997, D.C. Law 11-245,  20, 44 DCR 1158.)  Prior Codifications 1981 Ed.,  35-4719.
 313520. Oversight role and fiduciary obligation of directors, officers, and employees. (a) The Mayor shall promulgate regulations establishing the oversight role and fiduciary obligation of each member of the board of directors or trustees of a corporation issued a certificate of authority under this chapter. Such regulations shall require the corporation to adopt a code of conduct and compliance program for all board members, officers and employees of the corporation. (b) A corporation issued a certificate of authority under this chapter shall file with the Mayor annually, on or before June 1, a copy of its bylaws which shall require the corporations board of directors or trustees to adopt policies consistent with the provisions of the code of conduct and compliance program regulations promulgated by the Mayor. Any amendments to the bylaws shall be filed with the Mayor by the corporation within 30 days of adoption by the board.  (Apr. 9, 1997, D.C. Law 11-245,  21, 44 DCR 1158.)  Prior Codifications 1981 Ed.,  35-4720.
 313521. Sanctions for violations. (a) If the directors or trustees of a corporation issued a certificate of authority under this chapter knowingly violate, or knowingly permit any of the officers, employees, or agents of the corporation to violate, any provision of this chapter, any other provision of law made applicable to the corporation by this chapter, or any regulation promulgated under this chapter or such other provisions of law, the certificate of authority granted to the corporation may be suspended or revoked upon a determination of such violation by the Mayor. (b) Forfeiture of monetary gain; civil money penalties. (1) The Mayor may require a corporation issued a certificate of authority under this chapter, and any director, trustee, officer, employee, or agent of such a corporation, that the Mayor finds has willfully violated any provision of this chapter, any other provision of law made applicable to the corporation by this chapter, or any regulations promulgated under this chapter or such other provision of law to forfeit any monetary gain derived thereby to the Treasurer of the District of Columbia or to any person who has suffered financial injury or damage as a result of the violation. Upon a determination of such violation by the Mayor, the Mayor also may impose a civil penalty against a corporation in an amount not to exceed $25,000 for each violation, and as to an individual an amount not to exceed $5,000 for each type of violation, not to exceed $25,000 in total for each type of violation. (2) For the purposes of this section, the terms violate and violation denote any action, alone or with another or others, that involves causation, participation in, counseling, aiding, or abetting. (3) A person or organization against whom a forfeiture or penalty has been imposed under this section may, within 30 days after service of written notice thereof by hand delivery or mail, make a written request for a hearing on such action by delivering the request to the Department of Insurance, Securities, and Banking. The hearing shall commence in not fewer than 10 days nor more than 30 days from the date on which the request for a hearing is received by the Department of Insurance, Securities, and Banking. The hearing and its disposition shall be governed by the rules for contested cases set forth in Title 26 (Insurance) of the District of Columbia Municipal Regulations (26 DCMR). (4) The resignation, separation, or termination of a director, trustee, officer, employee, or agent (including a separation caused by the liquidation of a corporation issued a certificate of authority under this chapter) shall not affect the jurisdiction and authority of the Mayor to issue any notice and proceed under this subsection against any such individual, if the notice is served before the end of the 3-year period beginning on the date on which the individual ceased to be a director, trustee, officer, employee, or agent. (c) Whenever the Mayor determines that a corporation issued a certificate of authority under this chapter, or that a director, trustee, officer, employee, or agent of such a corporation has committed or is about to commit a violation of this chapter or of any rule, regulation, or order issued hereunder, the Mayor may issue an order directing such corporation or individual to cease and desist from violating or continuing to violate this chapter or any such rule, regulation, or order, subject to the notice, hearing, and other procedural requirements in subsection (b) of this section. (d) The foregoing penalties and remedies shall be in addition to, and not in lieu of, any other penalty which may be imposed pursuant to any other provision of law which this chapter makes applicable to a corporation and its officers, directors, employees, and agents. This section shall not be construed to prevent any person financially damaged by a director, trustee, officer, employee, or agent of a corporation from bringing a separate cause of action in a court of competent jurisdiction. (e) Whenever the Mayor determines that a corporation issued a certificate of authority under this chapter, or that a director, trustee, officer, employee, or agent of such a corporation, has willfully violated this chapter, the Mayor shall report such violation to the Corporation Counsel of the District of Columbia. Willful violations of this chapter shall be deemed misdemeanors, except where other provisions of this chapter or other provisions of law made applicable by this chapter provide for greater criminal liability. Prosecutions authorized by this section shall be upon information filed in the Superior Court of the District of Columbia by the Corporation Counsel or any of his or her assistants. Any corporation convicted of a willful violation of this chapter shall be fined in an amount not to exceed $50,000 for each violation. In addition to any fines or punishments imposed for violations of any other laws, any individual convicted of a willful violation of this chapter shall be fined in an amount not to exceed $5,000 for each violation; or, if such violation involves the deliberate perpetration of a fraud upon the corporation, its subscribers, or the Mayor, imprisoned for not more than 1 year, or both.  (Apr. 9, 1997, D.C. Law 11-245,  22, 44 DCR 1158; June 11, 2004, D.C. Law 15-166,  4(u)(4), 51 DCR 2817.)  Prior Codifications 1981 Ed.,  35-4721. Effect of Amendments D.C. Law 15-166, in par. (3) of subsec. (b), substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities Regulation both times it appears. Emergency Legislation For temporary (90 day) amendment of section, see  4(u)(4) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
 313522. Appeals. If, within the time for approval, the Mayor sends notice of disapproval of the proposed form of any subscriber contract, of proposed contract rates, or of any management contract or service agreement required by this chapter to be approved by the Mayor, the affected corporation may contest the Mayors decision. Any action to contest the Mayors decision shall be initiated within 30 days from the date on which the notice of decision is served on the corporation by delivering a written request for a hearing to the Department of Insurance, Securities, and Banking. The hearing shall commence in not fewer than 10 days nor more than 30 days from the date on which the action to contest the Mayors decision is received by the Department of Insurance, Securities, and Banking. The hearing and its disposition shall be governed by the procedures for contested cases in Chapter 1 of Title 26 (Insurance) of the District of Columbia Municipal Regulations (26 DCMR chapter 1).  (Apr. 9, 1997, D.C. Law 11-245,  23, 44 DCR 1158; June 11, 2004, D.C. Law 15-166,  4(u)(5), 51 DCR 2817.)  Prior Codifications 1981 Ed.,  35-4722. Section References This section is referenced in  31-3508 and  31-3517. Effect of Amendments D.C. Law 15-166 substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities Regulation both times it appears. Emergency Legislation For temporary (90 day) amendment of section, see  4(u)(5) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
 313523.01. Regulatory authority. Nothing in this chapter shall be construed to diminish the authority of the Council to regulate the affairs of Group Hospitalization and Medical Services, Inc.  (Apr. 9, 1997, D.C. Law 11-245,  24a; as added Mar. 25, 2009, D.C. Law 17-369,  2(i), 56 DCR 1346.) 
 313523. General transition provisions. (a) In his or her sole discretion, the Mayor may provide, upon application and for good cause shown by a corporation in existence and operating in the District of Columbia on April 9, 1997, for a reasonable period of time for such corporation to comply with any requirement of this chapter. (b) Notwithstanding any provisions to the contrary in Chapter 7 of this title, or this chapter, a transaction ongoing as of April 9, 1997, which would otherwise be subject to the notice requirements of  31-706(a), shall be filed with the Mayor for approval no later than 90 days after April 9, 1997, only if the transaction involves more than 3% of the amount of admitted assets or more than 20% of the amount of surplus of the corporation as of the 31st day of the previous December, whichever amount is less. Failure of the Mayor to act within 60 days after such a filing shall constitute approval of the transaction. The Mayor shall not disapprove a transaction ongoing as of April 9, 1997, if the transaction was lawful when begun. Extension or renewal of a transaction ongoing as of April 9, 1997, shall be subject to the notice and other requirements of the Holding Company Systems Act of 1993, and shall not be renewed or extended except upon terms approved by the Mayor.  (Apr. 9, 1997, D.C. Law 11-245,  24, 44 DCR 1158.)  Prior Codifications 1981 Ed.,  35-4723. Section References This section is referenced in  31-3508. References in Text The Holding Company Systems Act of 1993, referred to in (b), is D.C. Law 10-44, which is codified primarily as  31-701 et seq.
 313524. Rules and regulations. The Mayor, in accordance with subchapter I of Chapter 5 of Title 2, shall issue rules to implement the provisions of this chapter.  (Apr. 9, 1997, D.C. Law 11-245,  25, 44 DCR 1158; Mar. 25, 2009, D.C. Law 17-369,  2(j), 56 DCR 1346.)  Prior Codifications 1981 Ed.,  35-4724. Effect of Amendments D.C. Law 17-369 substituted shall for may.
 313551. Reduction of health care benefits lien. (a) Except as provided in subsection (d) of this section, this chapter shall apply to any right of subrogation under a contract or applicable law for payment of health-care benefits or services for an injured person paid or payable by a subrogee or under any system of self-insurance or indemnification for health-care expenses, if the amount of the subrogee's claim as determined under subsection (b) of this section is voluntarily paid by the injured person from the injured person's recovery in a claim for personal injury. (b)(1) Unless a subrogee files a petition to intervene in the personal injury action and is independently represented by counsel, in a subrogation claim arising out of a claim for personal injury, the amount permitted to be recovered by a subrogee for health-care benefits or services paid or payable on behalf of the injured person, subject to paragraph (2) of this subsection, shall be reduced by dividing the total amount of the costs of litigation and the attorneys fees incurred by the injured person for services rendered in connection with the injured person's claim for personal injury by the amount of the total recovery in the claim for personal injury and multiplying the result by the amount of the subrogees subrogation claim. (2) The result under paragraph (1) of this subsection shall not exceed one-third of an injured persons recovery in a claim for personal injury. (3) A subrogee has no obligation to advise an injured person or the attorney for the injured person of the injured person's right to a reduction of the subrogation claim. (c) On written request by a subrogee, an injured person or the attorney for the injured person who demands a reduction of the subrogation claim as described in this chapter shall provide the subrogee with a certification by the injured person that states the amount of the attorneys fees and the costs of litigation incurred by the injured person in connection with the injured person's claim. (d) This chapter shall not apply to: (1) A voluntary reduction of a subrogation claim by a subrogee that exceeds the reduction of the subrogation claim as described in subsection (b) of this section; or (2) The District of Columbia Medicaid program. (e) For the purposes of this chapter, the term "subrogee" means any person or entity that provides accident and sickness benefits or medical, surgical, or hospital benefits, whether on an indemnity or a reimbursement basis or a prepaid basis, including insurance carriers, and employers.  (May 12, 2016, D.C. Law 21-110,  2, 63 DCR 4322.) 
 313601. Definitions. For the purposes of this chapter, the term: (1) Applicant means: (A) In the case of an individual long-term care insurance policy, the person who seeks to contract for benefits; and (B) In the case of a group long-term care insurance policy, the proposed certificate holder. (2) Certificate means any certificate issued under a group long-term care insurance policy, which policy has been delivered or issued for delivery in the District of Columbia. (3) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking. (4) Group long-term care insurance means a long-term care insurance policy which is delivered or issued for delivery in the District of Columbia and issued to one of the following groups: (A) One or more employers or labor organizations, a trust or the trustees of a fund established by one or more employers or labor organizations, or a combination thereof, for employees or former employees, or a combination thereof or for members or former members, or a combination thereof, of the labor organizations; (B) Any professional, trade, or occupational association for its members, former or retired members, or combination thereof, if such association: (i) Is composed of individuals all of whom are or were actively engaged in the same profession, trade, or occupation; and (ii) Has been maintained in good faith for purposes other than obtaining insurance; (C) An association, trust, or the trustee of a fund established, created, or maintained for the benefit of members of one or more associations; (D) Any other group; provided that, the Commissioner finds the following: (i) The issuance of the group policy is not contrary to the best interest of the public; (ii) The issuance of the group policy would result in economies of acquisition or administration; and (iii) The benefits are reasonable in relations to the premiums charged. (5)(A) Long-term care insurance means any insurance policy or rider advertised, marketed, offered, or designed to provide coverage for not less than 12 consecutive months for each covered person on an expense incurred, indemnity, prepaid, or other basis; for one or more necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance or personal care services provided in a setting other than an acute care unit of a hospital. Long-term care insurance includes group and individual annuities and life insurance policies or riders which provide directly, or which supplement, long-term care insurance. Long-term care insurance also includes a policy or rider which provides for payment of benefits based upon cognitive impairment or the loss of functional capacity as well as qualified long-term care insurance contracts. (B) Long-term care insurance shall not include any insurance policy which is offered primarily to provide basic Medicare supplement coverage, basic hospital expense coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income or related asset-protection coverage, accident only coverage, specified disease or specified accident coverage, or limited benefit health coverage. With regard to life insurance, long-term care insurance shall not include life insurance policies which accelerate the death benefit specifically for one or more of the qualifying events of terminal illness, medical conditions requiring extraordinary medical intervention, or permanent institutional confinement and which provide the option of lump-sum payment for those benefits and in which neither the benefits nor the eligibility for the benefits is conditioned upon the receipt of long-term care. (6) Nonforfeiture benefit means a benefit provided to a policyholder in the event of nonpayment of a premium due. (7) Policy means any policy, contract, subscriber agreement, rider or endorsement delivered or issued for delivery in the District of Columbia by an insurer; fraternal benefits society; nonprofit health, hospital, or medical service corporation; prepaid health plan, health maintenance organization, or any similar organization. (8)(A) Qualified long-term care insurance contract means an individual or group insurance contract that meets the requirements of section 7702B(b) of the Internal Revenue Code of 1986, approved August 21, 1996 (110 Stat. 259; 26 U.S.C.  7702B(b)), and the following: (i) The only insurance protection provided under the contract is coverage of qualified long-term care services; provided, that a contract shall not fail to satisfy the requirements of this sub-subparagraph by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate; (ii) The contract does not pay or reimburse expenses incurred for services or items to the extent that the expenses incurred for services or items are reimbursable under Title XVIII of the Social Security Act, approved July 30, 1965 (79 Stat. 291; 42 U.S.C.  1395 et seq.), or would be so reimbursable but for the application of a deductible or coinsurance amount; provided, that the requirements of this sub-subparagraph shall not apply to expenses that are reimbursable under Title XVIII of the Social Security Act, approved July 30, 1965 (79 Stat. 291; 42 U.S.C.  1395 et seq.), only as a secondary payor; provided further, that a contract shall not fail to satisfy the requirements of this sub-subparagraph by reason of payments being made on a per diem or other periodic basis without regard to expenses incurred during the period to which the payments relate; (iii) The contract is guaranteed renewable, within the meaning of section 7702B(b)(1)(C) of the Internal Revenue Code of 1986, approved August 21, 1996 (110 Stat. 259; 26 U.S.C.  7702B(b)(1)(C)); (iv) The contract does not provide for a cash surrender value or other money that can be paid, assigned, pledged as collateral for a loan, or borrowed except as provided by sub-subparagraph (v) of this subparagraph; (v) All refunds of premiums, and all policyholder dividends or similar amounts, under the contract are to be applied as a reduction in future premiums or to increase future benefits; provided, that a refund in the event of death of the insured or a complete surrender or cancellation of the contract cannot exceed the aggregate premiums paid under the contract; and (vi) The contract meets the consumer protection provisions set forth in section 7702B(g) of the Internal Revenue Code of 1986, approved August 21, 1996 (110 Stat. 259; 26 U.S.C.  7702B(g)). (B) Qualified long-term care insurance contract also means the portion of a life insurance contract that provides long-term care insurance coverage by rider or as part of the contract and that satisfies requirements of section 7702B(b) and (e) of the Internal Revenue Code of 1986, approved August 21, 1996 (110 Stat. 259; 26 U.S.C.  7702B(c) and (e)).  (May 23, 2000, D.C. Law 13-121,  2, 47 DCR 2038; Oct. 1, 2002, D.C. Law 14-190,  502(a), 49 DCR 6968; June 11, 2004, D.C. Law 15-166,  4(v), 51 DCR 2817.)  Section References This section is referenced in  31-3604,  31-3605,  31-3606,  31-3610, and  47-1803.03. Effect of Amendments D.C. Law 14-190, in par. (5)(A), substituted loss of functional capacity as well as qualified long-term care insurance contracts for loss of functional capacity; and added par. (8). D.C. Law 15-166, in par. (3), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of the District of Columbia Department of Insurance and Securities Regulation. Emergency Legislation For temporary (90-day) amendment of section, see  2(a) of the Long-Term Care Insurance Emergency Amendment Act of 2000 (D.C. Act 13-312, April 7, 2000, 47 DCR 2738). For temporary (90-day) amendment of section, see  2(a) of the Long-Term Care Insurance Congressional Review Emergency Amendment Act of 2000 (D.C. Act 13-370, July 10, 2000, 47 DCR 5838). For temporary (90 day) amendment of section, see  502(a) of Fiscal Year 2003 Budget Support Emergency Act of 2002 (D.C. Act 14-453, July 23, 2002, 49 DCR 8026). For temporary (90 day) amendment of section, see  4(v) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). Temporary Legislation For temporary (225 day) amendment of section, see  2(a) of Long-Term Care Insurance Temporary Amendment Act of 2000 (D.C. Law 13-147, July 18, 2000, law notification 47 DCR 6097). Short Title Short title of title V of Law 14-190: Section 501 of D.C. Law 14-190 provided that title V of the act may be cited as the Long-Term Insurance Conformity Amendment Act of 2002.
 313602. Scope. (a) Any policy or rider advertised, marketed, or offered as long-term care or nursing home insurance delivered or issued for delivery in the District of Columbia shall comply with the provisions of this chapter. (b) This chapter is not intended to supersede the obligations of entities subject to this chapter to comply with the substance of other applicable insurance laws insofar as they do not conflict with this chapter; except that, this chapter shall supersede laws and regulations designed and intended to apply to Medicare supplement insurance policies. (c) The requirements of this chapter shall apply to policies delivered or issued for delivery in the District of Columbia on or after May 23, 2000.  (May 23, 2000, D.C. Law 13-121,  3, 47 DCR 2038.) 
 313603. Long-term insurance; who may issue. Long-term care insurance may be issued by insurers, fraternal benefits societies, nonprofit health, hospital, and medical service corporations, prepaid health plans, and health maintenance organizations, and any similar organization to the extent they are otherwise authorized to issue life or health insurance. Any product advertised, marketed, or offered as long-term care insurance shall be subject to the provisions of this chapter.  (May 23, 2000, D.C. Law 13-121,  4, 47 DCR 2038.) 
 313604. Group policies issued in other states. No group long-term care insurance coverage may be offered to a resident of the District of Columbia under a group policy issued in another state to a group described in  31-3601(4)(D), unless the District of Columbia, or another state having statutory and regulatory long-term care insurance requirements substantially similar to those adopted in the District of Columbia has made a determination that such requirements have been met.  (May 23, 2000, D.C. Law 13-121,  5, 47 DCR 2038.) 
 313605. Standards for long-term care insurance. (a) No long-term care insurance policy shall: (1) Be cancelled, not renewed, or otherwise terminated on the grounds of the age or deterioration of the mental or physical health of the insured individual or certificate holder; (2) Contain a provision establishing a new waiting period in the event existing coverage is converted to, or replaced by, a new or other form of coverage within the same company, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder; or (3) Provide coverage for skilled nursing care only or provide significantly more coverage for skilled care in a facility than coverage for lower levels of care. (b)(1) No long-term care insurance policy or certificate, other than a policy or certificate thereunder issued to a group as described in  31-3601(4)(A), shall contain a definition of preexisting condition which is more restrictive than the following definition: A condition for which medical advice or treatment was recommended by, or received from a provider of health care services, within 6 months preceding the effective date of coverage of an insured person. (2) No long-term care insurance policy or certificate, other than a policy or certificate thereunder issued to a group as described in  31-3601(4)(A), may exclude coverage for a loss or confinement which is the result of a preexisting condition unless such loss or confinement begins within 6 months following the effective date of coverage of an insured person. (3) The Commissioner may extend the limitation periods set forth in paragraphs (1) and (2) of this subsection as to specific group categories in specific policy forms if the Commissioner finds that the extension is in the best interest of the public. (4) Nothing in this chapter shall be construed to prohibit an insurer from using an application form designed to elicit the complete health history of an applicant and, on the basis of the answers on that application, from underwriting in accordance with that insurers established underwriting standards. Unless otherwise provided in the policy or certificate, a preexisting condition, regardless of whether it is disclosed on the application, need not be covered until the waiting period described in paragraph (2) of this subsection expires. No long-term care insurance policy or certificate may exclude or use waivers or riders of any kind to exclude, limit, or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions beyond the waiting period described in paragraph (2) of this subsection. (c)(1) No long-term care insurance policy may be delivered or issued for delivery in the District if such policy: (A) Conditions eligibility for any benefits on a prior hospitalization requirement; (B) Conditions eligibility for benefits provided in an institutional care setting on the receipt of a higher level of institutional care; or (C) Conditions eligibility for any benefits other than waiver of premium, post-confinement, post-acute care or recuperative benefits on a prior institutionalization requirement. (2)(A) A long-term care insurance policy containing post-confinement post-acute care, or recuperative benefits shall clearly label in a separate paragraph of the policy or certificate entitled Limitations or Conditions on Eligibility for Benefits such limitations or conditions, including any required number of days of confinement. (B) A long-term care insurance policy or rider which conditions eligibility of noninstitutional benefits on the prior receipt of institutional care shall not require a prior institutional stay of more than 30 days. (d)(1) Applicants for long-term care insurance shall have the right to return the policy or certificate within 30 days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied for any reason. (2) Long-term care insurance policies and certificates shall have a notice prominently printed on the first page or attached thereto stating in substance that the applicant shall have the right to return the policy or certificate within 30 days of its delivery and to have the premium refunded if, after examination of the policy or certificate, other than a certificate issued pursuant to a policy issued to a group defined in  31-3601(4)(A), the applicant is not satisfied for any reason. (3) If an application for a long-term care contract is denied, the issuer shall refund to the applicant any premium and any other fees submitted by the applicant within 30 days of the denial.  (May 23, 2000, D.C. Law 13-121,  6, 47 DCR 2038.) 
 313606. Disclosure. (a)(1) An outline of coverage, written at a fifth grade reading level, shall be delivered to a prospective applicant for long-term care insurance at the time of initial solicitation through means which prominently direct the attention of the recipient to the document and its purpose. (2) When an agent solicits individuals to purchase long-term care insurance, the agency must deliver the outline of coverage before the presenting of an application or enrollment form to the person being solicited to make a purchase. (3) In the case of direct response solicitations, the outline of coverage must be presented no later than when any application or enrollment form is presented. (b) The outline of coverage shall include the following: (1) A description of the principal benefits and coverage provided in the policy; (2) A statement of the principal exclusions, reductions, and limitations contained in the policy; (3) A statement of the terms under which the policy or certificate, or both, may be contained in force or discontinued, including any reservation in the policy of a right to change premium (continuation or conversion provisions of group coverage shall be specifically described); (4) A statement that the outline of coverage is a summary only, not a contract of insurance, and that the policy or group master policy contains governing contractual provisions; (5) A description of the relationship of cost of care and benefits; and contract, a statement that discloses to the policyholder or certificate holder that the policy is intended to be a long-term care insurance contract. (6) A brief description of the relationship of cost of care and benefits; and (7) If the policy or certificate is intended to be a qualified long-term care insurance contract, a statement that discloses to the policyholder or certificate holder that the policy is intended to be a qualified long-term care insurance contract. (c) In the case of a policy issued to a group described in  31-3601(4)(D), an outline of coverage shall not be required to be delivered; provided that, the information described in subsection (e) of this section is contained in other material relating to enrollment. Upon request, these other materials shall be made available to the Commissioner. (d) A certificate issued pursuant to a group long-term care insurance policy which is delivered or issued for delivery in the District of Columbia shall include the following: (1) A description of the principal benefits and coverage provided in the policy; (2) A statement of the principal exclusions, reductions, and limitations contained in the policy; and (3) A statement that the group master policy determines governing contractual provisions. (e) At the time of policy, deliver, a policy summary shall be delivered for an individual life insurance policy which provides long-term care benefits within the policy or by rider. In the case of direct response solicitations, the insurer shall deliver the policy summary either upon the applicants request, or the time of policy delivery, whichever occurs later. In addition to complying with all other applicable requirements, the summary shall also include: (1) An explanation of how the long-term care benefits interacts with other components of the policy, including deductions from death benefits; (2) An illustration of the amount of benefits, the length of benefit, and the guaranteed lifetime benefits, for each covered person, if any: (3) Any exclusions, reductions, and limitations on benefits of long-term care; and (4) If applicable to the policy type, the following: (A) A disclosure of the effects or exercising other rights under the policy; (B) A disclosure of guarantees related to long-term care costs of insurance charges; and (C) Current and projected maximum lifetime benefits. (f) If an application for a long-term care insurance contract or certificate is approved, the issuer shall deliver the contract or certificate of insurance to the applicant no later than 30 days after the date of approval.  (May 23, 2000, D.C. Law 13-121,  7, 47 DCR 2038; Oct. 1, 2002, D.C. Law 14-190,  502(b), 49 DCR 6968; Mar. 13, 2004, D.C. Law 15-105,  67, 51 DCR 881; Apr. 13, 2005, D.C. Law 15-354,  44, 52 DCR 2638.)  Effect of Amendments D.C. Law 14-190, in subsec. (b)(7), substituted qualified long-term care insurance contract for long-term insurance care contract in two places; and added subsec. (f). D.C. Law 15-105, in subsecs. (b) and (f), validated previously made technical corrections. D.C. Law 15-354, in subsec. (b)(7), validated a previously made technical correction. Emergency Legislation For temporary (90-day) amendment of section, see  2(b) of the Long-Term Care Insurance Emergency Amendment Act of 2000 (D.C. Act 13-312, April 7, 2000, 47 DCR 2738). For temporary (90-day) amendment of section, see  2(b) of the Long-Term Care Insurance Congressional Review Emergency Amendment Act of 2000 (D.C. Act 13-370, July 10, 2000, 47 DCR 5838). For temporary (90 day) amendment of section, see  502(b) of Fiscal Year 2003 Budget Support Emergency Act of 2002 (D.C. Act 14-453, July 23, 2002, 49 DCR 8026). Temporary Legislation For temporary (225 day) amendment of section, see  2(b) of Long-Term Care Insurance Temporary Amendment Act of 2000 (D.C. Law 13-147, July 18, 2000, law notification 47 DCR 6097).
 313607. Minimum number of members for associations. (a) Prior to advertising, marketing, or offering a group long-term care insurance policy within the District of Columbia, an association or associations, or an insurer of the association or associations, shall file evidence with the Commissioner that the association, or associations has: (1) At the outset, a minimum of 100 members; (2) Been organized and maintained in good faith for purposes other than that of obtaining insurance; (3) Been in active existence for at least one year; and (4) A constitution and bylaws which provide the following: (A) That the association or associations hold regular meetings not less than annually to further the purposes of the members; (B) That, except for credit unions, the association or associations collect dues or solicit contributions from members; and (C) That the members have voting privileges and representation on the governing board and committees. (b) Thirty days after the filing required by subsection (a) of this section, the association or associations shall be deemed to have satisfied the organizational requirements of subsection (a) of this section unless the Commissioner make a finding that the association, or associations, does not satisfy the organizational requirements.  (May 23, 2000, D.C. Law 13-121,  8, 47 DCR 2038.) 
 313608. Monthly reports. Any time a long-term care benefit which is funded through a life insurance vehicle by the acceleration of the death benefit is in benefit payment status, a monthly report shall be provided to the policyholder. The monthly report shall include the following: (1) Any long-term care benefits paid out during the month; (2) An explanation of any changes in the policy (e.g., death benefits or cash values due to long-term care benefits being paid out); and (3) The amount of long-term care benefits existing or remaining.  (May 23, 2000, D.C. Law 13-121,  9, 47 DCR 2038.) 
 313609.01. Denial of claims. If a claim under a long-term care insurance contract is denied, the issuer shall, within 60 days of the date of a written request by the policyholder or certificate holder, or a representative thereof: (1) Provide a written explanation of the reasons for the denial; and (2) Make available all information directly related to the denial.  (May 23, 2000, D.C. Law 13-121,  10a; as added Oct. 1, 2002, D.C. Law 14-190,  502(c), 49 DCR 6968.) 
 313609. Incontestability period. (a) If a policy or certificate has been in force for less than 6 months, an insurer may rescind a long-term care insurance policy or certificate or deny an otherwise valid long-term care insurance claim upon a showing of misrepresentation that is material to the acceptance for coverage. (b) If a policy or certificate has been in force for at least 6 months, but less than 2 years, an insurer may rescind a long-term care insurance policy or certificate or deny an otherwise valid long-term care insurance claim upon a showing of misrepresentation that is both material to the acceptance for coverage and which pertains to the condition for which benefits are sought. (c) After a policy or certificate has been in force for 2 years, it shall not be contestable upon the grounds of misrepresentations alone. The policy or certificate may be contested only upon a showing that the insured knowingly and intentionally misrepresented relevant facts relating to the insureds health. (d)(1) No long-term care insurance policy or certificate may be field unless based on medical or health status. (2) For purposes of this subsection, the term field issued means a policy or certificate issued by an agent or third party administrator pursuant to the underwriting authority granted to the agent or third party administrator by an insurer. (e) If an insurer has paid benefits under a long-term care insurance policy or certificate, the benefit payments may not be recovered by the insurer in the event that the policy or certificate is rescinded. (f)(1) In the event of the death of the insured, this section shall not apply to the remaining death benefits of a life insurance policy that accelerates benefits for long term care; except that, in the event of death of the insured, the remaining death benefits under these policies shall be governed by  31-4803.  (May 23, 2000, D.C. Law 13-121,  10, 47 DCR 2038.)  Emergency Legislation For temporary (90-day) addition of  35-4909.1 1981 Ed., see  2(c) of the Long-Term Care Insurance Emergency Amendment Act of 2000 (D.C. Act 13-312, April 7, 2000, 47 DCR 2738). For temporary (90-day) addition of  35-4909.1 1981 Ed., see  2(c) of the Long-Term Care Insurance Congressional Review Emergency Amendment Act of 2000 (D.C. Act 13-370, July 10, 2000, 47 DCR 5838). For temporary (90 day) addition of  31-3609.01, see  502(c) of Fiscal Year 2003 Budget Support Emergency Act of 2002 (D.C. Act 14-453, July 23, 2002, 49 DCR 8026). Temporary Legislation For temporary (225 day) amendment of section, see  2(c) of Long-Term Care Insurance Temporary Amendment Act of 2000 (D.C. Law 13-147, July 18, 2000, law notification 47 DCR 6097).
 313610. Nonforfeiture benefits. (a) Except as provided in subsection (b) of this section, a long-term care insurance policy may not be delivered or issued for delivery in the District of Columbia unless the policyholder or certificate holder has been offered the option of purchasing a policy or certificate including a nonforfeiture benefit. The offer of a nonforfeiture benefit may be in the form of a rider that is attached to the policy. In the event the policyholder or certificate holder declines the nonforfeiture benefit, the insurer shall provide a contingent benefit upon lapse that shall be available for a specified period of time following a substantial increase in premium rates. (b) When a group long-term care insurance policy is issued, the offer required in subsection (a) of this section shall be made to the group policyholder. If, however, the policy is issued as a group long-term care insurance as described in  31-3601(4)(D), other than a continuing care retirement community or other similar entity, the offering shall be made to each proposed certificate holder. (c) The Commissioner shall promulgate regulations specifying the type or types of nonforfeiture benefits to be offered as part of long-term care insurance policies and certificates, the standards for nonforfeiture benefits, and the rules regarding a contingent benefit upon lapse, including a determination of the specified period of time during a contingent benefit upon lapse will be available and the substantial premium rate increase that triggers a contingent benefit upon lapse as described in subsection (a) of this section.  (May 23, 2000, D.C. Law 13-121,  11, 47 DCR 2038.) 
 313611. Rules and regulations. The Commissioner may issue rules to implement any provisions of this chapter. The rules may include: (1) Requirements for any disclosure made under this chapter, including the manner, content, and required disclosures for the sale of long-term care insurance policies, terms of renewability, initial and subsequent conditions of eligibility, nonduplication of coverage provisions, coverage of dependents and preexisting conditions, termination of coverage, continuation or conversion of coverage, probationary periods, limitations, exceptions, reductions, elimination periods, requirements for replacement, recurrent conditions, and definitions; (2) Loss ratio standards specifically applicable to long-term care insurance policies; (3) A standard format, which may include a description of the style, arrangement, overall appearance, and the content of an outline of coverage; and (4) Minimum standards for making and reporting practices for long-term care insurance.  (May 23, 2000, D.C. Law 13-121,  12, 47 DCR 2038.) 
 313612. Penalties. In addition to any other penalties provided by law, if, after a judicial proceeding or an administrative proceeding conducted in accordance with subchapter I of Chapter 5 of Title 2, an insurer or any agent is found to have violated any requirements of this chapter, that insurer or agent shall be subject to a fine of up to 3 times the amount of any commissions paid for each policy involved in the violation or up to $10,000, whichever is greater.  (May 23, 2000, D.C. Law 13-121,  13, 47 DCR 2038.) 
 313701. Definitions. For the purposes of this subchapter, the term: (1) Applicant means: (A) In the case of an individual Medicare supplement policy, the person who seeks to contract for insurance benefits; and (B) In the case of a group Medicare supplement policy, the proposed certificate holder. (2) Certificate means any certificate delivered or issued for delivery in the District of Columbia under a group Medicare supplement policy. (3) Certificate form means the form on which the certificate is delivered or issued for delivery by the insurer. (4) Issuer means an insurance company, a fraternal benefit association, a health care service plan, a health maintenance organization, and any other entity delivering or issuing for delivery in the District of Columbia Medicare supplement policies or certificates. The term issuer includes Group Hospitalization and Medical Services, Incorporated. (5) Medicare means the health insurance program established pursuant to the Health Insurance for the Aged Act (42 U.S.C.  303 et seq.). (6) Medicare supplement policy means a group or individual policy of accident and sickness insurance or a subscriber contract of hospital and medical service associations or health maintenance organizations, other than a policy issued pursuant to a contract under  1876 of the Social Security Act (42 U.S.C.  1395mm), or an issued policy under a demonstration project specified in 42 U.S.C.  1395ss(g)(1), which is advertised, marketed, or designed primarily as a supplement to reimbursements under Medicare for the hospital, medical, or surgical expenses of persons eligible for Medicare. (7) Policy form means the form on which the policy is delivered or issued for delivery by the issuer.  (Oct. 1, 1992, D.C. Law 9-170,  2, 39 DCR 5825; Apr. 9, 1997, D.C. Law 11-202,  2(a), 43 DCR 6054; Mar. 24, 1998, D.C. Law 12-81,  35(a), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-2611. Emergency Legislation For temporary amendment of section, see  2(a) of the Medicare Supplement Insurance Minimum Standards Emergency Amendment Act of 1996 (D.C. Act 11-244, April 11, 1996, 43 DCR 2119),  2(a) of the Medicare Supplement Insurance Minimum Standards Legislative Review Emergency Amendment Act of 1996 (D.C. Act 11-396, October 9, 1996, 43 DCR 5684),  2(a) of the Medicare Supplement Insurance Minimum Standards Congressional Review Emergency Amendment Act of 1996 (D.C. Act 11-416, October 28, 1996, 43 DCR 6078),  2(a) of the Medicare Supplement Insurance Minimum Standards Second Congressional Review Emergency Amendment Act of 1996 (D.C. Act 11-474, December 30, 1996, 44 DCR 198), and see  2(a) of the Medicare Supplement Insurance Minimum Standards Congressional Review Emergency Amendment Act of 1997 (D.C. Act 12-49, March 31, 1997, 44 DCR 2112). Temporary Legislation For temporary (225 day) addition of  35-2611 through 35-2620 comprising Chapter 26 of Title 35 1981 Ed., see  2 to 11 of Medicare Supplement Insurance Minimum Standard Temporary Act of 1992 (D.C. Law 9-133, July 22, 1992, law notification 39 DCR 5814). Delegation of Authority Delegation of authority under D.C. Act 9-199, the Medicare Supplement Insurance Minimum Standards Emergency Act of 1992, see Mayors Order 92-92, July 20, 1992. Delegation of authority under D.C. Law 9-170, the Medicare Supplement Insurance Standards Act of 1992, see Mayors Order 93-60, May 12, 1993.
 313702. Applicability and scope. (a) Except as otherwise specifically provided, this subchapter shall apply to: (1) All Medicare supplement policies delivered or issued for delivery in the District of Columbia on or after October 1, 1992; and (2) All certificates issued under group Medicare supplement policies, which certificates have been delivered or issued for delivery in the District of Columbia. (b) This subchapter shall not apply to a policy for 1 or more employers or labor organizations, or of the trustees of a fund established by 1 or more employers or labor organizations, or combination thereof, for employees or former employees or a combination thereof, or for members or former members, or a combination thereof, of the labor organizations. (c) Except as otherwise specifically provided in  31-3706(d) [sic], the provisions of this subchapter are not intended to prohibit or apply to insurance policies or health care benefit plans, including group conversion policies, provided to Medicare eligible persons, which policies are not marketed or held to be Medicare supplement policies or benefit plans.  (Oct. 1, 1992, D.C. Law 9-170,  3, 39 DCR 5825; Apr. 9, 1997, D.C. Law 11-202,  2(b)-(c), 43 DCR 6054.)  Prior Codifications 1981 Ed.,  35-2612. Emergency Legislation For temporary amendment of section, see  2(b) and (c) of the Medicare Supplement Insurance Minimum Standards Emergency Amendment Act of 1996 (D.C. Act 11-244, April 11, 1996, 43 DCR 2119),  2(b) and (c) of the Medicare Supplement Insurance Minimum Standards Legislative Review Emergency Amendment Act of 1996 (D.C. Act 11-396, October 9, 1996, 43 DCR 5684),  2(b) and (c) of the Medicare Supplement Insurance Minimum Standards Congressional Review Emergency Amendment Act of 1996 (D.C. Act 11-416, October 28, 1996, 43 DCR 6078),  2(b) and (c) of the Medicare Supplement Insurance Minimum Standards Second Congressional Review Emergency Amendment Act of 1996 (D.C. Act 11-474, December 30, 1996, 44 DCR 198), and see  2(b) and (c) of the Medicare Supplement Insurance Minimum Standards Congressional Review Emergency Amendment Act of 1997 (D.C. Act 12-49, March 31, 1997, 44 DCR 2112). Temporary Legislation See Historical and Statutory Notes following  31-3701.
 313703. Standards for policy provisions and authority to promulgate regulations. (a) No Medicare supplement policy or certificate in force in the District of Columbia shall contain benefits that duplicate benefits provided by Medicare. (b) Notwithstanding any other provision of law of the District of Columbia, a Medicare supplement policy or certificate shall not exclude or limit benefits for losses incurred more than 6 months from the effective date of coverage because it involved a preexisting condition. The policy or certificate shall not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within 6 months before the effective date of coverage. (c) The Mayor shall issue reasonable regulations to establish specific standards for policy provisions of Medicare supplement policies and certificates. These standards shall be in addition to and in accordance with applicable laws of the District of Columbia. No requirement of District of Columbia law relating to minimum required policy benefits, other than the minimum standards contained in this subchapter, shall apply to Medicare supplement policies and certificates. The standards may cover, but not be limited to: (1) Terms of renewability; (2) Initial and subsequent conditions of eligibility; (3) Nonduplication of coverage; (4) Probationary periods; (5) Benefit limitations, exceptions, and reductions; (6) Elimination periods; (7) Requirements for replacement; (8) Recurrent conditions; and (9) Definition of terms. (d) The Mayor shall issue reasonable regulations to establish minimum standards for benefits, claims payment, marketing practices, compensation arrangements, and reporting practices for Medicare supplement policies and certificates. (e) The Mayor may issue reasonable regulations necessary to conform Medicare supplement policies and certificates to the requirements of federal law and regulations promulgated thereunder, including, but not limited to: (1) Requiring refunds or credits if the policies or certificates do not meet loss ratio requirements; (2) Establishing a uniform methodology for calculating and reporting loss ratios; (3) Assuring public access to policies, premiums, and loss ratio information of issuers of Medicare supplement insurance; (4) Establishing a process for approving or disapproving policy forms and certificate forms and proposed premium increases; (5) Establishing a policy for holding public hearings prior to approval of premium increases; and (6) Establishing standards for Medicare select policies and certificates. (f) The Mayor may issue reasonable regulations that specify prohibited policy provisions not otherwise specifically authorized by statute, which, in the opinion of the Mayor, are unjust, unfair, or unfairly discriminatory to any person insured or proposed to be insured under a Medicare supplement policy or certificate.  (Oct. 1, 1992, D.C. Law 9-170,  4, 39 DCR 5825; May 23, 2000, D.C. Law 13-122,  2, 47 DCR 2048.)  Prior Codifications 1981 Ed.,  35-2613. Effect of Amendments D.C. Law 13-122 in subsec. (b), in the first sentence, substituted exclude for include. Temporary Legislation See Historical and Statutory Notes following  31-3701.
 313704. Loss ratio standards. Medicare supplement policies shall return to policyholders benefits which are reasonable in relation to the premium charged. The Mayor shall issue reasonable regulations to establish minimum standards for loss ratios of Medicare supplement policies on the basis of incurred claims experience, or incurred health care expenses where coverage is provided by a health maintenance organization on a service rather than reimbursement basis, and earned premiums in accordance with accepted actuarial principles and practices.  (Oct. 1, 1992, D.C. Law 9-170,  5, 39 DCR 5825.)  Prior Codifications 1981 Ed.,  35-2614. Temporary Legislation See Historical and Statutory Notes following  31-3701.
 313705. Disclosure standards. (a) In order to provide for full and fair disclosure in the sale of Medicare supplement policies, no Medicare supplement policy or certificate shall be delivered in the District of Columbia unless an outline of coverage is delivered to the applicant at the time application is made. (b) The Mayor shall prescribe the format and content of the outline of coverage required by subsection (c) of this section. For purposes of this section, the term format means style, arrangements, and overall appearance, including such items as the size, color, and prominence of type and arrangement of text and captions. The outline of coverage shall include: (1) A description of the principal benefits and coverage provided in the policy; (2) A statement of the renewal provisions, including any reservation by the issuer of a right to change premiums, and disclosure of the existence of any automatic renewal premium increases based on the policyholders age; and (3) A statement that the outline of coverage is a summary of the policy issued or applied for and that the policy should be consulted to determine governing contractual provisions. (c) The Mayor may prescribe by regulation a standard form and the contents of an informational brochure for persons eligible for Medicare, which is intended to improve the buyers ability to select the most appropriate coverage and improve the buyers understanding of Medicare. Except in the case of the direct response insurance policies, the Mayor may require by regulation that the informational brochure be provided to any prospective insured eligible for Medicare concurrently with delivery of the outline of coverage. With respect to direct response insurance policies, the Mayor may require by regulation that the prescribed brochure be provided upon request to any prospective insured eligible for Medicare, but in no event later than the time of policy delivery. (d) The Mayor may issue regulations for captions or notice requirements, determined to be in the public interest and designed to inform prospective insureds that particular insurance coverages are not Medicare supplement coverages, for all accident and sickness insurance policies sold to persons eligible for Medicare, other than: (1) Medicare supplement policies; or (2) Disability income policies. (3) Repealed. (4) Repealed. (e) The Mayor may issue reasonable regulations to govern the full and fair disclosure of the information in connection with the replacement of accident and sickness policies, subscriber contracts, or certificates by persons eligible for Medicare.  (Oct. 1, 1992, D.C. Law 9-170,  6, 39 DCR 5825; Apr. 9, 1997, D.C. Law 11-202,  2(d)-(f), 43 DCR 6054; Mar. 24, 1998, D.C. Law 12-81,  35(b), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-2615. Emergency Legislation For temporary amendment of section, see  2(d) through (f) of the Medicare Supplement Insurance Minimum Standards Emergency Amendment Act of 1996 (D.C. Act 11-244, April 11, 1996, 43 DCR 2119),  2(d) through (f) of the Medicare Supplement Insurance Minimum Standards Legislative Review Emergency Amendment Act of 1996 (D.C. Act 11-396, October 9, 1996, 43 DCR 5684),  2(d) through (f) of the Medicare Supplement Insurance Minimum Standards Congressional Review Emergency Amendment Act of 1996 (D.C. Act 11-416, October 28, 1996, 43 DCR 6078),  2(d) through (f) of the Medicare Supplement Insurance Minimum Standards Second Congressional Review Emergency Amendment Act of 1996 (D.C. Act 11-474, December 30, 1996, 44 DCR 198), and see  2(d) through (f) of the Medicare Supplement Insurance Minimum Standards Congressional Review Emergency Amendment Act of 1997 (D.C. Act 12-49, March 31, 1997. Temporary Legislation See Historical and Statutory Notes following  31-3701.
 313706. Filing requirements; master policy and certificate. (a) Except as provided in subsection (b) of this section, any insurer who provides group Medicare supplement insurance benefits to a resident of the District shall file the master policy and certificate, as provided by rule issued pursuant to  31-3710. (b) An insurer shall not be required to file the master policy and certificate within the 30-day period following the date that the insurance is provided if the policy is a master policy issued for delivery outside the District.  (Oct. 1, 1992, D.C. Law 9-170,  7, 39 DCR 5825.)  Prior Codifications 1981 Ed.,  35-2616. Section References This section is referenced in  31-3702. Temporary Legislation See Historical and Statutory Notes following  31-3701.
 313707. Notice of free examination. Medicare supplement policies and certificates shall have a notice prominently printed on the 1st page of the policy or certificate, or attached thereto, stating in substance that the applicant shall have the right to return the policy or certificate within 30 days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied for any reason. Any refund made pursuant to this section shall be paid directly to the applicant by the issuer in a timely manner.  (Oct. 1, 1992, D.C. Law 9-170,  8, 39 DCR 5825.)  Prior Codifications 1981 Ed.,  35-2617. Temporary Legislation See Historical and Statutory Notes following  31-3701.
 313708. Filing requirements for advertising. (a) The Mayor shall establish, by rule, standards for advertising Medicare supplement insurance and benefits in the District. (b) Each insurer, health care service plan, or other entity that provides Medicare supplement insurance or benefits in the District shall provide the Mayor, for review, a copy of any Medicare supplement advertisement intended for use in the District.  (Oct. 1, 1992, D.C. Law 9-170,  9, 39 DCR 5825.)  Prior Codifications 1981 Ed.,  35-2618. Temporary Legislation See Historical and Statutory Notes following  31-3701.
 313709. Remedies. In addition to any other applicable penalty for a violation of the insurance laws of the District, the Mayor may require an insurer who violates this subchapter, or rules issued pursuant to this subchapter, to cease marketing in the District any Medicare supplement policy or certificate that is related directly or indirectly to a violation, or may require the issuer to take any actions necessary to comply with the provisions of this subchapter, or both.  (Oct. 1, 1992, D.C. Law 9-170,  10, 39 DCR 5825.)  Prior Codifications 1981 Ed.,  35-2619. Temporary Legislation See Historical and Statutory Notes following  31-3701.
 313710. Rules. (a) The Mayor shall issue proposed rules to implement the provisions of this subchapter within 180 days of October 1, 1992. The proposed rules shall be submitted to the Council for a 45-day period of review, excluding Saturdays, Sundays, legal holidays, and days of Council recess. If the Council does not approve or disapprove the proposed rules, in whole or in part, by resolution within this 45-day period, the proposed rules shall be deemed approved. Nothing in this section shall affect any requirements imposed upon the Mayor by subchapter I of Chapter 5 of Title 2. (b) The Mayor may issue emergency rules without prior Council approval, which shall be effective for not more than 120 days.  (Oct. 1, 1992, D.C. Law 9-170,  11, 39 DCR 5825.)  Prior Codifications 1981 Ed.,  35-2620. Section References This section is referenced in  31-3706. Temporary Legislation See Historical and Statutory Notes following  31-3701. Resolutions Resolution 16-394, Medicare Supplement Insurance Minimum Standards Approval Resolution of 2005, was approved effective November 26, 2005. Resolution 16-788, the Medicare Supplement Insurance Minimum Standards Approval Resolution of 2006, was approved effective August 11, 2006. Resolution 18-298, the Medicare Supplement Insurance Minimum Standards Approval Resolution of 2009, was approved effective November 3, 2009.
 313751. Definitions [Repealed] Repealed.  (Oct. 1, 1992, D.C. Law 9-170,  12, 39 DCR 5825.)  Prior Codifications 1981 Ed.,  35-2601 to 35-2610. Temporary Legislation For temporary (225 day) repeal of  35-2601 to 35-2610 1981 Ed., see  2 of Medicare Supplement Insurance Minimum Standard Temporary Act of 1992 (D.C. Law 9-133, July 22, 1992, law notification 39 DCR 5814).
 313752. Applicability and scope [Repealed] Repealed.  (Oct. 1, 1992, D.C. Law 9-170,  12, 39 DCR 5825.)  Prior Codifications 1981 Ed.,  35-2601 to 35-2610. Temporary Legislation For temporary (225 day) repeal of  35-2601 to 35-2610 1981 Ed., see  2 of Medicare Supplement Insurance Minimum Standard Temporary Act of 1992 (D.C. Law 9-133, July 22, 1992, law notification 39 DCR 5814).
 313753. Standards for policy provisions and authority to promulgate regulations [Repealed] Repealed.  (Oct. 1, 1992, D.C. Law 9-170,  12, 39 DCR 5825.)  Prior Codifications 1981 Ed.,  35-2601 to 35-2610. Temporary Legislation For temporary (225 day) repeal of  35-2601 to 35-2610 1981 Ed., see  2 of Medicare Supplement Insurance Minimum Standard Temporary Act of 1992 (D.C. Law 9-133, July 22, 1992, law notification 39 DCR 5814).
 313754. Loss ratio standards [Repealed] Repealed.  (Oct. 1, 1992, D.C. Law 9-170,  12, 39 DCR 5825.)  Prior Codifications 1981 Ed.,  35-2601 to 35-2610. Temporary Legislation For temporary (225 day) repeal of  35-2601 to 35-2610 1981 Ed., see  2 of Medicare Supplement Insurance Minimum Standard Temporary Act of 1992 (D.C. Law 9-133, July 22, 1992, law notification 39 DCR 5814).
 313755. Disclosure standards [Repealed] Repealed.  (Oct. 1, 1992, D.C. Law 9-170,  12, 39 DCR 5825.)  Prior Codifications 1981 Ed.,  35-2601 to 35-2610. Temporary Legislation For temporary (225 day) repeal of  35-2601 to 35-2610 1981 Ed., see  2 of Medicare Supplement Insurance Minimum Standard Temporary Act of 1992 (D.C. Law 9-133, July 22, 1992, law notification 39 DCR 5814).
 313756. Filing requirements; master policy and certificate [Repealed] Repealed.  (Oct. 1, 1992, D.C. Law 9-170,  12, 39 DCR 5825.)  Prior Codifications 1981 Ed.,  35-2601 to 35-2610. Temporary Legislation For temporary (225 day) repeal of  35-2601 to 35-2610 1981 Ed., see  2 of Medicare Supplement Insurance Minimum Standard Temporary Act of 1992 (D.C. Law 9-133, July 22, 1992, law notification 39 DCR 5814).
 313757. Notice of free examination [Repealed] Repealed.  (Oct. 1, 1992, D.C. Law 9-170,  12, 39 DCR 5825.)  Prior Codifications 1981 Ed.,  35-2601 to 35-2610. Temporary Legislation For temporary (225 day) repeal of  35-2601 to 35-2610 1981 Ed., see  2 of Medicare Supplement Insurance Minimum Standard Temporary Act of 1992 (D.C. Law 9-133, July 22, 1992, law notification 39 DCR 5814).
 313758. Filing requirements for advertising [Repealed] Repealed.  (Oct. 1, 1992, D.C. Law 9-170,  12, 39 DCR 5825.)  Prior Codifications 1981 Ed.,  35-2601 to 35-2610. Temporary Legislation For temporary (225 day) repeal of  35-2601 to 35-2610 1981 Ed., see  2 of Medicare Supplement Insurance Minimum Standard Temporary Act of 1992 (D.C. Law 9-133, July 22, 1992, law notification 39 DCR 5814).
 313759. Remedies [Repealed] Repealed.  (Oct. 1, 1992, D.C. Law 9-170,  12, 39 DCR 5825.)  Prior Codifications 1981 Ed.,  35-2601 to 35-2610. Temporary Legislation For temporary (225 day) repeal of  35-2601 to 35-2610 1981 Ed., see  2 of Medicare Supplement Insurance Minimum Standard Temporary Act of 1992 (D.C. Law 9-133, July 22, 1992, law notification 39 DCR 5814).
 313760. Rules [Repealed] Repealed.  (Oct. 1, 1992, D.C. Law 9-170,  12, 39 DCR 5825.)  Prior Codifications 1981 Ed.,  35-2601 to 35-2610. Temporary Legislation For temporary (225 day) repeal of  35-2601 to 35-2610 1981 Ed., see  2 of Medicare Supplement Insurance Minimum Standard Temporary Act of 1992 (D.C. Law 9-133, July 22, 1992, law notification 39 DCR 5814).
 313801. Payable benefits. All individual and group health insurance policies providing coverage on an expense-incurred basis and individual and group service-or indemnity-type contracts issued by a nonprofit health service plan shall provide that health insurance benefits shall be payable with respect to a newly born child of the insured or subscriber from the moment of birth.  (Oct. 20, 1979, D.C. Law 3-33,  2, 26 DCR 1116.)  Prior Codifications 1981 Ed.,  35-1101. 1973 Ed.,  35-2001. Cross References Hospital and medical services corporations, applicability of this section, see  31-3503.
 313802.01. Inpatient postpartum treatment; at-home post-delivery care. (a) Except as provided in subsection (b) of this section, all individual and group health policies providing maternity and newborn care coverage on an expense-incurred basis and individual and group service or indemnity type contracts issued by a nonprofit health service plan, including policies issued by Group Hospitalization and Medical Services, Inc., shall provide coverage for inpatient postpartum treatment in accordance with the medical criteria outlined in the most current version of or an official update to the Guidelines for Perinatal Care (Guidelines) prepared by the American Academy of Pediatrics and the American College of Obstetricians or the Standards for Obstetric-Gynecologic Services (Standards) prepared by the American College of Obstetricians and Gynecologists, and such coverage must include an in-hospital stay of a minimum of 48 hours after a vaginal delivery, and 96 hours after a Caesarian delivery. (b) A private review agent or health maintenance organization may authorize a shorter length of stay if the physician, in consultation with the mother, determines that the newborn and mother meet the criteria for medical stability in accordance with the Guidelines or Standards. (c) In all cases of early discharge pursuant to subsection (b) of this section, the insurer shall provide coverage for post-delivery care within the minimum time periods established in subsection (a) of this section, to be delivered in the patients home, or, in a providers office, as determined by the physician in consultation with the mother. The at-home post-delivery care shall be provided by a registered professional nurse, physician, nurse practitioner, certified midwife, certified nurse-midwife, or physician assistant experienced in maternal and child health, and shall include: (1) Parental education; (2) Assistance and training in breast or bottle feeding; and (3) Performance of any medically necessary and clinically appropriate tests, including the collection of an adequate sample for hereditary and metabolic newborn screening. (d) Upon notification of the pregnancy of the insured, the insurer shall: (1) Encourage and assist the insured, prior to the delivery date, to select and contact a primary care provider for the expected newborn prior to delivery; and, (2) Provide the insured prior to the delivery date with information on postpartum home visits for the mother and child that includes the names of providers that are available for postpartum home visits. (e) No insurer may deselect, terminate the services of, require additional documentation from, require additional utilization review, reduce payments, or otherwise provide financial disincentives to any attending provider who orders care consistent with this chapter. (f) Every insurer shall provide notice to policyholders regarding the coverage required under this chapter. The notice shall be in writing and shall be transmitted at the earliest of either the next mailing to the policyholder, the yearly summary of benefits sent to the policyholder, or January 1 of the year following April 9, 1997.  (Oct. 20, 1979, D.C. Law 3-33,  3a; as added Apr. 9, 1997, D.C. Law 11-241,  3, 44 DCR 1125; Dec. 29, 2021, D.C. Law 24-46,  4(b), 68 DCR 011642.)  Prior Codifications 1981 Ed.,  35-1102.1. Editor's Notes Purpose of Law 11-241 Section 2 of D.C. Law 11-241 provided: (a) The Council of the District of Columbia finds that: (1) Phenylketonuria (PKU) is a cause of severe mental retardation that can be prevented if diagnosed within the first 3 weeks of childbirth. (2) The Districts statutes and regulations direct the screening of newborn infants for hereditary and congenital disorders in the hospital prior to discharge. (3) Hospital stays of less than 24 hours after childbirth typically result in unsatisfactory PKU specimens as a result of insufficient milk feedings. (4) Insurers, both indemnity and managed care plans, have implemented benefit plans covering no more than 24 hours of postpartum stay in a hospital, despite little or no scientific support for the efficacy of this policy for the general population. (5) The Guidelines for Perinatal Care, prepared by the American Academy of Pediatrics and the American College of Obstetrics and Gynecology, recommends a hospital stay of at least 48 hours after childbirth. (b) In the interest of maximizing the prevention of mental retardation from PKU and other hereditary and congenital disorders, the Council of the District of Columbia hereby establishes a policy to require all individual and group health insurance policies to provide coverage for a minimum hospital stay for a mother and child following the birth of a child.
 313802. Extent of coverage. [Repealed] Repealed.  (Oct. 20, 1979, D.C. Law 3-33,  3, 26 DCR 1116; May 21, 1992, D.C. Law 9-99,  2(a), 39 DCR 2142; Apr. 13, 2005, D.C. Law 15-353,  351, 52 DCR 2331.)  Prior Codifications 1981 Ed.,  35-1102. 1973 Ed.,  35-2002. Temporary Repeal of Section For temporary (225 day) repeal of section, see  306 of the Child and Youth, Safety and Health Omnibus Second Temporary Amendment Act of 2004 (D.C. Law 15-319, April 8, 2005, law notification 52 DCR 4708). Emergency Legislation For temporary (90 day) repeal of section, see  306 of Child and Youth, Safety and Health Omnibus Emergency Amendment Act of 2004 (D.C. Act 15-630, November 30, 2004, 52 DCR 1143). For temporary (90 day) repeal of section, see  351 of Child and Youth, Safety and Health Omnibus Congressional Review Emergency Amendment Act of 2005 (D.C. Act 16-30, February 17, 2005, 52 DCR 2993).
 313803. Notification of birth and payment of premiums or fees. If payment of a specific premium or subscription fee is required to provide coverage for a child, the policy or contract may require that notification of birth of a newly born child and payment of the required premium or fees must be furnished to the insurer or nonprofit service or indemnity corporation within 31 days after the date of birth in order to have the coverage continue beyond such 31-day period.  (Oct. 20, 1979, D.C. Law 3-33,  4, 26 DCR 1116.)  Prior Codifications 1981 Ed.,  35-1103. 1973 Ed.,  35-2003.
 313804. Applicability of chapter. The requirements of this chapter shall apply: (1) To all insurance policies and subscriber contracts delivered or issued for delivery in the District more than 120 days after October 20, 1979. (2) To all such insurance policies and subscriber contracts renewed, amended or reissued after 120 days following October 20, 1979; (3) To only children born more than 120 days after October 20, 1979; (4) To all individual subscriber contracts and group certificates issued or delivered in the District of Columbia by Group Hospitalization and Medical Services, Inc.; (5) To all for-profit as well as nonprofit indemnity type health insurers issuing or delivering individual indemnity type accident and sickness health insurance policies and group certificates in the District of Columbia; and (6) To health insurance certificates, except those described in  31-3802(2) [repealed], that are delivered within the District of Columbia from group health insurance policies which are sold outside of the District of Columbia.  (Oct. 20, 1979, D.C. Law 3-33,  5, 26 DCR 1116; May 21, 1992, D.C. Law 9-99,  2(b), 39 DCR 2142.)  Prior Codifications 1981 Ed.,  35-1104. 1973 Ed.,  35-2004.
 313805. Exclusions. Specifically excluded from the coverage requirements of this chapter are Medicare Supplement insurance policies, accident only policies, dread disease policies, student accident policies, nursing home policies, and home health care policies.  (Oct. 20, 1979, D.C. Law 3-33,  6; as added May 21, 1992, D.C. Law 9-99, 2(c), 39 DCR 2142.)  Prior Codifications 1981 Ed.,  35-1105. Cross References Hospital and medical services corporations, applicability of this section, see  31-3503.
 313821. Definitions. For the purposes of this chapter, the term: (1) Aggregate attachment point means the total amount of health claims incurred by a small employer in a policy year for all covered employees and their dependents, and covered by a stop-loss insurance policy, above which the stop-loss insurer incurs a liability for payment under aggregate stop-loss coverage. (2) Attachment point means the claims amount incurred by an insured group beyond which the insurer incurs a liability for payment. (3) Commissioner means the Commissioner of the Department of Insurance, Securities and Banking. (4) Expected claims means the total amount of claims that, in the absence of medical stop-loss insurance, are projected to be incurred by the insured using reasonable and accepted actuarial principles in a policy year. (5) Individual attachment point means the amount of health claims incurred by a small employer in a policy year for an individual employee or dependent of an employee, and covered by a stop-loss insurance policy, above which the stop-loss insurer incurs a liability for payment, under individual stop-loss coverage. (6) Stop-loss insurance means coverage that insures an employer or an employer-sponsored health plan against the risk that: (A) One claim will exceed a specific dollar amount; or (B) The entire loss of a self-insurance plan will exceed a specific dollar amount.  (May 2, 2015, D.C. Law 20-265,  201, 62 DCR 1529.) 
 313822. Stop-loss policy. (a) An insurer shall not issue or deliver to a small employer, as defined in 31-3301.01(42), a stop-loss insurance policy unless the employer has a fully-insured employee health benefit plan. (b) Stop-loss insurance is subject to the following: (1) The policy must be issued to and insure the employer, the trustee, or other sponsor of the plan, or the plan itself, but not the employees, members, or participants; (2) Payment by the insurer must be made to the employer, trustee, or other sponsor of the plan, or to the plan itself, but not to the employees, members, participants, or health care providers; and (3) Stop-loss insurance policies issued or renewed after May 2, 2015, shall not contain any of the following provisions: (A) An individual attachment point for a policy year that is less than $40,000. (B) An aggregate attachment point for a policy year that is less than the greater of one of the following: (i) Five thousand dollars times the total number of group members; (ii) One hundred twenty percent of expected claims; or (iii) Forty thousand dollars. (c)(1) A stop-loss insurer shall not exclude any employee or dependent on the basis of an actual or expected health status-related factor. (2) Health status-related factors include any of the following: health status; medical condition, including both physical and mental illnesses; claims experience; medical history; receipt of health care; genetic information; disability; evidence of insurability, including conditions arising out of acts of domestic violence of the employee or dependent; or any other health status-related factor as determined by the Commissioner. (d) A stop-loss insurer shall not cancel or not renew a stop-loss insurance policy except if: (1) The employer has failed to make the required premium payments; (2) The employer demonstrates fraud or an intentional misrepresentation of material fact under the terms of the stop-loss insurance policy; (3) The stop-loss insurer has been determined by the Commissioner to be financially impaired; or (4) The stop-loss insurer ceases to write, issue, or administer new stop-loss insurance policies in the District; provided, that the following conditions are satisfied: (A) The insurer provides notice to the Commissioner and employer of its intent to cease writing, issuing, or administering new or existing stop-loss insurance policies in the District at least 180 days before the date the insurer seeks to discontinue the coverage; and (B) The insurer provides the employer at least 180 days advance written notice of its intent to cancel stop-loss insurance coverage beginning from the date of discontinuation provided to the Commissioner pursuant to subparagraph (A) of this paragraph. (e) If an insurer elects to cancel or not renew an employers stop-loss insurance pursuant to subsection (d)(1) of this section, the insurer shall: (1) Provide the employer notice no less than 30 days before the date of cancellation or expiration of the policy period; (2) Accept any premium payment by the employer that would satisfy any outstanding amounts owed to the insurer and cure the deficiency giving rise to the cancellation or non-renewal; and (3) Continue the policy in full force until the date of cancellation or expiration provided in the notice. (f) Nothing in this section shall be construed to extinguish, limit, or otherwise impair any existing right in law or equity arising under a stop-loss insurance policy. (g) On April 1, 2015, and on April 1 annually thereafter, a stop-loss insurer shall report to the Commissioner the number of small employer stop-loss policies it had issued and in effect as of December 31 of the previous year. The information in the report shall include new policies issued and policies reissued or renewed in the previous year for groups that have 1 to 50 employees and 51 to 100 employees. (h) The provisions of this section shall apply to stop-loss insurance policies issued or renewed after May 2, 2015. (i) The Commissioner, pursuant to subchapter I of Chapter 5 of Title 2 [ 2-501 et seq.], may issue rules to implement the requirements of this section, including rules providing for:  et seq.  (1) Additional standards for employee benefit stop-loss insurance policies; and (2) Required disclosures to policyholders by an insurance carrier providing employee benefit stop-loss insurance.  (May 2, 2015, D.C. Law 20-265,  202, 62 DCR 1529.) 
 313831. Definitions. For the purposes of this chapter, the term: (1) Commissioner means Commissioner of the Department of Insurance and Securities Regulation. (2) District means the District of Columbia. (3) Group health plan means an employee welfare plan (as defined in section 3(1) of the Employee Retirement Income Security Act of 1974, approved September 2, 1974 (88 Stat. 829; 29 U.S.C.  1002(1)), to the extent that the plan provides medical care and includes items and services paid for as medical care to employees or their dependents (as defined under the terms of the plan) directly or through insurance, reimbursement, or otherwise. (4) Health insurance coverage means benefits consisting of medical care (provided directly, through insurance or reimbursement, or otherwise and includes items and services paid for as medical care) under any hospital or medical service policy or certificate, hospital, or medical service plan contract, or health maintenance organization contract offered by a health insurer. (5) Health insurer means any person that provides one or more health benefit plans or insurance in the District, including an insurer, a hospital and medical services corporation, a fraternal benefit society, a health maintenance organization, a multiple employer welfare arrangement, or any other person providing a plan of health insurance subject to the authority of the Commissioner. (6) Health benefit plan means any accident and health insurance policy or certificate, hospital and medical services corporation contract, health maintenance organization subscriber contract, plan provided by a multiple employer welfare arrangement, or plan provided by another benefit arrangement. The term health benefit plan does not mean accident only, credit, or disability insurance; coverage of Medicare services or federal employee health plans, pursuant to contracts with the United States government; Medicare supplement or long-term care insurance; dental only or vision only insurance; specified disease insurance; hospital confinement indemnity coverage; limited benefit health coverage; coverage issued as a supplement to liability insurance; insurance arising out of a workers compensation or similar law; automobile medical payment insurance; medical expense and loss of income benefits; or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance. (7) Individual health plan means a plan offering health insurance coverage offered to individuals other than in connection with a group health plan. (8) Mastectomy means the surgical removal of all or substantially all of a breast as a result of breast cancer.  (Apr. 3, 2001, D.C. Law 13-254,  2, 48 DCR 723.) 
 313832. Coverage for reconstructive surgery following mastectomies. (a) An individual or group health plan which is a health benefit plan, and a health insurer providing health insurance coverage, that provides medical and surgical benefits with respect to a mastectomy shall, in a manner determined in consultation with the attending physician and the patient, provide the following coverage in the case of a participant or beneficiary who is receiving benefits in connection with a mastectomy and who elects breast reconstruction in connection with such mastectomy: (1) All stages of reconstruction of the breast on which the mastectomy has been performed; (2) Surgery and reconstruction of the other breast to produce a symmetrical appearance; and (3) Prostheses and physical complications at all stages of mastectomy, including lymphedemas. (b) Coverage for the procedures in subsection (a) of this section may be subject to annual deductibles and coinsurance provisions as may be considered appropriate and as are consistent with those established for other benefits under the health benefit plan or coverage.  (Apr. 3, 2001, D.C. Law 13-254,  3, 48 DCR 723.)  Section References This section is referenced in  31-3833.
 313833. Notice. (a) Written notice of the availability of coverage, as set forth in  31-3832, shall be delivered to the participant and beneficiary under the health plan upon enrollment and annually thereafter. Notice of the benefits shall be prominently positioned in any literature or correspondence made available or distributed by the health benefit plan or health insurer and shall be transmitted to the participant or beneficiary upon the earlier of: (1) Any yearly informational packet sent to the participant or beneficiary, as part of the packet; (2) In the next mailing made by the health benefit plan or health insurer to the participant or beneficiary; or (3) Not later than 60 days after April 3, 2001. (b) An individual or group health plan which is a health benefit plan, and a health insurer that has already provided notice in order to comply with the Womens Health and Cancer Rights Act of 1998, approved October 21, 1998 (112 Stat. 2681; 29 U.S.C.  1185b, 42 U.S.C.  300gg-6, and 42 U.S.C.  300gg-52), need not provide additional notice under this chapter; provided, that it files with the Commissioner a written statement, with a copy of the notice attached, certifying that it is in compliance.  (Apr. 3, 2001, D.C. Law 13-254,  4, 48 DCR 723.) 
 313834.01. Full-year coverage for contraception. (a) An individual health plan or group health plan, a health insurer offering health insurance coverage for prescription drugs, and health insurance coverage through Medicaid and the D.C. Healthcare Alliance program shall provide coverage for a supply of contraceptives intended to last over the course of a 12-month period, that shall be dispensed all at once or over the course of the 12 months at the patient's election, including for over-the-counter contraceptives and contraceptives obtained from a licensed pharmacist pursuant to  3-1202.08(g-1); provided, that the D.C. Healthcare Alliance program shall not be required to provide coverage for a supply of contraceptives intended to last longer than the period of recertification for the D.C. Healthcare Alliance. The costs of any consultation by the pharmacist shall also be covered. (b) For the purposes of this section, the term: (1) "Contraceptive" means a drug or drug regimen approved by the U.S. Food and Drug Administration to prevent pregnancy. (2) "Medicaid" shall have the same meaning as provided in  4-204.12(2). (c) Repealed.  (Apr. 3, 2001, D.C. Law 13-254,  5a; as added Sept. 17, 2015, D.C. Law 21-21,  2, 62 DCR 8848; Mar. 28, 2018, D.C. Law 22-75,  3(a), 65 DCR 1374.)  Applicability Applicability of D.C. Law 21-21: Section 3 of D.C. Law 21-21 provided that the act shall apply as of January 1, 2017. Emergency Legislation  For temporary (90 days) amendment of this section, see  3(a) of Defending Access to Women's Health Care Services Congressional Review Emergency Amendment Act of 2018 (D.C. Act 22-266, Feb. 21, 2018, 65 DCR 2119).   For temporary (90 days) creation of  31-3834.02, see  2 of Defending Access to Women's Health Care Services Emergency Amendment Act of 2017 (D.C. Act 22-49, Apr. 24, 2017, 64 DCR 4017).  Temporary Legislation  For temporary (225 days) addition of  31-3834.02, see  2 of Defending Access to Women's Health Care Services Temporary Amendment Act of 2017 (D.C. Law 22-6, July 11, 2017, 64 DCR 4905). 
 313834.02. Coverage of preventive health services. (a) An individual health plan or group health plan and health insurance coverage through Medicaid or the D.C. Healthcare Alliance program shall provide coverage for, and shall not impose any cost-sharing requirements on, women for the following preventive health services and products: (1)(A) Breast cancer screening; (A-i) Adjuvant breast cancer screening, including magnetic resonance imaging, ultrasound screening, or molecular breast imaging of the breast, if: (i) A mammogram demonstrates a Class C or Class D breast density classification; or (ii) A woman is believed to be at an increased risk for cancer due to family history or prior personal history of breast cancer, positive genetic testing, or other indications of an increased risk for cancer as determined by a woman's physician or advanced practice registered nurse; (B) Breast feeding support, services, and supplies; (C) Screening for cervical cancer, including HPV testing; (D) Screening for gestational diabetes; (E) Screening and counseling for HIV; (F) Screening and counseling for interpersonal and domestic violence; (G) Screening and counseling for sexually-transmitted diseases; (H) Screening and counseling for Hepatitis B and C; (I) Well-woman preventive visits, including visits to obtain necessary preventive care, preconception care, and prenatal care; (J) Folic acid supplementation; (K) Breast cancer chemoprevention counseling and preventive medications; (L) Risk assessment and genetic counseling and testing using the Breast Cancer Risk Assessment tool approved by the National Cancer Institute; and (M) Rh incompatibility screening; (2) Those evidence-based items or services that have in effect a rating of "A" or "B" in the recommendations of the United States Preventive Services Task Force as of September 19, 2017; and (3) Any additional health services or products identified by rules issued pursuant to subsection (c) of this section. (b) A health insurer and health insurance coverage through Medicaid or the D.C. Healthcare Alliance program offering health insurance coverage exclusively for prescription drugs shall provide coverage for, and shall not impose any cost-sharing requirements for women for contraceptive drugs, devices, products, and services, including those obtained over-the-counter and those prescribed and dispensed by a pharmacist pursuant to  3-1202.08(g-1), and the following: (1) Those evidence-based prescription-drug items or related services that have in effect a rating of "A" or "B" in the recommendations of the United States Preventive Services Task Force as of September 19, 2017; and (2) Any additional contraceptive drugs, devices, products and services identified by rules issued pursuant to subsection (c) of this section. (c)(1) Within 30 days after March 28, 2018, the Mayor, pursuant to subchapter I of Chapter 5 of Title 2, shall issue rules listing the items and services defined in subsections (a) and (b) of this section to be covered without imposing any cost-sharing requirements. (2) The Mayor shall amend the rules required by this subsection as necessary to: (A) Include additional preventive services or products for women or expansions of covered preventive services or products for women identified by the United States Preventive Services Task Force or the Health Resources and Services Administration of the United States Department of Health and Human Services after September 19, 2017; and (B) Remove items or services defined in subsections (a) and (b) of this section that a federal agency determines to pose a significant safety concern, consistent with the requirements of 45 C.F.R.  147.130(b). (d) For the purposes of this section, the term "breast density classification" means the 4 levels of breast density identified in the Breast Imaging Reporting and Data System established by the American College of Radiology, which are: (A) Class A, indicating fatty breast tissue; (B) Class B, indicating scattered fibroglandular breast tissue; (C) Class C, indicating heterogeneously dense breast tissue with fibrous and glandular tissue that are evenly distributed throughout the breast; and (D) Class D, indicating extremely dense breast tissue.  (Apr. 3, 2001, D.C. Law 13-254,  5b ; as added Mar. 28, 2018, D.C. Law 22-75,  3(b), 65 DCR 1374; Oct. 30, 2018, D.C. Law 22-164,  303(a), 65 DCR 9324; Mar. 22, 2019, D.C. Law 22-261,  202, 66 DCR 1373.)  Emergency Legislation  For temporary (90 days) creation of this section, see  3(b) of Defending Access to Women's Health Care Services Congressional Review Emergency Amendment Act of 2018 (D.C. Act 22-266, Feb. 21, 2018, 65 DCR 2119). 
 313834.03. Coverage of additional preventive health services. (a) Health insurance coverage through Medicaid or the D.C. Healthcare Alliance program shall also provide coverage for and shall not impose any cost-sharing requirements for the following: (1) Voluntary sterilization procedures for women; (2)(A) All contraceptive drugs, devices, products and services approved by the U.S. Food and Drug Administration ("FDA"), including emergency contraception; provided, that: (B) If there is a therapeutic equivalent of an FDA-approved contraceptive drug, device, product, or service, coverage shall also include either the original FDA-approved contraceptive drug, device, product, or service or at least one of its therapeutic equivalents, without imposing any cost-sharing requirements; (C) If the covered contraceptive drug, device, product, or service is deemed medically inadvisable by a provider, the health insurer shall defer to the determination and judgment of the attending provider and provide coverage for the alternative prescribed contraceptive drug, device, product, or service without imposing any cost-sharing requirements; and (D) Nothing in this section shall prohibit a health insurer from requiring the use of a generic prescription drug when providing coverage for preventive contraceptive drugs, devices, products, or services, so long as such health insurer: (i) Has a process for a member to seek medically necessary coverage of a covered brand name contraceptive drug, device, product, or service as determined by the member's prescribing provider; and (ii) Provides coverage for a brand name contraceptive drug, device, product, or service when there is no generic substitute available in the market; (3) Contraceptive services including consultation with a pharmacist, patient education, and counseling on contraceptive drugs, devices, products, or services; and (4) Follow-up services related to the drugs, devices, products, and services covered under this section, including management of side effects, counseling for continued adherence, and device insertion and removal. (b) Beginning on January 1, 2019, or the next date when carrier forms are approved, whichever is earlier, an individual health plan or group health plan shall also provide coverage for and shall not impose any cost-sharing requirements for all drugs, devices, products, and services listed in subsection (a) of this section; provided, that an individual health plan or group health plan subject to this subsection may require a co-payment or cost sharing for coverage of male contraceptive products for an enrollee covered by a high deductible health plan, as defined in section 1201(a) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, approved December 8, 2003 (117 Stat. 2066; 26 U.S.C.  223(c)(2)).  (Apr. 3, 2001, D.C. Law 13-254,  5c ; as added Mar. 28, 2018, D.C. Law 22-75,  3(b), 65 DCR 1374; Oct. 30, 2018, D.C. Law 22-164,  303(b), 65 DCR 9324.)  Emergency Legislation  For temporary (90 days) creation of this section, see  3(b) of Defending Access to Women's Health Care Services Congressional Review Emergency Amendment Act of 2018 (D.C. Act 22-266, Feb. 21, 2018, 65 DCR 2119). 
 313834.04. Religious exemption and accommodation. (a)(1) An employer organized and operating as a nonprofit entity and referred to in section 6033(a)(3)(A)(i) or (iii) of the Internal Revenue Code of 1986, approved October 22, 1986 (100 Stat. 2740; 26 U.S.C.  6033(a)(3)(A)(i) or (iii)), may be exempt from any requirement to cover contraceptive drugs, devices, products, and services under  31-3834.01, 31-3834.02, and 31-3834.03. (2) An employer claiming an exemption under this subsection shall provide its employees and prospective employees reasonable and timely notice of the exemption before enrollment with the group health plan, and the notice shall list the contraceptive drugs, devices, products, and services for which the employer does not provide coverage. (3) Nothing in this subsection shall be construed to allow for the exclusion of coverage for contraceptive drugs, devices, products, and service as prescribed by a provider, acting within his or her scope of practice, for reasons other than contraceptive purposes, such as decreasing the risk of ovarian cancer or eliminating symptoms of menopause, or for contraceptive drugs, devices, products, and services that are necessary to preserve the life or health of an enrollee. (b)(1) Nothing in this chapter shall be construed to require an employer to provide coverage for contraceptive drugs, devices, products, and services through its group health plan if the employer has provided to its group health insurance issuer a notice of request for accommodation, in a form and manner specified by the Mayor, and the insurer has certified that the employer meets the requirements of subsection (c) of this section. (2) Beginning on January 1, 2019, and on a quarterly basis thereafter, a group health insurance issuer shall notify the Department of Insurance, Securities, and Banking which employers have been granted an accommodation pursuant to subsection (c) of this section. (3) An employer that receives an accommodation pursuant to subsection (c) of this section shall provide, through its group health plan, coverage for contraceptive drugs, devices, products, and services as prescribed and dispensed by a provider, acting within her or her scope of practice, for reasons other than contraceptive purposes, such as decreasing the risk of ovarian cancer or eliminating symptoms of menopause, and for contraceptive drugs, devices, products, and services that are necessary to preserve the life or health of an enrollee. (c) A group health insurance issuer shall provide an employer with an accommodation to the requirements of  31-3834.01,  31-3834.02, or  31-3834.03 upon receipt of a self-certification, in a form and manner specified by the Mayor, that the employer is: (1) A nonprofit entity that holds itself out as a religious organization and objects to covering some or all of the contraceptive drugs, devices, products, or services on account of its sincerely held religious beliefs; or (2) A closely-held for-profit entity; provided, that its highest governing body (such as its board of directors, board of trustees, or owners, if managed directly by its owners) has adopted a resolution or similar action establishing that it objects to covering some or all of the contraceptive drugs, devices, products, or services on account of the owners' sincerely held religious beliefs. (d) Upon receipt of a notice of request for accommodation that conforms to the requirements of subsection (c) of this section, a group health insurance issuer shall: (1) Exclude contraceptive drugs, devices, products, or services coverage from the group health insurance coverage provided in connection with the employer's group health plan; and (2) Provide separate payments for any contraceptive drugs, devices, products, or services required to be covered under  31-3834.01,  31-3834.02, or  31-3834.03 without imposing any cost-sharing requirements or any other fee directly or indirectly on the employer, the group health plan, or plan participants or beneficiaries. (e) For the purposes of this section, the term "closely-held for-profit entity" means an entity that: (1) Is not a nonprofit entity; (2) Has no publicly traded ownership interests of any class of common equity securities required to be registered under section 12 of the Securities Exchange Act of 1934, approved June 6, 1934 (48 Stat. 892; 15 U.S.C.  78l); and (3) Has more than 50% of the value of its ownership interest owned directly or indirectly by 5 or fewer individuals, or has an ownership structure that is substantially similar thereto, as of the date of the entity's self-certification pursuant to subsection (c) of this section.  (Apr. 3, 2001, D.C. Law 13-254,  5d; as added Mar. 28, 2018, D.C. Law 22-75,  3(b), 65 DCR 1374; Oct. 30, 2018, D.C. Law 22-164,  303(c), 65 DCR 9324.)  Emergency Legislation  For temporary (90 days) creation of this section, see  3(b) of Defending Access to Women's Health Care Services Congressional Review Emergency Amendment Act of 2018 (D.C. Act 22-266, Feb. 21, 2018, 65 DCR 2119). 
 313834.05. Notice of rights to healthcare coverage. (a) An insurer that is subject to  31-3834.01,  31-3834.02, or  31-3834.03 shall make readily accessible to enrollees and potential enrollees information regarding: (1) Full and accurate information relevant to coverage and cost-sharing for contraceptive drugs, devices, products, and services by each health insurance plan, including an explanation of an insured's financial responsibility for payment of premiums, coinsurance, copayments, deductibles, and any other charges; (2) The coverage of other drugs, devices, products, and services described in  31-3834.01, 31-3834.02, and 31-3834.03; and (3) The right to receive up to a 12-month supply of self-administered hormonal contraceptives prescribed and dispensed by a licensed pharmacist, pursuant to  3-1202.08(g-1), without cost-sharing requirements. (b)(1) The insurer shall provide the information described in subsection (a) of this section in a consumer-friendly format: (A) That can be viewed on the insurer's public website through a clearly identifiable link or tab without requiring an individual to create or access an account or enter a policy or contract number; (B) By email or letter within 14 days after a request by an enrollee; and (C) Within one year after March 28, 2018, or whenever written materials are reprinted, whichever is sooner, in written materials that explain benefits or coverage that are provided to enrollees and potential enrollees, including in an addendum summarizing benefits and coverage. (2) This subsection shall be construed consistently with section 2715 of the Public Health Services Act, as amended by the Patient Protection and Affordable Care Act, approved March 23, 2010 (124 Stat. 132; 42 U.S.C.  300gg-15). (c) The Department of Insurance, Securities and Banking shall provide health insurers operating in the District of Columbia with an annual notice of their obligation to provide coverage for drugs, devices, products, and services described in  31-3834.01, 31-3834.02, and 31-3834.03.  (Apr. 3, 2001, D.C. Law 13-254,  5e ; as added Mar. 28, 2018, D.C. Law 22-75,  3(b), 65 DCR 1374; Oct. 30, 2018, D.C. Law 22-164,  303(d), 65 DCR 9324.)  Emergency Legislation  For temporary (90 days) creation of this section, see  3(b) of Defending Access to Women's Health Care Services Congressional Review Emergency Amendment Act of 2018 (D.C. Act 22-266, Feb. 21, 2018, 65 DCR 2119). 
 313834. Hormone replacement therapy coverage. An individual or group health plan, and a health insurer offering health care coverage that provides coverage for prescription drugs, shall provide benefits which cover any hormone replacement therapy that is prescribed or ordered for treating symptoms and conditions of menopause.  (Apr. 3, 2001, D.C. Law 13-254,  5, 48 DCR 723.) 
 313835. Prohibitions. An individual or group health plan which is a health benefit plan, and a health insurer offering health care coverage, shall not: (1) Deny a patient eligibility, or continued eligibility, to enroll or renew coverage under terms of the health benefit plan, solely for the purpose of avoiding the requirements of this chapter; or (2) Penalize or otherwise reduce or limit the reimbursement of an attending provider, or provide incentives (monetary or otherwise) to an attending provider, to induce such provider to provide care to an individual participant or beneficiary in a manner inconsistent with this chapter.  (Apr. 3, 2001, D.C. Law 13-254,  6, 48 DCR 723.) 
 313836. Regulations. The Commissioner shall promulgate regulations necessary to implement the provisions of this chapter within 180 days after April 3, 2001.  (Apr. 3, 2001, D.C. Law 13-254,  7, 48 DCR 723.) 
 313837. Applicability to group health plans. The provisions of this chapter shall apply to group health benefit plans for years beginning on or after April 3, 2001.  (Apr. 3, 2001, D.C. Law 13-254,  8, 48 DCR 723.) 
 313841.01. Definitions.  For the purposes of this chapter, the term: (1) "Health insurer" means a person that provides one or more health benefit plans or insurance in the District of Columbia, including an insurer, a hospital and medical services corporation, a fraternal benefit society, a health maintenance organization, a multiple employer welfare arrangement, or any other person providing a plan of health insurance subject to the authority of the Commissioner of the Department of Insurance, Securities, and Banking. (2) "Open enrollment period" means the yearly period during which a person can enroll in a health insurance plan. (3) "Special enrollment period" means any time a person has the option to enroll in or change their health insurance outside of the open enrollment period.  (Oct. 20, 2020, D.C. Law 23-135,  2, 67 DCR 9885.) 
 313841.02. Pregnancy as a qualifying event. (a) A health insurer shall allow for a special enrollment period for a pregnant individual for: (1) Sixty days when offering individual health insurance coverage from the date of confirmation of pregnancy, as certified by a licensed healthcare professional acting within the scope of the professional's practice; and (2) At least 30 days when offering group health insurance coverage from the date of confirmation of pregnancy, as certified by a licensed healthcare professional acting within the scope of the professional's practice. (b) Coverage shall be effective as of the first of the month in which the health care professional certifies the individual is pregnant, unless the individual elects to have coverage effective on the first day of the month following the date that the individual makes a plan selection.  (Oct. 20, 2020, D.C. Law 23-135,  3, 67 DCR 9885.) 
 313861. Definitions.  For the purposes of this chapter, the term: (1) Health benefits plan shall have the same meaning as provided in  31-3131(4). (2) Health insurer shall have the same meaning as provided in  31-3131(5). (2A) "Postpartum" means the time after delivery when maternal physiological changes related to pregnancy return to the nonpregnant state, which may last for as long as 12 months after delivery. (3) Provider shall have the same meaning as provided in  31-3131(7). (4) Telehealth means the delivery of healthcare services through the use of interactive audio, video, or other electronic media used for the purpose of diagnosis, consultation, or treatment; provided, that services delivered through email messages or facsimile transmissions are not included.  (Oct. 17, 2013, D.C. Law 20-26,  2, 60 DCR 11117; July 3, 2018, D.C. Law 22-126,  2(a), 65 DCR 5110; Oct. 20, 2020, D.C. Law 23-132,  2(a), 67 DCR 9887; Dec. 3, 2020, D.C. Law 23-149,  5042, 7105, 67 DCR 10493.)  Applicability Section 7190 of D.C. Law 24-45 repealed section 4 of D.C. Law 23-132 removing the applicability provision impacting this section. Therefore the amendment of this section by Law 23-132 has been implemented.  Section 7190 of D.C. Act 24-159 repealed section 4 of D.C. Law 23-132 removing the applicability provision impacting this section. Therefore the amendment of this section by Law 23-132 has been implemented.  Applicability of D.C. Law 23-132:  4 of D.C. Law 23-132 provided that the change made to this section by  2(a) of D.C. Law 23-132 is subject to the inclusion of the laws fiscal effect in an approved budget and financial plan. Therefore that amendment has not been implemented. Applicability of D.C. Law 22-126:  3 of D.C. Law 22-126 provided that the change made to this section by  2(a) of D.C. Law 22-126 is subject to the inclusion of the laws fiscal effect in an approved budget and financial plan. Therefore that amendment has not been implemented.
 313862.01. Postpartum maternal health services.  Health insurance coverage through Medicaid or the D.C. Healthcare Alliance program shall cover and reimburse health care services and expenses for: (1) Home visits via telehealth, face-to-face interaction, or digital health for a pregnant woman; and (2) Provider delivered digital health interventions that are used to directly manage a patient's pregnancy.  (Oct. 17, 2013, D.C. Law 20-26,  3a; as added Oct. 20, 2020, D.C. Law 23-132,  2(b), 67 DCR 9887.)  Applicability Section 7190 of D.C. Law 24-45 repealed section 4 of D.C. Law 23-132 removing the applicability provision impacting this section. Therefore the creation of this section by Law 23-132 has been implemented.  Section 7190 of D.C. Act 24-159 repealed section 4 of D.C. Law 23-132 removing the applicability provision impacting this section. Therefore the creation of this section by Law 23-132 has been implemented.  Applicability of D.C. Law 23-132:  4 of D.C. Law 23-132 provided that the creation of this section by  2(b) of D.C. Law 23-132 is subject to the inclusion of the laws fiscal effect in an approved budget and financial plan. Therefore that amendment has not been implemented. Editor's Notes Section 3 of D.C. Law 23-132 provides that by October 1, 2020, the Mayor shall seek approval from the Centers for Medicare and Medicaid Services, within United States Department of Health and Human Services, through a waiver request, of the requirement that all health policies offered through the District's Medicaid program cover inpatient and outpatient maternity and newborn care for at least one year after childbirth. 
 313862. Private reimbursement. (a) A health insurer offering a health benefits plan in the District may not deny coverage for a healthcare service on the basis that the service is provided through telehealth if the same service would be covered when delivered in person. (b) A health insurer shall reimburse the provider for the diagnosis, consultation, or treatment of the insured when the service is delivered through telehealth. (c) A health insurer shall not be required to: (1) Reimburse a provider for healthcare service delivered through telehealth that is not a covered under the health benefits plan; and (2) Reimburse a provider who is not a covered provider under the health benefits plan. (d) A health insurer may require a deductible, copayment, or coinsurance amount for a healthcare service delivered through teleheath; provided, that the deductible, copayment, or coinsurance amount may not exceed the amount applicable to the same service when it is delivered in person. (e) A health insurer shall not impose any annual or lifetime dollar maximum on coverage for telehealth services other than an annual or lifetime dollar maximum that applies in the aggregate to all items and services under the health benefits plan. (f) Nothing in this chapter shall preclude the health insurer from undertaking utilization review to determine the appropriateness of telehealth as a means of delivering a healthcare service; provided, that the determinations shall be made in the same manner as those regarding the same service when it is delivered in person.  (Oct. 17, 2013, D.C. Law 20-26,  3, 60 DCR 11117.) 
 313863. Medicaid reimbursement. Medicaid shall cover and reimburse for healthcare services appropriately delivered through telehealth if the same services would be covered when delivered in person.  (Oct. 17, 2013, D.C. Law 20-26,  4, 60 DCR 11117; July 3, 2018, D.C. Law 22-126,  2(b), 65 DCR 5110; Dec. 3, 2020, D.C. Law 23-149,  7105, 67 DCR 10493.)  Applicability Applicability of D.C. Law 22-126:  3 of D.C. Law 22-126 provided that the change made to this section by  2(b) of D.C. Law 22-126 is subject to the inclusion of the laws fiscal effect in an approved budget and financial plan. Therefore that amendment has not been implemented.
 313864. Remote patient monitoring service providers; payment. [Repealed] Repealed.  (Oct. 17, 2013, D.C. Law 20-26,  4a; as added July 3, 2018, D.C. Law 22-126,  2(c), 65 DCR 5110; Dec. 3, 2020, D.C. Law 23-149,  7105, 67 DCR 10493.)  Applicability Applicability of D.C. Law 22-126:  3 of D.C. Law 22-126 provided that the creation of this section by  2(c) of D.C. Law 22-126 is subject to the inclusion of the laws fiscal effect in an approved budget and financial plan. Therefore that amendment has not been implemented.
 313865. Right to synchronous interaction. [Repealed] Repealed.  (Oct. 17, 2013, D.C. Law 20-26,  4b; as added July 3, 2018, D.C. Law 22-126,  2(c), 65 DCR 5110; Dec. 3, 2020, D.C. Law 23-149,  7105, 67 DCR 10493.)  Applicability Applicability of D.C. Law 22-126:  3 of D.C. Law 22-126 provided that the creation of this section by  2(c) of D.C. Law 22-126 is subject to the inclusion of the laws fiscal effect in an approved budget and financial plan. Therefore that amendment has not been implemented.
 313866. Facility fees. [Repealed] Repealed.  (Oct. 17, 2013, D.C. Law 20-26,  4c; as added July 3, 2018, D.C. Law 22-126,  2(c), 65 DCR 5110; Dec. 3, 2020, D.C. Law 23-149,  7105, 67 DCR 10493.)  Applicability Applicability of D.C. Law 22-126:  3 of D.C. Law 22-126 provided that the creation of this section by  2(c) of D.C. Law 22-126 is subject to the inclusion of the laws fiscal effect in an approved budget and financial plan. Therefore that amendment has not been implemented.
 313867. Federal authorization. [Repealed] Repealed.  (Oct. 17, 2013, D.C. Law 20-26,  4d; as added July 3, 2018, D.C. Law 22-126,  2(c), 65 DCR 5110; Dec. 3, 2020, D.C. Law 23-149,  7105, 67 DCR 10493.)  Applicability Applicability of D.C. Law 22-126:  3 of D.C. Law 22-126 provided that the creation of this section by  2(c) of D.C. Law 22-126 is subject to the inclusion of the laws fiscal effect in an approved budget and financial plan. Therefore that amendment has not been implemented.
 313868. Rules. [Repealed] Repealed.  (Oct. 17, 2013, D.C. Law 20-26,  4e; as added July 3, 2018, D.C. Law 22-126,  2(c), 65 DCR 5110; Dec. 3, 2020, D.C. Law 23-149,  7105, 67 DCR 10493.)  Applicability Applicability of D.C. Law 22-126:  3 of D.C. Law 22-126 provided that the creation of this section by  2(c) of D.C. Law 22-126 is subject to the inclusion of the laws fiscal effect in an approved budget and financial plan. Therefore that amendment has not been implemented.
 313871. Medically necessary foods. (a) A health benefits plan issued, renewed, extended, or modified in the District by a health insurer after December 31, 2022, shall provide coverage for the cost of medically necessary food ordered as necessary by a provider for the following diseases or conditions: (1) Inflammatory bowel disease, including Crohn's disease, ulcerative colitis, and indeterminate colitis; (2) Gastroesophageal reflux disease that is nonresponsive to standard medical therapies; (3) Immunoglobulin E- and non-Immunoglobulin E-mediated allergies to food proteins; (4) Food protein-induced enterocolitis syndrome; (5) Eosinophilic disorders, including eosinophilic esophagitis, eosinophilic gastroenteritis, eosinophilic colitis, and post-transplant eosinophilic disorders; (6) Impaired absorption of nutrients caused by disorders affecting the absorptive surface, functional length, and motility of the gastrointestinal tract, including short bowel syndrome and chronic intestinal pseudo-obstruction; (7) Malabsorption due to liver or pancreatic disease; (8) Inherited metabolic disorders; and (9) Any other diseases or conditions as determined by the Mayor through rulemaking. (b) The coverage provided under this section shall not be more restrictive than or separate from coverage provided for any other illness, condition, or disorder for purposes of determining deductibles, benefit year or lifetime durational limits, benefit year or lifetime dollar limits, lifetime episodes or treatment limits, copayment and coinsurance factors, and benefit year maximum for deductibles and copayments and coinsurance factors. (c) The Mayor, pursuant to subchapter I of Chapter 5 of Title 2, may issue rules to implement the provisions of this chapter. (d) For the purposes of this section, the term: (1) "Health benefits plan" means any accident and health insurance policy or certificate, hospital and medical services corporation contract, health maintenance organization subscriber contract, plan provided by a multiple employer welfare arrangement, or plan provided by another benefit arrangement. The term "health benefit plan" does not include accident only, credit, or disability insurance; coverage of Medicare services or federal employee health plans, pursuant to contracts with the United States government; Medicare supplemental or long-term care insurance; dental only or vision only insurance; specified disease insurance; hospital confinement indemnity coverage; limited benefit health coverage; coverage issued as a supplement to liability insurance, insurance arising out of a workers' compensation or similar law; automobile medical payment insurance; medical expense and loss of income benefits; or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance. (2) "Health insurer" means a person that provides one or more health benefit plans or insurance in the District, including an insurer, a hospital and medical services corporation, a fraternal benefit society, a health maintenance organization, a multiple employer welfare arrangement, or any other person providing a plan of health insurance subject to the authority of the Department of Insurance, Securities, and Banking. (3) "Medically necessary food" means food, including a low-protein modified food product or an amino acid preparation product, a modified fat preparation product, or a nutritional formula that is specially formulated and processed for the partial or exclusive feeding of an individual by means of oral intake or enteral feeding by tube, and intended for dietary management of an individual who, because of therapeutic or chronic medical needs, has limited or impaired capacity to ingest, digest, absorb, or metabolize ordinary foodstuffs or certain nutrients or who has other specially medically determined nutrient requirements, the dietary management of which cannot be achieved by modification of the normal diet alone.  (Sept. 21, 2022, D.C. Law 24-168,  2, 69 DCR 009201.) 
 313901. Definitions. [Repealed] Repealed.  (Oct. 21, 2000, D.C. Law 13-192,  2, 47 DCR 7320; June 11, 2004, D.C. Law 15-166,  4(x), 51 DCR 2817; Mar. 17, 2005, D.C. Law 15-262,  24(a), 52 DCR 1205.)  Emergency Legislation For temporary (90 day) amendment of section, see  2(a) of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-346, January 29, 2004, 51 DCR 1834). For temporary (90 day) amendment of section, see  4(x) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). For temporary (90 day) amendment of section, see  4(a) of the Captive Insurance Company Enhancement Emergency Amendment Act of 2004 (D.C. Act 15-481, July 19, 2004, 51 DCR 7811). For temporary (90 day) amendment of section, see  4(a) of Captive Insurance Company Enhancement Congressional Review Emergency Amendment Act of 2004 (D.C. Act 15-549, October 26, 2004, 51 DCR 10336). For temporary (90 day) repeal of section and transition provisions, see  24 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238). Temporary Legislation For temporary (225 day) amendment of section, see  2(a) of Captive Insurance Company Temporary Amendment Act of 2004 (D.C. Law 15-151, April 22, 2004, law notification 51 DCR 4935). For temporary (225 day) amendment of section, see  4(a) of Captive Insurance Company Enhancement Temporary Amendment Act of 2004 (D.C. Law 15-215, December 7, 2004, law notification 52 DCR 459). For temporary (225 day) additions, see  2 to 16 of District of Columbia Free Clinic Captive Insurance Company Establishment Temporary Act of 2007 (D.C. Law 17-63, December 11, 2007, law notification 55 DCR 438).
 313902. Authority to do business  Certificate of authority. [Repealed] Repealed.  (Oct. 21, 2000, D.C. Law 13-192,  3, 47 DCR 7320; Mar. 17, 2005, D.C. Law 15-262,  24(a), 52 DCR 1205.)  Emergency Legislation For temporary (90 day) repeal of section and transition provisions, see  24 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313903. Authority to do businessapplication requirements. [Repealed] Repealed.  (Oct. 21, 2000, D.C. Law 13-192,  4, 47 DCR 7320; Mar. 17, 2005, D.C. Law 15-262,  24(a), 52 DCR 1205.)  Emergency Legislation For temporary (90 day) repeal of section and transition provisions, see  24 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313904. Authority to do businessrevocation or suspension. [Repealed] Repealed.  (Oct. 21, 2000, D.C. Law 13-192,  5, 47 DCR 7320; Mar. 17, 2005, D.C. Law 15-262,  24(a), 52 DCR 1205.)  Emergency Legislation For temporary (90 day) repeal of section and transition provisions, see  24 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313905. Name. [Repealed] Repealed.  (Oct. 21, 2000, D.C. Law 13-192,  6, 47 DCR 7320; Mar. 17, 2005, D.C. Law 15-262,  24(a), 52 DCR 1205.)  Emergency Legislation For temporary (90 day) repeal of section and transition provisions, see  24 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313906. Organizational requirements for transacting business; incorporation. [Repealed] Repealed.  (Oct. 21, 2000, D.C. Law 13-192,  7, 47 DCR 7320; Mar. 17, 2005, D.C. Law 15-262,  24(a), 52 DCR 1205.)  Emergency Legislation For temporary (90 day) amendment of section, see  2(b) of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-346, January 29, 2004, 51 DCR 1834). For temporary (90 day) amendment of section, see  4(b) of the Captive Insurance Company Enhancement Emergency Amendment Act of 2004 (D.C. Act 15-481, July 19, 2004, 51 DCR 7811). For temporary (90 day) amendment of section, see  4(b) of Captive Insurance Company Enhancement Congressional Review Emergency Amendment Act of 2004 (D.C. Act 15-549, October 26, 2004, 51 DCR 10336). For temporary (90 day) repeal of section and transition provisions, see  24 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238). Temporary Legislation For temporary (225 day) amendment of section, see  2(b) of Captive Insurance Company Temporary Amendment Act of 2004 (D.C. Law 15-151, April 22, 2004, law notification 51 DCR 4935). For temporary (225 day) amendment of section, see  4(b) of Captive Insurance Company Enhancement Temporary Amendment Act of 2004 (D.C. Law 15-215, December 7, 2004, law notification 52 DCR 459).
 313907. Requirements for transacting business. [Repealed] Repealed.  (Oct. 21, 2000, D.C. Law 13-192,  8, 47 DCR 7320; Mar. 17, 2005, D.C. Law 15-262,  24(a), 52 DCR 1205.)  Emergency Legislation For temporary (90 day) repeal of section and transition provisions, see  24 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313908. Minimum capital and surplus requirements. [Repealed] Repealed.  (Oct. 21, 2000, D.C. Law 13-192,  9, 47 DCR 7320; Mar. 17, 2005, D.C. Law 15-262,  24(a), 52 DCR 1205.)  Emergency Legislation For temporary (90 day) amendment of section, see  4(d) of the Captive Insurance Company Enhancement Emergency Amendment Act of 2004 (D.C. Act 15-481, July 19, 2004, 51 DCR 7811). For temporary (90 day) amendment of section, see  4(d) of Captive Insurance Company Enhancement Congressional Review Emergency Amendment Act of 2004 (D.C. Act 15-549, October 26, 2004, 51 DCR 10336). For temporary (90 day) repeal of section and transition provisions, see  24 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238). Temporary Legislation For temporary (225 day) amendment of section, see  4(d) of Captive Insurance Company Enhancement Temporary Amendment Act of 2004 (D.C. Law 15-215, December 7, 2004, law notification 52 DCR 459).
 313909. Annual report. [Repealed] Repealed.  (Oct. 21, 2000, D.C. Law 13-192,  10, 47 DCR 7320; Mar. 17, 2005, D.C. Law 15-262,  24(a), 52 DCR 1205.)  Emergency Legislation For temporary (90 day) repeal of section and transition provisions, see  24 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313910. Financial examination. [Repealed] Repealed.  (Oct. 21, 2000, D.C. Law 13-192,  11, 47 DCR 7320; Mar. 17, 2005, D.C. Law 15-262,  24(a), 52 DCR 1205.)  Emergency Legislation For temporary (90 day) repeal of section and transition provisions, see  24 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313911. Investments. [Repealed] Repealed.  (Oct. 21, 2000, D.C. Law 13-192,  12, 47 DCR 7320; April 11, 2003, D.C. Law 14-297,  401(d), 50 DCR 330; Mar. 17, 2005, D.C. Law 15-262,  24(a), 52 DCR 1205.)  Effect of Amendments D.C. Law 14-297, in subsec. (a), substituted Chapter 13A of this title for  31-2502.18. Emergency Legislation For temporary (90 day) repeal of section and transition provisions, see  24 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313912. Reinsurance. [Repealed] Repealed.  (Oct. 21, 2000, D.C. Law 13-192,  13, 47 DCR 7320; Mar. 17, 2005, D.C. Law 15-262,  24(a), 52 DCR 1205.)  Emergency Legislation For temporary (90 day) repeal of section and transition provisions, see  24 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313913. Rating organization. [Repealed] Repealed.  (Oct. 21, 2000, D.C. Law 13-192,  14, 47 DCR 7320; Mar. 17, 2005, D.C. Law 15-262,  24(a), 52 DCR 1205.)  Emergency Legislation For temporary (90 day) repeal of section and transition provisions, see  24 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313914. Insolvency. [Repealed] Repealed.  (Oct. 21, 2000, D.C. Law 13-192,  15, 47 DCR 7320; Mar. 17, 2005, D.C. Law 15-262,  24(a), 52 DCR 1205.)  Emergency Legislation For temporary (90 day) repeal of section and transition provisions, see  24 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313915. Tax on premiums collected. [Repealed] Repealed.  (Oct. 21, 2000, D.C. Law 13-192,  16, 47 DCR 7320; Mar. 17, 2005, D.C. Law 15-262,  24(a), 52 DCR 1205.)  Emergency Legislation For temporary (90 day) repeal of section and transition provisions, see  24 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313916. Captive Insurance Regulatory and Supervision Trust Account. [Repealed] Repealed.  (Oct. 21, 2000, D.C. Law 13-192,  17, 47 DCR 7320; Mar. 17, 2005, D.C. Law 15-262,  24(a), 52 DCR 1205.)  Emergency Legislation For temporary (90 day) additions, see  4(c) of the Captive Insurance Company Enhancement Emergency Amendment Act of 2004 (D.C. Act 15-481, July 19, 2004, 51 DCR 7811). For temporary (90 day) additions, see  4(c) of Captive Insurance Company Enhancement Congressional Review Emergency Amendment Act of 2004 (D.C. Act 15-549, October 26, 2004, 51 DCR 10336). For temporary (90 day) repeal of section and transition provisions, see  24 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238). Temporary Legislation For temporary (225 day) additions, see  4(c) of Captive Insurance Company Enhancement Temporary Amendment Act of 2004 (D.C. Law 15-215, December 7, 2004, law notification 52 DCR 459).
 313917. Regulations. [Repealed] Repealed.  (Oct. 21, 2000, D.C. Law 13-192,  18, 47 DCR 7320; Mar. 17, 2005, D.C. Law 15-262,  24(a), 52 DCR 1205.)  Emergency Legislation For temporary (90 day) repeal of section and transition provisions, see  24 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313918. Laws applicable. [Repealed] Repealed.  (Oct. 21, 2000, D.C. Law 13-192,  18, 47 DCR 7320; Mar. 17, 2005, D.C. Law 15-262,  24(a), 52 DCR 1205.)  Emergency Legislation For temporary (90 day) repeal of section and transition provisions, see  24 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313931.01. Definitions. For the purposes of this chapter, the term: (1) Affiliated company means a company in the same corporate system as its parent or a member organization by virtue of common ownership, control, operation, or management. (2) Agency captive insurer means a captive insurer that is owned by an insurance agency or brokerage and that only insures risks of policies that are placed by or through the agency or brokerage. (3) Alien captive insurer means any non-U.S. insurance company formed to write insurance business for its parents and affiliates and licensed pursuant to the laws of a foreign country that imposes statutory or regulatory standards in a form acceptable to the Commissioner on companies transacting the business of insurance in the jurisdiction. (4) Association means a legal entity consisting of 2 or more individuals, corporations, partnerships, associations, or other forms of business organization. (5) Association captive insurer means a captive insurer that only insures risks of the member organizations of an association and the affiliated companies of those members, including: (A) Groups formed pursuant to the Product Liability Risk Retention Act of 1981, approved September 25, 1981 (95 Stat. 949; 15 U.S.C.  3901 et seq.), and the employee benefit plans or trusts of such organizations or companies; and (B) Risk retention groups chartered pursuant to Chapter 41 of this title [ 31-4101 et seq.]. (6) Branch business means any insurance business transacted by a branch captive insurer in the District. (7) Branch captive insurer means any alien captive insurer licensed by the Commissioner to transact the business of insurance in the District through a business unit with a principal place of business in the District. (8) Branch operations means any business operations of a branch captive insurer in the District. (9) Captive insurer means any insurer that insures the risks of its parent or affiliated companies of its parent, any member organizations of an association and the affiliated companies of the member organizations, or any other policyholders or participants that have entered into a contractual relationship with the insurer for the purchase of insurance, including any pure captive insurer, association captive insurer, agency captive insurer, branch captive insurer, protected cell captive insurer, and rental captive insurer licensed pursuant to this chapter. (10) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking. (11) Common ownership and control means: (A) In the case of a stock insurer, the direct or indirect ownership of 51% or more of the voting stock of 2 or more corporations by the same member or members; and (B) In the case of a mutual insurer, the direct or indirect ownership of 51% or more of the surplus and the voting power of 2 or more corporations by the same member or members. (12) Department means the Department of Insurance, Securities, and Banking. (13) Excess workers compensation insurance means insurance in excess of the specified per-incident or aggregate limit, if any, established by: (A) The Commissioner, if the insurance is being transacted in the District; or (B) The chief regulatory officer for insurance in the jurisdiction in which the insurance is being transacted. (13A) Incorporated protected cell means a protected cell that is established as a corporation or other legal entity separate from the protected cell captive insurer of which it is a part. (14) Member organization means any individual, corporation, partnership, association, or other form of business organization that belongs to an association. (15) Mutual insurer means an incorporated insurer without any issued and outstanding stock whose capital and surplus are owned by its policyholders. (16) Net direct premiums means the direct premiums collected or contracted for on policies or contracts of insurance written by a captive insurer during the preceding calendar year, less the amounts paid to policyholders as return premiums, including dividends on unabsorbed premiums or premium deposits returned or credited to policyholders. (17) Parent means a corporation, partnership, association, or other form of business organization that directly or indirectly owns, controls, or holds power to vote more than 51% or more of the outstanding voting securities of a pure captive insurer. (18) Participant means any individual or organization, and any affiliates thereof, that are insured by a protected cell captive insurer if the losses of the person are limited through a participant contract to the assets of a protected cell. (19) Participant contract means a contract by which a protected cell captive insurer insures the risks of a participant and limits the losses of the participant to the assets of the protected cell. (20) Person means any individual, corporation, partnership, limited liability company, limited liability partnership, joint venture, an association, joint stock company, trust, unincorporated organization, similar entity, or any combination of the foregoing. (20A) Protected cell means a separate account established and maintained by a protected cell captive insurer and includes an incorporated protected cell. (20B) Protected cell captive insurer means a captive insurer that: (A) Is formed and licensed under the provisions of this chapter; (B) Insures the risks of separate participants through a contract; and (C) Segregates each participants liability through one or more protected cells. (21) Provisional certificate of authority means a certificate of authority issued to a captive insurer that authorizes the captive insurer to engage in limited activities authorized by the Commissioner. (22) Pure captive insurer means a captive insurer that only insures or reinsures risks of its parent and affiliated companies or controlled unaffiliated business. The parent of a pure captive insurer includes an employee benefit plan or trust. (23) Reciprocal insurer includes an interinsurance exchange or a risk retention group as defined in  31-4101(12). (24) Redomestication means the transfer to the District of the insurance domicile of an authorized foreign or alien insurance company. (25) Rental captive insurer means a captive insurer formed to enter into contractual agreements with policyholders or associations to offer some or all of the benefits of a program of captive insurance and that only insures risks of the policyholders or associations. (26) Repealed. (27) Stock insurer means an incorporated insurer with issued and outstanding stock whose capital and surplus is owned by its stockholders.  (Mar. 17, 2005, D.C. Law 15-262,  2, 52 DCR 1205; Mar. 10, 2015, D.C. Law 20-203,  2(a), 61 DCR 12572.)  Section References This section is referenced in  31-3931.22,  31-3932.02, and  31-4102. Effect of Amendments The 2015 amendment by D.C. Law 20-203 rewrote (5); substituted insurer for insurance company in (6); substituted branch captive insurer, protected cell for segregated account in (9); added (13A); substituted protected cell for segregated account throughout (18) and (19); added (20A) and (20B); and repealed (26). Cross References Dissolution of the District of Columbia Free Clinic Captive Insurance Company, see  1-307.94. Emergency Legislation For temporary (90 day) addition of section, see  2 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238). For temporary (90 day) additions, see  2 to 17 of District of Columbia Free Clinic Captive Insurance Company Establishment Emergency Act of 2007 (D.C. Act 17-113, October 3, 2007, 54 DCR 9977).
 313931.02. Authority to do business; prohibited activities. (a) A captive insurer may be organized and operated in any form of business organization authorized by the Commissioner and may, pursuant to this chapter, transact any insurance or annuity business. (b) Notwithstanding subsection (a) of this section, a captive insurer shall not: (1) Directly provide personal motor vehicle or homeowners insurance coverage, or any component thereof; (2) Accept or cede reinsurance, except as otherwise provided in  31-3931.08; (3) Insure any risks other than those of its parent and affiliated companies if it is a pure captive insurer; (4) Insure any risks other than those of the member organizations of its association and the affiliated companies of the member organizations if it is an association captive insurer; (5) Insure any risks other than those of the policies that are placed by or through the insurance agency or brokerage that owns the captive insurer if it is an agency captive insurer; (6) Insure any risks other than those of the policyholders or associations that have entered into agreements with the rental captive insurer for the insurance of those risks if it is a rental captive insurer, and shall use a form approved by the Commissioner for these agreements; (7) Provide excess workers compensation insurance to its parent and affiliated companies if the transaction is prohibited by the laws of the state in which the insurance is transacted; (8) Reinsure workers compensation insurance provided pursuant to a program of self-funded insurance of its parent and affiliated companies unless: (A) The parent or affiliated company which is providing the self-funded insurance is certified as a self-insured employer by the Commissioner, if the insurance is being transacted in the District; or (B) The program of self-funded insurance is otherwise qualified pursuant to, or in compliance with, the laws of the state in which the insurance is transacted; or (9) Write insurance or reinsurance for employee benefits that are subject to the provisions of the provisions of the Employee Retirement Income Security Act of 1974, approved September 2, 1974 (88 Stat. 832; 29 U.S.C.  1001 et seq.), for any entity except its parent and affiliated companies. (c) Notwithstanding subsections (a) and (b) of this section, the Commissioner may authorize a captive insurer that is otherwise qualified to conduct business in the District to engage in any activity in any form permitted by a captive insurer in any other jurisdiction. (d) A captive insurer shall file with the Commissioner a written request to engage in any activity under subsection (c) of this section. The Commissioner shall approve the request within 30 days after receiving the request, unless the Commissioner determines that the activity will be harmful to the captive insurers policyholders. (e) For the purposes of this chapter, a branch captive insurer shall be deemed to be a pure captive insurer with respect to operations in the District, unless otherwise permitted by the Commissioner.  (Mar. 17, 2005, D.C. Law 15-262,  3, 52 DCR 1205; Apr. 7, 2006, D.C. Law 16-91,  102(a), 52 DCR 10637; Mar. 2, 2007, D.C. Law 16-191,  54(a), 53 DCR 6794.)  Effect of Amendments D.C. Law 16-91, in par. (b)(2), substituted  31-3931.08 for  31-3931.07. D.C. Law 16-191, in subsec. (b)(2), validated a previously made technical correction. Emergency Legislation For temporary (90 day) addition of section, see  3 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November
 313931.03. Organizational requirements for transacting business; incorporation. (a) A captive insurer may be organized in the District in any form of authorized by the Commissioner. (a-1) The articles of incorporation of a captive insurer shall become effective when approved by the Commissioner. (b) The articles of incorporation or organizational documents of a captive insurer shall satisfy the following minimum requirements: (1) The capital stock of a captive insurer incorporated as a stock insurer shall be issued at not less than par value; (2) The captive insurer shall not have less than 2 incorporators or organizers; (3) The articles of association, articles of incorporation, articles of organization, charter, or bylaws of a captive insurer shall require a quorum of the board of directors that consists of more than 1/3 of the number of directors prescribed by the articles of association, articles of incorporation, articles of organization (or equivalent organizational document), charter, or bylaws; and (4) Any additional provisions that the Commissioner considers necessary. (c) The Commissioner may, at the request of the captive insurer, issue a certificate of good standing and charge a fee for each certificate in an amount to be established by the Commissioner. (d) An attorney-in-fact of a reciprocal captive insurer may be organized in the District in any form of business, including as an individual, authorized by the Commissioner. (e) A captive insurer organized in the District shall have the privileges of, and shall be subject to, the provisions of Chapters 1, 2, 3, 4, and 8 of Title 29. If the provisions of this chapter conflict with the general provisions of Title 29, the provisions of this chapter shall control. (f) The Commissioner may regulate the manager of a captive insurer.  (Mar. 17, 2005, D.C. Law 15-262,  4, 52 DCR 1205; Mar. 2, 2007, D.C. Law 16-191,  54(b), 53 DCR 6794; July 2, 2011, D.C. Law 18-378,  3(w), 58 DCR 1720; Mar. 14, 2012, D.C. Law 19-103,  2(a), 59 DCR 432.)  Section References This section is referenced in  31-3932.03. Effect of Amendments D.C. Law 16-191, in subsec. (e), validated a previously made technical correction. D.C. Law 18-378, in subsec. (e), substituted Chapters 1, 2, 3, 4, and 8 of Title 29 for general corporation law set forth in Chapter 1 of Title 29, subchapter I of Chapter 3 of Title 29, and Chapter 10 of Title 29, and the applicable provisions contained in this chapter, and substituted general provisions in Title 29 for general provisions of the acts codified in Title 29. D.C. Law 19-103 added subsec. (a-1). Emergency Legislation For temporary (90 day) addition of section, see  4 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313931.04. Protected cell captive insurers. (a) For the purposes of this chapter, the term: (1) Incorporated protected cell means a protected cell that is established as a corporation or other legal entity separate from the protected cell captive insurer of which it is a part. (2) Protected cell means a separate account established and maintained by a protected cell captive insurer and shall include an incorporated protected cell (3) Protected cell captive insurer means a captive insurer that: (A) Is formed and licensed under the provisions of this chapter; (B) Insures the risks of separate participants through a contract; and (C) Segregates each participants liability through one or more protected cells. (b)(1) A captive insurer may be organized as a protected cell captive insurer and shall be permitted to form one or more protected cells under this chapter to insure risks of one or more participants. The assets and liabilities of each protected cell shall be held separately from the assets and liabilities of all other protected cells. (2) Repealed. (3) Repealed. (4) A protected cell captive insurer shall, at the time of paying the annual fee, pay an additional annual fee for each protected cell in an amount to be established by the Commissioner. (5) Each incorporated protected cell of a protected cell captive insurer shall be treated as a captive insurer for purposes of this chapter. (6) Unless otherwise permitted by the articles of incorporation or other organizational document of a protected cell captive insurer, each incorporated protected cell of the protected cell captive insurer shall have the same directors, secretary, and registered office as the protected cell captive insurer. (7) A protected cell captive insurer may provide that a protected cell it creates shall be wound up and dissolved upon: (A) The bankruptcy, death, expulsion, insanity, resignation or retirement of any participant of the protected cell; (B) The happening of some other event that is not the expiration of a fixed period of time; or (C) The expiration of a fixed period of time. (8) In addition to the requirements in  31-3931.03(b), the articles of incorporation of a protected cell captive insurer: (A) Shall provide that a protected cell shall not own shares in the protected cell captive insurer of which it is a part; and (B) May provide that a protected cell may own shares in any other protected cell of the protected cell captive insurer. (9) The name of a protected cell captive insurer shall include the words Protected cell captive or the abbreviation PCC. (10) A name that includes the words Protected cell captive may, in setting out or using its name for any purpose under this chapter, do so in full or in the abbreviated form. (11) A protected cell captive insurer shall assign a distinctive name to each of its protected cells that is not an incorporated protected cell that: (A) Identifies the protected cell as being part of the protected cell captive insurer; (B) Distinguishes the protected cell from any other protected cell of the protected cell captive insurer; and (C) Includes the words Protected Cell or the abbreviation PC. (12) An incorporated protected cell must include the words Incorporated Cell or the abbreviation IC. (13) Any captive insurer or protected cell formed prior to March 14, 2007, shall not be required to change its name or the designation of any of its protected cells to comply with the provisions of paragraphs (9), (10), (11), or (12) of this subsection. (14) A protected cell of a protected cell captive insurer, unless created as an incorporated protected cell, has no legal identity separate from that of the protected cell captive insurer of which it is a part. (15) A protected cell of a protected cell captive insurer may enter into an agreement with its protected cell captive insurer or with another protected cell of the protected cell captive insurer that shall be enforceable as if each protected cell of the protected cell captive insurer were a separate legal entity, even if the protected cell is not organized as an incorporated protected cell. (16) The assets of a protected cell captive insurer shall be cell assets or general assets. The cell assets comprise the assets of the protected cell captive insurer that are held within or on behalf of its protected cells. The general assets of a protected cell captive insurer comprise the assets of the protected cell captive insurer that are not cell assets. (17) The liabilities of a protected cell captive insurer shall be cell liabilities or general liabilities. The cell liabilities comprise the obligations of the protected cell captive insurer attributed to its protected cells. The general liabilities of a protected cell captive insurer comprise the obligations of the protected cell captive insurer that are not cell liabilities. (18) Each protected cell shall be accounted for separately on the books and records of the protected cell captive insurer to reflect the financial condition and results of operations of each protected cell, including net income or loss, dividends or other distributions to participants, and such other factors as may be provided by the participant contract or required by the Commissioner. (19) Each protected cell captive insurer shall annually file with the Commissioner such financial reports as the Commissioner shall require, which reports shall include financial statements detailing the financial experience of each protected cell. (20) The captive manager of a protected cell captive insurer shall immediately notify the Commissioner if any protected cell of the protected cell captive insurer becomes insolvent or is otherwise unable to meet its claims or other obligations. (21) A protected cell captive insurer may create and issue shares in one or more classes or series for one or more protected cells. The proceeds of the issue shall be included in the assets of the protected cell that issued the shares. (22) The proceeds of the issue of shares, other than protected cell shares, shall be included in the protected cell captive insurers general assets. (23) A protected cell captive insurer may pay a dividend on protected cell shares of any class or series whether or not a dividend is declared on any other class or series of protected cell shares or any other shares. (24) Dividends may be paid on protected cell shares only from the cell assets of the protected cell that issued the shares and otherwise in accordance with the rights of such shares. (25) No sale, exchange, or other transfer of assets may be made by a protected cell captive insurer between or among any of its protected cells without the written consent of the participants of the protected cell and the Commissioner. (26) No sale, exchange, transfer of assets, dividend, or distribution may be made from a protected cell to any person without the Commissioners prior written approval. An approval shall not be given if the sale, exchange, transfer, dividend, or distribution will result in the insolvency or impairment with respect to a protected cell. (27) The owners of a protected cell captive insurer, shall not, by virtue of being owners, be the owners or participants of any protected cell of the protected cell captive insurer. (28) The participants of a protected cell shall not, by virtue of being such participants, be the owners of the protected cell captive insurer or participants or owners of any other protected cell of the protected cell captive insurer. (29) Any individual or legal entity may be a participant in a protected cell formed under this chapter. (30) A participant in a protected cell need not be a shareholder of the protected cell or of the protected cell captive insurer or any affiliate thereof. (31) No participant contract shall take effect without the Commissioners prior written approval. The addition of each new protected cell or the withdrawal or other transfer of any participant from any existing protected cell shall constitute a change in the strategic business plan of that protected cell requiring the Commissioners prior written approval. (32) A protected cell captive insurer shall, in addition to keeping a register of its owners or participants, keep a register of the participants of each of its protected cells. (33) If a protected cell captive insurer (A) enters into a transaction in respect of a particular protected cell of the protected cell captive insurer, or (B) incurs a liability arising from an activity or asset of a particular protected cell, a claim by any person in connection with the transaction or liability extends only to the cell assets of the protected cell. (34) If a protected cell captive insurer (A) enters into a transaction in its own right and not in respect of any of its protected cells, (B) incurs a liability arising from an activity its own right and not in respect of any of its protected cells, or (C) incurs a liability arising from an asset held in its own right and not in respect of any of its protected cells, a claim by any person in connection with the transaction or liability shall extend only to the general assets of the protected cell captive insurer. (35) Except as provided by paragraphs (37) and (39) of this subsection, a protected cell captive insurer shall not satisfy any liability: (A) Attributable to a particular protected cell of the protected cell captive insurer from the general assets of the protected cell captive insurer; or (B) Whether attributable to a particular protected cell or not, from the cell assets of another protected cell of the protected cell captive insurer. (36) If (A) a protected cell captive insurer is permitted to do so under its articles of incorporation or similar organizational documents, and (B) the requirement set forth in paragraph (68) of this subsection is satisfied, the protected cell captive insurer may satisfy any liability attributable to a particular protected cell from the protected cell captive insurers general assets. (37) Prior to a protected cell captive insurer satisfying any liability attributable to a particular protected cell from the protected cell captive insurers general assets, the directors who authorize the satisfaction of the liability shall state as part of the authorization that, having made the inquiry into the affairs and prospects of the protected cell captive insurer, they have formed the opinion that: (A) Immediately following the date on which the liability is proposed to be met by the general assets of the protected cell captive insurer, the protected cell captive insurer will be able to discharge its liabilities as they fall due; and (B) Having regard to the prospects of the protected cell captive insurer, the intentions of the directors with respect to the management of the protected cell captive insurers business, and the amount and character of the financial resources that will, in their view, be available to the protected cell captive insurer, the protected cell captive insurer will be able to continue to carry on business and will be able to discharge its liabilities as they fall due until the expiration of the period of one year immediately following the date on which the liability is proposed to be satisfied by the general assets of the protected cell captive insurer or until the protected cell captive insurer is dissolved, whichever first occurs. (38) A protected cell captive insurer may satisfy any liability, whether attributable to a particular protected cell or not, from the cell assets of another protected cell if: (A) It is permitted to do so by the articles of incorporation or other organizational document of that other protected cell, in the case of an incorporated protected cell, or by the participant contract, in the case of all other protected cells; and (B) Prior to the protected cell captive insurer satisfying any liability from the cell assets of that other protected cell, the directors who authorize the satisfaction of the liability shall obtain written approval from the Commissioner, upon first having made full inquiry into the affairs and prospects of that protected cell, and stating, as part of the authorization, that they have formed the opinion that: (i) Immediately following the date on which the liability is proposed to be met by the cell assets of the protected cell, the protected cell will be able to discharge its liabilities as they fall due; and (ii) Having regard to the prospects of the protected cell, the intentions of the directors with respect to the management of the protected cells business, and the amount and character of the financial resources that will in their view be available to the protected cell, the protected cell will be able to continue to carry on business and will be able to discharge its liabilities as they become due or until the protected cell is dissolved, whichever first occurs. (39) A director who makes a statement under paragraph (37) or paragraph (38) of this subsection without having reasonable grounds for the opinion expressed in the statement violates this chapter and may be removed by order of the Commissioner. (40) If a protected cell captive insurer is liable for any penalty, under this chapter or otherwise, due to an act or failure to act of a protected cell of the protected cell captive insurer or of an officer or director of a protected cell of the protected cell captive insurer, the penalty shall: (A) Only be met by the protected cell captive insurer from the cell assets of the protected cell; and (B) Not be enforceable in any way against any other assets of the protected cell captive insurer or assets of any other protected cell. (41) The directors of a protected cell captive insurer shall establish and maintain, or cause to be established and maintained, procedures: (A) To segregate cell assets and liabilities separate and separately identifiable from general assets and liabilities; (B) To segregate cell assets and liabilities of each protected cell separate and separately identifiable from cell assets and liabilities of any other protected cell; and (C) Where relevant, to apportion or transfer assets and liabilities between protected cells or between protected cells and general assets and liabilities of the protected cell captive insurer. (42) If a protected cell captive insurer enters into an agreement with respect to a protected cell of the protected cell captive insurer, a director shall ensure that: (A) The other party to the transaction knows, or ought reasonably to know, that the protected cell captive insurer is acting with respect to a particular protected cell; and (B) The minutes of any meeting of directors held with regard to the agreement clearly record the fact that the company was entering into the agreement with respect to the protected cell and that the obligation imposed by subparagraph (A) of this paragraph was, or will be, complied with. (43) The duties of a director of a protected cell captive insurer under this chapter shall be in addition to, and not in lieu of, those under other applicable law. (44) Any act, matter, deed, agreement, contract, instrument under seal, or other instrument or arrangement which is to be binding on or to inure to the benefit of a protected cell that is not an incorporated protected cell shall be executed by the protected cell captive insurer for and on behalf of the protected cell, shall be identified, and, if in writing, shall indicate that the execution is in the name of, by, or for the account of the protected cell. (45) If a protected cell captive insurer fails to comply with paragraph (41) of this subsection: (A) The directors of the protected cell captive insurer shall, notwithstanding any provisions to the contrary in the protected cells organizational documents or in any contract with the protected cell captive insurer or otherwise, shall be personally liable for the liabilities of the protected cell captive insurer and the protected cell under the chapter, matter, deed, agreement, contract, instrument or arrangement that was executed; and (B)(i) Unless they were fraudulent, reckless, negligent, or acted in bad faith, the directors of the protected cell captive insurer shall have a right of indemnity, in the case of a matter on behalf of or attributable to a protected cell, against the assets of the protected cell. (ii) In the case of a matter not on behalf of or attributable to a protected cell, the directors shall have a right of indemnity against the general assets of the protected cell captive insurer. (46) Notwithstanding the provisions of paragraph (45)(A) of this subsection, a court may relieve a director of all or part of the personal liability under paragraph (45) of this subsection if he or she satisfies the court that he or she should be relieved because: (A) The director was not aware of the circumstances giving rise to the liability and, in being not so aware, was not fraudulent, reckless, or negligent and did not act in bad faith; or (B) The director expressly objected, and exercised such rights as a director, whether by way of voting power or otherwise, so as to try to prevent the circumstances giving rise to the liability. (47) If, pursuant to the provisions of paragraph (46) of this subsection, the court relieves a director of all or part of his or her personal liability under paragraph (45)(A) of this subsection, the court may order that the liability in question shall instead be met from such of the protected cell or general assets of the account of the protected cell captive insurer as may be specified in the order. (48) Any provision in the organizational document of a captive insurer or any other contractual provision under which the protected cell captive insurer may be liable, which provision purports to indemnify directors in respect of conduct which would otherwise prohibit them from indemnification by virtue of paragraph (46) of this subsection, shall be void. (49) A captive insurer may amend its organizational document to become a protected cell captive insurer. (50) The amendment of the organizational document of a captive insurer to become a protected cell captive insurer shall require approval by: (A) Holders of 2/3 of the outstanding shares or ownership interests of the captive insurer, unless a greater amount is required by the organizational document of the captive insurer; and (B) All the creditors of the captive insurer; provided, that if the consent of all the creditors of the captive insurer cannot be obtained, the amendment may be approved by the Commissioner if he or she is satisfied that no creditor will be materially prejudiced by the amendment. (51) A protected cell captive insurer may amend its other organizational document to cease to be a protected cell captive insurer. (52) The amendment of the other organizational document of a captive insurer to cease to be a protected cell captive insurer shall require approval by: (A) The Commissioner; (B) Holders of 2/3 of the outstanding shares or ownership interests of the protected cell captive insurer, unless a greater amount is required by the other organizational document of the protected cell captive insurer; (C) Two-thirds of the participants of each protected cell; and (D) All the creditors of the protected cell captive insurer and its protected cells; provided, that if the consent of all the creditors of the captive insurer and its protected cells cannot be obtained, the amendment may be approved by the Commissioner upon being satisfied that no creditor will be materially prejudiced by the amendment. (53) If a captive insurer or protected cell captive insurer seeks to change its status in accordance with paragraph (49) or (51) of this subsection, the Commissioner shall issue a certificate of authority that is appropriate to the amended status of the company if there is delivered to the Commissioner: (A) A copy of the amendment to its name; and (B) Evidence satisfactory to the Commissioner that the requirements of paragraph (50) or (52) of this subsection have been met. (54) If a company changes its status in accordance with this section, the change of status shall take effect when the Commissioner issues a new certificate of authority. (55) A protected cell of a protected cell captive insurer may be transferred to another protected cell captive insurer. (56) The protected cell captive insurers between which a protected cell is being transferred shall enter into a written agreement that sets forth the terms of the transfer. (57) A transfer of a protected cell shall be approved when the directors of each protected cell captive insurer who authorized the transfer have approved the transfer and: (A) When the transfer agreement is approved by the Commissioner as an arrangement in accordance with this chapter; (B) When the transfer agreement is consented to by at least 2/3 of the participants of the protected cell being transferred and all the creditors, if any, of that protected cell; or (C) If the agreement of all the creditors of the cell cannot be obtained, when the transfer is approved by the Commissioner upon being satisfied that no creditor of the cell will be materially prejudiced by the transfer. (58) Within 30 days of a transfer agreement being approved by the Commissioner, the protected cell captive insurer to which the protected cell is being transferred shall deliver to the Commissioner: (A) A copy of the executed transfer agreement; and (B) A declaration made in accordance with paragraph (59) of this subsection, signed by a majority of the directors of the protected cell captive insurer transferring the protected cell who authorized the transfer. (59) The declaration required in paragraph (58)(B) of this subsection shall state that each director has reason to believe that: (A) The protected cell being transferred is able to discharge its liabilities as they become due; (B) There are no creditors of the protected cell captive insurer from which the cell is being transferred whose interests will be unfairly prejudiced by the transfer; and (C) The transfer agreement has been approved in accordance with this chapter. (60) If a protected cell captive insurer fails to deliver the documents mentioned in paragraph (58) of this subsection within the 30-day period, the Commissioner may void the transfer. (61) The Commissioner may void the transfer and order the removal of any director who makes a declaration under paragraph (59) of this subsection without having the grounds to do so. (62) Upon delivery of the documents referred to in paragraph (58) to the Commissioner, the Commissioner shall, if those documents comply with this chapter: (A) Record the transfer of the protected cell; (B) Issue to the protected cell a new certificate of authority; and (C) Record that the protected cell has ceased to be a protected cell of the protected cell captive insurer that transferred the protected cell. (63) Upon the issuance of the new certificate of authority: (A) The protected cell shall cease to be a protected cell of the protected cell captive insurer that transferred it; (B) The protected cell becomes a protected cell of the protected cell captive insurer to which it has been transferred; (C) If a protected cell was an incorporated protected cell or an unincorporated protected cell; (i) All property and rights to which the protected cell was entitled immediately before the issue of the new certificate of authority shall remain the property and rights of the protected cell; (ii) The liabilities, and all contracts, debts, and other obligations to which the protected cell was subject immediately before the issue of the new certificate of authority, shall remain the liabilities, contracts, debts, and other obligations of the protected cell; and (iii) All actions and other legal proceedings which, immediately before the issue of the new certificate of authority were pending by or against such protected cell may be continued by or against the protected cell. (64) The operation of paragraph (63) of this subsection shall not be regarded as: (A) A breach of contract or otherwise as a civil wrong; (B) A breach of any contractual provision prohibiting, restricting, or regulating the assignment or transfer of rights or liabilities; or (C) Giving rise to any remedy by a party to a contract or other instrument as an event of default under any contract or other instrument or as causing or permitting the termination of any contract or other instrument or of any obligation or relationship. (65) A protected cell shall not be transferred under this chapter if the transfer would be inconsistent with the articles of incorporation or similar organizational document, if applicable, of the protected cell, the protected cell captive insurer transferring the protected cell, or the protected cell captive insurer to which it is to be transferred. (66) Any insurer, including a captive insurer, that is not a protected cell captive insurer, may become a protected cell of a protected cell captive insurer. (67) A protected cell of a protected cell captive insurer may apply to the Commissioner to be incorporated as an insurer, including a captive insurer, independent from the protected cell captive insurer. (68) An application made under paragraph (67) of this subsection shall be approved by 2/3 of the participants of the protected cell or, if the protected cell has more than one class of participants, 2/3 approval of each class of participants, unless the organizational document of the protected cell provides for a greater percentage. (69) If a protected cell has made an application under paragraph (68) of this subsection, a participant of the protected cell who objects to the protected cell being incorporated as an insurer, including a captive, independent of its protective cell captive may petition the Commissioner for an order denying the application on the grounds that the incorporation or the terms of the incorporation unfairly prejudice his or her interests. (70) An application shall not be made under paragraph (69) of this subsection after the expiration of the 30-day period following the application being made under paragraph (67) of this subsection. (71) If a protected cell is licensed as a legal entity pursuant to this section, and if the protected cell was either an incorporated protected cell or an unincorporated protected cell of a protected cell captive insurer: (A) All property and rights to which the protected cell was entitled immediately before its licensure as a new entity shall remain the property and rights of the new entity; (B) The protected cell shall remain subject to all criminal and civil liabilities and all contracts, debts, and other obligations to which the protected cell was subject immediately before its licensure as a new entity; (C) All contracts, debts, and other obligations of the protected cell shall remain the contracts, debts, other obligations of the new entity; and (D) All actions and other legal proceedings which, immediately before the licensure of the protected cell as a new entity, were pending by or against the protected cell may be continued by or against the new entity. (72) The operation of paragraph (71)(B) and (D) of this subsection shall not be regarded as: (A) A breach of contract; (B) A breach of any contractual provision prohibiting, restricting, or regulating the assignment or transfer of rights or liabilities; or (C) Giving rise to any remedy by a party to a contract or other instrument as an event of default under the contract or other instrument or as causing or permitting the termination of any contract or other instrument or of any obligation or relationship.  (Mar. 17, 2005, D.C. Law 15-262,  5, 52 DCR 1205; Mar. 14, 2007, D.C. Law 16-286,  2, 54 DCR 957; Mar. 25, 2009, D.C. Law 17-353,  166, 56 DCR 1117; Mar. 10, 2015, D.C. Law 20-203,  2(b), 61 DCR 12572.)  Section References This section is referenced in  31-3931.05 and  31-3932.03. Effect of Amendments D.C. Law 16-286 rewrote this section, which formerly read: (a) A captive insurer may form one or more segregated accounts to insure risks of one or more participants. (b) A captive insurer that maintains a segregated account shall, at the time of paying the annual fee, pay an additional annual fee in an amount to be established by the Commissioner for each segregated account. (c) A captive insurer may create one or more segregated accounts to segregate its assets and liabilities from the assets and liabilities of its segregated accounts. The assets and liabilities of each segregated account shall be held separately from the assets and liabilities of all other segregated accounts. (d) A captive insurer shall be a single legal entity and each segregated account of or within a captive insurer may be established as a separate legal entity, which shall constitute a legal entity separate from the captive insurer. Each segregated account shall be separately identified or designated as being a part of the captive insurer. (e) A captive insurer may create and issue shares in one or more classes or series for one or more segregated accounts. The proceeds of the issue shall be included in the assets of the segregated account that issued the shares. (f) The proceeds of the issue of shares, other than segregated account shares, shall be included in the captive insurers general assets. (g) A captive insurer may pay a dividend on segregated account shares of any class or series whether or not a dividend is declared on any other class or series of segregated account shares, or any other shares. (h) Segregated account dividends may be paid on the segregated account shares from the segregated account assets. The dividends shall only be paid to the shareholders of the segregated account from which the segregated account shares were issued and otherwise in accordance with the rights of the shares. (i) Any act, matter, deed, agreement, contract, instrument under seal, or other instrument or arrangement which is to be binding on or to inure to the benefit of a segregated account or accounts shall be executed by the captive insurer for and on behalf of such segregated account or accounts, shall be identified, and, if in writing, shall indicate that the execution is in the name of, or by or for the account of, the segregated account or accounts. (j) If a captive insurer is in breach of subsection (i) of this section: (1) The directors of the captive insurer shall, notwithstanding any provisions to the contrary in the captive insurers organizational documents or in any contract with the company or otherwise, incur personal liability for the liabilities of the captive insurer and the segregated account under this chapter, matter, deed, agreement, contract, instrument, or arrangement that was executed; and (2) Unless they were fraudulent, reckless, negligent, or acted in bad faith, the directors of the captive insurer shall have a right of indemnity: (A) In the case of a matter on behalf of or attributable to a segregated account or accounts; against the assets of that account or accounts. (B) In the case of a matter not on behalf of or attributable to any segregated account or accounts, against the general assets of the captive insurer. (k) Notwithstanding the provisions of subsection (j)(1) of this section, a court may relieve a director of all or part of this personal liability thereunder if he or she satisfies the court that he or she should be relieved because: (1) The director was not aware of the circumstances giving rise to the liability and, in being not so aware, the director was not fraudulent, reckless, or negligent, and did not act in bad faith; or (2) The director expressly objected, and exercised his or her rights as a director, whether by way of voting power or otherwise, so as to try to prevent the circumstances giving rise to the liability. (l) If, pursuant to the provisions of subsection (k) of this section, the court relieves a director of all or part of his or her personal liability under subsection (j)(1) of this section, the court may order that the liability in question shall instead be met from such of the segregated account or general assets of the account of the captive insurer as may be specified in the order. (m) Any provision in the organizational documents of a captive insurer, or any other contractual provision under which the captive insurer may be liable, which purports to indemnify directors in respect of conduct which would otherwise disentitle them to an indemnity by virtue of subsection (j)(2) of this section, shall be void. (n) The assets of a captive insurer shall be either segregated account assets or general assets. The segregated account assets shall comprise the assets of the captive insurer held within or on behalf of the segregated accounts of the captive insurer. The general assets of a captive insurer shall comprise the assets of the captive insurer which are not segregated account assets. (o) The assets of a segregated account are comprised of assets representing the capital stock and reserves attributable to the segregated account or all other assets attributable to or held within the segregated account. For the purposes of this subsection, reserves includes retained earnings, capital surplus, and paid-in capital. (p) The directors of a captive insurer shall establish and maintain, or cause to be established and maintained, procedures: (1) To segregate, and keep segregated, account assets separate and separately identifiable from general assets; (2) To segregate, and keep segregated, account assets of each segregated account separate and separately identifiable from segregated account assets of any other segregated account; and (3) If relevant, to apportion or transfer assets and liabilities between segregated accounts, or between segregated accounts and general assets, of the segregated account captive insurer. (q) Segregated account assets shall: (1) Only be available and used to meet liabilities of the creditors with respect to that segregated account, and those creditors shall thereby be entitled to have recourse to the segregated account assets attributable to that segregated account; and (2) Not be available or used to meet liabilities to, and shall be absolutely protected from, the creditors of the captive insurer who are not creditors with respect to a particular segregated account, and those creditors shall not be entitled to have recourse to the protected segregated account assets. (r) If a liability of a captive insurer to a person arises from a matter, or is otherwise imposed, with respect to a particular segregated account, the liability shall extend only to, and that person shall, with respect to that liability, be entitled to have recourse only to: (1) First, the segregated account assets attributable to the segregated account; and (2) Second, the captive insurers general assets, to the extent that the segregated account assets attributable to the segregated account, are insufficient to satisfy the liability, and to the extent that the captive insurers general assets exceed any minimum capital amounts lawfully required by this chapter. (s) If a liability of a captive insurer to a person arises otherwise than from a matter in respect of a particular segregated account or accounts, or is imposed otherwise than in respect of a particular segregated account or accounts, the liability shall extend only to, and that person shall, with respect to that liability, be entitled to have recourse only to the captive insurers general assets. (t) Liabilities of a captive insurer not attributable to any of its segregated accounts shall be discharged from the account captive insurers general assets. Income, receipts, and other property or rights of or acquired by a captive insurer not otherwise attributable to any segregated account shall be attributed to the captive insurers general assets to the extent that the captive insurers general assets exceed any minimum capital amounts lawfully required by this chapter. (u)(1) Each segregated account shall be accounted for separately on the books and records of the captive insurer to reflect the financial condition and results of operations of the segregated account, including net income or loss, dividends, or other distributions to participants, and such other factors as may be provided by the participant contract or required by the Commissioner. (2) No sale, exchange, or other transfer of assets shall be made by the captive insurer between or among any of its segregated accounts without the written consent of the segregated accounts and the Commissioner. (3) No sale, exchange, transfer of assets, dividend, or distribution shall be made from a segregated account to any person without the Commissioners prior written approval and the approval shall not be given if the sale, exchange, transfer, dividend, or distribution would result in the insolvency or impairment with respect to the segregated account. (4) Each segregated account captive insurer shall annually file with the Commissioner such financial reports as the Commissioner shall require, which shall include financial statements detailing the financial experience of each segregated account. (5) Each captive insurer shall notify the Commissioner within 10 business days of any segregated account that is insolvent or otherwise unable to meet its claims or expense obligations. (6) No participant contract shall take effect without the Commissioners prior written approval. The addition of each new segregated account or the withdrawal of any participant from any existing segregated account shall constitute a change in the strategic business plan of that segregated account requiring the Commissioners prior written approval. (v) Any person or legal entity may be a participant in a segregated account formed or licensed under this chapter. (w) A participant in a segregated account need not be a shareholder insured within the segregated account or by the captive insurer or any affiliate thereof. D.C. Law 17-353 validated a previously made technical correction in subsec. (b)(41) The 2015 amendment by D.C. Law 20-203 substituted chapter for section in (a); repealed (b)(2) and (b)(3); added In addition to the requirements in  31-3931.03(b) in (b)(8); and substituted paragraphs (9), (10), (11), or (12) for paragraphs (6), (8), or (9) in (b)(13). Emergency Legislation For temporary (90 day) addition of section, see  5 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313931.05. Liquidation and rehabilitation of protected cells. (a) If a protected cell captive insurer with one or more protected cells is being liquidated under this chapter, the protected cell captive insurer shall not be deemed to have no assets and no liabilities if the protected cell captive insurer continues to have a protected cell. (b) In the course of the liquidating the protected cell captive insurer, each protected cell shall be: (1) Transferred to another protected cell captive insurer; (2) Liquidated; (3) Continued as a separate legal entity or protected cell under the law of another jurisdiction; (4) Incorporated independently of the protected cell captive insurer; or (5) Merged with another insurer. (c) If a protected cell captive insurer is being liquidated, the liquidation shall not apply with respect to any protected cell of the protected cell captive insurer. (d) If a protected cell of a protected cell captive insurer is being liquidated, the liquidation shall not apply with respect to the protected cell captive insurer or any other protected cell of the protected cell captive insurer. (e) The court, on the application of a protected cell captive insurer, may determine, in accordance with this chapter, if a liability of the protected cell captive insurer shall be satisfied by its general assets, by the cell assets of a specific protected cell of the company, or by a combination of those assets. (f) Notwithstanding any statutory provision or rule of law to the contrary, in the winding-up of a captive insurer, the liquidator shall: (1) Deal with the captive insurers assets only in accordance with the procedures set out in subsection (h)(6) of this section; and (2) In the discharge of the claims of creditors of the captive insurer, shall apply the captive insurers assets to those entitled to have recourse thereto under the provisions of  31-3931.04. (g)(1) A petition for a liquidation or rehabilitation order with respect to a protected cell of a protected cell captive insurer may be made by: (A) The protected cell captive insurer; (B) The majority of the directors of the protected cell captive insurer; (C) Any creditor of that protected cell; or (D) The Commissioner. (2) Notice of a petition to the court for a liquidation or rehabilitation order with respect to a protected cell of a captive insurer shall be served upon: (A) The captive insurer; (B) The Commissioner; and (C) Such other persons as the court may direct. (h)(1) Subject to the provisions of this section, the court may make a liquidation or rehabilitation order with respect to a protected cell if, in relation to a captive insurer, the court is satisfied that: (A) The cell assets attributable to a particular protected cell of the captive insurer, and in those cases where creditors of the captive insurer with respect to the protected cell are entitled to have recourse to the captive insurers general assets, are, or are likely to be, insufficient to discharge the claims of creditors with respect to that protected cell; and (B) An order would achieve the purposes set forth in paragraph (3) of this subsection. (2) A liquidation or rehabilitation order may be made with respect to one or more protected cells. (3) A liquidation or rehabilitation order shall direct that the business and cell assets of, or attributable to, a protected cell shall be managed by a liquidator or rehabilitator specified in the order for the purpose of: (A) The orderly closing or rehabilitation of the business of, or attributable to, the protected cell; and (B) The distribution of the cell assets, or assets attributable to the protected cell, to those having recourse thereto. (i) The liquidator or rehabilitator of a protected cell: (1) Shall have all the functions and powers of the directors responsible for the business and cell assets of, or attributable to, the protected cell; (2) May at any time apply to the court for directions as to the extent or exercise of any function or power, for the liquidation or rehabilitation order to be discharged or varied, or for an order as to any matter occurring during the course of the liquidation or rehabilitation. (3) In exercising his functions and powers, shall act as the agent of the captive insurer and shall not incur personal liability except to the extent that he or she acts fraudulently, recklessly, negligently, or in bad faith. (j) Upon the filing of a petition for, and during the period of operation of, a liquidation or rehabilitation order: (1) No proceedings shall be instituted or continued by or against the captive insurer or protected cell in respect of which the liquidation or rehabilitation order was made; and (2) No action shall be taken to enforce any security or in the execution of legal process with respect to the business or cell assets of or attributable to the protected cell with respect to which the liquidation or rehabilitation order was made, except by leave of the court. (k) During the period of operation of a liquidation or rehabilitation order: (1) The functions and powers of the directors shall cease with respect to the business of, or attributable to, the protected cell or cell assets for which the order was made; and (2)(A) The liquidator or rehabilitator of the protected cell shall be entitled to be present at all meetings of the captive insurer or protected cell and to vote at such meetings as if he or she were a director of the captive insurer. (B) Unless there are no creditors that are entitled to have recourse to the captive insurers general assets, the liquidators or rehabilitators voting authority shall include matters concerning the captive insurers general assets. (l)(1) The court shall not discharge a liquidation or rehabilitation order issued pursuant to this section unless it appears to the court that the purpose for which the order was made has been achieved, substantially achieved, or is incapable of being achieved. (2) The court, on hearing a petition for the discharge or variation of a liquidation or rehabilitation order, may make any interim order or adjourn the proceeding. (3) Upon the court issuing an order discharging a liquidation or rehabilitation order for a protected cell on the ground that the purpose for which the order was made had been achieved or substantially achieved, the court may direct that any payment made by the liquidator or rehabilitator to any creditor of the captive insurer, with respect to that protected cell, shall be deemed full satisfaction of the liabilities of the captive insurer to the creditor with respect to the protected cell, and the creditors claims against the captive insurer with respect to that protected cell shall be of its administrative, regulatory, and marketing activities as prescribed by law.  (Mar. 17, 2005, D.C. Law 15-262,  6, 52 DCR 1205; Mar. 14, 2007, D.C. Law 16-286,  2, 54 DCR 957.)  Section References This section is referenced in  31-3931.09 and  31-3932.03. Effect of Amendments D.C. Law 16-286 rewrote this section, which formerly read: (a) Notwithstanding any statutory provision or rule of law to the contrary, in the winding-up of a captive insurer, the liquidator: (1) Shall deal with the companys assets only in accordance with the procedures set forth in subsection (c)(6) of this section; and (2) In the discharge of the claims of creditors of the captive insurer, shall apply the captive insurers assets to those entitled to have recourse thereto under the provisions of  31-3931.04. (b)(1) A petition for a liquidation or rehabilitation order with respect to a segregated account of a captive insurer may be made by: (A) The segregated account captive insurer; (B) The majority of the directors of the segregated account captive insurer; (C) Any creditor of the segregated account; or (D) The Commissioner. (2) Notice of a petition to the court for a liquidation or rehabilitation order with respect to a segregated account of a captive insurer shall be served upon: (A) The captive insurer; (B) The Commissioner; and (C) Such other persons as the court may direct. (c)(1) Subject to the provisions of this section, the court may make a liquidation or rehabilitation order with respect to a segregated account if, in relation to a captive insurer, the court is satisfied that the: (A) Segregated account assets attributable to a particular segregated account of the captive insurer, and in those cases where creditors of the captive insurer with respect to that segregated account are entitled to have recourse to the captive insurers general assets, are or are likely to be insufficient to discharge the claims of creditors with respect to that segregated account; and (B) Making of an order under this section would achieve the purposes set forth in paragraph (3) of this subsection. (2) A liquidation or rehabilitation order may be made with respect to one or more segregated accounts. (3) A liquidation or rehabilitation order shall direct that the business and segregated account assets of, or attributable to, a segregated account shall be managed by a liquidator or rehabilitator specified in the order for the purpose of: (A) The orderly closing or rehabilitation of the business of, or attributable to, the segregated account; and (B) The distribution of the segregated account assets, or assets attributable to the segregated account, to those having recourse thereto. (d) The liquidator or rehabilitator of a segregated account: (1) Shall have all the functions and powers of the directors responsible for the business and segregated account assets of, or attributable to, the segregated account; (2) May at any time apply to the court for directions as to the extent or exercise of any function or power, for the liquidation or rehabilitation order to be discharged or varied, or for an order as to any matter occurring during the course of the liquidation or rehabilitation; and (3) In exercising his functions and powers, shall be deemed to act as the agent of the captive insurer and shall not incur personal liability except to the extent that he acts fraudulently, recklessly, negligently, or in bad faith. (e) Upon the filing of a petition for, and during the period of operation of, a liquidation or rehabilitation order: (1) No proceedings shall be instituted or continued by or against the captive insurer or segregated account in respect of which the liquidation or rehabilitation order was made; and (2) No steps shall be taken to enforce any security or in the execution of legal process in respect of the business or segregated account assets of or attributable to the segregated account in respect of which the liquidation or rehabilitation order was made, except by leave of the court. (f)(1) During the period of operation of a liquidation or rehabilitation order: (A) The functions and powers of the directors shall cease with respect to the business of, or attributable to, the segregated account or segregated account assets for which the order was made; and (B) The liquidator or rehabilitator of the segregated account shall be entitled to be present at all meetings of the captive insurer or segregated account and to vote at such meetings as if he or she were a director of the captive insurer. (2) Unless there are no creditors that are entitled to have recourse to the captive insurers general assets, the liquidators or rehabilitators voting authority includes matters concerning the captive insurers general assets. (g)(1) The Court shall not discharge a liquidation or rehabilitation order issued pursuant to this section unless it appears to the Court that the purpose for which the order was made has been achieved, substantially achieved, or is incapable of being achieved. (2) The Court, on hearing a petition for the discharge or variation of a liquidation or rehabilitation order, may make any interim order or adjourn the proceeding. (3) Upon the Court issuing an order discharging a liquidation or rehabilitation order for a segregated account on the ground that the purpose for which the order was made had been achieved or substantially achieved, the Court may direct that any payment made by the liquidator or rehabilitator to any creditor of the captive insurer, with respect to that segregated account, shall be full satisfaction of the liabilities of the captive insurer to that creditor with respect to that segregated account, and the creditors claims against the captive insurer with respect to that segregated account shall be thereby extinguished. Emergency Legislation For temporary (90 day) addition of section, see  6 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313931.06. Capital and surplus. (a)(1) In addition to any other capital required to be maintained pursuant to subsection (c) of this section, a captive insurer (except a protected cell captive insurer) authorized to do business in the District shall at all times maintain a minimum unimpaired capital of $ 100,000. (2) The Commissioner shall, in the Commissioner's discretion, establish the required minimum capital for a protected cell captive insurer, and for each protected cell, based on the type, volume, and nature of insurance that is transacted by the insurer and by the cell; provided, that the required minimum capital for a protected cell captive insurer may be zero so long as each of its protected cells maintains the minimum capital required for that cell. (b) Except as otherwise provided by the Commissioner pursuant to subsection (c) of this section, the capital required to be maintained pursuant to this section shall be in the form of cash or an irrevocable letter of credit. (c) The Commissioner may require a captive insurer, including each protected cell, to maintain additional unimpaired capital based on the type, volume, and nature of the insurance business that is transacted by the captive insurer and may determine the amount of capital, if any, that may be in the form of an irrevocable letter of credit. (d) A letter of credit used by a captive insurer or protected cell as evidence of capital required pursuant to this section shall: (1) Be issued by a bank chartered in the District or by a branch of a bank located in the District if such bank is a member of the United States Federal Reserve System, or its deposits are insured by the Federal Deposit Insurance Corporation; (2) Be issued on a form approved by the Commissioner; and (3) Include a provision pursuant to which a letter of credit is automatically renewed each year. (e) The Commissioner may approve an ongoing plan for the payment of dividends or other distributions by a captive insurer or protected cell if, at the time of each payment or distribution, the amount of capital and surplus retained by the captive insurer or protected cell is in excess of the amounts required by the Commissioner. The Commissioner shall adopt by rule: (1) A specific amount that a captive insurer or protected cell must have in excess capital and surplus for the approval of an ongoing plan for the payment of dividends or other distributions; or (2) A formula pursuant to which the specific amount of required excess capital and surplus may be calculated. (f) A captive insurer shall not be issued a certificate of authority, and shall not hold a certificate of authority, unless the captive insurer has and maintains, in addition to any other surplus required to be maintained pursuant to subsection (h) of this section, an unencumbered surplus of: (1) For a pure captive insurer, not less than $150,000; (2) For an association captive insurer incorporated as a stock insurer, not less than $300,000; (3) For an agency captive insurer, not less than $300,000; (4) For a rental captive insurer, not less than $300,000; (5) For an association captive insurer incorporated as a mutual insurer or reciprocal insurer, not less than $500,000; and (6) For each protected cell captive insurer, and for each protected cell, not less than an amount to be established by the Commissioner in the Commissioner's discretion; provided, that a protected cell captive insurer that does not write any insurance business in the District shall not be required to maintain any surplus so long as each of its protected cells maintains the required surplus for that cell. (g) Except as otherwise provided by the Commissioner pursuant to subsection (c) of this section, the surplus required to be maintained pursuant to this section shall be in the form of cash or an irrevocable letter of credit. (h) The Commissioner may prescribe additional requirements relating to surplus based on the type, volume, and nature of the insurance business that is transacted by a captive insurer or protected cell and requirements regarding which surplus, if any, may be in the form of an irrevocable letter of credit. (i) A letter of credit used by a captive insurer or a protected cell as evidence of surplus required pursuant to this section shall meet the same requirements as a letter of credit issued for paid-in capital found subsection (d) of this section. (j) The parent of a branch captive insurer shall be subject to the jurisdiction of the United States District Court for the District of Columbia for all matters involving the branch captive insurer. (k) Except as otherwise provided in this section, a captive insurer or protected cell shall pay dividends out of, or make any other distribution from, its capital or surplus, or both, in accordance with the provisions set forth in subsection (e) of this section. A captive insurer or protected cell shall not pay dividends out of, or make any other distribution out of, its capital or surplus or both, in violation of this section unless the captive insurer or protected cell has obtained the prior written approval of the Commissioner to make the a payment or distribution. (l) Section 31-2502.12 shall apply to risk retention groups licensed as captive insurers. A risk retention group subject to this section may petition the Commissioner for a waiver of the limitation on exposure to risks or hazards. The Commissioner may issues rules, pursuant to  31-3931.21, establishing the circumstances under which a risk retention group may obtain, and the conditions a risk retention group shall satisfy to obtain, a waiver of the limitation.  (Mar. 17, 2005, D.C. Law 15-262,  7, 52 DCR 1205; Mar. 14, 2012, D.C. Law 19-103,  2(b), 59 DCR 432; Mar. 10, 2015, D.C. Law 20-203,  2(c), 61 DCR 12572.)  Section References This section is referenced in  31-3931.07. Effect of Amendments D.C. Law 19-103 added subsec. (l). The 2015 amendment by D.C. Law 20-203 rewrote (a) and (f)(6); and substituted protected cell for segregated account throughout the section. Emergency Legislation For temporary (90 day) addition of section, see  7 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313931.07. Investments. (a) A captive insurer shall file with the Commissioner a schedule of its proposed investments, and any material changes thereto, which the Commissioner may approve if he or she determines that the investments do not threaten the solvency or liquidity of the captive insurer. The Commissioner shall not unreasonably disapprove the investments. (b) A captive insurer or protected cell may make a loan to its parent or affiliated company if the loan: (1) Is first approved in writing by the Commissioner; (2) Is evidenced by a note that is in a form that is approved by the Commissioner; and (3) Does not include any money that has been set aside as capital or surplus as required by  31-3931.06(a) or (f). (c) Notwithstanding subsection (b) of this section, a risk retention group licensed as a captive insurer shall be subject to subchapters I, III, and V of Chapter 13A of this title [ 31-1371.01 through 31-1371.07, 31-1373.01 through 31-1373.12, and 31-1375.01].  (Mar. 17, 2005, D.C. Law 15-262,  8, 52 DCR 1205; Mar. 14, 2012, D.C. Law 19-103,  2(c), 59 DCR 432; Mar. 10, 2015, D.C. Law 20-203,  2(d), 61 DCR 12572.)  Effect of Amendments D.C. Law 19-103 added subsec. (c). The 2015 amendment by D.C. Law 20-203 substituted protected cell for segregated account in (b). Emergency Legislation For temporary (90 day) addition of section, see  8 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313931.08. Reinsurance. (a) A captive insurer or protected cell may provide reinsurance on risks ceded by any other insurer, captive insurer, or protected cell. (b) A captive insurer or protected cell may take credit for the reinsurance of risks or portions of risks ceded to reinsurers in compliance with Chapter 5 of this title. Prior approval of the Commissioner shall be required for ceding or taking credit for the reinsurance of risks or portions of risks ceded to reinsurers not complying with Chapter 5 of this title, except for business written by an alien captive insurer outside of the United States. (c) In addition to reinsurers authorized under Chapter 5 of this title, a captive insurer or protected cell may take credit for the reinsurance of risks or portions of risks ceded to a pool, exchange, or association acting as a reinsurer which has been authorized by the Commissioner. The Commissioner may require any other documents, financial information, or other evidence that the pool, exchange, or association will be able to provide adequate security for its financial obligations. The Commissioner may deny authorization or impose any limitations on the activities of a reinsurance pool, exchange, or association that, in the Commissioners judgment, are necessary and proper to provide adequate security for the ceding captive insurer or protected cell and for the protection and consequent benefit of the public at large. (d) For all purposes of this chapter, insurance written by a captive insurer or protected cell of any workers compensation qualified self-insured plan of its parent or affiliates shall be deemed to be reinsurance.  (Mar. 17, 2005, D.C. Law 15-262,  9, 52 DCR 1205; Mar. 10, 2015, D.C. Law 20-203,  2(e), 61 DCR 12572.)  Section References This section is referenced in  31-3931.02. Effect of Amendments The 2015 amendment by D.C. Law 20-203 substituted protected cell for segregated account throughout the section. Emergency Legislation For temporary (90 day) addition of section, see  9 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313931.09. Application requirements. (a) A captive insurer shall apply to the Commissioner for a certificate of authority. If one or more protected cells are established as separate legal entities, each protected cell shall apply for a certificate of authority. The application shall include: (1) A proposed copy of the organizational documents of the captive insurer if the captive insurer has not been organized, or a certified copy of the organizational documents and evidence of good standing if the captive insurer has been organized; (2) A pro forma financial statement for the captive insurer that has been prepared by a certified public accountant; and (3) Any other statements or documents that the Commissioner requires to be filed with the application. (b) A captive insurer shall include in its application for a certificate of authority evidence of: (1) The amount of liquidity of its assets relative to the risks to be assumed by the captive insurer; (2) The expertise, experience, and character of the persons who will manage the captive insurer; (3) The overall soundness of the plan of operation of the captive insurer; (4) The adequacy of the programs that the captive insurer is providing for loss prevention by its parent or member organizations, as applicable; (5) Minimum capital and surplus requirements as set forth in  31-3931.05(a) and (f) [apparently intended to be a reference to  31-3931.09(a) and (f)]; and (6) Such other information considered to be relevant by the Commissioner in ascertaining whether the proposed captive insurer will be able to meet its policy obligations. (c) An application by a captive insurer or protected cell for a certificate of authority shall include a nonrefundable application fee to be determined by the Commissioner. The Commissioner may require the applicant to retain independent legal, financial, and examination services from outside the Department to review and make recommendations regarding the applicants qualifications, and to submit those reports and recommendations to the Commissioner for his or her review. The cost of those services shall be paid by the applicant. (d) If the Commissioner determines that the documents and statements filed by the captive insurer or protected cell of a captive insurer are complete and satisfy the requirements for a certificate of authority, the Commissioner shall issue a certificate of authority to the captive insurer or protected cell within 30 days. Each certificate shall be renewed each year not later than the 30th day of April succeeding the date of its issuance. The Commissioner may impose an administrative fine or penalty on a captive insurer or protected cell that fails to renew its certificate of authority before August 1. The Commissioner may suspend or revoke the certificate of authority of a captive insurer or protected cell that fails to renew its certificate of authority on or after August 1. (e) A captive insurer shall pay a fee to be established by the Commissioner for the issuance of a certificate of authority and an annual fee to be established by the Commissioner for the renewal of its certificate of authority. A captive insurer may be required to pay a fee for one or more protected cells. (f) A captive insurer shall include its strategic business plan with its application for the issuance of its certificate of authority. If the captive insurer intends to make any material or substantive changes to its strategic business plan, the captive insurer shall file a copy of the amended strategic business plan with the Commissioner for prior written approval. (g)(1) Documents, materials, and other information submitted pursuant to this section shall be confidential and shall be exempt from any otherwise applicable freedom of information law, including Chapter 5 of Title 2 [ 2-531 et seq.], public records law, public records disclosure law, or other similar statute and shall not be subject to subpoena or discovery or admissible in evidence in a private civil action, and shall not be divulged to any person except either as provided for in this subsection or with the written consent of the captive insurer or protected cell. (2) The Commissioner may use documents, materials, and other information submitted pursuant to this section in the furtherance of any regulatory or legal action brought as a part of the Commissioner's official duties. (3) To assist in the performance of the Commissioner's duties, the Commissioner may share documents, materials, or other information submitted pursuant to this section with state, federal, and international regulatory agencies, the National Association of Insurance Commissioners, including its affiliates and subsidiaries, and with state, federal, and international law enforcement authorities; provided, that the recipient agrees in writing, and has the legal authority to so agree, to maintain the confidentiality of the documents, materials, and other information.  (Mar. 17, 2005, D.C. Law 15-262,  10, 52 DCR 1205; Mar. 10, 2015, D.C. Law 20-203,  2(f), 61 DCR 12572.)  Section References This section is referenced in  31-3932.03 and  31-3932.04. Effect of Amendments The 2015 amendment by D.C. Law 20-203 substituted protected cell for segregated account throughout the section; substituted protected cells for segregated accounts in (e); and added (g). Emergency Legislation For temporary (90 day) addition of section, see  10 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313931.10. Name. A captive insurer shall not use or adopt a name that is the same as, deceptively similar to, or likely to be confused with or mistaken for any other insurer licensed in the District.  (Mar. 17, 2005, D.C. Law 15-262,  11, 52 DCR 1205.)  Section References This section is referenced in  31-3932.03. Emergency Legislation For temporary (90 day) addition of section, see  11 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313931.11. Requirements for transacting business. (a) A captive insurer shall not transact business in the District unless the captive insurer and, if applicable, each protected cell of a captive insurer, first obtains a certificate of authority from the Commissioner. (b) In determining whether to grant the approval required in subsection (a) of this section, the Commissioner shall consider: (1) The character, reputation, financial standing, and purposes of the incorporators or organizers; (2) The character, reputation, financial responsibility, experience relating to insurance, and business qualifications of the officers and directors (or equivalent managers if other than a corporation) of the captive insurer; (3) The competence of any person who, pursuant to a contract with the captive insurer, will manage the affairs of the captive insurer; (4) The competence, reputation, and experience of the legal counsel of the captive insurer relating to the regulation of insurance; (5) If the captive insurer is a rental captive insurer, the competence, reputation and experience of the underwriter of the captive insurer; (6) The strategic business plan of the insurer; and (7) Such other aspects of the captive insurer as the Commissioner considers advisable. (c) A captive insurer shall: (1) Maintain an office in the District; (2)(A) Appoint a person in the District of Columbia, consistent with the requirements of  31-202(b), as the agent for service of process and to otherwise act on behalf of the captive insurer in the District. (B) If the registered agent cannot be located with reasonable diligence for the purpose of serving notice or demand on the captive insurer, the notice or demand may be served on the Commissioner, who shall be deemed to be the agent for the captive insurer; (3) Make adequate arrangements with a bank chartered in the District, or a branch of a bank located in the District if the bank is a member of the United States Federal Reserve System or its deposits are insured by the Federal Deposit Insurance Corporation; (4) Employ or enter into a contract with an individual or business organization to manage the affairs of the captive insurer, which individual or business organization shall meet the standards of competence and experience satisfactory to the Commissioner; (5) Employ or enter into a contract with a qualified, experienced, certified public accountant or a firm of certified public accountants, which accountant or firm shall meet the standards of competence and experience in matters concerning the regulation of insurance in the District, as determined by the Commissioner; (6) Employ or enter into a contract with qualified, experienced actuaries to perform reviews and evaluations of the operations of the captive insurer; and (7) Employ or enter into a contract with an attorney who is licensed to practice law in the District, which attorney shall meet the standards of competence and experience in matters concerning the regulation of insurance in the District, as determined by the Commissioner. (d) The board of directors of a captive insurer shall meet at least one time each year in the District. (e) Repealed. (f) Notwithstanding subsection (a) of this section, a captive insurer that obtains a provisional certificate of authority may engage in limited activities as part of the initial organization and capitalization of the captive insurer.  (Mar. 17, 2005, D.C. Law 15-262,  12, 52 DCR 1205; Mar. 10, 2015, D.C. Law 20-203,  2(g), 61 DCR 12572.)  Section References This section is referenced in  31-3932.03 and  31-3932.04. Effect of Amendments The 2015 amendment by D.C. Law 20-203 substituted protected cell for segregated account in (a);and repealed (e). Emergency Legislation For temporary (90 day) addition of section, see  12 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313931.12. Tax on premiums collected. (a) Except as otherwise provided in this section, a captive insurer shall pay to the District, not later than March 2 of each year, a tax at the rate of: (1) Two hundred fifty thousandths of one percent on the first $25 million of its net direct premiums; (2) One hundred fifty thousandths of one percent on the next $25 million of its net direct premiums; and (3) Fifty thousandths of one percent on each additional dollar of its net direct premiums. (a-1) A captive insurer organized as a risk retention group, as defined in  31-4101(12), shall pay to the District, not later than March 2 of each year, a tax at the rate of: (1) Thirty-eight hundredths of 1% on the first $20 million of its total net direct premiums; (2) Twenty-five hundredths of 1% on the next $20 million of its total net direct premiums; and (3) Eighteen hundredths of 1% on each additional dollar of its total net direct premiums. (b)(1) Except as otherwise provided in this section, a captive insurer shall pay to the District, not later than March 2 of each year, a tax at the rate of: (A) Two hundred twenty-five thousandths of one percent on the first $25 million of revenue from assumed reinsurance premiums; (B) One hundred fifty thousandths of one percent on the next $25 million of revenue from assumed reinsurance premiums; and (C) Twenty-five thousandths of one percent on each additional dollar of revenue from assumed reinsurance premiums. (2) The tax on reinsurance premiums pursuant to this subsection shall not be levied on premiums for risks or portions of risks which are subject to taxation on a direct basis pursuant to subsection (a) of this section. A captive insurer shall not pay any reinsurance premium tax pursuant to this subsection on revenue related to the receipt of assets by the captive insurer in exchange for the assumption of loss reserves and other liabilities of another insurer that is under common ownership and control with the captive insurer, if the transaction is part of a plan to discontinue the operation of the other insurer and the intent of the parties to the transaction is to renew or maintain such business with the captive insurer. (c) If the sum of the taxes to be paid by a captive insurer, other than a risk retention group licensed as an association captive insurer, calculated pursuant to subsections (a) and (b) of this section is less than $7,500 in any given year, the captive insurer shall pay a minimum tax of $7,500 for the year. (d) If the sum of the taxes to be paid by a risk retention group, licensed as an association captive insurer, calculated pursuant to subsections (a-1) and (b) of this section is less than $15,000 in any given year, the captive insurer shall pay a minimum tax of $15,000 for the year. (e) The total tax paid by a captive insurer shall not exceed $100,000 in any year. (f) In the case of a branch captive insurer, the tax provided for in this section shall apply only to the branch business of the branch captive insurer. (g) In the case of annuity business, the tax provided for in this section shall not apply. (h) Notwithstanding any specific statute to the contrary and except as otherwise provided in this subsection, the tax provided for by this section shall constitute all the taxes collectible pursuant to the laws of the District from a captive insurer, and no occupation tax or other taxes shall be levied or collected from a captive insurer by the District, except for real property taxes pursuant to Chapter 8 of Title 47 or personal property taxes pursuant to subchapter II of Chapter 15 of Title 47. (i) A captive insurer that is issued a certificate of authority during the last quarter of the calendar year may file a written request with the Commissioner for a reduction in the minimum premium tax obligation calculated pursuant to subsections (c) and (d) of this section. The Commissioner may grant the a [sic] request pursuant to an appropriate methodology adopted by rule. (j) The tax provided for in this section shall be calculated on an annual basis, notwithstanding policies, contracts, insurance, or contracts of reinsurance issued on a multiyear basis. In the case of multiyear policies or contracts, the premium shall be prorated for purposes of determining the tax obligation under this section. (k) One hundred percent of the revenues collected from the tax imposed pursuant to this section shall be credited to the account for the regulation and supervision of captive insurers created by  31-1202(BB). (l) Repealed.  (Mar. 17, 2005, D.C. Law 15-262,  13, 52 DCR 1205; Apr. 7, 2006, D.C. Law 16-91,  102(b), 52 DCR 10637; Mar. 2, 2007, D.C. Law 16-191,  54(c), 53 DCR 6794; Aug. 16, 2008, D.C. Law 17-219,  2014, 55 DCR 7598.)  Section References This section is referenced in  31-3931.13 and  31-3932.03. Effect of Amendments D.C. Law 16-91, in subsec. (k), validated previously made technical corrections. D.C. Law 16-191, in subsec. (k), validated a previously made technical correction. D.C. Law 17-219 added subsec. (a-1); in subsec. (d), substituted subsections (a-1) and (b) for subsections (a) and (b) and substituted $15,000 for $10,000; and repealed subsec. (l), which had read as follows: (l) In determining the amount of premium taxes payable under this section, any insurance contract entered into by a captive insurance company issued a certificate of authority pursuant to this chapter, regardless of the location of the risk or the domicile of the purchaser, shall be subject to the payment of premium taxes on that transaction to the District of Columbia; provided, that upon presentation of evidence that another jurisdiction has claimed, and the company has paid, premium taxes to that jurisdiction on the same transaction, the company may credit the amount paid to the other jurisdiction against premium taxes owed to the District of Columbia. Emergency Legislation For temporary (90 day) addition of section, see  13 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238). Short Title Short title: Section 2013 of D.C. Law 17-219 provided that subtitle F of title II of the act may be cited as the Captive Insurance Company Adjustment Amendment Act of 2008. Editor's Notes Section 2015 of D.C. Law 17-219 provided that this subtitle shall apply as of January 1, 2008.
 313931.13. Annual report. (a)(1) On or before March 2 of each year, a captive insurer, including, if applicable, each protected cell, shall submit to the Commissioner, on a form prescribed by the Commissioner, a report of its financial condition, as prepared by a certified public accountant. A captive insurer shall file a consolidated report on behalf of each of its protected cells. (2) A captive insurer, including, if applicable, each protected cell, shall use generally accepted accounting principles and include any useful or necessary modifications or adaptations of these principles that have been approved or accepted by the Commissioner for the type of insurance and kinds of insurers to be reported upon, as supplemented by additional information required by the Commissioner. (b) A pure captive insurer may apply, in writing, for authorization to file its annual report based on a fiscal year that is consistent with the fiscal year of the parent company of the pure captive insurer. If an alternative date is granted: (1) The annual report shall be due not later than 60 days after the end of each fiscal year; and (2) The pure captive insurer shall file on or before March 2 of each year such forms as required by the Commissioner by regulation to provide sufficient detail to support its premium tax return filed pursuant to  31-3931.12. (c) All risk retention groups licensed as captive insurers shall comply with Chapter 3 of this title [ 31-301 et seq.], except that the exemption in  31-314(a) shall not apply to risk retention groups. All risk retention groups licensed as captive insurers shall comply with the actuarial opinion filing requirements set forth in  31-2502.26a and 31-2502.26b.  (Mar. 17, 2005, D.C. Law 15-262,  14, 52 DCR 1205; Mar. 14, 2012, D.C. Law 19-103,  2(d), 59 DCR 432; Mar. 10, 2015, D.C. Law 20-203,  2(h), 61 DCR 12572.)  Section References This section is referenced in  31-3932.03. Effect of Amendments D.C. Law 19-103 added subsec. (c). The 2015 amendment by D.C. Law 20-203 rewrote (a). Emergency Legislation For temporary (90 day) addition of section, see  14 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313931.14. Financial examination. (a) The Commissioner, or his designee, may visit each captive insurer at such times as he or she considers necessary to thoroughly inspect and examine the affairs of the captive insurer or protected cell of a captive insurer to ascertain: (1) The financial condition of the captive insurer; (2) The ability of the captive insurer to fulfill its obligations; and (3) Whether the captive insurer has complied with the provisions of this chapter and the regulations adopted pursuant thereto. (b) The Commissioner may require a captive insurer to retain qualified independent legal, financial, and examination services from outside the Department to conduct the examination and make recommendations to the Commissioner. The cost of the examination shall be paid by the captive insurer. (c) Chapter 14 of this title [ 31-1401 et seq.] shall apply to examinations conducted pursuant to this section. The Commissioner may waive the requirement in  13-1402(a) that a captive insurer must be examined at least once every 5 years, if the: (1) Captive insurer has filed unqualified audited financial statements each year since the captive insurer's last financial examination or the date of licensure; (2) Commissioner determines that the audited financial statements demonstrate that the captive insurer maintains sufficient surplus to satisfy all of its obligations to its policyholders and creditors; (3) Captive insurer is in compliance with all applicable District laws and regulations; and (4) Captive insurer is not a risk retention group licensed as a captive insurer. (d) For purposes of subsection (a) of this section, protected cells of a captive insurer shall not be separately examined unless the Commissioner has sufficient cause to examine one or more protected cells.  (Mar. 17, 2005, D.C. Law 15-262,  15, 52 DCR 1205; Mar. 10, 2015, D.C. Law 20-203,  2(i), 61 DCR 12572.)  Section References This section is referenced in  31-3932.03. Effect of Amendments The 2015 amendment by D.C. Law 20-203 substituted protected cell for segregated account in (a); rewrote (c); and substituted protected cells for segregated accounts in (d). Emergency Legislation For temporary (90 day) addition of section, see  15 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313931.15. Revocation, suspension, or fine. (a) The Commissioner may revoke or suspend the certificate of authority to transact insurance business in the District of a captive insurer, including, if applicable, a protected cell, which: (1) Has failed or refused to comply with any provision or requirement of this chapter; (2) Is impaired in capital or surplus; (3) Is insolvent; (4) Is determined, pursuant to Chapter 21 of this title, to be in such condition that further transaction of business by the company will be hazardous to its policyholders, creditors, or the general public; (5) Has failed or refused to submit any report or statement required by law or order of the Commissioner; (6) Has failed or refused to comply with any provision of its charter or bylaws; (6A) Has violated Chapter 22A of this title [  31-2231.01 et seq.]; provided, that this paragraph shall apply only to District-domiciled risk retention groups licensed as captive insurers; (7) Has used any method in transacting insurance business pursuant to this chapter which would be detrimental to the operation of the captive insurer or would make its condition unsound with respect to its policyholders or the general public; or (8) Has failed otherwise to comply with the laws of the District or any jurisdiction. (b) The Commissioner may also impose a fine not to exceed $5,000 for each violation by a captive insurer, including, if applicable, a protected cell, of any of the provisions found in subsection (a) of this section.  (Mar. 17, 2005, D.C. Law 15-262,  16, 52 DCR 1205; Mar. 10, 2015, D.C. Law 20-203,  2(j), 61 DCR 12572.)  Section References This section is referenced in  31-3932.03 and  31-3932.14. Effect of Amendments The 2015 amendment by D.C. Law 20-203 added including, if applicable, a protected cell in the introductory language of (a) and (b); and added (a)(6A). Emergency Legislation For temporary (90 day) addition of section, see  16 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313931.16. Insolvency. (a) A captive insurer shall not join or contribute financially to any risk-sharing plan, risk pool, or insurance insolvency guaranty fund in the District. A captive insurer or its insured, its parent or an affiliated company, or any member organization of its association shall not receive any benefit from the plan, pool, or fund for claims arising out of the operations of the captive insurer. (b) The terms and conditions set forth in Chapter 13 of this title [ 31-1301 et seq.] (1993 Act), pertaining to insurer rehabilitation, insolvency, and receiverships shall apply in full to captive insurers licensed under this chapter and shall apply to the protected cells of a captive insurer on a cell basis. If there is a conflict between the provisions of this chapter and the 1993 Act, the provisions of this chapter shall prevail, including the provisions of  31-3931.05 for liquidation and rehabilitation of protected cells.  (Mar. 17, 2005, D.C. Law 15-262,  17, 52 DCR 1205; Mar. 10, 2015, D.C. Law 20-203,  2(k), 61 DCR 12572.)  Section References This section is referenced in  31-3932.03. Effect of Amendments The 2015 amendment by D.C. Law 20-203 rewrote (b). Emergency Legislation For temporary (90 day) addition of section, see  17 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313931.17. Redomestication. (a) Any captive insurer which is licensed under laws of any jurisdiction may become a domestic captive insurer in the District by complying with all of the requirements of this chapter relative to the organization and licensing of a domestic insurer of the same type and by designating an office at a place within the District. The redomesticated captive insurer may transact business in the District and shall be subject to the authority and jurisdiction of the District. (b) All insurance contracts which are in existence at the time any captive insurer transfers its insurance domicile to the District by merger, consolidation, or any other lawful method shall continue in full force and effect upon the transfer if the captive insurer is duly qualified to transact the same type of insurance business in the District. (c) Every transferring insurer shall notify the Commissioner of the details of the proposed transfer and shall file promptly any resulting amendments to application documents filed or required to be filed with the Commissioner. (d) Any domestic captive insurer, upon the approval of the Commissioner, may transfer its domicile to any state in which it is licensed to transact business as a captive insurance company and, upon the transfer, shall cease to be a domestic insurer. The Commissioner shall approve any proposed transfer unless he or she determines the transfer is not in the best interest of the policyholders.  (Mar. 17, 2005, D.C. Law 15-262,  18, 52 DCR 1205.)  Section References This section is referenced in  31-3932.03. Emergency Legislation For temporary (90 day) addition of section, see  18 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313931.18. Rating organization. A captive insurer shall not be required to join a rating organization.  (Mar. 17, 2005, D.C. Law 15-262,  19, 52 DCR 1205; Mar. 10, 2015, D.C. Law 20-203,  2(l), 61 DCR 12572.)  Section References This section is referenced in  31-3932.03. Effect of Amendments The 2015 amendment by D.C. Law 20-203 substituted shall not be required for shall not required. Emergency Legislation For temporary (90 day) addition of section, see  19 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313931.19. Captive insurance regulatory and supervision trust account. All fees, fines, penalties, and assessments received by the Commissioner under this chapter shall be deposited in, and credited to, the account established by  31-1202(BB), and expended in accordance with  31-1202(BB).  (Mar. 17, 2005, D.C. Law 15-262,  20, 52 DCR 1205.)  Section References This section is referenced in  31-3932.03. Emergency Legislation For temporary (90 day) addition of section, see  20 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313931.20. Judicial review; mandamus. (a) Any captive insurer aggrieved by any act, determination, rule, regulation, order, or any other action taken by Commissioner pursuant to this chapter, and which was the subject of a contested case, may appeal to the District of Columbia Court of Appeals, in accordance with  2-510. (b) The filing of an appeal pursuant to this section shall not stay the application of any rule, regulation, order, or other action of the Commissioner to the appealing party unless the court, after giving the appealing party notice and an opportunity to be heard, determines that failure to grant the stay would be detrimental to the interest of policyholders, shareholders, creditors, or the public. (c) Any captive insurer aggrieved by any failure of the Commissioner to act or make a determination required by this chapter may petition the Superior Court of the District of Columbia for a writ in the nature of a mandamus or a peremptory mandamus directing the Commissioner to act or make such determination forthwith.  (Mar. 17, 2005, D.C. Law 15-262,  21, 52 DCR 1205.)  Section References This section is referenced in  31-3932.03. Emergency Legislation For temporary (90 day) addition of section, see  21 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313931.21. Regulations. The Commissioner may issue rules and regulations relating to captive insurers as are necessary to enable him or her to carry out the provisions of this chapter.  (Mar. 17, 2005, D.C. Law 15-262,  22, 52 DCR 1205.)  Section References This section is referenced in  31-3931.06,  31-3931.22, and  31-3932.03. Emergency Legislation For temporary (90 day) addition of section, see  22 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313931.22. Applicable laws. (a) Except as otherwise expressly provided in this chapter, only the following laws relating to insurance shall apply to risk retention groups licensed as captive insurers: (1) Chapter 4 of this title notwithstanding the definition of the term licensed insurer or insurer in  31-401(7)(A); (2) Subchapter I of Chapter 7 of this title; (3) Chapter 15 of this title; and (4) Chapter 18 of this title. (b) Except for  31-2002(a)(2) and 31-2003(f), Chapter 20 of this title shall, effective January 1, 2012, apply to risk retention groups licensed as captive insurers; provided, that the Commissioner may waive the requirement that a risk retention group licensed as a captive insurer file a Risk Based Capital Plan under Chapter 20 of this title if the insurer is in compliance with its approved plan of operation and any additional requirements imposed by the Commissioner by rule pursuant to  31-3931.21.  (Mar. 17, 2005, D.C. Law 15-262,  23, 52 DCR 1205; Mar. 14, 2012, D.C. Law 19-103,  2(e), 59 DCR 432.)  Effect of Amendments D.C. Law 19-103 rewrote the section, which formerly read: Except as provided in this chapter, no law relating to the insurance industry shall apply to captive insurers other than this chapter. Emergency Legislation For temporary (90 day) addition of section, see  23 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313931.23. Repeal and transition provisions. (a) Chapter 39 of this title is repealed, subject to the provisions of this section. (b) All existing fees set forth in Chapter 39 of this title, shall remain in effect under the corresponding provisions of this chapter, and shall be applicable to protected cells, unless modified or repealed by rules promulgated by the Commissioner. (c) All effective certificates of authority and all conditions imposed on the certificates of authority shall apply to the extent they would have applied under prior law. (d) All captive insurers granted a certificate of authority as sponsored captive insurers under prior law shall comply with all of the provisions found in this chapter.  (Mar. 17, 2005, D.C. Law 15-262,  24, 52 DCR 1205; Mar. 2, 2007, D.C. Law 16-191,  54(d), 53 DCR 6794; Mar. 10, 2015, D.C. Law 20-203,  2(m), 61 DCR 12572.)  Effect of Amendments The 2015 amendment by D.C. Law 20-203 substituted protected cells for segregated accounts in (b). Emergency Legislation For temporary (90 day) addition of section, see  24 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
 313932.01. Purpose. This subchapter provides for the creation of special purpose financial captive insurance companies for the exclusive purpose of facilitating the securitization of one or more risks as a means of accessing alternative sources of capital and achieving the benefits of securitization. Their creation is intended to achieve greater efficiencies in structuring and executing insurance securitizations, to diversify and broaden insurers access to sources of capital, to facilitate access for many insurers to insurance securitization and capital markets financing technology, and to further the economic development of the District of Columbia through its captive insurance program.  (Mar. 17, 2005, D.C. Law 15-262,  201; as added Mar. 14, 2007, D.C. Law 16-285,  2(b), 54 DCR 944.) 
 313932.02. Definitions. In addition to the terms defined in  31-3931.01, for the purposes of this subchapter, the term: (1)(A) Control (including the terms controlling, controlled by, and under common control with) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. (B) Control shall be presumed to exist if a person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing 10% or more of the voting securities of another person, but this presumption may be rebutted by a showing that control does not exist. (C) The fact that an SPFC exclusively provides reinsurance to a ceding insurer under an SPFC contract shall not by itself constitute common control between the SPFC and the ceding insurer. (2) Counterparty means the insurer that cedes risk to an SPFC and which, unless otherwise approved by the Commissioner, is the parent or an affiliated company of the SPFC. (3) Fair value means: (A) As to cash, the amount of it; and (B) As to an asset other than cash: (i) The amount at which that asset could be bought or sold in a current transaction between arms-length, willing parties. (ii) The quoted mid-market price for the asset in active markets must be used if available. (iii) If a quoted mid-market price is not available, a value determined using the best information available considering values of similar assets and other valuation methods, such as present value of future cash flows, historical value of the same or similar assets, or comparison to values of other asset classes, the value of which have been historically related to the subject asset. (4) Insolvency or insolvent means an inability to pay obligations when they are due, unless those obligations are the subject of a bona fide dispute. (5) Insurance securitization means a package of related risk-transfer instruments, capital market offerings, and facilitating administrative agreements by which proceeds are obtained by an SPFC directly or indirectly through the issuance of securities, and which proceeds are held in trust pursuant to the provisions of this subchapter to secure the obligations of the SPFC under one or more SPFC contracts with a counterparty, where investment risk to the holders of these securities is contingent upon the obligations of the SPFC to the counterparty under the SPFC contract in accordance with the terms of the transaction. (6) Management means the board of directors, managing board, or other individuals vested with overall responsibility for the management of the affairs of an SPFC, including the election and appointment of officers or other of those agents to act on behalf of the SPFC. (7) Organizational document means the articles of incorporation, articles of organization, bylaws, operating agreement, or other foundational documents that establish an SPFC as a legal entity. (8) Permitted investments means those investments that meet the qualifications set forth in  31-3932.07. (9) Qualified United States financial institution means a financial institution that is eligible to act as a fiduciary of a trust and is: (A) Organized or, in the case of a United States branch or agency office of a foreign banking organization, is licensed under the laws of the United States, any state of the United States, or the District of Columbia; and (B) Regulated, supervised, and examined by federal or state authorities having regulatory authority over banks and trust companies. (10) Securities has the same meaning as the term security in  31-5601.01(31). (11) SPFC or Special Purpose Financial Captive means a captive insurer that is formed for the purpose of an insurance securitization and that only insures or reinsures the risks of its counterparty. (12) SPFC contract means a contract between an SPFC and the counterparty pursuant to which the SPFC agrees to provide insurance or reinsurance protection to the counterparty for risks associated with the counterpartys insurance or reinsurance business. (13) SPFC securities means securities issued by an SPFC. (14) Surplus note means an unsecured subordinated debt obligation possessing characteristics consistent with paragraph 3 of the Statement of Statutory Accounting Principles No. 41, as amended, National Association of Insurance Commissioners.  (Mar. 17, 2005, D.C. Law 15-262,  202; as added Mar. 14, 2007, D.C. Law 16-285,  2(b), 54 DCR 944.) 
 313932.03. Application of subchapter I of this chapter. (a) Except as otherwise provided,  31-3931.03, 31-3931.04, 31-3931.05, 31-3931.09, 31-3931.10, 31-3931.11, 31-3931.12, 31-3931.13, 31-3931.14, 31-3931.15, 31-3931.16, 31-3931.17, 31-3931.18, 31-3931.19, 31-3931.20, 31-3931.21, and 31-3931.09 through 31-3931.22 shall apply under this subchapter to SPFCs. (b) The Commissioner, by rule or order, may exempt an SPFC, on a case-by-case basis, from the provisions of this title that the Commissioner determines to be inappropriate given the nature of the risks to be insured.  (Mar. 17, 2005, D.C. Law 15-262,  203; as added Mar. 14, 2007, D.C. Law 16-285,  2(b), 54 DCR 944; Mar. 25, 2009, D.C. Law 17-353,  165(a), 56 DCR 1117.)  Effect of Amendments D.C. Law 17-353 validated a previously made technical correction in subsec. (a).
 313932.04. Application requirements. (a)(1) An SPFC shall apply to the Commissioner for a certificate of authority. The application for a certificate of authority shall include the items required by  31-3931.09. (2) If an SPFC will have one or more protected cells, the SPFC shall include in its application for a certificate of authority: (A) A strategic business plan demonstrating the manner in which the SPFC will: (i) Account for the loss and expense experience of each segregated account at a level of detail found to be sufficient by the Commissioner; and (ii) How it will report the experience to the Commissioner; (B) A statement acknowledging that all financial records of the SPFC, including records pertaining to any protected cells, will be made available for inspection or examination by the Commissioner; (C) All contracts or sample contracts between the SPFC and any counterparty related to each protected cell; and (D) Evidence that expenses are allocated to each segregated account in an equitable manner. (b) An SPFCs strategic business plan shall include: (1) A description of the contemplated insurance securitization, the SPFC contract, and related transactions; (2) Draft documentation or, at the discretion of the Commissioner, a written summary of all material agreements that are entered into to effectuate the SPFC contract and the insurance securitization, which shall include the name of the counterparty, the nature of the risks being assumed, the proposed use of protected cells, if any, and the maximum amounts, purpose, and nature and the interrelationships of the various transactions required to effectuate the insurance securitization; (3) The investment policy of the SPFC and a description of its investment strategy; (4) A description of the underwriting, reporting, and claims payment methods by which losses covered by the SPFC contract are reported, accounted for, and settled; and (5) Pro forma balance sheets and income statements illustrating various stress case scenarios for the performance of the SPFC under the SPFC contract. (c) Section 31-1407, shall apply to examinations, investigations, and processing conducted pursuant to this subchapter. (d) In determining whether to issue a certificate of authority, the Commissioner shall consider, in addition to the matters specified in  31-3931.11(b), whether: (1) The proposed strategic business plan provides a reasonable and expected successful operation; (2) The terms of the SPFC contract and related transactions comply with this subchapter; and (3) The proposed strategic business plan is not hazardous to any counterparty. (e) The Commissioner shall not issue a certificate of authority to an SPFC until the Commissioner has received written notification, or other assurance satisfactory to the Commissioner, from the commissioner of the state of domicile of each counterparty that such commissioner has approved, or not disapproved, the transaction. (f) The SPFC shall provide a complete set of the documentation of the insurance securitization to the Commissioner upon closing of the transactions, including an opinion of legal counsel with respect to compliance with this chapter and any other applicable laws as of the effective date of the transaction. (g) Any material change of the SPFCs strategic business plan shall require prior approval of the Commissioner; provided, that: (1) If initially approved in the strategic business plan, securities subsequently issued to continue the securitization activities of the SPFC either during or after expiration, redemption, or satisfaction, of part or all of the securities issued pursuant to initial insurance securitization transactions may not be considered a material change; and (2) A change and substitution in a counterparty to a swap transaction for an existing insurance securitization as allowed pursuant to the provisions of this subchapter shall not be considered a material change if the replacement swap counterparty carries a similar or higher rating to its predecessor with 2 or more nationally recognized rating agencies. (h) Upon termination or cancellation of an SPFC contract and the redemption of any related securities issued in connection with the SPFC contract, the certificate of authority granted by the Commissioner shall expire or, in the case of retiring and surviving protected cells, shall be modified, and the SPFC shall no longer be authorized to conduct activities unless and until a new or modified certificate of authority is issued pursuant to a new filing pursuant to the provisions of this section or as agreed by the Commissioner.  (Mar. 17, 2005, D.C. Law 15-262,  204; as added Mar. 14, 2007, D.C. Law 16-285,  2(b), 54 DCR 944; Mar. 25, 2009, D.C. Law 17-353,  165(b), 56 DCR 1117.)  Effect of Amendments D.C. Law 17-353 validated a previously made technical correction in subsecs. (d), (g) and (h).
 313932.05. Capital and surplus. (a) In addition to any other capital required to be maintained pursuant to subsection (c) of this section, an SPFC authorized to do business in the District shall at all times maintain a minimum unimpaired capital of $100,000. (b) Except as otherwise provided by the Commissioner pursuant to subsection (c) of this section, the capital required to be maintained pursuant to this section shall be in the form of cash or an irrevocable letter of credit. (c) The Commissioner may require an SPFC, including each protected cell, to maintain additional unimpaired capital based on the type, volume, and nature of the insurance business that is transacted by the SPFC and may determine the amount of capital, if any, that may be in the form of an irrevocable letter of credit. (d) A letter of credit used by an SPFC or segregated account as evidence of capital required pursuant to this section shall: (1) Be issued by a bank chartered in the District or by a branch of a bank located in the District if such bank is a member of the United States Federal Reserve System, or its deposits are insured by the Federal Deposit Insurance Corporation; (2) Be issued on a form approved by the Commissioner; and (3) Include a provision pursuant to which the letter of credit is automatically renewed each year. (e) An SPFC shall not be issued a certificate of authority, and shall not hold a certificate of authority, unless the SPFC has and maintains, in addition to any other surplus required to be maintained pursuant to subsection (g) of this section, an unencumbered surplus of not less than $150,000. (f) Except as otherwise provided by the Commissioner pursuant to subsection (c) of this section, the surplus required to be maintained pursuant to this section shall be in the form of cash or an irrevocable letter of credit. (g) The Commissioner may prescribe additional requirements relating to surplus based on the type, volume, and nature of the insurance business that is transacted by an SPFC or protected cell and requirements regarding which surplus, if any, may be in the form of an irrevocable letter of credit. (h) A letter of credit used by an SPFC or segregated account as evidence of surplus required pursuant to this section shall meet the same requirements as a letter of credit issued for paid in capital found subsection (d) of this section.  (Mar. 17, 2005, D.C. Law 15-262,  205; as added Mar. 14, 2007, D.C. Law 16-285,  2(b), 54 DCR 944.) 
 313932.06. Securities of SPFCs. (a) An SPFC may issue securities, including surplus notes and other forms of financial instruments, subject to and in accordance with applicable law, its approved strategic business plan, and its organizational documents. (b) An SPFC, in connection with the issuance of securities, may enter into and perform all of its obligations under any required contracts to facilitate the issuance of such securities. (c) Subject to the approval of the Commissioner, an SPFC may: (1) Account for the proceeds of surplus notes as surplus and not as debt for purposes of statutory accounting; (2) Submit for prior approval of the Commissioner periodic written requests for payments of interest on and repayments of principal of surplus notes. (d) Surplus notes issued by an SPFC constitute surplus or contribution notes of the type described in  31-1340(7). (e) The Commissioner may approve formulas for an ongoing plan of interest payments or principal repayments, or both, to provide guidance in connection with his ongoing reviews of requests to approve the payments on and principal repayments of the surplus notes. (f) The obligation to repay principal or interest, or both, on the securities issued by the SPFC shall reflect the risk associated with the obligations of the SPFC to the counterparty under the SPFC contract.  (Mar. 17, 2005, D.C. Law 15-262,  206; as added Mar. 14, 2007, D.C. Law 16-285,  2(b), 54 DCR 944.) 
 313932.07. Authorized contracts. (a) An SPFC shall insure only the risks of a counterparty and shall not issue a contract for assumption of risk or indemnification of loss other than an SPFC contract; provided, that an SPFC may cede risks assumed through an SPFC contract to third party reinsurers through the purchase of reinsurance or retrocession protection on terms approved by the Commissioner. (b) An SPFC may enter into agreements with affiliated companies and third parties and conduct other commercial activities related or incidental to and necessary to fulfill the purposes of an SPFC contract and insurance securitization contemplated by the strategic business plan approved by the Commissioner. The agreements may include management and administrative services agreements and other allocation and cost sharing agreements. (c) An SPFC may enter into swap agreements, or other forms of asset management agreements, including guaranteed investment contracts, or other transactions that have the objective of leveling timing differences in funding of up-front or ongoing transaction expenses or managing asset, credit, or interest rate risk of the investments in the trust to ensure that the investments are sufficient to assure payment or repayment of the securities, and related interest or principal payments, issued pursuant to an SPFC insurance securitization transaction or the obligations of an SPFC under an SPFC contract. (d) An SPFC contract shall: (1) Obligate the SPFC to indemnify the counterparty for losses; (2) Require that contingent obligations of the SPFC under the SPFC contract that are securitized through an SPFC insurance securitization be funded and secured with assets held in trust for the benefit of the counterparty; (3) Require the SPFC to: (A) Enter into a trust agreement that meets the criteria set forth in this section and specifies the recoverables or reserves, or both, to covered; and (B) Establish a trust account for the benefit of the counterparty; (4) Stipulate that assets deposited in the trust account shall be valued according to their current fair value and shall consist only of permitted investments; (5) Require the SPFC, before depositing assets with the trustee, to execute assignments, endorsements in blank, or to transfer legal title to the trustee of all shares, obligations, or any other assets requiring assignments, in order that the counterparty, or the trustee upon the direction of the counterparty, may transfer whenever necessary the assets without consent or signature from the SPFC or another entity; (6) Require that all settlements of account between the counterparty and the SPFC be made in cash or its equivalent; and (7) Stipulate that the SPFC and the counterparty agree that the assets in the trust account, established pursuant to the provisions of the SPFC contract: (A) May be withdrawn by the counterparty at any time, notwithstanding any other provisions in the SPFC contract; and (B) Shall be utilized and applied by the counterparty or any successor by operation of law of the counterparty, including, subject to the provisions of  31-3932.11, but without further limitation, any liquidator, rehabilitator, receiver, or conservator of the counterparty, without diminution because of insolvency on the part of the counterparty or the SPFC, only for the following purposes: (i) To transfer all of the assets into one or more trust accounts for the benefit of the counterparty pursuant to and in accordance with the terms of the SPFC contract and in compliance with the provisions of this subchapter; and (ii) To pay any other incurred and paid amounts that the counterparty claims are due pursuant to and under the terms of the SPFC contract and in compliance with this subchapter. (e)(1) An SPFC contract may allow the SPFC to seek approval from the counterparty to withdraw from the trust all or part of the assets, or income from them, and to transfer the assets to the SPFC; provided, that, (A) At the time of the withdrawal, the SPFC shall replace the withdrawn assets, excluding any income withdrawn, with other qualified assets having a fair value equal to the fair value of the assets withdrawn and that meet the requirements of this section; and (B) After the withdrawals and transfer, the fair value of the assets in trust securing the obligations of the SPFC under the SPFC contract shall be no less than the amount needed to satisfy the funded requirement of the SPFC contract. (2) The counterparty shall be the sole judge as to the application of these provisions, but shall not unreasonably or arbitrarily withhold its approval. (f) In fulfilling its function, an SPFC shall comply with, and, to the extent of its powers, ensure that contracts obligating other parties to perform certain functions incident to its operations are substantively and materially consistent with, the following requirements and guidelines: (1) The assets by the SPFC shall be preserved and administered by or on behalf of the SPFC to satisfy the liabilities and obligations of the SPFC incident to the insurance securitization and other related agreements. (2) Assets held by the SPFC in trust shall be valued at their fair value. (3) The proceeds from the sale of securities pursuant to the insurance securitization shall be deposited with the trustee to the extent required to secure its obligations under the SPFC contract as provided by this subchapter and shall be held or invested by the trustee pursuant to the provisions of this section and the asset management agreement, if any, filed with the Department. (4)(A) Assets of the SPFC, other than those held in trust for the counterparty, and income on trust assets received by the SPFC may be used to pay interest on, or other consideration with respect to, any securities, outstanding debt, or other obligation of the SPFC. (B) This paragraph shall not prevent an SPFC from entering into a swap agreement or other asset management transaction that has the effect of hedging or guaranteeing the fixed or floating interest rate returns paid on the assets in trust or required for the securities issued by the SPFC generated from or other consideration or payment flows in the transaction. (5) In the SPFC insurance securitization, the contracts or other relating documentation shall identify the SPFC. (g) Unless otherwise approved by the Commissioner, an SPFC shall not: (1) Issue or otherwise administer primary insurance policies; (2) Enter into an SPFC contract with a person that is not licensed or otherwise authorized to transact the business of insurance or reinsurance in at least its state or country of domicile; (3) Assume or retain exposure to insurance or reinsurance losses for its own account that is not funded by proceeds from an SPFC securitization that complies with the provisions of this subchapter; provided, that the SPFC may wholly or partially reinsure or retrocede the risks assumed to a third party reinsurer on terms approved by the Commissioner; (4) Have any direct obligation to the policyholders or reinsureds of the counterparty; or (5) Lend or otherwise invest, or place in custody, trust, or under management any of its assets with, or to borrow money or receive a loan from, other than by issuance of the securities pursuant to an insurance securitization, or advance from, anyone convicted of a felony, anyone who is untrustworthy or of known bad character, or anyone convicted of a criminal offense involving the conversion or misappropriation of fiduciary funds or insurance accounts, theft, deceit, fraud, misrepresentation, or corruption.  (Mar. 17, 2005, D.C. Law 15-262,  207; as added Mar. 14, 2007, D.C. Law 16-285,  2(b), 54 DCR 944.)  Section References This section is referenced in  31-3932.02 and  31-3932.11.
 313932.08. Trust arrangements. (a) Assets of the SPFC that are pledged to secure obligations of the SPFC to a counterparty under an SPFC contract shall be held in trust that is administered by a qualified United States financial institution. The qualified United States financial institution shall not control, be controlled by, or be under common control with, the SPFC or the counterparty. (b) Assets of the SPFC held in trust to secure obligations under the SPFC contract shall at all times be held in: (1) Cash and cash equivalents; (2) Securities listed by the Securities Valuation Office of the National Association of Insurance Commissioners and qualifying as admitted assets under statutory accounting convention in its state of domicile; or (3) Another form of security acceptable to the Commissioner. (c) Assets of an SPFC held in trust to secure obligations under an SPFC contract shall be held by the trustee at one of the trustees offices or branch offices in the United States and may be held in certificated or electronic form. (d) The provisions for withdrawal by the counterparty of assets from the trust shall be clean and unconditional, subject only to the following requirements: (1) The counterparty may withdraw assets from the trust account at any time, without notice to the SPFC, subject only to written notice to the trustee from the counterparty that funds in the amount requested are due and payable by the SPFC, pursuant to the terms of the SPFC contract. (2) Presentment of a statement or document shall not be required to withdraw assets, except that the counterparty may be required to acknowledge receipt of withdrawn assets. (3) The trust agreement shall indicate that it is not subject to any conditions or qualifications outside of the trust agreement. (4) The trust agreement shall not contain references to any other agreements or documents. (e) The trust agreement shall be established for the sole use and benefit of the counterparty at least to the full extent of the obligations of the SPFC to the counterparty under the SPFC contract. If there is more than one counterparty, a separate trust agreement shall be entered into with each counterparty and, if there more than one SPFC contract with the same counterparty, a separate trust account shall be maintained for each SPFC contract with the counterparty, in each case unless otherwise approved by the Commissioner. (f) The trust agreement shall provide for the trustee to: (1) Receive assets and hold all assets in a safe place; (2) Determine that all assets are in a form that the counterparty or the trustee, upon direction by the counterparty, may transfer, whenever necessary, the assets, without consent or signature from the SPFC or another person or entity; (3) Furnish to the SPFC, the Commissioner, and the counterparty a statement of all assets in the trust account reported at fair value upon its inception and at intervals no less frequent than the end of each calendar quarter; (4) Notify the SPFC and the counterparty, within 10 days, of any deposits to or withdrawals from the trust account; (5) Upon written demand of the counterparty, immediately take the necessary steps to transfer absolutely and unequivocally all right, title, and interest in the assets held in the trust account to the counterparty and deliver physical custody of the assets to the counterparty; and (6) Allow no substitutions or withdrawals of assets from the trust account, except pursuant to the trust agreement or SPFC contract, or as otherwise permitted by the counterparty. (g) The trust agreement: (1) Shall create one or more trust accounts into which all pledged assets shall be deposited and held until distributed in accordance with the trust agreement; (2) Shall provide that at least 30 days, but not more than 45 days, before termination of the trust account, written notification of termination shall be delivered by the trustee to the counterparty with a copy of the notice provided to the Commissioner; (3) May be made subject to and governed by the laws of any state; provided, that the state shall be disclosed in the strategic business plan filed with and approved by the Commissioner; (4) Shall prohibit invasion of the trust corpus for the purpose of paying compensation to, or reimbursing the expenses of, the trustee; and (5) Shall provide that the trustee shall be liable for its own negligence, willful misconduct, or lack of good faith. (h)(1) Notwithstanding the provisions of subsection (d)(3) and (4) of this section, when a trust agreement is established in conjunction with an SPFC contract, the trust agreement or SPFC contract, or both, may provide that the counterparty shall undertake to use and apply any amounts drawn upon the trust account, without diminution because of the insolvency of the counterparty or the SPFC, only for one or more of the following purposes: (A) To pay or reimburse the counterparty for payment of the SPFCs share of premiums to be returned to owners of the counterpartys policies covered under the SPFC contract on account of cancellations of the policies under the counterpartys policies; (B) To pay or reimburse the counterparty for payment of the SPFCs share of surrenders, benefits, losses, or other benefits covered and payable pursuant to the provisions of the SPFC contract; (C) To fund an account with the counterparty in an amount to secure the credit or reduction from liability for reinsurance coverage provided under the SPFC contract; or (D) To pay any other amounts the counterparty claims are due under the SPFC contract. (2) Any assets deposited into an account of the counterparty pursuant to paragraph (1)(C) of this subsection, or withdrawn by the counterparty pursuant to subparagraph (1)(D) of this subsection, and any interest or other earnings on them, shall be held by the counterparty in trust and separate and apart from any general assets of the counterparty, for the sole purpose of funding the payments and reimbursements of the SPFC contract described in paragraph (1) of this subsection. (3) The counterparty shall return to the SPFC: (A) Amounts withdrawn under paragraph (1) of this subsection in excess of actual amounts required under paragraph (1)(A) through (C) of this subsection, and in excess of the amounts subsequently determined to be due under paragraph (1)(D) of this subsection; (B) Interest at a rate not in excess of the prime rate for the amounts held pursuant to paragraph (1) of this subsection, unless a higher rate of interest has been awarded by a panel of arbitration; and (C) Any net costs or expenses, including attorneys fees, awarded by a panel of arbitration. (4) If the counterparty has received notification of termination of the trust account, and if the SPFCs entire obligations secured under the specific SPFC contract remain unliquidated and undischarged 10 days before the termination date, the trust agreement shall permit the counterparty to withdraw amounts equal to the obligations and deposit the amounts in a separate account, in the name of the counterparty, in a qualified United States financial institution, separate and apart from the counterpartys general assets, to the extent the obligations or liabilities have not been funded by the SPFC, in trust only for those uses and purposes specified in paragraph (1)(A) of this subsection as may remain executory after the withdrawal and for any period after the termination date until discharged.  (Mar. 17, 2005, D.C. Law 15-262,  208; as added Mar. 14, 2007, D.C. Law 16-285,  2(b), 54 DCR 944.) 
 313932.09. Dividends and distributions. (a) Dividends may be declared by the management of an SPFC if the dividends do not violate the provisions of this subchapter or jeopardize the fulfillment of the obligations of the SPFC or the trustee pursuant to the SPFC insurance securitization agreements, the SPFC contract, or any related transaction documents and other provisions of this subchapter. (b) An SPFC shall not declare or pay dividends in any form other than in accordance with the insurance securitization transaction agreements and shall not declare or pay dividends which decrease the capital and surplus of the SPFC below $250,000. (c) An SPFC or protected cell of an SPFC shall not pay dividends out of, or make any other distribution out of, its capital or surplus, or both, unless the SPFC or protected cell has obtained the prior written approval of the Commissioner to make the payment or distribution. After giving effect to the dividends, the assets of the SPFC, including assets held in trust pursuant to the terms of the insurance securitization, shall be sufficient to satisfy the Commissioner that the SPFC can meet its obligations. (d) The Commissioner may approve an ongoing plan for the payment of dividends or other distributions by an SPFC or protected cell of an SPFC. Approval by the Commissioner of an ongoing plan for the payment of dividends or other distribution shall be conditioned upon the retention, at the time of each payment, of capital and surplus equal to or in excess of amounts specified by, or determined in accordance with formulas approved for the SPFC or protected cell by, the Commissioner.  (Mar. 17, 2005, D.C. Law 15-262,  209; as added Mar. 14, 2007, D.C. Law 16-285,  2(b), 54 DCR 944.) 
 313932.10. Confidentiality of examination reports; disclosure of information. (a) Except as provided in this section, all examination reports, preliminary examination reports or results, working papers, recorded information, documents, and copies of documents produced by, obtained by, or disclosed to, the Commissioner or any other person in the course of an examination made pursuant to this section shall be confidential, shall not be subject to subpoena, and shall not be made public by the Commissioner or an employee or agent of the Commissioner without the written consent of the SPFC. This subsection shall not prevent the Commissioner from using this information in furtherance of the Commissioners regulatory authority as provided by this subchapter. The Commissioner may grant access to this information to public officers having jurisdiction over the regulation of insurance in another state or country, or to law enforcement officers of the District or another state or agency of the federal government at any time; provided, that the officers receiving the information agree in writing to hold it in a manner consistent with this section. (b) Information submitted pursuant to this subchapter shall be confidential and shall not be made public by the Commissioner or an agent or employee of the Commissioner without the prior written consent of the SPFC; provided, that: (1) Information submitted pursuant to the provisions of this subchapter shall be discoverable by a party in a civil action or contested case to which the submitting SPFC is a party upon a specific finding by the court that: (A) The SPFC is a necessary party to the action and not joined only for the purposes of evading the confidentiality provisions of this subchapter; (B) The party seeking the information demonstrates by a clear and convincing standard that the information sought is relevant, material to, and necessary for the prosecution or defense of the claim asserted in the action; and (C) The information sought is unavailable from other nonconfidential sources. (2) The Commissioner may disclose the information to the public official having jurisdiction over the regulation of insurance in another state if: (A) The public official agrees in writing to maintain the confidentiality of the information; and (B) The laws of the state in which the public official serves require the information to be confidential.  (Mar. 17, 2005, D.C. Law 15-262,  210; as added Mar. 14, 2007, D.C. Law 16-285,  2(b), 54 DCR 944.) 


 313932.13. Discount on reserves; report on reserves. (a) An SPFC may discount its reserves at discount rates as approved by the Commissioner. (b) An SPFC shall file annually an actuarial opinion on reserves provided by an approved independent actuary.  (Mar. 17, 2005, D.C. Law 15-262,  213; as added Mar. 14, 2007, D.C. Law 16-285,  2(b), 54 DCR 944.) 

 313932.15. Rulemaking. The Commissioner may promulgate rules necessary to effectuate the purposes of this subchapter. Rules promulgated pursuant to this section shall not affect an SPFC insurance securitization in effect at the time of the promulgation.  (Mar. 17, 2005, D.C. Law 15-262,  215; as added Mar. 14, 2007, D.C. Law 16-285,  2(b), 54 DCR 944.) 
 31331. Definitions.  For the purposes of this chapter, the term: (1) "Commissioner" means the Commissioner of the Department of Insurance, Securities, and Banking. (2) "Corporate Governance Annual Disclosure" means the report filed by an insurer or insurance group under this chapter. (3) "Insurance group" means those insurers and affiliates included within an insurance holding company system, as defined in  31-701(4). (4) "Insurer" shall have the same meaning as defined in  31-301(3); except, that it shall not include agencies, authorities, or instrumentalities of the United States, its possessions or territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state. (5) "NAIC" means the National Association of Insurance Commissioners.  (Sept. 22, 2021, D.C. Law 24-26,  2, 68 DCR 007994.) 
 31332. Applicability and scope. (a) This chapter shall apply to all insurers domiciled in the District. (b) Nothing in this chapter shall be construed to prescribe or impose corporate governance standards and internal procedures beyond that which are required under applicable District law or to limit the Commissioner's authority, or the rights or obligations of third parties, under Chapter 14 of this title.  (Sept. 22, 2021, D.C. Law 24-26,  3, 68 DCR 007994.) 
 31333. Disclosure requirement. (a)(1) By June 1 of each year, an insurer, or the insurance group of which the insurer is a member, shall submit to the Commissioner a Corporate Governance Annual Disclosure that contains the information required by this chapter, or rules issued pursuant to this chapter; except, that if the insurer is a member of an insurance group operating in the District for which the Department of Insurance, Securities, and Banking is not the group's primary regulator the insurer shall submit the Corporate Governance Annual Disclosure to the commissioner of the lead state for the insurance group in accordance with the laws of the lead state, as outlined in the most recent edition of the NAIC Financial Analysis Handbook. (2) An insurer not required to submit a Corporate Governance Annual Disclosure to the Commissioner under this subsection shall provide a copy of the insurer's Corporate Governance Annual Disclosure to the Commissioner upon the Commissioner's request. (b) The Corporate Governance Annual Disclosure shall include a signature of the insurer or insurance group's chief executive officer or corporate secretary attesting, to the best of that individual's belief and knowledge, that the insurer has implemented the corporate governance practices described in the Corporate Governance Annual Disclosure and that a copy of the Corporate Governance Annual Disclosure has been provided to the insurer's board of directors or the appropriate committee of the insurer's board of directors. (c) For purposes of completing the Corporate Governance Annual Disclosure, the insurer or insurance group may provide information regarding corporate governance at the ultimate controlling parent level, an intermediate holding company level, or the individual legal entity level depending upon how the insurer or insurance group has structured its system of corporate governance.  (Sept. 22, 2021, D.C. Law 24-26,  4, 68 DCR 007994.) 
 31334. Contents of Corporate Governance Annual Disclosure. (a)(1) The Corporate Governance Annual Disclosure shall be prepared in accordance with rules issued pursuant to this chapter and contain the material information necessary to permit the Commissioner to gain an understanding of the insurer's or group's corporate governance structure, policies, and practices. (2) The Commissioner may request any additional information considered material to providing the Commissioner with a clear understanding of the corporate governance policies and the reporting or information system or controls implementing those policies. (b) Documentation and supporting information for the Corporate Governance Annual Disclosure shall be maintained by the insurer or insurance group and made available for examination or upon request of the Commissioner.  (Sept. 22, 2021, D.C. Law 24-26,  5, 68 DCR 007994.) 
 31335. Confidentiality. (a) Documents, materials, and other information, including the Corporate Governance Annual Disclosure, in the possession or control of the Commissioner that are obtained by, created by, or disclosed to the Commissioner or any other person under this chapter shall be treated as confidential pursuant to the standards set forth in  31-4121.07. (b) Documents obtained by, created by, or disclosed to the Commissioner or any other person under this chapter that are already in the public domain shall not be subject to the confidentiality provisions described in subsection (a) of this section.  (Sept. 22, 2021, D.C. Law 24-26,  6, 68 DCR 007994.) 
 31336. NAIC and third-party consultants. (a) The Commissioner may disclose information received pursuant to this chapter to the NAIC in reviewing the Corporate Governance Annual Disclosure and related information or in evaluating an insurer's compliance with this chapter. (b)(1) The Commissioner may retain, at the insurer's expense, third-party consultants, including attorneys, actuaries, accountants, and other experts not otherwise a part of the Commissioner's staff, as may be reasonably necessary, to assist the Commissioner in reviewing the Corporate Governance Annual Disclosure and related information or in evaluating the insurer's compliance with this chapter. (2) The Commissioner shall have the authority to enter into a written agreement with the NAIC or a third-party consultant governing the sharing and use of information provided pursuant to this chapter. The agreement shall comply with the standards set forth in  31-4121.07(d)(2). (3) A third-party consultant retained pursuant to this subsection shall serve under the direction and control of the Commissioner and shall act in an advisory capacity to the Commissioner. (4) The NAIC, and third-party consultants retained pursuant to this subsection, shall be subject to the same confidentiality standards and requirements as the Commissioner. (c) As part of the retention process, a third-party consultant shall verify to the Commissioner, with notice to the insurer, that it is free of a conflict of interest and has internal procedures in place to identify conflicts and monitor compliance with any measures taken to cure any conflicts and to comply with the confidentiality standards and requirements of this chapter.  (Sept. 22, 2021, D.C. Law 24-26,  7, 68 DCR 007994.) 
 31337. Sanctions. An insurer or insurance group failing, without just cause, to timely file a Corporate Governance Annual Disclosure as required in this chapter, after notice and hearing, may be fined up to $1,000 per day, with a maximum penalty of $25,000, or have its certificate of authority suspended, revoked, or denied renewal.  (Sept. 22, 2021, D.C. Law 24-26,  8, 68 DCR 007994.) 
 31338. Rulemaking. The Commissioner may, in accordance with Chapter 5 of Title 2, issue rules to implement the provisions of this chapter.  (Sept. 22, 2021, D.C. Law 24-26,  9, 68 DCR 007994.) 
 31401. Definitions. For the purposes of this chapter, the term: (1) Accredited state means a jurisdiction in which the insurance department or regulatory agency has qualified as meeting the minimum financial regulatory standards promulgated and established from time to time by the National Association of Insurance Commissioners (NAIC). (2) Captive insurers means insurance companies owned by another organization whose exclusive purpose is to insure risks of the parent organization and affiliated companies, or, in the case of groups and associations, insurance organizations owned by the insureds whose exclusive purpose is to insure risks to member organizations or group members and their affiliates. (2A) Commissioner means the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking]. (3) Control or controlled has the meaning ascribed in  31-701(2). (4) Controlled insurer means a licensed insurer which is controlled, directly or indirectly, by a producer. (5) Controlling producer means a producer who, directly or indirectly, controls an insurer. (6) Holding company system has the meaning ascribed in  31-701(4). (7) Licensed insurer or insurer means any person, firm, association, or corporation duly licensed to transact a property/casualty insurance business in the District of Columbia. The following, inter alia, are not licensed insurers for the purposes of this chapter: (A) All risk retention groups as defined in the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C.  9601 et seq.), the Product Liability Risk Retention Act of 1981 (15 U.S.C.  3901 et seq.), and  31-4101; (B) All residual market pools and joint underwriting authorities or associations; and (C) All captive insurers. (8) Producer means an insurance broker or brokers or any other person, firm, association, or corporation, when, for any compensation, commission, or other thing of value, such a person, firm, association, or corporation acts or aids in any manner in soliciting, negotiating, or procuring the making of any insurance contract on behalf of an insured other than the person, firm, association, or corporation. (9) Repealed.  (Oct. 21, 1993, D.C. Law 10-52,  2, 40 DCR 6129; May 21, 1997, D.C. Law 11-268,  10(hh), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-4001. Editor's Notes Mayor authorized to issue rules: Section 10 of D.C. Law 10-52 provided that the Mayor shall, pursuant to subchapter I of Chapter 15 of Title 1 [subchapter I of Chapter 5 of Title 2, 2001 Ed.], issue rules to implement the provisions of this chapter. Delegation of Authority Delegation of authority pursuant to D.C. Law 10-52, the Business Transacted with Producer Controlled Insurance Act of 1993, see Mayors Order 94-54, March 7, 1994 ( 41 DCR 1433).
 31402. Applicability. This chapter shall apply to licensed insurers either domiciled in the District of Columbia or domiciled in a state that is not an accredited state having in effect a substantially similar law. All provisions of Chapter 7 of this title, to the extent they are not superseded by this chapter, shall continue to apply to all parties within holding company systems subject to this chapter.  (Oct. 21, 1993, D.C. Law 10-52,  3, 40 DCR 6129.)  Prior Codifications 1981 Ed.,  35-4002.
 31403. Applicability of minimum standards. (a) The provisions of  31-404, 31-405, and 31-406 shall apply if, in any calendar year, the aggregate amount of gross written premium on business placed with a controlled insurer by a controlling producer is equal to or greater than 5% of the admitted assets of the controlled insurer, as reported in the controlled insurers quarterly statement filed as of September 30 of the prior year. (b) Subsection (a) of this section shall not apply if: (1) The controlling producer: (A) Places insurance only with the controlled insurer, or only with the controlled insurer and a member or members of the controlled insurers holding company system, or the controlled insurers parent, affiliate, or subsidiary, and receives no compensation based upon the amount of premiums written in connection with the insurance; and (B) Accepts insurance placements only from nonaffiliated subproducers, and not directly from insureds; and (2) The controlled insurer, except for insurance business written through a residual market facility accepts insurance business only from a controlling producer, a producer controlled by the controlled insurer, or a producer that is a subsidiary of the controlled insurer.  (Oct. 21, 1993, D.C. Law 10-52,  4, 40 DCR 6129.)  Prior Codifications 1981 Ed.,  35-4003.
 31404. Required contract provisions. A controlled insurer shall not accept business from a controlling producer and a controlling producer shall not place business with a controlled insurer unless there is a written contract between the controlling producer and the controlled insurer specifying the responsibilities of each party, which contract has been approved by the board of directors of the controlled insurer, and contains the following minimum provisions: (1) The controlled insurer may terminate the contract for cause, upon written notice to the controlling producer. The controlled insurer shall suspend the authority of the controlling producer to write business during the pendency of any dispute regarding the cause for termination. (2) The controlling producer shall render accounts to the controlled insurer detailing all material transactions, including information necessary to support all commissions, charges, and other fees received by, or owing to, the controlling producer. (3) The controlling producer shall remit all funds due under the terms of the contract to the controlled insurer on at least a monthly basis. The due date shall be fixed so that premiums or installments collected shall be remitted no later than 90 days after the effective date of any policy placed with the controlled insurer under this contract. (4) All funds collected for the controlled insurers account shall be held by the controlling producer in a fiduciary capacity, in one or more appropriately identified bank accounts in banks that are members of the Federal Reserve System, in accordance with applicable provisions of insurance law of the District of Columbia. Funds of a controlling producer not required to be licensed in the District of Columbia shall be maintained in compliance with the requirements of the controlling producers domiciliary jurisdiction. (5) The controlling producer shall maintain separately identifiable records of business written for the controlled insurer. (6) The contract shall not be assigned in whole or in part by the controlling producer. (7) The controlled insurer shall provide the controlling producer with its underwriting standards, rules and procedures, manuals setting forth the rates to be charged, and the conditions for the acceptance or rejection of risks. The controlling producer shall adhere to the standards, rules, procedures, rates, and conditions. The standards, rules, procedures, rates, and conditions shall be the same as those applicable to comparable business placed with the controlled insurer by a producer other than the controlling producer. (8) The rates and terms of the controlling producers commissions, charges, or other fees and the purposes for those charges or fees shall be included. The rates of the commissions, charges, and other fees shall be no greater than those applicable to comparable business placed with the controlled insurer by producers other than controlling producers. For purposes of this paragraph and paragraph (7) of this section, examples of comparable business include the same lines of insurance, same kinds of insurance, same kinds of risks, similar policy limits, and similar quality of business. (9) If the contract provides that the controlling producer, on insurance business placed with the insurer, is to be compensated contingent upon the insurers profits on that business, then the compensation shall not be determined and paid until at least 5 years after the premiums on liability insurance are earned and at least 1 year after the premiums are earned on any other insurance. In no event shall the commissions be paid until the adequacy of the controlled insurers reserves on remaining claims has been independently verified pursuant to paragraphs (1) and (6) of this section. (10) The contract provides a limit on the controlling producers writings in relation to the controlled insurers surplus and total writings. The insurer may establish a different limit for each line or subline of business. The controlled insurer shall notify the controlling producer when the applicable limit is approached and shall not accept business from the controlling producer if the limit is reached. The controlling producer shall not place business with the controlled insurer if it has been notified by the controlled insurer that the limit has been reached. (11) The controlling producer may negotiate, but shall not bind, reinsurance on behalf of the controlled insurer on business the controlling producer places with the controlled insurer, except that the controlling producer may bind facultative reinsurance contracts pursuant to obligatory facultative agreements if the contract with the controlled insurer contains underwriting guidelines, including, for both reinsurance assumed and ceded, a list of reinsurers with which automatic agreements are in effect, the coverages and amounts or percentages that may be reinsured, and commission schedules.  (Oct. 21, 1993, D.C. Law 10-52,  5, 40 DCR 6129; May 16, 1995, D.C. Law 10-255,  34, 41 DCR 5193.)  Prior Codifications 1981 Ed.,  35-4004. Section References This section is referenced in  31-403.
 31405. Audit committee. Every controlled insurer shall have an audit committee of the board of directors composed of independent directors. The audit committee shall annually meet with management, the insurers independent certified public accountants, and an independent casualty actuary, or other independent loss reserve specialist acceptable to the Mayor, to review the adequacy of the insurers loss reserves.  (Oct. 21, 1993, D.C. Law 10-52,  6, 40 DCR 6129.)  Prior Codifications 1981 Ed.,  35-4005. Section References This section is referenced in  31-403.
 31406. Reporting requirements. (a) In addition to any other required loss reserve certification, the controlled insurer shall annually, on April 1 of each year, file with the Mayor an opinion of an independent casualty actuary, or any other independent loss reserve specialist acceptable to the Mayor reporting loss reserve for each line of business written and attesting to the adequacy of loss reserves established for losses incurred and outstanding as of year-end, including that incurred, but not reported, on business placed by the producer. (b) The controlled insurer shall annually report to the Mayor the amount of commissions paid to the producer, the percentage the amount represents of the net premiums written, and comparable amounts and percentage paid to noncontrolling producers for placements of the same kinds of insurance.  (Oct. 21, 1993, D.C. Law 10-52,  7, 40 DCR 6129; Apr. 26, 1994, D.C. Law 10-103,  9, 41 DCR 1005.)  Prior Codifications 1981 Ed.,  35-4006. Section References This section is referenced in  31-403. Temporary Legislation For temporary (225 day) amendment of section, see  9 of the Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17 1994, law notification 41 DCR 1626).
 31407. Disclosure. The producer, prior to the effective date of the policy, shall deliver written notice to the prospective insured disclosing the relationship between the producer and the controlled insurer, except that, if the business is placed through a subproducer who is not a controlling producer, the controlling producer shall retain in his or her records a signed commitment from the subproducer that the subproducer is aware of the relationship between the insurer and the producer and that the subproducer has or will notify the insured.  (Oct. 21, 1993, D.C. Law 10-52,  8, 40 DCR 6129.)  Prior Codifications 1981 Ed.,  35-4007.
 31408. Penalties. (a)(1) If the Mayor believes that the controlling producer or any other person has not materially complied with this chapter, or any regulation or order promulgated hereunder, after notice and opportunity to be heard, the Commissioner may order the controlling producer to cease placing business with the controlled insurer; and (2) If it was found that because of material noncompliance the controlled insurer or any policyholder has suffered any loss or damage, the Mayor may maintain a civil action or intervene in an action brought by or on behalf of the insurer or policyholder for recovery of compensatory damages for the benefit of the insurer or policyholder or for other appropriate relief. (b) If an order for liquidation or rehabilitation of the controlled insurer has been entered pursuant to Chapter 13 of this title, and the receiver appointed under that order believes that the controlling producer, or any other person, has not materially complied with this chapter, or any regulation or order promulgated hereunder, and the insurer suffered any loss or damage therefrom, the receiver may maintain a civil action for recovery of damages or other appropriate sanctions for the benefit of the insurer. (c) Nothing contained in this section shall affect the right of the Mayor to impose any other penalties provided under the insurance laws of the District of Columbia. (d) Nothing contained in this section shall in any manner alter or affect the rights of policyholders, claimants, creditors, or other third parties.  (Oct. 21, 1993, D.C. Law 10-52,  9, 40 DCR 6129; May 21, 1997, D.C. Law 11-268,  10, 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-4008.
 314001. Definitions. For the purposes of this chapter, the term: (1) Insurer means any individual, partnership, corporation, company, organization, professional association, or other business entity that issues, amends, or renews motor vehicle liability or homeowners liability insurance policies or contracts in the District of Columbia (District). (2) Child development home means a child development program provided in a private residence for up to a total of 5 children and infants, with no more than 2 infants in the group. The total of 5 children and infants shall not include the children of the child development home caregiver who are 6 years of age or older if the total number of children of the child development home caregiver between the ages of 6 and 15 years of age does not exceed 3 children, and of those 3 children, no more than 2 are 10 years old or younger. (3) Child development program means a program responsive to the stages of physical, emotional, social, and intellectual growth and behavior of infants or children. (4) Caregiver means a person whose duties include direct care, supervision, and guidance of infants or children in a child development home. (5) Infant means an individual between the ages of birth and 2 years. (6) Child means an individual between the ages of 2 and 15 years. (7) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking. (8) Person means any individual, firm, partnership, company, corporation, trustee, or association.  (June 13, 1990, D.C. Law 8-140,  2, 37 DCR 2651; May 21, 1997, D.C. Law 11-268,  10(x), 44 DCR 1730; June 11, 2004, D.C. Law 15-166,  4(y), 51 DCR 2817.)  Prior Codifications 1981 Ed.,  35-2501. Effect of Amendments D.C. Law 15-166, in par. (7), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance and Securities. Emergency Legislation For temporary (90 day) amendment of section, see  4(y) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
 314002. General provisions. (a) An insurer shall offer to any person who is a licensed caregiver pursuant to 29 DCMR 301, optional liability and comprehensive coverage for up to a total of 5 children and infants. The optional protection shall provide liability coverage for a child or infant who is injured while attending the child development home and comprehensive coverage for property damage to the child development home. (b) An insurer who offers motor vehicle liability insurance in the District, pursuant to Chapter 24 of this title, may offer to any policyholder who is licensed pursuant to 29 DCMR 301 as a child development home caregiver, optional personal injury protection to cover a child or infant who suffers an injury while a passenger in an automobile operated out of the insureds activities as a child development home caregiver. The coverage required pursuant to this subsection shall be in an amount approved by the Commissioner. (c) Nothing in this chapter shall prohibit an insurer from denying a child development home caregivers application for optional insurance or denying liability coverage to an insured for an injury that results from abuse or neglect.  (June 13, 1990, D.C. Law 8-140,  3, 37 DCR 2651; May 21, 1997, D.C. Law 11-268,  10(x), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2502.
 314003. Commissioner to establish liability coverage levels. For purposes of this chapter, the Commissioner shall establish liability coverage levels in rulemaking pursuant to the provisions of subchapter I of Chapter 5 of Title 2.  (June 13, 1990, D.C. Law 8-140,  4, 37 DCR 2651; May 21, 1997, D.C. Law 11-268,  10, 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  34, 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-2503.
 314101. Definitions. For the purposes of this chapter, the term: (1) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking, or the commissioner, director, or superintendent of insurance in any other state. (A) Any person who performs that work; or (B) Any person who hires an independent contractor to perform that work, but shall include liability for activities which are completed or abandoned before the date of the occurrence giving rise to the liability. (1A) Completed operations liability means liability arising out of installation, maintenance, or repair of any product at a site which is not owned or controlled by: (2) District means the District of Columbia. (3) Domicile, for purposes of determining the state in which a purchasing group is domiciled, means: (A) For a corporation, the state in which the purchasing group is incorporated; and (B) For an unincorporated entity, the state of its principal place of business. (4) Hazardous financial condition means that, based on its present reasonably anticipated financial condition, a risk retention group, although not yet financially impaired or insolvent, is unlikely to be able to: (A) Meet obligations to policyholders with respect to known claims and reasonably anticipated claims; (B) Pay other obligations in the normal course of business; or (C) Meet the minimum capital and surplus requirements of licensed property and casualty insurance companies. (5) Insurance means primary insurance, excess insurance, reinsurance, surplus lines insurance, and any other arrangement for shifting and distributing risk which is determined to be insurance under the laws of the District. (6) Liability means legal liability for damages, including costs of defense, legal costs, and fees, and other claims expenses, because of injuries to other persons, damage to their property, or other damage or loss to other persons resulting from or arising out of any business (whether profit or nonprofit), trade, product, services (including professional services), premises, or operations, or any activity of any state or local government, or any agency or political subdivision thereof. The term liability does not include personal risk liability and an employers liability with respect to its employees other than legal liability under the Federal Employers Liability Act (45 U.S.C.  51 et seq.). (7) NAIC means National Association of Insurance Commissioners. (8) Personal risk liability means liability for damages because of injury to any person, damage to property, or other loss or damage resulting from any personal, familial, or household responsibilities or activities, rather than from responsibilities or activities referred to in paragraph (10) of this section. (9) Plan of operation or a feasibility study means an analysis which presents the expected activities and results of a risk retention group including, at a minimum: (A) Information sufficient to verify that its members are engaged in businesses or activities similar or related with respect to the liability to which the members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations; (B) For each state in which it intends to operate, the coverages, deductibles, coverage limits, rates, and rating classification systems for each line of insurance the group intends to offer; (C) Historical and expected loss experience of the proposed members and national experience of similar exposures to the extent that this experience is reasonably available; (D) Pro forma financial statements and projections; (E) Appropriate opinions by a qualified, independent casualty actuary including a determination of minimum premium or participation levels required to commence operations and to prevent a hazardous financial condition; (F) Identification of management, underwriting, and claims procedures marketing methods, managerial oversight methods, investment policies, and reinsurance agreements; (G) Identification of each state in which the risk retention group has obtained, or sought to obtain, a charter and license, and a description of its status in each state; and (H) Other matters as may be prescribed by the insurance commissioner of the jurisdiction in which the risk retention group is chartered for liability insurance companies authorized by the insurance laws of that jurisdiction. (10) Product liability means liability for damages because of any personal injury, death, emotional harm, consequential economic damage, or property damage (including damages resulting from the loss of use of property) arising out of the manufacture, design, importation, distribution, packaging, labeling, lease, or sale of a product, but does not include the liability of any person for those damages if the product involved was in the possession of the person when the incident giving rise to the claim occurred. (11) Purchasing group means any group which: (A) Has as one of its purposes the purchase of liability insurance on a group basis; (B) Purchases liability insurance only for its group members and only to cover their similar or related liability exposure, as described in subparagraph (C) of this paragraph; (C) Is composed of members whose businesses or activities are similar or related with respect to the liability to which members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations; and (D) Is domiciled in any state. (12) Risk retention group means any corporation or other limited liability association: (A) Whose primary activity consists of assuming and spreading all, or any portion, of the liability exposure of its group members; (B) Which is organized for the primary purpose of conducting the activity described under subparagraph (A) of this paragraph; (C) Which is chartered and licensed as a liability insurance company and authorized to engage in the business of insurance under the laws of any state; or which, before January 1, 1985, was chartered or licensed and authorized to engage in the business of insurance under the laws of Bermuda or the Cayman Islands and, before that date, had certified to the insurance commissioner of at least 1 state that it satisfied the capitalization requirements of that state, except that any group shall be considered a risk retention group only if it has been engaged in business continuously since that date and only for the purpose of continuing to provide insurance to cover product liability or completed operations liability, as these terms were defined in the federal Product Liability Risk Retention Act of 1981, approved September 25, 1981 (95 Stat. 949; 15 U.S.C.  3901 et seq.), before the date of the enactment of the Liability Risk Retention Act of 1986, approved October 27, 1986 (100 Stat. 3170; 15 U.S.C.  3901 et seq.); (D) Repealed. (E) Which does not exclude any person from membership in the group solely to provide members of the group a competitive advantage over that person; (F) Which has as its owners only persons who comprise the membership of the risk retention group and who are provided insurance by the group, or has as its sole owner an organization which has as its members only persons who comprise the membership of the risk retention group, and as its owners only persons who comprise the membership of the risk retention group and who are provided insurance by the group; (G) Whose members are engaged in businesses or activities similar or related with respect to the liability of which the members are exposed by virtue of any related, similar, or common business trade, product, services, premises, or operations; (H) Whose activities do not include the provision of insurance other than: (i) Liability insurance for assuming and spreading all or any portion of the liability of its group members; and (ii) Reinsurance with respect to the liability of any other risk retention group, or any members of the other group, which is engaged in business or activities so that the group or a member meets the requirement described in paragraph (9)(G) of this section from membership in the risk retention group which provides the reinsurance; and (I) The name of which includes the phrase Risk Retention Group. (13) State means any state of the United States or the District of Columbia. (14) Repealed.  (Oct. 21, 1993, D.C. Law 10-46,  2, 40 DCR 6082; Apr. 26, 1994, D.C. Law 10-103,  4(a), 41 DCR 1005; Feb. 27, 1996, D.C. Law 11-90,  3(a)-(c), 42 DCR 7155; May 21, 1997, D.C. Law 11-268,  10(aa)(1), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  38(a), 45 DCR 745; June 11, 2004, D.C. Law 15-166,  4(z), 51 DCR 2817.)  Prior Codifications 1981 Ed.,  35-2901. Section References This section is referenced in  31-401,  31-751,  31-3931.01,  31-3931.12,  31-4103, and  31-4107. Effect of Amendments D.C. Law 15-166, in par. (1), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance and Securities. Cross References Reciprocal insurance company to include interinsurance exchange but not risk retention group, see  31-751. Emergency Legislation For temporary amendment of section, see  3(a) through (c) of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and  3(a) through (c) of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844). For temporary (90 day) amendment of section, see  4(z) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). Temporary Legislation For temporary (225 day) amendment of section, see  4(a) of Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17, 1994, law notification 41 DCR 1626). For temporary (225 day) amendment of section, see  3(a)-(c) of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305). Editor's Notes Mayor authorized to issue rules: Section 14 of D.C. Law 10-46 provided that the Mayor shall, pursuant to subchapter I of Chapter 15 of Title 1subchapter I of Chapter 5 of Title 2, 2001 Ed., issue rules to implement the provisions of this chapter. Delegation of Authority Delegation of authority pursuant to D.C. Law 10-46, the Risk Retention Act of 1993, see Mayors Order 94-54, March 7, 1994 ( 41 DCR 1433).
 314102. Risk retention groups chartered in the District. (a)(1) A risk retention group shall be chartered as an association captive insurer licensed pursuant to  31-3931.01, and licensed to write only liability insurance pursuant to this chapter, and shall comply with all of the laws, rules, and regulations, and requirements applicable to captive insurers chartered and licensed in the District and with  31-4103, to the extent the requirements are not a limitation on laws, rules, regulations, or requirements of the District. (2) All risk retention groups chartered in the District shall file with the Mayor and the NAIC annual and quarterly statements in a form prescribed by the NAIC and in any other form required by the Mayor. (3) Any license issued pursuant to this section shall be issued as a Financial Services endorsement to a basic business license under the basic business license system as set forth in subchapter I-A of Chapter 28 of Title 47. (b) Before it may offer insurance in any state, each risk retention group shall also submit to the Mayor a plan of operation or feasibility study. The risk retention group shall submit an appropriate revision in the event of any subsequent material change in any item of the plan of operation or feasibility study, within 10 days of any change. The group shall not offer any additional kinds of liability insurance, in the District or in any other state, until a revision of the plan or study is approved by the Commissioner. (c)(1) At the time of filing its application for a charter, the risk retention group shall provide to the Commissioner, in summary form, the following information: (A) The identity of the initial members of the group; (B) The identity of those individuals who organized the group or who will provide administrative services or otherwise influence or control the activities of the group; (C) The amount and nature of initial capitalization; (D) The coverages to be afforded; and (E) The states in which the group intends to operate. (2) Upon receipt of this information, the Mayor shall forward the information to the NAIC. Providing notification to the NAIC is in addition to and shall not be sufficient to satisfy the requirements of  31-4103 or any other sections of this chapter.  (Oct. 21, 1993, D.C. Law 10-46,  3, 40 DCR 6082; Apr. 26, 1994, D.C. Law 10-103,  4(b), 41 DCR 1005; May 21, 1997, D.C. Law 11-268,  10(aa)(2), 44 DCR 1730; Apr. 20, 1999, D.C. Law 12-261,  2003(ll), 46 DCR 3142; Oct. 28, 2003, D.C. Law 15-38,  3(z), 50 DCR 6913; Mar. 17, 2005, D.C. Law 15-262,  26, 52 DCR 1205; Mar. 10, 2015, D.C. Law 20-203,  3, 61 DCR 12572.)  Prior Codifications 1981 Ed.,  35-2902. Section References This section is referenced in  31-4103. Effect of Amendments D.C. Law 15-38, in subsec. (a)(3), substituted Financial Services endorsement to a basic business license under the basic for Class A Financial Services endorsement to a master business license under the master. D.C. Law 15-262 rewrote subsec. (a)(1) which had read: (a)(1) A risk retention group shall be chartered and licensed to write only liability insurance pursuant to this chapter, and, except as provided elsewhere in this chapter, must comply with all of the laws, rules, regulations, and requirements applicable to an insurer chartered and licensed in the District and with  31-4103 to the extent the requirements are not a limitation on laws, rules, regulations, or requirements of the District. The 2015 amendment by D.C. Law 20-203 substituted insurers for insurance companies in (a)(1); and substituted annual and quarterly statements for an annual statement in (a)(2). Emergency Legislation For temporary (90 day) amendment of section, see  3(z) of Streamlining Regulation Emergency Act of 2003 (D.C. Act 15-145, August 11, 2003, 50 DCR 6896). For temporary (90 day) amendment of section, see  26 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238). Temporary Legislation For temporary (225 day) amendment of section, see  4(b) of Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17, 1994, law notification 41 DCR 1626).
 314103. Risk retention groups not chartered in the District. Risk retention groups chartered and licensed in states other than the District seeking to do business as a risk retention group in the District shall comply with the laws of the District as follows: (1)(A) Before offering insurance in the District, a risk retention group shall submit to the Mayor on a form prescribed by the NAIC: (i) A statement identifying the state or states in which the retention group is chartered and licensed as a liability insurance company, charter date, its principal place of business, and any other information, including information on its membership, as the Mayor may require to verify that the risk retention group is qualified under  31-4101(12); and (ii) A copy of its plan of operations or feasibility study and revisions of the plan or study submitted to the state in which the risk retention group is chartered and licensed; provided, however, that the provision relating to the submission of a plan of operation or feasibility study shall not apply with respect to any line or classification of liability insurance which was defined in the federal Product Liability Risk Retention Act of 1981 (15 U.S.C.  3901 et seq.), before October 27, 1986, and which was offered before the date by any risk retention group which had been chartered and operating for not less than 3 years before the date. (B) The risk retention group shall submit a copy of any revision to its plan of operation or feasibility study required by  31-4102(b) at the same time that the revision is submitted to the commissioner of its chartering state. (C) The risk retention group shall submit a statement of registration, for which a filing fee shall be determined by the Mayor, proof of compliance with the service of process provisions of  31-202. (2) Any risk retention group doing business in the District shall submit to the Mayor: (A) A copy of the groups financial statement submitted to the state in which the risk retention group is chartered and licensed which shall be certified by an independent public accountant and contain a statement of opinion on loss and loss adjustment expense reserves made by a member of the American Academy of Actuaries or a qualified loss reserve specialist under criteria established by the NAIC; (B) A copy of each examination of the risk retention group as certified by the Commissioner or public official conducting the examination; (C) Upon request by the Commissioner, a copy of any information or document pertaining to any outside audit performed with respect to the risk retention group; and (D) Any information required to verify its continuing qualification as a risk retention group under  31-4101(12). (3)(A) Each risk retention group shall be liable for the payment of premium taxes and taxes on premiums of direct business for risks resident or located within the District, and shall report to the Commissioner the net premiums written for risks resident or located within the District. Such a risk retention group shall be subject to taxation, and any related applicable fines and penalties, on the same basis as a foreign admitted insurer. (B) To the extent licensed agents or brokers are utilized pursuant to  31-4111, they shall report to the Commissioner the premiums for direct business for risks resident or located within the District which these licensees have placed with or on behalf of a risk retention group not chartered in the District of Columbia. (C) To the extent that insurance agents or brokers are utilized pursuant to  31-4111, the agent or broker shall keep a complete and separate record of all policies procured from each risk retention group, which record shall be open to examination by the Commissioner, as provided by the insurance laws of the District of Columbia. These records shall contain each policy and each kind of insurance provided thereunder, and shall include the following: (i) The limit of liability; (ii) The time period covered; (iii) The effective date; (iv) The name of the risk retention group which issued the policy; (v) The gross premium charged; and (vi) The amount of return premiums, if any. (4) Any risk retention group, its agents, and representatives shall comply with District law governing fraud or deceptive practices. If the Mayor seeks an injunction regarding this conduct, the injunction shall be obtained from a court of competent jurisdiction. (5) Any risk retention group shall comply with the laws governing the proper transaction of insurance business as provided by the District. (6) Any risk retention group must submit to an examination by the Commissioner to determine its financial condition if the superintendent or Commissioner of the jurisdiction in which the group is chartered and licensed has not initiated an examination within 60 days after a request by the Commissioner of the District. Any examination shall be coordinated to avoid unjustified repetition and conducted in an expeditious manner and in accordance with the NAICs Examiner Handbook. Cost of the examination shall be borne by the risk retention group. (7) Every application form for insurance from a risk retention group, and every policy, on its front and declaration page issued by a risk retention group, shall contain in 10-point type the following notice: This policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for your risk retention group..   NOTICE (8) The following acts by a risk retention group are prohibited: (A) The solicitation or sale of insurance by a risk retention group to any person who is not eligible for membership in the group; and (B) The solicitation or sale of insurance by, or operation of, a risk retention group that is in hazardous financial condition or financially impaired. (9) After April 26, 1994, risk retention groups shall not be allowed to do business in the District if an insurance company is directly or indirectly a member or owner of the risk retention group, other than in the case of a risk retention group all of whose members are insurance companies. (10) The terms of any insurance policy issued by risk retention groups shall not provide, or be construed to provide, coverage prohibited generally by a statute of the District or declared unlawful by the highest court of the District whose law applies to such a policy. (11) A risk retention group not chartered in the District and doing business in the District shall comply with a lawful order issued in a voluntary dissolution proceeding or in a delinquency proceeding commenced by a state insurance commissioner if there has been a finding of financial impairment after an examination under paragraph (6) of this section. (12) A risk retention group that violates any provision of this chapter will be subject to fines and penalties, including revocation of its right to do business in the District, applicable to licensed insurers generally. (13) In addition to complying with the requirements of this section, any risk retention group operating in the District prior to enactment of this chapter shall, within 30 days after October 21, 1993, comply with paragraph (1) of this section.  (Oct. 21, 1993, D.C. Law 10-46,  4, 40 DCR 6082; Apr. 26, 1994, D.C. Law 10-103,  4(c), 41 DCR 1005; Mar. 21, 1995, D.C. Law 10-233,  8, 42 DCR 24; May 16, 1995, D.C. Law 10-255,  47, 41 DCR 5193; Feb. 27, 1996, D.C. Law 11-90,  3(d)-(f), 42 DCR 7155; May 21, 1997, D.C. Law 11-268,  10(aa)(2), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  38(b), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-2903. Section References This section is referenced in  31-4102. Emergency Legislation For temporary amendment of section, see  3(d) through (f) of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and  3(d) through (f) of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844). Temporary Legislation For temporary (225 day) amendment of section, see  4(c) of Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17, 1994, law notification 41 DCR 1626). For temporary (225 day) amendment of section, see  3(d)-(f) of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305).
 314104. Restrictions. (a) No risk retention group shall be required or permitted to join or contribute financially to any insurance insolvency guaranty fund, or similar mechanism, in the District, nor shall any risk retention group or its insureds or claimants against its insureds, receive any benefit from such a fund for claims arising under the insurance policies issued by the risk retention group. (b) When a purchasing group obtains insurance covering its members from an insurer not authorized in this state, or a risk retention group, no risks, resident or located, shall be covered by any insurance guaranty fund or similar mechanism in the District. (c) When a purchasing group obtains insurance covering its members risks from an authorized insurer, only risks resident or located in the District shall be covered by the District property and liability guaranty fund.  (Oct. 21, 1993, D.C. Law 10-46,  5, 40 DCR 6082.)  Prior Codifications 1981 Ed.,  35-2904.
 314105. Countersignatures not required. A policy of insurance issued to a risk retention group, or any member of that group, shall not be required to be countersigned as otherwise provided in the District of Columbia insurance law.  (Oct. 21, 1993, D.C. Law 10-46,  6, 40 DCR 6082.)  Prior Codifications 1981 Ed.,  35-2905.
 314106. Purchasing groups  Exemption from certain laws. A purchasing group and its insurer or insurers shall be subject to all applicable laws of the District, except that a purchasing group and its insurer or insurers shall be exempt, in regard to liability insurance for the purchasing group, from any law that would: (1) Prohibit the establishment of a purchasing group; (2) Make it unlawful for an insurer to provide, or offer to provide, insurance on a basis providing to a purchasing group or its members advantages based on their loss and expense experience not afforded to other persons with respect to rates, policy forms, coverages, or other matters; (3) Prohibit a purchasing group or its members from purchasing insurance on a group basis described in paragraph (2) of this section; (4) Prohibit a purchasing group from obtaining insurance on a group because the group has not been in existence for a minimum period of time or because any member has not belonged to the group for a minimum period of time; (5) Require that a purchasing group must have a minimum number of common ownership or affiliation, or certain legal form; (6) Require that a certain percentage of a purchasing group must obtain insurance on a group basis; (7) Otherwise discriminate against a purchasing group or any of its members; or (8) Require that any insurance policy issued to a purchasing group or any of its members be countersigned by an insurance agent or broker residing in the District.  (Oct. 21, 1993, D.C. Law 10-46,  7, 40 DCR 6082.)  Prior Codifications 1981 Ed.,  35-2906.
 314107. Notice and registration requirements of purchasing groups. (a) A purchasing group which intends to do business in the District shall, prior to doing business, furnish notice to the Commissioner which shall: (1) Identify the state in which the group is domiciled; (2) Identify all other states in which the group intends to do business; (3) Specify the lines and classifications of liability insurance which the purchasing group intends to purchase; (4) Identify the insurance company or companies from which the group intends to purchase its insurance and the domicile of each company; (5) Specify the method by which, and the person or persons, if any, through whom, the insurance will be offered to its members whose risks are resident or located in the District; (6) Identify the principal place of business of the group; and (7) Provide any other information required by the Commissioner to verify that the purchasing group is qualified under  31-4101(11). (b) A purchasing group shall, within 10 days, notify the Commissioner of any changes in any of the items set forth in subsection (a) of this section. (c) The purchasing group shall register with the District and provide proof of compliance with the service of process provisions of  31-202, for which a filing fee shall be determined by the Commissioner, except that these requirements shall not apply in the case of a purchasing group which only purchases insurance that was authorized under the federal Product Liability Risk Retention Act of 1981 (15 U.S.C.  3901 et seq.), and: (1) Which was domiciled in any state of the United States before April 1, 1986, and after October 27, 1986; (2) Which purchased insurance from an insurance carrier licensed in any state before October 27, 1986, and since October 27, 1986; or (3) Which was a purchasing group under the requirements of the federal Product Liability Risk Retention Act of 1981 (15 U.S.C.  3901 et seq.), before October 27, 1986. (d) Each purchasing group that is required to give notice pursuant to subsection (a) of this section shall also furnish information required by the Commissioner to: (1) Verify that the entity qualifies as a purchasing group; (2) Determine where the purchasing group is located; and (3) Determine appropriate tax treatment. (e) Any purchasing group which was doing business in the District prior to the enactment of this chapter shall, within 30 days after October 21, 1993, furnish notice to the Mayor pursuant to the provisions of subsection (a) of this section and furnish the information required pursuant to subsections (b) and (c) of this section.  (Oct. 21, 1993, D.C. Law 10-46,  8, 40 DCR 6082; Mar. 21, 1995, D.C. Law 10-233,  9, 42 DCR 24; May 21, 1997, D.C. Law 11-268,  10(aa)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2907. Section References This section is referenced in  31-4111.
 314108. Restrictions on insurance purchased by purchasing groups. (a) A purchasing group may not purchase insurance from a risk retention group that is not chartered in a state or from an insurer not admitted in the state in which the purchasing group is located, unless the purchase is effected through a licensed agent or broker acting pursuant to the surplus lines laws and regulations of such a state. (b) A purchasing group which obtains liability insurance from an insurer not admitted in the District or a risk retention group shall inform each of the members of the group that has a risk resident or located in the District that such a risk is not protected by an insurance insolvency guaranty fund in the District, and that the risk retention group or the insurer may not be subject to all the insurance laws and regulations of the District. (c) No purchasing group may purchase insurance providing for a deductible or self-insured retention applicable to the group as a whole; however, coverage may provide for a deductible or self-insured retention applicable to individual members. (d) Purchases of insurance by purchasing groups are subject to the same standards regarding aggregate limits which are applicable to all purchases of group insurance.  (Oct. 21, 1993, D.C. Law 10-46,  9, 40 DCR 6082.)  Prior Codifications 1981 Ed.,  35-2908. Section References This section is referenced in  31-4111.
 314109. Purchasing group taxation. Premium taxes and taxes on premiums paid for coverage of risks resident or located in the District by a purchasing group or any members of the purchasing groups shall be: (1) Imposed at the same rate and subject to the same interest, fines, and penalties as that applicable to premium taxes and taxes on premiums paid for similar coverage from a similar insurance source by other insureds; and (2) Paid first by the insurance source, and if not by the source by the agent or broker for the purchasing group, and if not by the agent or broker then by the purchasing group, and if not by the purchasing group then by each of its members.  (Oct. 21, 1993, D.C. Law 10-46,  10, 40 DCR 6082.)  Prior Codifications 1981 Ed.,  35-2909.
 314110. Administrative and procedural authority regarding risk retention groups and purchasing groups. The Commissioner is authorized to make use of any of the powers established under the Insurance Code of the District of Columbia to enforce the laws of the District of Columbia not specifically preempted by the federal Liability Risk Retention Act of 1986 (15 U.S.C.  3901 et seq.), including the Commissioners administrative authority to investigate, issue subpoenas, conduct depositions and hearings, issue orders, impose penalties, and seek injunctive relief. With regard to any investigation, administrative proceedings, or litigation, the Commissioner can rely on the procedural laws of the District. The injunctive authority of the Commissioner, in regard to risk retention groups, is restricted by the requirement that any injunction be issued by a court of competent jurisdiction.  (Oct. 21, 1993, D.C. Law 10-46,  11, 40 DCR 6082; Apr. 9, 1997, D.C. Law 11-255,  41, 44 DCR 1271; May 21, 1997, D.C. Law 11-268,  10(aa)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-2910.
 314111. Duty of agents or brokers to obtain license. (a) No person, firm, association, or corporation shall act or aid in any manner in soliciting, negotiating, or procuring liability insurance in the District from a risk retention group unless the person, firm, association, or corporation is licensed as an insurance agent or broker in accordance with the District of Columbia insurance licensing laws. (b)(1) No person, firm, association, or corporation shall act or aid in any manner in soliciting, negotiating, or procuring liability insurance in the District for a purchasing group from an authorized insurer or a risk retention group chartered in a state unless the person, firm, association, or corporation is licensed as an insurance agent or broker in accordance with the District of Columbia insurance licensing laws. (2) No person, firm, association, or corporation shall act or aid in any manner in soliciting, negotiating, or procuring liability insurance coverage in the District for any member of a purchasing group under a purchasing groups policy unless the person, firm, association, or corporation is licensed as an insurance agent or broker in accordance with the District of Columbia insurance licensing laws. (3) No person, firm, association, or corporation shall act or aid in any manner in soliciting, negotiating, or procuring liability insurance from an insurer not authorized to do business in the District on behalf of a purchasing group located in this state unless the person, firm, association, or corporation is licensed as a surplus lines agent or excess line broker in accordance with the District of Columbia insurance licensing laws. (c) For purposes of acting as an agent or broker for a risk retention or purchasing group pursuant to subsections (a) and (b) of this section, the requirement of residence in the District shall not apply. (d) Every person, firm, association, or corporation licensed pursuant to the provisions of Chapter 28 of Title 47, on business placed with risk retention groups or written through a purchasing group, shall inform each prospective insured of the provisions of the notice required by  31-4108(b) in the case of a risk retention group and  31-4107(c) in the case of a purchasing group.  (Oct. 21, 1993, D.C. Law 10-46,  12, 40 DCR 6082; Feb. 27, 1996, D.C. Law 11-90,  3(g), 42 DCR 7155.)  Prior Codifications 1981 Ed.,  35-2911. Section References This section is referenced in  31-4103. Emergency Legislation For temporary amendment of section, see  3(g) of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and  3(g) of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844). Temporary Legislation For temporary (225 day) amendment of section, see  3(g) of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305).
 314112. Binding effect of orders issued in United States District Court. An order issued by any district court of the United States enjoining a risk retention group from soliciting or selling insurance, or operating in any state, or in all states or in any territory or possession of the United States, upon finding that such a group is in hazardous financial or financially impaired condition shall be enforceable in the courts of the state.  (Oct. 21, 1993, D.C. Law 10-46,  13, 40 DCR 6082.)  Prior Codifications 1981 Ed.,  35-2912.

 314121.02. Risk management framework. (a)(1) An insurer shall maintain a risk management framework, as described in the ORSA Guidance Manual, to assist the insurer with identifying, assessing, monitoring, managing, and reporting on its material and relevant risks. (2) A change in the ORSA Guidance Manual shall be effective on the January 1 following the calendar year in which the changes are adopted by NAIC. (b) The requirement set forth in subsection (a) of this section may be satisfied if the insurance group of which the insurer is a member maintains a risk management framework applicable to the operations of the insurer.  (Mar. 28, 2019, D.C. Law 22-269,  3, 66 DCR 1438.) 
 314121.03. ORSA requirement. Except as provided in  31-4121.05, an insurer, or the insurance group of which the insurer is a member, shall conduct an ORSA using a process comparable to the applicable process contained in the ORSA Guidance Manual annually and any time there is significant change to the risk profile of the insurer or the insurance group of which the insurer is a member.  (Mar. 28, 2019, D.C. Law 22-269,  4, 66 DCR 1438.) 
 314121.04. ORSA Summary Report. (a) Upon the Commissioner's request, and no more than once each year, an insurer shall submit to the Commissioner an ORSA Summary Report or any combination of reports applicable to the insurer or the insurance group of which it is a member that together contain the information described in the ORSA Guidance Manual ("reports"). If the insurer is a member of an insurance group, the insurer shall annually submit the reports required by this subsection to the lead state commissioner of the insurance group as determined by the procedures within the Financial Analysis Handbook adopted by the NAIC regardless of whether the Commissioner has made a request. (b) The reports shall be signed by the insurer or insurance group's chief risk officer or other executive having responsibility for the oversight of the insurer's enterprise risk management process. The executive shall attest that to the best of the executive's belief and knowledge the insurer has applied the enterprise risk management process described in the ORSA Summary Report and that a copy of the report has been provided to the insurer's board of directors or the appropriate committee of the board. (c) An insurer may comply with subsection (a) of this section by providing the most recent and substantially similar report provided by the insurer or another member of an insurance group of which the insurer is a member to the commissioner of another state or to a supervisor or regulator of a foreign jurisdiction; provided, that the report provides information that is comparable to the information described in the ORSA Guidance Manual; provider further, that a report in a language other than English shall be accompanied by an English translation of the report.  (Mar. 28, 2019, D.C. Law 22-269,  5, 66 DCR 1438.) 
 314121.05. Exemptions. (a) An insurer shall be exempt from the requirements of this chapter if: (1) The insurer has annual direct written and unaffiliated assumed premiums, including international direct and assumed premiums, but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of less than $500 million; and (2) The insurance group of which the insurer is a member has annual direct written and unaffiliated assumed premiums, including international direct and assumed premiums, but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of less than $1 billion. (b) If an insurer qualifies for exemption pursuant to subsection (a)(1) of this section, but the insurance group of which the insurer is a member does not qualify for exemption pursuant to subsection (a)(2) of this section, then the ORSA Summary Report that may be required pursuant to  31-4121.04 shall include every insurer within the insurance group; which requirement may be satisfied by the submission of more than one ORSA Summary Report for any combination of insurers; provided, that the combination of reports includes every insurer within the insurance group. (c) If an insurer does not qualify for exemption pursuant to subsection (a)(1) of this section, but the insurance group of which it is a member qualifies for exemption pursuant to subsection (a)(2) of this section, then the only ORSA Summary Report that may be required pursuant to  31-4121.04 shall be the report applicable to that insurer. (d)(1) An insurer that does not qualify for exemption pursuant to subsection (a) of this section may apply to the Commissioner for a waiver from the requirements of this chapter based upon unique circumstances. (2)(A) In deciding whether to grant an insurer's request for waiver, the Commissioner may consider: (i) The type and volume of business written; (ii) The ownership; (iii) The organizational structure; and (iv) Any other factor the Commissioner considers relevant to the insurer or insurance group of which the insurer is a member. (B) If the insurer is part of an insurance group with insurers domiciled in more than one state, the Commissioner shall coordinate with the lead state commissioner and with other domiciliary commissioners of the other states in considering whether to grant the insurer's request for a waiver. (e) Notwithstanding the exemptions stated in this section, the Commissioner may require an insurer to: (1) Maintain a risk management framework, conduct an ORSA, and file an ORSA Summary Report based on unique circumstances, including the type and volume of business written, ownership, and organizational structure, and federal agency and international supervisor requests; or (2) Maintain a risk management framework, conduct an ORSA, and file an ORSA Summary Report if: (A) The insurer has risk-based capital for a Company Action Level Event, as defined in  31-2003; (B) Meets one or more of the standards of an insurer deemed to be in hazardous financial condition, as defined in  31-2101; or (C) As determined by the Commissioner, exhibits other qualities of a troubled insurer. (f) If an insurer that qualifies for an exemption pursuant to subsection (a) of this section no longer qualifies for that exemption due to changes in premiums as reflected in the insurer's most recent annual statement or in the most recent annual statements of the insurers within the insurance group of which the insurer is a member, the insurer shall have one year following the loss of exemption qualification to comply with the requirements of this chapter.  (Mar. 28, 2019, D.C. Law 22-269,  6, 66 DCR 1438.) 
 314121.06. Contents of ORSA Summary Report. (a) The ORSA Summary Report, and any additional requests for information, shall be prepared: (1) In consistence with the ORSA Guidance Manual; and (2) Using procedures consistent with  31-707 and Chapter 14 of this title. (b) Documentation and supporting information shall be maintained for a period to be determined by the Commissioner and made available upon request of the Commissioner.  (Mar. 28, 2019, D.C. Law 22-269,  7, 66 DCR 1438.) 
 314121.07. Confidentiality. (a) Documents, materials, or other information, including the ORSA Summary Report, ("ORSA-related information") in the possession or control of the Department that are obtained by, created by, or disclosed to the Commissioner or other person acting under the authority of the Commissioner shall be deemed by the District as proprietary, to contain trade secrets, confidential, and privileged, not subject to subchapter II of Chapter 5 of Title 2, not subject to subpoena, and not subject to discovery or admissible in evidence in any private civil action. (b) Notwithstanding subsection (a) of this section, the Commissioner may use the ORSA-related information in the furtherance of any regulatory or legal action brought as part of the Commissioner's official duties; provided, that the Commissioner shall not otherwise make the ORSA-related information public without the prior written consent of the insurer. (c) Neither the Commissioner nor any other person acting under the authority of the Commissioner who has received ORSA-related information, through examination or otherwise, shall be permitted or required to testify in any private civil action concerning any ORSA-related information. (d)(1) To assist in the performance of the Commissioner's regulatory duties, the Commissioner may: (A) Upon request, share ORSA-related information with other District, state, federal, or international financial regulatory agencies, including members of any supervisory college in accordance with the Holding Company System Act, with NAIC, or a third-party consultant designated by the Commissioner; provided, that the recipient agrees in writing to maintain the confidentiality and privileged status of the ORSA-related information and verifies in writing that it has the legal authority to maintain the confidentiality and privileged status of the ORSA-related information under all applicable laws and regulations; and (B) Receive ORSA-related information, including otherwise confidential and privileged documents, materials or information, from state, federal, or international financial regulatory agencies, including members of any supervisory college in accordance with the Holding Company System Act and from NAIC, and shall maintain as confidential or privileged any documents, materials, or information received with notice that it is confidential or privileged under the laws of the jurisdiction that is the source of the ORSA-related information. (2) The Commissioner shall enter into a written agreement with NAIC or a third-party consultant ("recipient") governing the sharing and use of this information provided pursuant to this chapter, which shall: (A) Specify procedures and protocols to be used to protect the confidentiality and security of information, and, in the case of an agreement with NAIC, including procedures and protocols for sharing the information with other state regulators from states in which an insurance group has domiciled insurers; (B) Require the recipient to maintain the confidentiality and privileged status of the ORSA-related information or other information and to verify that the recipient has the legal authority to maintain confidentiality and privileged status of the ORSA-related information or other information under all applicable laws and regulations; (C) Specify that the Commissioner retains ownership of the information and that the use of the information is subject to the direction of the Commissioner; (D) Prohibit the recipient from storing the information in a permanent database after the underlying analysis is completed; (E) Require the Department to give prompt notice to an insurer whose confidential information is in the possession of the recipient and is subject to a request or subpoena for disclosure or production in a judicial or administrative action; (F) Require the recipient to consent to intervention by an insurer in a judicial or administrative action in which the recipient may be required to disclose confidential information about the insurer shared with the recipient; and (G) In the case of an agreement with a third-party consultant, provide for the insurer's written consent. (e) The Commissioner is solely responsible for the administration and execution of this chapter and sharing ORSA-related information by the Commissioner with another regulatory authority shall not constitute a delegation of regulatory authority. (f) No waiver of any applicable privilege or claim of confidentiality in the ORSA-related information shall occur as a result of disclosure of the ORSA-related information to the Commissioner under this section or as a result of sharing the ORSA-related information, as authorized in this chapter. The ORSA-related information shall retain the confidential status specified in subsection (a) of this section notwithstanding its lawful disclosure to the Commissioner, NAIC, or a third-party consultant.  (Mar. 28, 2019, D.C. Law 22-269,  8, 66 DCR 1438.) 
 314121.08. Sanctions. An insurer failing without just cause, as defined by the Commissioner by rule, to timely file an ORSA Summary Report required by this chapter shall, after notice and a hearing conducted according to the rules for contested cases set forth in Chapter 38 of Title 26 of the District of Columbia Municipal Regulations, be subject to a penalty in an amount not to exceed $1,000 per day. The maximum penalty assessed under this section shall be $25,000. The Commissioner shall recover this penalty.  (Mar. 28, 2019, D.C. Law 22-269,  9, 66 DCR 1438.) 
 314121.09. Rulemaking. The Commissioner, pursuant to subchapter I of Chapter 5 of Title 2, may issue rules to implement the provisions of this chapter.  (Mar. 28, 2019, D.C. Law 22-269,  10, 66 DCR 1438.) 
 314201. Short title; applicability of provisions. This subdivision shall be known as the Life Insurance Act. All life insurance companies now or hereafter incorporated or formed by authority of any general or special law of this District or by other act of Congress, and all foreign and alien companies authorized to do business in this District, shall be subject to said chapters.  (June 19, 1934, 48 Stat. 1127, ch. 672, ch. I,  1.)  Prior Codifications 1981 Ed.,  35-301. 1973 Ed.,  35-301. Cross References Application of chapter to existing companies, see  31-4420. Hospital and medical services corporations, applicability of this section, see  31-3503.
 314202. Definitions. In this subdivision, unless the context otherwise requires: (1) District means the District of Columbia. (2) Mayor means the Mayor of the District of Columbia. (3) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking of the District of Columbia, or the officer or officers, agency or agencies succeeding to his functions under Reorganization Plan No. 5 of 1952. (4) Department means the Department of Insurance, Securities, and Banking of the District of Columbia. (5) Company means any life insurance company and includes a corporation, company, or association of persons engaged in, or proposing to engage in, the business of life insurance. (6) Domestic company means an insurance company organized under the laws of the District, or formed or organized under an act of Congress. (7) Foreign company means an insurance company organized under the laws of any state of the United States, or of any territory or insular possession of the United States. (8) Alien company means a company organized under the laws of any country other than the United States or a territory or insular possession thereof. (9) Person includes individuals, corporations, associations, and partnerships; personal pronouns include all genders; the singular includes the plural, and the plural includes the singular. (10) The term general agent in this subdivision shall include an individual, copartnership, or corporation authorized in writing by a company, association, or exchange to solicit risks and collect premiums, and/or issue policies in its behalf. (11) The term agent in this subdivision shall include an individual, copartnership, or corporation authorized in writing by a company, association, or exchange to solicit risks and collect premiums in its behalf. (12) The term solicitor in this subdivision shall include any individuals authorized in writing by a duly licensed agent to solicit risks and collect premiums in behalf of said agent. (13) The terms agent and solicitor shall not include officers or salaried employees of any company, association, or exchange which is authorized to transact business in the District, who do not solicit, negotiate, or place risks. (14) The term broker in this subdivision shall include consultant, surveyor and/or any person, partnership, association, or corporation who, for money, commission, or anything of value, acts or aids in any manner on behalf of the insured in negotiating contracts of insurance or placing risks or taking out insurances, including surety bonds. (15) Net premium receipts means gross premiums received less the sum of the following: (A) Premiums returned on policies cancelled or not taken; (B) Premiums paid for reinsurances where the same are paid to companies duly licensed to do business in the District; and (C) Dividends paid in cash or used by policyholders in payment of renewal premiums or in purchase of paid-up additional insurance. (16) Surplus means the excess of admitted assets over liabilities and capital, in the case of a company with capital stock, and the excess of admitted assets over liabilities in the case of a company without capital stock. (17) Liabilities means all debts, due or to become due, contingent or otherwise, of which the company has knowledge, and includes the reserves required by this subdivision. (18) Industrial life insurance means that form of life insurance, either: (A) Under which the premiums are payable weekly; or (B) under which the premiums are payable monthly or oftener; if the face amount of insurance provided in the policy is less than $1,000, and the words industrial policy are plainly printed upon the policy as a part of the descriptive matter. (19) Admitted assets includes the investments authorized or permitted pursuant to the National Association of Insurance Commissioners Accounting Practices and Procedures Manual. (20) Domestic partner shall have the same meaning as provided in  32-701(3). (21) Domestic partnership shall have the same meaning as provided in  32-701(4)).  (June 19, 1934, 48 Stat. 1128, ch. 672, ch. I,  2; July 16, 1953, 67 Stat. 172, ch. 196,  2; Apr. 26, 1994, D.C. Law 10-103,  2, 41 DCR 1005; May 21, 1997, D.C. Law 11-268,  10(h), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  21, 45 DCR 745; June 12, 2003, D.C. Law 14-310,  8, 50 DCR 1092; June 11, 2004, D.C. Law 15-166,  4(aa), 51 DCR 2817; Sept. 12, 2008, D.C. Law 17-231,  28(a), 55 DCR 6758.)  Prior Codifications 1981 Ed.,  35-302. 1973 Ed.,  35-302. Section References This section is referenced in  22-3225.01 and  31-701. Effect of Amendments D.C. Law 14-310, in par. (4), validated a previously made technical correction. D.C. Law 15-166, in par. (3), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance and Securities; and, in par. (4), substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities Regulation. D.C. Law 17-231 added pars. (20) and (21). Cross References Hospital and medical services corporations, applicability of this section, see  31-3503. Emergency Legislation For temporary (90 day) amendment of section, see  4(aa) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). Temporary Legislation For temporary (225 day) amendment of section, see  2 of Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17, 1994, law notification 41 DCR 1626). Editor's Notes Department of Insurance abolished: The Department of Insurance, including the Superintendent, was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. Reorganization Order No. 43, dated June 23, 1953, as amended, established, under the direction and control of a Commissioner, a Department of Insurance headed by a Superintendent. The Order provided for the organization of the Department, abolished the previously existing Department of Insurance, and provided that all functions and positions of the previous Department would be transferred to the new Department of Insurance, including the duties, powers, and authorities of all officers and employees; and that all personnel, property, records and unexpended balances relating to the functions and positions transferred would also be transferred to the new Department. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. The functions of the Superintendent of Insurance were transferred to the Department of Consumer and Regulatory Affairs by Reorganization Plan No. 1 of 1983, effective March 31, 1983. Pursuant to the provisions of D.C. Law 11-268, the Department of Insurance and Securities Regulation was established and the duties of the Superintendent of Insurance and the Insurance Administration were assumed by the Commissioner of Insurance and Securities, and the Insurance Administration in the Department of Consumer and Regulatory Affairs was abolished. Change in Government This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 401 of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to a single Commissioner. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 314301. Department continued; personnel; performance of Commissioners duties; seal; Commissioners office and papers to be public; Commissioners annual reports; out-of-state visits. (a) There shall be continued in the District a department charged with the execution of the laws relating to insurance, to be called the Department of Insurance, Securities, and Banking. At the head of such Department there shall be a Commissioner of the Department of Insurance, Securities, and Banking, who shall devote his entire service to the Department. He shall be appointed by and hold his office at the pleasure of the Mayor. The Commissioner, during his term of office, shall not be interested in the business of any insurance company except as a policyholder. He shall take and subscribe an oath of office which shall be filed with the Mayor. In said Department there shall be also 2 Deputy Commissioners and such other personnel as may be necessary within appropriations annually made by Congress for said Department. The compensation of the Commissioner, Deputy Commissioners, and other personnel shall be fixed in accordance with the provisions of Chapter 51 and subchapter III of Chapter 53 of Title 5, United States Code [5 U.S.C.  5101 et seq. and 5 U.S.C.  5331 et seq.]. (b) In case of the absence or inability of the Commissioner, or in the event of the removal of the Commissioner, and pending the appointment of his successor, one of the Deputy Commissioners shall perform the duties of the Commissioner. (c) The Mayor shall provide the Department with an official seal, which shall be the seal of the District of Columbia surrounded by a border in which shall appear Department of Insurance, Securities, and Banking. (d) Every certificate and other document or paper executed by such Commissioner, or his deputies, in pursuance of any authority conferred upon him by law and sealed with the seal of his office, and all copies of papers certified by him or by his deputies and authenticated by said seal, shall, in all cases, be evidence equally and in like manner as the original thereof and shall have the same force and effect as would the original in any suit or proceeding in any court of this District. (e) The office of the Commissioner shall be a public office, and the records, books, and papers thereof on file therein shall be public records of the District, except as it may be provided otherwise herein. (f) The Commissioner shall report annually to the Mayor his official transactions, and shall include in such report abstracts of the annual statements of the several companies and an exhibit of the financial condition and business transactions of the same as shown by their annual statements. He shall also include therein a statement of the receipts and expenditures of the Department for the preceding year and such recommendations relative to insurance and the insurance laws of the District as he shall deem proper. (g) The Commissioner is authorized to attend and participate in the meetings of the National Convention of Insurance Commissioners and of the committees thereof; he is also authorized to visit the insurance departments of the various states when in his judgment such visits are necessary for the proper conduct of his official office; and he may require such of his assistants as he may designate to attend and participate in such meetings, all subject to the prior approval of the Mayor. The actual expense of such attendance by the Commissioner and his assistants shall be paid in like manner as other expenses of the District are paid.  (June 19, 1934, 48 Stat. 1129, ch. 672, ch. II,  1; Oct. 28, 1949, 63 Stat. 972, ch. 782, title XI,  1106(a); May 21, 1997, D.C. Law 11-268,  10(i), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  22(a), 45 DCR 745; June 11, 2004, D.C. Law 15-166,  4(bb), 51 DCR 2817; Mar. 2, 2007, D.C. Law 16-191,  55, 53 DCR 6794.)  Prior Codifications 1981 Ed.,  35-401. 1973 Ed.,  35-401. Section References This section is referenced in  31-3503. Effect of Amendments D.C. Law 15-166, in subsecs. (a) and (c), substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities Regulation; and, in subsec. (a), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance and Securities. D.C. Law 16-191, in subsec. (c), validated a previously made technical correction. Cross References Application of chapter to existing companies, see  31-4420. Hospital and medical services corporations, applicability of this section, see  31-3503. Emergency Legislation For temporary (90 day) amendment of section, see  4(bb) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). Editor's Notes Department of Insurance abolished: The Department of Insurance, including the Superintendent, was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. Reorganization Order No. 43, dated June 23, 1953, as amended, established, under the direction and control of a Commissioner, a Department of Insurance headed by a Superintendent. The Order provided for the organization of the Department, abolished the previously existing Department of Insurance, and provided that all functions and positions of the previous Department would be transferred to the new Department of Insurance, including the duties, powers, and authorities of all officers and employees; and that all personnel, property, records and unexpended balances relating to the functions and positions transferred would also be transferred to the new Department. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. The functions of the Superintendent of Insurance were transferred to the Department of Consumer and Regulatory Affairs by Reorganization Plan No. 1 of 1983, effective March 31, 1983. Pursuant to the provisions of D.C. Law 11-268, the Department of Insurance and Securities Regulation was established and the duties of the Superintendent of Insurance and the Insurance Administration were assumed by the Commissioner of Insurance and Securities, and the Insurance Administration in the Department of Consumer and Regulatory Affairs was abolished. Change in Government This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 401 of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to a single Commissioner. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 314302. Collection of charges and fees. (a) All charges and fees provided for in this section shall be collected by the Commissioner and made payable to the District of Columbia. (b) For filing charter or articles of incorporation or association, or deed of settlement or copy thereof, required by law, $300; for each company certificate of authority, $200, renewal fee, $200; for license of each general agent, $100, renewal fee, $100; for license of each agent, or solicitor, $50, renewal fee $50; for license of each broker, $100, renewal fee, $100. For each appointment fee for each agent, general agent, or each solicitor, $25 fee, $25 renewal fee; provided, however, that beginning October 1, 1994, the license and renewal fee of each general agent, agent or solicitor, and broker shall be payable biennially in accordance with the rulemaking procedures in section 3(a)(2). (c) The Mayor may amend all fees referred to in this chapter by rulemaking pursuant to subchapter I of Chapter 5 of Title 2.  (June 19, 1934, 48 Stat. 1130, ch. 672, ch. II,  2; Feb. 23, 1980, D.C. Law 3-52,  2, 27 DCR 26; June 14, 1994, D.C. Law 10-128,  401, 41 DCR 2096; Feb. 27, 1996, D.C. Law 11-90,  10, 42 DCR 7155; May 21, 1997, D.C. Law 11-268,  10(i), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-402. 1973 Ed.,  35-402. Section References This section is referenced in  31-3503. Cross References Hospital and medical services corporations, applicability of this section, see  31-3503. Taxation and fiscal affairs of insurance companies, see  47-2601 et Emergency Legislation For temporary amendment of section, see  11 of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and  10 of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844). Temporary Legislation For temporary (225 day) amendment of section, see  10 of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305). References in Text Section 3(a)(2), referred to in (b), is  3(a)(2) of chapter II of the Life Insurance Act, approved June 19, 1934, Pub. L. 73-436, 48 Stat. 1130, ch. 672. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4301.
 314303. Disposition of excess in fees, charges, or taxes. Whenever it appears to the satisfaction of the Commissioner that, because of some error, mistake, or erroneous interpretation of a statute, a company has paid fees, charges, or taxes in excess of the amount legally chargeable against it, the Commissioner shall, on application of the company, present the matter to the Mayor, with the view of refunding to such company any such excess, or applying the excess or portion thereof toward the payment of fees, charges, or taxes already due from such company.  (June 19, 1934, 48 Stat. 1131, ch. 672, ch. II,  4; May 21, 1997, D.C. Law 11-268,  10(i), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-403. 1973 Ed.,  35-403. Section References This section is referenced in  31-3503. Cross References Hospital and medical services corporations, applicability of this section, see  31-3503. Tax refunds, see  47-1317, 47-1318. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4301. Change in Government This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 401 of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to a single Commissioner. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 314304. Certificate of authority  Investigation of qualifications; effect; Issuance. (a) The Commissioner shall issue a certificate of authority to a company when it shall have complied with the requirements of the laws of the District so as to be entitled to do business therein. The Commissioner may, however, satisfy himself by such investigation as he may consider proper or necessary that the company is duly qualified under the laws of the District to transact business therein, and may refuse to issue or renew a certificate to a company if the issuance or renewal of the certificate would adversely affect the public interest. In each case, the certificate shall be issued under the seal of the Commissioner, authorizing and empowering the company to transact the kind of business specified in the certificate, and the certificate shall expire on the 30th day of April next succeeding the date of its issuance. (b) Repealed. (c) No company shall transact any business of insurance in or from the District until it shall have received a certificate of authority as authorized by this section, and no company shall transact any business of insurance not specified in such certificate of authority.  (June 19, 1934, 48 Stat. 1131, ch. 672, ch. II,  5; Feb. 22, 1958, 72 Stat. 19, Pub. L. 85-334,  1; May 21, 1997, D.C. Law 11-268,  10(i), 44 DCR 1730; Oct. 21, 2000, D.C. Law 13-190,  2(a), 47 DCR 7261; Oct. 1, 2002, D.C. Law 14-190,  602(a), 49 DCR 6968; Mar. 8, 2007, D.C. Law 16-232,  205(a)(1), 54 DCR 368.)  Prior Codifications 1981 Ed.,  35-404. 1973 Ed.,  35-404. Section References This section is referenced in  31-301 and  31-1501. Effect of Amendments D.C. Law 13-190 inserted the fourth and fifth sentences. D.C. Law 14-190 rewrote the section which had read as follows: It shall be the duty of the Commissioner to issue a certificate of authority to a company when it shall have complied with the requirements of the laws of the District so as to be entitled to do business therein. The Commissioner may, however, satisfy himself by such investigation as he may deem proper or necessary that such company is duly qualified under the laws of the District to transact business therein, and may refuse to issue or renew any such certificate to a company if the issuance or renewal of such certificate would adversely affect the public interest. In each case the certificate shall be issued under the seal of the Commissioner, authorizing and empowering the company to transact the kind or kinds of business specified in the certificate, and each such certificate shall be made to expire on the 30th day of April next succeeding the date of its issuance. A company may, at its own option and expense, submit a statement from an independent organization acceptable to the Commissioner, attesting that it meets all the requirements of the laws and regulations of the District and is qualified to transact the business for which it seeks a certificate of authority. The statement shall be signed, under oath, by an officer or principal of the independent organization and shall be considered prima facie evidence by the Commissioner that the company is entitled to do business in the District, subject to (1) an investigation and review, and (2) the Commissioners authority to revoke or suspend a certificate of authority as provided in this subdivision. No company shall transact any business of insurance in or from the District until it shall have received a certificate of authority as authorized by this section, and no company shall transact any business of insurance not specified in such certificate of authority. D.C. Law 16-232 repealed subsec. (b), which formerly read: (b)(1) A company may, at its own option and expense, submit a statement from an independent organization acceptable to the Commissioner, attesting that it meets all the requirements of the laws and regulations of the District and is qualified to transact the business for which it seeks a certificate of authority. The statement shall be signed, under oath, by an officer or principal of the independent organization and shall be considered prima facie evidence by the Commissioner that the company is entitled to do business in the District, subject to an investigation and review and the Commissioners authority to revoke or suspend a certificate of authority as provided in this subdivision. (2) A company may, at its option, submit a certified copy of its current certificate of authority to do business from the jurisdiction where it is organized (home jurisdiction) and where it conducts its largest volume of business (largest volume jurisdiction), if different than its home jurisdiction, together with a statement by a corporate officer that it meets all the requirements of the laws and regulations of the District and is qualified to transact the business for which it seeks a certificate of authority; provided, that the companys home jurisdiction and largest volume jurisdiction have been determined by the Commissioner to have legal and regulatory requirements that meet or exceed those applicable to insurance companies under District law. The statement of the corporate officer shall be signed, under oath, and shall, together with certified copies of the companys certificates of authority, be considered prima facie evidence by the Commissioner that the company is entitled to do business in the District. Nothing in the preceding sentence shall limit the Commissioners authority to subject the applicant to investigation and review or to suspend a certificate of authority as provided in this subdivision. As a condition of obtaining a certificate of authority to do business in the District, the Commissioner may also require a company submitting a certificate of authority from an alien jurisdiction to submit a power of attorney and undertaking, in a form acceptable to the Commissioner, that provide that the company will not set up a defense to any claim, action, or proceeding brought against it arising from an insurance contract entered into in the District, refuse to obey any lawful order of the Commissioner, or pay any fine or penalty imposed upon it by the Commissioner or any court of competent jurisdiction, on the ground that it is not subject to the laws of the United States of America or the District. The Commissioner shall publish annually in the District of Columbia Register a list of foreign and alien jurisdictions that have been determined by the Commissioner as having legal and regulatory requirements that meet or exceed those applicable to insurance companies under District law. The Commissioner may at any time add or remove jurisdictions from the list and the additions and deletions shall be effective immediately until the next annual publication date. Cross References Authority of the Council to regulate, modify, or eliminate license requirements and promulgate regulations, see  47-2842, 47-2844. Revocation of certificates of authority, see  31-4305. Emergency Legislation For temporary (90 day) amendment of section, see  602(a) of Fiscal Year 2003 Budget Support Emergency Act of 2002 (D.C. Act 14-453, July 23, 2002, 49 DCR 8026). Short Title Short title of title VI of Law 14-190: Section 601 of D.C. Law 14-190 provided that title VI of the act may be cited as the Insurer and Health Maintenance Organization Self-Certification Amendment Act of 2002. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4301.
 314305. Certificate of authority  Revocation or suspension; grounds; hearing; alternative penalty. (a) The Commissioner shall have power to revoke or suspend the certificate of authority to transact business in the District of any company which has failed or refused to comply with any provision or requirement of this subdivision, or which: (1) Is impaired in capital or surplus; (2) Is insolvent; (3) Is in such a condition that its further transaction of business in the District would be hazardous to its policyholders or creditors or to the public; (4) Has refused or neglected to pay a valid final judgment against such company within 30 days after such judgment shall have become final either by expiration without appeal within the time when such appeal might have been perfected, or by final affirmance on appeal; (5) Has violated any law of the District or has in the District violated its charter or exceeded its corporate powers; (6) Has refused to submit its books, papers, accounts, records, or affairs to the reasonable inspection or examination of the Commissioner, his Deputies, or duly appointed examiners; (7) Has an officer who has refused upon reasonable demand to be examined under oath touching its affairs; (8) Fails to file with the Commissioner a copy of an amendment to its charter or articles of association within 30 days after the effective date of such amendment; (9) Has had its corporate existence dissolved or its certificate of authority revoked in the state in which it was organized; (10) Has had all its risks reinsured in their entirety in another company, without prior approval of the Commissioner; (11) Has made, issued, circulated, or caused to be issued or circulated any estimate, illustration, circular, or statement of any sort misrepresenting either its status or the terms of any policy issued or to be issued by it, or the benefits or advantages promised thereby, or the dividends or shares of the surplus to be received thereon, or has used any name or title of any policy or class of policies misrepresenting the true nature thereof; (12) Has filed, caused to be filed, or failed to prevent the filing of, a statement on its behalf from an independent organization attesting to its qualifications to transact business in the District for which it sought and received a certificate of authority if it knew, or should have known, that the statement was based on false, misleading, or incomplete information; or (13) Has filed, caused to be filed, or failed to prevent the filing of a statement on its behalf from a corporate officer attesting to its qualifications to transact business in the District for which it sought and received a certificate of authority if it knew, or should have known, that the statement was based on false, misleading, or incomplete information. (b) The Commissioner shall not revoke or suspend the certificate of authority of any company until he has given the company not less than 30 days notice of the proposed revocation or suspension and of the grounds alleged therefor, and has afforded the company an opportunity for a full hearing; provided, that if the Commissioner shall find upon examination that the further transaction of business by the company would be hazardous to the public or to the policyholders or creditors of the company in the District, he may suspend such authority without giving notice as herein required; provided further, that in lieu of revoking or suspending the certificate of authority of any company for causes enumerated in this section, after hearing as herein provided, the Commissioner may subject such company to a penalty of not more than $10,000 for any violation or not more than $25,000 for intentional violations, when in his judgment he finds that the public interest would be best served by the continued operation of the company. The amount of any such penalty shall be paid by the company through the Office of the Commissioner to the Collector of Taxes of the District of Columbia. At any hearing provided by this section, the Commissioner shall have authority to administer oaths to witnesses. Anyone testifying falsely after having been administered such an oath shall be subject to the penalties of perjury.  (June 19, 1934, 48 Stat. 1131, ch. 672, ch. II,  6; May 4, 1950, 64 Stat. 103, ch. 157,  1; Feb. 22, 1958, 72 Stat. 20, Pub. L. 85-334,  2; Mar. 14, 1985, D.C. Law 5-160,  3(a), 32 DCR 39; May 21, 1997, D.C. Law 11-268,  10(i), 44 DCR 1730; Oct. 21, 2000, D.C. Law 13-190,  2(b), 47 DCR 7261; Oct. 1, 2002, D.C. Law 14-190,  602(b), 49 DCR 6968; Mar. 13, 2004, D.C. Law 15-105,  65, 51 DCR 881.)  Prior Codifications 1981 Ed.,  35-405. 1973 Ed.,  35-405. Section References This section is referenced in  31-305,  31-1403,  31-1608,  31-2231.17,  31-3503, and  31-5111. Effect of Amendments D.C. Law 13-190 added subsec. (a)(12) D.C. Law 14-190, in subsec. (a), made nonsubstantive changes to pars. (11) and (12), and added par. (13). D.C. Law 15-105, in par. (12) of subsec. (a), validated a previously made technical correction. Cross References Administrative procedure, see  2-501 et seq. Credit life, accident, and health insurer violations, proceedings, see  31-5111. Examination of insurers, proceedings on refusal to comply, see  31-1403. Hospital and medical services corporations, applicability of this section, see  31-3503. Qualified independent certified public accountants, hearing to determine qualifications, see  31-305. Emergency Legislation For temporary (90 day) amendment of section, see  602(b) of Fiscal Year 2003 Budget Support Emergency Act of 2002 (D.C. Act 14-453, July 23, 2002, 49 DCR 8026). Editor's Notes Office of Collector of Taxes abolished: The Office of the Collector of Taxes was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. All functions of the Office of the Collector of Taxes including the functions of all officers, employees, and subordinate agencies were transferred to the Director, Department of General Administration by Reorganization Order No. 3, dated August 28, 1952. Reorganization Order No. 20, dated November 10, 1952, transferred the functions of the Collector of Taxes to the Finance Office. The same Order provided for the Office of the Collector of Taxes headed by a Collector in the Finance Office, and abolished the previously existing Office of the Collector of Taxes. Reorganization Order No. 20 was superseded and replaced by Organization Order No. 121, dated December 12, 1957, which provided that the Finance Office (consisting of the Office of the Finance Officer, Property Tax Division, Revenue Division, Treasury Division, Accounting Division, and Data Processing Division) would continue under the direction and control of the Director of General Administration, and that the Treasury Division would perform the function of collecting revenues of the District of Columbia and depositing the same with the Treasurer of the United States. Organization Order No. 121 was revoked by Organization Order No. 3, dated December 13, 1967, Part IVC of which prescribed the functions of the Finance Office within a newly established Department of General Administration. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. Functions of the Finance Office as stated in Part IVC of Organization Order No. 3 were transferred to the Director of the Department of Finance and Revenue by Commissioners Order No. 69-96, dated March 7, 1969. The collection functions of the Director of the Department of Finance and Revenue were transferred to the District of Columbia Treasurer by  47-316 on March 5, 1981. Department of Insurance abolished: See Historical and Statutory Notes following  31-4301.
 314306. Annual financial statement  Forms to be furnished by Superintendent. [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-42,  7(b), 40 DCR 6020.)  Prior Codifications 1981 Ed.,  35-406, 35-407. Editor's Notes D.C. Law 11-268,  10(i) ( 44 DCR 1730), eff. May 21, 1997, amends these sections subsequent to their repeal.
 314307. Annual financial statement  Companies required to file; failure to file; publication of summary [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-42,  7(b), 40 DCR 6020.)  Prior Codifications 1981 Ed.,  35-406, 35-407. Editor's Notes D.C. Law 11-268,  10(i) ( 44 DCR 1730), eff. May 21, 1997, amends these sections subsequent to their repeal.
 314308. Companies or agents not to make or publish false statements. [Repealed] Repealed.  (June 19, 1934, 48 Stat. 1132, ch. 672, ch. II,  9; Apr. 3, 2001, D.C. Law 13-265,  126(a), 48 DCR 1225; redesignated  301, Oct. 19, 2002, D.C. Law 14-213,  20(b), 49 DCR 8140.)  Prior Codifications 1981 Ed.,  35-408. 1973 Ed.,  35-408.
 314309. Representation of financial standingAll companies or agents. [Repealed] Repealed.  (June 19, 1934, 48 Stat. 1132, ch. 672, ch. II,  10; Apr. 3, 2001, D.C. Law 13-265,  126(a), 48 DCR 1225; redesignated  301, Oct. 19, 2002, D.C. Law 14-213,  20(b), 49 DCR 8140.)  Prior Codifications 1981 Ed.,  35-409. 1973 Ed.,  35-409.
 314310. Representation of financial standing  Alien companies; violations. (a) Every advertisement or public announcement and every sign, circular, or card issued by an alien company doing business in the District, representing its financial standing, shall exhibit as capital stock and assets only the capital stock and assets held by its United States branch, the liabilities, including therein the premium and loss reserves required by law, and the amount of surplus, and shall correspond to the next preceding verified statement made by such company to the Commissioner; provided, however, that this section shall not be deemed to prevent an alien company from furnishing to its policyholders in the District of Columbia its annual report to policyholders of its domicile. This subsection shall not apply to an alien company which maintains in the United States, as required by law, assets held in trust for the benefit of the United States policyholders in an amount not less than the sum of its required capital deposit and the amount of its outstanding liabilities arising out of its insurance transactions in the United States. (b) Any violation of this section or  31-4309 [repealed] shall be a misdemeanor, and any person convicted of such violation shall, for the 1st offense, be liable to a fine of not more than $500, and for each subsequent offense shall be liable to a fine of not more than $1,000.  (June 19, 1934, 48 Stat. 1132, ch. 672, ch. II,  11; Dec. 5, 1963, 77 Stat. 347, Pub. L. 88-193,  2; Sept. 7, 1966, 80 Stat. 705, Pub. L. 89-559, 1; Aug. 8, 1968, 82 Stat. 662, Pub. L. 90-467; May 21, 1997, D.C. Law 11-268,  10(i), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-410. 1973 Ed.,  35-410. Section References This section is referenced in  31-3503. Cross References Hospital and medical services corporations, applicability of this section, see  31-3503. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4301.
 314311. Defamatory or injurious false statements against companies. [Repealed] Repealed.  (June 19, 1934, 48 Stat. 1132, ch. 672, ch. II,  12; Apr. 3, 2001, D.C. Law 13-265,  126(a), 48 DCR 1225; redesignated  301, Oct. 19, 2002, D.C. Law 14-213,  20(b), 49 DCR 8140.)  Prior Codifications 1981 Ed.,  35-411. 1973 Ed.,  35-411.
 314312. Commissioner authorized to issue subpoenas; enforcement. (a) In the examination of any company as provided for in this subdivision, the Commissioner shall have power to issue subpoenas in the name of the Chief Judge of the Superior Court of the District of Columbia to compel witnesses to appear and testify and/or to produce all books, records, papers, or documents before said Commissioner. (b) If any witness having been personally summoned shall neglect or refuse to obey the subpoena issued as herein provided, then and in that event the Commissioner may report that fact to the Superior Court of the District of Columbia, or one of the judges thereof, and said Court, or any judge thereof, hereby is empowered to compel obedience to said subpoena to the same extent as witnesses may be compelled to obey the subpoenas of that Court.  (June 19, 1934, 48 Stat. 1133, ch. 672, ch. II,  13; June 25, 1936, 49 Stat. 1921, ch. 804; June 25, 1948, 62 Stat. 991, ch. 646,  32(a), (b); May 24, 1949, 62 Stat. 107, ch. 139,  127; July 29, 1970, 84 Stat. 572, Pub. L. 91-358, title I,  155(c)(37)(A); May 21, 1997, D.C. Law 11-268,  10(i), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-412. 1973 Ed.,  35-412. Section References This section is referenced in  31-3503. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4301.
 314313. Enforcement of Commissioners orders or actions. The Commissioner may, through the Corporation Counsel of the District, invoke the aid of any court of competent jurisdiction to enforce any order made or action taken by him in pursuance of law.  (June 19, 1934, 48 Stat. 1133, ch. 672, ch. II,  14; May 21, 1997, D.C. Law 11-268,  10(i), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-413. 1973 Ed.,  35-413. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4301.
 314314. False statements in application for policy. The falsity of a statement in the application for any policy of insurance shall not bar the right to recovery thereunder unless such false statement was made with intent to deceive or unless it materially affected either the acceptance of the risk or the hazard assumed by the company.  (June 19, 1934, 48 Stat. 1133, ch. 672, ch. II,  15; May 21, 1997, D.C. Law 11-268,  10(i), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-414. 1973 Ed.,  35-414. Cross References Form and contents of insurance contracts, see  31-4703, 31-4712. Industrial policies, special provisions, see  31-4801 et seq. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4301.
 314315. Deposit of securities by companies desiring to transact business  Amount; deposits outside District. (a) Every company desiring to transact business in the District shall, as a prerequisite to the issuance of a certificate of authority, deposit, as herein provided, approved securities of not less than $100,000 market value. In the case of domestic companies, such deposit shall be made in the District as prescribed under  31-4316; provided, that the deposit of every domestic company heretofore organized under the provisions of the laws of the District or other act of Congress may, in the discretion of the Commissioner, be limited: (1) For stock companies, to an amount equal to the capital stock outstanding on June 19, 1934; and (2) for nonstock companies, to such amount as in the opinion of the Commissioner would be required from stock companies of comparable size. In no case shall the deposit of a domestic company be less than $25,000 in value. In the case of foreign or alien companies, the deposit may be made as provided under  31-4316, or may be made with the supervising official of any state, territory, or insular possession of the United States authorized to accept such deposit, which shall be held for the benefit of all policyholders. (b) In the case of a deposit made with an official outside the District, a certificate of deposit from said official shall be filed with the Commissioner, showing the character of the deposit, before a certificate of authority to transact business in the District may be issued, and, if the securities so deposited are not of the class authorized by this subdivision for investments of companies, the Commissioner may require an additional deposit in approved securities.  (June 19, 1934, 48 Stat. 1133, ch. 672, ch. II,  16; May 20, 1940, 54 Stat. 217, ch. 204; May 21, 1997, D.C. Law 11-268,  10(i), 44 DCR 1730; Mar. 24, 1998; D.C. Law 12-81,  22(b), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-415. 1973 Ed.,  35-415. Cross References Reserves, see  31-5201. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4301.
 314316. Deposit of securities by companies desiring to transact business  Type of securities allowed; officials responsible for safekeeping; collection of income; substitution; decline in value. (a) When any company is required by this subdivision to make a deposit in the District, such deposit shall be in securities of the class authorized by this subdivision for investments of companies, and shall be delivered by the company to the Executive Secretary of the District and the Auditor of the District, who shall receive and hold the same subject to the lawful orders of the Commissioner, and who shall be responsible for the safekeeping of all securities deposited or delivered under the authority of this section. The company shall have the right to collect the income on deposited securities so long as it continues solvent and complies with the laws of the United States and of the District, and it shall have the right to substitute for such securities other securities, provided such substituted securities are of the character, amount, and value required by this section, and are approved by the Commissioner; provided, that not less than $25,000 of such deposit shall at all times consist of bonds or other evidences of indebtedness of the United States or of any state of the United States, or of any county or incorporated city of any state of the United States, and that securities of a class different from such bonds or other evidences of indebtedness shall not in any case be accepted for deposit except with the specific approval of and at values determined by the Commissioner. (b) If the value of securities deposited by any company shall decline, the Commissioner may require the company to make a further deposit, in order that the amount and value of the deposit required by this subdivision shall at all times be maintained.  (June 19, 1934, 48 Stat. 1134, ch. 672, ch. II,  17; May 20, 1940, 54 Stat. 217, ch. 204; May 21, 1997, D.C. Law 11-268,  10(i), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-416. 1973 Ed.,  35-416. Section References This section is referenced in  31-4315. Cross References Reserves, see  31-5201. Transfer of Functions Reorganization Order No. 23, dated December 30, 1952, transferred the functions relating to the delivery of securities required to be deposited by insurance companies transacting business in the District of Columbia from the Secretary of the Board of Commissioners and the Auditor of the District to the Internal Audit Officer or his deputy and the Disbursing Officer or his deputy, Department of General Administration. The Disbursing Office was established in the Finance Office of the Department of General Administration by Reorganization Order No. 20, dated November 10, 1952. Reorganization Order No. 20 was superseded by Organization Order No. 121, dated December 12, 1957, which placed disbursing functions in the Treasury Division of the Office of the Finance Officer. Organization Order No. 121 was revoked by Organization Order No. 3, dated December 23, 1967, under Part IVC of which disbursing functions were continued in the Treasury Division of the Finance Office. These functions were subsequently transferred to the Director of the Department of Finance and Revenue by Commissioners Order No. 69-96, dated March 7, 1969. Editor's Notes Office of Secretary to Board of Commissioners abolished: The Office of the Secretary to the Board of Commissioners of the District of Columbia was abolished and the functions thereof transferred to the Board of Commissioners by Reorganization Plan No. 5 of 1952. Reorganization Order No. 41 of the Board of Commissioners, dated June 23, 1953, issued pursuant to that Plan, established as part of the Executive Office of the Board of Commissioners, under the direction and control of the Board, an Office of the Secretary to the Board of Commissioners to perform ministerial duties for the Board. The Order described the purpose and functions of the Office of Secretary, and provided that the functions and positions of the previously existing Office of the Secretary to the Board be transferred to the new Office, and that the previously existing Office of the Secretary be abolished. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. Organization Order No. 2 of the Commissioner, dated December 13, 1967, as amended, established within the Executive Office of the Commissioner a Secretariat headed by an Executive Secretary. The Order transferred to the Secretariat certain functions, including the duties, powers, and authorities of all officers and employees performing such functions and assigned to the Office of the Secretary as it existed immediately prior to December 13, 1967, and revoked all other orders inconsistent therewith. Office of Auditor abolished: The Office of the Auditor of the District of Columbia was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. All functions of the Office of the Auditor including the functions of all officers, employees, and subordinate agencies were transferred to the Director, Department of General Administration by Reorganization Order No. 3 of the Board of Commissioners, dated August 28, 1952. Reorganization Order No. 19, dated November 10, 1952, established in the Department of General Administration an Internal Audit Office headed by an Internal Office Auditor. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. Reorganization Orders No. 3 and 19 were revoked by Organization Order No. 3 of the Commissioner of the District of Columbia, dated December 13, 1967. Parts III and IVB of the latter Order established, within the newly created Department of General Administration, an Internal Audit Office headed by an Internal Audit Officer and prescribed the functions thereof. These functions were subsequently transferred to the Director of the Department of Finance and Revenue by paragraph 4 of Commissioners Order No. 69-96, dated March 7, 1969. Part IVB of Organization Order No. 3 and that portion of paragraph 4 of Commissioners Order No. 69-96 pertaining to a transfer of audit functions to the Department of Finance and Revenue, were revoked by Organization Order No. 33, dated July 14, 1972. The latter Order established an Office of Municipal Audit and Inspection and prescribed the functions thereof. Organization Order No. 50, dated December 31, 1974, established the Office of Budget and Management Systems, and transferred to that Office the functions of the Office of Municipal Audit and Inspection. The Office of Budget and Management Systems was replaced by Mayors Order 79-5, dated January 2, 1979, which Order established the Office of Budget and Revenue Development. Department of Insurance abolished: See Historical and Statutory Notes following  31-4301.
 314317. Deposit of securities by companies desiring to transact business  Withdrawal upon discontinuance of business or reinsurance. (a) When a company determines to discontinue its business or to cease to do business in the District and desires to withdraw its deposit made in the District pursuant to this subdivision the Commissioner shall, upon the application of the company, and at its expense, give notice of such intention in a newspaper of general circulation in the District once a week for 3 consecutive weeks. After such publication he shall deliver to such company or its assigns the securities so deposited when he is satisfied upon examination and investigation made by him or under his authority and upon the oaths of the president and secretary or other chief officers of the company that all debts and liabilities of every kind due and to become due which the deposit was made to secure are paid and extinguished; provided, that the Commissioner may require any company so withdrawing from the District to furnish bond to cover any undisclosed or contingent liabilities. (b) Upon a company being wholly reinsured the Commissioner may deliver to it or to its assigns all securities deposited by it upon compliance with the following condition: The reinsuring company shall assume and agree to discharge all liabilities of every kind due and to become due which the deposit of the reinsured company was made to secure. Such reinsuring company shall have a deposit in the District or with some state official in the United States in securities recognized by this law as lawful investments of the company in an amount and value not less than the deposit required of the reinsured company. The deposit of the reinsuring company shall be such that it will subsist for the security of the obligations of the reinsured company assumed by the reinsuring company. The Commissioner shall give notice of such reinsurance agreement and of the application for the deposit once a week for 3 consecutive weeks in a newspaper of general circulation in the District before the delivery of such securities to the reinsuring company.  (June 19, 1934, 48 Stat. 1134, ch. 672, ch. II,  18; May 21, 1997, D.C. Law 11-268,  10(i), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-417. 1973 Ed.,  35-417. Cross References Reserves, see  31-5201. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4301.
 314318. Examinations; reports; expenses. [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-49,  9(b), 40 DCR 6110.)  Prior Codifications 1981 Ed.,  35-418.
 314319. Superintendent authorized to take over companies; grounds; procedure; liquidation; special agents and employees; rules and regulations; reports and bonds [Repealed] Repealed.  (Oct. 15, 1993, D.C. Law 10-35,  59(a), 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-419 to 35-421. Temporary Legislation For temporary (225 day) amendment of section, see  7(b) of Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17, 1994, law notification 41 DCR 1626). Editor's Notes D.C. Law 10-76 and D.C. Law 10-103 purported to amend former  35-419 1981 Ed. by rewriting (a)(4).
 314320. Companies deemed insolvent [Repealed] Repealed.  (Oct. 15, 1993, D.C. Law 10-35,  59(a), 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-419 to 35-421. Temporary Legislation For temporary (225 day) amendment of section, see  7(b) of Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17, 1994, law notification 41 DCR 1626). Editor's Notes D.C. Law 10-76 and D.C. Law 10-103 purported to amend former  35-419 1981 Ed. by rewriting (a)(4).
 314321. Reinsurance by Superintendent [Repealed] Repealed.  (Oct. 15, 1993, D.C. Law 10-35,  59(a), 40 DCR 5773.)  Prior Codifications 1981 Ed.,  35-419 to 35-421. Temporary Legislation For temporary (225 day) amendment of section, see  7(b) of Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17, 1994, law notification 41 DCR 1626). Editor's Notes D.C. Law 10-76 and D.C. Law 10-103 purported to amend former  35-419 1981 Ed. by rewriting (a)(4).
 314322. Valuation of securities. [Repealed] Repealed.  (June 19, 1934, 48 Stat. 1137, ch. 672, ch. II,  23; May 21, 1997, D.C. Law 11-268,  10, 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  22(c), 45 DCR 745; Apr. 11, 2003, D.C. Law 14-297,  401(e)(1), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-422. 1973 Ed.,  35-422. For legislative history of D.C. Law 11- (Act 11-524), see Historical and Statutory Notes following  31-4301. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4301.
 314323. Service of process; appointment of Superintendent as attorney of companies; violations. [Repealed] Repealed.  (Mar. 21, 1995, D.C. Law 10-233,  12, 42 DCR 24.)  Prior Codifications 1981 Ed.,  35-423.
 314324. Political contributions prohibited; immunity of witnesses in proceedings in regard to violations. [Repealed] Repealed.  (June 19, 1934, 48 Stat. 1138, ch. 672, ch. II,  25; Mar. 8, 2007, D.C. Law 16-232,  205(a)(2), 54 DCR 368.)  Prior Codifications 1981 Ed.,  35-424. 1973 Ed.,  35-424.
 314325. General agents, agents, or solicitors; issuance, expiration and renewal of required license; exceptions; termination of employment; information provided Superintendent deemed privileged [Repealed] Repealed.  (April 9, 1997, D.C. Law 11-227,  16, 44 DCR 140.)  Prior Codifications 1981 Ed.,  35-425 to 35-428. Editor's Notes D.C. Law 11-268,  10(i) ( 44 DCR 1730), effective May 21, 1997, amends the repealed sections subsequent to repeal.
 314326. Suspension or revocation of licenses; grounds; hearing and appeal; alternative penalty [Repealed] Repealed.  (April 9, 1997, D.C. Law 11-227,  16, 44 DCR 140.)  Prior Codifications 1981 Ed.,  35-425 to 35-428. Editor's Notes D.C. Law 11-268,  10(i) ( 44 DCR 1730), effective May 21, 1997, amends the repealed sections subsequent to repeal.
 314327. Judicial appeals from rulings of Superintendent; procedure; liability of Superintendent in proceedings [Repealed] Repealed.  (April 9, 1997, D.C. Law 11-227,  16, 44 DCR 140.)  Prior Codifications 1981 Ed.,  35-425 to 35-428. Editor's Notes D.C. Law 11-268,  10(i) ( 44 DCR 1730), effective May 21, 1997, amends the repealed sections subsequent to repeal.
 314328. Brokers; issuance, revocation and renewal of required license; violations [Repealed] Repealed.  (April 9, 1997, D.C. Law 11-227,  16, 44 DCR 140.)  Prior Codifications 1981 Ed.,  35-425 to 35-428. Editor's Notes D.C. Law 11-268,  10(i) ( 44 DCR 1730), effective May 21, 1997, amends the repealed sections subsequent to repeal.
 314329. Disposition of premiums paid to agents. An insurance agent, solicitor, or broker who acts in negotiating or renewing or continuing a contract of insurance for a company lawfully doing business in the District, and who receives any money or substitute for money as a premium for such a contract from the insured, whether he shall be entitled to an interest in same or otherwise, shall be deemed to hold such premium in trust for the company making the contract. If he fails to pay the same over to the company after written demand made upon him therefor, such failure shall be prima facie evidence that he has used or applied the said premium for a purpose other than paying the same over to the company, and upon conviction thereof he shall be deemed guilty of theft and punished accordingly.  (June 19, 1934, 48 Stat. 1142, ch. 672, ch. II,  30; Aug. 2, 1983, D.C. Law 5-24,  15, 30 DCR 3341.)  Prior Codifications 1981 Ed.,  35-429. 1973 Ed.,  35-429. Section References This section is referenced in  31-3503.
 314330. Contractual rights of minors. Any minor of the age of 15 years or more may, notwithstanding such minority, contract for life, health, and accident insurance on his own life for his or her own benefit or for the benefit of his father, mother, spouse, child, brother, sister, or for the benefit of any person who has the care or custody of said minor or with whom said minor makes his or her home, and may exercise all such contractual rights with respect to any such contract of insurance as might be exercised by a person of full legal age and may at any time surrender his or her interest in any such insurance or give a valid discharge for any benefit accruing or money payable thereunder.  (June 19, 1934, 48 Stat. 1142, ch. 672, ch. II,  31; Sept. 12, 2008, D.C. Law 17-231,  28(b), 55 DCR 6758.)  Prior Codifications 1981 Ed.,  35-430. 1973 Ed.,  35-430. Effect of Amendments D.C. Law 17-231 substituted spouse for husband, wife.
 314331. Assessment companies prohibited. Any company which makes insurance or reinsurance the performance of which is not guaranteed by the reserves required by this subdivision, but is contingent upon the payment of assessments or calls made upon its members, shall not be formed, admitted, or licensed in the District.  (June 19, 1934, 48 Stat. 1142, ch. 672, ch. II,  32; May 4, 1950, 64 Stat. 104, ch. 157,  3.)  Prior Codifications 1981 Ed.,  35-431. 1973 Ed.,  35-431.
 314332. Appeals from Commissioner to Mayor. Any appeals to the Mayor from rulings of the Commissioner shall be perfected and filed with the Mayor within 20 days exclusive of Sundays and legal holidays from the date such rulings are communicated to the party at interest.  (June 19, 1934, 48 Stat. 1142, ch. 672, ch. II,  33; May 21, 1997, D.C. Law 11-268,  10(i), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-432. 1973 Ed.,  35-432. Section References This section is referenced in  31-1404 and  31-1506. Cross References Examiner orders following mayors consideration of findings, appeals, see  31-1404. Managing general agent license suspension or revocation, appeal from mayor, see  31-1506. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4301. Change in Government This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 401 of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to a single Commissioner. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 314401. Formation  Required contents of articles of incorporation. Any 7 or more persons who desire to become incorporated as an insurance company shall make, sign, and acknowledge articles of incorporation before an officer authorized to take acknowledgment of deeds, in which shall be stated: (1) The proposed corporate name, which shall not be identical with nor so nearly resemble the name of an existing corporation organized under the laws of the District, or authorized to transact business therein, as to mislead the public or cause confusion and, in case of a mutual company, shall contain the word mutual; (2) The term of its existence, which may be perpetual; (3) The place where its principal office shall be located, which shall be the District of Columbia; (4) The purpose of the company, which shall be restricted to the business of insurance appertaining to persons; (5) The mode and manner in which the corporate power shall be exercised; the number, terms of office, and manner of electing directors, who shall be stockholders, or, in the case of a mutual company, shall be members or policyholders of the corporation; (6) The provisions for meeting and votes of stockholders and policyholders. A stock company in which the policyholders do not vote shall provide for cumulative voting in its articles of incorporation. A stock company in which policyholders vote shall provide that each stockholder shall have 1 vote, in person or by proxy, for each share of stock owned. A company without capital stock shall provide that every policyholder shall be a member and entitled to 1 or more votes, in person, or by proxy, based on the insurance in force, the number of policies held or the amount of premiums paid as may be provided in the bylaws, and a stock company may provide for votes by policyholders, but in such case each policyholder shall have the same voting power as every other policyholder; (7) The amount of its capital stock, if any, the number of shares, and the par value of each share; (8) The number of directors who shall manage the company for the 1st year and their names; and (9) Such other particulars as may be necessary to manifest and explain the objects and purposes of the company.  (June 19, 1934, 48 Stat. 1143, ch. 672, ch. III,  1.)  Prior Codifications 1981 Ed.,  35-601. 1973 Ed.,  35-501. Section References This section is referenced in  31-3503. Cross References Health and accident companies, see  31-5202. Hospital and medical services corporations, applicability of this section, see  31-3503. Prohibition against assessment companies, see  31-4331. Quo warranto proceedings to question right to corporate rights and franchises, see  16-3501 et seq.
 314402. Formation  Filing, notice and bond requirements. The incorporators shall file such articles with the Commissioner and shall publish in a newspaper of general circulation in the District notice of the filing of such articles and of the intention to form such company. Copy of such notice verified by the oath of the publisher of the newspaper, or his agent, copies of proposed bylaws and forms of subscription for capital stock and of proposed applications for membership and for insurance and of all proposed forms of insurance policies, literature, and advertisements shall be filed with the Commissioner. The incorporators shall also file with the Commissioner a bond payable to the Commissioner and his successors, as trustee, in the sum of $10,000 with approved corporate sureties, and conditioned upon the faithful accounting to the proposed company, on completion of its organization and the receipt of its certificate of authority from the Commissioner, or the stockholders, members, applicants for policies, and creditors, or the trustee, receiver, or assignee of the proposed company, duly appointed in any proceedings in any court or department of competent jurisdiction in the District, in accordance with their respective rights in case the organization of the proposed company shall not be completed and a certificate of authority shall not be procured from the Commissioner.  (June 19, 1934, 48 Stat. 1144, ch. 672, ch. III,  2; May 21, 1997, D.C. Law 11-268,  10(k), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-602. 1973 Ed.,  35-502. Editor's Notes Department of Insurance abolished: The Department of Insurance, including the Superintendent, was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. Reorganization Order No. 43, dated June 23, 1953, as amended, established, under the direction and control of a Commissioner, a Department of Insurance headed by a Superintendent. The Order provided for the organization of the Department, abolished the previously existing Department of Insurance, and provided that all functions and positions of the previous Department would be transferred to the new Department of Insurance, including the duties, powers, and authorities of all officers and employees; and that all personnel, property, records and unexpended balances relating to the functions and positions transferred would also be transferred to the new Department. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. The functions of the Superintendent of Insurance were transferred to the Department of Consumer and Regulatory Affairs by Reorganization Plan No. 1 of 1983, effective March 31, 1983. Pursuant to the provisions of D.C. Law 11-268, the Department of Insurance and Securities Regulation was established and the duties of the Superintendent of Insurance and the Insurance Administration were assumed by the Commissioner of Insurance and Securities, and the Insurance Administration in the Department of Consumer and Regulatory Affairs was abolished.
 314403. Formation  Corporate powers during completion of organization; issuance of certificate of authority. (a) The Commissioner shall examine the proposed articles and other papers so filed with him and, if he finds the same in accordance with law, he shall so certify and return the same to the Commissioner, who shall cause the articles and the certificate of the Corporation Counsel to be recorded in the records of the Commissioner and issue to the incorporators 2 certified copies thereof, one of which shall be recorded in the Office of the Recorder of Deeds for the District of Columbia, and thereupon such incorporators and their associates shall become and be a body corporate with power to sue and be sued, contract and be contracted with, adopt a seal, and do such other acts, subject to the provisions of this subdivision, as shall be needful to accomplish the purposes of its organization. If the Commissioner shall approve the sureties on the bond so filed, or on any like bond substituted therefor, he shall issue to the corporation a permit, as a company in course of organization, authorizing it to complete its organization. Said company in course of organization shall have authority under such permit to solicit subscriptions and payments for capital stock, if a stock company, and applications and advance premiums for insurance, and to exercise such powers, subject to the limitations in this subdivision prescribed, as may be necessary and proper in completing its organization and qualifying itself for a certificate of authority from the Commissioner to transact the business of insurance appertaining to persons. But such company shall not issue policies or enter into contracts of insurance until it shall have received the certificate of the Commissioner authorizing it so to do. (b) Upon completion of organization in accordance with this subdivision the Commissioner shall issue to such company, in course of organization, a certificate of authority as an insurance company.  (June 19, 1934, 48 Stat. 1144, ch. 672, ch. III,  3; May 21, 1997, D.C. Law 11-268,  10(k), 44 DCR 1730; Mar. 8, 2007, D.C. Law 16-232,  205(b)(1), 54 DCR 368.)  Prior Codifications 1981 Ed.,  35-603. 1973 Ed.,  35-503. Effect of Amendments D.C. Law 16-232, in subsec. (a), substituted The Commissioner shall examine the proposed articles and other papers so filed with him for The Commissioner shall submit the proposed articles and other papers so filed with him to the Corporation Counsel of the District, who shall examine the same. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4402.
 314404. Formation  Authority to solicit stock subscriptions or insurance applications. No person shall solicit subscriptions for the capital stock of or applications for insurance in any such company in course of organization unless he has been duly authorized by the company and a certificate of his authority, duly signed by a principal officer of the company, has been filed with and approved by the Commissioner.  (June 19, 1934, 48 Stat. 1145, ch. 672, ch. III,  4; May 21, 1997, D.C. Law 11-268,  10(k), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-604. 1973 Ed.,  35-504. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4402.
 314405. Formation  Disposition of sums paid upon stock subscriptions. Every subscription to the capital stock of a stock company shall contain the stipulation that no sum shall be used for commission, promotion, or organization expenses in excess of a percentage of the amount paid upon the stock subscriptions, to be named in such stipulation and proved by the Commissioner, and the remainder of sums so paid to the company shall be invested in securities in which a life insurance company is authorized to invest, or deposited in a bank or trust company in the District until the company has duly procured a certificate of authority from the Commissioner.  (June 19, 1934, 48 Stat. 1145, ch. 672, ch. III,  5; May 21, 1997, D.C. Law 11-268,  10(k), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-605. 1973 Ed.,  35-505. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4402.
 314406. Formation  Examination of company; revocation and reinstatement of companys permit or agents authority. The Commissioner shall personally, or through his Deputy and assistants, examine into the affairs of any such company in course of organization and inspect its books and papers, and may summon and examine under oath any officer or agent or any person who is or has been connected with or who has knowledge of the affairs of such company, and if he finds the company is violating the law, or if the company shall not be qualified for a certificate of authority within 2 years from date of its permit, he shall revoke its permit; and if he finds an agent of such company has violated the law, he shall revoke his authority, and he may for such agents violation revoke the companys permit. Any revocation shall be after 20 days notice. The Commissioner may, on proper showing, reinstate any companys permit or agents authority which he has revoked.  (June 19, 1934, 48 Stat. 1145, ch. 672, ch. III,  6; May 21, 1997, D.C. Law 11-268,  10(k), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-606. 1973 Ed.,  35-506. Cross References Hospital and medical services corporations, applicability of this section, see  31-3503. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4402.
 314407. Formation  Time limitation for issuance of policies. If any domestic life insurance company, in course or organization, shall not commence to issue policies within 2 years from the date of filing its articles of incorporation in the office of the Commissioner, its powers shall thereby cease, and the court, upon petition of the Commissioner or of any person interested, may fix by decree the time in which the Commissioner may settle and close its affairs; provided, however, that the Commissioner may extend the time for any such company to commence the issuance of policies for a period not exceeding 2 years if the said company shall show good cause in writing why the same should be done.  (June 19, 1934, 48 Stat. 1145, ch. 672, ch. III,  7; May 21, 1997, D.C. Law 11-268,  10(k), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-607. 1973 Ed.,  35-507. Section References This section is referenced in  31-3503. Cross References Hospital and medical services corporations, applicability of this section, see  31-3503. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4402.
 314408. Minimum capital and surplus requirements. (a) A domestic capital-stock company organized under this subdivision shall have a paid-up capital stock of not less than $1,000,000. Each domestic capital-stock company organized under this subdivision, in addition to the paid-up capital stock, shall have a surplus paid-up equal to at least 50% of such capital stock. Each domestic mutual company organized or doing business under this subdivision shall at all times have a surplus as defined by this subdivision of not less than $1,500,000. (b) No company shall be exempt from the provisions of this section by reason of its having been incorporated in the District or elsewhere prior to the effective date of this subsection or subsequent amendment, except that in the case of companies authorized in the District of Columbia on August 31, 1964, and continuously authorized thereafter without any increase or broadening of authority, the minimum capital required of a stock company, or the minimum surplus required of a mutual company, shall not be increased by this section.  (June 19, 1934, 48 Stat. 1145, ch. 672, ch. III,  8; May 4, 1950, 64 Stat. 104, ch. 157,  4; Aug. 31, 1964, 78 Stat. 764, Pub. L. 88-556,  1; Aug. 14, 1973, 87 Stat. 303, Pub. L. 93-89, title II,  201(1), (2).)  Prior Codifications 1981 Ed.,  35-608. 1973 Ed.,  35-508. Section References This section is referenced in  31-308. Cross References Independent certified public accountant report, minimum capital and surplus requirement, see  31 References in Text The effective date of this subsection, referred to in subsection (b) of this section, is prescribed by  5 of the Act of August 31, 1964, 78 Stat. 764, Pub. L. 88-557.
 314409. Amendment of articles of incorporation. Any company may amend its articles of incorporation upon publishing notice of such intention, authorized by a majority of its directors, once a week for 3 consecutive weeks in a newspaper of general circulation in the District, and with the written consent of stockholders representing at least two thirds of the capital stock entitled to vote, or two thirds of its members present in person or by proxy at a meeting called for that purpose if it does not have capital stock, and by observing such other and further requirements in that behalf as may be prescribed in its articles of incorporation. Such amendment shall be signed and acknowledged by the president and secretary or like officers of the company, and, with a copy of the proceedings of the stockholders or members, if any, and of the directors, shall be filed with the Commissioner and by him submitted to the Corporation Counsel, and if he finds the amendment and proceedings in conformity with the law, he shall so certify to the Commissioner. The amendment shall not take effect until the Commissioner shall deliver to the company his certified copy of the amendment and of the certificate of the Corporation Counsel.  (June 19, 1934, 48 Stat. 1145, ch. 672, ch. III,  9; Aug. 31, 1964, 78 Stat. 765, Pub. L. 88-556,  3; May 21, 1997, D.C. Law 11-268,  10(k), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-609. 1973 Ed.,  35-509. Section References This section is referenced in  31-3503. Cross References Hospital and medical services corporation, applicability of this section, see  31-3503. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4402.
 314410. Increase of capital stock. (a) If a company amends its articles of incorporation by providing for an increase of its capital stock, such increase shall be subscribed and fully paid up within 1 year of the date of such amendment, unless the Commissioner shall certify his consent to an extension of such time. Failure to have such increase of capital stock paid up within the time provided may be considered grounds for ousting the company from its powers under any such amendment to such articles of incorporation by a court of competent jurisdiction in a proceeding by the Commissioner, the Corporation Counsel representing him, against the company for such judgment. (b) Subsection (a) of this section shall not be applicable to an amendment of the articles of incorporation providing for an increase of capital stock wherein said amendment provides that said increase will be reserved for issuance for: (1) the acquisition of the ownership or control of another insurance company as an affiliate or subsidiary subject to the limitations of  31-4435(a)(10)(B) [repealed]; provided, however, that no such acquisition shall be consummated until it has been approved or ratified by stockholders representing at least a majority of the capital stock entitled to votes; (2) the granting of options to officers or employees of the company to purchase authorized but unissued shares of stock of the company, for such consideration and upon such terms and conditions as may be fixed by the board of directors; provided, however, that: (A) at no time shall the number of shares reserved for this purpose exceed, in the aggregate, 5% of the total authorized shares of stock of the company; (B) no more than 10% of the total number of shares authorized to be optioned may be made available to any individual under any and all options issued to him by the company; (C) no option shall be promised or granted: (i) to any individual employed by an insurance company authorized to do business in the District of Columbia (other than the company promising or granting the option or a subsidiary of the company promising or granting the option) while that individual is so employed; or (ii) to any individual within 2 years following the termination of his employment with such an insurance company; (D) the option price of shares subject to any such option shall not be less than 95% of the fair market value of such shares at the time the option is granted and shall be not less than the par value of such shares; (E) any such option shall not be transferable except by will or the laws of descent and distribution; and (F) any such option shall not be exercisable after the expiration of 10 years from the time the option is granted; or (3) the paying of stock dividends; provided, that at no time shall the number of shares of reserved unissued stock exceed the number of shares of issued and outstanding shares of stock of said company.  (June 19, 1934, 48 Stat. 1146, ch. 672, ch. III,  10; Aug. 31, 1964, 78 Stat. 765, Pub. L. 88-556,  4; May 21, 1997, D.C. Law 11-268,  10(k), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  24(a), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-610. 1973 Ed.,  35-510. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4402.
 314411. Decrease of capital stock. A company may, with the approval of the Commissioner, amend its articles of incorporation by providing for a decrease of its capital stock and a corresponding increase in surplus to an amount not less than the minimum capital stock and surplus required by this subdivision. The Commissioner shall not approve or issue his certified copy of such amendment if he be of the opinion that the interests of policyholders or creditors may be prejudiced thereby. No distribution of the assets of the company shall be made to stockholders upon any such decrease of capital stock which shall reduce the surplus and capital stock to less than the minimum capital stock and surplus required as aforesaid. Upon any such amendment so decreasing the capital stock such company may require each stockholder to return his certificate of stock and accept a new certificate for such proportion of the amount of its original capital stock as the reduced capital stock shall bear to the original capital stock.  (June 19, 1934, 48 Stat. 1146, ch. 672, ch. III,  11; May 21, 1997, D.C. Law 11-268,  10(k), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-611. 1973 Ed.,  35-511. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4402.
 314412. Liability of stockholders; rights of fiduciary stockholders and persons pledging stock. (a) All the stockholders of every company incorporated under this chapter shall be severally and individually liable to the policyholders and creditors of the company in which they are stockholders for the unpaid amount due upon the shares of capital stock held by them, respectively, for all debts and contracts made by such company until the whole amount of capital stock fixed and limited by such company shall have been paid in. (b) No person holding capital stock in such company as executor, administrator, guardian, committee, or trustee shall be personally subject to any liability as stockholder of such company, but the estate and funds in the hands of such executor, administrator, guardian, committee, or trustee shall be liable in like manner and to the same extent as the testator or intestate or the ward or person interested in such trust would have been if he had been living and competent to act and hold the stock in his own name. (c) Every such executor, administrator, guardian, committee, or trustee shall represent the capital stock in his hands at all meetings of the company, and may vote accordingly as a stockholder. (d) No person holding capital stock in such company as collateral security shall be personally subject to any liability as stockholder of such company, but the person pledging such capital stock shall be considered as holding the same, and shall be liable as a stockholder accordingly; and every person who shall pledge his capital stock as collateral security may, nevertheless, represent the same at all meetings and vote as a stockholder.  (June 19, 1934, 48 Stat. 1146, ch. 672, ch. III,  12.)  Prior Codifications 1981 Ed.,  35-612. 1973 Ed.,  35-512.
 314413. Payments for capital stock. No company incorporated under this chapter shall be authorized to transact any business until the authorized capital stock shall have been actually paid in, either in cash or in investments authorized by this subdivision at market value; and it shall be lawful for the directors to call in and demand from the stockholders the residue of their subscriptions in money or property at such times and in such instalments as the directors shall deem proper, under the penalty of forfeiting the shares of capital stock subscribed for and all previous payments made thereon, if payment shall not be made by the stockholder within 60 days after a personal demand or a notice requiring such payment shall have been published once a week for 3 consecutive weeks in a daily newspaper in the District.  (June 19, 1934, 48 Stat. 1147, ch. 672, ch. III,  13.)  Prior Codifications 1981 Ed.,  35-613. 1973 Ed.,  35-513.
 314414. Capital stock transfers. (a) The capital stock of such company shall be deemed personal estate and shall be transferable in such manner as shall be prescribed by the bylaws of the company; but no shares shall be transferable until all previous calls thereon shall have been fully paid in or the shares shall have been declared forfeited for nonpayment. (b) A person in whose name shares of capital stock stand on the books of a company shall be deemed the owner thereof as regards the company, but if any such person shall in good faith sell or otherwise dispose of any of his shares of capital stock to another and deliver to him the certificates for such shares, with written authority for the transfer of the same on the books, the title of the former shall vest in the latter so far as may be necessary to effect the purpose of the sale or other disposition, not only as between the parties themselves but also as against the creditors of and subsequent purchasers from the former.  (June 19, 1934, 48 Stat. 1147, ch. 672, ch. III,  14.)  Prior Codifications 1981 Ed.,  35-614. 1973 Ed.,  35-514.
 314415. Capital stock records. (a) It shall be the duty of the directors of every domestic stock company to cause a record to be kept by the treasurer or secretary of the company or by the stock transfer agent of the company containing the names of all persons, alphabetically arranged, who are or shall within 6 years have been stockholders of such company, and showing their place of residence, the number of shares of capital stock held by them, respectively, the time when they became owners of such shares, and the amount of capital stock actually paid in. (b) Such record shall, during the usual business hours of the day, on every business day, be open for inspection by policyholders, stockholders, creditors of the company, and the personal representatives of such policyholders, stockholders, and creditors at the office or principal place of business of such company in the place where its business operations shall be located in the District of Columbia, or at the office of the stock transfer agent located in the District of Columbia, and any policyholder, stockholder, creditor, or representative shall have a right to make extracts from such record. (c) Such record shall be presumptive evidence of the facts therein stated in favor of the plaintiff in any suit or proceeding against such company or against any 1 or more stockholders. (d) Every officer, stock transfer agent, or any other agent of any company who shall neglect to make any proper entry in such record, or shall refuse or neglect to exhibit the same, or allow the same to be inspected and extracts to be taken therefrom, as herein provided, shall be deemed guilty of a misdemeanor and the company shall pay to the party injured a penalty of $50 for any such neglect or refusal, and all damages resulting therefrom. (e) Every company that shall neglect to have such record kept open for inspection, as herein provided, shall forfeit to the District the sum of $50 for every day it shall so neglect, to be sued for and recovered by the Commissioner, the Corporation Counsel representing him, in the Superior Court of the District of Columbia.  (June 19, 1934, 48 Stat. 1147, ch. 672, ch. III,  15; June 25, 1936, 49 Stat. 1921, ch. 804; June 25, 1948, 62 Stat. 991, ch. 646,  32(b); May 24, 1949, 63 Stat. 107, ch. 139,  127; Aug. 20, 1964, 78 Stat. 556, Pub. L. 88-458, 1; July 29, 1970, 84 Stat. 572, Pub. L. 91-358, title I,  155(c)(37)(C); May 21, 1997, D.C. Law 11-268,  10(k), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-615. 1973 Ed.,  35-515. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4402.
 314416. Mutual companies  Corporations, boards, or associations as agents or members thereof. Public or private corporations, boards, or associations of the District or elsewhere may make applications, enter into agreements for, hold policies in, and become members of mutual companies. Any officer, stockholder, trustee, or legal representative of any such corporation, board, association, or of an estate may be recognized as acting for or on its behalf, but shall not be personally liable by reason of acting in such representative capacity.  (June 19, 1934, 48 Stat. 1148, ch. 672, ch. III,  16.)  Prior Codifications 1981 Ed.,  35-616. 1973 Ed.,  35-516.
 314417. Mutual companies  Requirements before doing business. No domestic mutual company shall transact any business until at least 200 persons shall have subscribed in the aggregate for at least $200,000 of insurance and shall have paid in full 1 annual premium in money upon the insurance so subscribed.  (June 19, 1934, 48 Stat. 1148, ch. 672, ch. III,  17.)  Prior Codifications 1981 Ed.,  35-617. 1973 Ed.,  35-517. Cross References Prohibition against assessment companies, see  31-4331.
 314418. Reincorporation of existing corporations. (a) Any domestic insurance corporation existing or doing business on June 19, 1934, may, by a vote of a majority of its directors or trustees, accept the provisions of this subdivision and amend its charter to conform with the same upon obtaining the consent of the Commissioner thereto in writing, and filing such consent in the Officer of the Recorder of Deeds for the District; and thereafter it shall be deemed to have been incorporated under this chapter, and every such corporation in reincorporating under this provision may for that purpose so adopt in whole or in part a new charter, in conformity herewith, and include therein any and all provisions of its existing charter, and any or all changes from its existing charter, to cover and enjoy any or all the privileges and provisions of existing laws which might be so included and enjoyed if it were originally incorporated hereunder, and it shall, upon such adoption of and after obtaining the consent, as in this section before provided, to such charter and filing the same with the Commissioner and the record thereof with the Recorder of Deeds of the District, perpetually enjoy the same as and be such corporation, which is declared to be a continuation of such corporation which existed prior to such reincorporation; and the offices therein which shall be continued shall be filled by the respective incumbents for the period and the same general proceedings shall be taken upon the presentation of such amended charter or certificate adopted in relation to such amendment, to the Commissioner, as are required by this chapter to be taken with respect to an original charter or certificate, except that no examination of the condition and affairs of such corporation shall be required unless so ordered by the Commissioner, and if the amended charter or certificate be approved by the Commissioner and his certificate of authority to do business thereunder is granted, the corporation shall thereafter be deemed to possess the same powers and be subject to the same liabilities as if such charter or certificate so amended had been its original charter or certificate of incorporation, but without prejudice to pending action or proceeding or any rights previously accrued. (b) Upon the reincorporation or upon the amendment of the charter of any corporation having a capital stock in accordance with the provisions of this section it may by a vote of the majority of its directors confer upon its policyholders as may have a prescribed amount of insurance upon their lives the right to vote for all or any less number of the directors in such manner not inconsistent with any provision of this subdivision.  (June 19, 1934, 48 Stat. 1148, ch. 672, ch. III,  18; May 21, 1997, D.C. Law 11-268,  10(k), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-618. 1973 Ed.,  35-518. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4402.
 314419. Conversion of stock companies into mutual life companies. Any domestic stock company organized or licensed to do business, whether incorporated under this subdivision, or any previous existing law, or act of Congress, may become a mutual company, and to that end may carry out a plan for the acquisition of shares of its capital stock; provided, however, that such plan: (1) Shall have been adopted by a vote of a majority of the directors of such company; (2) Shall have been approved by a vote of stockholders representing a majority of the capital stock at a meeting of stockholders called for the purpose; (3) Shall have been approved by a majority vote of the policyholders voting at a meeting, called for the purpose, of policyholders each insured for at least $1,000 and whose insurance shall then be in force and shall have been in force for at least 1 year prior to such meeting; notice of such meeting shall be given by mailing such notice from the home office of such corporation at least 30 days prior to such meeting, in a sealed envelope, postage prepaid, addressed to such policyholders at their last known post-office addresses, and such meeting shall be otherwise provided for and conducted in such manner as shall be provided in such plan; provided, however, that policyholders may vote in person, by proxy, or by mail; that all votes shall be cast by ballot and the Commissioner shall supervise and direct the methods and procedure of said meeting and appoint an adequate number of inspectors to conduct the voting at said meeting who shall have power to determine all questions concerning the verification of the ballots, the ascertainment of the validity thereof, the qualifications of the voters, and the canvass of the vote, and who shall certify to the Commissioner and to the company the result thereof, and with respect thereto shall act under such rules and regulations as shall be prescribed by the Council of the District of Columbia; that all necessary expenses incurred by the Commissioner shall be paid by the company as certified to by him; and (4) Shall have been submitted to the Commissioner and shall have been approved by him in writing; provided, that every payment for the acquisition of any shares of the capital stock of such company, the purchase price of which is not fixed by such plan, shall be subject to the approval of the Commissioner; provided further, that neither such plan, nor any such payment, shall be approved by the Commissioner unless at the time of such approvals, respectively, the company, after deducting the aggregate sum appropriated by such plan for the acquisition of any part or all of its capital stock, and in the case of any payment not fixed by such plan and subject to separate approval as aforesaid after the approval of such plan, after deducting also the amount of such payment, shall be possessed of assets not less than the entire liabilities of the company, including the net values of its outstanding contracts computed according to the standard adopted by the company under  31-4701, and also all funds, contingent reserves, and surplus save so much of the latter as shall have been appropriated or paid under such plan.  (June 19, 1934, 48 Stat. 1149, ch. 672, ch. III,  19; May 21, 1997, D.C. Law 11-268,  10(k), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-619. 1973 Ed.,  35-519. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4402. Change in Government This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 402(274) of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to the District of Columbia Council, subject to the right of the Commissioner as provided in  406 of the Plan. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 314420. Applicability of provisions to existing corporations. Every company incorporated under the provisions of the laws of the District, or act of Congress, prior to June 19, 1934, is hereby brought under all the provisions of this subdivision, except that its capital may continue in the amount named in its charter during the existing term thereof, unless it extends its business to other kinds of insurance, and it shall be entitled to all privileges granted by such charter not authorized by this law.  (June 19, 1934, 48 Stat. 1149, ch. 672, ch. III,  20.)  Prior Codifications 1981 Ed.,  35-620. 1973 Ed.,  35-520.
 314421. Directors  Annual election; qualifications; limitation on proxies. The stock, property, and business of every company organized under this subdivision shall be managed by the directors who shall, except for the 1st year, be annually elected, at such time and place as shall be determined by the bylaws of the company. All proxies used in the election of directors of such companies shall be valid for a period not exceeding 1 year from the election for which they were signed and in which they were authorized to be voted.  (June 19, 1934, 48 Stat. 1149, ch. 672, ch. III,  21; Mar. 8, 2007, D.C. Law 16-232,  205(b)(2), 54 DCR 368.)  Prior Codifications 1981 Ed.,  35-621. 1973 Ed.,  35-521. Section References This section is referenced in  31-735. Effect of Amendments D.C. Law 16-232 deleted the second sentence, which had read: Every director of such a stock company shall be a stockholder thereof, and every director of such a mutual company shall be a policyholder thereof. Cross References Mutual insurance holding company, membership interest, see  31-735. Quo warranto proceedings to question right to corporate office, see  16-3501 et seq.
 314422. Directors  Power to make bylaws. The directors of companies organized under this subdivision shall have power to make such bylaws as they deem proper for the management of the business affairs of such company, not inconsistent with the laws of the District and the Constitution of the United States, and prescribing the duties of officers, employees, and servants that may be employed, for the appointment or election of all officers, and for carrying on all kinds of business within the objects and purposes of such company.  (June 19, 1934, 48 Stat. 1150, ch. 672, ch. III,  22.)  Prior Codifications 1981 Ed.,  35-622. 1973 Ed.,  35-522.
 314423. Directors  General election procedure. (a) Notice of the time and place of holding election of directors of a company organized under this subdivision shall be sent to those entitled to vote, and the election shall be made by such of the stockholders and/or policyholders as shall attend for that purpose, either in person or by proxy. All elections shall be by ballot, and the persons receiving the greatest number of votes shall be directors. When any vacancy shall happen among the directors it shall be filled for the remainder of the year in such manner as shall be prescribed by the bylaws of the company. (b) In case it shall happen at any time that an election of directors shall not be made on the day designated by the bylaws of said company when it ought to have been made, the company shall not for that reason be dissolved, but it shall be lawful on any other day to hold an election for directors in such manner as may be provided in the bylaws, and all acts of directors shall be valid and binding as against said company until their successors shall be elected.  (June 19, 1934, 48 Stat. 1150, ch. 672, ch. III,  23.)  Prior Codifications 1981 Ed.,  35-623. 1973 Ed.,  35-523.
 314424. Directors  Cumulative voting in stock company election. In an election for directors of any stock company in which the policyholders do not vote, each stockholder having a right to vote may cast the whole number of his votes for 1 candidate, or distribute them upon 2 or more candidates, as he may prefer, that is to say: If the stockholder having a right to vote owns 1 share of stock, or has 1 vote, or is entitled to 1 vote for each of 7 directors by virtue thereof, he may give 1 vote to each of said 7 directors, or 7 votes for any 1 thereof, or a less number of votes for any less number of directors, whatever may be the actual number to be elected, and in this manner may distribute or cumulate his votes as he may see fit.  (June 19, 1934, 48 Stat. 1150, ch. 672, ch. III,  24.)  Prior Codifications 1981 Ed.,  35-624. 1973 Ed.,  35-524.
 314425. Voting powers under group policies. In every group policy issued by a domestic life company the employer shall be deemed to be the policyholder for all purposes, within the meaning of this chapter, and, if entitled to vote at meetings of the company, shall be entitled to 1 vote thereat.  (June 19, 1934, 48 Stat. 1150, ch. 672, ch. III,  25.)  Prior Codifications 1981 Ed.,  35-625. 1973 Ed.,  35-525.
 314426. Liability of directors. The directors of any company organized under the laws of the District shall be personally liable when they have participated in or assented to any act which shall cause injury to policyholders, creditors, or stockholders resulting from: (1) ultra vires acts; (2) illegal corporate acts done with their connivance, knowledge, or consent; (3) issuing unpaid or part-paid stock and marking or representing it as paid up in full; (4) dividend payments declared whether negligently or purposely impairing the capital stock and minimum surplus; (5) mismanagement; (6) loaning corporate funds to stockholders or discounting their notes out of corporate moneys; (7) making false notices or reports that deceive the public; or, (8) transferring property to officers or stockholders to defraud policyholders or creditors. If any of the directors shall object to declaring a dividend or the payment of the same, and shall, at any time before the time fixed for the payment thereof, file a certificate of their objections in writing with the secretary of the company and with the Commissioner, they shall be exempt from the liability prescribed in this section for dividends declared or paid impairing the capital stock and minimum surplus.  (June 19, 1934, 48 Stat. 1150, ch. 672, ch. III,  26; May 21, 1997, D.C. Law 11-268,  10, 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  24(b), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-626. 1973 Ed.,  35-526.
 314427. Salaries to be authorized by directors. No domestic company shall pay any salary, compensation, or emolument to any officer, trustee, or director thereof, amounting in any 1 year to more than $5,000, unless such payment shall be authorized by the board of directors of the company.  (June 19, 1934, 48 Stat. 1151, ch. 672, ch. III,  27.)  Prior Codifications 1981 Ed.,  35-627. 1973 Ed.,  35-527. Section References This section is referenced in  31-3503. Cross References Hospital and medical services corporation, applicability of this section, see  31-3503.
 314428. Limitation of payments to stockholders and policyholders. No domestic company shall make any payments in form of dividends or otherwise to its stockholders for or on account of any interest in or relation to the company as stockholders unless it possesses assets in the amount of such payment in excess of its liabilities, including its capital stock, and the surplus required by this subdivision; and no domestic company shall make any payments to its policyholders for or on account of any interest in or relation to the company as members or policyholders except for matured claims or other policy obligations and in the purchase of surrender values unless it possesses assets in the amount of such payments in excess of its liabilities, and the capital stock and surplus required by this subdivision.  (June 19, 1934, 48 Stat. 1151, ch. 672, ch. III,  28.)  Prior Codifications 1981 Ed.,  35-628. 1973 Ed.,  35-528.
 314429. Election or appointment of officers; required security. There shall be a president, a secretary, and a treasurer of the company, who shall be elected by the directors; and also such subordinate officers as may be elected or appointed, and who may be required to give security for the faithful performance of the duties of their office, as this subdivision and the company by its bylaws may require.  (June 19, 1934, 48 Stat. 1151, ch. 672, ch. III,  29.)  Prior Codifications 1981 Ed.,  35-629. 1973 Ed.,  35-529. Section References This section is referenced in  31-3503. Cross References Hospital and medical services corporation, applicability of this section, see  31-3503. Quo warranto proceedings to question right to corporate office, see  16-3501 et seq.
 314430. Officers and directors not to be pecuniarily interested in transactions. No director or officer of any company doing business in the District shall receive any money or valuable thing for negotiating, procuring, recommending, or aiding in any purchase by or sale to such company of any property, or any loan from such company, nor be pecuniarily interested, either as principal, coprincipal, agent, or beneficiary, in any such purchase, sale, or loan, nor shall the financial obligation of any such director or officer be guaranteed by such company in any capacity; provided, that nothing herein contained shall prevent any such director or officer from receiving a fee for appraising property for said company or for serving on any committee that passes on the investments of said company; provided further, that nothing herein contained shall prevent a life insurance company from making a loan upon a policy held therein by a director or officer not in excess of the net value thereof or prevent any company in connection with the relocation of the place of employment of an officer, including any relocation in connection with the initial employment of such officer from: (1) making (or such officer from accepting therefrom) a mortgage loan to such officer on real property owned by such officer which is to serve as such officers residence; or (2) acquiring (or such officer from selling thereto), at not more than the fair market value thereof, the residence of such officer. Any person violating any provision of this section shall be guilty of a misdemeanor.  (June 19, 1934, 48 Stat. 1151, ch. 672, ch. III,  30; Apr. 16, 1982, D.C. Law 4-99,  2, 29 DCR 967.)  Prior Codifications 1981 Ed.,  35-630. 1973 Ed.,  35-530. Section References This section is referenced in  31-3503. Cross References Hospital and medical services corporation, applicability of this section, see  31-3503.
 314431. Voting-trust agreements. It shall be unlawful for any stockholder, director, or officer of any company having capital stock to enter into any contract or agreement, commonly known as voting-trust agreements, whereby the rights, benefits, or liabilities attaching to the capital stock are transferred or assigned, temporarily or otherwise, to any person or group of persons, incorporated or unincorporated, for the purpose of controlling, managing, or directing the company, or voting its stock; provided, that this section shall not prevent the granting of proxies by stockholders authorizing a designated individual to represent them at stockholders meetings.  (June 19, 1934, 48 Stat. 1151, ch. 672, ch. III,  31.)  Prior Codifications 1981 Ed.,  35-631. 1973 Ed.,  35-531.
 314432. Maximum and contingent premiums of mutual companies. [Repealed] Repealed.  (June 19, 1934, 48 Stat. 1152, Ch. 672, ch. III,  32; May 4, 1950, 64 Stat. 104, ch. 157,  5.)  Prior Codifications 1973 Ed.,  35-532.
 314433. Classification of risks and members, payment of dividends, and creation of surplus by mutual companies. A mutual company may, in its articles of incorporation or in its bylaws, provide for the classification of its risks and of its members and for the payment of dividends and for the creation of a surplus.  (June 19, 1934, 48 Stat. 1152, ch. 672, ch. III,  33.)  Prior Codifications 1981 Ed.,  35-632. 1973 Ed.,  35-533.
 314434. Power of mutual company to borrow or assume liability. (a)(1) In addition to the general power and authority to borrow money for its regular business purposes, if a domestic insurance company obtains prior written approval for a stated maximum amount, it may borrow money by the issuance of notes to: (A) Pay the reasonable expenses of its organization; (B) Provide contingency loss funds; (C) Provide additional surplus funds; (D) Satisfy a deficiency; or (E) Provide the amount of required minimum surplus. (2) The notes issued for the purposes stated in paragraph (1) of this subsection shall be known as surplus notes and shall fully recite the purpose for which the money was borrowed. The amount of the outstanding principal and unpaid interest of the surplus notes shall be stated in each annual report. (b) The principal indebtedness of surplus notes issued on or after October 21, 2000, shall not be a liability or claim against any of the assets of the company. The principal of, and interest on, the notes may be paid from time to time, either in full or in part, from available surplus funds of the company only if the amount of the surplus of the company is twice the amount of principal and interest being paid. The company may make such payments whenever it is able to do so if it receives the prior written approval of the Commissioner. The Commissioner shall use the standards set forth in subchapter I of Chapter 7 of this title, relating to adequacy of surplus in determining whether or not to approve the payments. Upon a dissolution of the company, the principal and accrued and unpaid interest of the surplus notes shall be payable from surplus.  (June 19, 1934, 48 Stat. 1152, ch. 672, ch. III,  34; May 21, 1997, D.C. Law 11-268,  10(k), 44 DCR 1730; Oct. 21, 2000, D.C. Law 13-189,  2, 47 DCR 7077; June 19, 2001, D.C. Law 13-313,  13, 48 DCR 1873.)  Prior Codifications 1981 Ed.,  35-633. 1973 Ed.,  35-534. Effect of Amendments D.C. Law 13-189 rewrote this section which prior thereto provided: A mutual company organized under chapters 3 to 8 1981 Ed. of this title may borrow or assume a liability for the repayment of a sum of money sufficient to defray the reasonable expenses of its organization or to enable it to comply with any requirement of the law or as a guaranty fund upon agreement, which shall first be submitted to and approved by the Commissioner, that such loan or advance, with interest at a rate not exceeding 6% per annum, shall be repaid out of the earnings, or profits of such corporation with the approval of the Commissioner whenever in his judgment the financial condition of the company shall warrant; but such approval shall not be withheld if, after such repayment shall be made, the company shall have and be in possession of a surplus equal to 10% or more of its gross annual premiums. Any such loan or advance shall not form a part of the legal liabilities of the company, but until repaid all statements published by such company or filed with the Commissioner shall show the amount thereof then remaining unpaid. D.C. Law 13-313 substituted prior written approval for prior approval in the third sentence of subsec. (b). Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4402.
 314435. Investments and loans. [Repealed] Repealed.  (June 19, 1934, 48 Stat. 1152, ch. 672, ch. III,  35; Feb. 3, 1938, 52 Stat. 26, ch. 13,  12; June 19, 1948, 62 Stat. 480, ch. 503; July 19, 1954, 68 Stat. 494, ch. 546,  1; Sept. 21, 1959, 73 Stat. 598, Pub. L. 86-329,  1; Sept. 8, 1960, 74 Stat. 866, Pub. L. 86-731,  1; Sept. 14, 1961, 75 Stat. 514, Pub. L. 87-245,  1; Oct. 3, 1962, 76 Stat. 715, Pub. L. 87-739,  1; Aug. 31, 1964, 78 Stat. 765, Pub. L. 88-566,  2(a), (b); Aug. 14, 1973, 87 Stat. 303, Pub. L. 93-89, title II,  201(3), (4); Oct. 30, 1981, D.C. Law 4-50,  2, 28 DCR 4258; June 13, 1990, D.C. Law 8-141,  2, 37 DCR 2654; May 21, 1997, D.C. Law 11-268,  10(k), 44 DCR 1730; Apr. 11, 2003, D.C. Law 14-297,  401(e)(2), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-634. 1973 Ed.,  35-535. Editor's Notes The reference to  3701 et seq. of Title 38, United States Code appearing in (a)(4)(H) was translated from  1801 et seq., which originally appeared, as this section was renumbered in the U.S. Code. Department of Insurance abolished: See Historical and Statutory Notes following  31-4402.
 314436. Domestic company real-estate holdings. [Repealed] Repealed.  (June 19, 1934, 48 Stat. 1153, Ch. 672, ch. III,  36; June 19, 1948, 62 Stat. 480, ch. 503.)  Prior Codifications 1973 Ed.,  35-536.
 314437. Reinsurance by domestic companies in authorized companies. [Repealed] Repealed.  (June 19, 1934, 48 Stat. 1154, Ch. 672, ch. III,  37; Oct. 15, 1993, D.C. Law 10-36,  6(a), 40 DCR 5812; May 16, 1995, D.C. Law 10-255,  26(c), 41 DCR 5193.)  Prior Codifications 1981 Ed.,  35-635. 1973 Ed.,  35-537.
 314438. Reinsurance of risks. [Repealed] Repealed.  (Oct. 15, 1993, D.C. Law 10-36,  6(a), 40 DCR 5812; May 16, 1995, D.C. Law 10-255,  26(c), 41 DCR 5193.)  Prior Codifications 1981 Ed.,  35-635.
 314439. Vouchers or affidavits as evidence of disbursements. No domestic company shall make any disbursement of $100 or more unless the same be evidenced by a voucher signed by or on behalf of the person, firm, or corporation receiving the money and describing the consideration for the payment; and if the expenditure be in connection with any matter pending before any legislative or public body or before any department or officer of any state or government, the voucher shall describe the nature of the matter and the interest of the company therein, or, if such voucher cannot be obtained, the expenditure shall be evidenced by affidavit describing its character and object and stating the reasons for not obtaining such voucher.  (June 19, 1934, 48 Stat. 1154, ch. 672, ch. III,  38.)  Prior Codifications 1981 Ed.,  35-636. 1973 Ed.,  35-538. Section References This section is referenced in  31-3503. Cross References Hospital and medical services corporations, applicability of this section, see  31-3503.
 314440. Manner of keeping books, records, accounts, and vouchers. Every domestic company shall keep its books, records, accounts, and vouchers in such manner that its financial condition can be ascertained and so that its financial statements filed with the Commissioner can be readily verified.  (June 19, 1934, 48 Stat. 1154, ch. 672, ch. III,  39; May 21, 1997, D.C. Law 11-268,  10, 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  24(c), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-637. 1973 Ed.,  35-539. Section References This section is referenced in  31-1503 and  31-3503. Cross References Hospital and medical services corporations, applicability of this section, see  31-3503. Managing general agents, retention of contract records, see  31-1503.
 314441. Acquisition of own capital stock. [Repealed] Repealed.  (June 19, 1934, 48 Stat. 1154, ch. 672, ch. III,  40; May 21, 1997, D.C. Law 11-268,  10, 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  24(d), 45 DCR 745; Apr. 11, 2003, D.C. Law 14-297,  401(e)(2), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-638. 1973 Ed.,  35-540.
 314442. Variable or modified guaranteed contracts. (a) Every domestic life insurance company which issues contracts providing for payments which vary directly according to investment experience shall establish 1 or more separate accounts in connection with such contracts, as directed by the Commissioner. All amounts received by the company which are required by contract to be applied to provide such variable payments shall be added to the appropriate separate account, and the assets of any such separate account shall not be chargeable with liabilities arising out of any other business the company may conduct. Any surplus or deficit which may arise in any such separate account by virtue of mortality experience shall be adjusted by withdrawals from or additions to such account so that the assets of such account shall always equal the assets required to satisfy the companys obligations for such variable payments. (a-1) Every domestic life insurance company that issues modified guaranteed contracts may establish 1 or more separate accounts in connection with these types of contracts. All amounts received by the company to provide benefits under contracts for which separate accounts have been established shall be added to the appropriate separate account. Amounts allocated by the company to separate accounts for modified guaranteed contracts shall be owned by the company, the assets therein shall be the property of the company, and no company by reason of such account shall be or hold itself out to be a trustee. The assets of any such separate account shall not be chargeable with liabilities arising out of any other business the company may conduct. For the purposes of this section, the term: (1) Modified guaranteed annuity means any group or individual contract for an annuity in which the benefits are guaranteed if held for specified periods and nonforfeiture values are based upon a market-value adjustment formula if held for shorter periods. The formula may or may not reflect the investment experience of any separate account. The assets underlying the annuity contract must be maintained by the insurance company in a separate account during the period, or periods, when the annuity becomes payable. (2) Modified guaranteed contracts means a modified guaranteed annuity or modified guaranteed life insurance policy or contract. (3) Modified guaranteed life insurance means any group or individual policy of life insurance, the underlying assets of which are held in a separate account, in which the benefits are guaranteed if held for specified periods and nonforfeiture values are based upon a market-value adjustment formula if held for shorter periods. The formula may or may not reflect the investment experience of any separate account. The assets underlying the policy must be maintained by the insurance company in a separate account during the period, or periods, when the policyholder can surrender the policy. (b) A foreign or alien life insurance company authorized to do business in the District may be authorized to issue or deliver contracts in the District providing for payments which vary directly according to investment experience only if authorized to issue such contracts under the laws of its domicile. (c) No domestic life insurance company shall be authorized to issue such variable contracts or modified guaranteed contracts, and no foreign or alien life insurance company shall be authorized to issue or deliver such contracts in the District, until such company has satisfied the Commissioner that its condition and methods of operation in connection with the issuance of such variable contracts or modified guaranteed contracts will not be such as to render its operation hazardous to the public or to its policyholders in the District. In determining the qualification of a company to issue or deliver such variable contracts or modified guaranteed contracts in the District, the Commissioner shall consider, among other things, the history and financial condition of the company; the character, responsibility, and general fitness of the officers and directors of the company; and, in the case of a foreign or alien company, whether the regulation provided by the laws of its domicile provides a degree of protection to policyholders and the public substantially equal to that provided by this section and the rules and regulations issued by the Commissioner pursuant thereto. (d) Every life insurance company which issues or delivers such variable contracts or modified guaranteed contracts in the District shall file with the Commissioner, in addition to the annual statement required by  31-4307 [repealed], such other periodic or special reports as the Commissioner may prescribe. (e) The provisions of this section shall not apply to any contracts which do not provide for payments which vary directly according to investment experience other than modified guaranteed contracts and shall not apply to contracts issued pursuant to subsection (l) of this section. (f) The Commissioner shall have the authority to issue such reasonable rules and regulations as may be necessary to carry out the purposes of this section. (g) Repealed. (h) Unless otherwise approved by the Commissioner, separate accounts relating to modified guaranteed contracts will be subject to investment laws applicable to a life insurance companys general asset account. (i) Any modified guaranteed contract delivered or issued for delivery in the District, and any certificate evidencing nonforfeiture benefits that vary according to market-value adjustment formula issued pursuant to any life insurance or annuity contract issued on a group basis shall contain, on its first page, a prominent statement that the nonforfeiture value may increase or decrease, based on the market-value adjustment formula in the contract, and, for modified guaranteed life insurance only, be accompanied by a written disclosure to the purchaser of the policys interest adjusted net cost index in compliance with regulations or forms approved by the Commissioner. (j) To the extent necessary to comply with the Investment Company Act of 1940, (15 U.S.C.  80a-1 et seq.) as now or later amended, or any rules issued thereunder, the insurance company may adopt special procedures for the conduct of the business and affairs of the modified guaranteed contract separate accounts, and may, for persons having beneficial interests therein, provide special voting and other rights, including special rights and procedures relating to investment policy, investment advisory services, selection of certified public accountants, and selection of a committee, the members of which need not be otherwise affiliated with the corporation, to manage the business and affairs of the account. (k) Reasonable actuarial expenses incurred in connection with approval of a modified guaranteed contract shall be paid by the person seeking approval of such a contract. (l)(1) Every domestic life insurance company which issues modified guaranteed contracts in connection with a pension, retirement, or profit sharing plan may, after adoption of a resolution by its board of directors and delivery of certification of that adoption to the Commissioner, establish 1 or more separate accounts in connection with these types of contracts. The contracts may provide for payments and nonforfeiture values which vary according to investment experience of the accounts, for guaranteed payments and nonforfeiture values, for payments and nonforfeiture values that are subject to a market value adjustment formula, or for any other type of payments or incidental benefits. Any income and any realized or unrealized gain or loss on each separate account established pursuant to this paragraph shall be credited to or charged against that separate account in accordance with the terms of the contract without regard to the other income, gains, or losses of the company. Amounts allocated to the separate account shall be owned by the company, the assets therein shall be the property of the company, and no company by reason of such account shall be or hold itself out to be trustee. Unless the contract provides otherwise, the assets of any such separate account shall not be chargeable with liabilities arising out of any other business the company may conduct. (2) Repealed.  (June 19, 1934, ch. 672, ch. III,  41; June 12, 1960, 74 Stat. 218, Pub. L. 86-520,  1; Mar. 22, 1994, D.C. Law 10-95,  2, 41 DCR 503; Apr. 9, 1997, D.C. Law 11-255,  38, 44 DCR 1271; May 21, 1997, D.C. Law 11-268,  10(k), 44 DCR 1730; Apr. 11, 2003, D.C. Law 14-297,  401(e)(2), 50 DCR 330.)  Prior Codifications 1981 Ed.,  35-639. 1973 Ed.,  35-541. Section References This section is referenced in  31-702. Effect of Amendments D.C. Law 14-297 repealed subsecs. (g) and (l)(2). Cross References Holding company subsidiaries, investment limitations, see  31-702. Temporary Legislation For temporary (225 day) amendment of section, see  3(b) of Modified Guaranteed Contracts Temporary Amendment Act of 1993 (D.C. Law 10-85, March 19, 1994, law notification 41 DCR 1635). References in Text  Section 31-4307, referred to in (d), was repealed by D.C. Law 10-42,  7(b), 40 DCR 6020, effective October 21, 1993. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4402.
 314443. Effect of merger or consolidation. (a)(1) When a merger or consolidation has been completed, the merging or consolidating companies shall be a single company. (2) For a merger, the single company shall be the 1 designated in the plan as the surviving company and, for a consolidation, shall be the new company described in the plan. (b) The separate existence of the merging or consolidating companies shall cease. (c) The surviving or new company shall have the rights, the privileges, the immunities, and the powers and shall be subject to the duties and liabilities of a life company organized under this subdivision. (d)(1) The surviving or the new company shall have the rights, the privileges, the immunities, and the franchises of each of the merging or consolidating companies. (2) All property interests, debts, claims, or other interests belonging to the merging or the consolidating companies shall be transferred automatically to the single company. (3) Realty interests vested in the merging or the consolidating companies shall not revert or be impaired because of the merger or the consolidation. (e)(1) The surviving or the new company shall be responsible for obligations of the merging or the consolidating companies. (2) A claim involving 1 of the merging or consolidating companies may be litigated as though the merger or the consolidation had not taken place or with the single company replacing the merging or the consolidating company. (3) Neither the rights of creditors nor any liens upon the property of a merging or consolidating company shall be impaired by the merger or the consolidation. (f)(1) For a merger, the articles of incorporation of the surviving company shall be considered amended to the extent that the articles of merger described changes in the articles of incorporation. (2) For a consolidation, articles of consolidation provisions required or permitted in the articles of incorporation of life companies shall be considered the articles of incorporation of the new company. (g) The aggregate amount of the net assets of the merging or the consolidating companies available for the payment of dividends immediately before the merger or the consolidation, to the extent that the amount cannot be transferred to stated capital, shall continue to be available for the payment of dividends by the surviving or the new company.  (June 19, 1934, ch. 672, ch. III,  42; as added Mar. 14, 1985, D.C. Law 5-160,  3(c), 32 DCR 39.)  Prior Codifications 1981 Ed.,  35-640. Section References This section is referenced in  31-3503 and  31-5311. Cross References Fraternal benefit societies, consolidations and mergers, see  31-5311. Hospital and medical services corporations, applicability of this section, see  31-3503.
 314444. Procedure for merger of domestic companies. (a) Two or more domestic life companies may merge into 1 company. (b) The board of directors of each company shall, by resolution adopted by a majority vote of the members of the boards, approve a plan of merger that lists the following: (1) The names of the companies proposing to merge. (2) The name of the surviving company the merging companies would become. (3) The terms and the conditions of the proposed merger. (4) The manner and the basis of converting the shares or memberships of each merging company into: (A) Shares, memberships, or other securities of the surviving company. (B) Shares or other securities of another company. (C) Cash or property. (5) Changes in the articles of incorporation of the surviving company. (6) Other provisions with respect to the proposed merger as are deemed necessary or desirable.  (June 19, 1934, ch. 672, ch. III,  43; as added Mar. 14, 1985, D.C. Law 5-160,  3(c), 32 DCR 39.)  Prior Codifications 1981 Ed.,  35-641.
 314445. Procedure for consolidating domestic companies. (a) Two or more domestic life companies may consolidate into a new company. (b) To consolidate, the board of directors of each consolidating company, by resolution adopted by majority vote of the members of the boards, shall approve a plan of consolidation listing the following: (1) The names of the companies proposing to consolidate. (2) The name of the new company into which they propose to consolidate. (3) The terms and conditions of the proposed consolidation. (4) The manner and the basis of converting the shares or memberships of each company into: (A) Shares, memberships, or other securities of the new company. (B) Shares or other securities of another company. (C) Cash or property. (5) The articles of incorporation for domestic companies organized under this chapter. (6) Other provisions with respect to the proposed consolidation as are deemed necessary or desirable.  (June 19, 1934, ch. 672, ch. III,  44; as added Mar. 14, 1985, D.C. Law 5-160,  3(c), 32 DCR 39.)  Prior Codifications 1981 Ed.,  35-642.
 314446. Merger or consolidation of domestic and foreign companies. (a) Foreign and domestic life companies may be merged or consolidated if the laws where each company is organized permit the merger or the consolidation. (b) If the surviving or the new company is governed by a foreign jurisdiction, then the surviving or the new company shall comply with Chapter 45 of this subdivision, before transacting life insurance business in the District of Columbia. (c) The surviving or the new company shall comply with  31-202, and maintain and appoint in the District, or not more than 10 miles beyond the territorial limits of the District, an agent for service of process and shall register with the Commissioner the address of its principal office and the name and address of its agent for service of process in the District, including any changes in address. (d) Repealed. (e)(1) Except as provided in paragraph (2) of this subsection, a merger or a consolidation under this section shall be the same as a merger or a consolidation of domestic companies creating a surviving or a new company governed by the District of Columbia. (2) If the surviving or the new company shall be governed by a foreign jurisdiction, the merger or the consolidation shall be the same as a merger or a consolidation of domestic companies except insofar as the laws of the foreign jurisdiction provide otherwise.  (June 19, 1934, ch. 672, ch. III,  45; as added Mar. 14, 1985, D.C. Law 5-160,  3(c), 32 DCR 39; Mar. 21, 1995, D.C. Law 10-233,  3, 42 DCR 24; Apr. 18, 1996, D.C. Law 11-110,  37, 43 DCR 530; May 21, 1997, D.C. Law 11-268,  10(k), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-643. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4402.
 314447. Merger or consolidation  Approval by Mayor. (a) The plan of merger or of consolidation and the filings required by  31-5803 shall be mailed to shareholders, to members, or to policyholders of the domestic merging and consolidating companies, and shall be filed with the Mayor according to  31-5803 [repealed]. (b) A life company aggrieved by the Mayors decision to disapprove a plan of merger or of consolidation with the Mayor under subsection (a) of this section shall have the rights, under  31-5803 [repealed], to judicial review of the decision.  (June 19, 1934, ch. 672, ch. III,  46; as added Mar. 14, 1985, D.C. Law 5-160,  3(c), 32 DCR 39.)  Prior Codifications 1981 Ed.,  35-644. References in Text Section 31-5803, referred to in (a) and (b), was repealed by  17 of D.C. Law 10-44, effective Oct. 21, 1993. Editor's Notes Subsection (b) of this section is set forth above as it appears in D.C. Law 5-160. The word filed should probably appear following consolidation..
 314448. Merger or consolidation  Procedures before voting. (a)(1) After approval from the Mayor, the board of directors shall, by resolution, direct that the plan of merger or of consolidation be voted upon at a meeting of the shareholders, the members, or the policyholders of record and entitled to vote. (2) The vote may be conducted at either an annual or a special meeting. (b) Written notice shall be delivered at least 20 days before the meeting, either personally or by mail, to each shareholder, member, or policyholder. (c) The notice shall state the place, the time, and the purpose of the meeting, and a copy or a summary of the plan of merger or of consolidation shall be delivered with the notice. (d) The notice shall also summarize dissenting shareholders rights under  31-4450.  (June 19, 1934, ch. 672, ch. III,  47; as added Mar. 14, 1985, D.C. Law 5-160,  3(c), 32 DCR 39.)  Prior Codifications 1981 Ed.,  35-645.
 314449. Merger or consolidation  Approval by shareholders. (a) The plan of merger or of consolidation shall be approved by the affirmative vote of the holders of two thirds of the voting outstanding shares of each company unless 2 or more classes of shares have been issued for any of the companies. (b) If the company has issued 2 or more classes of shares, the plan of merger or of consolidation shall be approved by the affirmative vote of at least two thirds of the voting outstanding shares of each class. (c) For a mutual company, each member or policyholder entitled to vote shall have 1 vote, regardless of the amount of insurance or number of policies held by the individual.  (June 19, 1934, ch. 672, ch. III,  48; as added Mar. 14, 1985, D.C. Law 5-160,  3(c), 32 DCR 39; Feb. 27, 1996, D.C. Law 11-90,  11, 42 DCR 7155.)  Prior Codifications 1981 Ed.,  35-646. Section References This section is referenced in  31-4450. Emergency Legislation For temporary amendment of section, see  11 of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844).
 314450. Merger or consolidation  Rights of dissenting shareholders. (a)(1)(A) If, by the date of shareholder meeting described in  31-4449, a shareholder of a domestic merging or consolidating company files with the company a written objection to the merger or the consolidation and does not vote for the action and if, within 20 days after the merger or consolidation, the shareholder makes a written demand to the surviving or the new company for payment of the fair market value of the dissenting shareholders shares, then the surviving or new company shall pay the shareholder the value of the shares. (B) The fair market value of the shares shall equal the market value on the day before the shareholders vote. (2) The company shall make the payment when the dissenter surrenders the dissenters certificate of share ownership. (3) The demand shall state the number and the class of the shares owned by the dissenting shareholder. (4) Any shareholders failing to make the demand described in subsection (1) of this section within the 20-day period shall have their interests in the company and their shares limited by the terms of the merger or consolidation. (b)(1) If, within 30 days after the completion of the merger or consolidation, the dissenting shareholder and the surviving or new company agree upon the value of the shares, then the company shall pay the agreed upon value, according to subsection (a)(2) of this section, within 90 days after the merger or the consolidation becomes complete. (2) When the company pays the agreed upon value, the dissenting shareholder shall cease having an interest either in the shares or in the company. (c)(1) If, at the end of the 30-day period described in subsection (b)(1) of this section, the dissenting shareholder and the surviving or new company do not agree upon the value of the shares, then, within 60 days after the 30-day period ends, the dissenting shareholder may file a petition in the Superior Court of the District of Columbia asking for a determination of the fair value of the shares. (2) The dissenter filing a timely petition shall be entitled to judgment against the surviving or new company for the amount the Court determines to be the fair value, and shall also be entitled to interest at the rate described in  28-3302. (3) The costs of the proceeding may be determined by the Court and may be apportioned by the Court against the parties. (4) Some factors the Court may consider while making the apportionment described in paragraph (3) of this subsection shall be the following: (A) Whether the fair value of the shares substantially exceeds the amount the company offered to pay. (B) Whether the dissenting shareholder rejected the companys offer and brought the action in good faith. (C) Whether the company failed to make an offer. (5) The judgment shall be payable after the dissenting shareholder complies with subsection (a)(2) of this section. (6) Any dissenting shareholder failing to petition within the 60-day period described in paragraph (1) of this subsection shall have his or her interests in the company and in his or her shares, as well as the interests of people claiming under the dissenter, limited by the terms of the merger or the consolidation. (d) The right of a dissenter to receive the fair value for shares shall cease when the company abandons the merger or consolidation.  (June 19, 1934, ch. 672, ch. III,  49; as added Mar. 14, 1985, D.C. Law 5-160,  3(c), 32 DCR 39.)  Prior Codifications 1981 Ed.,  35-647. Section References This section is referenced in  31-4448. Editor's Notes In D.C. Law 5-160, paragraph (2) of subsection (c) of this section was mistakenly set forth twice. This duplication error has been eliminated from the section as set forth above.
 314451. Articles of merger or consolidation. (a) Upon shareholder approval of the merger or consolidation, articles of merger or consolidation shall be executed in duplicate by the president of each company, attested by the secretary of each company, and the corporate seal of each company shall be stamped on the articles. (b) The articles shall list the following: (1) The plan of merger or consolidation. (2) For each company, the number of members, policyholders, or shares outstanding and, if 2 or more classes of shares have been issued, the designation of each class and the number of shares outstanding in each class. (3) For each company, the number of members, policyholders, or shares voting for the plan and the number voting against the plan and, if 2 or more classes of shares have been issued, the number of shares of each class voting for the plan and the number voting against the plan. (c)(1) The articles shall be filed with the Mayor. (2) The Mayor shall charge a fee for filing the articles. (3) If both the form of the articles and the fee payment comply with this section, then the Mayor shall perform the following: (A) State the date of the filing and the word filed on the duplicates. (B) Keep 1 of the duplicates. (C) Send to the new or surviving company both the other duplicate and a certificate of merger or consolidation.  (June 19, 1934, ch. 672, ch. III,  50; as added Mar. 14, 1985, D.C. Law 5-160,  3(c), 32 DCR 39.)  Prior Codifications 1981 Ed.,  35-648. Section References This section is referenced in  31-4452.
 314452. Date merger or consolidation completed. The merger or consolidation shall be complete when the Mayor issues under  31-4451(c)(3)(C) the certificate of merger or consolidation to the new or surviving company.  (June 19, 1934, ch. 672, ch. III,  51; as added Mar. 14, 1985, D.C. Law 5-160,  3(c), 32 DCR 39.)  Prior Codifications 1981 Ed.,  35-649. Cross References Insurance, merger or consolidation of life companies, new company governed by a foreign jurisdiction, compliance with this chapter, see  31-4446.
 314501. Filing requirements; approval by Commissioner of certain conditions. (a) A foreign or alien insurance company desiring to transact business in the District shall file with the Commissioner: (1) Its application for certificate of authority, stating the kind or kinds of insurance it proposes to transact; (2) A copy of its charter, articles of incorporation, or deed or settlement, certified by the official who is required to keep or record the same in the state under whose laws the company is incorporated, or if organized under the laws of a foreign government, province, or state, by the proper official of such government, province, or state; (3) A copy of its bylaws, or regulations, if any, certified to by the secretary of the company; (4) Copies of the policies it is issuing or proposes to issue and of the applications therefor; (5) Proof of compliance with the service of process requirements of  31-202; and (6) A statement of its financial condition and business, in form as prescribed by law for annual statements, signed and sworn to by the president and secretary or other principal officers of the company. If an alien company, the statement shall comprise only its condition and business in the United States, and shall be signed and sworn to by its United States manager. (b) It shall satisfy the Commissioner that the company is duly organized under the laws of the state, province, or government under whose laws it professes to be organized, and authorized to do the business it is transacting or proposes to transact, and that its name is not identical with, nor so similar to, that of another company organized prior to the organization of the applying company as to lead to confusion. (c) It shall satisfy the Commissioner that its funds are invested in accordance with the laws of its domicile and in securities or property which afford a degree of financial security substantially equal to that required for similar domestic companies, and, if a stock company, that it has paid-up capital and surplus at least equal to the capital and surplus required of domestic stock companies, or, if a mutual company, that it has a surplus at least equal to that required by this subdivision for domestic mutual companies.  (June 19, 1934, 48 Stat. 1154, ch. 672, ch. IV,  1; May 4, 1950, 64 Stat. 104, ch. 157,  6; Mar. 21, 1995, D.C. Law 10-233,  4, 42 DCR 24; May 21, 1997, D.C. Law 11-268,  10(l), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-701. 1973 Ed.,  35-601. Section References This section is referenced in  31-5326. Cross References Application of chapter to existing companies, see  31-4420. Deposits of domestic companies, see  31-4315 et seq. Foreign or alien fraternal benefit society, admission, see  31-5326. Editor's Notes Department of Insurance abolished: The Department of Insurance, including the Superintendent, was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. Reorganization Order No. 43, dated June 23, 1953, as amended, established, under the direction and control of a Commissioner, a Department of Insurance headed by a Superintendent. The Order provided for the organization of the Department, abolished the previously existing Department of Insurance, and provided that all functions and positions of the previous Department would be transferred to the new Department of Insurance, including the duties, powers, and authorities of all officers and employees; and that all personnel, property, records and unexpended balances relating to the functions and positions transferred would also be transferred to the new Department. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. The functions of the Superintendent of Insurance were transferred to the Department of Consumer and Regulatory Affairs by Reorganization Plan No. 1 of 1983, effective March 31, 1983. Pursuant to the provisions of D.C. Law 11-268, the Department of Insurance and Securities Regulation was established and the duties of the Superintendent of Insurance and the Insurance Administration were assumed by the Commissioner of Insurance and Securities, and the Insurance Administration in the Department of Consumer and Regulatory Affairs was abolished.
 314502. Alien companies; trustees; examinations; financial statements. The directors of an alien company may appoint citizens or corporations of the United States, approved by the Commissioner, as its trustees to hold funds and assets in trust for the benefit of the policyholders and creditors of the company in the United States. A certified copy of the record of such appointment and of the deed of trust shall be filed with the Commissioner, who may examine such trustees and any officers and agents, books, and papers of the company in the same manner as he may examine officers, agents, books, papers, and affairs of insurance companies. The funds and assets so held by such trustees shall, with the deposits otherwise made by the company and the funds and assets held by the company in the United States for the benefit of its policyholders and creditors in the United States, constitute the assets of the company for the purpose of making its financial statements required by this subdivision.  (June 19, 1934, 48 Stat. 1155, ch. 672, ch. IV,  2; May 21, 1997, D.C. Law 11-268,  10(l), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-702. 1973 Ed.,  35-602. Section References This section is referenced in  31-5326. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4501.
 314601. Violations. Any person, partnership, or company who violates any of the provisions of this subdivision, or fails to comply with any duty imposed upon him or it by any provision of this subdivision, for which violation or failure no penalty is elsewhere provided by the laws of the District, shall be fined not exceeding $500 for each and every violation. Civil fines, penalties, and fees may be imposed as alternative sanctions for any infraction of the provisions of this subdivision for which no penalty is provided elsewhere, or any rules or regulations issued under the authority of this subdivision, pursuant to Chapter 18 of Title 2. Adjudication of any infraction of this subdivision shall be pursuant to Chapter 18 of Title 2.  (June 19, 1934, 48 Stat. 1176, ch. 672, ch. VI,  1; Oct. 5, 1985, D.C. Law 6-42,  456, 32 DCR 4450.)  Prior Codifications 1981 Ed.,  35-801. 1973 Ed.,  35-801. Cross References Application of chapter to existing companies, see  31-4420. Hospital and medical services corporations, applicability of this section, see  31-3503.
 314602. Testimony; production of books; immunity of witness. [Repealed] Repealed.  (June 19, 1934, 48 Stat. 1176, Ch. 672, ch. VI,  2; Oct. 13, 1970, Pub. L. 91-452, title II,  254, 84 Stat. 931.)  Prior Codifications 1973 Ed.,  35-802.
 314603. Severability. Should any section or provision of this subdivision be decided by the courts to be unconstitutional or invalid, the validity of this subdivision as a whole or of any part thereof other than the part decided to be unconstitutional shall not be affected.  (June 19, 1934, 48 Stat. 1177, ch. 672, ch. VI,  3.)  Prior Codifications 1981 Ed.,  35-802. 1973 Ed.,  35-803. Cross References Hospital and medical services corporations, applicability of this section, see  31-3503.
 314701. Valuation of reserves by Commissioner. (a)(1)(A) The Commissioner shall annually value, or cause to be valued, the reserve liabilities (hereinafter called reserves) for all outstanding life insurance policies and annuity and pure endowment contracts of every life insurance company doing business in the District issued prior to the operative date of the valuation model, except that in the case of an alien company such valuation shall be limited to its insurance transactions in the United States. All such valuations made by him or by his authority shall be made upon the net premium basis. In calculating such reserves, he may use group methods and approximate averages for fractions of a year or otherwise. In lieu of the valuation of the reserves herein required of any foreign or alien company, he may accept any valuation made, or caused to be made, by the insurance supervisory official of any state or other jurisdiction when such valuation complies with the minimum standard provided in this section. (B) The provisions set forth in subsections (c), (d), (e), and (f) of this section and  31-4720 shall apply to all policies and contracts, as appropriate, subject to this section, issued on or after the operative date of  31-4705.02 and before the operative date of the valuation model. The provisions set forth in subsections (g) and (h) of this section shall not apply to any such policies and contracts. (C) The minimum standard for the valuation of policies and contracts issued before the operative date of  31-4705.02 shall be provided in subsection (b) of this section. (1A)(A) The Commissioner shall annually value, or cause to be valued, the reserve liabilities ("reserves") for all outstanding life insurance contracts, annuity and pure endowment contracts, accident and health contracts, and deposit-type contracts of every company issued on or after the operative date of the valuation manual. (B) The provisions set forth in subsections (f), (g), and (h) of this section shall apply to all policies and contracts issued on or after the operative date of the valuation manual. (2) Any such company which at any time shall have adopted any standard of valuation producing greater aggregate reserves than those calculated according to a minimum standard herein provided may, with the approval of the Commissioner, adopt any lower standard of valuation, but not lower than the minimum herein provided. (b)(1) This subsection shall apply to only those policies and contracts issued prior to the operative date of  31-4705.02 (the standard nonforfeiture law). (2) The legal minimum standard for the valuation of life insurance contracts issued before January 1, 1935, shall be the method and basis of valuation heretofore applied by the Commissioner in the valuation of such contracts, and for life insurance contracts issued on and after said date shall be the 1-year preliminary term method of valuation, except as hereinafter modified, on the basis of the American Experience Table of Mortality with interest at 3 1/2% per annum; provided, that any life company may, at its option, value its insurance contracts issued on and after January 1, 1935, in accordance with their terms on the basis of the American Men Ultimate Table of Mortality with interest not higher than 3 1/2% per annum by the level net premium method or by the modified preliminary term method hereinafter described. (3) If the premium charged for term insurance under a limited payment life preliminary term policy providing for the payment of all premiums thereon in less than 20 years from date of the policy, or under an endowment preliminary term policy, exceeds that charged for like insurance under 20-payment life preliminary term policies of the same company, the reserve thereon at the end of the year, including the 1st, shall not be less than the reserve on a 20-payment life preliminary term policy issued in the same year and at the same age, together with an amount which shall be equivalent to the accumulation of a net level premium sufficient to provide for a pure endowment at the end of the premium payment period, equal to the difference between the value at the end of such period of such a 20-payment life preliminary term policy and the full net level premium reserve at such time of such a limited payment life or endowment policy. The premium payment period is the period during which premiums are concurrently payable under such 20-payment life preliminary term policy and such limited payment life or endowment policy. (4) Policies issued on the preliminary term method shall contain a clause specifying that the reserve thereof shall be computed in accordance with modified preliminary term method of valuation provided for herein. (5) Except as otherwise provided in paragraph (3) of subsection (c) of this section for group annuity and pure endowment contracts, the legal minimum standard for the valuation of annuities issued on and after January 1, 1935, shall be McClintocks Table of Mortality Among Annuitants, with interest at 4% per annum, but annuities deferred 10 or more years and written in connection with life insurance shall be valued on the same basis as that used in computing the consideration or premium therefor, or upon any higher standard at the option of the company. (6) The legal minimum standard for the valuation of industrial policies issued after January 1, 1935, shall be the American Experience Table of Mortality with interest at 3 1/2% per annum; provided, that any life company may voluntarily value its industrial policies on the basis of the standard industrial mortality table or the substandard industrial mortality table by the level net premium method or in accordance with their terms by the modified preliminary term method hereinbefore described. (7) The Commissioner may vary the standards of interest and mortality in the case of alien companies as to contracts issued by such companies in countries other than the United States, and in particular cases of invalid lives and other extra hazards. (8) Reserves for all such policies and contracts may be calculated, at the option of the company, according to any standards which produce greater aggregate reserves for all such policies and contracts than the minimum reserves required by this subsection. (c)(1) This subsection shall apply to only those policies and contracts issued on or after the operative date of  31-4705.02 (the standard nonforfeiture law) except as otherwise provided in paragraph (3) of this subsection for group annuity and pure endowment contracts issued prior to such operative date. (2) Except as otherwise provided in paragraph (3) of this subsection and subsections (d) and (f) of this section, the minimum standard for the valuation of all such policies and contracts shall be the Commissioner's reserve valuation methods defined in paragraphs (4) and (5) of this subsection and in  31-4720, 3 1/2% interest per annum, or in the case of policies and contracts, other than annuity and pure endowment contracts, issued on or after the October 13, 1978, 4 1/2% interest per annum, and the following tables: (A) For ordinary policies of life insurance issued on the standard basis, excluding any disability and accidental death benefits in such policies, the Commissioners 1941 Standard Ordinary Mortality Table for such policies issued prior to the operative date of paragraph (5) of  31-4705.02(d), and the Commissioners 1958 Standard Ordinary Mortality Table for category of the policies issued on or after the operative date of the 5th paragraph in  31-4705.02(d) and before the operative date for the category of policies described in  31-4705.02(e); provided that for any category of such policies issued on female risks all modified net premiums and present values referred to in this section may be calculated according to an age not more than 6 years younger than the actual age of the insured and for any category of the policies issued on or after the operative date for the category described in  31-4705.02(e), the Commissioners 1980 Standard Ordinary Mortality Table, or at the election of the company for any 1 or more specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors or any ordinary mortality table adopted after 1980 by the National Association of Insurance Commissioners and approved by the Commissioner for determining the minimum standard for valuing the policies; (B) For industrial life insurance policies issued on the standard basis, excluding any disability and accidental death benefits in such policies, the 1941 Standard Industrial Mortality Table for such policies issued prior to the operative date of paragraph (6) of subsection (d) of  31-4705.02, and for such policies issued on or after such operative date; provided, that for any category of such policies issued on female risks and evaluated by either the 1941 Standard Industrial Mortality Table or the Commissioners 1961 Standard Industrial Mortality Table, all modified net premiums and present values referred to in this section may be calculated according to an age not more than 6 years younger than the actual age of the insured, the Commissioners 1961 Standard Industrial Mortality Table or any industrial mortality table adopted after 1980 by the National Association of Insurance Commissioners and approved by the Commissioner for determining the minimum standard for valuing the policies; (C) For individual annuity and pure endowment contracts, excluding any disability and accidental death benefits in such policies, the 1937 Standard Annuity Mortality Table or, at the option of the company, the Annuity Mortality Table for 1949, Ultimate, or any modification of either of these Tables approved by the Commissioner; (D) For group annuity and pure endowment contracts, excluding any disability and accidental death benefits in such policies, the Group Annuity Mortality Table for 1951, any modification of such Table approved by the Commissioner, or, at the option of the company, any of the tables or modifications of tables specified for individual annuity and pure endowment contracts; (E) For total and permanent disability benefits in or supplementary to ordinary policies or contracts, for policies or contracts issued on or after January 1, 1966, the tables of period 2 disablement rates and the 1930 to 1950 termination rates of the 1952 Disability Study of the Society of Actuaries, with due regard to the type of benefit, or any tables of disablement rates and termination rates adopted after 1980 by the National Association of Insurance Commissioners and approved by the Commissioner for determining the minimum standard for valuing the policies; for policies or contracts issued on or after January 1, 1961, and prior to January 1, 1966, either such tables or, at the option of the company, the Class (3) Disability Table (1926); and for policies issued prior to January 1, 1961, the Class (3) Disability Table (1926). Any such table shall, for active lives, be combined with a mortality table permitted for calculating the reserves for life insurance policies; (F) For accidental death benefits in or supplementary to policies, for policies issued on or after January 1, 1966, the 1959 Accidental Death Benefits Table or any accidental death benefits table adopted after 1980 by the National Association of Insurance Commissioners and approved by the Commissioner for determining the minimum standards for valuing the policies; for policies issued on or after January 1, 1961, and prior to January 1, 1966, either such table or, at the option of the company, the Intercompany Double Indemnity Mortality Table; and for policies issued prior to January 1, 1961, the Intercompany Double Indemnity Mortality Table. Either table shall be combined with a mortality table permitted for calculating the reserves for life insurance policies; or (G) For group life insurance, life insurance issued on the substandard basis and other special benefits, such tables as may be approved by the Commissioner. (3)(A) Except as provided in subsection (d) of this section, the minimum standard of valuation for individual annuity and pure endowment contracts issued on or after the operative date of this paragraph and for annuities and pure endowments purchased on or after such operative date under group annuity and pure endowment contracts shall be the Commissioner's reserve valuation methods defined in paragraphs (4) and (5) of this subsection and the following tables and interest rates: (i) For individual single premium immediate annuity contracts, excluding any disability and accidental death benefits in such contracts, the 1971 Individual Annuity Mortality Table, any individual annuity mortality table adopted after 1980 by the National Association of Insurance Commissioners and approved by the Commissioner for determining the minimum standard for valuing the contracts, or any modification of the tables approved by the Commissioner and 7 1/2% interest per annum; (ii) For individual annuity and pure endowment contracts, other than single premium immediate annuity contracts, excluding any disability and accidental death benefits in such contracts, the 1971 Individual Annuity Mortality Table, any individual annuity mortality table adopted after 1980 by the National Association of Insurance Commissioners and approved by the Commissioner for determining the minimum standard for valuing the contracts, or any modification of the tables approved by the Commissioner and 5 1/2% interest per annum for single premium deferred annuity and pure endowment contracts and 4 1/2% interest per annum for all other such individual annuity and pure endowment contracts; or (iii) For annuities and pure endowments purchased under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under such contracts, the 1971 Group Annuity Mortality Table, any group annuity mortality table adopted after 1980 by the National Association of Insurance Commissioners and approved by the Commissioner for determining the minimum standard for valuing the annuities and the pure endowments, or any modification of the tables approved by the Commissioner and 7 1/2% interest per annum. (B) After October 13, 1978, any company may file with the Commissioner a written notice of its election to comply with the provisions of this paragraph after a specified date before January 1, 1979, which shall be the operative date of this paragraph for such company, provided, a company may elect a different operative date for individual annuity and pure endowment contracts from that elected for group annuity and pure endowment contracts. If a company makes no such election, the operative date of this paragraph for such company shall be January 1, 1979. (4)(A) Except as provided in paragraph (5) of this subsection and in  31-4720, and according to the reserve valuation method, reserves for life insurance and endowment benefits from policies providing uniform amounts of insurance and requiring uniform premium payments shall be the excess of the present value, on the valuation date, of the future guaranteed benefits from the policies over the then present value of any future modified net premiums. (B) The modified net premiums shall be a uniform percentage of the respective premiums that makes the present value, on the issuance date, of all modified net premiums equal the sum of the then present value of the benefits and the excess of the amount described in sub-subparagraph (i) of this subparagraph over the amount described in sub-subparagraph (ii) of this subparagraph. (i) Except as provided in subparagraph (C) of this paragraph, a net level annual premium equal to the present value, on issuance date, of the benefits provided after the first policy year, divided by the present value, on issuance date, of an annuity of one per year to be paid on every anniversary of the policy for which a premium becomes due. (ii) A net 1-year term premium for the benefits provided in the first policy year. (C) The net level annual premium described in subparagraph (B)(i) of this paragraph shall not exceed the net level annual premium or the 19-year premium whole life plan for insuring the same amount at an age one year higher than the age at issuance in the policy. (4A)(A) This paragraph governs life insurance policies issued after December 31, 1986, when the policies have the following features: (i) The premium for the first year of the life insurance policy exceeds the premium for the second year. (ii) The policy does not provide an additional benefit in the first year of the policy for the amount that the 1st-year premium exceeds the premium for the second year. (iii) The policy provides an endowment benefit or a cash surrender value that exceeds the difference in the first year and the second year premiums. (B) Except as provided in  31-4702, and according to the reserve valuation method on any policy anniversary that takes place no later than the 1st year after a life insurance policy provides an endowment benefit or a cash surrender value that, together, exceeds the difference in the premiums described in subparagraph (A)(i) of this paragraph, the reserve shall be the greater of the following amounts: (i) The reserve on the policy anniversary as described in paragraph (4) of this subsection. (ii) The reserve on the policy anniversary as described in paragraph (4) of this subsection, but with the amount described in paragraph (4)(B)(i) of this subsection reduced by 15% of the excess first year premium, with present values of benefits and premiums determined without reference to premiums or benefits after the first year after a life insurance policy provides an endowment benefit or a cash surrender value that, together, exceeds the difference in the premiums described in subparagraph (A)(i) of this paragraph, with an assumption that the policy will mature as an endowment on that date; and with the cash surrender value provided on that date regarded as an endowment benefit. (C) For the comparison described in subparagraph (B) of this paragraph, the mortality and interest bases described in paragraphs (3) and (4) of this subsection and in subsection (d)(2) and (3) of this section shall apply. (5)(A) This paragraph shall apply to all annuity and pure endowment contracts except those group annuity and pure endowment contracts for which reserves are to be calculated by a method consistent with the principles of paragraph (4) of this subsection. (B) Reserves according to the Commissioner's annuity reserve method for benefits under annuity or pure endowment contracts, excluding any disability and accidental death benefits in such contracts, shall be the greatest of the respective excesses of the present values, at the date of valuation, of the future guaranteed benefits, including guaranteed nonforfeiture benefits, provided for by such contracts at the end of each respective contract year, over the present value, at the date of valuation, of any future valuation consideration derived from future gross considerations, required by the terms of such contract, that become payable prior to the end of such respective contract year. The future guaranteed benefits shall be determined by using the mortality table, if any, and the interest rate, or rates, specified in such contracts for determining guaranteed benefits. The valuation considerations are the portions of the respective gross considerations applied under the terms of such contracts to determine nonforfeiture values. (6) In no event shall a companys aggregate reserves for all life insurance policies, excluding disability and accidental death benefits, be less than the aggregate reserves calculated according to the method described in paragraph (4) of this subsection, in subsection (e) of this section, in  31-4720, and in the mortality tables and rates of interest used to calculate nonforfeiture benefits for the policies. (7) Reserves for any category of policies, contracts, or benefits, as established by the Commissioner, may be calculated, at the option of the company, according to any standards which produce greater aggregate reserves for such category than those calculated according to the minimum standard herein provided, but the rate or rates of interest used for policies and contracts, other than annuity and pure endowment contracts, shall not be greater than the corresponding rate or rates of interest used in calculating any nonforfeiture benefits provided in the policies or contracts. (d)(1) The calendar year statutory valuation interest rates shall be the interest rates used to determine the minimum standard for valuing the following: (A) Life insurance benefits under  31-4705.02 and issued no earlier than the operative date for policies under  31-4705.02(e). (B) Annuities and pure endowments purchased under group annuity and pure endowments contracts after December 31, 1983. (C) Except as provided in subparagraphs (A) and (B) of this paragraph, all life insurance benefits, individual annuity contracts, and pure endowment contracts issued after December 31, 1983. (D) In a calendar year following December 31, 1983, the net increase of amounts held under guaranteed interest contracts. (2) The calendar year statutory valuation interest rates shall be determined according to the equations described in this paragraph, and the results from the equations shall be rounded to the nearest 1/4%. (A) For life insurance, the equation for determining the calendar year statutory valuation interest rates is the following: I = .03 + W (R - .03) + w /2 (R2 - .09). (B) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options, I = .03 + W (R - .03) where R /1 is the lesser of R and .09, R /2 is the greater of R and .09, R is the reference interest rate described in paragraph (4) of this subsection, and W is the weighting factor. (C) Where cash settlement options are valued on an issue year basis, the formula in subparagraph (A) of this paragraph shall apply to annuities and guaranteed interest contracts with guarantee duration exceeding 10 years and the formula in subparagraph (B) of this paragraph shall apply to annuities and guaranteed interest contracts with guarantee duration of 10 years or less. (D) Where no cash settlement options apply, the formula for single premium immediate annuities stated in subparagraph (B) of this paragraph shall apply. (E) Where cash settlement options are valued on a change in fund basis, the formula for single premium immediate annuities stated in subparagraph (B) of this paragraph shall apply. (F)(i) If the calendar year statutory valuation interest rate for life insurance policies for a calendar year differs from the actual interest rate for similar policies issued in the preceding calendar year by less than 12%, the calendar year statutory valuation interest rate shall equal the corresponding actual interest rate for the preceding calendar year. (ii) The calendar year statutory valuation interest rate shall be determined for each calendar year regardless of when  31-4705.02(e) becomes operative. (3) The weighting factors in the paragraph (2)(A) and (B) of this subsection equations are as follows: (A) Weighting factors for life insurance: Guarantee Duration (Years) Weighting Factors 10 or less .50 More than 10, but not more than 20 .45 More than 20 .35  For life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance with premium rates or nonforfeiture values, or both, which are guaranteed in the original policy. (B) Weighting factor for single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options: .80. (C) Except as provided in subparagraph (B) of this paragraph, weighting factors for other annuities and for guaranteed interest contracts shall be specified in the following sub-subparagraphs: (i) For purposes of this subsection, the following plan types apply: Plan Type A means that, unless the company prohibits a withdrawal, the policyholder may withdraw funds with an adjustment to reflect changes in interest rates or asset values since the company received the funds; without adjustment, but in installments for 5 years or more; or as an immediate life annuity. Plan Type B means that, before the interest rate guarantee expires, and unless the company prohibits a withdrawal, the policyholder may withdraw funds with an adjustment to reflect changes in interest rates or asset values since the company received the funds; without the adjustment, but in installments for 5 years or more; or, after the interest rate guarantee ends, in a lump sum without the adjustment or in installments lasting less than 5 years. Plan Type C means that, before the interest rate guarantee expires, the policyholder may withdraw funds in a lump sum or in installments lasting less than 5 years, and either without the withdrawal being adjusted to reflect changes in interest rates or asset values since the company received the funds or with the withdrawal subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund. (ii) Weighting factors for annuities and guaranteed interest contracts valued on an issue year basis: Guarentee Duration(Years) Weighting Factor for plan type  A B C 5 or less: .80 .60 .50 More than 5, but not more than 10: .75 .60 .50 More than 10, but not more than 20: .65 .50 .45 More than 20: .45 .35 .35.  (iii) For annuities and guaranteed interest contracts valued on a change in fund basis, the factors shown in sub-subparagraph (ii) of this subparagraph increased by: Plan Type A B C .15 .25 .05.  (iv) For annuities and guaranteed interest contracts valued on an issue year basis (other than those with no cash settlement options) and which do not guarantee interest on considerations received more than one year after issue or purchase, and for annuities and guaranteed interest contracts valued on a change in fund basis and which do not guarantee interest rates on considerations received more than 12 months beyond the valuation date, the factors shown in sub-subparagraph (ii) of this subparagraph or derived in sub-subparagraph (iii) of this subparagraph increased by: Plan Type A B C .05 .05 .05.  (v) Where cash settlement options apply to annuities and guaranteed interest contracts, the guarantee duration is the number of years that the contract guarantees interest rates in excess of the calendar year statutory valuation interest rate for life insurance policies with guarantee duration in excess of 20 years. (vi) Where no cash settlement options apply to annuities or guaranteed interest contracts, the guarantee duration is the number of years from the issuance or the purchase date that the policy has scheduled the annuity benefits to begin. (D)(i) A company may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on either an issue year basis or on a change in fund basis. (ii) Guaranteed interest contracts with no cash settlement options and other annuities with no cash settlement options must be valued on an issue year basis. (iii) An issue year basis of valuation refers to a valuation basis where the interest rate used to determine the minimum valuation standard for the annuity or the guaranteed interest contract is the calendar year valuation interest rate for the issuance year or purchase year. (iv) The change in fund basis of valuation refers to a valuation basis where the interest rate used to determine the minimum valuation standard for each change in the annuity or the guaranteed interest contract fund is the calendar year valuation interest rate for the year that the fund changed. (4) The reference interest rate referred to in paragraph (2) of this subsection shall be as follows: (A) For all life insurance, the reference rate shall be the lesser between the average rate during a 36-month period and the average rate during a 12-month period ending June 30 of the calendar year preceding the issuance year. (B) For single premium immediate annuities and for annuity benefits involving life contingencies arising where cash settlement options apply to other annuities and to guaranteed interest contracts, the reference rate shall be the average rate during a 12-month period ending June 30 of the calendar year of issue or purchase. (C) Where guarantee duration exceeds 10 years and where cash settlement options for annuities and for guaranteed interest contracts have values based upon the issuance year, the reference rate shall be the least between the average rate during a 36-month period and the average rate during a 12-month period ending June 30 of the calendar year of issue or purchase. (D) Where guarantee duration does not exceed 10 years and where cash settlement options for annuities and for guaranteed interest contracts have values based upon the issuance year, the reference rate shall be the average rate during a 12-month period ending June 30 of the calendar year of issue or purchase. (E) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the reference rate shall be the average rate during a 12-month period ending June 30 of the calendar year of issue or purchase. (F) Where cash settlement options apply to annuities and to guaranteed interest contracts and have values based on a change in the fund, the reference rate shall be the average rate during a 12-month period ending June 30 of the calendar year of the change in the fund. (5) The reference interest rate referred to in paragraph (2) of this subsection shall be as follows: (A) Moodys Corporate Bond Yield AverageMonthly Average Corporate published by Moodys Investors Service, Inc., shall set the reference rates described in paragraph (4) of this subsection. (B) If the National Association of Insurance Commissioners determines that Moodys Investors Service, Inc., is no longer an appropriate source for the reference rate, then an alternative method shall be adopted by the National Association of Insurance Commissioners and approved by the Commissioner. (e) For life insurance plans which require the company to fix future premium determination according to the then present estimates of future experience, and for life insurance plans or annuities with minimum reserves that cannot be determined by the methods described in subsection (c)(5) and (6) of this section and in  31-4720, the reserves held under the plan shall: (1) Be appropriated in relation to the benefits and the pattern of premiums for the plan. (2) Be computed by a method consistent with the principles of the Standard Valuation Law and according to regulations promulgated by the Commissioner. (f) For disability and accident and sickness health insurance policies and contracts as provided under  31-4712 and accident and long-time care health insurance policies and contracts as provided under Chapter 36 of this title, issued on or after the operative date of  31-4705.02 and before the operative date of the valuation manual, the minimum standard of valuation is the standard adopted by the Commissioner by regulation. For accident and health insurance policies and contracts issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required under subsection (a)(1A) of this section. (g)(1) For policies issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required under subsection (a)(1A) of this section, except as provided under paragraphs (5) or (7) of this subsection. (2) The operative date of the valuation manual is April 11, 2019. (3) The valuation manual shall specify the following: (A) The minimum valuation standards for and definitions of the policies or contracts subject to subsection (a)(1A) of this section. Such minimum valuation standards shall be: (i) The Commissioner's reserve valuation method for life insurance contracts, other than annuity contracts, subsection to (a)(1A) of this section; (ii) The Commissioner's annuity reserve valuation method for annuity contracts subject to subsection (a)(1A) of this section; and (iii) The Minimum reserves for all other policies or contracts subject to subsection (a)(1A) of this section; (B) Which policies or contracts or types of policies or contracts that are subject to the requirements of a principle-based valuation in subsection (h)(1) of this section and the minimum valuation standards consistent with those requirements; (C) For policies and contracts subject to a principle-based valuation under subsection (h) of this section: (i) The requirements for the format of reports to the Commissioner under subsection (h)(2)(C) of this section and which shall include information necessary to determine if the valuation is appropriate and in compliance with this section; (ii) The assumptions shall be prescribed for risks over which the company does not have significant control or influence; and (iii) The procedures for corporate governance and oversight of the actuarial function, and a process for appropriate waiver or medication of such procedures; (D) For policies not subject to a principle-based valuation under subsection (h) of this section, that the minimum valuation standard shall: (i) Be consistent with the minimum standard of valuation prior to the operative date of the valuation manual; or (ii) Require the development of reserves that quantify the benefits and guarantees, and the funding, associated with the contracts and their risk at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring; (E) Other requirements, including, those relating to reserve methods, models for measuring risk, generation of economic scenarios, assumptions, margins, use of company experience, risk measurement, disclosure, certifications, reports, actuarial opinions and memorandums, transition rules, and internal controls; and (F) The data and form of the data, required under subsection (i) of this section, to whom the data must be submitted, and may specify other requirements, including data analyses and reporting of analyses. (4) In the absence of a specific valuation requirement or if a specific valuation requirement in the valuation manual is not, in the opinion of the Commissioner, in compliance with this section, then the company shall, with respect to such requirements, comply with minimum valuation standards prescribed by the Commissioner by regulation. (5)(A) The Commissioner may engage a qualified actuary, at the expense of the company, to perform an actuarial examination of the company and opine on the appropriateness of any reserve assumption or method used by the company, or to review and opine on a company's compliance with any requirement set forth in this section or  31-4709. The Commissioner may rely upon the opinion, regarding provisions contained within this section or  31-4709 of a qualified actuary engaged by the Commissioner of another state, district, or territory of the United States. (B) For the purposes of this paragraph, the term "engage" means to employ or contract. (6) The Commissioner may require a company to change any assumption or method that in the opinion of the Commissioner is necessary to comply with the requirements of the valuation manual or this section. The company shall adjust the reserves as required by the Commissioner. (g)(1) For policies issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required under subsection (a)(1A) of this section, except as provided under paragraphs (5) or (7) of this subsection. (h)(1) A company shall establish reserves using a principle-based valuation that meets the following conditions for policies or contracts as specified in the valuation manual: (A) Quantifies the benefits and guarantees, and the funding, associated with the policies and contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring during the lifetime of the policies and contracts, and for polices and contracts with significant tail risk, reflects conditions appropriately adverse to quantify the tail risk; (B) Incorporates assumptions, risk analysis methods, and financial models and management techniques that are consistent with, but not necessarily identical to, those utilized within the company's overall risk assessment process, while recognizing potential differences in financial reporting structures and any prescribed assumptions or methods; (C) Incorporates assumptions that are derived in one of the following manners: (i) The assumption is prescribed in the valuation manual; or (ii) For assumptions that are not prescribed, the assumptions shall: (I) Be established utilizing the company's available experience, to the extent it is relevant and statistically credible; or (II) To the extent that company data is not available, relevant, or statistically credible, be established utilizing other relevant, statistically credible experience; and (D) Provides margins for uncertainty, including adverse deviation and estimation error, such that the greater the uncertainty the larger the margin and resulting reserve. (2) A company using a principle-based valuation for one or more policies or contracts subject to this subsection as specified in the valuation manual shall: (A) Establish procedures for corporate governance and oversight of the actuarial valuation function consistent with those described in the valuation manual; (B) Provide to the Commissioner and the Board of Directors an annual certification of the effectiveness of the internal controls with respect to the principle-based valuation where the controls are designed to assure that all material risks inherent in the liabilities and associated assets subject to such valuation are included in the valuation, and that valuations are made in accordance with the valuation manual, and which certification shall be based on the controls in place as of the end of the preceding calendar year; and (C) Develop, and file with the Commissioner upon request, a principle-based valuation report that complies with standards prescribed in the valuation manual. (3) A principle-based valuation may include a prescribed formulaic reserve component. (i) A company shall submit mortality, morbidity, policyholder behavior, or expense experience and other data as prescribed in the valuation model. (j)(1) For the purposes of this subsection, the term "confidential information" shall mean: (A) A memorandum in support of an opinion submitted pursuant to  31-4901, and any other documents, materials, and other information, including all working papers, and copies thereof, created, produced, or obtained by or disclosed to the Commissioner or any other person in connection with such memorandum; (B) All documents, materials, and other information, including all working papers, and copies thereof, created, produced, or obtained by or disclosed to the Commissioner or any other person in the course of an examination made under subsection (g)(5) of this section; provided, that if an examination report or other material prepared in connection with an examination made pursuant to Chapter 14 of this title is not held as private and confidential information, the examination report or other materials prepared in connection with an examination made under subsection (g)(5) of this section shall not be confidential information to the same extent as such examination report that had been prepared pursuant to the Chapter 14 of this title. (C) Any reports, documents, materials, and other information developed by a company in support of, or in connection with, an annual certification by the company pursuant to subsection (h)(2)(B) of this section that evaluates the effectiveness of the company's internal controls with respect to a principle-based valuation and any other documents, materials, and other information, including all working papers, and copies thereof, created, produced, or obtained by or disclosed to the Commissioner or any other person in connection with such reports, documents, materials, and other information; (D) Any principle-based valuation report developed under section (h)(2)(C) of this section and any other documents, materials, and other information, including all working papers, and copies thereof, created, produced, or obtained by or disclosed to the Commissioner or any other person in connection with such report; and (E) Any documents, materials, data, and other information submitted by a company under subsection (i) of this section and any other documents, materials, data, and other information, including all working papers, and copies thereof, created or produced in connection with such experience data, which in each case includes any potentially company-identifying or personally identifiable information, that is provided to, or obtained by, the Commissioner and any other documents, materials, data, and other information, including all working papers, and copies thereof, created, produced, or obtained by or disclosed to the Commissioner or any other person in connection with such experience materials. (2) Confidential information specified in paragraphs (1)(A) and (D) of this subsection: (A) May be subject to subpoena for the purpose of defending an action seeking damages from the appointed actuary submitting the related memorandum in support of an opinion submitted pursuant to  31-4901 or principle-based valuation report developed under subsection (h)(2)(C) of this section by reason of an action required by this section or by regulations issued pursuant to this section; (B) May be released by the Commissioner with written consent of the company; and (C) Shall no longer be confidential once any portion of a memorandum of support of an opinion submitted pursuant to Chapter 49 of this title or a principle-based valuation report developed under subsection (h)(2)(C) of this section is cited by the company in its marketing or is publicly volunteered to or before a governmental agency, other than the insurance department of a state or jurisdiction, or is released by the company to the news media. (3)(A) Except as provided in this subsection, a company's confidential information is confidential by law and privileged and shall not be subject to subchapter II of Chapter 5 of Title 2, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The Commissioner is authorized to use the confidential information in the furtherance of any regulatory or legal action brought against the company as part of the Commissioner's official duties. (B) Neither the Commissioner nor any other person who received confidential information while acting under the authority of the Commissioner in performing the duties as required by this chapter shall be permitted or required to testify in any private civil action concerning any confidential information. (C)(i) To assist in the performance of the Commissioner's duties, the Commissioner may share and receive confidential information from: (I) Other state, federal, and international regulatory agencies; and (II) The National Association of Insurance Commissioners and its affiliates and subsidiaries. (ii) The Commissioner may share and receive confidential information specified in paragraphs (1)(A) and (D) of this subsection from the Actuarial Board for Counseling and Discipline or its successor upon a request stating that the confidential information is required for the purpose of professional disciplinary proceedings with state, federal, or international law enforcement officials. (iii) Any recipient of confidential information shall maintain the confidentiality and privileged status of such documents, materials, data, or other information in the same manner and to the same extent as required for the Commissioner of the jurisdiction that is the source of the documents, materials, data, or other information. (D) The Commissioner may enter into agreements governing sharing and use of information pursuant to this paragraph. (E) No waiver of any applicable privilege or claim of confidentiality in the confidential information shall occur as a result of disclosure to the Commissioner under this subsection. (F) A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established under this paragraph shall be available and enforced in any proceeding in, and in any court of, the District of Columbia. (k)(1) The Commissioner may exempt specific product forms or product lines of a domestic company that is licensed and doing business only in the District of Columbia from the requirements provided under subsection (g) of this section if: (A) The Commissioner has issued an exemption in writing to the company and has not subsequently revoked the exemption in writing; and (B) The company computes reserves using assumptions and methods used before the operative date of the valuation manual in addition to any requirements established by the Commissioner and promulgated by regulation. (2) Subsections (c), (d), (e), and (f) of this section and  31-4720 and Chapter 49 of this title shall remain applicable to a company that is granted an exemption under this subsection. With respect to a company applying for an exemption under this subsection, any reference to subsection (g) found in subsections (c), (d), (e), and (f) of this section and  31-4720 and Chapter 49 of this title shall not be applicable. (l) For the purposes of this section, the term: (1) "Accident and health insurance" means contracts that incorporate morbidity risk and provide protection against economic loss resulting from accident, sickness, or medical conditions and as may be specified in the valuation manual. (2) "Appointed actuary" means a qualified actuary who is appointed in accordance with the valuation manual to prepare the actuarial opinion required under  31-4901(c) and (d). (3) "Company" means an entity that: (A) Has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in the District and has at least one such policy in force or on claim; or (B) Has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in any state or jurisdiction and is required to hold a certificate of authority to write life insurance, accident and health insurance, or deposit-type contracts in the District. (4) "Deposit-type contract" means contracts that do not incorporate mortality risk, including annuity and pure endowment contracts, and as may be specified in the valuation manual. (5) "Life insurance" means contracts that incorporate mortality risk, including annuity and pure endowment contracts, and as may be specified in the valuation manual. (6) "Policyholder behavior" means any action a policyholder, contract holder, or any other person with the right to elect options, such as a certificate holder, may take under a policy or contract subject to this section including lapse, withdrawal, transfer, deposit, premium payment, loan, annuitization, or benefit elections prescribed by the policy or contract but excluding events of mortality or morbidity that result in benefits prescribed in their essential aspects by the terms of the policy or contract. (7) "Principle-based valuation" means a reserve valuation that uses one or more methods or one or more assumptions determined by the insurer and is required to comply with subsection (h) of this section as specified in the valuation manual. (8) "Qualified actuary" means an individual who is qualified to sign the applicable statement of actuarial opinion in accordance with the American Academy of Actuaries qualification standards for actuaries signing such statements and who meets the requirement specified in the valuation manual. (9) "Tail risk" means a risk that occurs either where the frequency of low probability events is higher than expected under a normal probability distribution or where there are observed events of very significant size or magnitude. (10) "Valuation manual" means the manual of valuation instructions adopted by the National Association of Insurance Commissioner as specified in this section or as amended.  (June 19, 1934, 48 Stat. 1156, ch. 672, ch. V,  1; Feb. 19, 1948, 62 Stat. 27, ch. 66,  1; June 27, 1960, 74 Stat. 227, Pub. L. 86-530,  1; Oct. 3, 1962, 76 Stat. 711, Pub. L. 87-738,  1; Oct. 13, 1978, D.C. Law 2-120, 2, 3, 25 DCR 1519; Mar. 14, 1985, D.C. Law 5-160,  3(d), 32 DCR 39; May 21, 1997, D.C. Law 11-268,  10(j), 44 DCR 1730; Apr. 11, 2019, D.C. Law 22-286,  2(a), 66 DCR 1637.)  Prior Codifications 1981 Ed.,  35-501. 1973 Ed.,  35-701. Section References This section is referenced in  31-4419,  31-4705.02,  31-4720, and  31-4901. Cross References Application of chapter to existing companies, see  31-4420. Domestic stock companies, conversion into mutual life companies, valuations, see  31-4419. Life insurance actuarial opinion of reserves and related actuarial items, requirements, see  31-4901. Editor's Notes References in D.C. Law 5-160 in this section and in  31-4720 have been translated accurately to reflect the D.C. Code numbering system for  31-4701(c). It should be noted, however, that the numbering system used by the D.C. Code and the numbering system used by the Organic Law differ markedly. Department of Insurance abolished: The Department of Insurance, including the Superintendent, was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. Reorganization Order No. 43, dated June 23, 1953, as amended, established, under the direction and control of a Commissioner, a Department of Insurance headed by a Superintendent. The Order provided for the organization of the Department, abolished the previously existing Department of Insurance, and provided that all functions and positions of the previous Department would be transferred to the new Department of Insurance, including the duties, powers, and authorities of all officers and employees; and that all personnel, property, records and unexpended balances relating to the functions and positions transferred would also be transferred to the new Department. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. The functions of the Superintendent of Insurance were transferred to the Department of Consumer and Regulatory Affairs by Reorganization Plan No. 1 of 1983, effective March 31, 1983. Pursuant to the provisions of D.C. Law 11-268, the Department of Insurance and Securities Regulation was established and the duties of the Superintendent of Insurance and the Insurance Administration were assumed by the Commissioner of Insurance and Securities, and the Insurance Administration in the Department of Consumer and Regulatory Affairs was abolished. Change in Government This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 401 of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to a single Commissioner. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 314702. Companies issuing both participating and nonparticipating policies. Every life company doing business in the District which issues both participating and nonparticipating policies shall keep the 2 classes of business separate and shall make, and include in the annual statement to be filed with the Commissioner each year, a separate statement of the gains, losses, and expenses properly attributable to each of such classes and also showing the manner in which any general outlay of expenses of the company has been apportioned to each. No such life company shall be permitted to do business in the District unless it makes such a separation of its business. This section shall not apply to paid-up, temporary, or pure endowment insurance issued or granted in exchange for lapsed or returned policies.  (June 19, 1934, 48 Stat. 1157, ch. 672, ch. V,  2; May 21, 1997, D.C. Law 11-268,  10(j), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-502. 1973 Ed.,  35-702. Section References This section is referenced in  31-4701. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4701.
 314703. Life policies  Required provisions. (a) No life insurance policy other than industrial insurance, annuities, and pure endowments shall be issued or delivered in the District or shall be issued by a life company organized under District laws after the 1st day of January, 1935, unless the policy has the following features: (1) A provision that all premiums after the 1st year shall be payable in advance, either at the home office of the company or to an agent of the company, upon delivery of a receipt signed by 1 or more of the officers who shall be designated in the policy. (2)(A) A provision that the insured is entitled to a grace period of at least 30 days or of 1 month within which the payment of any premiums after the 1st year may be made, subject at the option of the company to an interest charge not in excess of 6 per centum per year for the number of days of grace elapsing before the payment of the premium. (B) A provision that, if the policy becomes a claim during the grace period before overdue or deferred premiums of the current policy year are paid, the amount of the premiums, with interest on any overdue premiums, may be deducted from any settlement payable under the policy. (C) A provision that grace shall begin on the premium-paying date stated in the policy. (3)(A)(i) Except as provided in subparagraphs (B) and (C) of this paragraph, a provision that the policy shall constitute the entire contract between the parties and shall be incontestable after it has been in force during the lifetime of the insured for at least 2 years from its date, except for nonpayment of premiums and except for violations of the conditions of the policy relating to naval or military service during a war, and at the option of the company, provisions relative to benefits when total and permanent disability occurs and provisions granting additional insurance specifically against death by accident may also be excepted. (ii) All statements made by the insured shall, in the absence of fraud, be considered representations and not warranties. (iii) No statements by the insured shall be used in defense of a claim under the policy unless the statements are in a written application and a copy of the statements are endorsed upon or attached to the policy when issued. (B) A provision that nothing in this paragraph applies to applications for reinstatement. (C) A provision that a reinstated policy shall be contestable for fraud or for misrepresenting material facts for as long a period as provided by the original policy. (4) A provision that if the company discovers before the final settlement that the age of the insured (or the age of the beneficiary, if considered in determining the premium) has been wrongly stated, the amount payable under the policy shall be the amount the premium would have purchased had the correct age been stated, according to the companys rate at date of issue. (5)(A)(i) A provision that the policy shall participate in the surplus of the company and that any policy containing provisions for participation at the end of the 1st policy year and afterwards may also provide that each dividend shall be paid subject to the payment of premium for the next year. (ii) A provision that the insured under any annual dividend policy shall have the right each year to receive dividends from the participation paid in cash. (iii) A provision that if the policy provides other dividend options, the policy shall explain which options shall be effective if the insured does not elect any of the other options by the end of the grace period allowed for paying the premium. (B) A provision that the requirements described in subparagraph (A) of this paragraph shall not apply to any form of paid-up insurance, temporary insurance, or pure endowment insurance issued or granted in exchange for lapsed or surrendered policies and shall not apply to nonparticipating policies. (6)(A)(i) Except as provided in subparagraphs (A)(iv), (v), and (B) of this paragraph, a provision that, after the policy has been in force for 3 full years, the company will loan to the insured, while the policy is in force, on proper assignment or pledge of the policy and on the sole security of the policy and at a specified interest rate, a sum equal to or, at the option of the insured, less than the amount required by  31-4705.02. (ii) A provision that the company will deduct from the loan value any indebtedness not already deducted when determining the value and any unpaid balance on premiums for the current policy year. (iii) A provision that the company may collect, in advance, interest on the loan to the end of the current policy year. (iv) The provisions described in subparagraph (A)(i) through (iii) of this paragraph shall not be required in term insurance, temporary insurance, or pure endowment insurance issued or granted in exchange for lapsed or surrendered policies. The policy may further provide that if the interest on the loan is not paid when due, it shall be added to the existing loan and shall bear interest at the same rate. (v) The specified interest rate mentioned in subparagraph (A)(i) of this paragraph shall not apply to policies issued after March 14, 1985. (B) Policies issued after March 14, 1985, shall include a provision describing the policy loan interest rates to be 1 of the following: (i) Not more than 8% per year. (ii) An adjustable maximum interest rate established by the company under subparagraph (C) of this paragraph. (C) The interest rate described in paragraph (6)(B)(ii) of this subsection shall be in a policy which describes how frequently the company determines the rates, and the rates shall not exceed the higher of the following: (i) The published monthly average for the calendar month ending 2 months before the company determines the interest rate; or (ii) The sum of 1 per centum per year and the rate used by the company when computing the cash surrender value during the applicable period. (D) For policies issued after March 14, 1985, which contain an interest rate determined pursuant to subparagraph (B)(ii) of this paragraph, the following provisions shall be included in the policy: (i) The maximum interest rate shall be determined at least once every 12 months, at regular intervals, but not more frequently than once every 3 months. (ii) The interest rate being charged may be increased when the rate-determination standards described in subparagraph (C) of this paragraph indicate at least a 1/2% per year increase in the maximum rate. (iii) The interest rate being charged shall be decreased when the rate-determination standards described in subparagraph (C) of this paragraph require at least a 1/2% per year decrease in the maximum rate. (E) Except as provided in subparagraph (E)(v) of this paragraph and for policies issued after March 14, 1985, policies shall include a provision that the company shall notify, in the following manner, a policyholder who borrows under the policy: (i) When the company makes a cash loan, a written notice of the initial interest rate. (ii) When the company makes a premium loan, a written notice, within a reasonable time after the loan, of the initial interest rate. (iii) When the company plans to increase the interest rate, a written notice within a reasonable time before the rate increase of the change in the rate. (iv) Every notice described in this subparagraph shall describe how frequently the company, under subparagraph (C) of this paragraph, reevaluates the rates and also shall describe, under subparagraph (B) of this paragraph, the rates either as no more than 8% per year or as an adjustable rate under subparagraph (C) of this paragraph. (v) Except as provided in subparagraph (E)(iii) of this paragraph, notice shall not be required for premium loans added to an original premium loan described in subparagraph (E)(ii) of this paragraph. (F) The loan value of the policy shall be determined according to  31-4705.04, but no policy shall terminate in a policy year as the sole result of change in the interest rate and the life insurer shall maintain coverage until the time at which it would otherwise have terminated if there had been no increase during that policy year. (G) For purposes of subparagraphs (B) through (G) of this paragraph: (i) The term published monthly average means Moodys Corporate Bond Yield AverageMonthly Average Corporates published by Moodys Investors Service, Inc., or any successor thereto; or in the event that Moodys Corporate Bond Yield AverageMonthly Average Corporates is no longer published, a substantially similar average, established by regulation issued by the Commissioner. (ii) The rate of interest on policy loans permitted under this subsection also includes the interest rate charged on reinstatement of policy loans for the period during and after any lapse of a policy. (iii) The term policy loan also includes any premium loan made under a policy to pay 1 or more premiums that were not paid to the life insurer as they fell due. (iv) The term policyholder includes the owner of the policy or the person designated to pay premiums as shown on the records of the life insurer. (v) The term policy also includes certificates issued by a fraternal benefit society and annuity contracts which provide for policy loans. (H) No other provision of law shall apply to policy loan interest rates unless made specifically applicable to such rates. (I) The provisions of subparagraphs (B) through (H) of this paragraph shall not apply to any insurance contract issued before March 14, 1985, unless the policyholder agrees in writing to the application of such provisions. (7) A provision for nonforfeiture benefits and cash surrender values according to the requirements of  31-4705.01 or  31-4705.02. (8) A provision specifying the options, if any, to which the policyholder is entitled in the event of default in a premium payment. (9) A table showing in figures the loan values and the options available under the policy each year upon default in premium payments, during at least the first 20 years of the policy or during the premium paying period if less than 20 years. (10) A provision that if in event of default in premium payments the value of the policy shall have been applied to the purchase of other insurance as provided for in this section, and if such insurance shall be in force and the original policy shall not have been surrendered to the company and cancelled, the policy may be reinstated within 3 years from such default, upon evidence of insurability satisfactory to the company and payment of arrears of premiums and the payment or reinstatement of any other indebtedness to the company upon said policy, with interest on said premium at the rate of not exceeding 6% per annum payable annually, and that such reinstated policy shall be contestable, on account of suicide, fraud, or misrepresentation of material facts pertaining to the reinstatement, for the same period after reinstatement as provided in the policy with respect to the original issue. The rate of interest on policy loans permitted under this subsection also includes the interest rate charged on reinstatement policy loans for the period during and after any lapse of the policy. (11) A provision that, when a policy shall become a claim by death of the insured, settlement shall be made upon receipt of due proof of death. (12) A table showing the amount of installments, if any, in which the policy may provide its proceeds may be payable. (13) Title on the face and on the back of the policy briefly describing its form. (b) Any of the foregoing provisions or portions thereof not applicable to single premium or nonparticipating or term policies shall, to that extent, not be incorporated therein; and any such policy may be issued or delivered in the District which in the opinion of the Commissioner contains provisions on any 1 or more of the several foregoing requirements more favorable to the policyholder than hereinbefore required. The provisions of this section shall not apply to policies of reinsurance, or to policies issued or granted in exchange for lapsed or surrendered policies, or to group insurance.  (June 19, 1934, 48 Stat. 1158, ch. 672, ch. V,  3; Feb. 19, 1948, 62 Stat. 30, ch. 66,  2; Oct. 13, 1978, D.C. Law 2-120,  4, 25 DCR 1519; Mar. 14, 1985, D.C. Law 5-160,  3(e), 32 DCR 39; Feb. 24, 1987, D.C. Law 6-192, 25(a)-(d), 33 DCR 7836; May 21, 1997, D.C. Law 11-268,  10(j), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-503. 1973 Ed.,  35-703. Section References This section is referenced in  31-4705.01 and  31-4705.04. Cross References False statements in application, effect, see  31-4314. Special provisions governing industrial policies, see  31-4801 et seq.
 314704. Life policies  Prohibited provisions. No policy of life insurance other than industrial insurance, annuities, and pure endowments, with or without return of premiums or of premiums and interest, shall be issued or delivered in the District or be issued by a life company organized under the laws of the District after the 1st day of January 1935 if it contains any of the following provisions: (1) A provision limiting the time within which any action at law or in equity may be commenced to less than 3 years after the cause of action shall accrue; (2) A provision by which the policy shall purport to be issued or take effect more than 6 months before the original application for the insurance was made; (3) Except for provisions relating to misstatement of age, suicide, aviation, and military or naval service in time of war, a provision for any mode of settlement at maturity, after the expiration of the contestable period of the policy, of less value than the amount insured on the face of the policy plus dividend additions, if any, less any indebtedness to the company on or secured by the policy, and less any premium that may, by the terms of the policy, be deducted. This paragraph shall not apply to any nonforfeiture provision; (4) A provision for forfeiture of the policy for failure to repay any loan on the policy, or to pay interest on such loan, while the total indebtedness on the policy, including interest, is less than the loan value thereof; (5) A provision to the effect that the agent soliciting the insurance is the agent of the person insured under said policy, or making the acts or representations of such agent binding upon the person so insured under said policy; (6) A provision permitting the payment of funeral benefits in merchandise or services, or permitting the payment of any benefits other than in lawful money of the United States; or (7) A provision permitting either contracting to pay, or the payment of, funeral, burial, and other expenses to any designated undertaker or undertaking establishment, or to any particular tradesman or business man, so as to deprive the persons entitled by law to dispose of the body of a deceased, or in any way to control such persons in procuring and purchasing said supplies and services in the open market with the advantage of competition.  (June 19, 1934, 48 Stat. 1161, ch. 672, ch. V,  4; Feb. 19, 1948, 62 Stat. 30, ch. 66,  3.)  Prior Codifications 1981 Ed.,  35-504. 1973 Ed.,  35-704.
 314705.01. Nonforfeiture benefits and cash surrender values. (a) This section shall apply only to policies of life insurance issued prior to the operative date of  31-4705.02 (the standard nonforfeiture law). (b) The nonforfeiture benefits referred to in paragraph (7) of subsection (a) of  31-4703 shall be available to the insured in event of default in premium payments, after premiums shall have been paid for 3 years, and shall be a stipulated form of insurance, effective from the due date of the defaulted premium, the net value of which shall be at least equal to the reserve at the date of default on the policy and on dividend additions thereto, if any, exclusive of the reserve on account of return premium insurance and on total and permanent disability and additional accidental death benefits (the policy to specify the mortality table and rate of interest adopted for computing such reserve), less a specified percentage (not more than 2 1/2) of the amount insured by the policy and of existing dividend additions thereto, if any, and less any existing indebtedness to the company on or secured by the policy; provided, that a company may, in lieu of the provision herein permitted for the deduction from the reserve of a sum not more than 2 1/2% of the amount insured by the policy, and of any dividend additions thereto, insert in the policy a provision that one fifth of said reserve may be deducted, or may provide therein that a deduction may be made of said 2 1/2% or one fifth of said reserve, at the option of the company; provided further, that the policy may be surrendered to the company at its home office within 1 month of the due date of defaulted premium for a specified cash value at least equal to the sum which would otherwise be available for the purchase of insurance as aforesaid; and provided further, that the company may defer payment for not more than 6 months after the application therefor is made. A provision may also be inserted in the policy that in event of default in a premium payment before such benefit becomes available, the reserve on any dividend additions then in force may at the option of the company be paid in cash or applied as a net premium to the purchase of paid-up term insurance for any amount not in excess of the face of the original policy. This section shall not apply to term insurance of 20 years or less. The net single premium rate employed in computing the term of temporary insurance or the amount of pure endowment insurance granted as a nonforfeiture value under any life insurance policy may at the option of the company be based upon a table of mortality showing rates of mortality not greater than 130 per centum of those shown by the American Men Ultimate Table of Mortality instead of the table used in computing the reserve on the policy, or in case of substandard policies not greater than 130 per centum of the rates of mortality shown by the table of mortality approved by the Commissioner for computing the reserve on the policy, anything herein to the contrary notwithstanding.  (June 19, 1934, ch. 672, ch. V,  5a; Feb. 19, 1948, 62 Stat. 30, ch. 66,  4; May 21, 1997, D.C. Law 11-268,  10(j), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-506. 1973 Ed.,  35-705a. Section References This section is referenced in  31-4703 and  31-4722. References in Text The operative date of  31-4705.02, referred to in subsection (a) of this section, was prescribed by  2 of the Act of October 3, 1962, 76 Stat. 712, Pub. L. 87-738, and was formerly codified as  35-507(g) (1981 Ed.). Section 35-507  31-4705.02, 2001 Ed. was rewritten effective March 14, 1985, and no longer contains the operative date language. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4701.
 314705.02. Standard nonforfeiture law  In general. (a)(1) Except as provided in subsections (i) and (j) of this section and for policies issued after the operative date of this section, no life insurance policy shall be issued or delivered in the District of Columbia unless it contains the following provisions or corresponding provisions which the Commissioner considers at least as favorable to the defaulting or surrendering policyholder as the following provisions; (A)(i) If the insured defaults on a premium payment after premiums have been paid 1 full year for ordinary insurance or 3 full years for industrial insurance, the company shall grant, upon proper request no later than 60 days after the premium became due, a paid-up nonforfeiture benefit on a plan stipulated in the policy, and the paid-up nonforfeiture benefit shall be effective when the premiums became due. (ii) The company may substitute for the nonforfeiture benefit described in subparagraph (A)(i) of this paragraph an actuarially equal alternative paid-up nonforfeiture benefit which provides a greater amount or longer period of death benefits or a greater amount or earlier payment of endowment benefits. (B) If the insured defaults on a premium payment after ordinary insurance premiums have been paid for 3 full years or industrial insurance premiums have been paid for 5 full years and surrenders the policy within 60 days after the premiums became due, the company shall pay a cash surrender value instead of paying a paid-up nonforfeiture benefit. (C) A specified paid-up nonforfeiture benefit shall become effective unless the person entitled to make an election chooses another available option no later than 60 days after the defaulted premium became due. (D) If all premium payments become paid or if the company continues the policy under a paid-up nonforfeiture benefit which became effective after the eve of the 3rd policy anniversary for ordinary insurance or after the eve of the 5th policy anniversary for industrial insurance, and if the insured surrenders the policy within 30 days after any policy anniversary, the company will pay a cash surrender value. (E)(i) For policies creating upon the guaranteed bases unscheduled changes in benefits or premiums or having an option for changes in benefits or premiums other than a change to a new policy, the policy shall describe or show the mortality table, the interest rate, and the method used to calculate cash surrender values and paid-up nonforfeiture benefits available under the policy. (ii) For all other policies, the policy shall show the mortality table and the interest rate used to calculate the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value and paid-up nonforfeiture benefit available under the policy on each anniversary either during the first 20 policy years or during the term of the policy, whichever is shorter, and with the values and benefits calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the company on the policy. (F)(i) The policy shall provide a brief and general statement of the method to be used in calculating the cash surrender value and the paid-up nonforfeiture benefit available on any policy anniversary after the last anniversary treated in the policy according to the manner described in subparagraph (E)(ii) of this paragraph. (ii) The brief statement shall explain how paid-up additions and indebtedness on the policy changes the cash surrender values and the paid-up nonforfeiture benefits. (2) Any subsection (a) provision that does not apply to the plan of insurance in a policy may be omitted from the policy to the extent that the provision does not apply. (3) The company shall reserve the right to defer the payment of any cash surrender value until 6 months after payment has been demanded and until the insured has surrendered the policy. (b)(1) Any cash surrender value available under subsection (a) of this section after a default on a premium due on a policy anniversary shall be at least the excess of the present value, on the anniversary, of the future guaranteed benefits which would have been provided by the policy and any existing paid-up additions, had there been no default, over the sum of the following: (A) The then present value of the adjusted premiums described in subsections (d) and (e) of this section, corresponding to premiums which would have become due after the eve of the anniversary. (B) The amount of any indebtedness to the company on the policy. (2) For any policy issued after the operative date of subsection (e) of this section and which provides supplemental life insurance or annuity benefits at the option of the insured and for an additional premium by rider or by supplemental policy provision, the cash surrender value referred to in subsection (b)(1) of this section shall be at least the sum of the cash surrender value for an otherwise similar policy issued at the same age without the rider or the supplemental policy provision and the cash surrender value for a policy which provides only the benefits otherwise provided by the rider or the supplemental provision. (3) For any family policy issued after the operative date of subsection (e) of this section and which defines a primary insured and provides term insurance on the life of the spouse of the primary insured for a period that shall expire before the spouse becomes 71, the cash surrender value referred to in subsection (b)(1) of this section shall be at least the sum of the cash surrender for an otherwise similar policy issued at the same age without the term insurance on the life of the spouse and the cash surrender value for a policy which provides only the benefits otherwise provided by the term insurance on the life of the spouse. (4) Any cash surrender value available within 30 days after any policy anniversary on a policy paid up by completion of all premium payments or a policy continued under a paid-up nonforfeiture benefit shall be at least the present value, on the anniversary, of the future guaranteed benefits provided by the policy and any existing paid-up additions, decreased by any indebtedness to the company on the policy. (c) Any paid-up nonforfeiture benefit available under a policy referred to in subsection (a) of this section after a default in a premium payment due on a policy anniversary shall be in a sufficient amount for the present value on the anniversary to be at least equal to the cash surrender value then provided by the policy or, if none is provided, the cash surrender value that would have been required by this section in the absence of the condition that premiums shall be paid for at least a specified period. (d)(1) This subsection shall not apply to policies issued after the operative date of subsection (e) of this section. (2) Except as provided in paragraphs (2), (3), and (8) of this subsection, the adjusted premiums for any policy referred to in subsection (a) of this section shall be calculated on an annual basis and shall be a uniform percentage of the premiums for each policy year, excluding any extra premiums charged because of impairments or special hazards, and the adjusted premiums shall equal the sum of: (A) The value, on the issuance date, of the future guaranteed benefits provided by the policy. (B) Two per centum of the amount of insurance for uniform amounts of insurance or an equal amount for amounts of insurance that vary with the duration of the policy. (C) Forty per centum of the adjusted premium for the 1st policy year. (D) Twenty-five per centum of either the adjusted premium for the 1st policy year or the adjusted premium for a whole life policy of the same or equal uniform amount, with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less. (3) For the percentages described in paragraph (2)(C) and (D) of this subsection, no adjusted premium shall exceed 4% of the amount of insurance. (4)(A) For a policy providing an amount of insurance varying with the duration of the policy, the equal uniform amount shall be the uniform amount of insurance provided by an otherwise similar policy that contained the same endowment benefits issued at the same age for the same term, with the benefits not varying with the duration of the policy and with the benefits valued the same on the date of issue as the benefits under the policy. (B) For a policy providing a varying amount of insurance issued on the life of a child under age 10, the equal uniform amount may be computed as though the amount of insurance provided by the policy before the child became 10 was the amount of insurance provided at age 10. (5)(A) The adjusted premiums for any policy providing term insurance benefits by rider or supplemental policy provision shall equal the sum of the following: (i) The adjusted premiums for an otherwise similar policy issued at the same age without the term insurance benefits. (ii) For the period when premiums for the term insurance benefits become payable, the adjusted premiums for the term insurance. (B) Except as provided in subparagraph (C) of this paragraph, the equation in subparagraph (A) of this paragraph shall be calculated separately and according to paragraphs (1), (2), and (3) of this subsection. (C) For paragraph (2)(B), (C), and (D) of this subsection, the amount of insurance or equal uniform amount of insurance used to calculate the adjusted premiums referred to in subparagraph (A)(ii) of this paragraph shall equal the excess of the corresponding amount determined for the entire policy over the amount used to calculate the adjusted premiums described in subparagraph (A)(i) of this paragraph. (6)(A) Except as provided in subsections (d) and (e) of this section, paragraph (5)(B) and (C) of this subsection, and paragraph (8) of this subsection, all adjusted premiums and present values for ordinary insurance policies shall be calculated on the basis of the Commissioners 1941 Standard Ordinary Mortality Table. (B) For ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age no more than 3 years younger than the actual age of the insured, and the calculations for all policies of industrial insurance shall be made on the basis of the 1941 Standard Industrial Mortality Table. (C)(i) All calculations shall be made on the basis of the rate of interest, not exceeding 3 1/2% per year, specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits. (ii) In calculating the present value of any paid-up term insurance with accompanying pure endowment offered as a nonforfeiture benefit, the rates of mortality assumed shall not exceed 130% of the rates of mortality according to the applicable table. (iii) For insurance issued on a substandard basis, the calculation of any adjusted premiums and present values may be based on another mortality table specified by the company and approved by the Commissioner. (7)(A)(i) Except as provided in subparagraphs (B), (C), (D), and (E) of this paragraph and paragraph (8) of this subsection and for ordinary policies issued after the operative date of this paragraph, the adjusted premiums and present values shall be calculated on the basis of the Commissioners 1958 Standard Ordinary Mortality Table and the interest rate for calculating cash surrender values and paid-up nonforfeiture benefits shall be specified in the policy. (ii) Except as provided in sub-subparagraph (iii) of this subparagraph, the interest rate shall not exceed 3 1/2% per year. (iii) An interest not exceeding 5 1/2% per year may be used for policies issued after October 12, 1978. (B) For ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age no more than 6 years younger than the actual age of the insured. (C) In calculating the present value of a paid-up term insurance with pure endowment offered as a nonforfeiture benefit, the rates of mortality assumed may be no more than the rates in the Commissioners 1958 Extended Term Insurance Table. (D) For insurance issued on a substandard basis, the calculation of adjusted premiums and present values may be based on another mortality table specified by the company and approved by the Commissioner. (E)(i) After June 27, 1960, a company may file with the Commissioner a written notice of the companys election to comply with this paragraph after a specified date before January 1, 1966. (ii) After filing the notice, then, on the specified date, this paragraph shall become operative for ordinary policies issued by the company. (iii) If a company makes no election, then the operative date of the paragraph for the company shall be January 1, 1966. (8)(A)(i) Except as provided in subparagraphs (B), (C), (D), and (E) of this paragraph and for industrial policies issued after the operative date of this paragraph, adjusted premiums and present values shall be calculated on the basis of the Commissioners 1961 Standard Industrial Mortality Table and the interest rate for calculating cash surrender values and paid-up nonforfeiture benefits shall be specified in the policy. (ii) Except as provided in subparagraph (A)(iii) of this paragraph, the interest rate shall not exceed 3 1/2% per year. (iii) An interest rate not exceeding 5 1/2% per year may be used for policies issued after October 12, 1978. (B) For individual insurance issued on female risks, adjusted premiums and present values may be calculated according to an age no more than 6 years younger than the actual age of the insured. (C) In calculating the present value of any paid-up term insurance with pure endowment offered as a nonforfeiture benefit, the rates of mortality assumed shall be no more than the rates in the Commissioners 1961 Industrial Extended Term Insurance Table. (D) For insurance issued on a substandard basis, the calculation of adjusted premiums and present values may be based on another mortality table specified by the company and approved by the Commissioner. (E)(i) After October 3, 1962, a company may file with the Commissioner a written notice of the companys election to comply with this paragraph after a specified date before January 1, 1968. (ii) After filing the notice, then, on the specified date, this paragraph shall become operative for the industrial policies issued by the company. (iii) If a company makes no election, the operative date of this paragraph for the company shall be January 1, 1968. (e)(1) This subsection shall apply to all policies issued after the operative date of this subsection. (2) Except as provided in paragraph (7) of this subsection, the adjusted premiums for a policy shall be calculated on an annual basis and shall be the uniform percentage of the policy premiums for each policy year. (3) The adjusted premium shall exclude amounts payable as extra premiums to cover impairments or special hazards and shall also exclude a uniform annual contract change or policy fee described in the policy statement of the method used to calculate the cash surrender values and paid-up nonforfeiture benefits. (4) The present value, on the issuance date, of all adjusted premiums shall be equal to the sum of the following: (A) The then present value of the future guaranteed benefits provided for by the policy. (B) One per centum of either the amount of insurance for uniform amounts of insurance or the average amount of insurance at the beginning of each of the first 10 policy years. (C) One hundred twenty-five per centum of the nonforfeiture net level premium. (5) For the percentage described in paragraph (4)(C) of this subsection, no nonforfeiture net level premium shall be considered in excess of 4% of either the amount of insurance for uniform amounts of insurance or the average amount of insurance at the beginning of each of the first 10 policy years. (6) The policy shall issue when the rated age of the insured is determined. (7) The nonforfeiture net level premium shall be equal to the present value, at the issuance date of the guaranteed benefits provided by the policy divided by the present value, on the issuance date, of an annuity of 1 per year payable when the policy issues and on each anniversary when a premium becomes due. (8) For policies which create in a guaranteed basis unscheduled changes in benefits or premiums or which provide an option for changes in benefits or premiums other than a change to a new policy, the adjusted premiums and present value shall initially be calculated on the assumption that future benefits and premiums do not change from benefits and premiums established when the policy issues. (9) When the benefits or premiums change, the future adjusted premiums, the nonforfeiture net level, and the present values shall be recalculated on the assumption that future benefits and premiums do not change from the benefits and premiums established by the change. (10) Except as provided by paragraph (15) of this subsection, the recalculated future adjusted premiums for the policy shall be the uniform percentage of the future premiums for each policy. (11) The recalculated future premiums shall exclude amounts payable as extra premiums to cover impairments and special hazards and shall also exclude a uniform annual contract charge or policy fee described on the policy in a statement of the method used to calculate the cash surrender values and paid-up nonforfeiture benefits. (12) At the time of the change to new benefits or premiums, the present value of all the future adjusted premiums shall equal the excess of the sum described in subparagraph (A) of this paragraph over the amount described in subparagraph (B) of this paragraph. (A) The then present value of the future guaranteed benefits provided by the policy and the additional expense allowance. (B) The then cash surrender value or present value of paid-up nonforfeiture benefit under the policy. (13) At the time of the change to the new benefits or premiums, the additional expense allowance shall be the sum of the following: (A) One per centum of the difference, if positive, between the average amount of insurance at the beginning of each of the first 10 policy years after the change and the average amount of insurance before the change at the beginning of each of the first 10 years after the most recent previous change or, if there has been no previous change, the issuance date. (B) One hundred twenty-five per centum of the increase in the nonforfeiture net level premium. (14) The recalculated nonforfeiture net level premium shall equal the result obtained by dividing the equation described in subparagraph (A) of this paragraph with the amount described in subparagraph (B) of this paragraph. (A) This amount equals the sum of the following: (i) The nonforfeiture net level premium before the change multiplied by the present value of an annuity of 1 per year payable, after the change, on each anniversary of the policy where a premium would have fallen due had the change not occurred. (ii) The present value of the increase in future guaranteed benefits provided by the policy. (B) This amount equals the present value of an annuity of 1 per year payable, after the change, on each anniversary of the policy where a premium falls due. (15) For a policy issued on a substandard basis which provides reduced graded amounts of insurance so that, in each policy year, the policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis which provides higher uniform amounts of insurance, adjusted premiums and present values for the substandard policy may be calculated as if they were issued to provide the higher uniform amounts of insurance on the standard basis. (16)(A)(i) Except as provided in subparagraphs (B) through (H) of this paragraph, adjusted premiums and present values shall for all policies of ordinary insurance be calculated on the basis of the Commissioners 1980 Standard Ordinary Mortality Table or, at the election of the company for any specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors. (ii) Adjusted premiums and present values shall for all policies of industrial insurance be calculated on the basis of the Commissioners 1961 Standard Industrial Mortality Table. (iii) Adjusted premiums and present values shall for all policies issued in a particular calendar year be calculated on the basis of a rate of interest not exceeding the nonforfeiture interest rate for policies issued in the calendar year. (B) At the option of the company, calculations for all policies issued in a particular calendar year may be made on the basis of an interest rate not exceeding the nonforfeiture interest rate for policies issued in the immediately preceding calendar year. (C) Under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any cash surrender value available shall be calculated on the basis of the mortality table and the interest rate used to determine the amount of the paid-up nonforfeiture benefit and the paid-up dividend additions. (D) A company may calculate the guaranteed paid-up nonforfeiture benefit including any paid-up additions under the policy on the basis of an interest rate no lower than the rate specified in the policy for calculating cash surrender values. (E) In calculating the present value of a paid-up term insurance with pure endowment offered as a nonforfeiture benefit, the rates of mortality assumed shall be no more than the rates in the Commissioners 1980 Extended Term Insurance Table for ordinary insurance policies and no more than the Commissioners 1961 Industrial Extended Term Insurance Table for industrial insurance policies. (F) For insurance issued on a substandard basis, the calculation of any adjusted premiums and present values may be based on appropriate modifications of the tables described in subparagraph (E) of this paragraph. (G)(i) For policies issued before the operative date of the valuation manual, any Commissioners Standard Ordinary Mortality Tables adopted after 1980 by the National Association of Insurance Commissioners and by the Commissioner determining the minimum nonforfeiture standard may be substituted for the Commissioners 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or for the Commissioners 1980 Extended Term Insurance Table. (ii) For policies issued on or after the operative date of the valuation manual, the valuation manual shall provide the Commissioners Standard mortality table for use in determining the minimum nonforfeiture standard that may be substituted for the Commissioners 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or for the Commissioners 1980 Extended Term Insurance Table. If the Commissioner approves by regulation any Commissioners Standard Ordinary Mortality Table adopted by the National Association of Insurance Commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual, then that minimum nonforfeiture standard shall supersede the minimum nonforfeiture standard provided by the valuation manual. (H)(i) For policies issued before the operative date of the valuation manual, any Commissioners Standard Industrial Mortality Tables adopted after 1980 by the National Association of Insurance Commissioners and approved by the Commissioner for determining the minimum nonforfeiture standard may be substituted for the Commissioners 1961 Standard Industrial Mortality Table or the Commissioners 1961 Industrial Extended Term Insurance Table. (ii) For policies issued on or after the operative date of the valuation manual, the valuation manual shall provide the Commissioners Standard Mortality Table for use in determining the minimum nonforfeiture standard that may be substituted for the Commissioners 1961 Standard Industrial Mortality Table or the Commissioners 1961 Industrial Extended Term Insurance Table. If the Commissioner approves by regulation any Commissioners Standard Industrial Mortality Table adopted by the National Association of Insurance Commissioners for use in determining the minimum nonforfeiture standard for policies or contracts issued on or after the operative date of the valuation manual, then that minimum nonforfeiture standard shall supersede the minimum nonforfeiture standard provided by the valuation manual. (17)(A) The nonforfeiture interest rate for policies issued before the operative date of the valuation manual in a particular calendar year shall be equal to 125% of the calendar year statutory valuation interest rate for the policy, as described in  31-4701, rounded to the nearest 1/4%; provided, that the nonforfeiture interest rate shall not be less than 4.00%. (B) For policies issued on or after the operative date of the valuation manual, the nonforfeiture interest rate per annum for any policy issued in a particular calendar year shall be provided by the valuation manual. (18) Any refiling of nonforfeiture values or their methods of computation for a previously approved policy form which involves only a change in the interest rate or mortality table used to compute nonforfeiture values shall not require refiling of other provisions of the policy form. (19)(A) After March 14, 1985, a company may file with the Commissioner a written notice of the companys election to comply with this subsection after a specified date before January 1, 1989, which shall be the operative date of this subsection for the category of insurance for the company. (B) If a company makes no election for a category of insurance, the operative date for the category of insurance issued by the company shall be January 1, 1989. (f) For life insurance with future premiums determined by the insurance company based on estimates of future experience or for life insurance with minimum values that cannot be determined according to subsections (a) through (e) of this section, the following requirements shall be complied with: (1) The Commissioner shall be satisfied that the benefits are substantially as favorable to policyholders and insureds as the benefits required by subsections (a) through (e) of this section. (2) The Commissioner shall be satisfied that the benefits and the pattern of premiums do not mislead prospective policyholders or insureds. (3) The cash surrender values and paid-up nonforfeiture benefits shall not be less than the minimum values and benefits required by this section. (g)(1) Any cash surrender value and any paid-up nonforfeiture benefit, available after a default in the payment of a premium due other than on the policy anniversary, shall be calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary. (2) All values described in subsections (b) through (f) of this section may be calculated upon the assumption that any death benefit is payable at the end of the policy or contract year of death. (3) Besides paid-up term additions, the net value of paid-up additions shall be at least the amounts used to provide the additions. (4)(A) Notwithstanding subsection (b) of this section, additional benefits payable under the following conditions shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits under this section: (i) For death or dismemberment by accident. (ii) For total and permanent disability. (iii) Reversionary annuity or deferred reversionary annuity benefits. (iv) Term insurance benefits provided by a rider or by a supplementary policy provision which if issued as a separate policy would not be under this section. (v) Term insurance on the lives of children under a policy on the life of a parent of the children if the term insurance expires before a childs age is 26, if the term insurance is uniform in amount after a childs age is 1, and if the term insurance has not been paid up because of the parents death. (vi) Other policy benefits in addition to life insurance, endowment benefits, and premiums for the additional benefits. (B) No additional benefits described in paragraph (4)(A) of this subsection shall be required in paid-up nonforfeiture benefits. (h)(1) This subsection shall apply to policies issued after December 31, 1986. (2) For uniform amounts of insurance, a cash surrender value available after a default on a premium due on a policy anniversary shall not differ by more than 1/5 of 1% of the amount of insurance from the sum of the following: (A) Either zero or the basic cash value, whichever is greater. (B) The present value of existing paid-up additions exceeding policy indebtedness to the company. (3) For insurance amounts not treated in paragraph (2) of this subsection, a cash surrender value available after a default on a premium due on a policy anniversary shall not differ by more than 1/5 of 1% of the average insurance amounts at the beginning of the first 10 policy years from the sum of the following: (A) Either zero or the basic cash value, whichever is greater. (B) The present value of existing paid-up additions exceeding policy indebtedness to the company. (4)(A) Except as provided in subparagraphs (B) and (C) of this paragraph, the basic cash value shall equal the present value at the policy anniversary of the future guaranteed benefits exceeding the present value on nonforfeiture factors corresponding with premiums due after the eve of the anniversary. (B) The future guaranteed benefits used to determine the basic cash value excludes existing paid-up additions and, where there has been no default in premium payments, would be computed without deducting indebtedness to the company. (C) The basic cash value for supplemental life insurance, annuity benefits, or family coverage shall not be affected differently than cash surrender values described in subsections (b) and (d) of this section. (5)(A) The nonforfeiture factor for a policy year shall be a percentage of the adjusted premium for the policy year. (B) Except as provided in paragraph (6) of this subsection, the adjusted premium percentage shall comply with the following: (i) Except as provided in subparagraph (B)(ii) of this paragraph, the percentage cannot change during policy years between the 2nd policy anniversary and the 5th policy anniversary. (ii) Unless the 5th anniversary precedes an anniversary when a cash surrender value without paid-up additions and without indebtedness deductions equal at least 1/5 of 1% of the amount described in subparagraph (iii) of this paragraph, the percentage cannot change during policy years between the 2nd anniversary and an anniversary with a cash surrender value, without the additions and the deductions, equaling at least 1/5 of 1% of the subparagraph (iii) amount. (iii) The average amount of insurance at the beginning of the first 10 policy years. (iv) After the latest anniversary referred to in subparagraph (B)(ii) of this paragraph, or the 5th policy anniversary if later, no percentage may apply to fewer than 5 consecutive policy years. (6) The basic cash value shall exceed the amount that would result in the paragraph (4) formula by replacing the nonforfeiture factors with adjusted premiums. (7)(A) Adjusted premiums and present values shall be calculated on the mortality and interest rate bases permitted by the Life Insurance Amendments Reform Act of 1984. (B) The cash surrender values all include endowment benefits under the policy. (8)(A) Except for a defaulted premium due on a policy anniversary, a cash surrender value and a paid-up nonforfeiture benefit arising from a premium default shall be determined consistently with subsections (a) through (g) of this section. (B) The cash surrender values and the paid up nonforfeiture benefits granted with additional benefits shall conform with this subsection. (i)(1) After February 19, 1948, a company, in writing, may inform the Commissioner of the companys election to comply with this section after an expressly selected date before January 1, 1950. (2) After filing the notice described in paragraph (1) of this subsection, this section shall govern the policies and the contracts issued by the company after the date. (3) Except as provided in paragraph (4) of this subsection and if a company does not choose a date, then, beginning January 1, 1950, this section shall govern the company. (4) Subsection (d)(6) and (7) of this section and subsection (e) of this section expressly establish dates when those provisions govern a company. (j)(1) This section shall not apply to the following: (A) Reinsurance. (B) Group insurance. (C) Pure endowment. (D) Annuity or reversionary annuity contract. (E) Uniform amounts of term policy, with no guaranteed nonforfeiture or endowment benefits and with no renewal of guaranteed nonforfeiture or endowment benefits, for a term that lasts no more than 20 years and that expires before the insured becomes age 71, and with premiums payable throughout the policy term. (F) Decreasing amounts of term policy with no guaranteed nonforfeiture or endowment benefits, with adjusted premiums under subsections (d) and (e) of this section exceeded by adjusted premiums for uniform amounts of term policy, for a term that lasts no more than 20 years and that expires before the insured becomes age 71, and for a policy issued at the same age and for the same initial amount of insurance as originally provided by the policy. (G) A policy with guaranteed nonforfeiture or endowment benefits with no cash value or present value of a paid-up nonforfeiture benefit at the beginning of a policy year exceeding 2 1/2% of the amount of insurance at the beginning of the policy year. (H) A policy delivered outside the District of Columbia by an agent of the company. (2) For this section, the expiration age for joint term life insurance shall be the age of the oldest life when the insurance expires. (k) For the purposes of this section, the term "operative date of the valuation manual" means the valuation as described in  31-4701.  (June 19, 1934, ch. 672, ch. V,  5b; Feb. 19, 1948, 62 Stat. 30, ch. 66,  4; June 27, 1960, 74 Stat. 228, Pub. L. 86-530,  2; Oct. 3, 1962, 76 Stat. 712, Pub. L. 87-738,  2; Oct. 13, 1978, D.C. Law 2-120,  6 to 8, 25 DCR 1519; Mar. 14, 1985, D.C. Law 5-160,  3(f), 32 DCR 39; Feb. 24, 1987, D.C. Law 6-192,  25(e)-(g), 33 DCR 7836; May 21, 1997, D.C. Law 11-268,  10(j), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  23(a), 45 DCR 745; Apr. 11, 2019, D.C. Law 22-286,  2(b), 66 DCR 1637.)  Prior Codifications 1981 Ed.,  35-507. 1973 Ed.,  35-705b. Section References This section is referenced in  31-4701,  31-4703,  31-4705.01,  31-4705.04, and  31-4722. References in Text The Life Insurance Amendments Reform Act of 1984, referred to in subparagraph (A) of paragraph (7) of subsection (h), is D.C. Law 5-160, codified primarily within Chapters 43, 44, and 47 of Title 31.
 314705.03. Standard nonforfeiture law  Individual deferred annuities. (a) This section shall not apply to any reinsurance, group annuity purchased under a retirement plan or plan of deferred compensation established or maintained by an employer (including a partnership or sole proprietorship) or by an employee organization, or by both, other than a plan providing individual retirement accounts of individual retirement annuities under  408 of the Internal Revenue Code of 1954 (88 Stat. 959;  408 of Title 26, United States Code), as now or hereafter amended, premium deposit fund, variable contract, immediate annuity, any deferred annuity contract after annuity payments have commenced, or reversionary annuity, nor to any contract which shall be delivered outside the District of Columbia through an agent or other representative of the company issuing the contract. (b)(1) In the case of contracts issued on or after the operative date of this section as defined in subsection (k) of this section, no contract of annuity, except as stated in subsection (a) of this section, shall be delivered or issued for delivery in the District of Columbia unless it contains in substance the following provisions, or corresponding provisions which in the opinion of the Commissioner are at least as favorable to the contract holder: (A) That upon cessation of payment of considerations under a contract, the company will grant a paid-up annuity benefit on a plan stipulated in the contract of such value as is specified in subsections (d), (e), (f), (g), and (i) of this section; (B) If a contract provides for a lump-sum settlement at maturity, or at any other time, that upon surrender of the contract at or prior to the commencement of any annuity payments, the company will pay in lieu of any paid-up annuity benefit as cash surrender benefit of such amount as is specified in subsections (d), (e), (g), and (i) of this section. The company shall reserve the right to defer the payment of such cash surrender benefit for a period of 6 months after demand therefor with surrender of the contract; (C) A statement of the mortality table, if any, and interest rates used in calculating any minimum paid-up annuity, cash surrender or death benefits that are guaranteed under the contract, together with sufficient information to determine the amounts of such benefits; and (D) A brief and general statement of the method to be used in calculating any paid-up annuity, cash surrender or death benefits that may be available under the contract and an explanation of the manner in which such benefits are altered by the existence of any additional amounts credited by the company to the contract, any indebtedness to the company on the contract or any prior withdrawals from or partial surrenders of the contract. (2) Notwithstanding the requirements of this section, any deferred annuity contract may provide that if no considerations have been received under a contract for a period of 2 full years and the portion of the paid-up annuity benefit at maturity on the plan stipulated in the contract arising from considerations paid prior to such period would be less than $20 monthly, the company may at its option terminate such contract by payment in cash of the then present value of such portion of the paid-up annuity benefit, calculated on the basis of the mortality table, if any, and interest rate specified in the contract for determining the paid-up annuity benefit, and by such payment shall be relieved of any further obligation under such contract. (c) The minimum values as specified in subsections (d), (e), (f), (g), and (i) of this section of any paid-up annuity, cash surrender or death benefits available under an annuity contract shall be based upon minimum nonforfeiture amounts as defined in this subsection: (1)(A) With respect to contracts providing for flexible considerations, the minimum nonforfeiture amount at any time at or prior to the commencement of any annuity payments shall be equal to an accumulation up to such time at a rate of interest of 1.5% per year of percentages of the net considerations (as hereinafter defined) paid prior to such time, decreased by the sum of: (i) Any prior withdrawals from or partial surrender of the contract accumulated at a rate of interest of 1.5% per year; and (ii) The amount of any indebtedness to the company on the contract, including interest due and accrued; and increased by any existing additional amounts credited by the company to the contract; (A-i) Notwithstanding the interest rate of 1.5% per year used to calculate the minimum nonforfeiture amount under subparagraph (A) of this paragraph, the Mayor shall issue regulations which shall set forth the computation of the interest rate used to determine the minimum nonforfeiture amount. The regulations shall apply to any contract issued on or after the effective date of the regulations. (B) The net considerations for a given contract year used to define the minimum nonforfeiture amount shall be an amount not less than 0 and shall be equal to the corresponding gross considerations credited to the contract during that contract year less an annual contract charge of $30 and less a collection charge of $1.25 per consideration credited to the contract during that contract year. The percentages of net considerations shall be 65% of the net consideration for the 1st contract year and 87 1/2% of the net considerations for the 2nd and later contract years. Notwithstanding the provisions of the preceding sentence, the percentage shall be 65% of the portion of the total net consideration for any renewal contract year which exceeds by not more than 2 times the sum of those portions of the net considerations in all prior contract years for which the percentage was 65%; (2) With respect to contracts providing for fixed scheduled considerations, minimum nonforfeiture amounts shall be calculated on the assumption that considerations are paid annually in advance and shall be defined as for contracts with flexible considerations which are paid annually with 2 exceptions: (A) The portion of the net consideration for the 1st contract year to be accumulated shall be the sum of 65% of the net consideration for the 1st contract year plus 22 1/2% of the excess of the net consideration for the 1st contract year over the lesser of the net considerations for the 2nd and 3rd contract years; and (B) The annual contract charge shall be the lesser of $30 or 10% of the gross annual consideration; (3) With respect to contracts providing for a single consideration, minimum nonforfeiture amounts shall be defined as for contracts with flexible considerations except that the percentage of net consideration used to determine the minimum nonforfeiture amount shall be equal to 90% and the net consideration shall be the gross consideration less a contract charge of $75. (d) Any paid-up annuity benefit available under a contract shall be such that its present value on the date annuity payments are to commence is at least equal to the minimum nonforfeiture amount on that date. Such present value shall be computed using the mortality table, if any, and the interest rate specified in the contract for determining the minimum paid-up annuity benefits guaranteed in the contract. (e) For contracts which provide cash surrender benefits, such cash surrender benefits available prior to maturity shall not be less than the present value as of the date of surrender of that portion of the maturity value of the paid-up annuity benefit which would be provided under the contract at maturity arising from considerations paid prior to the time of cash surrender reduced by the amount appropriate to reflect any prior withdrawals from or partial surrenders of the contract, such present value being calculated on the basis of an interest rate not more than 1 percent higher than the interest rate specified in the contract for accumulating the net considerations to determine such maturity value, decreased by the amount of any indebtedness to the company on the contract, including interest due and accrued, and increased by any existing additional amounts credited by the company to the contract. In no event shall any cash surrender benefit be less than the minimum nonforfeiture amount at that time. The death benefit under such contracts shall be at least equal to the cash surrender benefit. (f) For contracts which do not provide cash surrender benefits, the present value of any paid-up annuity benefit available as a nonforfeiture option at any time prior to maturity shall not be less than the present value of that portion of the maturity value of the paid-up annuity benefit provided under the contract arising from considerations paid prior to the time the contract is surrendered in exchange for, or changed to, a deferred paid-up annuity, such present value being calculated for the period prior to the maturity date on the basis of the interest rate specified in the contract for accumulating the net considerations to determine such maturity value, and increased by any existing additional amounts credited by the company to the contract. For contracts which do not provide any death benefits prior to the commencement of any annuity payments, such present values shall be calculated on the basis of such interest rate and the mortality table specified in the contract for determining the maturity value of the paid-up annuity benefit. However, in no event shall the present value of the paid-up annuity benefit be less than the minimum nonforfeiture amount at the time. (g) For the purpose of determining the benefits calculated under subsections (e) and (f) of this section, in the case of annuity contracts under which an election may be made to have annuity payments commence at optional maturity dates, the maturity date shall be deemed to be the latest date for which election shall be permitted by the contract, but shall not be deemed to be later than the anniversary of the contract next following the annuitants 70th birthday or the 10th anniversary of the contract, whichever is later. (h) Any contract which does not provide cash surrender benefits or does not provide death benefits at least equal to the minimum nonforfeiture amount prior to the commencement of any annuity payments shall include a statement in a prominent place in the contract that such benefits are not provided. (i) Any paid-up annuity, cash surrender or death benefits available at any time, other than on the contract anniversary under any contract with fixed scheduled considerations, shall be calculated with allowance for the lapse of time and the payment of any scheduled considerations beyond the beginning of the contract year in which cessation of payment of considerations under the contract occurs. (j) For any contract which provides, within the same contract by rider or supplemental contract provision, both annuity benefits and life insurance benefits that are in excess of the greater of cash surrender benefits or a return of the gross considerations with interest, the minimum nonforfeiture benefits shall be equal to the sum of the minimum nonforfeiture benefits for the annuity portion and the minimum nonforfeiture benefits, if any, for the life insurance portion computed as if each portion were a separate contract. Notwithstanding the provisions of subsections (d), (e), (f), (g), and (i) of this section, additional benefits payable: (1) in the event of total and permanent disability; (2) as reversionary annuity or deferred reversionary annuity benefits; or (3) as other policy benefits additional to life insurance, endowment and annuity benefits; and considerations for all such additional benefits, shall be disregarded in ascertaining the minimum nonforfeiture amounts, paid-up annuity, cash surrender and death benefits that may be required by this section. The inclusion of such additional benefits shall not be required in any paid-up benefits, unless such additional benefits separately would require minimum nonforfeiture amounts, paid-up annuity, cash surrender and death benefits. (k) After October 13, 1978, any company may file with the Commissioner a written notice of its election to comply with the provisions of this section after a specified date which is no more than 2 years after such effective date. After the filing of such notice, then upon such specified date, which shall be the operative date of this section for such company, this section shall become operative with respect to annuity contracts thereafter issued by such company. If a company makes no such election, the operative date of this section for such company shall be 2 years after October 13, 1978.  (June 19, 1934, ch. 672, ch. V,  5c; as added Oct. 13, 1978, D.C. Law 2-120, 9(b), 25 DCR 1519; May 21, 1997, D.C. Law 11-268,  10, 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  23(b), 45 DCR 745; Feb. 6, 2004, D.C. Law 15-63,  2, 50 DCR 9301; Apr. 13, 2005, D.C. Law 15-354,  48, 52 DCR 2638; Mar. 2, 2007, D.C. Law 16-191,  48(c), 53 DCR 6794.)  Prior Codifications 1981 Ed.,  35-508. 1973 Ed.,  35-705c. Section References This section is referenced in  31-4705. Effect of Amendments D.C. Law 15-63, in subsec. (c)(1), substituted 1.5% per year for 3% per annum throughout subpar. (A), and added subpar. (A-1). D.C. Law 15-354, in subsec. (c)(1)(A)(A-i), substituted (A-I) Notwithstanding for (A-1) Notwithstanding. D.C. Law 16-191, in subsec. (c)(1)(A-i), validated a previously made technical correction. Emergency Legislation For temporary (90 day) amendment of section, see  2 of Standard Valuation and Nonforfeiture Emergency Amendment Act of 2002 (D.C. Act 14-565, December 23, 2002, 50 DCR 287). For temporary (90 day) amendment of section, see  2 of Standard Valuation and Nonforfeiture Congressional Review Emergency Amendment Act of 2003 (D.C. Act 15-37, March 24, 2003, 50 DCR 2772). For temporary (90 day) amendment of section, see  2 of Standard Valuation and Nonforfeiture Emergency Amendment Act of 2003 (D.C. Act 15-204, October 24, 2003, 50 DCR 9842). For temporary (90 day) amendment of section, see  2 of Standard Valuation Congressional Review Emergency Amendment Act of 2004 (D.C. Act 15-355, February 19, 2004, 51 DCR 2322). Temporary Legislation For temporary (225 day) amendment of section, see  2 of Standard Valuation and Nonforfeiture Temporary Amendment Act of 2002 (D.C. Law 14-278, April 2, 2003, law notification 50 DCR 3377). References in Text Section 408 of the Internal Revenue Code of 1954, referred to in subsection (a) has been retained under the Internal Revenue Code of 1986.
 314705.04. Loan provisions in policies. (a) In the case of ordinary policies issued prior to the operative date of  31-4705.02 (the standard nonforfeiture law) the loan value referred to in paragraph (6) of subsection (a) of  31-4703 shall be the reserve at the end of the current policy year on the policy and on the dividend additions thereto, if any, exclusive of the reserve on account of return premium insurance and of total and permanent disability and additional accidental death benefits, less a sum not more than 2 1/2% of the amount insured by the policy and of any dividend additions thereto (the policy to specify the mortality table and rate of interest adopted for computing such reserve). The policy may provide that such loan may be deferred for not exceeding 6 months after the application therefor is made. A company may, in lieu of the provision hereinabove permitted for the deduction from a loan on the policy of a sum not more than 2 1/2% of the amount insured by the policy and of any dividend additions thereto, insert in the policy a provision that one fifth of the said reserve may be deducted in case of a loan under the policy, or may provide therein that the deduction may be the said 2 1/2% or the one fifth of the said reserve at the option of the company. (b) In the case of ordinary policies issued on or after the operative date of  31-4705.02 (the standard nonforfeiture law) the loan value referred to in paragraph (6) of subsection (a) of  31-4703 shall be the cash surrender value at the end of the current policy year as required by  31-4705.02. The company shall reserve the right to defer such loan, except when made to pay premiums, for 6 months after application therefor is made.  (June 19, 1934, ch. 672, ch. V,  5c; Feb. 19, 1948, 62 Stat. 30, ch. 66,  4; redesignated  5d, Oct. 13, 1978, D.C. Law 2-120,  9(a), 25 DCR 1519.)  Prior Codifications 1981 Ed.,  35-509. 1973 Ed.,  35-705d. Section References This section is referenced in  31-4703. References in Text The operative date of  31-4705.02, referred to in subsections (a) and (b) of this section, was prescribed by  2 of the Act of October 13, 1962, 76 Stat. 712, Pub. L. 87-738, which was formerly codified as  35-507(g) (1981 Ed.). Section 35-507  31-4705.02, 2001 Ed. was rewritten effective March 14, 1985, and no longer contains the operative date language.
 314705. Annuity and pure endowment contracts; forms to be filed and approved; required provisions; applications, riders and endorsements. (a) On and after January 1, 1935, no annuity or pure endowment contract shall be issued or delivered in the District unless and until a copy of the form thereof has been filed with the Commissioner and formally approved by him. (b) Except in the case of a reversionary annuity, otherwise called a survivorship annuity, or an annuity contracted by an employer in behalf of his employees, no annuity or pure endowment contract shall be so issued or delivered in this District unless it contains, in substance, the following provisions: (1) A provision that there shall be a period of grace, either of 30 days or of 1 month, within which any stipulated payment to the company falling due after the 1st year may be made, subject, at the option of the company, to an interest charge thereon at a rate to be specified in the contract, but not exceeding 6 per centum per annum for the number of days of grace elapsing before such payment, during which period of grace the contract shall continue in full force; but in case a claim arises under the contract on account of death during the said period of grace before the overdue payment to the company or the deferred payments of the current contract year, if any, are made, the amount of such payments, with interest on any overdue payments, may be deducted from any amount payable under the contract in settlement; (2) If statements, other than those relating to age and identity, are required, as a condition of issuing the contract, a provision that the contract shall be incontestable after it has been in force during the lifetime of the person or each of the persons as to whom such statements are required, for a period of 2 years from its date of issue, except where stipulated payments to the company have not been made, and except for violation of the conditions of the contract relating to military or naval service in time of war, and at the option of the company, provisions relative to benefits in the event of total and permanent disability and provisions which grant insurance specifically against death by accident may also be excepted; (3) A provision that such contract shall constitute the entire contract between the parties, but if the company desires to make the application a part of the contract it may do so, provided a copy of such application shall be endorsed upon or attached to such contract, when issued, and in such case such contract shall contain a provision that it, together with the application therefor, shall constitute the entire contract between the parties; (4)(A) A provision that if the age of the person or persons upon whose life or lives the contract is based, or of any of them, has been misstated, the amount payable under the contract shall be such as the stipulated payments to the company would have purchased at the correct age or ages; or (B) Any overpayment or overpayments by the company, on account of misstatement of age, shall with interest thereon at a rate to be specified in the contract, but not exceeding 6 per centum per annum, be charged against the current or next-succeeding payment or payments to be made by the company under the contract; (5) If the contract is participating, a provision that the divisible surplus shall be apportioned annually and dividends shall be payable in cash or shall be applicable to any stipulated payment or payments to the company under the contract; (6) A provision specifying the options available in the event of cessation of payment of considerations under the contract. In the case of contracts issued on or after the operative date of  31-4705.03 (the standard nonforfeiture law for individual deferred annuities), such options shall be in accordance with  31-4705.03. In the case of contracts issued prior to the operative date of  31-4705.03, such option shall provide that if the contract, after having been in force for 3 full years, shall, by its terms, lapse or become forfeited because any stipulated payment to the company shall not have been made, the reserve on such contract, computed according to the standard adopted by said company in accordance with this chapter, shall, after deducting one fifth of the said entire reserve, and any indebtedness to the company under the contract, be applied as a net single payment, according to said standard, for the purchase of a paid-up annuity or pure endowment contract, which may be nonparticipating and which shall be payable by the company under the same terms and conditions, except as to amount, as the original contract. For contracts issued prior to the operative date of  31-4705.03, a company may provide, in lieu of such paid-up values, for a paid-up annuity or pure endowment contract in an amount bearing the same proportion to the original annuity or pure endowment contract as the number of stipulated payments which shall have been made to the company shall bear to the total number of stipulated payments required to be made to the company under the contract, and if there be any indebtedness to the company under the contract, the amount of such paid-up annuity or pure endowment shall be reduced by an amount bearing the same proportion to such paid-up annuity or pure endowment as such indebtedness bears to the reserve on such paid-up annuity or pure endowment, computed according to the standard adopted by said company in accordance with this chapter; and (7) A provision that the contract may be reinstated at any time within 1 year from the date of default in making stipulated payments to the company, provided that all overdue stipulated payments and any indebtedness to the company on the contract shall be made or paid, with interest thereon at a rate to be specified in the contract, but not exceeding 6% per annum, payable annually. In cases where applicable a company may also include a requirement of evidence of insurability satisfactory to the company. (c) No contract for a reversionary annuity shall be so issued or delivered unless it contains in substance the following provisions: (1) Paragraphs (1), (2), (3) and (5) of subsection (b) of this section, except that under paragraph (1) of subsection (b) of this section, the company may, at its option, provide for an equitable reduction of the amount of the annuity payments in settlement of any overdue or deferred payments, in lieu of providing for a deduction of such payments from any amount payable upon a settlement under the contract; (2) A provision that, if the age of any of the persons upon whose lives the contract is based has been misstated, the amount payable under the contract shall be such as the stipulated payments to the company would have purchased at the correct ages; and (3) A provision that the contract may be reinstated at any time within 3 years from the date of default in making stipulated payments to the company, upon production of evidence of insurability satisfactory to the company, provided that all overdue payments and any indebtedness to the company on the contract shall be made or paid, with interest thereon at a rate to be specified in the contract, but not exceeding 6 per centum per annum, payable annually. (d) Any of the foregoing provisions or portions thereof not applicable to nonparticipating contracts nor to contracts for which a single stipulated payment to the company is made shall, to that extent, not be incorporated therein; and any such contract may be issued or delivered in this District, which, in the opinion of the Commissioner, contains provisions on any 1 or more of the several foregoing requirements, more favorable to the holder of the contract than hereinbefore required. (e) Nothing herein contained shall be construed to prevent a life company, which issues life insurance on a participating basis, from issuing annuities, reversionary annuities, or pure endowments on a nonparticipating basis. (f) Any such contract or any application, endorsement, or rider form used in connection therewith, issued in violation of this section, shall, nevertheless, be held valid, but shall be construed as provided in this section and when any provision in such contract, application, endorsement, or rider is in conflict with any provision of this section or with any other statutory provision, the rights, duties, and obligations of the company, of the holder of the contract and of the beneficiary or annuitant thereunder shall be governed by the provisions of this section. (g) The provisions of this section shall not apply to contracts of reinsurance nor to contracts for deferred annuities or reversionary annuities included in life insurance policies. (h) For the purposes of this section, application forms, rider forms, and endorsement forms for use in connection with any such contract, excepting riders or endorsements relating to the manner of distribution of benefits or to the reservation of rights and benefits under any such contract, and used at the request of the individual holders of such contracts, shall be deemed to be parts of such contract and shall require the approval of the Commissioner. No rider and no endorsement, except as stated above, shall be attached to or printed or stamped upon any such contract issued or delivered in the District until the form of such rider or endorsement has been filed with the Commissioner and formally approved by him.  (June 19, 1934, 48 Stat. 1161, ch. 672, ch. V,  5; Oct. 13, 1978, D.C. Law 2-120,  5, 25 DCR 1519; May 21, 1997, D.C. Law 11-268,  10(j), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-505. 1973 Ed.,  35-705. Cross References Copy of application, required delivery with policy, see  31-5203. False statements in application, effect, see  31-4314. Industrial policies, special provisions governing, see  31-4801 et seq. References in Text The operative date of  31-4705.03, referred to throughout paragraph (b)(6) of this section, is prescribed by  (9)(b) of D.C. Law 2-120. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4701.
 314706. Extension of time for payment of premiums. A life company may enter into subsequent agreements in writing with the insured, which need not be attached to the policy, to extend the time for the payment of any premium, or part thereof, upon condition that failure to comply with the terms of such agreement shall lapse the policy, as provided in said agreement or in the policy. Subject to such lien as may be created to secure any indebtedness contracted by the insured, in consideration of such extension, said agreement shall not impair any right existing under the policy.  (June 19, 1934, 48 Stat. 1164, ch. 672, ch. V,  6.)  Prior Codifications 1981 Ed.,  35-510. 1973 Ed.,  35-706.
 314707. Ascertainment of loan indebtedness. In ascertaining the indebtedness due upon policy or premium loans the interest, if not paid when due, shall be added to the principal of such loans and shall bear interest at the rate specified in the note or loan agreement.  (June 19, 1934, 48 Stat. 1164, ch. 672, ch. V,  7.)  Prior Codifications 1981 Ed.,  35-511. 1973 Ed.,  35-707.
 314708. Filing and approval of life policy forms. A policy of life insurance shall not be issued or delivered in the District until the form of the same has been filed with the Commissioner, nor if the Commissioner gives written notice, within 30 days of such filing, to the company proposing to issue it, showing wherein the form of such policy does not comply with the requirements of the laws of the District, provided that such action of the Commissioner shall be subject to review by a court of competent jurisdiction.  (June 19, 1934, 48 Stat. 1164, ch. 672, ch. V,  8; May 21, 1997, D.C. Law 11-268,  10, 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  23(c), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-512. 1973 Ed.,  35-708.
 314709. Policy provisions required by foreign government entities. The policies of a life company, not organized under the laws of the District, may contain any provisions prescribed by the laws of the state, territory, district, or country, under which the company is organized. The policies of a life company, organized under the laws of the District, may, when issued or delivered in any state, territory, district, or country, contain any provisions required by the laws of the state, territory, district, or country in which the same are issued or delivered, anything in this subdivision to the contrary notwithstanding.  (June 19, 1934, 48 Stat. 1164, ch. 672, ch. V,  9.)  Prior Codifications 1981 Ed.,  35-513. 1973 Ed.,  35-709.
 314710. Group policies  General requirements. [Repealed] Repealed.  (June 19, 1934, 48 Stat. 1164, ch. 672, ch. V,  10; July 2, 1940, 54 Stat. 726, ch. 518; July 12, 1950, 64 Stat. 330, ch. 457,  1; July 5, 1960, 74 Stat. 315, 316, Pub. L. 86-579,  1-5; Sept. 14, 1961, 75 Stat. 519, Pub. L. 87-249,  1; Oct. 23, 1962, 76 Stat. 1131, Pub. L. 87-855,  1, 2; Sept. 20, 1966, 80 Stat. 821, Pub. L. 89-594,  1; Aug. 14, 1973, 87 Stat. 304, Pub. L. 93-89, title III,  301; Feb. 23, 1980, D.C. Law 3-52,  3, 27 DCR 26; Dec. 10, 1981, D.C. Law 4-55,  2, 28 DCR 4649; May 10, 1989, D.C. Law 7-231,  43, 36 DCR 492; Feb. 5, 1994, D.C. Law 10-68,  31, 40 DCR 6311; Nov. 13, 2003, D.C. Law 15-39,  2302(a), 50 DCR 5668.)  Prior Codifications 1981 Ed.,  35-514. 1973 Ed.,  35-710. Effect of Amendments D.C. Law 15-39 repealed this section. Emergency Legislation For temporary (90 day) repeal of section, see  2202(a) of Fiscal Year 2004 Budget Support Emergency Act of 2003 (D.C. Act 15-105, June 20, 2003, 50 DCR 5613). For temporary (90 day) repeal of section, see  2202(a) of Fiscal Year 2004 Budget Support Congressional Review Emergency Act of 2003 (D.C. Act 15-149, September 22, 2003, 50 DCR 8360). Short Title Short title of title XXIII of Law 15-39: Section 2301 of D.C. Law 15-39 provided that title XXIII of the act may be cited as the Life Insurance Amendment Act of 2003. Change in Government This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 401 of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to a single Commissioner. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 314711.01. Group policies  Right to, and notice of, issuance of individual policy. (a) If any individual insured under a group life insurance policy hereafter delivered in the District becomes entitled under the terms of such policy to have an individual policy of life insurance issued to him without evidence of insurability, subject to making of application and payment of the 1st premium within the period specified in such policy, and if such individual is not given notice of the existence of such right at least 15 days prior to the expiration date of such period, then, in such event, the individual shall have an additional period within which to exercise such right, but nothing herein contained shall be construed to continue any insurance beyond the period provided in such policy. This additional period shall expire 15 days next after the individual is given such notice but in no event shall such additional period extend beyond 60 days next after the expiration date of the period provided in such policy. Written notice presented to the individual or mailed by the policyholder to the last known address of the individual or mailed by the insurer to the last known address of the individual as furnished by the policyholder shall constitute notice for the purpose of this subsection. (b) Except as provided in this chapter it shall be unlawful to make a contract of life insurance for a group in the District.  (June 19, 1934, ch. 672, ch. V,  11(a); as added July 12, 1950, 64 Stat. 333, ch. 457,  2.)  Prior Codifications 1981 Ed.,  35-516. 1973 Ed.,  35-711a.
 314711. Group policies  Required provisions. No policy of group life insurance shall be delivered in the District unless it contains in substance the following provisions, or provisions which in the opinion of the Commissioner are more favorable to the persons insured, or at least as favorable to the persons insured and more favorable to the policyholder; provided, however: (1) that the standard provisions required for individual life insurance policies shall not apply to group life insurance policies; (2) that if the group life insurance policy is on a plan of insurance other than the term plan, it shall contain a nonforfeiture provision or provisions which in the opinion of the Commissioner is or are equitable to the insured persons and to the policyholder, but nothing herein shall be construed to require that group life insurance policies contain the same nonforfeiture provisions as are required for individual life insurance policies; and (3) that subject to the terms of the policy any person insured under a group life insurance contract, whether issued before or after August 14, 1973, may make to any person, other than his employer, an absolute or collateral assignment of any or all the rights and benefits conferred on him by any provision of such policy or by law, including specifically, but not by way of limitation, any right to designate a beneficiary or beneficiaries thereunder and any right to have an individual policy issued upon termination either of employment or of said policy of group life insurance; but nothing herein shall be construed to have prohibited an insured from making an assignment of all or any part of his rights and privileges under the policy before August 14, 1973, and, subject to the terms of the policy, an assignment by an insured before or after August 14, 1973, is valid for the purposes of vesting in the assignee all rights and privileges so assigned, but without prejudice to the insurer on account of any payment it may make or individual policy it may issue prior to receipt of notice of the assignment: (1) A provision that the policyholder is entitled to a grace period of 31 days for the payment of any premium due except the first, during which grace period the death benefit coverage shall continue in force, unless the policyholder shall have given the insurer written notice of discontinuance in advance of the date of discontinuance and in accordance with the terms of the policy. The policy may provide that the policyholder shall be liable to the insurer for the payment of a pro rata premium for the time the policy was in force during such grace period; (2) A provision that the validity of the policy shall not be contested, except for nonpayment of premiums, after it has been in force for 2 years from its date of issue; and that no statement made by any person insured under the policy relating to his insurability shall be used in contesting the validity of the insurance with respect to which such statement was made after such insurance has been in force prior to the contest for a period of 2 years during such persons lifetime nor unless it is contained in a written instrument signed by him; (3) A provision that a copy of the application, if any, of the policyholder shall be attached to the policy when issued, that all statements made by the policyholder or by the persons insured shall be deemed representations and not warranties, and that no statement made by any person insured shall be used in any contest unless a copy of the instrument containing the statement is or has been furnished to such person or to his beneficiary; (4) A provision setting forth the conditions, if any, under which the insurer reserves the right to require a person eligible for insurance to furnish evidence of individual insurability satisfactory to the insurer as a condition to part or all of his coverage; (5) A provision specifying an equitable adjustment of premiums or of benefits or of both to be made in the event the age of a person insured has been misstated, such provision to contain a clear statement of the method of adjustment to be used; (6) A provision that any sum becoming due by reason of the death of the person insured shall be payable to the beneficiary designated by the person insured, subject to the provisions of the policy in the event there is no designated beneficiary as to all or any part of such sum living at the death of the person insured, and subject to any right reserved by the insurer in the policy and set forth in the certificate to pay at its option a part of such sum not exceeding $250 to any person appearing to the insurer to be equitably entitled thereto by reason of having incurred funeral or other expenses incident to the last illness or death of the person insured; (7) A provision that the insurer will issue to the policyholder for delivery to each person insured an individual certificate setting forth a statement as to the insurance protection to which he is entitled, to whom the insurance benefits are payable, and the rights and conditions set forth in paragraphs (8), (9), and (10) of this section; (8) A provision that if the insurance, or any portion of it, on a person covered under the policy ceases because of termination of employment or of membership in the class or classes eligible for coverage under the policy, such person shall be entitled to have issued to him by the insurer, without evidence of insurability, an individual policy of life insurance without disability or other supplementary benefits, provided application for the individual policy shall be made, and the 1st premium paid to the insurer, within 31 days after such termination: And provided further, that: (A) The individual policy shall, at the option of such person, be on any 1 of the forms, except term insurance, then customarily issued by the insurer at the age and for the amount applied for; (B) The individual policy shall be in an amount not in excess of the amount of life insurance which ceases because of such termination, provided that any amount of insurance which shall have matured on or before the date of such termination as an endowment payable to the person insured, whether in 1 sum or in installments or in the form of an annuity, shall not, for the purposes of this provision, be included in the amount which is considered to cease because of such termination; and (C) The premium on the individual policy shall be at the insurers then customary rate applicable to the form and amount of the individual policy, to the class of risk to which such person then belongs, and to his age attained on the effective date of the individual policy; (9) A provision that if the group policy terminates or is amended so as to terminate the insurance of any class of insured persons, every person insured thereunder at the date of such termination whose insurance terminates and who has been so insured for at least 5 years prior to such termination date shall be entitled to have issued to him by the insurer an individual policy of life insurance, subject to the same conditions and limitations as are provided by paragraph (8) of this section, except that the group policy may provide that the amount of such individual policy shall not exceed the smaller of: (A) The amount of the persons life insurance protection ceasing because of the termination or amendment of the group policy, less the amount of any life insurance for which he is or becomes eligible under any group policy issued or reinstated by the same or another insurer within 31 days after such termination; and (B) $2,000; and (10) A provision that if a person insured under the group policy dies during the period within which he would have been entitled to have an individual policy issued to him in accordance with subparagraph (8) or (9) of this section and before such an individual policy shall have become effective, the amount of life insurance which he would have been entitled to have issued to him under such individual policy shall be payable as a claim under the group policy, whether or not application for the individual policy or the payment of the 1st premium therefor has been made.  (June 19, 1934, 48 Stat. 1165, ch. 672, ch. V,  11; July 2, 1940, 54 Stat. 726, ch. 518; July 12, 1950, 64 Stat. 333, ch. 457,  2; Oct. 3, 1962, 76 Stat. 715, Pub. L. 87-740,  1; Aug. 14, 1973, 87 Stat. 304, Pub. L. 93-89, title III,  302; May 21, 1997, D.C. Law 11-268,  10(j), 44 DCR 1730; Nov. 13, 2003, D.C. Law 15-39,  2302(b), 50 DCR 5668.)  Prior Codifications 1981 Ed.,  35-515. 1973 Ed.,  35-711. Effect of Amendments D.C. Law 15-39, in the introductory paragraph, substituted (1) that the standard provisions required for individual life insurance policies shall not apply to group life insurance policies; (2) that if the group life insurance policy is on a plan of insurance other than the term plan, it shall contain a nonforfeiture provision or provisions which in the opinion of the Commissioner is or are equitable to the insured persons and to the policyholder, but nothing herein shall be construed to require that group life insurance policies contain the same nonforfeiture provisions as are required for individual life insurance policies; and (3) for (1) that subparagraphs (6) to (10) of this section, inclusive, shall not apply to policies issued to a creditor to insure debtors of such creditor, or to policies issued pursuant to paragraph (8) of  31-4710; (2) that the standard provisions required for individual life insurance policies shall not apply to group life insurance policies; (3) that if the group life insurance policy is on a plan of insurance other than the term plan, it shall contain a nonforfeiture provision or provisions which in the opinion of the Commissioner is or are equitable to the insured persons and to the policyholder, but nothing herein shall be construed to require that group life insurance policies contain the same nonforfeiture provisions as are required for individual life insurance policies; and (4). Cross References Copy of application, required delivery with policy, see  31-5203. False statements in application, effect, see  31-4314. Emergency Legislation For temporary (90 day) amendment of section, see  2202(b) of Fiscal Year 2004 Budget Support Emergency Act of 2003 (D.C. Act 15-105, June 20, 2003, 50 DCR 5613). For temporary (90 day) amendment of section, see  2202(b) of Fiscal Year 2004 Budget Support Congressional Review Emergency Act of 2003 (D.C. Act 15-149, September 22, 2003, 50 DCR 8360). Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4701.
 314712. Accident and sickness policies. (a) Filing requirements.  No policy of insurance against loss resulting from sickness or from bodily injury or death by accident, or both, shall be issued or delivered to any person in the District by any company organized under this or any other law of the District, or, if a foreign or alien company, authorized to do business in the District, including, but not limited to, all Health Maintenance Organizations, Group Hospitalization and Medical Services, Inc., all life insurance companies licensed to do business in the District, and all for-profit as well as nonprofit health insurers issuing or delivering expense incurred accident and sickness health insurance policies and certificates, until a copy of the form thereof, and of the classification of risks and the premium rates appertaining thereto, have been filed with the Commissioner; nor shall it be so issued or delivered until the expiration of 30 days after it has been so filed, unless the Commissioner shall sooner give his written approval thereto. If the Commissioner shall give written notice to the company which has filed such form that it does not comply with the requirements of law, specifying the reasons for his opinion, it shall be unlawful thereafter for any such insurer to issue any policy in such form. Rates filed with respect to a policy or certificate subject to the Reasonable Health Insurance Ratemaking Reform Act of 2010 [Chapters 30A, 31C, and 33A of this title] shall also comply with the provisions of such act. (b) Form.  (1) No policy of accident and sickness insurance shall be delivered or issued for delivery to any person in the District unless: (A) The entire money and other considerations therefor are expressed therein; (B) The time at which the insurance takes effect and terminates is expressed therein; (C) It purports to insure only 1 person, except that a policy may insure, originally or by subsequent amendment, upon the application of an adult member of a family who shall be deemed the policyholder, any 2 or more eligible members of that family, including spouse, domestic partner, dependent children or any children under a specified age which shall not exceed 19 years and any other person dependent upon the policyholder; (D) The style, arrangement, and overall appearance of the policy give no undue prominence to any portion of the text, and unless every printed portion of the text of the policy and of any endorsements or attached papers is plainly printed in lightfaced type of a style in general use, the size of which shall be uniform and not less than 10-point with a lowercase unspaced alphabet length not less than 120-point (the text shall include all printed matter except the name and address of the insurer, name or title of the policy, the brief description, if any, and captions and subcaptions); (E) The exceptions and reductions of indemnity are set forth in the policy and, except those which are set forth in subsection (c) of this section, are printed, at the insurers option, either included with the benefit provision to which they apply, or under an appropriate caption such as EXCEPTIONS, or EXCEPTIONS AND REDUCTIONS; provided, that, if an exception or reduction specifically applies only to a particular benefit of the policy, a statement of such exception or reduction shall be included with the benefit provision to which it applies; (F) Each such form, including riders and endorsements, shall be identified by a former number in the lower left-hand corner of the 1st page thereof; (G) It contains no provision purporting to make any portion of the charter, rules, constitution, or bylaws of the insurer a part of the policy unless such portion is set forth in full in the policy, except in the case of the incorporation of, or reference to, a statement of rates or classification of risks, or short-rate table filed with the Commissioner; (H) It contains no provision which would restrict access to psychologists or optometrists. When a policy relating to health insurance requires payment or reimbursement for services which may be performed by a duly licensed psychologist or optometrist, any person covered by the policy shall be free to select and have direct access to such psychologist or optometrist without supervision or referral by a practitioner of the healing art and shall be entitled, under the policy, to have payment or reimbursement made for services performed; (I) For a policy issued or renewed after April 15, 1995, it contains a provision covering a minor grandchild, niece, or nephew of an employee of the District of Columbia if the minor grandchild, niece, or nephew is under the primary care of the insured, and if the legal guardian of the minor grandchild, niece, or nephew, if other than the insured, is not covered by an accident or sickness policy. For the purposes of this paragraph, the term primary care means that the insured provides food, clothing, and shelter, on a regular and continuous basis, for the minor grandchild, niece, or nephew during the time that the District of Columbia public schools are in regular session; and (J) For a policy issued or renewed after April 15, 1996, it contains a provision covering a minor grandchild, niece, or nephew under the primary care of the insured, and if the legal guardian of the minor grandchild, niece, or nephew, if other than the insured, is not covered by an accident or sickness policy. For the purposes of this paragraph, the term primary care means that the insured provides food, clothing, and shelter, on a regular and continuous basis, for the minor grandchild, niece, or nephew during the time that the District of Columbia public schools are in regular session. (2) If any policy is issued by an insurer domiciled in the District for delivery to a person residing in another jurisdiction, and if the official having responsibility for the administration of the insurance laws of such other jurisdiction shall have advised the Commissioner that any such policy is not subject to approval or disapproval by such official, the Commissioner may by ruling require that such policy meet the standards set forth in paragraph (1) of this subsection and in subsection (c) of this section. (c) Provisions.  (1) Required provisions.  Except as provided in paragraph (3) of this subsection each such policy delivered or issued for delivery to any person in the District shall contain the provisions specified in this paragraph in the words in which the same appear in this paragraph; provided, however, that the insurer may, at its option, substitute for one or more of such provisions corresponding provisions of different wording approved by the Commissioner which are in each instance not less favorable in any respect to the insured or the beneficiary. Such provisions shall be preceded individually by the caption appearing in this paragraph or, at the option of the insurer, by such appropriate individual or group captions or subcaptions as the Commissioner may approve: (A) A provision as follows: ENTIRE CONTRACT; CHANGES: This policy, including the endorsements and the attached papers, if any, constitutes the entire contract of insurance. No change in this policy shall be valid until approved by an executive officer of the insurer and unless such approval be endorsed hereon or attached hereto. No agent has authority to change this policy or to waive any of its provisions.. (B)(i) A provision as follows: TIME LIMIT ON CERTAIN DEFENSES: After 3 years from the date of issue of this policy no misstatements, except fraudulent misstatements, made by the applicant in the application for such policy shall be used to void the policy or to deny a claim for loss incurred or disability (as defined in the policy) commencing after the expiration of such 3-year period.. (ii) (The foregoing policy provision shall not be so construed as to affect any legal requirement for avoidance of a policy or denial of a claim during such initial 3-year period, nor to limit the application of subparagraphs (A), (B), (C), (D), and (E) of paragraph (2) of this subsection in the event of misstatement with respect to age or occupation or other insurance.) (iii) A policy which the insured has the right to continue in force subject to its terms by the timely payment of premium until at least age 50 or in the case of a policy issued after age 44, for at least 5 years from its date of issue; may contain in lieu of the foregoing the following provision (from which the clause in parentheses may be omitted at the insurers option) under the caption INCONTESTABLE. After this policy has been in force for a period of 3 years during the lifetime of the insured (excluding any period during which the insured has a disability), it shall become incontestable as to the statements contained in the application. No claim for loss incurred or disability (as defined in the policy) commencing after 3 years from the date of issue of this policy shall be reduced or denied on the ground that a disease or physical condition not excluded from coverage by name or specific description effective on the date of loss had existed prior to the effective date of coverage of this policy. (C)(i) A provision as follows: GRACE PERIOD: A grace period of . . . . . . . . .(insert the last day of the month for which the premium is due for policies issued on a calendar month basis and a period not less than 31 days for all other policies) will be granted for the payment of each premium falling due after the 1st premium, during which grace period the policy shall continue in force.. (ii) A policy which contains a cancellation provision may add, at the end of the above provision, Subject to the right of the insurer to cancel in accordance with the cancellation provision hereof.. (iii) A policy in which the insurer reserves the right to refuse any renewal shall have, at the beginning of the above provision; Unless not less than 5 days prior to the premium due date the insurer has delivered to the insured or has mailed to his last address as shown by the records of the insurer written notice of its intention not to renew this policy beyond the period for which the premium has been accepted.. (D)(i) A provision as follows: REINSTATEMENT: If any renewal premium be not paid within the time granted the insured for payment, a subsequent acceptance of premium by the insurer or by any agent duly authorized by the insurer to accept such premium, without requiring in connection therewith an application for reinstatement, shall reinstate the policy; provided, however, that if the insurer or such agent requires an application for reinstatement and issues a conditional receipt for the premium tendered, the policy will be reinstated upon approval of such application by the insurer, or, lacking such approval, upon the 45th day following the date of such conditional receipt unless the insurer has previously notified the insured in writing of its disapproval of such application. The reinstated policy shall cover only loss resulting from such accidental injury as may be sustained after the date of reinstatement and loss due to such sickness as may begin more than 10 days after such date. In all other respects the insured and insurer shall have the same rights thereunder as they had under the policy immediately before the due date of the defaulted premium, subject to any provisions endorsed hereon or attached hereto in connection with the reinstatement. Any premium accepted in connection with a reinstatement shall be applied to a period for which premium has not been previously paid, but not to any period more than 60 days prior to the date of reinstatement.. (ii) The last sentence of the above provision may be omitted from any policy which the insured has the right to continue in force subject to its terms by the timely payment of premiums until at least age 50 or in the case of a policy issued after age 44, for at least 5 years from its date of issue. (E)(i) A provision as follows: NOTICE OF CLAIM: Written notice of claim must be given to the insurer within 20 days after the occurrence or commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible. Notice given by or on behalf of the insured or the beneficiary to the insurer at . . . . . . . . . . (insert the location of such office as the insurer may designate for the purpose), or to any authorized agent of the insurer, with information sufficient to identify the insured, shall be deemed notice to the insurer.. (ii) In a policy providing a loss-of-time benefit which may be payable for at least 2 years, an insurer may at its option insert the following between the 1st and 2nd sentences of the above provision: Subject to the qualifications set forth below, if the insured suffers loss of time on account of disability for which indemnity may be payable for at least 2 years, he shall, at least once in every 6 months after having given notice of claim, give to the insurer notice of continuance of said disability, except in the event of legal incapacity. The period of 6 months following any filing of proof by the insured or any payment by the insurer on account of such claim or any denial of liability in whole or in part by the insurer shall be excluded in applying this provision. Delay in the giving of such notice shall not impair the insureds right to any indemnity which would otherwise have accrued during the period of 6 months preceding the date on which such notice is actually given.. (F) A provision as follows: CLAIM FORMS: The insurer, upon receipt of a notice of claim, will furnish to the claimant such forms as are usually furnished by it for filing proofs of loss. If such forms are not furnished within 15 days after the giving of such notice the claimant shall be deemed to have complied with the requirements of this policy as to proof of loss upon submitting, within the time fixed in the policy for filing proofs of loss, written proof covering the occurrence, the character and the extent of the loss for which claim is made. (G) A provision as follows: PROOFS OF LOSS: Written proof of loss must be furnished to the insurer at its said office in case of claim for loss for which this policy provides any periodic payment contingent upon continuing loss within 90 days after the termination of the period for which the insurer is liable and in case of claim for any other loss within 90 days after the date of such loss. Failure to furnish such proof within the time required shall not invalidate nor reduce any claim if it was not reasonably possible to give proof within such time, provided such proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity, later than 1 year from the time proof is otherwise required.. (H) A provision as follows: TIME OF PAYMENT OF CLAIMS: Indemnities payable under this policy for any loss other than loss for which this policy provides any periodic payment will be paid immediately upon receipt of due written proof of such loss. Subject to due written proof of loss, all accrued indemnities for loss for which this policy provides periodic payment will be paid . . . . . . . . . . (insert period for payment which must not be less frequently than monthly) and any balance remaining unpaid upon the termination of liability will be paid immediately upon receipt of due written proof.. (I)(i) A provision as follows: PAYMENT OF CLAIMS: Indemnity for loss of life will be payable in accordance with the beneficiary designation and the provisions respecting such payment which may be prescribed herein and effective at the time of payment. If no such designation or provision is then effective, such indemnity shall be payable to the estate of the insured. Any other accrued indemnities unpaid at the insureds death may, at the option of the insurer, be paid either to such beneficiary or to such estate. All other indemnities will be payable to the insured.. (ii) The following provisions, or either of them, may be included with the foregoing provision at the option of the insurer: If any indemnity of this policy shall be payable to the estate of the insured, or to an insured or beneficiary who is a minor or otherwise not competent to give a valid release, the insurer may pay such indemnity up to an amount not exceeding $. . . . . . . . . . (insert an amount which shall not exceed $1,000), to any relative by blood or connection by marriage or domestic partnership of the insured or beneficiary who is deemed by the insurer to be equitably entitled thereto. Any payment made by the insurer in good faith pursuant to this provision shall fully discharge the insurer to the extent of such payment. Subject to any written direction of the insured in the application or otherwise all or a portion of any indemnities provided by this policy on account of hospital, nursing, medical, or surgical services may, at the insurers option and unless the insured requests otherwise in writing not later than the time of filing proofs of such loss, be paid directly to the hospital or person rendering such services; but it is not required that the service be rendered by a particular hospital or person.. (J) A provision as follows: PHYSICAL EXAMINATIONS AND AUTOPSY: The insurer at its own expense shall have the right and opportunity to examine the person of the insured when and as often as it may reasonably require during the pendency of a claim hereunder and to make an autopsy in case of death where it is not forbidden by law.. (K) A provision as follows: LEGAL ACTIONS: No action at law or in equity shall be brought to recover on this policy prior to the expiration of 60 days after written proof of loss has been furnished in accordance with the requirements of this policy. No such action shall be brought after the expiration of 3 years after the time written proof of loss is required to be furnished.. (L)(i) A provision as follows: CHANGE OF BENEFICIARY: Unless the insured makes an irrevocable designation of beneficiary, the right to change of beneficiary is reserved to the insured and the consent of the beneficiary or beneficiaries shall not be requisite to surrender or assignment of this policy or to any change of beneficiary or beneficiaries, or to any other changes in this policy.. (ii) The 1st clause of this provision, relating to the irrevocable designation of beneficiary, may be omitted at the insurers option. (2) Other provisions.  Except as provided in paragraph (3) of this subsection, no such policy delivered or issued for delivery to any person in the District shall contain provisions respecting the matters set forth below unless such provisions are in the words in which the same appear in this paragraph; provided, however, that the insurer may, at its option, use in lieu of any such provision a corresponding provision of different wording approved by the Commissioner which is not less favorable in any respect to the insured or the beneficiary. Any such provision contained in the policy shall be preceded individually by the appropriate caption appearing in this paragraph or, at the option of the insurer, by such appropriate individual or group captions or subcaptions as the Commissioner may approve: (A) A provision as follows: CHANGE OF OCCUPATION: If the insured be injured or contract sickness after having changed his occupation to one classified by the insurer as more hazardous than that stated in this policy or while doing for compensation anything pertaining to an occupation so classified, the insurer will pay only such portion of the indemnities provided in this policy as the premium paid would have purchased at the rates and within the limits fixed by the insurer for such more hazardous occupation. If the insured changes his occupation to one classified by the insurer as less hazardous than that stated in this policy, the insurer, upon receipt of proof of such change of occupation, will reduce the premium rate accordingly, and will return the excess pro rata unearned premium from the date of change of occupation or from the policy anniversary date immediately preceding receipt of such proof, whichever is the more recent. In applying this provision, the classification of occupational risk and the premium rates shall be such as have been last filed by the insurer prior to the occurrence of the loss for which the insurer is liable or prior to date of proof of change in occupation with the official having supervision of insurance in the jurisdiction where the insured resided at the time this policy was issued; but if such filing was not required, then the classification of occupational risk and the premium rates shall be those last made effective by the insurer in such jurisdiction prior to the occurrence of the loss or prior to the date of proof of change in occupation.. (B) A provision as follows: MISSTATEMENT OF AGE: If the age of the insured has been misstated, all amounts payable under this policy shall be such as the premium paid would have purchased at the correct age.. (C)(i) A provision as follows: OTHER INSURANCE IN THIS INSURER: If an accident or sickness or accident and sickness policy or policies previously issued by the insurer to the insured be in force concurrently herewith, making the aggregate indemnity for . . . . . . . . . . (insert type of coverage or coverages) in excess of $. . . . . . . . . . (insert maximum limit of indemnity or indemnities) the excess insurance shall be void and all premiums paid for such excess shall be returned to the insured or to his estate.. (ii) Or, in lieu thereof: Insurance effective at any one time on the insured under a like policy or policies in this insurer is limited to the one such policy elected by the insured, his beneficiary or his estate, as the case may be, and the insurer will return all premiums paid for all other such policies.. (D)(i) A provision as follows: INSURANCE WITH OTHER INSURERS: If there be other valid coverage, not with this insurer, providing benefits for the same loss on a provision of service basis or on an expense incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability under any expense incurred coverage of this policy shall be for such proportion of the loss as the amount which would otherwise have been payable hereunder plus the total of the like amounts under all such other valid coverages for the same loss of which this insurer had notice bears to the total like amounts under all valid coverages for such loss, and for the return of such portion of the premiums paid as shall exceed the pro rata portion for the amount so determined. For the purpose of applying this provision when other coverage is on a provision of service basis, the like amount of such other coverage shall be taken as the amount which the services rendered would have cost in the absence of such coverage.. (ii) If the foregoing policy provision is included in a policy which also contains the next following policy provision there shall be added to the caption of the foregoing provision the phrase EXPENSE INCURRED BENEFITS. The insurer may, at its option, include in this provision a definition of other valid coverage, approved as to form by the Commissioner, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this or any other jurisdiction of the United States or any province of Canada, and by hospital or medical service organizations, and to any other coverage the inclusion of which may be approved by the Commissioner. In the absence of such definition such term shall not include group insurance, automobile medical payments insurance, or coverage provided by hospital or medical service organizations or by union welfare plans or employer or employee benefit organizations. For the purpose of applying the foregoing policy provision with respect to any insured, any amount of benefit provided for such insured pursuant to any compulsory benefit statute (including any workmens compensation or employers liability statute) whether provided by a governmental agency or otherwise shall in all cases be deemed to be other valid coverage of which the insurer has had notice. In applying the foregoing policy provision no 3rd party liability coverage shall be included as other valid coverage. (E)(i) A provision as follows: INSURANCE WITH OTHER INSURERS: If there be other valid coverage, not with this insurer, providing benefits for the same loss on other than an expense-incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability for such benefits under this policy shall be for such proportion of the indemnities otherwise provided hereunder for such loss as the like indemnities of which the insurer had notice (including the indemnities under this policy) bear to the total amount of all like indemnities for such loss, and for the return of such portion of the premium paid as shall exceed the pro rata portion for the indemnities thus determined.. (ii) If the foregoing policy provision is included in a policy which also contains the next preceding policy provision there shall be added to the caption of the foregoing provision the phrase OTHER BENEFITS. The insurer may, at its option, include in this provision a definition of other valid coverage, approved as to form by the Commissioner, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this or any other jurisdiction of the United States or any province of Canada, and to any other coverage the inclusion of which may be approved by the Commissioner. In the absence of such definition such term shall not include group insurance, or benefits provided by union welfare plans or by employer or employee benefit organizations. For the purpose of applying the foregoing policy provision with respect to any insured, any amount of benefit provided for such insured pursuant to any compulsory benefit statute (including any workmens compensation or employers liability statute) whether provided by a governmental agency or otherwise shall in all cases be deemed to be other valid coverage of which the insurer has had notice. In applying the foregoing policy provision no 3rd-party liability coverage shall be included as other valid coverage. (F)(i) A provision as follows: RELATION OF EARNINGS TO INSURANCE: If the total monthly amount of loss-of-time benefits promised for the same loss under all valid loss-of-time coverage upon the insured, whether payable on a weekly or monthly basis, shall exceed the monthly earnings of the insured at the time disability commenced or his average monthly earnings for the period of 2 years immediately preceding a disability for which claim is made, whichever is the greater, the insurer will be liable only for such proportionate amount of such benefits under this policy as the amount of such monthly earnings or such average monthly earnings of the insured bears to the total amount of monthly benefits for the same loss under all such coverage upon the insured at the time such disability commences and for the return of such part of the premiums paid during such 2 years as shall exceed the pro rata amount of the premiums for the benefits actually paid hereunder; but this shall not operate to reduce the total monthly amount of benefits payable under all such coverage upon the insured below the sum of $200 or the sum of the monthly benefits specified in such coverages, whichever is the lesser, nor shall it operate to reduce benefits other than those payable for loss of time.. (ii) The foregoing policy provision may be inserted only in a policy which the insured has the right to continue in force subject to its terms by the timely payment of premiums until at least age 50 or in the case of a policy issued after age 44, for at least 5 years from its date of issue. The insurer may, at its option, include in this provision a definition of valid loss-of-time coverage, approved as to form by the Commissioner, which definition shall be limited in subject matter to coverage provided by governmental agencies or by organizations subject to regulation by insurance law or by insurance authorities of this or any other jurisdiction of the United States or any province of Canada, or to any other coverage the inclusion of which may be approved by the Commissioner or any combination of such coverages. In the absence of such definition such term shall not include any coverage provided for such insured pursuant to any compulsory benefit statute (including any workmens compensation or employers liability statute), or benefits provided by union welfare plans or by employer or employee benefit organizations; (G) A provision as follows: UNPAID PREMIUM: Upon the payment of a claim under this policy, any premium then due and unpaid or covered by any note or written order may be deducted therefrom.. (H) A provision as follows: CANCELLATION: The insurer may cancel this policy at any time by written notice delivered to the insured, or mailed to his last address as shown by the records of the insurer, stating when, not less than 5 days thereafter, such cancellation shall be effective; and after the policy has been continued beyond its original term the insured may cancel this policy at any time by written notice delivered or mailed to the insurer, effective upon receipt or on such later date as may be specified in such notice. In the event of cancellation, the insurer will return promptly the unearned portion of any premium paid. If the insured cancels, the earned premium shall be computed by the use of the short-rate table last filed with the official having supervision of insurance in the jurisdiction where the insured resided when the policy was issued. If the insurer cancels, the earned premium shall be computed pro rata. Cancellation shall be without prejudice to any claim originating prior to the effective date of cancellation.. (I) A provision as follows: CONFORMITY WITH STATE STATUTES: Any provision of this policy which, on its effective date, is in conflict with the statutes of the jurisdiction in which the insured resides on such date is hereby amended to conform to the minimum requirements of such statutes.. (J) A provision as follows: ILLEGAL OCCUPATION: The insurer shall not be liable for any loss to which a contributing cause was the insureds commission of or attempt to commit a felony or to which a contributing cause was the insureds being engaged in an illegal occupation.. (K) Repealed. (3) Inapplicable or inconsistent provisions.  If any provision of this subsection is in whole or in part inapplicable to or inconsistent with the coverage provided by a particular form of policy the insurer, with the approval of the Commissioner, shall omit from such policy any inapplicable provision or part of a provision, and shall modify any inconsistent provision or part of the provision in such manner as to make the provision as contained in the policy consistent with the coverage provided by the policy. (4) Order.  The provisions which are the subject of paragraphs (1) and (2) of this subsection, or any corresponding provisions which are used in lieu thereof in accordance with such paragraphs, shall be printed in the consecutive order of the provisions in such paragraphs or, at the option of the insurer, any such provision may appear as a unit in any part of the policy, with other provisions to which it may be logically related, provided the resulting policy shall not be in whole or in part unintelligible, uncertain, ambiguous, abstruse, or likely to mislead a person to whom the policy is offered, delivered, or issued. (5) Third-party rights.  The word insured, as used in this section, shall not be construed as preventing a person other than the insured with a proper insurable interest from making application for and owning a policy covering the insured or from being entitled under such a policy to any indemnities, benefits, and rights provided therein. (6) Rules and regulations.  The Council of the District of Columbia may make such reasonable rules and regulations concerning the procedure for the filing or submission of policies subject to this section as are necessary, proper or advisable to the administration of this section. This provision shall not abridge any other authority granted the Commissioner by law. (d) Conforming to statutory requirements.  (1) Provisions not subject to requirements.  No policy provision which is not subject to subsection (c) of this section shall make a policy, or any portion thereof, less favorable in any respect to the insured or the beneficiary then the provisions thereof which are subject to this section. (2) Violations and conflicts.  A policy delivered or issued for delivery to any person in the District in violation of this section shall be held valid but shall be construed as provided in this section. When any provision in a policy subject to this section is in conflict with any provision of this section, the rights, duties, and obligations of the insurer, the insured, and the beneficiary shall be governed by the provisions of this section. (e) Applications.  (1) The insured shall not be bound by any statement made in an application for a policy unless a copy of such application is attached to or endorsed on the policy when issued as a part thereof. If any such policy delivered or issued for delivery to any person in the District shall be reinstated or renewed, and the insured or the beneficiary or assignee of such policy shall make written request to the insurer for a copy of the application, if any, for such reinstatement or renewal, the insurer shall, within 15 days after the receipt of such request at its home office or any branch office of the insurer, deliver or mail to the person making such request, a copy of such application. If such copy shall not be so delivered or mailed, the insurer shall be precluded from introducing such application as evidence in any action or proceeding based upon or involving such policy or its reinstatement or renewal. (2) No alteration of any written application for any such policy shall be made by any person other than the applicant without his written consent, except that insertions may be made by the insurer, for administrative purposes only, in such manner as to indicate clearly that such insertions are not to be ascribed to the applicant. (3) The falsity of any statement in the application for any policy covered by this section may not bar the right to recovery thereunder unless such false statement materially affected either the acceptance of the risk or the hazard assumed by the insurer. (f) Waiver of insurers rights.  The acknowledgment by any insurer of the receipt of notice given under any policy covered by this section, or the furnishing of forms for filing proofs of loss, or the acceptance of such proofs, or the investigation of any claim thereunder shall not operate as a waiver of any of the rights of the insurer in defense of any claim arising under such policy. (g) Limitations on coverage.  If any such policy contains a provision establishing, as an age limit or otherwise, a date after which the coverage provided by the policy will not be effective, and if such date falls within a period for which premium is accepted by the insurer or if the insurer accepts a premium after such date, the coverage provided by the policy will continue in force subject to any right of cancellation until the end of the period for which premium has been accepted. In the event the age of the insured has been misstated and if, according to the correct age of the insured, the coverage provided by the policy would not have become effective, or would have ceased prior to the acceptance of such premium or premiums, then the liability of the insurer shall be limited to the refund, upon request, of all premiums paid for the period not covered by the policy. (h) Exceptions.  Except as provided in  31-4724, nothing in this section shall apply to or affect: (1) Repealed. (2) Life insurance, endowment or annuity contracts, or contracts supplemental thereto which contain only such provisions relating to accident and sickness insurance as: (A) Provide additional benefits in case of death or dismemberment or loss of sight by accident; or (B) Operate to safeguard such contracts against lapse, or to give a special surrender value or special benefit or an annuity in the event that the insured or annuitant shall come to have a total and permanent disability, as defined by the contract or supplemental contract; provided, that no such supplemental contract shall be issued or delivered to any person in the District unless and until a copy of the form thereof has been submitted to and approved by the Commissioner under such reasonable rules and regulations as the Council of the District of Columbia shall make concerning the provisions in such contracts and their submission to and approval by him.  (June 19, 1934, 48 Stat. 1166, ch. 672, ch. V,  12; July 12, 1950, 64 Stat. 335, ch. 457,  3; July 16, 1953, 67 Stat. 162, ch. 196,  1; Feb. 19, 1976, D.C. Law 1-46,  2, 22 DCR 4680; Feb. 11, 1982, D.C. Law 4-66,  2(a), 28 DCR 5040; Aug. 25, 1994, D.C. Law 10-158,  2, 41 DCR 4881; Apr. 18, 1996, D.C. Law 11-110,  36, 43 DCR 530; May 21, 1997, D.C. Law 11-268,  10(j), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  23(d), 45 DCR 745; Mar. 8, 2007, D.C. Law 16-247,  2, 54 DCR 620; Apr. 24, 2007, D.C. Law 16-305,  43, 53 DCR 6198; Sept. 12, 2008, D.C. Law 17-231,  28(c), 55 DCR 6758; Mar. 25, 2009, D.C. Law 17-353,  199, 56 DCR 1117; Apr. 8, 2011, D.C. Law 18-360,  504, 58 DCR 896; May 2, 2015, D.C. Law 20-265,  106, 62 DCR 1529.)  Prior Codifications 1981 Ed.,  35-517. 1973 Ed.,  35-712. Section References This section is referenced in  31-2502.28. Effect of Amendments D.C. Law 16-247 repealed subsec. (c)(2)(K) which had read as follows: (K) A provision as follows: LEGAL ACTIONS: No action at law or in equity shall be brought to recover on this policy prior to the expiration of 60 days after written proof of loss has been furnished in accordance with the requirements of this policy. No such action shall be brought after the expiration of 3 years after the time written proof of loss is required to be furnished. D.C. Law 16-305, in subsec. (c)(1)(B)(iii), substituted has a disability for is disabled; and in subsec. (h)(2)(B), substituted have a total and permanent disability for become totally and permanently disabled. D.C. Law 17-231, in subsecs. (b)(1)(C), substituted spouse, domestic partner for husband, wife; and, in subsec. (c)(1)(I)(ii), substituted marriage or domestic partnership for marriage. D.C. Law 17-353, in subsec. (h)(2)(B), substituted come to have a total for have a total. D.C. Law 18-360, in subsec. (a), rewrote the last sentence which had read as follows: The action of the Commissioner in this regard shall be subject to appeal and review in the form and manner prescribed in  31-4327.; and repealed subsec. (h)(1), which formerly read: (1) Any policy of group accident, group health, or group accident and health insurance; or The 2015 amendment by D.C. Law 20-265 rewrote (c)(1)(C)(i). Cross References Health and accident companies, see  31-5202. Health and accident policies issued by companies operating under Fire and Casualty Act, see  31-2502.28. References in Text Section 31-4327, referred to in subsection (a) of this section, was repealed by D.C. Law 11-227,  16, effective April 9, 1997. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4701. Section 4 of D.C. Law 16-247 provided: This act shall apply to all individual and group health benefit plans delivered, issued for delivery, or renewed on the first day of the month beginning on or after 90 days after the effective date of this act. Change in Government This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 402(276) of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to the District of Columbia Council, subject to the right of the Commissioner as provided in  406 of the Plan. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 314713. Prohibited activities  Securities operations. [Repealed] Repealed.  (June 19, 1934, 48 Stat. 1173, ch. 672, ch. V,  13; May 21, 1997, D.C. Law 11-268,  10(j), 44 DCR 1730; Apr. 3, 2001, D.C. Law 13-265,  126(a), 48 DCR 1225; redesignated  301, Oct. 19, 2002, D.C. Law 14-213,  20(b), 49 DCR 8140.)  Prior Codifications 1981 Ed.,  35-518. 1973 Ed.,  35-713.
 314714. Prohibited activitiesMisrepresentations. [Repealed] Repealed.  (June 19, 1934, 48 Stat. 1174, ch. 672, ch. V,  14; May 21, 1997, D.C. Law 11-268,  10(j), 44 DCR 1730; Apr. 3, 2001, D.C. Law 13-265,  126(a), 48 DCR 1225; redesignated  301, Oct. 19, 2002, D.C. Law 14-213,  20(b), 49 DCR 8140.)  Prior Codifications 1981 Ed.,  35-519. 1973 Ed.,  35-714. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4701.
 314715. Prohibited activitiesDiscriminations. [Repealed] Repealed.  (June 19, 1934, 48 Stat. 1174, ch. 672, ch. V,  15; Apr. 3, 2001, D.C. Law 13-265,  126(a), 48 DCR 1225; redesignated  301, Oct. 19, 2002, D.C. Law 14-213,  20(b), 49 DCR 8140.)  Prior Codifications 1981 Ed.,  35-520. 1973 Ed.,  35-715.
 314716.01. Exemption from legal process  Disability benefits. No money or other benefit paid, provided, allowed, or agreed to be paid by any company on account of the disability from injury or sickness of any insured person shall be liable to execution, attachment, garnishment, or other process, or to be seized, taken, appropriated or applied by any legal or equitable process or operation of law, to pay any debt or liability of such insured person whether such debt or liability was incurred before or after the commencement of such disability, but the provisions of this section shall not affect the assignability of any such disability benefit otherwise assignable, nor shall this section apply to any money income disability benefit in an action to recover for necessaries contracted for after the commencement of disability covered by the disability clause or contract allowing such money income benefit.  (June 19, 1934, 48 Stat. 1175, ch. 672, ch. V,  16a.)  Prior Codifications 1981 Ed.,  35-522. 1973 Ed.,  35-717.
 314716. Rights of parties under life policies. (a) When a policy of insurance, whether heretofore or hereafter issued, is effected by any person on his own life or on another life in favor of some person other than himself having an insurable interest therein, or, except in cases of transfer with intent to defraud creditors, if a policy of life insurance is assigned or in any way made payable to any such person, the lawful beneficiary or assignee thereof, other than the insured or the person so effecting such insurance or executors or administrators of such insured or the person so effecting such insurance, shall be entitled to its proceeds and avails against the creditors and representatives of the insured and of the person effecting such insurance whether or not the right to change the beneficiary is reserved or permitted and whether or not the policy is made payable to the person whose life is insured, if the beneficiary or assignee shall predecease such person; provided, that subject to the statute of limitations the amount of any premiums for said insurance paid with intent to defraud creditors, with interest thereon, shall inure to their benefit from the proceeds of the policy, but the company issuing the policy shall be discharged of all liability thereon by payment of its proceeds in accordance with its terms, unless before such payment the company shall have written notice by or in behalf of a creditor of a claim to recover for transfer made or premiums paid with intent to defraud creditors with specifications of the amount claimed. (b) A charitable, benevolent, educational, governmental, or religious institution that is described in  501(c)(3) or  170(b)(1)(A) of the Internal Revenue Code or a trust for the benefit of the institution that is qualified as a charitable remainder trust under  664 or a pooled income fund under  642(c)(5) of the Internal Revenue Code may acquire an insurable interest in the life of an individual if: (1) The institution or trust is designated irrevocably as the beneficiary of the insurance proceeds or designated as the owner of the life insurance policy, or both; (2) The application for the insurance contract is procured and signed by the individual whose life is to be insured; and (3) Notwithstanding paragraph (1) of this subsection, the insured pays the premiums for the insurance policy for at least 3 years following the issuance of the policy. (c) Subsection (b) of this section does not prohibit the insured from retaining all ownership rights conferred by the insurance policy, except the right to loan or borrow value during the premium-paying period or at maturity.  (June 19, 1934, 48 Stat. 1175, ch. 672, ch. V,  16; Aug. 1, 1947, 61 Stat. 711, ch. 427; Mar. 16, 1995, D.C. Law 10-211,  2, 41 DCR 8027.)  Prior Codifications 1981 Ed.,  35-521. 1973 Ed.,  35-716. References in Text Sections 501(c)(3), 170(b)(1)(A), 664 and 642(c)(5) of the Internal Revenue Code, referred to in (b), are codified as 26 U.S.C.  501(c)(3), 170(b)(1)(A), 664 and 642(c)(5), respectively. Editor's Notes Application of 10-211: Section 3 of D.C. Law 10-211 provided that the act shall be applied retroactively, thereby validating any insurance contract authorized under this act if the individual on whose life the insurance contract was taken is alive on March 16, 1995, even though the insurance contract was entered into before March 16, 1995, and the beneficiary or owner of the policy continues to pay the premiums until maturity.
 314717. Exemption from legal process  Group life policy or proceeds. No policy of group life insurance, nor the proceeds thereof when paid to any employee or employees thereunder, shall be liable to attachment, garnishment, or other process, or to be seized, taken, appropriated, or applied by any legal or equitable process or operation of law, to pay any debt or liability of such employee, or his beneficiary, or any other person who may have a right thereunder, either before or after payment; nor shall the proceeds thereof, when not made payable to a named beneficiary, constitute a part of the estate of the employee for the payment of his debts.  (June 19, 1934, 48 Stat. 1176, ch. 672, ch. V,  17.)  Prior Codifications 1981 Ed.,  35-523. 1973 Ed.,  35-718.
 314718. Fraudulent statements or representations against companies. [Repealed] Repealed.  (June 19, 1934, 48 Stat. 1176, ch. 672, ch. V,  18; Apr. 3, 2001, D.C. Law 13-265,  126(a), 48 DCR 1225; redesignated  301, Oct. 19, 2002, D.C. Law 14-213,  20(b), 49 DCR 8140.)  Prior Codifications 1981 Ed.,  35-524. 1973 Ed.,  35-719.
 314719. Authority to hold proceeds under trust or agreement. Any life company licensed under the laws of the District shall have power to hold the proceeds of any policy issued by it under a trust or other agreement upon such terms and restrictions as to revocation by the policyholder and control by beneficiaries and with such exemptions from the claims of creditors or beneficiaries other than the policyholder as shall have been agreed to in writing by such company and the policyholder. Such insurance company shall not be required to segregate funds so held, but may hold them as a part of its general corporate assets.  (June 19, 1934, 48 Stat. 1176, ch. 672, ch. V,  19.)  Prior Codifications 1981 Ed.,  35-525. 1973 Ed.,  35-720.
 314720. Calculations of premiums and reserves. If in any contract year the gross premium charged by any life insurance company on any policy or contract subject to  31-4701(a)(1) is less than the valuation net premium for the policy or contract calculated by the method used in calculating the reserve thereon but using the minimum valuation standards of mortality and rate of interest, the minimum reserve required for such policy or contract shall be the greater of either the reserve calculated according to the mortality table, rate of interest, and method actually used for such policy or contract, or the reserve calculated by the method actually used for such policy or contract but using the minimum standards of mortality and rate of interest and replacing the valuation net premium by the actual gross premium in each contract year for which the valuation net premium exceeds the actual gross premium. The minimum valuation standards of mortality and rate of interest referred to in this section are those standards stated in  31-4701(c)(3) and (d); provided, that for any life insurance policy issued on or after January 1, 1987, for which the gross premium in the 1st policy year exceeds that of the 2nd year and for which no comparable additional benefit is provided in the 1st year for such excess and which provides an endowment benefit or a cash surrender value or a combination thereof in an amount greater than such excess premium, the foregoing provisions of this section shall be applied as if the method actually used in calculating the reserve for such policy were the method described in  31-4701(c)(5), ignoring subsection (c)(5)(B) of  31-4701. The minimum reserve at each policy anniversary of such a policy shall be the greater of the minimum reserve calculated in accordance with  31-4701(c)(5), including subsection (c)(5)(B) of  31-4701, and the minimum reserve calculated in accordance with this section.  (June 19, 1934, 48 Stat. 1176, ch. 672, ch. V,  20; Oct. 13, 1978, D.C. Law 2-120,  10, 25 DCR 1519; Mar. 14, 1985, D.C. Law 5-160,  3(g), 32 DCR 39; Apr. 11, 2019, D.C. Law 22-286,  2(c), 66 DCR 1637.)  Prior Codifications 1981 Ed.,  35-526. 1973 Ed.,  35-721. Section References This section is referenced in  31-4701. Editor's Notes References in D.C. Law 5-160 in  31-4701 and in this section have been translated accurately to reflect the D.C. Code numbering system for  31-4701(c). It should be noted, however, that the numbering system used by the D.C. Code and the numbering system used by the Organic Law differ markedly.
 314721. Acceptance and recordation of premiums on industrial life or sick-benefit policies. (a) No industrial insurance company or agent thereof shall accept any money in payment of premiums which are in arrears on any industrial life or industrial sick-benefit insurance policy which has lapsed and which the insured seeks to reinstate, unless such payment shall amount at least to the total of all premiums in arrears or unless such payment shall, under the regulations of the company, make the policy immediately eligible for reinstatement, subject only to evidence of insurability. (b) Every current premium shall be correctly recorded by the agent or by the company in the premium receipt book of the insured at the time the premium is paid. (c) Every advance premium paid by an industrial life or industrial sick-benefit policyholder shall be recorded in the receipt book of the insured in exactly the same manner as current premiums are recorded, and accurate entry thereof shall be made in the record book of the agent; provided, however, that failure so to do shall not invalidate the policy.  (June 19, 1934, ch. 672, ch. V,  21; May 4, 1950, 64 Stat. 104, ch. 157,  7.)  Prior Codifications 1981 Ed.,  35-527. 1973 Ed.,  35-722.
 314722. Industrial life policies  Required provisions. (a) No policy of industrial life insurance shall be delivered or issued for delivery in the District unless it contains in substance the following provisions, or provisions which in the opinion of the Commissioner are more favorable to the policyholders: (1) A provision that all premiums after the first shall be payable in advance, either at the home office of the company or to an agent of the company; (2) A provision that the insured is entitled to a grace period of at least 28 days within which the payment of any premiums after the first may be made, and during which period of grace the policy shall continue in full force, but in case the policy becomes a claim during the said period of grace before the overdue premium is paid, the amount of such premium may be deducted from any amount payable under the policy in settlement; (3) A provision that, except as otherwise expressly provided by law, the policy shall constitute the entire contract between the parties and shall be incontestable after it has been in force during the lifetime of the insured for a period of not more than 2 years from its date, except for nonpayment of premiums and except for violations of the conditions of the policy relating to naval or military service in time of war, and, at the option of the company, provisions relative to benefits in the event of total and permanent disability and provisions which grant additional insurance specifically against death by accident may also be excepted; if a copy of the application be attached to the policy, a provision that all statements made by the insured shall, in the absence of fraud, be deemed representations and not warranties, and that no such statement or statements shall be used in defense of a claim under the policy unless contained in the attached written application; (4) A provision that if it shall be found at any time before final settlement under the policy that the age of the insured (or the age of any other person considered in determining the premium) has been misstated, the amount payable under the policy shall be such as the premium would have purchased at the correct age, according to the companys rate at date of issue; (5) If the policy is a participating policy, a provision indicating the conditions under which the company shall periodically ascertain and apportion any divisible surplus accruing to the policy; (6) A provision for nonforfeiture benefits and cash surrender values in accordance with the requirements of  31-4705.01 or  31-4705.02; (7) A provision specifying the options, if any, to which the policyholder is entitled in the event of default in a premium payment; (8) A provision that if in event of default in premium payments the value of the policy shall have been applied to the purchase of other insurance as provided for in this section, and if such insurance shall be in force and the original policy shall not have been surrendered to the company and cancelled, the policy may be reinstated within 2 years from such default, upon evidence of insurability satisfactory to the company and payment of arrears of premiums and the payment or reinstatement of any other indebtedness to the company upon said policy, with interest on said premium and indebtedness at the rate of not exceeding 6 per centum per annum payable annually; (9) A provision that when a policy shall become a claim by the death of the insured settlement shall be made upon receipt of due proof of death; and (10) Title on the face and on the back of the policy briefly describing its form. (b) Any of the foregoing provisions or portions thereof not applicable to single premium or nonparticipating or term policies shall, to that extent, not be incorporated therein; and any such policy may be issued or delivered in the District which in the opinion of the Commissioner contains provisions on any 1 or more of the several foregoing requirements more favorable to the policyholder than hereinbefore required. The provisions of this section shall not apply to policies issued or granted in exchange for lapsed or surrendered policies. Nothing contained in paragraph (3) of subsection (a) of this section shall apply to applications for reinstatement. A reinstated policy shall be contestable on account of fraud or misrepresentation of material facts pertaining to the reinstatement, for the same period after reinstatement as provided in the policy with respect to the original issue.  (June 19, 1934, ch. 672, ch. V,  22; May 4, 1950, 64 Stat. 104, ch. 157,  7; May 21, 1997, D.C. Law 11-268,  10(j), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-528. 1973 Ed.,  35-723. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4701.
 314723. Industrial life policies  Prohibited provisions. No policy of industrial life insurance shall be delivered or issued for delivery, in the District, if it contains any of the following provisions: (1) A provision limiting the time within which any action at law or in equity may be commenced to less than 3 years after the cause of action shall accrue; (2) Except for provisions relating to misstatement of age, suicide, aviation, and military or naval service in time of war, a provision for any mode of settlement at maturity, after the expiration of the contestable period of the policy, of less value than the amount insured on the face of the policy plus dividend additions, if any, less any indebtedness to the company on or secured by the policy, and less any premium that may, by the terms of the policy, be deducted. This paragraph shall not apply to any nonforfeiture provision; (3) A provision for forfeiture of the policy for failure to repay any loan on the policy, or to pay interest on such loan, while the total indebtedness on the policy, including interest, is less than the loan value thereof; (4) A provision to the effect that the agent soliciting the insurance is the agent of the person insured under said policy, or making the acts or representations of such agent binding upon the person so insured under said policy; (5) A provision permitting the payment of funeral benefits in merchandise or services, or permitting the payment of any benefits other than in lawful money of the United States; (6) A provision whereby the benefits or any part thereof accruing under such policy upon the death of a person insured may be paid to any designated undertaker or undertaking firm or corporation or to any person or persons engaged in or connected with such business, without the written consent of the person or persons to whom such benefits would otherwise be paid, or so as in any way to deprive the personal representative or family of the deceased of the advantages of competition in procuring and purchasing supplies and services in connection with the burial of the person insured; or (7) A provision that the liability of the company by reason of the insureds death shall be limited to less than the face amount of the policy if the death of the insured results from a specified kind or character of disease.  (June 19, 1934, ch. 672, ch. V,  23; May 8, 1950, 64 Stat. 104, ch. 157,  7.)  Prior Codifications 1981 Ed.,  35-529. 1973 Ed.,  35-724.
 314724. Access to psychologists or optometrists under group health insurance policy. (a) No policy of group health insurance shall be delivered or issued in the District of Columbia or be issued or amended to cover any resident of the District of Columbia if it contains a provision which would restrict access to psychologists or optometrists. When a policy relating to group health insurance requires payment or reimbursement for services which may be performed by a duly licensed psychologist or optometrist, any person covered by the policy shall be free to select and have direct access to such psychologist or optometrist without supervision or referral by a practitioner of the healing art and shall be entitled under the policy to have payment or reimbursement made for services performed. (b) No policy of group health insurance shall be delivered or issued in the District or be issued or amended to cover any resident of the District if it does not contain a provision which: (1) For a policy issued or renewed after April 15, 1995, covers a minor grandchild, niece, or nephew of an employee of the District of Columbia if the minor grandchild, niece, or nephew is under the primary care of the insured, and if the legal guardian of the minor grandchild, niece, or nephew, if other than the insured, is not covered by an accident or sickness policy. For the purposes of this paragraph, the term primary care means that the insured provides food, clothing, and shelter, on a regular and continuous basis, for the minor grandchild, niece, or nephew during the time that the District of Columbia public schools are in regular session; and (2) For a policy issued or renewed after April 15, 1996, covers a minor grandchild, niece, or nephew under the primary care of the insured, and if the legal guardian of the minor grandchild, niece, or nephew, if other than the insured, is not covered by an accident or sickness policy. For the purposes of this paragraph, the term primary care means that the insured provides food, clothing, and shelter, on a regular and continuous basis, for the minor grandchild, niece or nephew during the time that the District of Columbia public schools are in regular session.  (June 19, 1934, 48 Stat. 1156, ch. 672, ch. V,  24; as added Feb. 11, 1982, D.C. Law 4-66, 2(b), 28 DCR 5040; Aug. 25, 1994, D.C. Law 10-158,  3, 41 DCR 4881.)  Prior Codifications 1981 Ed.,  35-530. Section References This section is referenced in  31-3503 and  31-4712. Cross References Hospital and medical services corporations, applicability of this section, see  31-3503.
 314725. Policy language simplification standards. (a) Except as provided under  31-4727, no policy forms shall be delivered or issued for delivery in the District of Columbia after the operative date of this section, unless the forms qualify under the following standards; (1) The text of the form scores at least 40 on the Flesch reading ease test presented to the Commissioner by the National Association of Insurance Commissioners after 1980 or on another comparable test described in subsection (c) of this section. (2) The forms shall be printed in at least 10-point type and shall be 1-point leaded. (3) The style, the arrangement, and the overall appearance of the form shall not unduly highlight a portion of the text, an endorsement, or a rider. (4) If the policy has more than 3,000 words on 3 pages or has more than 3 pages, then the form shall contain a table of contents or an index of the principal portions of the text. (b) A Flesch reading ease test score shall be measured by the following method: (1)(A) For forms containing no more than 10,000 words, the entire form shall be analyzed. (B) For policy forms containing more than 10,000 words, the readability of 2 different 200 word samples, per page of text, may be analyzed instead of the entire form. (C) The samples shall be separated by at least 20 printed lines. (2)(A) The number of words and sentences shall be counted and the total number of words divided by the number of sentences. (B) The quotient shall be multiplied by 1.015. (3)(A) The total number of syllables shall be counted and divided by the total number of words. (B) The quotient shall be multiplied by 84.6. (4) The sum of the products described in paragraphs (2) and (3) of this subsection, subtracted from 206.835, equals the Flesch reading ease score. (5) For paragraphs (2), (3), and (4) of this subsection, the following shall apply: (A) A contraction, hyphenated word, number, and isolated letter, when separated in the text by spaces shall be counted as 1 word. (B) A unit of words ending with a period, semicolon, or colon, but excluding headings and captions, shall be counted as a sentence. (C) The following shall not be counted in computations described in this subsection: (i) The company name and address. (ii) The policy name, number, or title. (iii) The table of contents and index. (iv) The captions and subchapters. (v) The specification pages, schedules, or tables. (vi) Policy language drafted to conform to law or a collectively bargained agreement. (vii) Policy language which is medical terminology or defined in the policy. (D) The company shall identify the language exempted under subparagraph (C) of this paragraph and certify, in writing, that the language should be exempted under subparagraph (C) of this paragraph. (c) Any other reading test may be approved by the Commissioner as an alternative to the Flesch reading ease test if the alternative is comparable to the Flesch reading ease test. (d)(1) Filings of forms shall be accompanied by a certificate signed by an officer of the company and stating that the form scored successfully on the test or that the score was inadequate but should be approved under  31-4726. (2) The Commissioner may require the submission of information to verify the certification described in paragraph (1) of this subsection. (e) At the option of the company, riders, endorsements, applications, and other forms made part of the policy form may be scored separately or as part of the policy. (f)(1) A form complying with subsection (a) of this section shall be approved if the form protects policyholders and claimants at least as favorably as laws which otherwise would invalidate the use of the forms. (2) A policy written in a language other than English and used in the District of Columbia shall be considered in compliance with subsection (a)(1) of this section if the company certifies that the policy has been translated from a policy written in English and complying with subsection (a)(1) of this section.  (June 19, 1934, ch. 672, ch. V,  25; as added Mar. 14, 1985, D.C. Law 5-160,  3(h), 32 DCR 39; Feb. 24, 1987, D.C. Law 6-192,  25(h), 33 DCR 7836; May 21, 1997, D.C. Law 11-268,  10(j), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-531. Section References This section is referenced in  31-4726,  31-4727,  31-4729, and  31-4730. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-4701.
 314726. Commissioners review of test. (a) The Commissioner, in his discretion, may, under subsection (b) of this section, permit the use of a form that scores inadequately under  31-4725(a)(1). (b) Before the Commissioner permits the use of inadequately scoring forms, the Commissioner shall find that: (1) A lower score more accurately reflects the readability of the form. (2) The particular nature of the form or of a type of form warrants a lower passing score than required by  31-4725(a)(1). (3) Policy language drafted to conform with state law or state agency interpretation of the law has impaired the readability of the rest of the policy or has otherwise lowered the score for the rest of the policy.  (June 19, 1934, ch. 672, ch. V,  26; as added Mar. 14, 1985, D.C. Law 5-160,  3(h), 32 DCR 39; Feb. 24, 1987, D.C. Law 6-192,  25(i), 33 DCR 7836; May 21, 1997, D.C. Law 11-268,  10, 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  23(e), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-532. Section References This section is referenced in  31-4725 and  31-4730.
 314727. Applicability of  31-4725 through 31-4730. (a) Except as provided in subsection (b) of this section,  31-4725 through 31-4730 shall apply to all policies used in the District of Columbia. (b) Sections 31-4725 through 31-4730 shall not apply to the following: (1) A policy which is a security under federal legislative jurisdiction. (2)(A) Except as provided in subparagraph (B) of this paragraph, a group policy covering 1,000 or more lines when issued, other than a group credit life insurance policy or a group credit health insurance policy. (B) No certificate issued pursuant to a group policy used in the District of Columbia may be exempt. (3) A group annuity contract which finances pension, profit-sharing, or deferred compensation plans. (4) A form used in connection with a contractual provision for a policy on a form permitted to be issued before the approval dates in  31-4730 for similar forms. (5) The renewal of a policy used before the approval dates in  31-4730 for similar forms.  (June 19, 1934, ch. 672, ch. V,  27; as added Mar. 14, 1985, D.C. Law 5-160,  3(h), 32 DCR 39; Feb. 24, 1987, D.C. Law 6-192,  25(j), 33 DCR 7836.)  Prior Codifications 1981 Ed.,  35-533. Section References This section is referenced in  31-4725 and  31-4730.
 314728. Regulations. The Mayor shall issue rules to implement the provisions of this chapter pursuant to subchapter I of Chapter 5 of Title 2.  (June 19, 1934, ch. 672, ch. V,  28; as added Mar. 14, 1985, D.C. Law 5-160,  3(h), 32 DCR 39.)  Prior Codifications 1981 Ed.,  35-534.
 314729. Construction of  31-4725 through 31-4730. Sections 31-4725 through 31-4730 shall not be construed to invalidate a law permitting the use of a policy form which has been filed for the period required by local legislation governing the forms of policies.  (June 19, 1934, ch. 672, ch. V,  29; as added Mar. 14, 1985, D.C. Law 5-160,  3(h), 32 DCR 39.)  Prior Codifications 1981 Ed.,  35-535.
 314730. Operative dates of  31-4725 through 31-4730. (a)(1) Except as described in  31-4727,  31-4725 through 31-4730 apply to policy forms filed 2 years after March 14, 1985. (2) No form shall be used in the District of Columbia 5 years after March 14, 1985, unless the form complies with  31-4725 or unless the Commissioner approves the form under  31-4726. (3)(A) A form permitted to be used before 5 years after March 14, 1985, and complying with  31-4725 need not be refiled to be approved under either  31-4725 or  31-4726. (B) The forms described in subparagraph (A) of this paragraph may be used in the District of Columbia after the company files with the Commissioner a list of the forms used by the company and qualifying for the subparagraph (A) exception, the form number for each form, and, for each form, the certificate described in  31-4725(d). (b) For individual forms and in the discretion of the Commissioner, the Commissioner may extend the deadlines described in subsection (a) of this section.  (June 19, 1934, ch. 672, ch. V,  30; as added Mar. 14, 1985, D.C. Law 5-160,  3(h), 32 DCR 39; May 21, 1997, D.C. Law 11-268,  10, 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  23(f), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-536. Section References This section is referenced in  31-4727.
 314731. Duty of insurers to compare names of insureds with death master file and to locate beneficiaries. (a) For purposes of this section: (1) "Contract" means an annuity contract. The term "contract" does not include an annuity used to fund an employment-based retirement plan or program if: (A) The insurer does not perform the record keeping services; or (B) The insurer is not committed by terms of the annuity contract to pay death benefits to the beneficiaries of specific plan participants. (2) "Death master file" means the United States Social Security Administration Death Master File or other database or service that is at least as comprehensive as the United States Social Security Administration Death Master File for determining that an individual reportedly has died. (3) "Death master file match" means a search of the death master file that results in a match of the Social Security number or the name and date of birth of an insured, annuity owner, or retained asset account holder. (4) "Knowledge of death" means: (A) Receipt of an original or valid copy of a certified death certificate; or (B) A death master file match validated by the insurer in accordance with subsection (b)(1)(A) of this section. (5) "Policy" means any policy or certificate of life insurance that provides a death benefit. The term "policy" does not include: (A) A policy or certificate of life insurance that provides a death benefit under an employee benefit plan: (i) Subject to the Employee Retirement Income Security Act of 1974, approved September 2, 1974 (88 Stat. 829; 29 U.S.C.  1001 et seq.); or (ii) Under any federal employee benefit program; (B) A policy or certificate of life insurance that is used to fund a pre-need funeral contract or prearrangement; (C) A policy or certificate of credit life or accidental death insurance; or (D) A policy issued to a group master policyholder for which the insurer does not provide record keeping services. (6) "Record keeping services" means those services which the insurer has agreed with a group policy or contract customer to be responsible for obtaining, maintaining, and administering in its own or its agents' systems information about each individual insured under an insured's group insurance contract, or a line of coverage thereunder, at least the following information: (A) Social Security number or name and date of birth; (B) Beneficiary designation information; (C) Coverage eligibility; (D) Benefit amount; and (E) Premium payment status. (7) "Retained asset account" means a mechanism whereby the settlement of proceeds payable under a policy or contract is accomplished by the insurer or an entity acting on behalf of the insurer depositing the proceeds into an account with check or draft writing privileges, if those proceeds are retained by the insurer or its agent, pursuant to a supplementary contract not involving annuity benefits other than death benefits. (b)(1) An insurer shall perform a comparison of its insureds' in-force policies, contracts, and retained asset accounts against a death master file, on at least a semi-annual basis, by using the full death master file once and thereafter using the death master file update files for future comparisons to identify potential matches of its insureds. For those potential matches identified as a result of a death master file match, the insurer shall within 90 days of a death master file match: (A) Complete a good faith effort, which shall be documented by the insurer, to confirm the death of the insured or retained asset account holder against other available records and information; (B) Determine whether benefits are due in accordance with the applicable policy or contract; and if benefits are due in accordance with the applicable policy or contract: (i) Use good faith efforts, which shall be documented by the insurer, to locate the beneficiary or beneficiaries; and (ii) Provide the appropriate claims forms or instructions to the beneficiary or beneficiaries to make a claim including the need to provide an official death certificate, if applicable under the policy or contract. (2) With respect to group life insurance, insurers are required to confirm the possible death of an insured when the insurers maintain at least the following information of those covered under a policy or certificate: (A) Social Security number or name and date of birth; (B) Beneficiary designation information; (C) Coverage eligibility; (D) Benefit amount; and (E) Premium payment status. (3) Every insurer shall implement procedures to account for: (A) Common nicknames, initials used in lieu of a first or middle name, use of a middle name, compound first and middle names, and interchanged first and middle names; (B) Compound last names, maiden or married names, and hyphens, blank spaces or apostrophes in last names; (C) Transposition of the "month" and "date" portions of the date of birth; and (D) Incomplete Social Security numbers. (4) To the extent permitted by law, the insurer may disclose minimum necessary personal information about the insured or beneficiary to a person who the insurer reasonably believes may be able to assist the insurer locate the beneficiary or a person otherwise entitled to payment of the claims proceeds. (c) An insurer or its service provider shall not charge any beneficiary or other authorized representative for any fees or costs associated with a death master file search or verification of a death master file match conducted pursuant to this section. (d) The benefits from a policy, contract, or a retained asset account, plus any applicable accrued contractual interest shall first be payable to the designated beneficiaries or owners and in the event said beneficiaries or owners cannot be found, shall be transferred to the Unclaimed Property Administrator as unclaimed property pursuant to Chapter 1A of Title 41. Interest payable under  28-3302 shall not be payable as unclaimed property. (e) Pursuant to  41-152.10, an insurer shall notify the Unclaimed Property Administrator upon the expiration of the statutory time period for abandoned property that: (1) A policy or contract beneficiary or retained asset account holder has not submitted a claim with the insurer; and (2) The insurer has complied with subsection (b) of this section and has been unable, after good faith efforts documented by the insurer, to contact the retained asset account holder, beneficiary or beneficiaries (f) Upon such notice, an insurer shall immediately submit the unclaimed policy or contract benefits or unclaimed retained asset accounts, plus any applicable accrued interest, to the Unclaimed Property Administrator pursuant [to]  41-152.10. (g) Failure to meet any requirement of this section with such frequency as to constitute a general business practice is a violation of a law of the District under  31-4706. Nothing herein shall be construed to create or imply a private cause of action for a violation of this section.  (June 19, 1934, 48 Stat. 1156, ch. 672, ch. V,  31; as added Nov. 13, 2021, D.C. Law 24-45,  7094(d), 68 DCR 010163.)  Emergency Legislation  For temporary (90 days) creation of this section, see  7094(d) of Fiscal Year 2022 Budget Support Emergency Act of 2021 (D.C. Act 24-159, Aug. 23, 2021, 68 DCR 008602). 
 314801. Applicability of provisions. Policies of industrial weekly payment life insurance after June 4, 1934, issued or delivered in the District of Columbia shall be subject to the following conditions, in addition to any others prescribed by law and not inconsistent with the provisions of this chapter.  (June 4, 1934, 48 Stat. 834, ch. 373,  1.)  Prior Codifications 1981 Ed.,  35-901. 1973 Ed.,  35-1001.
 314802. Policies  Defenses to validity. If payment of such a policy shall be refused because of unsound health at or prior to the date of the policy, the good faith of both applicant and insured shall constitute a material element in determining the validity of the policy; and it shall not be held invalid because of unsound health unless the insurer shall prove that, at or before the date of issue of the policy, the insured or applicant had knowledge of, or reason to know, the facts on which the defense is based, or shall prove that the insurance was procured by the insured or applicant in bad faith or with intent to defraud the company, any provision, agreement, condition, warranty, or clause contained in said policy, or endorsed thereon, or added or attached thereto, to the contrary notwithstanding. Proof by the insurer of fraud, intent to deceive, unsound health, bad faith, breach of warranty or condition precedent, or other matter of defense, shall be subject to the provisions of  31-5203.  (June 4, 1934, 48 Stat. 834, ch. 373,  2.)  Prior Codifications 1981 Ed.,  35-902. 1973 Ed.,  35-1002. Cross References Formal requisites of insurance policies, see  31-4703 et seq.
 314803. Policies  Incontestability. Every such policy shall be incontestable upon any ground relating to health after 2 years from its date of issue (notwithstanding a longer period may be named therein), provided the insured shall be alive at the end of said period. If the policy by its terms shall be incontestable after a shorter period than herein provided the terms of the policy with regard to such period of limitation shall govern.  (June 4, 1934, 48 Stat. 834, ch. 373,  3.)  Prior Codifications 1981 Ed.,  35-903. 1973 Ed.,  35-1003. Section References This section is referenced in  31-3609. Cross References Formal requisites of insurance policies, see  31-4703 et seq.
 314804. Policies  Assignment. Nothing contained in the terms of any such policy shall operate to prevent its valid assignment by the insured; but the company issuing the policy so assigned shall be discharged of all liability thereon by payment of its proceeds in accordance with its terms, unless before such payment the company shall have written notice of such assignment.  (June 4, 1934, 48 Stat. 835, ch. 373,  4.)  Prior Codifications 1981 Ed.,  35-904. 1973 Ed.,  35-1004.
 314805. Beneficiaries and claimants. Any individual designated with the consent of the insurer, evidenced by the signature of its president or secretary, or designated upon a form furnished by and filed with the insurer, as beneficiary of such a policy shall be entitled to the proceeds of such policy after the death of the insured in priority to all other claimants, and may sue in his own name for such proceeds if payment is refused by the insurer; provided, that upon the expiration of 15 days after the death of the insured, unless proof of claim in the manner and form required by the policy, accompanied by the policy for surrender, has theretofore been made by or on behalf of such designated beneficiary, the insurer may pay to any other claimant permitted by the policy. A person specified as one to whom the insured desires payment made, but not formally designated as beneficiary, shall be deemed a beneficiary for the purposes of this section, provided such designation be made in writing and filed with the company during the lifetime of the insured.  (June 4, 1934, 48 Stat. 835, ch. 373,  5.)  Prior Codifications 1981 Ed.,  35-905. 1973 Ed.,  35-1005.
 314901. Actuarial opinion of reserves. (a) General requirements and guidelines before operative date of the valuation manual.  (1) Every life insurance company doing business in the District of Columbia shall annually submit the opinion of a qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the Mayor, by regulation, are computed appropriately, are based on assumptions which satisfy contractual provisions, are consistent with prior reported amounts, and comply with  31-4701 and all applicable laws of the District of Columbia. The Mayor by regulation shall define the specifics of this opinion and add any other items deemed to be necessary to its scope. (2) For each year ending on or after December 31, 1993, the opinion shall be submitted with the annual statements and reports required by  31-203 [repealed] and 31-5202, and Chapter 3 of this title. (3) The opinion shall apply to all business in force, including individual and group health insurance plans, in form and substance acceptable to the Mayor as specified by regulation. (4) The opinion shall be based on standards adopted from time to time by the Actuarial Standards Board and on any additional standards the Mayor may prescribe by regulation. (5) In the case of an opinion required to be submitted by a foreign or alien company, the Mayor may accept the opinion filed by that company with the insurance supervisory official of another state if the Mayor determines that the opinion reasonably meets the requirements applicable to a company domiciled in the District of Columbia. (6) For the purposes of this section, the term qualified actuary means a member in good standing of the American Academy of Actuaries who meets the requirements set forth in regulations. (7) Except in cases of fraud or willful misconduct, the qualified actuary shall not be liable for damages to any person, other than the insurance company and the Mayor, for any act, error, omission, decision, or conduct with respect to the actuarys opinion. (8) Disciplinary action by the Mayor against the company or the qualified actuary shall be defined in regulations by the Mayor. (8A) Except as provided in paragraph (11) of this subsection, documents, materials, or other information in the possession or control of the Department of Insurance, Securities, and Banking that are a memorandum in support of the opinion, and any other material provided by the company to the Commissioner in connection with the memorandum (individually and collectively, memorandum), shall be confidential and privileged; shall not be subject to subchapter II of Chapter 5 of Title 2; shall not be subject to subpoena; and shall not be subject to discovery or admissible in evidence in a private civil action; provided, that the Commissioner may use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the Commissioners official duties. (8B) The Commissioner or any person who received documents, materials, or other information while acting under the authority of the Commissioner shall not be permitted or required to testify in a private civil action concerning confidential documents, materials, or other information subject to paragraph (8A) of this subsection. (8C) To assist in the performance of the Commissioners duties, the Commissioner: (A) May share documents, materials, or other information, including the confidential and privileged documents, materials, or other information subject to paragraph (8A) of this subsection, with other state, federal and international regulatory agencies; with the National Association of Insurance Commissioners, including its affiliates and subsidiaries; and with state, federal and international law enforcement authorities; provided, that the recipient agrees, and has the legal authority, to maintain the confidentiality and privileged status of the documents, materials, or other information; (B) May receive documents, materials, or other information, including otherwise confidential and privileged documents, materials, or other information, from the National Association of Insurance Commissioners, including its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or other information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or other information; or (C) May enter into agreements governing the sharing and use of information consistent with paragraphs (8A), (8B), and (8C) of this subsection. (8D) No waiver of an applicable privilege or claim of confidentiality in the documents, materials, or other information shall occur as a result of disclosure to the Commissioner under this section or of sharing as authorized in paragraph (8C) of this subsection. Nothing in this section shall require an insurer to disclose documents, materials, or other information that is not otherwise required by law to be disclosed. (8E) The memorandum may be subject to subpoena for the purpose of defending an action seeking damages from the actuary submitting the memorandum by reason of an act required by this section or by regulations promulgated hereunder. (8F) The memorandum may be released by the Commissioner: (A) With the written consent of the company; or (B) To the American Academy of Actuaries, upon a request stating that the memorandum is required for the purpose of professional disciplinary proceedings and setting forth procedures satisfactory to the Commissioner for preserving the confidentiality of the memorandum. (8G) If a portion of the memorandum is cited by the company in its marketing, is cited before a governmental agency other than a state insurance department, or is released by the company to the news media, all portions of the memorandum shall be no longer confidential. (9) A memorandum, in form and substance acceptable to the Mayor as specified by regulation, shall be prepared to support each actuarial opinion. (10) If the insurance company fails to provide a supporting memorandum at the request of the Mayor within a period specified by regulation, or the Mayor determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by the regulations or is otherwise unacceptable to the Mayor, the Mayor may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare any supporting memorandum required by the Mayor. (11) Any memorandum in support of the opinion, and any other supporting material provided by the company to the Mayor, shall be kept confidential by the Mayor and shall not be made public and shall not be subject to subpoena, other than for the purpose of defending an action seeking damages from any person by reason of any action required by this section or by regulations promulgated hereunder. However, the memorandum or other material may otherwise be released by the Mayor with the written consent of the company, upon request stating that the memorandum or other material is required for the purpose of professional disciplinary proceedings and setting forth procedures satisfactory to the Mayor for preserving the confidentiality of the memorandum or other material. Once any portion of the confidential memorandum is cited by the company in its marketing or is cited before any governmental agency other than a state insurance department or is released by the company to the news media, all portions of the confidential memorandum shall no longer be confidential. (b) Actuarial analysis of reserves and assets supporting reserves before the operative date of the valuation manual.  (1) Every life insurance company, except as exempted by or pursuant to regulation, shall also annually include in the opinion required by subsection (a)(1) of this section an opinion of the same qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the Mayor by regulation, when considered in light of the assets held by the company with respect to the reserves and related actuarial items, including, but not limited to, the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the companys obligations under the policies and contracts, including, but not limited to, the benefits under and expenses associated with the policies and contracts. (2) The Mayor may provide by regulation for a transition period during which a life insurance company may establish any higher reserves that the qualified actuary deems necessary in order to render the opinion required by this section. (c) General requirements and guidelines.--- (1)(A) Every company with outstanding life insurance contracts, accident and health insurance contracts, or deposit-type contracts in the District of Columbia and subject to regulation by the Mayor shall annually submit the opinion of the appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts are: (i) Computed appropriately; (ii) Based on assumptions that satisfy contractual provisions; (iii) Consistent with prior reported amounts; and (iv) Comply with applicable laws of the District of Columbia. (B) The valuation manual will prescribe the specifics of this opinion, including any items deemed to be necessary to its scope. (2) The opinion shall be submitted with the annual statement reflecting the valuation of such reserve liabilities for each year ending on or after the operative date of the valuation manual. (3) The opinion shall apply to all policies and contracts subject to subsection (d) of this section, plus other actuarial liabilities as may be specified in the valuation manual. (4) The opinion shall be based on standards adopted from time to time by the Actuarial Standards Board, or its successor, and on such additional standards as may be prescribed in the valuation manual. (5) In the case of an opinion required to be submitted by a foreign or alien company, the Mayor may accept the opinion filed by that company with the insurance supervisory official of another state or jurisdiction if the Mayor determines that the opinion reasonably meets the requirements applicable to a company domiciled in the District of Columbia. (6) Except in cases of fraud or willful misconduct, the appointed actuary shall not be liable for damages to any person (other than the insurance company and the Mayor) for any act, error, omission, decision, or conduct with respect to the appointed actuary's opinion. (7) A memorandum, in form and substance as specified in the valuation manual and acceptable to the Mayor, shall be prepared to support each actuarial opinion. (8) If the insurance company fails to provide a supporting memorandum at the request of the Mayor within a period specified in the valuation manual or the Mayor determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by the valuation manual or is otherwise unacceptable to the Mayor, the Mayor may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting memorandum required by the Mayor. (d) Actuarial analysis of reserves and assets supporting reserves.-- Every company with outstanding life insurance contracts, accident and health insurance contracts, or deposit-type contracts in the District of Columbia and subject to regulation by the Mayor, except as exempted in the valuation manual, shall annually include in the opinion required by subsection (c)(1) of this section, an opinion of the same appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified in the valuation manual, when considered in light of the assets held by the company with respect to the reserves and related actuarial items, including the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the company's obligation under the policies and contracts, including the benefits under and expenses associated with the policies and contracts. (e) Definitions.-- For the purposes of this section, the term: (1) "Accident and health insurance" means contracts that incorporate morbidity risk and provide protection against economic loss resulting from accident, sickness, or medical conditions and as may be specified in the valuation manual. (2) "Appointed actuary" means a qualified actuary who is appointed in accordance with the valuation manual to prepare the actuarial opinion required under subsections (c) and (d) of this section. (3) "Company" means an entity that: (A) Has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in the District and has at least one such policy in force or on claim; or (B) Has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in any state or jurisdiction and is required to hold a certificate of authority to write life insurance, accident and health insurance, or deposit-type contracts in the District. (4) "Deposit-type contract" means contracts that do not incorporate mortality risk, including annuity and pure endowment contracts, and as may be specified in the valuation manual. (5) "Life insurance" means contracts that incorporate mortality risk, including annuity and pure endowment contracts, and as may be specified in the valuation manual. (6) "Qualified actuary" means an individual who is qualified to sign the applicable statement of actuarial opinion in accordance with the American Academy of Actuaries qualification standards for actuaries signing such statements and who meets the requirement specified in the valuation manual. (7) "Valuation manual" means the manual of valuation instructions adopted by the National Association of Insurance Commissioner as specified in  31-4701.  (Oct. 21, 1993, D.C. Law 10-50,  2, 40 DCR 6117; Oct. 21, 2000, D.C. Law 13-191,  7, 47 DCR 7311; June 11, 2004, D.C. Law 15-166,  4(cc), 51 DCR 2817; Apr. 11, 2019, D.C. Law 22-286,  3, 66 DCR 1637.)  Prior Codifications 1981 Ed.,  35-3801. Effect of Amendments D.C. Law 13-191 amending subsec. (a), added pars. (8A) to (8G). D.C. Law 15-166, in par. (8A) of subsec. (a), substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities Regulation. Emergency Legislation For temporary (90 day) amendment of section, see  4(cc) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). Delegation of Authority Delegation of authority pursuant to D.C. Law 10-50, the Life Insurance Actuarial Opinion of Reserves Act of 1993, see Mayors Order 94-54, March 7, 1994 ( 41 DCR 1433).
 31501. Credit allowed a domestic ceding insurer. (a)(1) Credit for reinsurance shall be allowed a domestic ceding insurer as either an asset or a reduction from liability on account of reinsurance ceded only when the reinsurer meets the requirements of subsections (b), (c), (d), (e), (f), or (g) of this section; provided, that the Commissioner may adopt by regulation specific additional requirements relating to or setting forth the: (A) Valuation of assets or reserve credits; (B) Amount and forms of security supporting reinsurance arrangements; and (C) Circumstances pursuant to which credit will be reduced or eliminated. (2) Credit shall be allowed under subsections (b), (c), or (d) of this section only in respect to cessions of those kinds or classes of business that the assuming insurer is licensed or otherwise permitted to write or assume in its state of domicile or, in the case of a United States branch of an alien assuming insurer, in the state through which it is entered and is licensed to transact insurance or reinsurance. (3) Credit shall be allowed under subsections (d) or (e) of this section only if the applicable requirements of subsection (h) of this section have been satisfied. (b) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is licensed to transact insurance or reinsurance in the District. (c) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is accredited by the Commissioner of the Department of Insurance, Securities, and Banking (Commissioner) as a reinsurer in the District. To be eligible for accreditation, a reinsurer shall: (1) File with the Commissioner evidence of its submission to the Districts jurisdiction; (2) Submit to the Districts authority to examine its books and records; (3) Be licensed to transact insurance or reinsurance in at least one state, or, in the case of a United States branch of an alien assuming insurer, entered through and licensed to transact insurance or reinsurance in at least one state; (4) File annually with the Commissioner a copy of its annual statement filed with the insurance department of its state of domicile and a copy of its most recent audited financial statement; and (5) Demonstrate to the satisfaction of the Commissioner that it has adequate financial capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers. An assuming insurer is deemed to meet this requirement as of the time of its application if it maintains a surplus as regards policyholders in an amount not less than $20 million and its accreditation has not been denied by the Commissioner within 90 days after submission of its application. (d)(1) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is domiciled in, or, in the case of a United States branch of an alien assuming insurer, is entered through a state that employs standards regarding credit for reinsurance substantially similar to those applicable under this statute, and the assuming insurer or United States branch of an alien assuming insurer: (A) Maintains a surplus as regards policyholders in an amount not less than $20 million; and (B) Submits to the authority of the District to examine its books and records. (2) The requirement of paragraph (1)(A) of this subsection does not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same holding company system. (e)(1) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that maintains a trust fund in a qualified United States financial institution, as defined in  31-503(b), for the payment of the valid claims of its United States ceding insurers, their assigns, and successors in interest. To enable the Commissioner to determine the sufficiency of the trust fund, the assuming insurer shall report annually to the Commissioner information substantially the same as that required to be reported on the National Association of Insurance Commissioners Annual Statement form by licensed insurers. The assuming insurer shall submit to examination of its books and records by the Commissioner and bear the expense of the examination. (2)(A) Credit for reinsurance shall not be granted under this subsection unless the form of the trust and any amendments to the trust have been approved by the commissioner of the state where the trust is domiciled or the commissioner of another state who, pursuant to the terms of the trust instrument, has accepted principal regulatory oversight of the trust. (B) The form of the trust and any trust amendments shall also be filed with the commissioner of every state in which the ceding insurer beneficiaries of the trust are domiciled. The trust instrument shall provide that contested claims shall be valid and enforceable upon the final order of any court of competent jurisdiction in the United States. The trust shall vest legal title to its assets in its trustees for the benefit of the assuming insurers United States ceding insurers, their assigns, and successors in interest. The trust and the assuming insurer shall be subject to examination as determined by the Commissioner. (C) The trust shall remain in effect for as long as the assuming insurer has outstanding obligations due under the reinsurance agreements subject to the trust. No later than February 28 of each year, the trustee of the trust shall report to the Commissioner in writing the balance of the trust and a listing of the trusts investments as of December 31 of the preceding year and shall certify the date of termination of the trust, if so planned, or certify that the trust will not expire before December 31 of that year. (3) The following requirements apply to the following categories of assuming insurer: (A) The trust fund for a single assuming insurer shall consist of funds in trust in an amount not less than the assuming insurers liabilities attributable to reinsurance ceded by United States ceding insurers, and, in addition, the assuming insurer shall maintain a trusteed surplus of not less than $20 million, except as provided for in subparagraph (B) of this paragraph. (B)(i) At any time after the assuming insurer has permanently discontinued underwriting new business secured by the trust for at least 3 full years, the commissioner with principal regulatory oversight of the trust may authorize a reduction in the required trusteed surplus, but only after a finding, based on an assessment of the risk, that the new required surplus level is adequate for the protection of United States ceding insurers, policyholders, and claimants in light of reasonably foreseeable adverse loss development. The risk assessment may involve an actuarial review, including an independent analysis of reserves and cash flows and shall consider all material risk factors, including, when applicable, the lines of business involved, the stability of the incurred loss estimates, and the effect of the surplus requirements on the assuming insurers liquidity or solvency. (ii) The minimum required trusteed surplus shall not be reduced to an amount of less than 30% of the assuming insurers liabilities attributable to reinsurance ceded by United States ceding insurers covered by the trust. (4)(A) In the case of a group including incorporated and individual unincorporated underwriters: (i) For reinsurance ceded under reinsurance agreements with an inception, amendment, or renewal date on or after August 1, 1995, the trust shall consist of a trusteed account in an amount not less than the groups respective underwriters several liabilities attributable to business ceded by United States domiciled ceding insurers to any member underwriter of the group; (ii) For reinsurance ceded under reinsurance agreements with an inception date on or before July 31, 1995, and not amended or renewed after that date, notwithstanding the other provisions of this chapter, the trust shall consist of a trusteed account in an amount not less than the groups respective underwriters several insurance and reinsurance liabilities attributable to business written in the United States; and (iii) In addition to these trusts, the group shall maintain in trust a trusteed surplus of which $100 million shall be held jointly for the benefit of the United States domiciled ceding insurers of any member of the group for all years of account. (B) The incorporated members of the group shall not be engaged in any business other than underwriting as a member of the group and shall be subject to the same level of regulation and solvency control by the groups domiciliary regulator as are the unincorporated members. (C) Within 90 days after its financial statements are due to be filed with the groups domiciliary regulator, the group shall provide to the Commissioner an annual certification by the groups domiciliary regulator of the solvency of each underwriter member or, if a certification is unavailable, financial statements prepared by independent public accountants of each underwriter member of the group. (5) In the case of a group of incorporated underwriters under common administration, the group shall: (A) Have continuously transacted an insurance business outside the United States for at least 3 years immediately before making application for accreditation; (B) Maintain aggregate policyholders surplus of at least $10 billion; (C) Maintain a trust fund in an amount not less than the groups several liabilities attributable to business ceded by United States domiciled ceding insurers to any member of the group pursuant to reinsurance contracts issued in the name of the group; (D) Maintain a joint trusteed surplus of which $100 million shall be held jointly for the benefit of the United States domiciled ceding insurers of any member of the group as additional security for these liabilities; and (E) Within 90 days after its financial statements are due to be filed with the groups domiciliary regulator, make available to the Commissioner an annual certification of each underwriter members solvency by the members domiciliary regulator and financial statements of each underwriter member of the group prepared by its independent public accountant. (f)(1) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that has been certified by the Commissioner as a reinsurer in this state and secures its obligations in accordance with the requirements of this subsection. (2) To be eligible for certification, the assuming insurer shall meet the following requirements: (A) Be domiciled and licensed to transact insurance or reinsurance in a qualified jurisdiction, as determined by the Commissioner pursuant to paragraph (4) of this subsection; (B) Maintain minimum capital and surplus, or its equivalent, in an amount to be determined by the Commissioner pursuant to regulation; (C) Maintain financial strength ratings from 2 or more rating agencies deemed acceptable by the Commissioner pursuant to regulation; (D) Submit to the jurisdiction of the District, appoint the Commissioner as its agent for service of process in the District, and agree to provide security for 100% of the assuming insurers liabilities attributable to reinsurance ceded by United States ceding insurers if it resists enforcement of a final United States judgment; (E) Meet all applicable information filing requirements as determined by the Commissioner, both with respect to an initial application for certification and on an ongoing basis; and (F) Satisfy any other requirements for certification considered relevant by the Commissioner. (3) An association, including incorporated and individual unincorporated underwriters, may be a certified reinsurer. To be eligible for certification, in addition to satisfying requirements of paragraph (2) of this subsection: (A) The association shall satisfy its minimum capital and surplus requirements through the capital and surplus equivalents of the association and its members, which shall include a joint central fund that may be applied to any unsatisfied obligation of the association or any of its members, in an amount determined by the Commissioner to provide adequate protection; (B) The incorporated members of the association shall not be engaged in any business other than underwriting as a member of the association and shall be subject to the same level of regulation and solvency control by the associations domiciliary regulator as are the unincorporated members; and (C) Within 90 days after its financial statements are due to be filed with the associations domiciliary regulator, the association shall provide to the Commissioner an annual certification by the associations domiciliary regulator of the solvency of each underwriter member or, if a certification is unavailable, financial statements prepared by independent public accountants of each underwriter member of the association. (4)(A) The Commissioner shall create and publish a list of qualified jurisdictions under which an assuming insurer licensed and domiciled in such jurisdiction shall be eligible to be considered for certification by the Commissioner as a certified reinsurer. (B)(i) To determine whether the domiciliary jurisdiction of a non-United States assuming insurer is eligible to be recognized as a qualified jurisdiction, the Commissioner shall evaluate the appropriateness and effectiveness of the reinsurance supervisory system of the jurisdiction, both initially and on an ongoing basis, and consider the rights, benefits, and the extent of reciprocal recognition afforded by the non-United States jurisdiction to reinsurers licensed and domiciled in the United States. A qualified jurisdiction must agree to share information and cooperate with the Commissioner with respect to all certified reinsurers domiciled within that jurisdiction. (ii) A jurisdiction may not be recognized as a qualified jurisdiction if the Commissioner has determined that the jurisdiction does not adequately and promptly enforce final United States judgments and arbitration awards. Additional factors may be considered at the discretion of the Commissioner. (C)(i) A list of qualified jurisdictions shall be published through the National Association of Insurance Commissioners Committee Process. The Commissioner shall consider this list in determining qualified jurisdictions. (ii) If the Commissioner approves a jurisdiction as qualified that does not appear on the list of qualified jurisdictions, the Commissioner shall provide thoroughly documented justification in accordance with criteria to be developed under regulations. (D) United States jurisdictions that meet the requirement for accreditation under the National Association of Insurance Commissioners financial standards and accreditation program shall be recognized as qualified jurisdictions. (E) If a certified reinsurers domiciliary jurisdiction ceases to be a qualified jurisdiction, the Commissioner has the discretion to suspend the reinsurers certification indefinitely, in lieu of revocation. (5) The Commissioner shall assign a rating to each certified reinsurer, giving due consideration to the financial strength ratings that have been assigned by rating agencies deemed acceptable to the Commissioner pursuant to regulation. The Commissioner shall publish a list of all certified reinsurers and their ratings. (6)(A) A certified reinsurer shall secure obligations assumed from United States ceding insurers under this subsection at a level consistent with its rating, as specified in regulations promulgated by the Commissioner. (B) For a domestic ceding insurer to qualify for full financial statement credit for reinsurance ceded to a certified reinsurer, the certified reinsurer shall maintain security in a form acceptable to the Commissioner and consistent with the provisions of  31-502, or in a multi-beneficiary trust in accordance with subsection (e) of this section, except as otherwise provided in this subsection. (C) If a certified reinsurer maintains a trust to fully secure its obligations subject to subsection (e) of this section and chooses to secure its obligations incurred as a certified reinsurer in the form of a multi-beneficiary trust, the certified reinsurer shall maintain separate trust accounts for its obligations incurred under reinsurance agreements issued or renewed as a certified reinsurer with reduced security as permitted by this subsection or comparable laws of other United States jurisdictions and for its obligations, subject to subsection (e) of this section. It shall be a condition to the grant of certification under this subsection that the certified reinsurer shall have bound itself, by the language of the trust and agreement with the commissioner with principal regulatory oversight of each such trust account, to fund, upon termination of any such trust account, out of the remaining surplus of such trust, any deficiency of any other such trust account. (D) The minimum trusteed surplus requirements provided in subsection (e) of this section are not applicable with respect to a multi-beneficiary trust maintained by a certified reinsurer for the purpose of securing obligations incurred under this subsection, except that such trust shall maintain a minimum trusteed surplus of $10 million. (E) With respect to obligations incurred by a certified reinsurer under this subsection, if the security is insufficient, the Commissioner shall reduce the allowable credit by an amount proportionate to the deficiency. The Commissioner has the discretion to impose further reductions in allowable credit upon finding that there is a material risk that the certified reinsurers obligations will not be paid in full when due. (F)(i) For the purposes of this subsection, a certified reinsurer whose certification has been terminated for any reason shall be treated as a certified reinsurer required to secure 100% of its obligations. (ii) For the purposes of this subsection, the term terminated refers to revocation, suspension, voluntary surrender, and inactive status. (iii) If the Commissioner continues to assign a higher rating as permitted by other provisions of this section, this requirement shall not apply to a certified reinsurer in inactive status or to a reinsurer whose certification has been suspended. (7) If an applicant for certification has been certified as a reinsurer in a National Association of Insurance Commissioners accredited jurisdiction, the Commissioner has the discretion to defer to that jurisdictions certification and has the discretion to defer to the rating assigned by that jurisdiction, and such assuming insurer shall be considered to be a certified reinsurer in this state. (8)(A) A certified reinsurer that ceases to assume new business in the District may request to maintain its certification in inactive status in order to continue to qualify for a reduction in security for its in-force business. (B) An inactive certified reinsurer shall continue to comply with all applicable requirements of this subsection. (C) The Commissioner shall assign a rating that takes into account, if relevant, the reasons why the reinsurer is not assuming new business. (f-1)(1) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that: (A) Has its head office or is domiciled in and is licensed in a reciprocal jurisdiction; (B)(i) Has and maintains, on an ongoing basis, minimum capital and surplus, or its equivalent, calculated according to the methodology of its domiciliary jurisdiction in an amount established by the Commissioner by regulation; and (ii) If it is an association, including incorporated and individual unincorporated underwriters, has and maintains, on an ongoing basis, minimum capital and surplus equivalents (net of liabilities), calculated according to the methodology applicable in its domiciliary jurisdiction and a central fund containing a balance in amounts established by the Commissioner by regulation; (C)(i) Has and maintains on an ongoing basis, the minimum solvency or capital ratio, as applicable, established by the Commissioner by regulation; and (ii) If it is an association, including incorporated and individual unincorporated underwriters, has and maintains, on an ongoing basis, a minimum solvency or capital ratio as determined by the reciprocal jurisdiction where the assuming insurer has its head office or is domiciled, as applicable, and is also licensed in the reciprocal jurisdiction; (D) Agrees and provides adequate assurance to the Commissioner in a form prescribed by the Commissioner that it: (i) Will provide prompt written notice and explanation to the Commissioner if it falls below the minimum requirements set forth in subparagraphs (B) or (C) of this paragraph or if any regulatory action is taken against it for serious, as determined by the Commissioner, noncompliance with applicable law; (ii) Will consent in writing to the jurisdiction of the courts of the District of Columbia and to the appointment of the Commissioner as agent for service of process, which the Commissioner may require to be provided to the Commissioner and included in each reinsurance agreement; provided, that nothing in this sub-subparagraph shall limit, or in any way alter, the capacity of parties to a reinsurance agreement to agree to alternative dispute resolution mechanisms, except to the extent such an agreement is unenforceable under applicable insolvency or delinquency laws; (iii) Will consent in writing to pay all final judgments, wherever enforcement is sought, obtained by a ceding insurer or its legal successor, that have been declared enforceable in the jurisdiction where the judgments were obtained; (iv) Will include in each reinsurance agreement a provision requiring the assuming insurer to provide security in an amount equal to 100% of the assuming insurer's liabilities attributable to reinsurance ceded pursuant to that agreement if the assuming insurer resists enforcement of a final judgment that is enforceable under the law of the jurisdiction in which it was obtained or a properly enforceable arbitration award, whether obtained by the ceding insurer or by its legal successor on behalf of its resolution estate; and (v) Will confirm in writing that it is not presently participating in any solvent scheme of arrangement that involves this state's ceding insurers and agrees to notify the ceding insurer and the Commissioner, and to provide security in an amount equal to 100% of the assuming insurer's liabilities to the ceding insurer, should the assuming insurer enter into such a solvent scheme of arrangement, which security shall be in a form consistent with subsection (f) of this section,  31-502, and any applicable regulations established by the Commissioner; (E) Provides (or its legal successor provides), if requested by the Commissioner on the Commissioner's own behalf or of any legal predecessor, certain documentation established by the Commissioner by regulation; (F) Maintains a practice of prompt payment of claims under reinsurance agreements, pursuant to criteria set forth in regulation established by the Commissioner; and (G) Will require its supervisory authority to confirm to the Commissioner on an annual basis, as of the preceding December 31, or as of the annual date otherwise statutorily reported to the reciprocal jurisdiction, that the assuming insurer is in compliance with the requirements set forth in subparagraphs (B) and (C) of this paragraph. (2) Nothing in paragraph (1) of this subsection precludes an assuming insurer from providing the Commissioner with information on a voluntary basis. (3)(A) The Commissioner shall timely create and publish a list of reciprocal jurisdictions that includes any reciprocal jurisdiction, as defined in paragraph (11)(B) of this subsection, and consider including any other reciprocal jurisdiction included on a list created by the National Association of Insurance Commissioners. (B)(i) In accordance with a process set forth in regulations established by the Commissioner, the Commissioner may remove a jurisdiction from the list of reciprocal jurisdictions upon a determination that the jurisdiction no longer meets the requirements of a reciprocal jurisdiction; except, that the Commissioner shall not remove from the list a reciprocal jurisdiction as defined in paragraph (11)(B)(i) and (ii) of this subsection. (ii) If a jurisdiction is removed from the Commissioner's list of reciprocal jurisdictions, credit for reinsurance ceded to an assuming insurer that has its home office or is domiciled in that jurisdiction shall be allowed if otherwise allowed pursuant to this chapter. (4)(A) The Commissioner shall timely create and publish a list of assuming insurers that have satisfied the conditions set forth in this subsection and to which cessions shall be granted credit in accordance with this subsection. (B) The Commissioner may add an assuming insurer to the list created pursuant to subparagraph (A) of this paragraph if a jurisdiction accredited by the National Association of Insurance Commissioners has added the assuming insurer to a list of assuming insurers or the assuming insurer submits the information to the Commissioner as required by paragraph (1)(D) of this subsection and complies with any additional requirements that the Commissioner may establish by regulation, except to the extent that the regulation conflicts with an applicable covered agreement. (5)(A) If the Commissioner determines that an assuming insurer no longer meets one or more of the requirements under this subsection, the Commissioner may revoke or suspend the eligibility of the assuming insurer for recognition under this subsection in accordance with procedures set forth in regulation. (B) While an assuming insurer's eligibility is suspended, no reinsurance agreement issued, amended, or renewed on or after the effective date of the suspension shall qualify for credit except to the extent that the assuming insurer's obligations under the contract are secured in accordance with  31-502. (C) If an assuming insurer's eligibility is revoked, no credit for reinsurance may be granted on or after the effective date of the revocation with respect to any reinsurance agreements entered into by the assuming insurer, including reinsurance agreements entered into prior to the date of revocation, except to the extent that the assuming insurer's obligations under the contract are secured in a form acceptable to the Commissioner and consistent with the provisions of  31-502. (6) If a ceding insurer is subject to a legal process of rehabilitation, liquidation, or conservation, the ceding insurer, or its representative, may seek and, if determined appropriate by the court in which the proceedings are pending, may obtain an order requiring that the assuming insurer post security for all outstanding ceded liabilities. (7) Nothing in this subsection shall limit or alter the capacity of parties to a reinsurance agreement to agree to requirements for security or other terms in the reinsurance agreement, except as expressly prohibited by this chapter or regulations issued pursuant to this chapter. (8)(A) Credit may be taken under this subsection only for reinsurance agreements entered into, amended, or renewed on or after July 27, 2022, and only with respect to losses incurred and reserves reported on or after the later of the date on which the assuming insurer has met all eligibility requirements pursuant to paragraph (1) of this subsection or the effective date of the new reinsurance agreement, amendment, or renewal. (B) This paragraph does not alter or impair a ceding insurer's right to take credit for reinsurance, to the extent that credit is not available under this subsection, as long as the reinsurance qualifies for credit under any other applicable provision of this chapter. (9) Nothing in this subsection shall authorize an assuming insurer to withdraw or reduce the security provided under any reinsurance agreement except as permitted by the terms of the agreement. (10) Nothing in this subsection shall limit or alter the capacity of parties to any reinsurance agreement to renegotiate the agreement. (11) For the purposes of this subsection, the term: (A) "Covered agreement" means an agreement entered into pursuant to 31 U.S.C.  313 and 314 that is currently in effect or in a period of provisional application and addresses the elimination, under specified conditions, of collateral requirements as a condition for entering into any reinsurance agreement with a ceding insurer domiciled in the District or for allowing the ceding insurer to recognize credit for reinsurance. (B) "Reciprocal jurisdiction" means: (i) A non-United States jurisdiction that is subject to an in-force covered agreement with the United States, or, in the case of a covered agreement between the United States and the European Union, is a member state of the European Union; (ii) A United States jurisdiction that meets the requirements for accreditation under the financial standards and accreditation program of the National Association of Insurance Commissioners; or (iii) A qualified jurisdiction, as determined by the Commissioner pursuant to subsection (f)(4) of this section, that is not otherwise described in sub-subparagraph (i) or (ii) of this subparagraph that meets certain additional requirements, consistent with the terms and conditions of in-force covered agreements, as established by the Commissioner by regulation. (g) Credit shall be allowed when the reinsurance is ceded to an assuming insurer not meeting the requirements of subsections (b), (c), (d), (e), or (f) of this section, but only as to the insurance of risks located in jurisdictions where the reinsurance is required by applicable law or regulation of that jurisdiction. (h)(1) If the assuming insurer is not licensed, accredited, or certified to transact insurance or reinsurance in this state, the credit permitted by subsections (c) and (d) of this section shall not be allowed unless the assuming insurer agrees in the reinsurance agreements: (A) That in the event of the failure of the assuming insurer to perform its obligations under the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding insurer, shall submit to the jurisdiction of any court of competent jurisdiction in any state of the United States, comply with all requirements necessary to give the court jurisdiction, and abide by the final decision of the court or of any appellate court in the event of an appeal; and (B) To designate the Commissioner or a designated attorney as its true and lawful attorney upon whom may be served any lawful process in any action, suit, or proceeding instituted by or on behalf of the ceding company insurer. (2) This subsection is not intended to conflict with or override the obligation of the parties to a reinsurance agreement to arbitrate their disputes if this obligation is created in the agreement. (i) If the assuming insurer does not meet the requirements of subsections (b), (c), or (d) of this subsection, the credit permitted by subsection (e) or (f) of this section shall not be allowed unless the assuming insurer agrees in the trust agreements to the following conditions: (1) Notwithstanding any other provisions in the trust instrument, if the trust fund is inadequate because it contains an amount less than the amount required by subsection (e)(3) of this section, or if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation, or similar proceeding under the laws of its state or country of domicile, the trustee shall comply with an order of the commissioner with regulatory oversight over the trust or with an order of a court of competent jurisdiction directing the trustee to transfer to the commissioner with regulatory oversight all of the assets of the trust fund. (2) The assets shall be distributed by and claims shall be filed with and valued by the commissioner with regulatory oversight in accordance with the laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic insurance companies. (3) If the commissioner with regulatory oversight determines that the assets of the trust fund or any part thereof are not necessary to satisfy the claims of the United States ceding insurers of the grantor of the trust, the assets or part thereof shall be returned by the commissioner with regulatory oversight to the trustee for distribution in accordance with the trust agreement. (4) The grantor shall waive any right otherwise available to it under United States law that is inconsistent with this provision. (j)(1) If an accredited or certified reinsurer ceases to meet the requirements for accreditation or certification, the Commissioner may suspend or revoke the reinsurers accreditation or certification. (2) The Commissioner shall give the reinsurer notice and opportunity for a hearing. The suspension or revocation shall not take effect until after the Commissioners order on a hearing, unless: (A) The reinsurer waives its right to a hearing; (B) The Commissioners order is based on regulatory action by the reinsurers domiciliary jurisdiction or the voluntary surrender or termination of the reinsurers eligibility to transact insurance or reinsurance business in its domiciliary jurisdiction or in the primary certifying state of the reinsurer under subsection (f)(7) of this section; or (C) The Commissioner finds that an emergency requires immediate action and a court of competent jurisdiction has not stayed the Commissioners action. (3)(A) While a reinsurers accreditation or certification is suspended, no reinsurance contract issued or renewed after the effective date of the suspension qualifies for credit except to the extent that the reinsurers obligations under the contract are secured in accordance with  31-502. (B) If a reinsurers accreditation or certification is revoked, no credit for reinsurance may be granted after the effective date of the revocation except to the extent that the reinsurers obligations under the contract are secured in accordance with subsection (f)(6) of this section or  31-502. (k)(1) A ceding insurer shall take steps to manage its reinsurance recoverables proportionate to its own book of business. A domestic ceding insurer shall notify the Commissioner within 30 days after reinsurance recoverables from any single assuming insurer, or group of affiliated assuming insurers, that exceeds 50% of the domestic ceding insurers last reported surplus to policyholders, or after it is determined that reinsurance recoverables from any single assuming insurer, or group of affiliated assuming insurers, is likely to exceed this limit. The notification shall demonstrate that the exposure is safely managed by the domestic ceding insurer. (2) A ceding insurer shall take steps to diversify its reinsurance program. A domestic ceding insurer shall notify the Commissioner within 30 days after ceding to any single assuming insurer, or group of affiliated assuming insurers, more than 20% of the ceding insurers gross written premium in the prior calendar year, or after it has determined that the reinsurance ceded to any single assuming insurer, or group of affiliated assuming insurers, is likely to exceed this limit. The notification shall demonstrate that the exposure is safely managed by the domestic ceding insurer.  (Oct. 15, 1993, D.C. Law 10-36,  2, 40 DCR 5812; Mar. 21, 1995, D.C. Law 10-233,  11, 42 DCR 24; Feb. 27, 1996, D.C. Law 11-90,  6, 42 DCR 7155; Apr. 9, 1997, D.C. Law 11-255,  42, 44 DCR 1271; May 21, 1997, D.C. Law 11-268,  10(cc), 44 DCR 1730; Oct. 21, 2000, D.C. Law 13-185,  3, 47 DCR 7068; Mar. 11, 2015, D.C. Law 20-235,  3(a), 62 DCR 461; Apr. 11, 2019, D.C. Law 22-292,  201(a), 66 DCR 1691; Dec. 13, 2022, D.C. Law 24-194,  2(a), 69 DCR 012703.)  Prior Codifications 1981 Ed.,  35-3301. Section References This section is referenced in  31-502. Effect of Amendments D.C. Law 13-185 added subsec. (b-1). The 2015 amendment by D.C. Law 20-235 rewrote this section. Cross References Hospital and medical services corporations, applicability of this section, see  31-3503. Applicability  Section 401 of D.C. Law 22-292 provided that the changes made to this section by D.C. Law 22-292 shall apply to all insurance policies issued or renewed in the District 90 days after April 11, 2019.  Emergency Legislation  For temporary (90 days) amendment of this section, see  2(a) of Credit for Reinsurance Congressional Review Emergency Amendment Act of 2022 (D.C. Act 24-589, Oct. 25, 2022, 0 DCR 0).   For temporary (90 days) amendment of this section, see  2(a) of Credit for Reinsurance Emergency Amendment Act of 2022 (D.C. Act 24-537, July 27, 2022, 0 DCR 0).  For temporary amendment of section, see  7 of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and  6 of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844). Temporary Legislation For temporary (225 day) amendment of section, see  6 of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305). Editor's Notes Application of Law 10-36: Section 7 of D.C. Law 10-36 provided that  35-3301 through 35-3303 and Section 5 of this act shall apply to all cession after the effective date of this act under reinsurance agreements which have had an inception, anniversary, or renewal date not less than 6 months after the effective date of this act. Mayor authorized to issue rules: Section 5 of D.C. Law 10-36 provided that the Mayor shall, pursuant to subchapter I of Chapter 15 of Title 1 [subchapter I of Chapter 5 of Title 2, 2001 Ed.], issue rules to implement the provisions of this chapter. Delegation of Authority Delegation of authority pursuant to D.C. Law 10-36, the Law on Credit for Reinsurance Act of 1993, see Mayors Order 94-54, March 7, 1994 ( 41 DCR 1433).
 31502. Asset or reduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of  31-501. (a) An asset or a reduction from liability for the reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of  31-501 shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer; provided, that the Commissioner may adopt by regulation pursuant to  31-504(b) specific additional requirements relating to or setting forth the: (1) Valuation of assets or reserve credits; (2) Amount and forms of security supporting reinsurance arrangements described  31-504(b); and (3) Circumstances pursuant to which credit will be reduced or eliminated. (b) The reduction shall be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the ceding insurer, under a reinsurance contract with the assuming insurer as security for the payment of obligations thereunder, if the security is held in the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer, or, in the case of a trust, held in a qualified U.S. financial institution, as defined in  31-503(a). This security may be in the form of: (1) Cash; (2) Securities listed by the Securities Valuation Office of the National Association of Insurance Commissioners, including those deemed exempt from filing as defined by the Purposes and Procedures Manual of the Securities Valuation Office, and qualifying as admitted assets; (3) Clean, irrevocable, unconditional letters of credit, issued or confirmed by a qualified U.S. financial institution effective no later than December 31 of the year for which the filing is being made, and in the possession of, or in trust for, the ceding insurer on or before the filing date of its annual statement; provided, that letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance (or confirmation) shall, notwithstanding the issuing (or confirming) institution's subsequent failure to meet applicable standards of issuer acceptability, continue to be acceptable as security until their expiration, extension, renewal, modification, or amendment, whichever first occurs; or (4) Any other form of security acceptable to the Commissioner.  (Oct. 15, 1993, D.C. Law 10-36,  3, 40 DCR 5812; May 21, 1997, D.C. Law 11-268,  10(cc), 44 DCR 1730; Mar. 11, 2015, D.C. Law 20-235,  3(b), 62 DCR 461; Apr. 11, 2019, D.C. Law 22-292,  201(b), 66 DCR 1691.)  Prior Codifications 1981 Ed.,  35-3302. Section References This section is referenced in  31-3932.11. Effect of Amendments The 2015 amendment by D.C. Law 20-235 rewrote (2). Applicability  Section 401 of D.C. Law 22-292 provided that the changes made to this section by D.C. Law 22-292 shall apply to all insurance policies issued or renewed in the District 90 days after April 11, 2019.  Editor's Notes Application of Law 10-36: See Historical and Statutory Notes following  31-501.
 31503. Qualified U.S. financial institutions. (a) For purposes of [ 31-502(b)], a qualified U.S. financial institution means an institution that: (1) Is organized, or, in the case of a United States office of a foreign banking organization, licensed, under the laws of the United States or any state thereof; (2) Is regulated, supervised, and examined by United States federal or state authorities having regulatory authority over banks and trust companies; (3) Has been determined by either the Commissioner or the Securities Valuation Office of the National Association of Insurance Commissioners to meet the standards of financial condition and standing considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the Commissioner; and (4) When eligible to act as a fiduciary of a trust under this chapter: (A) Is organized, or, in the case of a United States branch or agency office of a foreign banking organization, licensed, under the laws of the United States or any state thereof and has been granted authority to operate with fiduciary powers; and (B) Is regulated, supervised, and examined by federal or state authorities having regulatory authority over banks and trust companies.  (Oct. 15, 1993, D.C. Law 10-36,  4, 40 DCR 5812; May 21, 1997, D.C. Law 11-268,  10(cc), 44 DCR 1730; Apr. 11, 2019, D.C. Law 22-292,  201(c), 66 DCR 1691.)  Prior Codifications 1981 Ed.,  35-3303. Section References This section is referenced in  31-501. Applicability  Section 401 of D.C. Law 22-292 provided that the changes made to this section by D.C. Law 22-292 shall apply to all insurance policies issued or renewed in the District 90 days after April 11, 2019.  Editor's Notes Application of Law 10-36: See Historical and Statutory Notes following  31-501.
 31504. Rulemaking. (a) The Commissioner may adopt rules and regulations necessary to implement the provisions of this chapter. (b) The Commissioner is further authorized to adopt rules and regulations applicable to reinsurance arrangements; provided, that regulations adopted pursuant to this subsection: (1) May apply only to reinsurance relating to: (A) Life insurance policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits; (B) Universal life insurance policies with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period; (C) Variable annuities with guaranteed death or living benefits; (D) Long-term care insurance policies; and (E) Such other life and health insurance and annuity products as to which the National Association of Insurance Commissioners ("NAIC") adopts model regulatory requirements with respect to credit for reinsurance. (2) Pursuant paragraph (1)(A) or (B) of this subsection may apply to any treaty containing: (A) Policies issued on or after January 1, 2015; or (B) Policies issued prior to January 1, 2015, if risk pertaining to such pre-2015 policies is ceded in connection with the treaty, in whole or in part, on or after January 1, 2015; (3) May require the ceding insurer, in calculating the amounts or forms of security required to be held under regulations promulgated under this authority, to use the Valuation Manual adopted by the NAIC, as amended. (4) Shall not apply to cessions to an assuming insurer that: (A) Is certified in the District or, at a minimum, in 5 other states or meets the conditions set forth in  31-501(f-1); or (B) Maintains at least $250 million in capital and surplus when determined in accordance with the NAIC Accounting Practices and Procedures Manual, including all amendments thereto adopted by the NAIC, excluding the impact of any permitted or prescribed practices, and is: (i) Licensed in at least 26 states; or (ii) Licensed in at least 10 states, and licensed or accredited in a total of at least 35 states.  (Oct. 21, 1993, D.C. Law 10-36,  5, 40 DCR 5812; Apr. 11, 2019, D.C. Law 22-292,  201(c), 66 DCR 1691; Dec. 13, 2022, D.C. Law 24-194,  2(b), 69 DCR 012703.)  Applicability  Section 401 of D.C. Law 22-292 provided that the changes made to this section by D.C. Law 22-292 shall apply to all insurance policies issued or renewed in the District 90 days after April 11, 2019.  Emergency Legislation  For temporary (90 days) amendment of this section, see  2(b) of Credit for Reinsurance Congressional Review Emergency Amendment Act of 2022 (D.C. Act 24-589, Oct. 25, 2022, 0 DCR 0).   For temporary (90 days) amendment of this section, see  2(b) of Credit for Reinsurance Emergency Amendment Act of 2022 (D.C. Act 24-537, July 27, 2022, 0 DCR 0). 
 315001. Purposes of chapter. The purposes of this chapter are: (1) To assure stability in the property insurance market for property located in the District of Columbia; (2) To assure the availability of basic property insurance and homeowners insurance as defined by this chapter; (3) To encourage maximum use and utilization, in obtaining basic property insurance and homeowners insurance, of the normal insurance market provided by authorized insurers; (4) To provide for the equitable distribution among insurers of the responsibility for insuring qualified property in the District of Columbia for which insurance cannot be obtained through the normal insurance market and to authorize the establishment of a joint underwriting association in the District of Columbia to provide for insuring and reinsuring of basic property insurance and homeowners insurance without regard to environmental hazards; and (5) To encourage the delivery of essential property insurance, and the homeowners insurance that is provided by the Facility, at the most reasonable cost possible; provided, that insurance pricing by the Facility: (A) Is actuarially self-supporting; and (B) Does not actively compete with insurance pricing in the normal insurance market provided by authorized insurers.  (Aug. 1, 1968, 82 Stat. 567, Pub. L. 90-448, title XII,  1202; Mar. 27, 2003, D.C. Law 14-251,  2(a), 50 DCR 222.)  Prior Codifications 1981 Ed.,  35-1801. 1973 Ed.,  35-1701. Effect of Amendments D.C. Law 14-251 substituted basic property insurance and homeowners insurance for basic property insurance throughout the section; in par. (3), substituted maximum use and utilization for maximum use, and made a nonsubstantive change; in par. (4), substituted District of Columbia to provide for insuring and for District of Columbia to provide for, and made a nonsubstantive change; and added par. (5).
 315002. Definitions. As used in this chapter, unless the context otherwise requires: (1) The term Mayor means the Mayor of the District of Columbia or his designated agent. (2) The term basic property insurance means insurance against direct loss to property caused by perils as defined and limited in the standard fire policy and extended coverage endorsement thereon, as approved by the Commissioner. (3) The term environmental hazard means any hazardous condition that might give rise to loss under an insurance contract, but which is beyond the control of the property owner. (3A) The term homeowners insurance means insurance for residential property that provides a combination of coverages, including fire, extended coverage, vandalism and malicious mischief, burglary, theft, and personal liability. The term shall include a policy of insurance which is limited to basic market value, repair cost, or actual cash value contracts for owner-occupants of one-to-four-family dwellings as approved by the Commissioner. (4) The term inspection bureau means any rating bureau or other organization designated by the Mayor to perform inspections to determine the condition of the properties for which basic property insurance or homeowners insurance is sought. (5) The terms Industry Placement Facility and Facility mean the facility consisting of all insurers licensed to write and engaged in writing basic property insurance or homeowners insurance (including homeowners and commercial multiperil policies) within the District of Columbia to assist agents, brokers, and applicants in securing basic property insurance or homeowners insurance. (6) The term premiums written means gross direct premiums charged with respect to property in the District of Columbia on all policies of basic property insurance and the basic property insurance premium components of all multiperil policies, less all premiums and dividends returned, paid, or credited to policyholders or the unused or unabsorbed portions of premiums deposits. (7) The term property owner means any person having an insurable interest in real, personal, or mixed real and personal property.  (Aug. 1, 1968, 82 Stat. 568, Pub. L. 90-448, title XII,  1203; Mar. 27, 2003, D.C. Law 14-251,  2(b), 50 DCR 222.)  Prior Codifications 1981 Ed.,  35-1802. 1973 Ed.,  35-1702. Effect of Amendments D.C. Law 14-251 rewrote par. (2); added par. (3A); and substituted basic property insurance or homeowners insurance for basic property insurance in pars. (4) and (5). Editor's Notes Delegation of functions: Reorganization Order No. 43, as amended August 12, 1968, delegated to the Superintendent of Insurance the functions vested in the Mayor by this chapter. Department of Insurance abolished: The Department of Insurance, including the Superintendent, was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. Reorganization Order No. 43, dated June 23, 1953, as amended, established, under the direction and control of a Commissioner, a Department of Insurance headed by a Superintendent. The Order provided for the organization of the Department, abolished the previously existing Department of Insurance, and provided that all functions and positions of the previous Department would be transferred to the new Department of Insurance, including the duties, powers, and authorities of all officers and employees; and that all personnel, property, records and unexpended balances relating to the functions and positions transferred would also be transferred to the new Department. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. The functions of the Superintendent of Insurance were transferred to the Department of Consumer and Regulatory Affairs by Reorganization Plan No. 1 of 1983, effective March 31, 1983. Pursuant to the provisions of D.C. Law 11-268, the Department of Insurance and Securities Regulation was established and the duties of the Superintendent of Insurance and the Insurance Administration were assumed by the Commissioner of Insurance and Securities and the Insurance Administration in the Department of Consumer and Regulatory Affairs was abolished. Change in Government This section originated at a time when local government powers were delegated to the District of Columbia Council and to a Commissioner of the District of Columbia. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 315003. Industry Placement Facility. (a) Within 30 days after August 1, 1968, all insurers licensed to write and engaged in writing in the District of Columbia, on a direct basis, basic property insurance or any component thereof in multiperil policies shall establish an Industry Placement Facility. The Facility shall formulate and administer a program, subject to disapproval by the Mayor in whole or in part, to seek the equitable apportionment among such insurers of basic property insurance and homeowners insurance which may be afforded applicants in the District of Columbia whose property is insurable in accordance with reasonable underwriting standards and who individually or through their insurance agent or broker request the aid of the Facility to procure such insurance. The Facility shall seek to place insurance with 1 or more participating companies up to the full insurable value of the risk, if requested, except to the extent that deductibles, percentage participation clauses, and other underwriting devices are employed to meet special problems of insurability. (b) The Facility may, subject to the approval of the Commissioner, provide as part of its program for the equitable distribution of commercial risks and dwelling risks among insurers. Such distribution of risks may be implemented through assignment of policies to one or more participating companies or through joint underwriting of risks as provided by  31-5005. (c) Each insurer licensed to write and engaged in writing in the District of Columbia, on a direct basis, basic property insurance or any component thereof in multiperil policies shall participate in the Industry Placement Facility program in accordance with the established rules of the program as a condition of its authority to transact such kinds of insurance in the District of Columbia, except that, in lieu of revoking or suspending the certificate of authority of any company for any failure to comply with any of the established rules of the program, the Mayor may subject such company to a penalty of not more than $200 for each such failure to so comply when in his judgment he finds that the public interest would be best served by the continued operation of the company in the District of Columbia.  (Aug. 1, 1968, 82 Stat. 568, Pub. L. 90-448, title XII,  1204; Mar. 27, 2003, D.C. Law 14-251,  2(c), 50 DCR 222.)  Prior Codifications 1981 Ed.,  35-1803. 1973 Ed.,  35-1703. Effect of Amendments D.C. Law 14-251, in subsec. (a), substituted to seek the equitable apportionment among such insurers of basic property insurance and homeowners insurance which may be afforded applicants for to seek the equitable apportionment amount such insurers of basic property insurance which may be afforded applicants; and rewrote subsec. (b) which had read as follows: (b) The Facility may, subject to the approval of the Mayor, provide as part of its program for the equitable distribution of commercial risks and dwelling risks among insurers. Editor's Notes Delegation of functions: See Historical and Statutory Notes following  31-5002. Department of Insurance abolished: See Historical and Statutory Notes following  31-5002. Change in Government This section originated at a time when local government powers were delegated to the District of Columbia Council and to a Commissioner of the District of Columbia. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 315004. Rules and regulations. (a) The Industry Placement Facility shall on its own motion, or within 30 days after a request by the Mayor, submit to the Mayor such proposed rules and regulations applicable to insurers, agents, and brokers deemed necessary to assure all property owners fair access to basic property insurance through the normal insurance markets, including rules and regulations concerning: (1) The manner and scope of inspections of risk by an inspection bureau; (2) The preparation and filing of inspection reports and reports on actions taken in connection with inspected risks, and summaries thereof; and (3) The operation of the Facility, including rules and regulations concerning: (A) The basic property insurance coverages to be provided through the Facility; (A-i) The homeowners insurance coverages to be provided through the Facility; provided, that these coverages shall not be less than homeowners insurance; (B) The reasonable effort to obtain insurance in the normal commercial market required of an applicant before recourse to the Facility; and (C) The appeals procedure within the Facility for any applicant for insurance regarding any ruling, action, or decision by or on behalf of the Facility. (b) The Mayor may adopt such of the rules and regulations submitted pursuant to subsection (a) of this section as he approves. If the Mayor disapproves any proposed rule or regulation submitted, he shall state the reasons for so doing, and he shall require the Facility to submit a revision thereof within such time as he may designate, but not less than 10 days. During such designated time, the Mayor and the Facility shall consult regarding any such disapproved rule or regulation. If the Facility fails to submit a proposed rule or regulation, or revision thereof, within the designated time, or if a revised rule or regulation is unacceptable to the Mayor, the Mayor may make such rules and regulations covering the proposed general subject matter as he shall deem necessary to carry out the purposes of this chapter. Any rule or regulation adopted or made under this section shall be consistent with the requirements of part A of title XII of the National Housing Act.  (Aug. 1, 1968, 82 Stat. 569, Pub. L. 90-448, title XII,  1205; Mar. 27, 2003, D.C. Law 14-251,  2(d), 50 DCR 222.)  Prior Codifications 1981 Ed.,  35-1804. 1973 Ed.,  35-1704. Effect of Amendments D.C. Law 14-251 added par. (A-i) to subsec. (a)(3). References in Text Part A of title XII of the National Housing Act, referred to at the end of subsection (b), consists of  1211 to 1214, as added by  1103 of the Act of August 1, 1968, 82 Stat. 558, Pub. L. 90-448, codified at 12 U.S.C.  1749bbb-7 to 1749bbb-10. Editor's Notes Delegation of functions: See Historical and Statutory Notes following  31-5002. Department of Insurance abolished: See Historical and Statutory Notes following  31-5002. Change in Government This section originated at a time when local government powers were delegated to the District of Columbia Council and to a Commissioner of the District of Columbia. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 315005. Joint Underwriting Association; establishment; composition; plan of operation; participation by members; board of directors. (a) The Mayor is authorized to establish by order a Joint Underwriting Association if he finds, after notice and hearing, that such Association is necessary to carry out the purposes of this chapter. Such Joint Underwriting Association shall consist of all insurers licensed to write and engaged in writing in the District of Columbia, on a direct basis, such basic property insurance as may be designated by the Mayor or any component thereof in multiperil policies. (b) Every such insurer shall be and remain a member of the Association and shall comply with all requirements of membership as a condition of its authority to transact such kinds of insurance in the District of Columbia, except that in lieu of revoking or suspending the certificate of authority of any company for any failure to comply with any of the requirements of membership, the Mayor may subject such company to a penalty of not more than $200 for each such failure to so comply when in his judgment he finds that the public interest would be best served by the continued operation of the company in the District of Columbia. (c)(1) Within 60 days following the effective date of the order of the Mayor under this section the Association shall submit to him a proposed plan of operation, consistent with the provisions of this chapter, which shall provide for economical, fair, and nondiscriminatory administration of the Association and for the prompt and efficient provision of insurance or reinsurance, without regard to environmental hazards, for such basic property insurance and homeowners insurance as may be designated by the Mayor. The plan of operation shall include provisions for: (A) Preliminary assessment of all members for initial expenses necessary to commence operations; (B) Establishment of necessary facilities; (C) Management and operation of the Association; (D) Assessment of members to defray losses and expenses; (E) Commission arrangements; (F) Reasonable underwriting standards and ratemaking; (G) Assumption and cessation of insurance and of reinsurance; (G-i) Immediate binding of eligible homeowners risks; (G-ii) Encouragement of agents, brokers, and applicants to transfer insurance coverage provided by the Association, through either insurance or reinsurance, to the normal insurance market provided by authorized insurers; and (H) Such other matters as the Mayor may designate. (2) The plan of operation shall not take effect until approved by the Mayor. If the Mayor disapproves the proposed plan of operation (or any part thereof), he shall state the reasons for so doing, and the Association shall within 30 days thereafter submit for his review an appropriately revised plan of operation. During such time, the Mayor and the Association shall consult regarding the disapproved plan or part thereof. If the Association fails to submit a revised plan of operation, or if the revised plan so submitted is unacceptable to the Mayor, the Mayor shall promulgate a plan of operation. (3) The Association may, on its own initiative, amend such plan, subject to approval by the Mayor, and shall amend such plan at the direction of the Mayor if he finds such action is necessary to carry out the purposes of this chapter. (d) All members of the Association shall participate in its writings, expenses, profits, and losses, or in such categories thereof as may be separately established by the Association, subject to approval by the Mayor, in the proportion that the premiums written by each such member during the preceding calendar year bear to the aggregate premiums written in the District of Columbia by all members of the Association, or in accordance with such other formula as the Association may devise with the approval of the Mayor. Such participation by each insurer in the Association shall be determined annually on the basis of such premiums written during the preceding calendar year as disclosed in the annual statements and other reports filed by the insurer with the Mayor. (e) The Association shall be governed by a board of 11 directors, elected annually by cumulative voting by the members of the Association, whose votes in such election shall be weighted in accordance with the proportionate amount of each members net direct premiums written in the District of Columbia during the preceding calendar year. The 1st board shall be elected at a meeting of the members or their authorized representatives, which shall be held within 30 days after the effective date of the order under this section establishing the Association, at a time and place designated by the Mayor.  (Aug. 1, 1968, 82 Stat. 569, Pub. L. 90-448, title XII,  1206; Mar. 27, 2003, D.C. Law 14-251,  2(e), 50 DCR 222.)  Prior Codifications 1981 Ed.,  35-1805. 1973 Ed.,  35-1705. Section References This section is referenced in  31-5003. Effect of Amendments D.C. Law 14-251, in subsec. (c)(1), substituted efficient provision of insurance or for efficient provision of and substituted basic property insurance and homeowners insurance for basic property insurance; in par. (F) of subsec. (c)(1), substituted Reasonable underwriting standards and ratemaking for Reasonable underwriting standards; rewrote par. (G) of subsec. (c)(1); and added pars. (G-i) and (G-ii) to subsec. (c)(1). Prior to amendment, par. (G) of subsec. (c)(1) had read as follows: (G) Assumption and cessation of reinsurance; and Editor's Notes Delegation of functions: See Historical and Statutory Notes following  31-5002. Department of Insurance abolished: See Historical and Statutory Notes following  31-5002. Change in Government This section originated at a time when local government powers were delegated to the District of Columbia Council and to a Commissioner of the District of Columbia. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 315006. Supervision and regulation of operations by Mayor. The operation of any inspection bureau, the Industry Placement Facility, and the Joint Underwriting Association shall at all times be subject to the supervision and regulation of the Mayor. The Mayor shall have the power of visitation of and examination into such operations and free access to all the books, records, files, papers, and documents that relate to such operations, may summon and qualify witnesses under oath, and may examine directors, officers, agents, employees or any other person having knowledge of such operations.  (Aug. 1, 1968, 82 Stat. 571, Pub. L. 90-448, title XII,  1207.)  Prior Codifications 1981 Ed.,  35-1806. 1973 Ed.,  35-1706. Editor's Notes Delegation of functions: See Historical and Statutory Notes following  31-5002. Department of Insurance abolished: See Historical and Statutory Notes following  31-5002. Change in Government This section originated at a time when local government powers were delegated to the District of Columbia Council and to a Commissioner of the District of Columbia. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 315007. Immunity from liability in regard to statements concerning insurability. There shall be no liability on the part of, and no cause of action of any nature shall arise against, insurers, any inspection bureau, the Industry Placement Facility, the Joint Underwriting Association, the agents or employees of such bureau, Facility, or Association, or any officer or employee of the District of Columbia, for any statements made in good faith by them concerning the insurability of property: (1) In any reports or other communications; (2) at the time of the hearings conducted in connection therewith; or (3) in the findings with respect thereto required by the provisions of this chapter. The reports and communications of any inspection bureau, the Industry Placement Facility, and the Joint Underwriting Association with respect to individual properties shall not be open to inspection by, or otherwise available to, the public.  (Aug. 1, 1968, 82 Stat. 571, Pub. L. 90-448, title XII,  1208.)  Prior Codifications 1981 Ed.,  35-1807. 1973 Ed.,  35-1707.
 315008. Annual reports by Association; additional information. The Joint Underwriting Association shall file with the Mayor, annually on or before the 1st day of March, a statement which shall contain information with respect to its transactions, condition, operations, and affairs during the preceding year. Such statement shall contain such matters and information as are prescribed by the Mayor and shall be in such form as is approved by him. The Mayor may at any time require the Association to furnish him with additional information with respect to its transactions, condition, or any matter connected therewith which he considers to be material and which will assist him in evaluating the scope, operation, and experience of the Association.  (Aug. 1, 1968, 82 Stat. 571, Pub. L. 90-448, title XII,  1209.)  Prior Codifications 1981 Ed.,  35-1808. 1973 Ed.,  35-1708. Editor's Notes Delegation of functions: See Historical and Statutory Notes following  31-5002. Department of Insurance abolished: See Historical and Statutory Notes following  31-5002. Change in Government This section originated at a time when local government powers were delegated to the District of Columbia Council and to a Commissioner of the District of Columbia. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 315009. Administrative appeals; judicial review. (a) Any applicant for insurance and any affected insurer may appeal to the Mayor within 90 days after any final ruling, action, or decision by or on behalf of any inspection bureau, the Industry Placement Facility, or the Joint Underwriting Association, following exhaustion of remedies available within such bureau, Facility, or Association. (b) All final orders or decisions of the Mayor made under this chapter shall be subject to review by the District of Columbia Court of Appeals under the District of Columbia Administrative Procedure Act.  (Aug. 1, 1968, 82 Stat. 571, Pub. L. 90-448, title XII,  1210; July 29, 1970, 84 Stat. 583, Pub. L. 91-358, title I,  163(d).)  Prior Codifications 1981 Ed.,  35-1809. 1973 Ed.,  35-1709. References in Text The District of Columbia Administrative Procedure Act, referred to in Subsection (b) of this section, in the Act of October 21, 1968, 82 Stat. 1203, Pub. L. 90-614, codified as subchapter I of Chapter 15 of Title 1 (subchapter I of Chapter 5 of Title 2, 2001 Ed.). Editor's Notes Delegation of functions: See Historical and Statutory Notes following  31-5002. Department of Insurance abolished: See Historical and Statutory Notes following  31-5002. Change in Government This section originated at a time when local government powers were delegated to the District of Columbia Council and to a Commissioner of the District of Columbia. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 315010. Assessment of companies for reinsurance reimbursement fund; charge to insured to recover assessment. (a) In order to carry out the purposes of this chapter and to make available to insurers who participate hereunder the reinsurance afforded under part B of title XII of the National Housing Act [12 U.S.C.  1749bbb-7 et seq.] against losses to property resulting from riots or civil disorders, the Mayor is authorized to assess each insurance company authorized to do business in the District of Columbia an amount, in the proportion that the premiums earned by each such company in the District of Columbia, on lines reinsured in the District of Columbia by the Secretary of Housing and Urban Development, during the preceding calendar year bear to the aggregate premiums earned on those lines in the District of Columbia by all insurance companies, sufficient to provide a fund to reimburse the Secretary of Housing and Urban Development in the manner set forth in  1223(a)(1) of such Part B [12 U.S.C.  1749bbb-9]. Such fund may be added to or such fund may be created by moneys appropriated therefor by the Congress. (b) Insurers shall add to the premium rate an amount, to be approved by the Mayor, sufficient to recover, within not more than 3 years, any amounts assessed under subsection (a) of this section during the preceding calendar year. Such amount shall be a separate charge to the insured in addition to the premium to be paid and shall be reflected as such in the policy of insurance. No commission shall be paid thereon to any agent or broker producing or selling the policy of insurance wherein such amount is added.  (Aug. 1, 1968, 82 Stat. 572, Pub. L. 90-448, title XII,  1211.)  Prior Codifications 1981 Ed.,  35-1810. 1973 Ed.,  35-1710. References in Text Part B of title XII of the National Housing Act, referred to in subsection (a) of this section, consists of  1221 to 1224, as added by  1103 of the Act of August 1, 1968, 82 Stat. 560, Pub. L. 90-448, codified at 12 U.S.C.  1749bbb-7 to 1749bbb-10. Editor's Notes Delegation of functions: See Historical and Statutory Notes following  31-5002. Department of Insurance abolished: See Historical and Statutory Notes following  31-5002. Change in Government This section originated at a time when local government powers were delegated to the District of Columbia Council and to a Commissioner of the District of Columbia. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 315011. Delegation of functions by Mayor. The Mayor is authorized to delegate any of the functions vested in him by this chapter.  (Aug. 1, 1968, 82 Stat. 572, Pub. L. 90-448, title XII,  1212.)  Prior Codifications 1981 Ed.,  35-1811. 1973 Ed.,  35-1711. Editor's Notes Delegation of functions: See Historical and Statutory Notes following  31-5002. Department of Insurance abolished: See Historical and Statutory Notes following  31-5002. Change in Government This section originated at a time when local government powers were delegated to the District of Columbia Council and to a Commissioner of the District of Columbia. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 315031.01. Definitions. For the purposes of this chapter, the term: (1) Abstract of title or abstract means a written history, synopsis, or summary of the recorded instruments affecting the title to real property. (2) Affiliate means, with respect to a person, another person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the person. (3) Repealed. (4) Attorney means a person who holds a license to practice law in the District of Columbia. (4A) Business entity means a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity. (5) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking, or the Commissioners representatives, or the commissioner, director, or superintendent of insurance in any other state. (6) Direct operations means that portion of a title insurers operations that is attributable to business written or conducted directly by an employee of: (A) The title insurer; (B) A title insurance producer owned by: (i) The title insurer; (ii) A parent entity owning the title insurer; (iii) A holding entity owning the title insurer; or (iv) A subsidiary of a parent or holding entity owning a title insurer. (7) Escrow means written instruments, money, or other items deposited by one party with a depository, escrow agent, or escrowee for delivery to another party upon the performance of a specified condition or the happening of a certain event. (8) Escrow Officer means a person who maintains an escrow or indemnified deposit account. (9) Escrow, settlement, or closing fee means the consideration for supervising or handling the actual execution, delivery, or recording of transfer and lien documents and for disbursing funds. (10) Fire and Casualty Act means Chapter 25 of this title [ 31-2501.01 et seq.]. (11) Foreign title insurer means any title insurer incorporated or organized under the laws of any other state of the United States or any other jurisdiction of the United States. (12) Indemnity or indemnity deposit means funds or other property received by the title insurer as collateral to secure an indemnitors obligation under an indemnity agreement pursuant to which the insurer is granted a perfected security interest in the collateral in exchange for agreeing to provide coverage in a title insurance policy for a specific title exception to coverage. (12A) Individual means a natural person. (13) IRLA means Chapter 13 of this title [  31-1301 et seq.) ]. (14) Net retained liability means the total liability retained by a title insurer for a single risk, after taking into account any ceded liability and collateral, acceptable to the Commissioner, maintained by the insurer. (15) Non-U.S. title insurer means any title insurer incorporated or organized under the laws of any foreign nation or any province or territory. (16) Person means an individual or business entity. (17) Personal property means stock ownership in a cooperative housing association. (18) Qualified financial institution means an institution that is: (A) Organized or, in the case of a United States branch or agency office of a foreign banking organization, licensed under the laws of the United States or any state and has been granted authority to operate with fiduciary powers; (B) Regulated, supervised, and examined by federal or state authorities having regulatory authority over banks and trust companies; (C) Insured by the appropriate federal entity; and (D) Qualified under any additional rules established by the Commissioner. (19) Referral source means any person, including an officer, director, or owner of more than 5% or more of the equity or capital of any person engaged in the District in the trade, business, occupation, or profession of: (A) Buying or selling interests in real property; (B) Making loans secured by interests in real property; or (C) Acting as broker, agent, representative, or attorney of a person who buys or sells any interest in real property or who lends or borrows money with the interest as security. (20) Repealed. (21) Subsidiary means an affiliate controlled by a person, directly or indirectly, through one or more intermediaries. (22) Title insurance business or business of title insurance means: (A) Issuing as an insurer, or offering to issue as an insurer, a title insurance policy; (B) Engaging in, or proposing to engage in, any of the following activities when conducted or performed in contemplation of or in conjunction with the issuance of a title insurance policy: (i) Soliciting or negotiating the issuance of a title insurance policy; (ii) Guaranteeing, warranting, or otherwise insuring the correctness of title searches for all instruments affecting titles to real property, any interest in real property, cooperative units, and proprietary leases, and for all liens or charges affecting the same; (iii) Executing title insurance policies; (iv) Effecting contracts of reinsurance; or (v) Abstracting, searching, or examining titles; (C) Guaranteeing, warranting, or insuring searches or examinations of title to real property or any interest in real property; (D) Guaranteeing or warranting the status of title as to ownership of or liens on real property or personal property by any person other than the principals to the transaction; (E) Doing, or holding oneself out to do, business substantially equivalent to any of the activities listed in this paragraph in a manner designed to evade the provisions of this chapter; or (F) Matters insuring the correctness or marketability of title. (23) Title insurance commitment means a preliminary report, commitment, or binder issued prior to the issuance of a title insurance policy containing the terms, conditions, exceptions, and any other matters incorporated by reference under which the title insurer is willing to issue its title insurance policy. (24) Title insurance policy or policy means a contract insuring or indemnifying owners of, or other persons lawfully interested in, real or personal property or any interest in real or personal property, against loss or damage arising from any or all of the following conditions existing on or before the policy date and not excepted or excluded: (A) Defects in, or liens or encumbrances on, the insured title; (B) Unmarketability of the insured title; (C) Invalidity, lack of priority, or unenforceability of liens or encumbrances on the stated property; (D) Lack of legal right of access to the land; (E) Unenforceability of rights in title to the land and other matters affecting the title to, or the right to the use and enjoyment of, the property; or (F) Matters insuring the correctness or marketability of title. (25)(A) Title insurance producer or producer means a person who is authorized to perform, on behalf of a title insurer, the following acts in conjunction with the issuance of a title insurance commitment or policy covering real or personal property situated in the District of Columbia: (i) Determining insurability and issuing title insurance commitments or policies, or both, based upon the performance or review of a search or abstract of title; and (ii) Soliciting or negotiating title insurance business. (B) The term title insurance producer or producer shall not include: (i) A financial institution (and its employees) that does not solicit, procure, or negotiate title insurance contracts for compensation or conduct title insurance business; (ii) An employee of an abstracting company; (iii) A person whose activities in the District are limited to advertising, without the intent to solicit insurance in the District, through communications in printed publications or other forms of electronic mass media; provided, that the person does not sell, solicit, or negotiate insurance that would insure risks of persons residing in or located in, or activities to be performed in, the District; (iv) A salaried full-time employee who counsels or advises his or her employer relative to the insurance interests of the employer or of the subsidiaries of the employer; provided, that the employee does not sell, solicit, or negotiate insurance, or receive a commission; or (v) An employee of a title insurer; provided, that the employees activities are not focused on transactions in the District of Columbia, his or her primary responsibilities cover multiple states, and his or her involvement in transactions is to coordinate with title insurance producers licensed in the District of Columbia who conduct title insurance business. (26) Title insurer or insurer means a company organized under laws of the District of Columbia for the purpose of transacting the business of title insurance and any foreign or non-U.S. title insurer licensed in the District of Columbia to transact the business of title insurance. (27) Title plant means a set of records consisting of documents, maps, surveys, or entries affecting title to real property or any interest in or encumbrance on the property, which have been filed or recorded in the jurisdiction for which the title plant is established or maintained. (28) Underwrite means to accept or reject, or have the authority to accept or reject, risk on behalf of a title insurer.  (Sept. 24, 2010, D.C. Law 18-223,  2142, 57 DCR 6242; Nov. 5, 2013, D.C. Law 20-40,  5(a), 60 DCR 12304.)  Effect of Amendments The 2013 amendment by D.C. Law 20-40 repealed (3); added (4A) and (12A); rewrote (16); repealed (20); and substituted real or personal property for residential or personal property in (25)(A). Emergency Legislation For temporary (90 day) addition, see  2142 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542). Short Title Short title: Section 2141 of D.C. Law 18-223 provided that subtitle M of title II of the act may be cited as the Title Insurance Insurer Act of 2010.
 315031.02. Licensing needed to transact business. No person, other than a domestic, foreign, or non-U.S. title insurer organized on the stock plan and licensed under Chapter 25 of this title [ 31-2501.01 et seq.], shall issue a title insurance policy or otherwise transact the business of title insurance in the District.  (Sept. 24, 2010, D.C. Law 18-223,  2143, 57 DCR 6242.)  Emergency Legislation For temporary (90 day) addition, see  2143 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.03. Authorized activities of title insurers. Subject to the exceptions and restrictions contained in this chapter, a title insurer may do any of the following: (1) Engage in the business of writing title insurance directly or through title insurance producers appointed for the purpose of issuing policies of title insurance; (2) Reinsure title insurance policies; (3) Unless prohibited by the Commissioner, perform ancillary activities, including examining titles to real property and any interest in real or personal property and procuring and furnishing related information and information about relevant personal property, when not in contemplation of, or in conjunction with, the issuance of a title insurance policy; and (4) Maintain or perform escrow, indemnity, or settlement services.  (Sept. 24, 2010, D.C. Law 18-223,  2144, 57 DCR 6242.)  Emergency Legislation For temporary (90 day) addition, see  2144 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.04. Limitations on powers. (a) An insurer that transacts any class, type, or kind of business other than title insurance business shall not be eligible for the issuance or renewal of a license to transact the business of title insurance in the District of Columbia and shall not transact title insurance business. (b) A title insurer shall not engage in the business of guaranteeing payment of the principal of, or the interest on, bonds or mortgages. (c)(1) Notwithstanding subsection (a) of this section, and to the extent such coverage is lawful within the District, a title insurer may issue closing or settlement protection to a proposed insured upon request if the title insurer issues a preliminary report, binder, or title insurance policy. The closing or settlement protection shall conform to the terms of coverage and form of instrument as required by the Commissioner and may indemnify a proposed insured against loss of settlement funds because of the following acts of a title insurers named title insurance producer: (A) Theft of settlement funds in connection with the closing to the extent that the theft relates to the status of the title to that interest in land or to the validity, enforceability, and priority of the lien of the mortgage on that interest in land; and (B) Failure to comply with the written closing instructions by the proposed insured when agreed to by the title insurance producer, to the extent that they relate to the status of the title to that interest in land or the validity, enforceability, and priority of the lien of the mortgage on that interest in land. (2) The Commissioner may promulgate by rule pursuant to  31-5031.23, or approve, a required charge for providing the coverage. (3) Repealed. (4) Except as provided under this chapter, a title insurer shall not provide any other coverage which purports to indemnify against improper acts or omissions of a person with regard to escrow, settlement, or closing services. (5) The form of closing protection letter used by a title insurer and rates shall be filed with the Commissioner as provided by  31-5031.18(b)(3).  (Sept. 24, 2010, D.C. Law 18-223,  2145, 57 DCR 6242; Nov. 5, 2013, D.C. Law 20-40,  5(b), 60 DCR 12304.)  Effect of Amendments The 2013 amendment by D.C. Law 20-40, in (c)(1), deleted solely preceding against loss and deleted only preceding because of; and repealed (c)(3). Emergency Legislation For temporary (90 day) addition, see  2145 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.05. Minimum capital and surplus requirements. Before being licensed to do an insurance business in the District, a title insurer shall establish and maintain a minimum paid-in capital of not less than $500,000 and paid-in initial surplus of at least $500,000, for a total minimum capital and surplus total of at least $1 million.  (Sept. 24, 2010, D.C. Law 18-223,  2146, 57 DCR 6242.)  Emergency Legislation For temporary (90 day) addition, see  2146 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.06. Single risk limit. (a) The net retained liability of a title insurer for a single risk in regard to property, whether assumed directly or as reinsurance, shall not exceed the aggregate of 50% of surplus as regards policyholders, plus the statutory premium reserve less the companys investment in title plants, all as shown in the most recent annual statement of the insurer on file with the Commissioner. (b) For the purposes of this chapter: (1) A single risk shall be the insured amount of any title insurance policy; provided, that, if 2 or more title insurance policies are issued simultaneously covering different estates in the same real property, a single risk shall be the sum of the insured amounts of all the title insurance policies. (2) A policy under which a claim payment reduces the amount of insurance under one or more other title insurance policies shall be included in computing the single risk sum only to the extent that its amount exceeds the aggregate amount of the policy or policies whose amount of insurance is reduced.  (Sept. 24, 2010, D.C. Law 18-223,  2147, 57 DCR 6242.)  Emergency Legislation For temporary (90 day) addition, see  2147 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.07. Admitted asset standards. In determining the financial condition of a domestic title insurer doing business under this chapter, the general investment provisions of the Chapter 13A of this title [  31-1371.01 et seq. ], shall apply; provided, that: (1) An investment in a title plant or plants in an amount equal to the actual cost shall be allowed as an admitted asset for title insurers; and (2) The aggregate amount of the investment shall not exceed the lesser of 20% of admitted assets or 40% of surplus to policyholders, as shown on the most recent annual statement of the title insurer on file with the Commissioner.  (Sept. 24, 2010, D.C. Law 18-223,  2148, 57 DCR 6242.)  Emergency Legislation For temporary (90 day) addition, see  2148 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.08. Reserves. (a) In determining the financial condition of a title insurer doing business under this chapter, the general provisions of the acts relating to insurance which are codified in this title requiring the establishment of reserves sufficient to cover all known and unknown liabilities, including allocated and unallocated loss adjustment expense, shall apply; provided, that a domestic title insurer shall establish and maintain: (1) A known claim reserve in an amount estimated to be sufficient to cover all unpaid losses, claims, and allocated loss adjustment expenses arising under title insurance policies, guaranteed certificates of title, guaranteed searches, and guaranteed abstracts of title, and all unpaid losses, claims, and allocated loss adjustment expenses for which the title insurer may be liable, and for which the insurer has received notice by or on behalf of the insured, holder of a guarantee or escrow, or indemnity depositor; and (2) A statutory or unearned premium reserve consisting of: (A) The amount of statutory or unearned premium reserve required by the laws of the domiciliary state of the insurer if the insurer is a foreign or non-U.S. title insurer; or (B) If the insurer is a domestic insurer of the District of Columbia: (i) The amount of the statutory or unearned premium or reinsurance reserve on January 1, 2011, which balance shall be released in accordance with the law in effect at the time such sums were added to the reserve; and (ii) Out of total charges for policies of title insurance written or assumed commencing with January 1, 2011, and until December 31, 2011, a title insurer shall add to, and set aside in, the reserve an amount equal to 8% of the sum of the following items set forth in the title insurers most recent annual statement on file with the Commissioner: (I) Direct premiums written; (II) Escrow and settlement service fees; (III) Other title fees and service charges, including fees for closing protection letters; and (IV) Premiums for reinsurance assumed, less premiums for reinsurance ceded during year. (b) Additions to the reserve after January 1, 2011, shall be, made out of total charges for title insurance policies and guarantees written, equal to the sum of the following items, as set forth in the title insurers most recent annual statement on file with the Commissioner: (1) For each title insurance policy on a single risk written or assumed after January 1, 2011, $0.36 per $1,000 of net retained liability for policies under $500,000 and $0.16 per $1,000 of net retained liability for policies of $500,000 or greater; and (2) Eight percent of escrow, settlement, and closing fees collected in contemplation of the issuance of title insurance policies or guarantees. (c) The aggregate of the amounts set aside in the reserve in any calendar year pursuant to subsections (a)(2)(B)(ii) and (b) of this section shall be released from the reserve and restored to net profits over a period of 20 years pursuant to the following formula: (1) Thirty-five percent of the aggregate sum on July 1 of the year next succeeding the year of addition; (2) Fifteen percent of the aggregate sum on July 1 of each of the succeeding 2 years; (3) Ten percent of the aggregate sum on July 1 of the next succeeding year; (4) Three percent of the aggregate sum on July 1 of each of the next 3 succeeding years; (5) Two percent of the aggregate sum on July 1 of each of the next 3 succeeding years; and (6) One percent of the aggregate sum on July 1 of each of the next succeeding 10 years. (d) A supplemental reserve shall be established consisting of any other reserves necessary, when taken in combination with the reserves required by this section, to cover the companys liabilities with respect to all losses, claims, and loss-adjusted expenses. (e) A title insurer subject to the provisions of this chapter shall file with its annual statement required under Chapter 19 of this title [ 31-1901 et seq.], a certification by a member in good standing of the American Academy of Actuaries. The actuarial certification required of a title insurer shall conform to the National Association of Insurance Commissioners annual statement instructions for title insurers.  (Sept. 24, 2010, D.C. Law 18-223,  2149, 57 DCR 6242.)  Emergency Legislation For temporary (90 day) addition, see  2149 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.09. Liquidation, dissolution, or insolvency. (a) Except as otherwise provided in this section, the IRLA shall apply to all domestic title insurers subject to this chapter. In applying the provisions of the IRLA, the court shall consider the unique aspects of title insurance and shall have broad authority to fashion relief that provides for the maximum protection of the title insurance policyholders. (b) Indemnity and escrow funds held by or on behalf of the title insurer shall not become general assets and shall be administered as secured creditor claims as provided in the IRLA. (c) Title insurance policies issued by a domestic title insurer that are in force at the time an order of liquidation is entered shall not be canceled except upon a showing to the court of good cause by the liquidator. The determination of good cause shall be within the discretion of the court. In making this determination, the court shall consider the unique aspects of title insurance and all other relevant circumstances. (d) The court may set appropriate dates that potential claimants shall file their claims with the liquidator as to a domestic title insurer. The court may set different dates for claims based upon the title insurance policy than for all other claims. In setting dates, the court shall consider the unique aspects of title insurance and all other relevant circumstances. (e) As of the date of the order of insolvency or liquidation, all premiums paid, due, or to become due under policies of the domestic title insurers shall be fully earned. It shall be the obligation of producers, insureds, or representatives of the title insurer to pay fully earned premium to the liquidator or rehabilitator.  (Sept. 24, 2010, D.C. Law 18-223,  2150, 57 DCR 6242; Nov. 5, 2013, D.C. Law 20-40,  5(c), 60 DCR 12304.)  Effect of Amendments The 2013 amendment by D.C. Law 20-40 substituted producers for agents in (e). Emergency Legislation For temporary (90 day) addition, see  2150 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.10. Restrictions on dividends. A domestic title insurer shall only declare or distribute a dividend to shareholders without the prior written approval of the Commissioner as would be permitted under  31-706, for insurers other than life insurers.  (Sept. 24, 2010, D.C. Law 18-223,  2151, 57 DCR 6242.)  Emergency Legislation For temporary (90 day) addition, see  2151 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.11. Diversification requirement. (a) Without the prior written approval of the Commissioner, a domestic title insurer shall not accept: (1) Additional business from a title insurance producer that is not an affiliated company with the insurer if, when added to other business written through the title insurance producer during the same calendar year, that producers aggregate premiums written on behalf of the title insurer will exceed 20% of the title insurers gross premiums written during the prior calendar year, as shown on the title insurers most recent annual statement on file with the Commissioner; or (2)(A) Additional direct operations business from a single source if, when added to other direct operations business from the single source during the same calendar year, the aggregate premiums written on the direct operations business of the single source will exceed 20% of the title insurers gross premiums written during the prior calendar year as shown on the title insurers most recent annual statement on file with the Commissioner. (B) For purposes of this paragraph, the term single source means a person that refers business to the title insurer and any other person that controls, is controlled by, or is under common control with, that person. (b) In determining whether prior approval may be given, the Commissioner shall consider: (1) The potential that the acceptance of more business from the title insurance producer or source may adversely affect the financial solidity of the title insurer; (2) The availability of competing title agents or additional sources in the territories in which the title insurer accepts risks; (3) The number of years that the title insurer has been in business; (4) Reinsurance arrangements mitigating the concentration of business from the producer or source; (5) The comparative profitability of the producers or sources book of business; (6) The degree of oversight of the producers operations exercised by the title insurer; and (7) Any other circumstances considered by the Commissioner to be appropriate.  (Sept. 24, 2010, D.C. Law 18-223,  2152, 57 DCR 6242; Nov. 5, 2013, D.C. Law 20-40,  5(d), 60 DCR 12304.)  Effect of Amendments The 2013 amendment by D.C. Law 20-40 substituted producer for agent and substituted producers for agents throughout the section. Emergency Legislation For temporary (90 day) addition, see  2152 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.12. Direct operations and policyholder treatment. (a) If a title insurance commitment includes an offer to issue an owners policy covering the resale of owner-occupied property, the title insurance commitment shall be furnished to the purchaser-mortgagor or its representative no later than the time of closing. If the report cannot be delivered prior to or at closing, the title insurer shall document the reasons for the delay. The title insurance commitment furnished to the purchaser-mortgagor shall incorporate the following statement on the 1st page in bold type: Please read the exceptions and the terms shown or referred to herein carefully. The exceptions are meant to provide you with notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered. It is important to note that this form is not a written representation as to the condition of title and may not list all liens, defects, and encumbrances affecting title to the land. (b)(1) A title insurer issuing a lenders title insurance policy in conjunction with a mortgage loan made simultaneously with the purchase of all or part of the owner-occupied property securing the loan, if no owners title insurance policy has been requested, shall give written notice, on a form prescribed or approved by the Commissioner, to the purchaser-mortgagor at the time the title insurance commitment is prepared. The notice shall explain: (A) A lenders title insurance policy is to be issued protecting the mortgage-lender; (B) The policy does not provide title insurance protection to the purchaser-mortgagor as the owner of the property being purchased; (C) What a title policy insures against and what possible exposures exist for the purchaser-mortgagor that could be insured against through the purchase of an owners policy; and (D) The purchaser-mortgagor may obtain an owners title insurance policy protecting the property owner at a specified cost or approximate cost, if the proposed coverages or amount of insurance is not then known. (2) A copy of the notice, signed by the purchaser-mortgagor, shall be retained in the relevant underwriting file at least 3 years after the effective date of the policy.  (Sept. 24, 2010, D.C. Law 18-223,  2153, 57 DCR 6242; Nov. 5, 2013, D.C. Law 20-40,  5(e), 60 DCR 12304.)  Effect of Amendments The 2013 amendment by D.C. Law 20-40 deleted residential preceding property in (a) and (b)(1); substituted no later than the time of closing for as soon as reasonably possible prior to closing in (a); and substituted 3 years for 5 years in (b)(2). Emergency Legislation For temporary (90 day) addition, see  2153 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.13. Duties of title insurers utilizing the services of title insurance producers. (a) The title insurer shall not accept business from a title insurance producer unless there is in force a written contract between the parties which sets forth the responsibilities of each party and, if both parties share responsibility for a particular function, specifies the division of responsibilities. (b) Repealed. (c) The title insurer shall, at least annually, conduct an on-site review, or a review conducted electronically that would accomplish the functional equivalent of the same, of the underwriting, claims, and escrow practices of the title insurance producer which shall include a review of the producers policy blank inventory and processing operations. If the title insurance producer does not maintain separate bank or trust accounts for each title insurer it represents, the title insurer shall verify that the funds held on its behalf are reasonably ascertainable from the books of account and records of the title insurance producer. (d) Within 30 days after executing or terminating a contract with a title insurance producer, the title insurer shall provide written notification of the appointment or termination and the reason for termination to the Commissioner. Notices of appointment of a title insurance producer shall be made on a form promulgated by the Commissioner. (e) A domestic title insurer shall not appoint to its board of directors an officer, director, employee, controlling shareholder, or any title insurance producer who wrote 1% or more of the title insurers direct premiums written during the previous calendar year as shown on the title insurers most recent annual statement on file with the Commissioner. This subsection shall not apply to relationships governed by Chapter 7 of this title [ 31-701 et seq.]. (f) The title insurer shall maintain an inventory of all policy forms or policy numbers allocated to each title insurance producer. (g) The title insurer shall have on file proof that the title insurance producer is licensed in the District. (h) The title insurer shall establish the underwriting guidelines and, if applicable, limitations on title claims settlement authority to be incorporated into contracts with its title insurance producers.  (Sept. 24, 2010, D.C. Law 18-223,  2154, 57 DCR 6242; Nov. 5, 2013, D.C. Law 20-40,  5(f), 60 DCR 12304.)  Effect of Amendments The 2013 amendment by Law 20-40 repealed (b); and substituted producer for agent in (e). Emergency Legislation For temporary (90 day) addition, see  2154 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.14. Conditions for maintaining escrow and indemnity deposit accounts. (a) A title insurer may operate as an escrow, indemnity, settlement, or closing agent, if: (1) All funds deposited with the title insurer in connection with any escrow, settlement, closing, or indemnity deposit shall be submitted for collection to or deposited in a fiduciary trust account in a qualified financial institution no later than the close of the next business day in accordance with the following requirements: (A) The funds shall be the property of the person entitled to them under the provisions of the escrow, settlement, indemnity deposit, or closing agreement and shall be segregated for each depository by escrow, settlement, indemnity deposit, or closing in the records of the title insurer in a manner that permits the funds to be identified on an individual basis; and (B) The funds shall be applied only in accordance with the terms of the individual instructions or agreements under which the funds were accepted. (b) Funds held in an escrow account shall be disbursed only pursuant to a written instruction or agreement specifying how and to whom the funds may be disbursed. (c) Funds held in an indemnity deposit account shall be disbursed only pursuant to a written agreement specifying: (1) What actions the indemnitor shall take to satisfy his or her obligation under the agreement; (2) The duties of the title insurer with respect to disposition of the funds held, including a requirement to maintain evidence of the disposition of the title exception before any balance may be paid over to the depositing party or his or her designee; and (3) Any other provisions the Commissioner may require. (d) Any interest received on funds deposited in connection with any escrow, settlement, indemnity deposit, or closing shall be paid, net of administrative costs, to the depositing party, unless the depositors instructions for the funds or a governing law provides otherwise. (e) Disbursements may be made out of an escrow, settlement, or closing account only if deposits in amounts at least equal to the disbursement have first been made directly relating to the transaction disbursed against and if the deposits are in one of the following forms: (1) Cash; (2) Wire transfers such that the funds are unconditionally received by the title insurer or the insurers depository; (3) Checks, drafts, negotiable orders of withdrawal, money orders, and any other item that has been finally paid before any disbursements; provided, that a title insurer may accept a check in an amount not to exceed $3,000 that has not been finally paid before any disbursements; (4) A depository check, including a certified check, governed by the provisions of the Expedited Funds Availability Act, approved August 10, 1987 (101 Stat. 635; 12 U.S.C.  4001 et seq.); or (5) Credit transfers through the Automated Clearing House which have been deemed available by the depository institution receiving the credits transfers and conform to the operating rules set forth by the National Automated Clearing House Association. (f) This chapter shall not: (1) Prohibit the recording of documents prior to the time funds are available for disbursement with respect to a transaction; provided, that all parties consent to the transaction in writing; or (2) Amend, alter, or supersede other sections of this chapter, or the laws of the District of Columbia or the United States, regarding an escrow holders duties and obligations. (g) The Commissioner may prescribe a standard agreement for escrow, settlement, closing, or indemnity deposit funds.  (Sept. 24, 2010, D.C. Law 18-223,  2155, 57 DCR 6242.)  Emergency Legislation For temporary (90 day) addition, see  2155 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.15. Prohibition of rebate and fee splitting. A title insurer or other person shall not give or receive, directly or indirectly, any consideration for the referral of title insurance business or escrow or other service provided by a title insurer.  (Sept. 24, 2010, D.C. Law 18-223,  2156, 57 DCR 6242.)  Emergency Legislation For temporary (90 day) addition, see  2156 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.16. Favored producer of title insurer; buyers right to choose. (a) A title insurer shall not participate in any transaction in which it knows that a title insurance producer or other person requires, directly or indirectly, or through any trustee, director, officer, producer, employee, or affiliate, as a condition precedent to selling or furnishing any other person a loan, or loan extension, credit, sale, property, contract, lease, or service, that the other person shall place a title insurance policy of any kind with the title insurer or through a particular title insurance producer. (b) No seller of property shall require, directly or indirectly, that the buyer purchase title insurance from any particular title producer or insurer.  (Sept. 24, 2010, D.C. Law 18-223,  2157, 57 DCR 6242; Nov. 5, 2013, D.C. Law 20-40,  5(g), 60 DCR 12304.)  Effect of Amendments The 2013 amendment by DC Law 20-40 designated the existing text as (a); substituted producer for agent throughout (a); and added (b). Emergency Legislation For temporary (90 day) addition, see  2157 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.17. Premium rate filings and standards. (a) A title insurer or title insurance producer may charge any rates regulated by the District of Columbia after January 1, 2011; provided, that in accordance with the premium rate schedule and manual filed by the title insurer with and approved by the Commissioner in accordance with applicable law and rules governing rate filings. The Commissioner may provide, by rule, for interim use of premium rate schedules in effect prior to January 1, 2011. (b) The Commissioner may establish rules, including rules providing statistical plans, for use by all title insurers and title insurance producers in the recording and reporting of revenue, loss, and expense experience in such form and detail as is necessary to aid him or her in the establishment of rates and fees. (c) The Commissioner may require that the information provided under this section be verified by oath of the insurers or title insurance producers president or vice president or secretary or actuary, as applicable. The Commissioner may further require that the information required under this section be subject to an audit conducted by an independent certified public accountant. The Commissioner may establish a minimum threshold level at which an audit would be required. (d) Information filed with the Commissioner relating to the experience of a particular producer shall be kept confidential, subject to subchapter II of Chapter 5 of Title 2 [ 2-531 et seq.].  (Sept. 24, 2010, D.C. Law 18-223,  2158, 57 DCR 6242.)  Emergency Legislation For temporary (90 day) addition, see  2158 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.18. Form filing. (a)(1) The Commissioner may require that all policy forms used by every company covering title risks in the District be filed with the Commissioner. The Commissioner shall have authority to disapprove, within 60 days after the date of the receipt of a filing, the use in the District of any policy form which is inequitable, or does not comply with District law. (2) If a policy form is not disapproved for use within the 60-day period described in paragraph (1) of this subsection, the Commissioner may not disapprove the form for use unless it does not comply with District law. (b) Forms covered by this section shall include: (1) Title insurance policies, including standard form endorsements; (2) Title insurance commitments issued prior to the issuance of a title insurance policy; and (3) Closing protection letters. (c) After notice and opportunity to be heard are given to the insurer or rate service organization which submitted a form for approval, the Commissioner may withdraw approval of the form on finding that the use of the form is contrary to the legal requirements applicable at the time of withdrawal. The effective date of withdrawal of approval shall not be less than 90 days after notice of withdrawal is given. (d) An approved policy form or endorsement providing coverage for which no identifiable premium is assessed may be incorporated into every applicable title insurance policy. The insurer shall disclose any additional coverage to the insured. The provisions of this section shall not operate to eliminate any underwriting standard of conditions relating to the approved policy forms or endorsements. (e) Any term or condition related to an insurance coverage provided by an approved title insurance policy or any exception to the coverage, except those ascertained from a search and examination of records relating to a title or inspection or survey of a property to be insured, shall only be included in the policy after the term, condition, or exception has been filed with the Commissioner and approved.  (Sept. 24, 2010, D.C. Law 18-223,  2159, 57 DCR 6242; Nov. 5, 2013, D.C. Law 20-40,  5(h), 60 DCR 12304.)  Section References This section is referenced in  31-5031.04. Effect of Amendments The 2013 amendment by D.C. Law 20-40 rewrote (a). Emergency Legislation For temporary (90 day) addition, see  2159 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.19. Filing by rating bureaus. (a) A title insurer may satisfy its obligation to file premium rates, rating manuals, and forms as required by this chapter if: (1) It becomes a member of, or a subscriber to, a rate service organization, organized and licensed under the provisions of acts relating to insurance which are codified in this title; (2) The rate service organization makes the filings; and (3) It authorizes the Commissioner in writing to accept the filings on the title insurers behalf. (b) This chapter shall not: (1) Require any title insurer to become a member of, or a subscriber to, any rate service organization; and (2) Prohibit the filing of deviations from rate service organization filings by any member or subscriber.  (Sept. 24, 2010, D.C. Law 18-223,  2160, 57 DCR 6242.)  Emergency Legislation For temporary (90 day) addition, see  2160 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.20. Record retention requirements. Evidence of the examination of title and determination of insurability for business written by a title insurer or title insurance producer and records relating to escrow and indemnity deposits shall be preserved and retained by the insurer or producer for as long as appropriate to the circumstances but not less than 3 years after the title insurance policy has been issued or 3 years after the escrow or indemnity deposit account has been closed. This section shall not apply to a title insurer acting as coinsurer if one of the other coinsurers has complied with this section.  (Sept. 24, 2010, D.C. Law 18-223,  2161, 57 DCR 6242; Nov. 5, 2013, D.C. Law 20-40,  5(i), 60 DCR 12304.)  Effect of Amendments The 2013 amendment by D.C. Law 20-40 substituted insurer or producer for insurer or agent in the first sentence. Emergency Legislation For temporary (90 day) addition, see  2161 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.21. Penalties and liabilities. (a) If the Commissioner determines that the title insurer or any other person has violated this chapter, or any rule or order promulgated under this chapter, after notice and opportunity to be heard, the Commissioner may order: (1) A penalty not exceeding $2,500 for the 1st violation; (2) A penalty not exceeding $5,000 for each successive violation; and (3) Revocation or suspension of the title insurers license. (b) This section shall affect the right of the Commissioner to impose any other penalties provided for in any acts relating to insurance which are codified in this title.  (Sept. 24, 2010, D.C. Law 18-223,  2162, 57 DCR 6242.)  Emergency Legislation For temporary (90 day) addition, see  2162 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.22. Violations of Real Estate Settlement Procedures Act (RESPA). The Commissioner or Attorney General may bring an action in a court of competent jurisdiction to enjoin or seek remedies for violations of the Real Estate Settlement Procedures Act of 1974, approved December 23, 1974 (88 Stat. 1724; 12 U.S.C.  2601 et seq.).  (Sept. 24, 2010, D.C. Law 18-223,  2163, 57 DCR 6242.)  Emergency Legislation For temporary (90 day) addition, see  2163 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.23. Rules; orders. (a) The Commissioner, through the Mayor, pursuant to subchapter I of Chapter 5 of Title 2 [ 2-501 et seq.], may issue rules to implement the provisions of this chapter. (b) The Commissioner may issue orders to implement the provisions of this chapter.  (Sept. 24, 2010, D.C. Law 18-223,  2164, 57 DCR 6242.)  Section References This section is referenced in  31-5031.04. Emergency Legislation For temporary (90 day) addition, see  2164 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315031.24. Applicability; construction. (a) This chapter shall: (1) Apply to all persons engaged in the business of title insurance in the District; and (2) Supplement the provisions of Chapter 25 of this title [ 31-2501.01 et seq.]. (b) This chapter shall not: (1) Except as otherwise provided, limit the application of any acts relating to insurance which are codified in this title; or (2) Limit or restrict the rights of policyholders, claimants, and creditors. (c) If there is a conflict between a provision of this chapter and any provision in an act relating to insurance which is codified in this title, Chapter 25 of this title [ 31-2501.01 et seq.], this chapter shall apply. (d) This chapter shall apply as of January 1, 2011 and to all transactions entered into after January 1, 2011.  (Sept. 24, 2010, D.C. Law 18-223,  2165, 57 DCR 6242.)  Emergency Legislation For temporary (90 day) addition, see  2165 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315041.01. Definitions. For the purpose of this chapter, the term: (1) Abstract of title means a written history, synopsis, or summary of the recorded instruments affecting a title to real property. (2) Affiliate means, with respect to a person, another person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the person. (3) Aggrieved party means a lender, title insurer, consumer, or the District of Columbia, who shall have suffered economic harm as a result of matters insured under any fidelity coverage required under this chapter. (4) Attorney means a person who is admitted to practice law in the District of Columbia. (4A) Business entity means a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity. (5) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking. (6) Escrow means written instruments, money, or other items deposited by a party with a depository, escrow producer, or escrowee for delivery to another party upon the performance of a specified condition or the happening of a certain event. (7) Escrow Officer means a person who maintains an escrow or indemnified deposit account. (8) Indemnity or indemnity deposit means funds or other property received by the title insurer as collateral to secure an indemnitors obligation under an indemnity agreement pursuant to which the insurer is granted a perfected security interest in the collateral in exchange for agreeing to provide coverage in a title insurance policy for a specific title exception to coverage. (8A) Individual means a natural person. (9) Person means an individual or business entity. (10) Personal property means stock ownership in a cooperative housing association. (11) Producer Licensing Act means Chapter 11A of this title [ 31-1131.01 et seq.]. (12) Qualified financial institution means an institution that is: (A) Organized or, in the case of a United States branch or agency office of a non-U.S. banking organization, licensed under the laws of the United States, a state, the District of Columbia, or another jurisdiction of the United States and granted authority to operate with fiduciary powers; (B) Regulated, supervised, and examined by an authority of the United States, a state, the District of Columbia, or another jurisdiction of the United States having regulatory authority over banks and trust companies; (C) Insured by the appropriate federal entity; and (D) Qualified under any additional rules established by the Commissioner. (13) RESPA means the Real Estate Settlement Procedures Act of 1974, approved December 22, 1974 (88 Stat. 1724; 12 U.S.C.  2601 et seq.). (14) Repealed. (15) Subsidiary means an affiliate controlled by a person, directly or indirectly, through one or more intermediaries. (16) Title insurance business or business of title insurance means: (A) Issuing as an insurer, or offering to issue as an insurer, a title insurance policy; (B) Engaging in, or proposing to engage in, any of the following activities when conducted or performed in contemplation of or in conjunction with the issuance of a title insurance policy: (i) Soliciting or negotiating the issuance of a title insurance policy; (ii) Guaranteeing, warranting, or otherwise insuring the correctness of title searches for all instruments affecting titles to real property, any interest in real property, cooperative units, and proprietary leases, and for all liens or charges affecting the same; (iii) Executing title insurance policies; (iv) Effecting contracts of reinsurance; or (v) Abstracting, searching, or examining titles; (C) Guaranteeing, warranting; or insuring searches or examinations of title to real property or any interest in real property; (D) Guaranteeing or warranting the status of title as to ownership of or liens on real property or personal property by any person other than the principals to the transaction; (E) Doing, or holding oneself out to do, business substantially equivalent to any of the activities listed in this paragraph in a manner designed to evade the provisions of this chapter; or (F) Matters indemnifying against the incorrectness or marketability of title. (17) Title insurance commitment means a preliminary report or binder issued prior to the issuance of a title insurance policy containing the terms, conditions, exceptions, and any other matters under which the title insurer is willing to issue its title insurance policy. (18) Title insurance policy means a contract insuring or indemnifying owners of, or other persons lawfully interested in, real or personal property or an interest in real or personal property against loss or damage arising from any of the following conditions existing on or before the policy date and not expressly excepted or excluded from coverage: (A) Defects in, or liens or encumbrances on, the insured title; (B) Unmarketability of the insured title; (C) Invalidity, lack of priority, or unenforceability of liens or encumbrances on the property; (D) Lack of legal right of access to the property; or (E) Unenforceability of rights in title to the property and other matters affecting the title to, or right to use and enjoyment of, the property. (19)(A) Title insurance producer or producer means a person who is authorized to perform, on behalf of a title insurer, the following acts in conjunction with the issuance of a title insurance commitment or policy covering real or personal property situated in the District of Columbia: (i) Determining insurability and issuing title insurance commitments or policies, or both, based upon the performance or review of a search or abstract of title; and (ii) Soliciting or negotiating title insurance business. (B) The term title insurance producer or producer shall not include: (i) A financial institution (and its employees) that does not solicit, procure, or negotiate title insurance contracts for compensation or conduct title insurance business; (ii) An employee of an abstracting company; (iii) A person whose activities in the District are limited to advertising, without the intent to solicit insurance in the District, through communications in printed publications or other forms of electronic mass media; provided, that the person does not sell, solicit, or negotiate insurance that would insure risks of persons residing in or located in, or activities to be performed, in the District; (iv) A salaried full-time employee who counsels or advises his or her employer relative to the insurance interests of the employer or of the subsidiaries of the employer; provided, that the employee does not sell, solicit, or negotiate insurance, or receive a commission; (v) An employee of a title insurer; provided, that the employees activities are not focused on transactions in the District of Columbia, his or her primary responsibilities cover multiple states, and his or her involvement in transactions is to coordinate with title insurance producers licensed in the District of Columbia who conduct title insurance business. (20) Title insurer or insurer means a company organized under laws of this state for the purpose of transacting the business of title insurance and any foreign or non-U.S. title insurer licensed in the District to transact the business of title insurance. (21) Underwrite means to accept or reject, or have the authority to accept or reject, risk on behalf of a title insurer.  (Sept. 24, 2010, D.C. Law 18-223,  2122, 57 DCR 6242; Nov. 5, 2013, D.C. Law 20-40,  4(a), 60 DCR 12304.)  Effect of Amendments The 2013 amendment by D.C. Law 20-40 deleted the subsection (a) designation; added (4A) and (8A); substituted or business entity for partnership, limited liability company, association, cooperative, corporation, trust, or other legal entity in (9); repealed (14); substituted indemnifying against the incorrectness for insuring the correctness in (16)(F); and substituted real or personal property for residential or personal property in (19)(A). Emergency Legislation For temporary (90 day) addition, see  2122 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542). Short Title Short title: Section 2121 of D.C. Law 18-223 provided that subtitle L of title II of the act may be cited as the Title Insurance Producer Act of 2010.
 315041.02. Licensing requirements. (a) A person shall not act in the capacity of a title insurance producer and a title insurer shall not contract with any person to act in the capacity of a title insurance producer with respect to risks located in the District unless the person is licensed as a title insurance producer in the District of Columbia in accordance with this chapter. (b)(1) A title insurance producer licensed in the District shall: (A) Disclose on all recorded documents the name of the particular title insurer; (B) Exclude or eliminate the word insurer or underwriter or similar term from its agencys name; and (C) Provide, in a timely fashion, each title insurer with which it places business any information the title insurer reasonably requests to comply with reporting requirements of the Commissioner. (2) A title insurance producer operating in the District of Columbia licensed in the District of Columbia on January 1, 2011, shall have 180 days after January 1, 2011, to comply with the requirements of this subsection. (c)(1) The Commissioner shall require the title insurance producer to maintain the coverages listed in paragraph (1A) of this subsection for the benefit of the title insurer in amounts commensurate with the producers average exposure, under terms and conditions, and from insurers, acceptable to the Commissioner: (A) Repealed. (B) Repealed. (1A) At the time an application for an initial, renewal, or reinstatement of a title insurance producer license is filed, the applicant shall provide satisfactory evidence to the Commissioner of having secured the applicable proof of financial responsibility as herein provided: (A) Each business entity with a title insurance producer license is required to obtain an Errors and Omissions policy in an amount not less than $500,000 per occurrence or claim; (B) Each individual with a title insurance producer license is required to obtain Errors and Omissions coverage in an amount not less than $500,000 per occurrence or claim, either through the business entity through which the individual is employed or otherwise covered, or through an individually-issued policy; (C) Each business entity with a title insurance producer license is required to obtain a surety bond in an amount not less than $200,000 executed by the applicant as principal and by an insurance company as surety or obligor. The Bond shall run to the District of Columbia government as the obligee and benefit the District or any other aggrieved party, including consumer and title insurers; (D) Each individual with a title insurance producer license is required to obtain surety coverage in an amount not less than $200,000, either through a business entity where the individual is employed or otherwise covered, or through an individually issued bond; (E) Each business entity with a title insurance producer license is required to obtain a fidelity bond or similar insurance policy in an amount not less than $200,000 that covers all employees and contractors. A sole proprietor with no employees or a limited liability entity with no employees shall be exempt from this requirement. (2) The Commissioner may promulgate rules specifying acceptable alternatives to the preceding insurance requirements. The availability of closing or settlement protection shall not be an acceptable alternative to the requirements of this subsection. (d) If the title insurance producer delegates the title search to a third party, such as an abstract company, the title insurance producer shall exercise the appropriate diligence, in good faith, to determine that the third party is covered by or maintains the errors and omissions coverage required by subsection (c) of this section. (e) All funds collected pursuant to this section shall be deposited into the Securities and Banking Regulatory Trust Fund established by  31-107(b-2).  (Sept. 24, 2010, D.C. Law 18-223,  2123, 57 DCR 6242; Nov. 5, 2013, D.C. Law 20-40,  4(b), 60 DCR 12304.)  Effect of Amendments The 2013 amendment by D.C. Law 20-40 rewrote (b)(1)(A) and (c)(1); and added (c)(1A). Emergency Legislation For temporary (90 day) addition, see  2123 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315041.03. Examination of operation of title insurance producers. (a) The Commissioner, during normal business hours, may examine, audit, and inspect any and all books and records required and maintained by a title insurance producer; provided, that trust accounts maintained by attorneys shall be subject to any privilege permitted by law and properly asserted. (b) The Commissioner may require that the information provided under this section be verified by oath of the title insurance producer or an officer, employee, or accountant of the title insurance producer.  (Sept. 24, 2010, D.C. Law 18-223,  2124, 57 DCR 6242.)  Emergency Legislation For temporary (90 day) addition, see  2124 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315041.04. Record-retention requirements. A title insurance producer shall maintain sufficient records of its affairs, including its escrow operations, if any, and escrow trust accounts, if any, so that the Commissioner may adequately ensure that the title insurance producer is in compliance with this chapter. The Commissioner may prescribe the specific record entries and documents to be kept and the length of time for which the records shall be maintained, for a period of not to exceed 3 years, unless otherwise required by the RESPA.  (Sept. 24, 2010, D.C. Law 18-223,  2125, 57 DCR 6242.)  Emergency Legislation For temporary (90 day) addition, see  2125 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315041.05. Policyholder treatment. (a) Unless otherwise agreed upon in writing, if a title insurance commitment is issued before issuing an owners title insurance policy, the title insurance producer or insurer shall furnish the title insurance commitment no later than the time of closing. The commitment shall be accompanied by the following statement on the 1st page in bold type: Please read the exceptions and the terms shown or referred to herein carefully. The exceptions are meant to provide you with notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered. It is important to note that this form is not a written representation as to the condition of title and may not list all liens, defects, and encumbrances affecting title to the land. (b)(1) A title insurance producer or insurer which has been requested to issue a lenders title insurance policy in conjunction with a mortgage loan made simultaneously with the purchase of all or part of an owner-occupied property securing the loan, where no owners title insurance policy has been requested, shall give written notice, on a form prescribed or approved by the Commissioner, to the purchaser-mortgagor at the time the commitment is prepared. The notice shall explain: (A) A lenders title insurance policy is to be issued protecting the mortgage-lender; (B) The policy does not provide title insurance protection to the purchaser-mortgagor as the owner of the property being purchased; (C) What a title policy insures against and what possible exposures exist for the purchaser-mortgagor that could be insured against through the purchase of an owners policy; and (D) The purchaser-mortgagor may obtain an owners title insurance policy protecting the property owner at a specified cost or approximate cost, if the proposed coverages or amount of insurance is not then known. (2) A copy of the notice, signed by the purchaser-mortgagor, shall be retained in the relevant underwriting file at least 3 years after the effective date of the policy.  (Sept. 24, 2010, D.C. Law 18-223,  2126, 57 DCR 6242; Nov. 5, 2013, D.C. Law 20-40,  4(c), 60 DCR 12304.)  Effect of Amendments The 2013 amendment By D.C. Law 20-40 substituted issued before issuing an owners title insurance policy for issued preparatory to issuing an owners title insurance policy covering the sale of owner-occupied residential property of 4 or fewer units in (a); and substituted an owner-occupied for residential, owner-occupied in the introductory paragraph of (b)(1). Emergency Legislation For temporary (90 day) addition, see  2126 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315041.06. Conditions for providing escrow, settlement, closing, and indemnity deposit services. (a) All funds deposited with the title insurance producer or insurer in connection with an escrow, settlement, closing, or indemnity deposit shall be submitted for collection to or deposited in a fiduciary trust account in accordance with Chapter 24 of Title 42 [ 42-2401 et seq.], unless otherwise agreed upon in writing, and in accordance with the following requirements: (1) The funds shall be the property of the person entitled to them under the provisions of the escrow, settlement, indemnity deposit, or closing agreement and shall be segregated for each depository by escrow, settlement, indemnity deposit, or closing in the records of the title insurance producer in a manner that permits the funds to be identified on an individual basis; and (2) The funds shall be applied only in accordance with the terms of the individual instructions, settlement statement, or agreements under which the funds were accepted. (b) Funds held in an indemnity deposit account shall be disbursed only pursuant to a written agreement specifying: (1) What actions the indemnitor shall take to satisfy his or her obligation under the agreement; (2) The duties of the title insurance producer with respect to disposition of the funds held, including a requirement to maintain evidence of the disposition of the title exception before any balance may be paid over to the depositing party or his or her designee; and (3) Any other provisions that the Commissioner may require. (c) Any interest received on funds deposited in connection with any escrow, settlement, indemnity deposit, or closing shall be paid, net of administrative costs, to the depositing party, unless the depositors written instructions for the funds, a court order, or a governing law provides otherwise. (d) Disbursements may be made out of an escrow, settlement, or closing account only if deposits in amounts at least equal to the disbursement have first been made directly relating to the transaction disbursed against and if the deposits are in one of the following forms: (1) Cash; (2) Wire transfers such that the funds are unconditionally received by the title insurance producer, title insurer, or depository of either; (3) Checks, drafts, negotiable orders of withdrawal; money orders, and any other item that has been finally paid before any disbursements; provided, that a title insurance producer may accept a check in an amount not to exceed $3,000 that has not been finally paid before any disbursements; (4) A depository check, including a certified check, governed by the provisions of the Expedited Funds Availability Act, approved August 10, 1987 (101 Stat. 635; 12 U.S.C.  4001 et seq.); or (5) Credit transfers through the Automated Clearing House which have been deemed available by the depository institution receiving the credit transfers and conform to the operating rules set forth by the National Automated Clearing House Association. (e) This chapter shall not prohibit the recording of documents prior to the time funds are available for disbursement with respect to a transaction that does not relate to real or personal property; provided, that all parties consent to the transaction in writing. (f) A title insurance producer who maintains or operates fiduciary trust accounts in connection with providing escrow, closing settlement services shall have an annual audit made of its escrow, settlement, closing, and indemnity deposit accounts, conducted by an accountant at its expense. Alternatively, any title insurer, at its expense, may conduct, or cause to be conducted, an annual audit of the escrow, settlement, closing, and security deposit accounts of the title insurance producer, subject to the rules by the Commissioner as hereinafter set forth. The Commissioner may promulgate rules setting forth the minimum threshold level at which an audit would be required, the standards of audit, and the forms of audit report required. Title insurance producers who are attorneys licensed in any state or the District of Columbia, who are not exclusively in the business of title insurance, and who issue title insurance policies as part of their legal representation of clients shall be exempt from the requirements of this subsection; provided, that the title insurer may, at its expense, conduct, or cause to be conducted, an annual review or audit of the escrow, settlement, closing, and indemnity deposit accounts of the attorney. The Commissioner may also require the title insurance producer or escrow agent to provide a copy of its audit report to the Commissioner. (g) If the title insurance producer is appointed by 2 or more title insurers and maintains fiduciary trust accounts in connection with providing escrow, closing settlement services, the title insurance producer shall allow each title insurer reasonable access to the accounts and any or all of the supporting account information to ascertain the safety and security of the funds held by the title insurance producer. (h) The Commissioner may prescribe standard disclosures that must be included in all agreements for escrow, settlement, closing, or indemnity deposits.  (Sept. 24, 2010, D.C. Law 18-223,  2127, 57 DCR 6242; Nov. 5, 2013, D.C. Law 20-40,  4(d), 60 DCR 12304.)  Effect of Amendments The 2013 amendment by D.C. Law 20-40 substituted real or personal property for residential property in (e); and in (f) substituted at its expense for on a calendar year basis at its expense within 90 days after the close of the previous calendar year and deleted the former third sentence, which read By April 30th of each year, the title insurance producer shall provide a copy of the audit report to each title insurer which it represents or for which it was an appointed producer with the Company. Emergency Legislation For temporary (90 day) addition, see  2127 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315041.07. Prohibition of rebate and fee splitting. (a) In a real or personal property transaction, a title insurance producer, a title insurer, or any employee or representative of a title insurance producer or a title insurer, shall not pay, allow, or give, or offer to pay, allow, or give, directly or indirectly, as an inducement to insurance, or after insurance has been effected, any rebate, discount, abatement, credit, or reduction of the premium named in a policy of insurance, or any valuable consideration or inducement, whether or not specified or provided for in the policy, except to the extent provided for in an applicable filing with the Commissioner as provided by law. (b) In a real or personal property transaction, an insured named in a policy, or any employee of the insured, shall not knowingly receive or accept, directly or indirectly, any rebate, discount, abatement, credit, or reduction of premium, or any special favor, advantage, valuable consideration, or inducement, as specified in subsection (a) of this section. (c) This section shall not prohibit: (1) The payment of commissions or other compensation to domestic or foreign licensed title insurance producers or title insurer employees; or (2) Any insurer from allowing or returning to its participating policyholders, members, or subscribers dividends, savings, or unabsorbed premium deposits.  (Sept. 24, 2010, D.C. Law 18-223,  2128, 57 DCR 6242; Nov. 5, 2013, D.C. Law 20-40,  4(e), 60 DCR 12304.)  Effect of Amendments The 2013 amendment by D.C. Law 20-40, in (a), substituted real or personal property transaction, a title insurance producer, a title insurer for residential property transaction, a title insurer and substituted representative of a title insurance producer or a title insurance producer or a title insurer for representative of a title insurer; and substituted real or personal property for residential property in (b). Emergency Legislation For temporary (90 day) addition, see  2122 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315041.08. Underwriting contract required with title insurer. A person acting in the capacity of a title insurance producer shall not place business with a title insurer unless there is in force a written contract between the parties which sets forth the responsibilities of each party, and, if both parties share responsibility for a particular function, specifies the division of the responsibilities.  (Sept. 24, 2010, D.C. Law 18-223,  2129, 57 DCR 6242.)  Emergency Legislation For temporary (90 day) addition, see  2129 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315041.09. Penalties and liabilities. (a) If the Commissioner determines that the title insurance producer or any other person has violated this chapter, or any rule or order promulgated under this chapter, after notice and opportunity to be heard, the Commissioner may order: (1) A penalty not exceeding $2,500 for the 1st violation; (2) A penalty not exceeding $5,000 for each successive violation; and (3) Revocation or suspension of the title insurance producers or title insurers license. (b) If an order of rehabilitation or liquidation of the insurer has been entered pursuant to Chapter 13 of this title [ 31-1301 et seq.], and the receiver appointed under that order determines that the title insurance producer or any other person has not complied with this chapter, or any related rule or order, and the insurer suffered any resulting loss or damage, the receiver may maintain an action for recovery of damages or other appropriate sanctions for the benefit of the insurer and its policyholders and creditors. (c) This section shall not affect the right of the Commissioner to impose any other penalties provided for in acts relating to insurance which are codified in this title.  (Sept. 24, 2010, D.C. Law 18-223,  2130, 57 DCR 6242.)  Emergency Legislation For temporary (90 day) addition, see  2130 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315041.10. Violations of the Real Estate Settlement Procedures Act. The Commissioner or Attorney General for the District of Columbia may bring an action to enjoin or seek remedies for violations of RESPA.  (Sept. 24, 2010, D.C. Law 18-223,  2131, 57 DCR 6242.)  Emergency Legislation For temporary (90 day) addition, see  2131 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315041.11. Rules. The Commissioner, through the Mayor, pursuant to subchapter I of Chapter 5 of Title 2 [ 2-501 et seq.], may issue rules to implement the provisions of this chapter.  (Sept. 24, 2010, D.C. Law 18-223,  2132, 57 DCR 6242.)  Emergency Legislation For temporary (90 day) addition, see  2132 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315041.12. Applicability; construction. (a) This chapter shall: (1) Apply to all persons engaged in the business of title insurance in the District; (2) Supplement the provisions of Chapter 11A of this title [ 31-1131.01 et seq.]. (b) This chapter shall not: (1) Except as otherwise provided, limit the application of any insurance law codified in this title; or (2) Limit or restrict the rights of policyholders, claimants, and creditors. (c) If there is a conflict between a provision of this chapter and any other act relating to insurance which is codified in this title, including Chapter 11A of this title [ 31-1131.01 et seq.], this chapter shall apply. (d) This chapter shall apply as of January 1, 2011, and to all transactions entered into after January 1, 2011.  (Sept. 24, 2010, D.C. Law 18-223,  2133, 57 DCR 6242.)  Emergency Legislation For temporary (90 day) addition, see  2133 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
 315051.01. Definitions. For purposes of this chapter, the term: (1) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking. (2) Customer means a person who purchases portable electronics or services. (3) District means the District of Columbia. (4) Enrolled customer means a customer who elects coverage under a portable electronics insurance policy issued to a vendor of portable electronics. (5) Location means any physical location in the District or any website, call center site, or similar location directed to residents of the District. (6) Portable electronics means electronic devices that are portable in nature, their accessories and services related to the use of the device. (7)(A) Portable electronics insurance means insurance providing coverage for the repair or replacement of portable electronics, which may provide coverage for portable electronics against any one or more of the following causes of loss: (i) Loss; (ii) Theft; (iii) Inoperability due to mechanical failure; (iv) Malfunction; or (v) Damage or other similar causes of loss. (B) The term portable electronics insurance does not include: (i) A service contract or extended warranty providing coverage limited to the repair, replacement, or maintenance of property for the operational or structural failure of property due to a defect in materials, workmanship, accidental damage from handling, power surges, or normal wear and tear; (ii) A policy of insurance covering a sellers or a manufacturers obligations under a warranty; or (iii) A homeowners, renters, private passenger automobile, commercial, multi-peril, or similar policy. (8) Portable electronics transaction means: (A) The sale or lease of portable electronics by a vendor to a customer; or (B) The sale of a service related to the use of portable electronics by a vendor to a customer. (9) Supervising entity means a business entity that is a licensed insurer or insurance producer that is appointed by an insurer to supervise the administration of a portable electronics insurance program. (10) Vendor means a person in the business of engaging in portable electronics transactions directly or indirectly.  (May 1, 2013, D.C. Law 19-306,  101, 60 DCR 2746.) 
 315051.02. License requirements; training; sale of plans. (a) A vendor is required to hold a limited-lines license to sell or offer coverage under a policy of portable electronics insurance. (b)(1) A limited-lines license issued under this section shall authorize any employee or authorized representative of the vendor to sell or offer coverage under a policy of portable electronics insurance to a customer at each location at which the vendor engages in portable electronics transactions and such employee or authorized representative shall not be subject to licensure as an insurance producer; provided, that the insurer issuing the portable electronics insurance either directly supervises or appoints a supervising entity to supervise the administration of the training program, including development of a training program, for employees and authorized representatives of the vendors. (2)(A) The training required by this subsection shall comply with the following requirements: (i) The training shall be provided to employees and authorized representatives of vendors who are directly engaged in the activity of selling or offering portable electronics insurance; (ii) The training may be provided in electronic form; provided, that, if conducted in an electronic form, the supervising entity shall implement a supplemental education program regarding the portable electronics insurance product that is conducted and overseen by licensed employees of the supervising entity; and (iii) Each employee and authorized representative shall receive basic instruction about the portable electronics insurance offered to customers and the disclosures required under subsection (d) of this section. (B) The training provided pursuant to this subsection shall not be subject to the prior approval requirement of  31-1131.05a(b). (c) No employee or authorized representative of a vendor of portable electronics shall advertise, represent, or otherwise hold himself or herself out as a non-limited lines licensed insurance producer. (d) At every location where portable electronics insurance is offered to customers, brochures or other written materials must be made available to a prospective customer that: (1) Disclose that portable electronics insurance may provide a duplication of coverage already provided by a customers homeowners insurance policy, renters insurance policy, or other source of coverage; (2) State that the enrollment by the customer in a portable electronics insurance program is not required in order to purchase or lease portable electronics or services; (3) Summarize the material terms of the insurance coverage, including: (A) The identity of the insurer; (B) The identity of the supervising entity; (C) The amount of any applicable deductible and how it is to be paid; (D) Benefits of the coverage; and (E) Key terms and conditions of coverage, such as whether portable electronics may be repaired or replaced with similar make and model reconditioned or non-original manufacturer parts or equipment; (4) Summarize the process for filing a claim, including a description of how to return portable electronics and the maximum fee applicable in the event the customer fails to comply with any equipment return requirements; and (5) State that an enrolled customer may cancel enrollment for coverage under a portable electronics insurance policy at any time and the person paying the premium shall receive a refund of any applicable unearned premium. (e) Notwithstanding any other provision of law, employees or authorized representatives of a vendor of portable electronics shall not be compensated based primarily on the number of customers enrolled for portable electronics insurance coverage but may receive compensation for activities under the limited-lines license that is incidental to their overall compensation. (f) The supervising entity appointed to supervise a vendors portable electronics insurance program shall maintain a registry of vendor locations that are authorized to sell or solicit portable electronics insurance coverage in the District. Upon request by the Commissioner and with 10 days notice to the supervising entity, the registry shall be open to inspection and examination by the Commissioner during regular business hours of the supervising entity. (g) Applications for licensure under this section shall be made by a vendor in accordance with  31-1131.06 for residents of the District and  31-1131.08 for non-residents. Information regarding a vendors officers, directors, or shareholders submitted in connection with a vendors application for licensure shall be limited to an employee or officer of the vendor that is designated by the applicant as the person responsible for the vendors compliance with the requirements of this section; provided, that if the vendor derives more than 50% of its revenue from the sale of portable electronics insurance, the information shall be provided for all officers, directors, and shareholders of record having beneficial ownership of 10% or more of any class of securities registered under the federal securities law.  (May 1, 2013, D.C. Law 19-306,  102, 60 DCR 2746.) 
 315051.03. Billing and collection of premiums. (a) Charges for portable electronics insurance coverage may be billed and collected by the vendor of portable electronics. Any charge to the enrolled customer for coverage that is not included in the cost associated with the purchase or lease of portable electronics or related services shall be separately itemized on the enrolled customers bill. If the portable electronics insurance coverage is included with the purchase or lease of portable electronics or related services, the vendor shall clearly and conspicuously disclose to the enrolled customer that the portable electronics insurance coverage is included with the portable electronics or related services. (b) Vendors billing and collecting charges for portable electronics insurance coverage shall not be required to maintain funds collected in a segregated account; provided, that the vendor is authorized by the insurer to hold the funds in an alternative manner and remits the amounts to the supervising entity within 60 days of receipt. All funds received by a vendor from an enrolled customer for the sale of portable electronics insurance shall be considered funds held in trust by the vendor in a fiduciary capacity for the benefit of the insurer. (c) Vendors may receive compensation for billing and collection services.  (May 1, 2013, D.C. Law 19-306,  103, 60 DCR 2746.) 
 315051.04. Termination and modification of coverage. (a) Notwithstanding any other provision of law: (1) An insurer may terminate or otherwise change the terms and conditions of a policy of portable electronics insurance only upon providing the policyholder and enrolled customers with at least 30 days notice. (2) If the insurer changes the terms and conditions, then the insurer shall provide the vendor policyholder with a revised policy or endorsement and each enrolled customer with a revised certificate, endorsement, updated brochure, or other evidence indicating that a change in the terms and conditions has occurred and a summary of material changes. (3) Notwithstanding paragraph (1) of this subsection, an insurer may terminate an enrolled customers enrollment under a portable electronics insurance policy upon 15 days notice for discovery of fraud or material misrepresentation in obtaining coverage or in the presentation of a claim under the policy. (4) Notwithstanding paragraph (1) of this subsection, an insurer may immediately terminate an enrolled customers enrollment under a portable electronics insurance policy: (A) For nonpayment of premium; (B) If the enrolled customer ceases to have an active service with the vendor of portable electronics; or (C) If an enrolled customer exhausts the aggregate limit of liability, if any, under the terms of the portable electronics insurance policy and the insurer sends notice of termination to the enrolled customer within 30 days after exhaustion of the limit; provided, that if notice is not timely sent, enrollment shall continue notwithstanding the aggregate limit of liability until the insurer sends notice of termination to the enrolled customer. (5) Where a portable electronics insurance policy is terminated by a policyholder, the policyholder shall mail or deliver written notice to each enrolled customer advising the enrolled customer of the termination of the policy and the effective date of termination. The written notice shall be mailed or delivered to the enrolled customer at least 30 days before the termination. (b)(1) Whenever notice or correspondence with respect to a policy of portable electronics insurance is required pursuant to this section or is otherwise required by law, it shall be in writing and sent within the notice period, if any, specified within the statute or regulation requiring the notice or correspondence. Notwithstanding any other provision of law, notices and correspondence may be sent either by mail or by electronic means as set forth in this subsection. (2) If the notice or correspondence is mailed, it shall be sent to the vendor of portable electronics at the vendors mailing address specified for such purpose and to its affected enrolled customers last known mailing address on file with the insurer. The insurer or vendor of portable electronics, as the case may be, shall maintain proof of mailing in a form authorized or accepted by the United States Postal Service or other commercial mail delivery service. (3) If the notice or correspondence is sent by electronic means, it shall be sent to the vendor of portable electronics at the vendors electronic mail address specified for such purpose and to its affected enrolled customers last known electronic mail address as provided by each enrolled customer to the insurer or vendor of portable electronics, as the case may be. For purposes of this subsection, an enrolled customers provision of an electronic mail address to the insurer or vendor of portable electronics, as the case may be, shall be deemed consent to receive notices and correspondence by electronic means as long as disclosure to that effect is provided to the customer. The insurer or vendor of portable electronics, as the case may be, shall maintain proof that the notice or correspondence was sent. (c) Notice or correspondence required by this section or otherwise required by law may be sent on behalf of an insurer or vendor, as the case may be, by the supervising entity appointed by the insurer.  (May 1, 2013, D.C. Law 19-306,  104, 60 DCR 2746.) 
 315051.05. Penalties. (a) A vendor shall report any violation of this chapter to the Commissioner within 30 days of discovery of the violation by the vendor. (b) If a vendor of portable electronics or its employee or authorized representative violates any provision of this chapter, the Commissioner may: (1) After notice and hearing, impose fines not to exceed $2,500 per violation or a $10,000 maximum fine in the aggregate for such conduct; and (2) After notice and hearing, impose other penalties that the Commissioner considers necessary and reasonable to carry out the purpose of this chapter, including: (A) Suspending the privilege of transacting portable electronics insurance pursuant to this section at specific business locations where violations have occurred; and (B) Suspending or revoking the ability of individual employees or authorized representatives to act under the limited lines license.  (May 1, 2013, D.C. Law 19-306,  105, 60 DCR 2746.) 
 315051.06. Rules. The Mayor, pursuant to subchapter I of Chapter 5 of Title 2 [ 2-501 et seq.], may issue rules to implement the provisions of this chapter. The proposed rules shall be submitted to the Council for a 45-day period of review, excluding Saturdays, Sundays, legal holidays, and days of Council recess. If the Council does not approve or disapprove the proposed rules, in whole or in part, by resolution within this 45-day review period, the proposed rules shall be deemed disapproved.  (May 1, 2013, D.C. Law 19-306,  106, 60 DCR 2746.) 
 315101. Short title; applicability of provisions. (a) This chapter regulating credit life insurance and credit accident and health insurance in the District of Columbia may be cited as The Act for the Regulation of Credit Life Insurance and Credit Accident and Health Insurance. (b) All life insurance and all accident and health insurance in connection with loans or other credit transactions of less than 5 years duration in the District of Columbia shall be subject to the provisions of this chapter. Such insurance written in connection with a loan or other credit transaction of 5 years duration or more shall not be subject to the provisions of this chapter, nor shall such insurance be subject to the provisions of this chapter if the issuance of the insurance is an isolated transaction on the part of the insurer not related to a plan or regular course of conduct for insuring debtors of the creditor. (c) Repealed.  (Sept. 25, 1962, 76 Stat. 580, Pub. L. 87-686,  1; Apr. 3, 2001, D.C. Law 13-263,  1411(b)(1), 48 DCR 991; May 7, 2002, D.C. Law 14-132,  602(a).)  Prior Codifications 1981 Ed.,  35-1001. 1973 Ed.,  35-1601. Effect of Amendments D.C. Law 13-263 added subsec. (c). D.C. Law 14-132 repealed subsec. (c) which had read: (c) Sections  31-5110.01, 31-5111, and 31-5112 shall apply to an insurance plan or program for which an application of approval has been submitted to the Commissioner under  42-836.01(2)(B). D.C. Law 15-105 purported to amend subsec. (c) which was repealed by D.C. Law 14-132, therefore, the amendment was ineffective. Emergency Legislation Section 2 of Act 14-188, the Protections from Predatory Lending and Mortgage Foreclosure Improvements Emergency Amendment Act, deemed approved Nov. 27, 2001, without the signature of the Mayor, provided that D.C. Law 13-263 shall not apply beginning November 6, 2001, through March 6, 2002. Temporary Legislation For temporary (225 day) amendment of section, see  2 of Protections from Predatory Lending and Mortgage Foreclosure Improvements Temporary Amendment Act of 2001 (D.C. Law 14-86, March 19, 2002, law notification 49 DCR 2991).
 315102. Definitions. For the purpose of this chapter: (1) Mayor means the Mayor of the District of Columbia. (1A) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking. (2) Credit life insurance means insurance issued on the life of a debtor pursuant to or in connection with a specific loan or other credit transaction. (3) Credit accident and health insurance means insurance against the disability of a debtor which provides indemnity for payments on a specific loan or other credit transaction. (4) Creditor means the lender of money or vendor of goods, services, or property, including a lessor under a lease intended as a security, for which payment is arranged through a loan or other credit transaction, and includes any successor to the right, title, or interest of any such lender, vendor, or lessor. (5) Debtor means a borrower of money or purchaser of goods, services, or property, including a lessee under a lease intended as a security, for which payment is arranged through a loan or other credit transaction. (6) District means the District of Columbia. (7) Indebtedness means the amount payable by a debtor to a creditor in connection with a loan or other credit transaction. (8) Repealed.  (Sept. 25, 1962, 76 Stat. 580, Pub. L. 87-686,  2; May 21, 1997, D.C. Law 11-268,  10(m), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  25(a), 45 DCR 745; June 11, 2004, D.C. Law 15-166,  4(dd), 51 DCR 2817.)  Prior Codifications 1981 Ed.,  35-1002. 1973 Ed.,  35-1602. Effect of Amendments D.C. Law 15-166, in par. (1A), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance and Securities. Emergency Legislation For temporary (90 day) amendment of section, see  4(dd) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). Editor's Notes Department of Insurance abolished: The Department of Insurance, including the Superintendent, was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. Reorganization Order No. 43, dated June 23, 1953, as amended, established, under the direction and control of a Commissioner, a Department of Insurance headed by a Superintendent. The Order provided for the organization of the Department, abolished the previously existing Department of Insurance, and provided that all functions and positions of the previous Department would be transferred to the new Department of Insurance, including the duties, powers, and authorities of all officers and employees; and that all personnel, property, records and unexpended balances relating to the functions and positions transferred would also be transferred to the new Department. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. The functions of the Superintendent of Insurance were transferred to the Department of Consumer and Regulatory Affairs by Reorganization Plan No. 1 of 1983, effective March 31, 1983. Pursuant to the provisions of D.C. Law 11-268, the Department of Insurance and Securities Regulation was established and the duties of the Superintendent of Insurance and the Insurance Administration were assumed by the Commissioner of Insurance and Securities, and the Insurance Administration in the Department of Consumer and Regulatory Affairs was abolished. Change in Government This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 401 of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to a single Commissioner. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 315103. Forms authorized to be issued. Credit life insurance and credit accident and health insurance shall be issued only in the following forms: (1) Individual policies of life insurance issued to debtors on the term plan; (2) Individual policies of accident and health insurance issued to debtors on a term plan or disability provisions in individual life policies to provide such coverage; (3) Group policies of life insurance issued to creditors providing insurance upon the lives of debtors on the term plan; and (4) Group policies of accident and health insurance issued to creditors on a term plan insuring debtors or disability provisions in group life policies to provide such coverage.  (Sept. 25, 1962, 76 Stat. 581, Pub. L. 87-686,  3.)  Prior Codifications 1981 Ed.,  35-1003. 1973 Ed.,  35-1603.
 315104. Limitations on amount. (a) The amount of credit life insurance shall not exceed the initial indebtedness however the indebtedness may be repayable; provided, however, that nothing contained herein shall be deemed to supersede or repeal the limitation on the amount of group insurance specified in  31-4710(2)(D) [repealed]. In cases where an indebtedness is repayable in substantially equal installments, the amount of insurance shall at no time exceed the scheduled amount of unpaid indebtedness in the case of any individual policy or the actual amount of the unpaid indebtedness in the case of any group policy. (b) The amount of indemnity payable by credit accident and health insurance in the event of disability, as defined in the policy, shall not exceed the aggregate of the periodic scheduled unpaid installments of indebtedness; and the amount of each periodic indemnity payment shall not exceed the original indebtedness divided by the number of periodic installments. (c) Notwithstanding subsections (a) and (b) of this section, the amount of any credit life insurance or credit accident and health insurance with respect to indebtedness incurred to defray educational costs of a student may include the part of a commitment that has not been advanced by the creditor.  (Sept. 25, 1962, 76 Stat. 581, Pub. L. 87-686,  4; Sept. 20, 1966, 80 Stat. 821, Pub. L. 89-594,  2.)  Prior Codifications 1981 Ed.,  35-1004. 1973 Ed.,  35-1604.
 315105. Term of coverage. The term of any credit life insurance or credit accident and health insurance shall, subject to acceptance by the insurance company, commence on the date when the debtor becomes obligated to the creditor, except that where a group policy provides coverage with respect to existing obligations the insurance on a debtor with respect to such indebtedness shall commence on the effective date of the policy. Where evidence of insurability is required and such evidence is furnished more than 30 days from the date when the debtor becomes obligated to the creditor, the term of the insurance may commence on the date on which the insurance company determines the evidence to be satisfactory, and in such event there shall be an appropriate refund or adjustment of any charge to the debtor for insurance. The term of such insurance shall not extend more than 15 days beyond the scheduled maturity date of the indebtedness except when extended without additional cost to the debtor. If the indebtedness is discharged due to renewal or refinancing prior to the scheduled maturity date, the insurance in force shall be terminated before any new insurance may be issued in connection with the renewal or refinanced indebtedness. In all cases of termination prior to scheduled maturity, a refund shall be paid or credited as provided in  31-5108.  (Sept. 25, 1962, 76 Stat. 581, Pub. L. 87-686,  5.)  Prior Codifications 1981 Ed.,  35-1005. 1973 Ed.,  35-1605. Section References This section is referenced in  31-5106.
 315106. Required policies or certificates; contents; delivery; applications and notices. (a) All credit life insurance and credit accident and health insurance shall be evidenced by an individual policy or in the case of group insurance by a group policy and individual certificates of insurance. (b) Each individual policy or certificate of credit life insurance, each individual policy or certificate of credit accident and health insurance, and each individual policy or certificate of credit life insurance and credit accident and health insurance shall, in addition to other requirements of law, set forth the name and home office address of the insurance company, and the identity by name or otherwise of the person insured, the rate or amount of payment, if any, by the debtor separately in connection with credit life insurance and credit accident and health insurance, a description of the coverage, including the amount and term thereof (which in the case of group insurance may be by description rather than stated amount and term), any exceptions, limitations, or restrictions, and shall state that the benefits shall be paid to the creditor to reduce or extinguish the unpaid indebtedness and, whenever the amount of insurance may exceed the unpaid indebtedness, that any such excess shall be payable to a beneficiary, other than the creditor, named by the debtor or to his estate. (c) Except as hereinafter provided, an individual policy or certificate of insurance shall be delivered to the insured debtor at the time the indebtedness is incurred. (d) If a debtor makes a separate payment for credit life or credit accident and health insurance and an individual policy or certificate of insurance is not delivered to the debtor at the time the indebtedness is incurred, a copy of the application for such policy or a notice of proposed insurance shall be delivered at such time to the debtor by the creditor. The copy of the application for or notice of proposed insurance shall be signed by the debtor and shall set forth the identity by name or otherwise of the person insured; the rate or amount of payment by the debtor separately for credit life insurance and credit accident and health insurance; and a statement that within 30 days, if the insurance is accepted by the insurance company, there will be delivered to the debtor an individual policy or certificate of insurance containing the name and home office address of the insurance company, and a description of the amount, term, and coverage including any exceptions, limitations, and restrictions. The copy of the application for, or notice of, proposed insurance shall refer exclusively to insurance coverage, and shall be separate and apart from the loan, sale, or other credit statement of account, instrument, or agreement unless the information required by this subsection is prominently set forth in such statement of account, instrument, or agreement. If a debtor does not make a separate payment for credit life or credit accident and health insurance, an application need not be taken or a notice of proposed insurance given. In any case, upon acceptance of the insurance by the insurance company, and within 30 days of the date upon which the term of the insurance commences, the insurance company shall cause the individual policy or certificate of insurance to be delivered to the debtor. Said application or notice of proposed insurance shall state that, upon acceptance by the insurance company, the insurance shall become effective as provided in  31-5105.  (Sept. 25, 1962, 76 Stat. 581, Pub. L. 87-686,  6.)  Prior Codifications 1981 Ed.,  35-1006. 1973 Ed.,  35-1606.
 315107. Filing requirements; forms and rates to be approved by Commissioner. (a) All forms of policies, certificates of insurance, notices of proposed insurance, applications for insurance, binders, endorsements and riders delivered or issued for delivery in the District and the premium rates pertaining thereto shall be filed with the Commissioner by the insurance company, in such manner and together with such supporting information as the Commissioner may reasonably require. In any case where a group policy is made for a group in the District and the policy is neither delivered nor issued for delivery in the District, the form of policy and all other forms and premium rates referred to in the preceding sentence shall be filed with the Commissioner by the insurance company. (b) The Commissioner may, within 30 days after the filing of any form of policy, certificate of insurance, notice of proposed insurance, application for insurance, binder, endorsement or rider, disapprove any such form if the premium rates charged or to be charged appear by reasonable assumptions to be excessive in relation to benefits paid or to be paid, or if the form contains provisions which are unjust, unfair, inequitable, misleading, or deceptive. In determining whether to disapprove any such form the Commissioner may give due consideration to past and prospective loss experience within and outside the District, to underwriting practice and judgment to the extent appropriate, and to all other relevant factors within and outside the District, and he may take into account the experience of the individual company. (c) If the Commissioner notifies the insurance company that the form does not comply with the requirements of this chapter, it shall be unlawful thereafter for such insurance company to issue or use such form. In such notice, the Commissioner shall specify the reason for his disapproval and state that a hearing will be granted promptly upon request in writing by the insurance company. No such policy, certificate of insurance, notice of proposed insurance, application for insurance, binder, endorsement, or rider shall be issued or used until the expiration of 30 days after it has been so filed, unless the Commissioner shall give his prior written approval thereto. (d) The Commissioner may, at any time after a hearing, held after not less than 20-days written notice to the insurance company, withdraw his approval of any such form if it does not meet the requirements of this chapter. (e) The insurance company shall not issue such forms or use them after the effective date of such withdrawal of approval. (f) The insurance company may revise such forms and the premium rates pertaining thereto from time to time, and such revised forms and premium rates shall be filed with the Commissioner and shall be subject to all the preceding requirements of this section, in like manner as though they were original filings with the Commissioner.  (Sept. 25, 1962, 76 Stat. 582, Pub. L. 87-686,  7; May 21, 1997, D.C. Law 11-268,  10(m), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  25(b), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-1007. 1973 Ed.,  35-1607. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-5102.
 315108. Refunds, credits and charges. (a) Each individual policy or certificate of credit life insurance or credit accident and health insurance shall provide that in the event of termination of the insurance prior to the scheduled maturity date of the indebtedness, any refund of an amount paid by the debtor for insurance shall be paid or credited promptly to the person entitled thereto; provided, that the Commissioner shall prescribe a minimum refund and no refund which would be less than such minimum need be made. The formula to be used in computing refunds shall be filed with the Commissioner who may disapprove such formula if he finds that it is unjust or unreasonable. (b) If a creditor requires a debtor to make a payment in connection with credit life insurance or credit accident and health insurance and an individual policy or certificate of insurance is not issued, the creditor shall promptly give written notice to such debtor and shall promptly make an appropriate credit to the account. (c) The amount charged to a debtor for credit life or credit accident and health insurance shall not exceed the premium rate charged by the insurance company at the time the charge to the debtor is determined.  (Sept. 25, 1962, 76 Stat. 583, Pub. L. 87-686,  8; May 21, 1997, D.C. Law 11-268,  10(m), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-1008. 1973 Ed.,  35-1608. Section References This section is referenced in  31-5105. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-5102.
 315109. Claims. (a) All claims shall be paid either by draft drawn upon the insurance company or by check of the insurance company to the order of the claimant to whom payment of the claim is due pursuant to the policy provisions, or upon direction of such claimant to one specified, and every insurance company shall be held to strict settlement of all such claims. (b) It shall be unlawful for any creditor, having received any such check or draft from such insurance company, to fail to correctly credit the account, pay to or upon the direction of, or otherwise correctly account to the claimant to whom payment is due for the full amount of such check or draft, less any lawful deductions therefrom. (c) No plan or arrangement shall be used whereby any person, firm, or corporation other than the insurance company or its designated claim representative shall be authorized to settle or adjust claims. The creditor shall not be designated as claim representative for the insurance company in adjusting claims, nor, in the case of an individual creditor, shall the spouse of such creditor or any relative of the creditor or spouse within the 3rd degree of consanguinity be so designated, nor shall any officer or employee of a corporate creditor or any spouse or relative of such officer, employee, or spouse within the 3rd degree of consanguinity be so designated; provided, that a group policyholder may, by arrangement with the group insurance company, draw drafts or checks in payment of claims due to the group policyholder subject to audit and review by the insurance company.  (Sept. 25, 1962, 76 Stat. 584, Pub. L. 87-686,  9.)  Prior Codifications 1981 Ed.,  35-1009. 1973 Ed.,  35-1609.
 315110.01. Insurance plans and programs submitted pursuant to  42-836.01(2)(B). [Repealed] Repealed.  (Sept. 25, 1962, 76 Stat. 580, Pub. L. 87-686,  10a; as added Apr. 3, 2001, D.C. Law 13-263,  1411(b)(2), 48 DCR 991; May 7, 2002, D.C. Law 14-132,  602(a).)  Emergency Legislation Section 2 of Act 14-188, the Protections from Predatory Lending and Mortgage Foreclosure Improvements Emergency Amendment Act, deemed approved Nov. 27, 2001, without the signature of the Mayor, provided that D.C. Law 13-263 shall not apply beginning November 6, 2001, through March 6, 2002. Temporary Legislation For temporary (225 day) amendment of section, see  2 of Protections from Predatory Lending and Mortgage Foreclosure Improvements Temporary Amendment Act of 2001 (D.C. Law 14-86, March 19, 2002, law notification 49 DCR 2991). Effective Dates Section 602(a) of Law 14-132 provided: The Protections from Predatory Lending and Mortgage Foreclosure Improvements Act of 2000, effective April 3, 2001 (D.C. Law 13-263; 48 DCR 991), is repealed as of November 6, 2001.
 315110. Choice of companies to provide required coverage. [Repealed] Repealed.  (Sept. 25, 1962, 76 Stat. 584, Pub. L. 87-686,  10; Apr. 3, 2001, D.C. Law 13-265,  126(b), 48 DCR 1225; redesignated  302, Oct. 19, 2002, D.C. Law 14-213,  20(b), 49 DCR 8140.)  Prior Codifications 1981 Ed.,  35-1010. 1973 Ed.,  35-1610.
 315111. Violations. (a) In the case of any violation of this chapter by an insurance company, agent, solicitor, or broker, the Commissioner shall have authority to proceed in accordance with the provisions of  31-4305 and 31-4326 [repealed] and  31-2502.03 and 31-2502.36 [repealed]. (b) In the case of any violation of this chapter by a creditor or by any other person not licensed in the District as an insurance agent, solicitor, or broker, regardless of the fact that such creditor or other person is not required by law to be so licensed, the penalties and the procedure for their imposition shall be as set forth in  31-2502.42.  (Sept. 25, 1962, 76 Stat. 584, Pub. L. 87-686,  11; May 21, 1997, D.C. Law 11-268,  10(m), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-1011. 1973 Ed.,  35-1611. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-5102.
 315112. Administrative or judicial review of orders or actions. Any insurance company, agent, solicitor, or broker aggrieved by any order or action of the Commissioner under this chapter may contest the validity of such order or action by appeal or through any other appropriate proceeding, in accordance with the procedures prescribed by  31-2502.43 [repealed] and 31-2502.44 [repealed]; provided, that any such insurance company, agent, solicitor, or broker, which is licensed in the District under Subdivision A of Subtitle VI of this title, may contest the validity of such order or action by appeal or through any other appropriate proceeding in accordance with the procedures prescribed by Subdivision A of Subtitle VI of this title.  (Sept. 25, 1962, 76 Stat. 585, Pub. L. 87-686,  12; May 21, 1997, D.C. Law 11-268,  10(m), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-1012. 1973 Ed.,  35-1612. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-5102.
 315201. Maintenance of reinsurance reserve fund by life and fire insurance companies or associations; suspension or revocation of license for insolvency or impairment of capital; aiding unlicensed companies or associations; issuance of license. (a) All life and fire insurance companies or associations licensed to do business in said District shall be required to maintain a reinsurance reserve fund; and whenever any such company or association not excepted from the operations hereof shall become insolvent or impaired to the extent of 25% of its capital stock it shall be the duty of the Commissioner to suspend its license; and unless such impairment or insolvency shall be made good within 60 days thereafter, it shall be the duty of the Commissioner of the Department of Insurance, Securities, and Banking to revoke its license to do business in the District; and it shall be unlawful for any insurance company, association, or order to do business in the District without a license, or to continue business after the revocation of its license, and any such company or association violating this provision shall be liable to a penalty of $20 for each day it transacts business without such license to be recovered by the Mayor of the District by an action of debt in any court of the District of competent jurisdiction. And any person who shall aid in carrying on the business of any such company, or shall act as agent or solicitor for any company not licensed to do business in said District, or whose license is revoked, shall be guilty of a misdemeanor, and on conviction thereof in the Superior Court of the District of Columbia shall be punished by a fine not exceeding $100, or, in default of payment thereof, by imprisonment in the jail of the District for not less than 10 nor more than 60 days. And the Commissioner of the Department of Insurance, Securities, and Banking shall issue such license to any such insurance company or association whenever it shall have complied with the provisions of  31-202, subject, however, to the provisions of  31-5901 [repealed] and 31-5902 [repealed]; provided, that the Commissioner of the Department of Insurance, Securities, and Banking shall have power to make an official examination into the affairs of any insurance company or association organized under the laws of the District of Columbia, or having its principal office therein, at his discretion, for the purpose of ascertaining whether such company is impaired or insolvent, as aforesaid. Civil fines, penalties, and fees may be imposed as alternative sanctions for any infraction of the provisions of this section, or any rules or regulations issued under the authority of this section, pursuant to Chapter 18 of Title 2. Adjudication of any infraction of this section shall be pursuant to Chapter 18 of Title 2. (b) Any license issued pursuant to this section shall be issued as a Financial Services endorsement to a basic business license under the basic business license system as set forth in subchapter I-A of Chapter 28 of Title 47.  (Mar. 3, 1901, 31 Stat. 1290, ch. 854,  648; Apr. 1, 1942, 56 Stat. 190, ch. 207,  1; July 8, 1963, 77 Stat. 77, Pub. L. 88-60,  1; July 29, 1970, 84 Stat. 570, Pub. L. 91-358, title I,  155(a); Oct. 5, 1985, D.C. Law 6-42,  470(d), 32 DCR 4450; May 21, 1997, D.C. Law 11-268,  10(d), 44 DCR 1730; Apr. 20, 1999, D.C. Law 12-261,  2003(gg)(1), 46 DCR 3142; Oct. 28, 2003, D.C. Law 15-38,  3(t)(2), 50 DCR 6913; June 11, 2004, D.C. Law 15-166,  4(ee), 51 DCR 2817.)  Prior Codifications 1981 Ed.,  35-201. 1973 Ed.,  35-201. Effect of Amendments D.C. Law 15-38, in subsec. (b), substituted Financial Services endorsement to a basic business license under the basic for Class A Financial Services endorsement to a master business license under the master. D.C. Law 15-166, in subsec. (a), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance and Securities throughout the subsection. Cross References Authority of Council to regulate, modify, or eliminate license requirements and to promulgate regulations, see  47-2842, 47-2844. Claims of creditors, benefits from health and accident insurance, see  31-4716.01. Deposits of life insurance companies, see  31-4315 et seq. Fire, casualty, and marine insurance companies, capital requirements, see  31-2502.13. Fire, casualty, and marine insurance companies, licensing, see  31-2502.02. Impairment of capital, see  31-5202. Inspection and examination of insurance companies, see  31-208 and 31-5202. Minors contract for health and accident insurance, see  31-4330. Emergency Legislation For temporary (90 day) amendment of section, see  3(t)(2) of Streamlining Regulation Emergency Act of 2003 (D.C. Act 15-145, August 11, 2003, 50 DCR 6896). For temporary (90 day) amendment of section, see  4(ee) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). Editor's Notes Department of Insurance abolished: The Department of Insurance, including the Superintendent, was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. Reorganization Order No. 43, dated June 23, 1953, as amended, established, under the direction and control of a Commissioner, a Department of Insurance headed by a Superintendent. The Order provided for the organization of the Department, abolished the previously existing Department of Insurance, and provided that all functions and positions of the previous Department would be transferred to the new Department of Insurance, including the duties, powers, and authorities of all officers and employees; and that all personnel, property, records and unexpended balances relating to the functions and positions transferred would also be transferred to the new Department. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. The functions of the Superintendent of Insurance were transferred to the Department of Consumer and Regulatory Affairs by Reorganization Plan No. 1 of 1983, effective March 31, 1983. Pursuant to the provisions of D.C. Law 11-268, the Department of Insurance and Securities Regulation was established and the duties of the Superintendent of Insurance and the Insurance Administration were assumed by the Commissioner of Insurance and Securities, and the Insurance Administration in the Department of Consumer and Regulatory Affairs was abolished. Change in Government This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 401 of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to a single Commissioner. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 315202. Health, accident, and life insurance companies defined; assets or capital stock requirements; annual required tax and financial statement; annual required examinations; revocation or suspension of license; appeal; issuance of license; exemptions. Every corporation, joint-stock company, or association not exempt herein, transacting business in the District of Columbia, which collects premiums, dues, or assessments from its members or from holders of its certificates or policies, and which provides for the payment of indemnity on account of sickness or accident, or a benefit in case of death, shall be known as health, accident, and life insurance companies or associations. No such company or association shall transact business within the District of Columbia unless it shall have in assets or in capital stock fully paid up in cash, or in both together, not less than $25,000 as a capital or guarantee fund; which assets may be invested in United States, state, county, municipal bonds, and bonds of the District of Columbia, or railroad bonds; but investments in the bonds of railroads shall be limited to the bonds of those railroads which have paid dividends on their capital stock for the 10 years immediately previous to the date of the investment; or in improved real estate, or in first mortgages on improved real estate; but no loan on real estate shall be made for an amount exceeding 70% of its assessed value, such investments to be approved by the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking] of the District of Columbia. No such health, accident, and life insurance company or association, transacting on August 15, 1911, or thereafter the business of health, accident, and life insurance, or either or all said kinds of insurance, in the District of Columbia shall issue policies or certificates providing, either singly or in aggregate, a greater accident or death benefit than $500, or a greater weekly indemnity than $20, on any 1 person unless such company or association has in assets or in capital stock fully paid up in cash, or in both together, not less than $100,000 invested and approved as aforesaid. Every such company or association shall pay to the Collector of Taxes for the District of Columbia a sum of money, as tax, equal to 1% of all moneys received from members of policy or certificate holders within the District of Columbia, said tax to be paid on or before the 1st day of March of each year on the amount of such income for the year ending December 31st next preceding; and shall also file annually with said Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking], on or before the 1st day of March of each year, a sworn statement, on blanks furnished by said Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking], showing its true financial condition, income, disbursements, assets, and liabilities on the 31st of December next preceding, and such other information as said Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking] may require; and shall pay to the said Collector of Taxes $10 for filing such statement. All companies or associations described herein shall be examined as described in Chapter 14 of this title; and when the Mayor finds the capital stock of any such company impaired or its assets reduced in value to an amount less than required by the provisions hereof he shall at once give notice of said fact to said company or association, and unless said impairment is made good within 60 days after said notice, it shall be the duty of said Commissioner to revoke or suspend the license of said company or association until such impairment shall have been made good; and any company or association that issues policies or certificates of insurance as described herein without a license from said Commissioner or during a suspension thereof, as herein provided, shall be fined not less than $20 nor more than $100 per day; provided, that if any such company or association shall feel aggrieved by the decision of said Commissioner concerning the investment or impairment of its assets or capital stock, it shall have the right to appeal, within 10 days, from the decision of said Commissioner to the Mayor of the District of Columbia, and the Council of the District of Columbia shall prescribe rules and regulations for the hearing of said appeal, and the Mayors decision shall be final; provided also, that when any such company or association shall have complied with the provisions contained herein, the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking] shall issue to it a license to transact its business in the District of Columbia; provided, however, that nothing contained herein shall interfere with or abridge the rights of any fraternal beneficial association licensed to transact business under  31-5701 to 31-5717 [repealed], or incorporated by special act of Congress; and provided further, that nothing contained herein shall apply to any relief association, not conducted for profit, composed solely of officers and enlisted men of the United States Army, Navy, or Air Force, or solely of employees of any other branch of the United States government service, or solely of employees of any individual, company, firm, or corporation. Civil fines, penalties, and fees may be imposed as alternative sanctions for any infraction of the provisions of this section, or any rules or regulations issued under the authority of this section, pursuant to Chapter 18 of Title 2. Adjudication of any infraction of this section shall be pursuant to Chapter 18 of Title 2.  (Mar. 3, 1901, 31 Stat. 1292, ch. 854,  653; Aug. 15, 1911, 37 Stat. 16, ch. 12,  1; Oct. 5, 1985, D.C. Law 6-42,  470(e), 32 DCR 4450; Oct. 21, 1993, D.C. Law 10-49,  9(a), 40 DCR 6110; May 21, 1997, D.C. Law 11-268,  10(d), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-202. 1973 Ed.,  35-202. Section References This section is referenced in  31-4901. Cross References Annual statements and taxes, see  47-2601 et seq. Domestic life companies, formation, see  31-4401. Fire and Casualty Act, provision that health and accident insurance may be written under, see  31-2502.11. Fire, casualty, and marine insurance companies, capital and surplus requirements, see  31-2502.13. Health and accident insurance, required policy provisions, see  31-4712. Inspection and examination of insurance companies, see  31-208 and 31-5201. Life insurance companies, deposits, see  31-4315 et seq. Reserves and related actuarial items, submission of opinion with annual statement, see  31-4901. Editor's Notes Office of Collector of Taxes abolished: The Office of the Collector of Taxes was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. All functions of the Office of the Collector of Taxes including the functions of all officers, employees, and subordinate agencies were transferred to the Director, Department of General Administration by Reorganization Order No. 3, dated August 28, 1952. Reorganization Order No. 20, dated November 10, 1952, transferred the functions of the Collector of Taxes to the Finance Office. The same Order provided for the Office of the Collector of Taxes headed by a Collector in the Finance Office, and abolished the previously existing Office of the Collector of Taxes. Reorganization Order No. 20 was superseded and replaced by Organization Order No. 121, dated December 12, 1957, which provided that the Finance Office (consisting of the Office of the Finance Officer, Property Tax Division, Revenue Division, Treasury Division, Accounting Division, and Data Processing Division) would continue under the direction and control of the Director of General Administration, and that the Treasury Division would perform the function of collecting revenues of the District of Columbia and depositing the same with the Treasurer of the United States. Organization Order No. 121 was revoked by Organization Order No. 3, dated December 13, 1967, Part IVC of which prescribed the functions of the Finance Office within a newly established Department of General Administration. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. Functions of the Finance Office as stated in Part IVC of Organization Order No. 3 were transferred to the Director of the Department of Finance and Revenue by Commissioners Order No. 69-96, dated March 7, 1969. The collection functions of the Director of the Department of Finance and Revenue were transferred to the District of Columbia Treasurer by  47-316 on March 5, 1981. Department of Insurance abolished: See Historical and Statutory Notes following  31-5201. Change in Government This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 402(269) of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to the District of Columbia Council, subject to the right of the Commissioner as provided in  406 of the Plan. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 315203. Copy of application by insured to be delivered with policy. Each life insurance company, benefit order, and association doing a life insurance business in the District of Columbia shall deliver with each policy issued by it a copy of the application made by the insured so that the whole contract may appear in said application and policy, in default of which no defense shall be allowed to such policy on account of anything contained in, or omitted from, such application.  (Mar. 3, 1901, 31 Stat. 1294, ch. 854,  657; June 30, 1902, 32 Stat. 534, ch. 1329.)  Prior Codifications 1981 Ed.,  35-203. 1973 Ed.,  35-203. Section References This section is referenced in  31-3503 and  31-4802. Cross References Hospital and medical services corporations, applicability of this section, see  31-3503. Industrial life insurance policies, proof of fraud etc., with reference to requirements of this section, see  31-4802.
 315204. Principal office and books, records, and files of corporation to be in District; exception; reincorporation of certain corporations; violations; prosecutions. (a) Any corporation now or hereafter formed or organized under any provision of law in force and effect in the District of Columbia to engage in an insurance business shall maintain its principal office within said District and shall keep its books, records, and files therein, and shall not remove from said District either its principal office or its books, records, or files without the permission of the Mayor of the District of Columbia first had and obtained; provided, however, that nothing contained in this section shall be construed to apply to the books, records, and files of any such corporation kept in a branch office agency of such corporation, which books, records, and files relate solely to the business transacted by the said branch office agency; and provided further, that any insurance corporation created by special act of Congress is authorized upon resolution of its board of directors or trustees to reincorporate under the laws of any state of the United States, a certified copy of such resolution of such board of directors or trustees having first been filed in the Office of the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking] of the District of Columbia and recorded in the Office of the Recorder of Deeds of the District of Columbia. Upon compliance with the above conditions, the assets of the said corporation shall thereby become vested in the new corporation. Said new corporation shall faithfully carry out any and every right, obligation, and liability of said original corporation. (b) Any corporation violating any of the provisions of this section shall forthwith forfeit its charter, which forfeiture shall operate as a revocation of its license to do business within said District. (c) Any officer, agent, or employee of any such corporation who shall violate any of the provisions of this section shall be guilty of a misdemeanor and upon conviction shall pay a fine of not less than $300 or be imprisoned for not more than 90 days, or by both such fine and imprisonment. All prosecutions under this section shall be upon information filed in the Superior Court of the District of Columbia in the name of the District of Columbia by the Corporation Counsel thereof or any of his assistants.  (Mar. 3, 1901, ch. 854,  657a; May 17, 1932, 47 Stat. 158, ch. 189; Apr. 1, 1942, 56 Stat. 190, ch. 207,  1; July 8, 1963, 77 Stat. 77, Pub. L. 88-60, 1; July 29, 1970, 84 Stat. 570, Pub. L. 91-358, title I,  155(a); May 21, 1997, D.C. Law 11-268,  10(d), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-204. 1973 Ed.,  35-204. Section References This section is referenced in  31-1503 and  31-3503. Cross References Hospital and medical services corporations, applicability of this section, see  31-3503. Managing general agent records, retention, see  31-1503. Editor's Notes Delegation of functions: Reorganization Order No. 43, Part VIII, dated June 23, 1953, delegated to the Superintendent of Insurance the function of granting or denying permission to remove from the District of Columbia the principal office, books, records, and files of an insurance company, as set forth in subsection (a) of this section. Department of Insurance abolished: See Historical and Statutory Notes following  31-5201. Change in Government This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 401 of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to a single Commissioner. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 315205. Employees compensation corporations or associations to file certain information with Commissioner; disapproval of premium rate or schedule; judicial review. Every insurance corporation or association authorized to transact business in the District of Columbia, which insures employers against liability for compensation under the Employees Compensation Act, shall file with the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking] its manual of classifications and underwriting rules, together with basic rates for each class, and also merit rating plans designed to modify the class rates, none of which shall take effect until the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking] shall have approved the same as adequate and reasonable for the group of risks to which they respectively apply. The Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking] may withdraw his approval of any premium rate or schedule made by any insurance corporation or association, if, in his judgment, such premium rate or schedule is inadequate or unreasonable; provided, that upon petition of the company or association or any other party aggrieved the opinion of the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking] shall be subject to review by the Superior Court of the District of Columbia: Provided further, that any petition for review shall be filed with said Court within 30 days after the rendition of opinion by the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking].  (Mar. 3, 1901, ch. 854,  657b; April 16, 1934, 48 Stat. 592, ch. 144; June 25, 1936, 49 Stat. 1921, ch. 804; June 25, 1948, 62 Stat. 991, ch. 646,  32(b); May 24, 1949, 63 Stat. 107, ch. 139,  127; July 29, 1970, 84 Stat. 572, Pub. L. 91-358, title I,  155(c)(36); May 21, 1997, D.C. Law 11-268,  10(d), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-205. 1973 Ed.,  35-205. References in Text The Employees Compensation Act, referred to near the beginning of the first sentence, refers to Chapter 15 of Title 36. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-5201.
 315231. Definitions. For the purpose of this chapter, the term: (1) Affiliate means: (A) Any person, directly or indirectly, beneficially owning (whether through rights, options, convertible interests, or otherwise), controlling, or holding power to vote 15% or more of the outstanding voting securities or other voting ownership interests of the Certified Capital Company or Certified Investor; (B) Any person with 15% or more of its outstanding voting securities or other voting ownership interests directly or indirectly beneficially owned (whether through rights, options, convertible interests, or otherwise), controlled, or held with power to vote by the Certified Capital Company or Certified Investor; (C) Any person directly or indirectly controlling, controlled by, or under common control with the Certified Capital Company or Certified Investor; (D) A partnership or limited liability company in which the Certified Capital Company or Certified Investor is a general partner, manager, or managing member; or (E) Any person who is an officer, director, employee, or agent of the Certified Capital Company or Certified Investor or an immediate family member of the officer, director, employee, or agent. (2) Allocation Date means the date on which the Certified Investors of a Certified Capital Company are allocated Premium Tax Credits by the Commissioner under  31-5234. (3) Certified Capital means an investment of cash by a Certified Investor in a Certified Capital Company that fully funds the purchase price of an equity interest in the Certified Capital Company, a Qualified Debt Instrument, or a combination of the two. (4) Certified Capital Company means a partnership, corporation, trust, or limited liability company, whether organized on a profit or not for profit basis, that has as its primary business activity the investment of cash in Qualified Businesses and that is certified by the Commissioner as meeting the criteria of this chapter. (5) Certified Investor means any insurance company, approved by the Commissioner, that invests Certified Capital pursuant to an allocation of Premium Tax Credits under  31-5234. (6) Commissioner means the Commissioner of Insurance and Securities Regulation [Commissioner of the Department of Insurance, Securities, and Banking]. (7) District means the District of Columbia. (8) District Premium Tax Liability means any liability incurred by an insurance company under  31-205 or, in the case of a repeal or reduction by the District of the tax imposed by  31-205, any other tax liability incurred by an insurance company under District law. (8A) Economic Impact Study means an assessment of the performance of the Certified Capital Company program that includes: (A) Job growth and retention in Qualified Businesses after the receipt of Qualified Investments, with reference to the following measures: (i) Overall number of jobs created and retained; (ii) Number of jobs created and retained in Tier One Qualified Businesses, Tier Two Qualified Businesses, and Tier Three Qualified Businesses; and (iii) A description of whether the jobs are full-time salaried, full-time hourly, part-time, or contract; (B) Estimates of the taxation revenue generated as the result of Qualified Investments, with specific reference to income tax, sales tax, and corporate tax; and (C) Comparison of each of the measures set forth in subparagraphs (A) and (B) of this paragraph among all Certified Capital Companies. (8B) Follow-on Investment means any Qualified Investment that a Certified Capital Company makes in a Qualified Business that is subsequent to its Initial Investment in that Qualified Business. (8C) Initial Investment means the 1st Qualified Investment that a Certified Capital Company makes in a Qualified Business after May 27, 2010. (9) Person means any natural person or entity, including a corporation, general or limited partnership, trust, or limited liability company. (10) Premium Tax Credit means a tax credit which may be applied against a Certified Investors District Premium Tax Liability under  31-5233. (11) Premium Tax Credit Allocation Request means an application for allocation of Premium Tax Credits prepared and executed by a Certified Investor on a form provided by the Commissioner and filed by a Certified Capital Company with the Commissioner. (11A) Principal Business Operations means the location where a business conducts its primary business activities, its managers and the majority of its employees work, and its material books and records are maintained. (12)(A) Qualified Business means a business, except as provided in subparagraph (B) of this paragraph, that meets the following qualifications as of the time of a Certified Capital Companys Initial Investment in the business: (i)(I) It is headquartered in the District, its Principal Business Operations are located in the District, and the Qualified Investment it receives is used solely to support its business operations in the District, except for advertising, promotions, and sales purposes; or (II) It is headquartered and has its Principal Business Operations located outside the District, certifies in an affidavit that the business will relocate its headquarters and its Principal Business Operations to the District within 90 days after its receipt of the Initial Investment by the Certified Capital Company, and the Qualified Investment it receives is used solely to support its business operations in the District, except for advertising, promotions, and sales purposes; (ii) At least 25% of its employees are residents of the District; (iii) At least 75% of its employees are employed in the District; (iv) It is a small business concern as defined in 13 C.F.R.  121.201; (v) It certifies in an affidavit that the business is unable to obtain conventional financing, which means that the business has failed in an attempt to obtain funding for a loan from a bank or other commercial lender or that the business cannot reasonably be expected to qualify for financing under the standards of commercial lending; (vi) The business was not organized by a Certified Capital Company or an affiliate of a Certified Capital Company; provided, that this sub-subparagraph shall not prohibit a Certified Capital Company from providing financial, technical, or similar advice to a business before making an investment in such business; (vii) The business does not have an ownership interest, investment interest, compensation agreement, or similar financial relationship with a Certified Capital Company or any affiliate of a Certified Capital Company before the date on which a Certified Capital Company makes an Initial Investment in the business; provided, that this sub-subparagraph shall not prohibit a Certified Capital Company from providing financial, technical or similar advice to a business before making an investment in such business. (B) A business shall not be a Qualified Business if it is: (i) A regional or national franchise; (ii) Primarily engaged in real estate development or leasing projects; (iii) Primarily engaged in insurance; or (iv) Engaged in the provision of professional services by accountants, lawyers, or physicians. (13) Qualified Debt Instrument means a debt instrument issued to a Certified Investor by a Certified Capital Company, at par value or a premium, with an original maturity date of at least 5 years from date of issuance and a repayment schedule which is no faster than a level principal amortization over 5 years, which does not permit the Certified Investor to receive prepayment of interest, and which contains no interest, distribution, or payment features which are related to the profitability of the issuing Certified Capital Company or the performance of its investment portfolio. (14) Qualified Distribution means any distribution or payment of a Certified Capital Company in connection with the following: (A) Reasonable costs and expenses of forming and syndicating the Certified Capital Company, which may include the costs of financing and insuring the obligations of the Certified Capital Company; provided, that no more than one Certified Investor, or the Affiliates thereof, in the Certified Capital Company may receive a Qualified Distribution related to providing a guaranty, indemnity, bond, insurance policy, or other payment undertaking in favor of all of the Certified Investors; (B) Reasonable costs and expenses of managing and operating the Certified Capital Company, including reasonable and necessary fees paid for professional services (such as legal and accounting services) related to the formation and operation of the Certified Capital Company and an annual management fee in an amount that does not exceed 21/2% of the Certified Capital of the Certified Capital Company; and (C) Any projected increase in federal or state taxes of the direct or indirect equity holders of a Certified Capital Company resulting from the earnings or other tax liability of the Certified Capital Company to the extent that the increase is related to the direct or indirect ownership of a Certified Capital Company. (15) Qualified Investment means the investment of cash by a Certified Capital Company in a Qualified Business for the purchase of any debt, debt participation, equity, or hybrid security, of any nature and description, including a debt instrument or security which has the characteristics of debt but which provides for conversion into equity or equity participation instruments, such as options or warrants; provided, that: (A) Any such debt instrument shall have a maturity of at least 24 months from the date the debt is incurred; and (B) A Certified Capital Company, after an investment and assuming the conversion and exercise of any equity participation or hybrid security, shall not own more than 49% of the voting equity of the Qualified Business. (16) Tier One Qualified Business means any Qualified Business: (A) That did not receive a Qualified Investment prior to May 27, 2010; (B) That is engaged in one of the following lines of business as its primary line of business: (i) Healthcare services; (ii) Information technology; (iii) Environmental services/technology; (iv) Internet information providers; (v) Communication services; (vi) Biotechnology/research services; (vii) Multimedia/graphics software; (viii) Business management services; (ix) Financial services; or (x) Restaurant services; and (C) Whose Principal Business Operations are located within: (i) Repealed; (ii) The District of Columbia Enterprise Zone as defined by section 1400 of the Internal Revenue Code of 1986, approved August 5, 1997 (111 Stat. 863; 26 U.S.C.   1400). (17) Tier Two Qualified Business means any Qualified Business that did not receive a Qualified Investment prior to May 27, 2010, that is not a Tier One Qualified Business, and that is engaged in one of the lines of business set forth in paragraph (16)(B)(i) through (x) of this section as its primary line of business. (18) Tier Three Qualified Business means any Qualified Business that did not receive a Qualified Investment prior to May 27, 2010, and that is not a Tier One Qualified Business or a Tier Two Qualified Business.  (Mar. 10, 2004, D.C. Law 15-87,  2, 50 DCR 10982; Apr. 13, 2005, D.C. Law 15-354,  49(a), 52 DCR 2638; May 27, 2010, D.C. Law 18-181,  2(a), 57 DCR 3388; Feb. 26, 2015, D.C. Law 20-155,  9017(c), 61 DCR 9990.)  Section References This section is referenced in  31-5232 and  31-5235. Effect of Amendments D.C. Law 15-354, in par. (8), validated previously made technical corrections. D.C. Law 18-181 added pars. (8A), (8B), (8C), (11A), and (16) to (18); and rewrote pars. (12) and (15). The 2015 amendment by D.C. Law 20-155 repealed (16)(C)(i). Emergency Legislation For temporary (90 days) amendment of this section, see  9017(c) and 9029 of the Fiscal Year 2015 Budget Support Emergency Act of 2014 (D.C. Act 20-377, July 14, 2014, 61 DCR 7598, 20 STAT 3696). For temporary (90 days) amendment of this section, see  9017(c) of the Fiscal Year 2015 Budget Support Congressional Review Emergency Act of 2014 (D.C. Act 20-449, October 10, 2014, 61 DCR 10915, 20 STAT 4188). For temporary (90 days) amendment of this section, see  9017(c) of the Fiscal Year 2015 Budget Support Second Congressional Review Emergency Act of 2014 (D.C. Act 20-566, January 9, 2015, 62 DCR 884, 21 STAT 541). Editor's Notes Section 3 of D.C. Law 18-181 provided: Sec. 3. Applicability. This act shall not apply to any Qualified Investment or distribution made by any Certified Capital Company prior to the effective date of this act. Section 9029 of D.C. Law 20-155 provided that the amendment by  9017(c) of the act shall apply as of September 30, 2014.
 315232. Certification. (a) The Commissioner shall begin accepting applications for certification as a Certified Capital Company not later than 150 days after March 10, 2004. An applicant for certification as a Certified Capital Company shall pay a nonrefundable application fee of $15,000 at the time of filing the application with the Commissioner. The Commissioner shall establish by rule or regulation the procedures for making an application for certification as a Certified Capital Company. (b) From the time of the application to the time of allocation of Premium Tax Credits, the applicant shall have equity capitalization of at least $500,000 that must be in the form of unencumbered cash, marketable securities, or other liquid assets. (c) The Commissioner shall review the organizational documents of each applicant for certification and the business history of the applicant and shall determine whether the applicants cash, marketable securities, and other liquid assets meet the requirements of subsection (b) of this section. As part of its application, each applicant shall submit to the Commissioner its balance sheet, audited with an unqualified opinion of an independent certified public accountants, that is dated no earlier than 35 days prior to the date the application is filed under subsection (a) of this section. (d) The applicant shall certify that the Certified Capital Company does or will, following certification, maintain its principal office within the District and shall commit to maintain a set of its books, records, files, and any other information required by the Commissioner as a condition of certification or as required by rule or regulation. (e) The Commissioner shall verify that at least 2 principals of the Certified Capital Company or at least 2 persons employed or engaged to manage the funds of the Certified Capital Company each have 3 or more years of experience in the venture capital industry. (f) Any offering material involving the sale of securities of the Certified Capital Company shall include the following statement: By authorizing the formation of a Certified Capital Company, the District of Columbia does not necessarily endorse the quality of management or the potential for earnings of such company and is not liable for any damages or losses to any investor in the company. Use of the word certified in any offering material does not constitute a recommendation or endorsement of the investment by the District of Columbia, its officers, employees, or agents. Upon a violation of the Certified Capital Companies Act of 2003 [Chapter 52A of Title 31 of the D.C. Official Code,  31-5231 et seq.], the District of Columbia may require forfeiture of unused Premium Tax Credits and repayment of used Premium Tax Credits. (g) Within 30 days of receipt of a complete application, the Commissioner shall issue the certification or shall provide the applicant with notice of the disapproval of the certification that shall communicate in detail to the applicant the grounds for the refusal, including suggestions for curing any defects in the application. If an applicant submits an amended application within 15 days of receipt of refusal by the Commissioner, the Commissioner shall have 15 days from the receipt of the complete amended application by which to communicate its approval or refusal of the amended application to the applicant. The Commissioner shall review and approve or reject applications in the order complete applications are received. (h) No insurance company or any Affiliate of an insurance company shall, directly or indirectly, own (whether through rights, options, convertible interests, or otherwise) 15% or more of the voting equity interests, or other voting ownership interests of or manage a Certified Capital Company or control the direction of investments for a Certified Capital Company. This provision shall not preclude a Certified Investor, insurance company, or any other person from exercising its legal rights and remedies (which may include interim management of a Certified Capital Company): (1) if a Certified Capital Company is in default of its statutory obligations or its contractual obligations to the Certified Investor, insurance company, or other person; or (2) otherwise insure that the Certified Capital Company satisfies the requirements of  31-5235. Nothing in this section shall limit an insurance companys ownership of nonvoting equity securities or other nonvoting ownership interests of the Certified Capital Company.  (Mar. 10, 2004, D.C. Law 15-87,  3, 50 DCR 10982.)  Section References This section is referenced in  31-5234.
 315233. Premium Tax Credit. (a) Any Certified Investor who makes an investment of Certified Capital pursuant to an allocation of Premium Tax Credits under  31-5234 shall, in the year of investment, earn a Premium Tax Credit in the amount of the Certified Investors investment of Certified Capital. (b) A Certified Investor may claim an amount not to exceed 25% of the Premium Tax Credits per year (Annual Amount) against its District Premium Tax Liability, beginning with the premium tax filing for calendar year 2009. The Annual Amount shall not exceed the District Premium Tax Liability of the Certified Investor for the taxable year. All unused Premium Tax Credits may be carried forward indefinitely until they are utilized. (c)(1) A Certified Investor may use up to 1/2 of its Annual Amount to offset its required June 1st payment of 1/2 of an insurance companys District Premium Tax Liability, as set forth under  31-205(b)(4), beginning with the June 1, 2008 payment. (2) A Certified Investor claiming a Premium Tax Credit shall not be required to pay any additional or retaliatory tax levied pursuant to  31-205(f)(1) as a result of claiming the Premium Tax Credit. (d) A Certified Investor shall not be required to reduce the amount of premium tax included by the Certified Investor in connection with ratemaking in the District, for any insurance written by the Certified Investor or affiliate thereof, because of a reduction in the Certified Investors District Premium Tax Liability from the utilization of the Premium Tax Credits.  (Mar. 10, 2004, D.C. Law 15-87,  4, 50 DCR 10982; Apr. 13, 2005, D.C. Law 15-354,  49(b), 52 DCR 2638.)  Section References This section is referenced in  31-5231. Effect of Amendments D.C. Law 15-354, in pars. (1) and (2) of subsec. (c), validated previously made technical corrections.
 315234. Aggregate limitations on Premium Tax Credits; Premium Tax Credit Allocation Requests. (a) The aggregate amount of Premium Tax Credits that shall be allowed for all Certified Investors under this chapter shall not exceed $50 million. No Certified Capital Company, on an aggregate basis with its Affiliates, shall file Premium Tax Credit Allocation Requests in excess of the maximum amount of Premium Tax Credits which may be allowed. (b) A Premium Tax Credit Allocation Request shall be made by a Certified Investor on a form provided by the Commissioner and filed with the Commissioner by a Certified Capital Company on behalf of the Certified Investor. The form shall include the affidavit of the Certified Investor pursuant to which the Certified Investor shall irrevocably commit to invest Certified Capital in the Certified Capital Company in the amount of the Premium Tax Credit allocated to it (even if the amount is less than the amount of the Premium Tax Credit Allocation Request). The maximum amount of Premium Tax Credit Allocation Requests which shall be allowed to be filed by any one Certified Investor, on an aggregate basis with its Affiliates, in one or more Certified Capital Companies, shall not exceed the greater of $10 million or 15% of the aggregate limitation as provided in subsection (a) of this section. (c) Premium Tax Credits shall be allocated to Certified Investors in Certified Capital Companies in the order that Premium Tax Credit Allocation Requests are filed with the Commissioner by the Certified Capital Companies on their behalf. The Premium Tax Credit Allocation Requests may be filed on or after March 10, 2004, and the filings made before such date shall be considered to have been received by the Commissioner on such date. All filings made on the same day shall be treated as having been made contemporaneously. The deadline for submitting Premium Tax Credit Allocation Requests shall be the first business day which occurs 90 days after the date on which the Commissioner will begin accepting applications for certification as a Certified Capital Company pursuant to  31-5232. (d)(1) If 2 or more Certified Capital Companies file Premium Tax Credit Allocation Requests with the Commissioner on behalf of their respective Certified Investors on the same day, and the amount of the Premium Tax Credit Allocation Requests exceeds in the aggregate the limit of available Premium Tax Credits under subsection (a) of this section, Premium Tax Credits shall be allocated among the Certified Investors on a pro rata basis. The pro rata allocation for any one Certified Investor shall be the product of a fraction, the numerator of which is the amount in the Premium Tax Credit Allocation Request filed on behalf of the Certified Investor and the denominator of which is the total of the amounts in all Premium Tax Credit Allocation Requests filed on behalf of all Certified Investors, multiplied by the aggregate limitation as provided in subsection (a) of this section. (2) No allocation shall be made to the Certified Investors of a Certified Capital Company unless the Certified Capital Company has filed Premium Tax Credit Allocation Requests that are not less than 15% of the Premium Tax Credits available under subsection (a) of this section; provided, that if the allocation process does not result in all Premium Tax Credit Allocation Requests having been filled, the 15% minimum shall be reduced to 10% and then 5% until the aggregate of Premium Tax Credits provided in subsection (a) of this section have been allocated or all Premium Tax Credit Allocation Requests have been filled. (e) Within 5 business days after the Commissioner receives a Premium Tax Credit Allocation Request filed by a Certified Capital Company, the Commissioner shall notify the Certified Capital Company of the amount of Premium Tax Credits allocated to each of the Certified Investors in the Certified Capital Company. (f) At the time of receipt of Certified Capital from Certified Investors, the total cash, cash equivalents, or other assets readily available to the Certified Capital Company to make Certified Investments after deducting the costs and expenses of forming and syndicating the Certified Capital Company shall be an amount equal to or greater than 50% of the total Premium Tax Credit allocated to the Certified Investors under subsection (e) of this section. (g) If a Certified Capital Company does not receive from a Certified Investor an investment of Certified Capital equaling or exceeding the amount of Premium Tax Credits allocated to the Certified Investor within 5 business days of the Certified Capital Companys receipt of notice of the allocation, the Premium Tax Credits allocated to the Certified Investor shall be forfeited, and the Commissioner, within 5 business days, shall reallocate the Premium Tax Credits among the other Certified Investors in all Certified Capital Companies on a pro rata basis with respect to the Premium Tax Credit Allocation Requests filed.  (Mar. 10, 2004, D.C. Law 15-87,  5, 50 DCR 10982.)  Section References This section is referenced in  31-5231 and  31-5233.
 315235. Requirements for continuance of certification. (a) To continue to be certified, a Certified Capital Company shall make Qualified Investments according to the following schedule: (1) Within the period ending 30 months after its Allocation Date, a Certified Capital Company shall have made Qualified Investments cumulatively equal to 20% of its Certified Capital; (2) Within the period ending 4 years after its Allocation Date, a Certified Capital Company shall have made Qualified Investments cumulatively equal to 40% of its Certified Capital; (3) Within the period ending 5 years after its Allocation Date, a Certified Capital Company shall have made Qualified Investments cumulatively equal to 50% of its Certified Capital; and (4) Within the period ending 10 years after its Allocation Date, a Certified Capital Company shall have made Qualified Investments cumulatively equal to 100% of its Certified Capital. (b)(1) The aggregate cumulative amount of all Qualified Investments made by the Certified Capital Company following its Allocation Date shall be considered in the calculation of the percentage requirements under this chapter. Any proceeds received from a Qualified Investment may be invested in another Qualified Investment and shall count toward any requirement in this chapter with respect to investments of Certified Capital. (2) For the purposes of satisfying the percentage requirements of subsection (a) of this section only, for each Qualified Investment made after May 27, 2010, a Certified Capital Company that invests in a: (A) Tier One Qualified Business shall be deemed to have invested $1.25 for every dollar invested; (B) Tier Two Qualified Business shall be deemed to have invested $1.00 for every dollar invested; (C) Tier Three Qualified Business shall be deemed to have invested $0.75 for every dollar invested; (D) Qualified Business that receives an Initial Investment pursuant to a waiver granted in accordance with  31-5238.03 and that fails to satisfy the eligibility criteria to receive an Initial Investment within 6 months of the date of issuance of the waiver shall be deemed to have invested $0 for every dollar invested; (E) Qualified Business that received a Qualified Investment prior to May 27, 2010, and receives a subsequent Qualified Investment after May 27, 2010, shall be deemed to have invested $1.00 for every dollar invested; and (F) Qualified Business that receives an Initial Investment or a Follow-on Investment and that fails to maintain satisfaction of the eligibility criteria to receive an Initial or a Follow-on Investment, as applicable, for 6 consecutive months after the date of the Initial or Follow-On Investment shall be deemed to have invested $0 for every dollar invested. (c) Notwithstanding any other provision in this chapter, any Qualified Business that has received an Initial Investment may receive a Follow-on Investment if it: (1) Continues to meet the definition of a Qualified Business other than the requirements set forth in  31-5231(12)(A)(iv) and (v); and (2) Certifies in an affidavit that it intends to maintain its headquarters and Principal Business Operations in the District. (d) No Qualified Investment shall exceed 15% of the total Certified Capital of the Certified Capital Company at the time of investment. (e) A Certified Capital Company, at least 20 business days prior to making an Initial Investment or Follow-on Investment in a business, shall: (1) Certify in an affidavit that the business in which it proposes to invest: (A) In the case of an Initial Investment, is a Qualified Business; or (B) In the case of a Follow-on Investment, is eligible for a Follow-on Investment pursuant to subsection (c) of this section; and (2) Submit, along with the certification required by paragraph (1) of this subsection, an explanation of its determination that the business is eligible for an Initial Investment or Follow-on Investment. (e-1) If, after receiving the affidavit and certification under subsection (e) of this section, the Commissioner determines that a business is not eligible for an Initial Investment or a Follow-on Investment, the Commissioner shall, within 20 days of receiving the affidavit and certification, notify the Certified Capital Company of the determination and provide an explanation. (f) All Certified Capital not placed in Qualified Investments by the Certified Capital Company may be held or invested in a manner that the Certified Capital Company, in its discretion, considers appropriate; provided, that the Certified Capital Company shall not invest more than 5% of its Certified Capital in any security or policy issued by a Certified Investor or an Affiliate of a Certified Investor or any account maintained by a Certified Investor or Affiliate of any Certified Investor, unless the Certified Investor or an Affiliate thereof is providing a guaranty, indemnity, bond, insurance policy, or other payment undertaking in favor of the Certified Investors, which security or policy is: (1)(A) Rated AA or better by Standard & Poors Ratings Group or the equivalent by another nationally-recognized rating agency; or (B) Issued by, or guaranteed with respect to payment by, an entity whose unsecured indebtedness is rated at least AA or its equivalent by a nationally recognized credit rating organization; and (2) Not subordinated to other unsecured indebtedness of the issuer or the guarantor, as the case may be. (g) Each Certified Capital Company shall report to the Commissioner as follows: (1) Within 5 business days after the receipt of Certified Capital, each Certified Capital Company shall report the following to the Commissioner: (A) The name of each Certified Investor from which the Certified Capital was received, including the Certified Investors insurance premium tax identification number; (B) The amount of each Certified Investors investment of Certified Capital and Premium Tax Credits; and (C) The date on which the Certified Capital was received. (2) On or before January 31st of each year, each Certified Capital Company shall report the following to the Commissioner: (A) The amount of the Certified Capital Companys Certified Capital at the end of the immediately preceding year; (B) Whether or not the Certified Capital Company has invested more than 15% of its total Certified Capital in any one business; and (C)(i) All Qualified Investments that the Certified Capital Company made during the previous calendar year, including the number of employees of each Qualified Business in which it has made investments at the time of such investment and as of December 1st of the preceding calendar year; and (ii) For any Qualified Business in which the Certified Capital Company no longer has an investment, the Certified Capital Company shall provide employment figures for the Qualified Business at the time of such investment and as of the last day before the investment was terminated. (3) Each Certified Capital Company shall provide to the Commissioner annual audited financial statements, which shall include the opinion of an independent certified public accountant, within 120 days after the end of the fiscal year. In addition, each Certified Capital Company shall provide an agreed-upon procedures report by their independent certified public accountant that shall address the methods of operation and conduct of the business of the Certified Capital Company to determine if the Certified Capital Company is complying with this chapter and the rules and regulations hereunder and that the Certified Capital has been invested as required within the time limits under subsection (a) of this section. (4) On or before January 31st of each year, each Certified Capital Company shall pay an annual, nonrefundable certification fee of $10,000 to the Commissioner; provided, that no fee shall be required within 6 months of the initial Allocation Date. (h) After May 27, 2010, if a Certified Capital Company makes a Qualified Investment in a business that relocates its Principal Business Operations outside the District prior to the termination of the Qualified Investment or within 6 months after the termination of the Qualified Investment, the cumulative Qualified Investments that the Certified Capital Company will be deemed to have made for the purposes of  31-5236 will be reduced by the amount of the Qualified Investment in the business that relocated its Principal Business Operations outside the District, unless the business demonstrates that it has returned its Principal Business Operations to the District within 3 months of the relocation.  (Mar. 10, 2004, D.C. Law 15-87,  6, 50 DCR 10982; Apr. 13, 2005, D.C. Law 15-354,  49(c), 52 DCR 2638; May 27, 2010, D.C. Law 18-181,  2(b), 57 DCR 3388.)  Section References This section is referenced in  31-5232,  31-5236, and  31-5237. Effect of Amendments D.C. Law 15-354, in par. (3) of subsec. (g), validated previously made technical corrections. D.C. Law 18-181, in subsec. (a), deleted ; and from the end of par. (2), substituted ; and for a period at the end of par. (3), and added par. (4); rewrote subsecs. (b), (c), (e), and (g)(2)(C); and added subsecs. (e-1) and (h).
 315236. One hundred percent investment requirement. (a) A Certified Capital Company may make Qualified Distributions at any time. To make a distribution, other than a Qualified Distribution, a Certified Capital Company shall have made Qualified Investments in an amount cumulatively equal to 100% of its Certified Capital. A Certified Capital Company may repay principal and interest on its indebtedness without any restriction, including repayments of indebtedness of the Certified Capital Company on which Certified Investors earned Premium Tax Credits. (a-1) Notwithstanding any other provision in this chapter, if, pursuant to  31-5235(a)(4), a Certified Capital Company has not made Qualified Investments cumulatively equal to 100% of its Certified Capital within 10 years after its Allocation Date, the Certified Capital Company shall be prohibited from using its Certified Capital to pay its management fees. (b)(1) When distributions to holders of equity interests of a Certified Capital Company cumulatively exceed the Certified Capital Companys original Certified Capital plus any additional capital contributions to the Certified Capital Company (the Certified Capital Company Capital), the Certified Capital Company shall report to the Commissioner at the time of the distribution whether the aggregate total of such distributions, when combined with the annual Premium Tax Credits allocated to the Certified Capital Companys Certified Investors under this chapter to that time, have resulted in an annual internal rate of return exceeding 15% on the Certified Capital Company Capital. (2) If the Certified Capital Companys annual internal rate of return, determined in accordance with paragraph (1) of this subsection, exceeds 15%, the Certified Capital Company shall at the time of the distribution pay to the Commissioner an amount equal to 15% of the amount above that required to produce the 15% return.  (Mar. 10, 2004, D.C. Law 15-87,  7, 50 DCR 10982; May 27, 2010, D.C. Law 18-181,  2(c), 57 DCR 3388.)  Section References This section is referenced in  31-5235. Effect of Amendments D.C. Law 18-181 added subsec. (a-1).
 315237. Decertification. (a) The Commissioner shall conduct an annual review of each Certified Capital Company to determine if the Certified Capital Company is complying with the requirements of certification, to advise the Certified Capital Company as to the eligibility status of its Qualified Investments, and to ensure that no investment has been made in violation of this chapter. The cost of the annual review shall be paid by each Certified Capital Company under a fee schedule adopted by the Commissioner. (b) Any material violation of this chapter shall be grounds for decertification of the Certified Capital Company. If the Commissioner determines that a Certified Capital Company is not in compliance with the requirements of this chapter, the Commissioner shall, by written notice, inform the officers of the Certified Capital Company that the Certified Capital Company is subject to decertification in 120 days from the date of mailing of the notice unless the deficiencies are corrected. (c) If the Certified Capital Company is not in compliance with this chapter at the end of the 120-day notice period, the Commissioner may send a notice of decertification to the Certified Capital Company and to all other appropriate District agencies. (d) Decertification of a Certified Capital Company may cause the recapture of Premium Tax Credits previously claimed and the forfeiture of future Premium Tax Credits to be claimed by Certified Investors with respect to the Certified Capital Company, as follows: (1) Decertification of a Certified Capital Company within 3 years of the Allocation Date shall cause the recapture of all Premium Tax Credits previously claimed and the forfeiture of all future Premium Tax Credits to be claimed by Certified Investors unless the Certified Capital Company has met the requirements for continued certification as provided in this subsection. (2) If a Certified Capital Company has met all requirements for continued certification under  31-5235(a)(1) and subsequently fails to meet the requirements for continued certification under the provisions of  31-5235(a)(2), the Premium Tax Credits which have been or could be taken, subject to the other provisions of this chapter, by Certified Investors within 3 years from the Allocation Date shall not be subject to recapture or forfeiture; provided, that all other Premium Tax Credits shall be subject to recapture or forfeiture. (3) If a Certified Capital Company has met all requirements for continued certification under  31-5235(a)(1) and (2) and is subsequently decertified, the Premium Tax Credits which have been or could be taken, subject to the other provisions of this chapter, by Certified Investors within 4 years from the Allocation Date shall not be subject to recapture or forfeiture; provided, that all other Premium Tax Credits shall be subject to recapture or forfeiture. (4) If a Certified Capital Company has met all requirements for continued certification under  31-5235(a)(1), (2), and (3) and is subsequently decertified, those Premium Tax Credits which have been or could be claimed, subject to the other provisions of this chapter, by Certified Investors within 5 years from the Allocation Date shall not be subject to recapture or forfeiture. The Premium Tax Credits to be claimed subsequent to the 5th anniversary of the Allocation Date shall be subject to forfeiture only if the Certified Capital Company is decertified within 5 years from the Allocation Date. (5) If a Certified Capital Company has invested an amount cumulatively equal to 100% of its Certified Capital in Qualified Investments, notwithstanding any other provision of this chapter, all Premium Tax Credits shall not be subject to recapture or forfeiture. (e) If a Certified Capital Company has invested an amount cumulatively equal to 100% of its Certified Capital in Qualified Investments, notwithstanding any other provision of this chapter, the Certified Capital Company shall not be subject to regulation by the Commissioner. (f) The Commissioner shall send written notice to each Certified Investor whose Premium Tax Credits have been subject to recapture or forfeiture at the address last shown on the last premium tax filing. (g) Repealed.  (Mar. 10, 2004, D.C. Law 15-87,  8, 50 DCR 10982; May 27, 2010, D.C. Law 18-181,  2(d), 57 DCR 3388.)  Section References This section is referenced in  31-5238. Effect of Amendments D.C. Law 18-181, in subsecs. (a) and (b), substituted this chapter for  31-5235; and repealed subsec. (g), which had read as follows: (g) The Commissioner may waive, pursuant to rules established pursuant to  31-5239, any recapture or forfeiture of credits if, after considering all facts and circumstances, he or she determines that the waiver will have the effect of furthering the Districts economic development.
 315238.01. Fees deposited in Insurance Regulatory Trust Fund. All fees collected pursuant to this chapter shall be deposited in the Insurance Regulatory Trust Fund established by  31-1202 and expended for the purposes authorized by the Fund.  (Mar. 10, 2004, D.C. Law 15-87,  9a; as added Oct. 20, 2005, D.C. Law 16-33,  2203, 52 DCR 7503.)  Emergency Legislation For temporary (90 day) addition, see  2 of the Captive Insurance Company Enhancement Emergency Amendment Act of 2004 (D.C. Act 15-481, July 19, 2004, 51 DCR 7811). For temporary (90 day) amendment of section, see  2 of Captive Insurance Company Enhancement Congressional Review Emergency Amendment Act of 2004 (D.C. Act 15-549, October 26, 2004, 51 DCR 10336). For temporary (90 day) addition, see  2203 of Fiscal Year 2006 Budget Support Emergency Act of 2005 (D.C. Act 16-168, July 26, 2005, 52 DCR 7667). Temporary Legislation For temporary (225 day) addition, see  2 of Captive Insurance Company Enhancement Temporary Amendment Act of 2004 (D.C. Law 15-215, December 7, 2004, law notification 52 DCR 459).
 315238.02. Compliance and economic impact. (a) Information, records, or other data received, prepared, used, or retained by the Commissioner pursuant to this subsection shall not be subject to the disclosure requirements of subchapter II of Chapter 5 of Title 2 to the extent that: (1) The information, records, or other data describe the commercial and financial operations or intellectual property of a business entity or individual; (2) The information or records have not been publicly disseminated at any time; and (3) Disclosure of the information or records may put the business entity or individual at a competitive disadvantage. (b)(1) A Certified Capital Company shall receive and consider applications from every business interested in obtaining funds from the Certified Capital Company. The Certified Capital Company shall maintain a registry of all contacts made with every person or business that contacts the Certified Capital Company for the purpose of obtaining funding. The registry shall be made available to the Commissioner for inspection. (2) A Certified Capital Company shall provide, at the Commissioners request, the Commissioner with a detailed written explanation explaining its decision to fund or to decline to fund a prospective business. A Certified Capital Company providing a written explanation pursuant to this paragraph shall include a copy of the prospects business plan, financial statements, or other documents submitted by the person or business seeking funding. A Certified Capital Company shall also submit to the Commissioner all internal business analysis documents, if any, prepared by the Certified Capital Company that were considered during its decision-making process. (3) A Certified Capital Company that declines to provide funding to any business shall promptly communicate its decision in writing to the business seeking the funding. The letter shall include a detailed statement describing the reason the Certified Capital Company declined to fund the business. A copy of the letter shall be sent to the Commissioner. (c)(1) Each Qualified Business shall once a year provide the Certified Capital Companies from which it has received a Qualified Investment with a report stating the number and type of jobs created and retained in total and in the District, salaries paid to each employee, taxes paid to the District, money spent with local businesses or persons, including landlords, major suppliers and vendors, accountants, auditors, attorneys, and others, and whether such businesses or persons are located in the District or elsewhere. (2) Each Qualified Businesses shall provide the Certified Capital Company with documents, such as leases, invoices, payroll reports, employment records, tax returns and contracts, in support of the reports required by paragraph (1) of this subsection. The Certified Capital Company shall maintain the reports and supporting documents for a period of not less than 5 years from the date of receipt and shall make this information available to the Commissioner during the annual review. (d) Notwithstanding any other provision in this chapter, the Commissioner shall promptly make available to the Council and its committees, upon their request, any information made available to or otherwise in the possession of the Commissioner pursuant to this chapter. (e) The Commissioner shall conduct an Economic Impact Study once a year, beginning with the year ending December 31, 2009, and ending with the year ending December 31, 2014, to determine the economic impact of the Certified Capital Company program on the Districts economy. The Certified Capital Companies shall require its Qualified Businesses to provide all information necessary, as determined by the Commissioner or his or her designee, to complete the study. A detailed written report shall be prepared at the conclusion of the study. The Commissioner may retain consultants, economists, and other experts to conduct the Economic Impact Study. The costs of these experts shall be borne by the Certified Capital Companies in proportion to the amount of Certified Capital invested in each Certified Capital Company. (f) The Commissioner may subject a Certified Capital Company to an administrative penalty not to exceed $25,000 for any violation of this section, subject to the hearing requirements set forth [in]  2-509. Prior to imposing a penalty under this section, the Commissioner shall provide the Certified Capital Company with written notice of the violation and at least 30 days to cure the violation.  (Mar. 10, 2004, D.C. Law 15-87,  9a; as added by May 27, 2010, D.C. Law 18-181,  2(e), 57 DCR 3388.) 
 315238.03. Waivers and disqualifications. The Commissioner may grant a business a 6-month waiver from any of the eligibility criteria to receive an Initial Investment if the Commissioner finds that the business will meet the eligibility criteria to receive an Initial Investment within 6 months of the date of issuance of the waiver. The waiver shall expire 6 months after it is issued and a business shall not receive an additional waiver pursuant to this section. Upon satisfaction of all eligibility criteria within the 6-month period, the business shall promptly provide the Commissioner with an affidavit stating that the business has satisfied the eligibility criteria to receive an Initial Investment and shall provide any supporting documents requested by the Commissioner.  (Mar. 10, 2004, D.C. Law 15-87,  9b; as added May 27, 2010, D.C. Law 18-181,  2(e), 57 DCR 3388.)  Section References This section is referenced in  31-5235.
 315238. Transferability. The Premium Tax Credits may be transferred or sold. The Commissioner shall promulgate regulations to facilitate the transfer or sale of Premium Tax Credits. Any the transfer or sale shall not affect the time schedule for claiming the Premium Tax Credits. Any Premium Tax Credits recaptured under  31-5237 shall be the liability of the Certified Investor that actually claimed the Premium Tax Credits.  (Mar. 10, 2004, D.C. Law 15-87,  9, 50 DCR 10982.) 
 315239. Rulemaking. The Commissioner shall issue rules and regulations to implement this chapter within 120 days of March 10, 2004.  (Mar. 10, 2004, D.C. Law 15-87,  10, 50 DCR 10982.) 
 315301. Definitions. For the purposes of this chapter, the term: (1) Benefit contract means the agreement for provision of benefits authorized by  31-5313, as that agreement is described in  31-5316(a). (2) Benefit member means an adult member who is designated by the laws or rules of the society to be a benefit member under a benefit contract. (3) Certificate means the document issued as written evidence of the benefit contract. (4) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking. (5) District means the District of Columbia. (6) Fraternal benefit societies means any incorporated society, order or supreme lodge, without capital stock, including one exempted under the provisions of  31-5333(a)(2), whether incorporated or not, conducted solely for the benefit of its members and their beneficiaries and not for profit, operated on a lodge system with ritualistic form of work, having a representative form of government, and which provides benefits in accordance with this chapter. (7) Laws means the societys articles of incorporation, charter, constitution and bylaws, however designated. (8) Lodge means subordinate member units of the society, known as camps, courts, councils, branches or by any other designation. (9) Lodge System means a society that has a supreme governing body and subordinate lodges into which members are elected, initiated, or admitted in accordance with its laws, rules, and rituals. Subordinate lodges shall be required by the laws of the society to hold regular meetings periodically in furtherance of the purposes of the society. A society may, at its option, organize and operate lodges for children under the minimum age for adult membership, but membership and initiation in local lodges shall not be required of such children, nor shall they have a voice or vote in the management of the society. (10) Premiums means premiums, rates, dues, or other required contributions by whatever name known, which are payable under the certificate. (11) Representative form of government means a society in which: (A) There is a supreme governing body constituted in one of the following ways: (i) By assembly if the supreme governing body is composed of delegates elected directly by the members or at intermediate assemblies or conventions of members or their representatives, together with other delegates as may be prescribed in the societys laws. A society may provide for election of delegates by mail. The elected delegates shall constitute a majority in number and shall not have less than a majority of the votes and not less than the number of votes required to amend the societys laws. The assembly shall be elected and shall meet at least once every 4 years and shall elect a board of directors to conduct the business of the society between meetings of the assembly. Vacancies on the board of directors between elections may be filled in the manner prescribed by the societys laws; or (ii) By direct election if the supreme governing body is a board composed of persons elected by the members, either directly or by their representatives in intermediate assemblies, and any other persons prescribed in the societys laws. A society may provide for election of the board by mail. Each term of a board member may not exceed 4 years. Vacancies on the board between elections may be filled in the manner prescribed by the societys laws. Those persons elected to the board shall constitute a majority in number and not less than the number of votes required to amend the societys laws. A person filling the unexpired term of an elected board member shall be considered to be an elected member. The board shall meet at least quarterly to conduct the business of the society; (B) The officers of the society are elected either by the supreme legislative or governing body or by the board by whatever name known, as provided in the societys constitution and bylaws; (C) The members, officers, representatives, or delegates shall not vote by proxy; and (D) Only benefit members are eligible for election to the supreme governing body, the board of directors or any intermediate assembly. (12) Rules means all rules, regulations, or resolutions adopted by the supreme governing body or board of directors which are intended to have general application to the members of the society. (13) Society means fraternal benefit society, unless otherwise indicated.  (Apr. 29, 1998, D.C. Law 12-86,  1202, 45 DCR 1172; June 11, 2004, D.C. Law 15-166,  4(ff), 51 DCR 2817.)  Prior Codifications 1981 Ed.,  35-1231. Effect of Amendments D.C. Law 15-166, in par. (4), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance of the District of Columbia. Cross References Authority of Council to regulate, modify, or eliminate license requirements and to promulgate regulations, see  47-2842 and 47-2844. Exemption of fraternal benefit associations from provision of general law governing taxes and license fees for insurance companies, see  47-2611. Inspection and examination of insurance companies, see  31-208, 31-5201, and 31-5202. Quo warranto proceedings to question right to corporate rights and franchises, see  16-3501 et seq. Emergency Legislation For temporary (90 day) amendment of section, see  4(ff) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). Short Title Fraternal Benefit Societies Act of 1998: Section 1201 of D.C. Law 12-86 provided that title XII of the act may be cited as the Fraternal Benefit Societies Act of 1998.
 315302. Operation for benefit of members and their beneficiaries; bylaws. (a)(1) A society shall operate for the benefit of its members and their beneficiaries by: (A) Providing benefits as specified in  31-5313; and (B) Operating for one or more social, intellectual, educational, charitable, benevolent, moral, fraternal, patriotic, or religious purposes for the benefit of its members, which may also be extended to others. (2) The purposes of paragraph (2) of this subsection may be carried out directly by the society, or indirectly through subsidiary corporations or affiliated organizations. (b) Every society shall have the power to adopt laws and rules for the government of the society, the admission of its members, and the management of its affairs. It shall have the power to change, alter, add to, or amend such laws and rules and shall have other powers as are necessary and incidental to carrying into effect the objects and purposes of the society.  (Apr. 29, 1998, D.C. Law 12-86,  1203, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1232. Section References This section is referenced in  31-5309.
 315303. Qualifications for membership. (a) A society shall specify in its laws or rules: (1) Eligibility standards for each class of membership, provided that if benefits are provided on the lives of children, the minimum age for adult membership shall be set at not less than age 15 and not greater than age 21; (2) The process for admission to membership for each membership class; and (3) The rights and privileges of each membership class, provided that only benefit members shall have the right to vote on the management of the insurance affairs of the society. (b) A society may also admit social members who shall have no voice or vote in the management of the insurance affairs of the society. (c) Membership rights in the society are personal to the member and are not assignable.  (Apr. 29, 1998, D.C. Law 12-86,  1204, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1233.
 315304. Location of office. (a) The principal office of any domestic society shall be located in the District. The meetings of its supreme governing body may be held in any state, district, province, or territory wherein such society has at least one subordinate lodge, or in any other location as determined by the supreme governing body, and all business transacted at the meetings shall be as valid in all respects as if the meetings were held in the District. The minutes of the proceedings of the supreme governing body and of the board of directors shall be in the English language. (b)(1) A society may provide in its laws for an official publication in which any notice, report, or statement required by law to be given to members, including notice of election, may be published. The required reports, notices, and statements shall be printed conspicuously in the publication. If the records of a society show that 2 or more members have the same mailing address, an official publication mailed to one member is deemed to be mailed to all members at the same address unless a member requests a separate copy. (2) Not later than June 1st of each year, a synopsis of the societys annual statement providing an explanation of the facts concerning the condition of the society thereby disclosed shall be printed and mailed to each benefit member of the society or, in lieu thereof, the synopsis may be published in the societys official publication. (c) A society may provide in its laws or rules for grievance or complaint procedures for members.  (Apr. 29, 1998, D.C. Law 12-86,  1205, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1234.
 315305. Liability of officers and members. (a) The officers and members of the supreme governing body or any subordinate body of a society shall not be personally liable for any benefits provided by a society. (b) Any person may be indemnified and reimbursed by any society for expenses reasonably incurred by, and liabilities imposed upon, such person in connection with or arising out of any action, lawsuit, or proceeding, whether civil, criminal, administrative, or investigative, or threat thereof, in which the person may be involved by reason of the fact that he or she is or was a director, officer, employee, or agent of the society or of any firm, corporation, or organization which he or she served in any capacity at the request of the society. A person shall not be so indemnified or reimbursed: (1) In relation to any matter in such action, lawsuit, or proceeding as to which he or she shall finally be adjudged to be, or have been guilty of, breach of a duty as a director, officer, employee or agent of the society; or (2) In relation to any matter in such action, lawsuit, or proceeding, or threat thereof, which has been made the subject of a compromise settlement. (c) A society may indemnify or reimburse a person in relation to any matter specified in subsection (b)(1) and (2) of this section if the person acted in good faith for a purpose the person reasonably believed to be in or not opposed to the best interests of the society and, in a criminal action or proceeding, in addition, had no reasonable cause to believe that his or her conduct was unlawful. The determination whether the conduct of the person met the standard required in order to justify indemnification and reimbursement in relation to any matter described in subsection (b)(1) and (2) of this section may only be made by the supreme governing body or board of directors by a majority vote of a quorum consisting of persons who were not parties to the action, lawsuit, or proceeding or by a court of competent jurisdiction. The termination of any action, lawsuit, or proceeding by judgment, order, settlement, conviction, or upon a plea of no contest, as to the person shall not in itself create a conclusive presumption that the person did not meet the standard of conduct required in order to justify indemnification and reimbursement. (d) The right to indemnification and reimbursement shall not be exclusive of other rights to which such person may be entitled as a matter of law and shall inure to the benefit of his or her heirs, executors, and administrators. (e) A society shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the society, or who is or was serving at the request of the society as a director, officer, employee, or agent of any other firm, corporation, or organization against any liability asserted against such person and incurred by him or her in any such capacity or arising out of his or her status as such, whether or not the society would have the power to indemnify the person against such liability under this section. (f) No director, officer, employee, member, or volunteer of a society serving without compensation, shall be liable, and no cause of action may be brought, for damages resulting from the exercise of judgment or discretion in connection with the duties or responsibilities of such person for the society unless such act or omission involved willful or wanton misconduct.  (Apr. 29, 1998, D.C. Law 12-86,  1206, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1235.
 315306. Waiver of laws. The laws of the society may provide that no subordinate body, nor any of its subordinate officers or members, shall have the power or authority to waive any of the provisions of the laws of the society. Such provision shall be binding on the society and every member and beneficiary of a member.  (Apr. 29, 1998, D.C. Law 12-86,  1207, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1236.
 315307. Organization of societies. (a) A domestic society organized on or after April 29, 1998, shall be formed as follows: (1) Seven or more citizens of the United States, a majority of whom are residents of the District, who desire to form a fraternal benefit society may make, sign, and acknowledge, before some officer competent to take acknowledgment of deeds, articles of incorporation, in which shall be stated: (A) The proposed corporate name of the society, which shall not resemble the name of any society or insurance company already authorized to transact business in the District so as to be misleading or confusing; (B) The place where its principal office shall be located within the District; (C) The purposes for which it is being formed and the mode in which its corporate powers are to be exercised. Such purposes shall not include more liberal powers than are granted by this chapter; and (D) The names and residences of the incorporators and the names, residences, and official titles of all the officers, trustees, directors, or other persons who will manage the affairs and funds of the society for the first year or until the ensuing election, at which all such officers shall be elected by the supreme governing body. The ensuing election shall be held no later than one year from the date of issuance of the permanent certificate of authority. (2) Duplicate originals of the articles of incorporation, certified copies of the societys bylaws and rules, copies of all proposed forms of certificates, applications and rates therefor, and circulars to be issued by the society and a bond conditioned upon the return to applicants of the advanced payments if the organization is not completed within one year shall be filed with the Commissioner, who may require such further information as the Commissioner deems necessary. The bond with sureties approved by the Commissioner shall be in such amount, not less than $50,000, nor more than $500,000, as required by the Commissioner. All documents filed are to be in the English language. If the Commissioner finds that the purposes of the society conform to the requirements of this chapter and all provisions of the law have been complied with, the Commissioner shall approve the articles of incorporation and issue the incorporators a preliminary certificate of authority authorizing the society to solicit members as hereinafter provided. (b) No preliminary certificate of authority granted under the provisions of this section shall be valid after one year from its date or after such further period, not exceeding one year, as may be authorized by the Commissioner upon cause shown, unless the 100 applicants hereinafter required have been secured and the organization has been completed as herein provided. The charter and all other proceedings thereunder shall become null and void in one year from the date of the preliminary certificate of authority, or at the expiration of the extended period, unless the society shall have completed its organization and received a certificate of authority to do business as hereinafter provided. (c) Upon receipt of a preliminary certificate of authority from the Commissioner, the society may solicit members for the purpose of completing its organization, shall collect from each applicant the amount of not less than one regular monthly premium in accordance with its table of rates, and shall issue to each such applicant a receipt for the amount so collected. No society shall incur any liability other than for the return of such advance premium, nor issue any certificate, nor pay, allow, or offer or promise to pay or allow, any benefit to any person until: (1) Actual bona fide applications for benefits have been secured aggregating at least $100,000 on not less than 100 applicants, and any necessary evidence of insurability has been furnished to and approved by the society; (2) At least 5 subordinate lodges have been established into which the 100 applicants have been admitted; (3) There has been submitted to the Commissioner, under oath of the president or secretary, or corresponding officer of the society, a list of such applicants, giving their names, addresses, date each was admitted, name and number of the subordinate lodge of which each applicant is a member, amount of benefits to be granted, and premiums therefor; and (4) It shall have been shown to the Commissioner, by sworn statement of the treasurer, or corresponding officer of such society, that at least 100 applicants have each paid in cash at least one regular monthly premium as herein provided, which premiums in the aggregate shall amount to at least $50,000. Advance premiums shall be held in trust during the period of organization. If the society has not qualified for a certificate of authority within one year, as herein provided, advance premiums shall be returned to applicants. (d) The Commissioner may make such examination and require such further information as the Commissioner deems necessary. Upon presentation of satisfactory evidence that the society has complied with all the provisions of law, the Commissioner shall issue to the society a certificate of authority to that effect and that the society is authorized to transact business pursuant to the provisions of this chapter. The certificate of authority shall be prima facie evidence of the existence of the society at the date of such certificate of authority to be made and filed with the Recorder of Deeds of the District. A certified copy of such record may be given in evidence with like effect as the original certificate of authority. (e) Any incorporated society authorized to transact business in the District at the time this chapter becomes effective shall not be required to reincorporate. (f) No unincorporated or voluntary association shall be permitted to transact business in the District as a fraternal benefit society.  (Apr. 29, 1998, D.C. Law 12-86,  1208, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1237.
 315308. Laws; amendments. (a) A domestic society may amend its laws in accordance with the provisions of its laws by action of its supreme governing body at any regular or special meeting or, if its laws so provide, by referendum. The referendum may be held in accordance with the provisions of its laws by the vote of the voting members of the society, by the vote of delegates or representatives of voting members, or by the vote of local lodges. A society may provide for voting by mail. No amendment submitted for adoption by referendum shall be adopted unless, within 6 months from the date of submission, a majority of the members voting shall have signified their consent to such amendment by one of the methods herein specified. Any such amendment shall be filed with the Commissioner. (b) Within 90 days from the filing of any such amendment, a copy or synopsis thereof shall be furnished to all members of the society either by mail or by publication in full in the official publication of the society. The affidavit of any officer of the society or of anyone authorized by it to mail any amendments or synopsis thereof, stating facts which show that same have been duly addressed and mailed, shall be prima facie evidence that the amendments or synopsis, have been furnished to the addressee. (c) Every foreign or alien society authorized to do business in the District shall file with the Commissioner a duly certified copy of all amendments of, or additions to, its laws within 90 days after enactment. (d) Printed copies of the laws as amended, certified by the secretary or corresponding officer of the society shall be prima facie evidence of the legal adoption thereof.  (Apr. 29, 1998, D.C. Law 12-86,  1209, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1238.
 315309. Operations of nonprofit institutions. A society may create, maintain, and operate, or may establish organizations to operate, not-for-profit institutions to further the purposes permitted by  31-5302(a)(2). Such institutions may furnish services free of charge or at a reasonable charge. Any real or personal property owned, held, or leased by the society for this purpose shall be reported in every annual statement.  (Apr. 29, 1998, D.C. Law 12-86,  1210, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1239.
 315310. Reinsurance. A domestic society may enter into reinsurance transactions only in accordance with Chapter 5 of this title. Notwithstanding that law, a society may reinsure the risks of another society in a consolidation or merger approved by the Commissioner under  31-5311.  (Apr. 29, 1998, D.C. Law 12-86,  1211, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1240.
 315311. Consolidations and mergers. A domestic society may enter into agreements of consolidation or merger in accordance with  31-4443.  (Apr. 29, 1998, D.C. Law 12-86,  1212, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1241. Section References This section is referenced in  31-5310.
 315312. Conversion of fraternal benefit society into a mutual life insurance company. Any domestic fraternal benefit society may be converted and licensed as a mutual life insurance company by compliance with all the applicable requirements of the laws of the District with respect to similar mutual legal reserve life insurance corporations if the plan of conversion has been approved by the Commissioner. A plan of conversion shall be prepared in writing by the board of directors setting forth in full the terms and conditions of conversion. The affirmative vote of 2/3 of all members of the supreme governing body at a regular or special meeting shall be necessary for the approval of the plan. No such conversion shall take effect unless approved by the Commissioner who may grant approval if the Commissioner finds that the proposed change is in conformity with the requirements of law and not prejudicial.  (Apr. 29, 1998, D.C. Law 12-86,  1213, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1242.
 315313. Benefits. (a) A society may provide the following contractual benefits in any form: (1) Death benefits; (2) Endowment benefits; (3) Annuity benefits; (4) Temporary or permanent disability benefits; (5) Hospital, medical, or nursing benefits; (6) Monument or tombstone benefits to the memory of deceased members; and (7) Such other benefits as authorized for life insurers and which are not inconsistent with this chapter. (b) A society shall specify in its rules those persons who may be issued, or covered by, the contractual benefits in subsection (a) of this section, consistent with providing benefits to members and their dependents. A society may provide benefits on the lives of children under the minimum age for adult membership upon application of an adult person.  (Apr. 29, 1998, D.C. Law 12-86,  1214, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1243. Section References This section is referenced in  31-5301 and  31-5302.
 315314. Beneficiaries. (a) The owner of a benefit contract shall have the right at all times to change the beneficiary or beneficiaries in accordance with the laws or rules of the society unless the owner waives this right by specifically requesting in writing that the beneficiary designation be irrevocable. A society may, through its laws or rules, limit the scope of beneficiary designations and shall provide that no revocable beneficiary shall have or obtain any vested interest in the proceeds of any certificate until the certificate has become due and payable in conformity with the provisions of the benefit contract. (b) A society may make provision for the payment of funeral benefits to the extent the portion of any payment under a certificate as might reasonably appear to be due to any person equitably entitled thereto by reason of having incurred expense occasioned by the burial of the member. The portion so paid shall not exceed $2,000. (c) If, at the death of any person insured under a benefit contract, there is no lawful beneficiary to whom the proceeds shall be payable, the amount of the benefit, except to the extent that funeral benefits may be paid as provided in subsection (b) of this section, shall be payable to the estate of the deceased insured in the same manner as other property not exempt. If the owner of the certificate is other than the insured, the proceeds shall be payable to the owner.  (Apr. 29, 1998, D.C. Law 12-86,  1215, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1244.
 315315. Benefits not attachable. No money or other benefit, charity, relief, or aid to be paid, provided, or rendered by any society, shall be liable to attachment, garnishment, or other process, or to be seized, taken, appropriated, or applied by any legal or equitable process or operation of law to pay any debt or liability of a member or beneficiary, or any other person who may have a right thereunder, either before or after payment by the society.  (Apr. 29, 1998, D.C. Law 12-86,  1216, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1245.
 315316. Benefit contracts. (a) Every society authorized to do business in the District shall issue to each owner of a benefit contract a certificate specifying the amount of benefits provided thereby. The certificate, together with any riders or endorsements attached thereto, the laws of the society, the application for membership, the application for insurance and declaration of insurability, if any, signed by the applicant, and all amendments to each thereof, shall constitute the benefit contract, as of the date of issuance, between the society and the owner, and the certificate shall so state. A copy of the application for insurance and declaration of insurability, if any, shall be endorsed upon or attached to the certificate. All statements on the application shall be representations and not warranties. Any waiver of this provision shall be void. (b) Any changes, additions, or amendments to the laws of the society duly made or enacted subsequent to the issuance of the certificate, shall bind the owner and the beneficiaries, and shall govern and control the benefit contract in all respects the same as though the changes, additions, or amendments had been made prior to, and were in force at the time of, the application for insurance. No change, addition, or amendment shall destroy or diminish benefits which the society contracted to give the owner as of the date of issuance. (c) Any person upon whose life a benefit contract is issued prior to attaining the age of majority shall be bound by the terms of the application and certificate and by all the laws and rules of the society to the same extent as though the age of majority had been attained at the time of application. (d) A society shall provide in its laws that if its reserves as to all or any class of certificates become impaired, its board of directors or corresponding body may require the owner to pay to the society the amount of the owners equitable proportion of the deficiency as ascertained by its board, and that if the payment is not made either: (i) it shall stand as an indebtedness against the certificate and draw interest not to exceed the rate specified for certificate loans under the certificates; or (ii) in lieu of or in combination with clause (i), the owner may accept a proportionate reduction in benefits under the certificate. The society may specify the manner of the election and which alternative is to be presumed if no election is made. (e) Copies of any of the documents mentioned in this section, certified by the secretary or corresponding officer of the society, shall be received in evidence of the terms and conditions thereof. (f) No certificate shall be delivered or issued for delivery in the District unless a copy of the form has been filed with the Commissioner in the manner provided for like policies issued by life, accident, and health insurers in the District. Any certificate issued prior to one year after April 29, 1998 shall conform to the requirements provided by the laws applicable immediately prior to April 29, 1998. Every life, accident and health or disability insurance certificate and every annuity certificate issued on or after one year from April 29, 1998 shall meet the standard contract provision requirements not inconsistent with this chapter for like policies issued by life, accident, and health insurers in the District, except that a society may provide for a grace period for payment of premiums of one full month in its certificates. The certificate shall also contain a provision stating the amount of premiums which are payable under the certificate and a provision reciting or setting forth the substance of any sections of the societys laws or rules in force at the time of issuance of the certificate which, if violated, will result in the termination or reduction of benefits payable under the certificate. If the laws of the society provide for expulsion or suspension of a member, the certificate shall also contain a provision that a member so expelled or suspended, except for nonpayment of a premium or within the contestable period for material misrepresentation in the application for membership or insurance, shall have the privilege of maintaining the certificate in force by continuing payment of the required premium. (g) Benefit contracts issued on the lives of persons below the societys minimum age for adult membership may provide for transfer of control of ownership to the insured at an age specified in the certificate. A society may require approval of an application for membership in order to effect this transfer, and may provide in all other respects for the regulation, government and control of the certificates and all rights, obligations, and liabilities incident thereto and connected therewith. Ownership rights prior to the transfer shall be specified in the certificate. (h) A society may specify the terms and conditions on which benefit contracts may be assigned.  (Apr. 29, 1998, D.C. Law 12-86,  1217, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1246. Section References This section is referenced in  31-5301 and  31-5319.
 315317. Nonforfeiture benefits, cash surrender values, certificate loans, and other options. (a) For certificates issued prior to one year after April 29, 1998, the value of every paid-up nonforfeiture benefit and the amount of any cash surrender value, loan, or other option granted shall comply with the provisions of law applicable immediately prior to April 29, 1998. (b) For certificates issued on or after one year from April 29, 1998 for which reserves are computed on the Commissioners 1941 Standard Ordinary Mortality Table, the Commissioners 1941 Standard Industrial Table, the Commissioners 1958 Standard Ordinary Mortality Table, the Commissioners 1980 Standard Mortality Table, or any more recent table made applicable to life insurers, every paid-up nonforfeiture benefit and the amount of any cash surrender value, loan, or other option granted shall not be less than the corresponding amount ascertained in accordance with the laws of the District applicable to life insurers issuing policies containing like benefits based upon such tables.  (Apr. 29, 1998, D.C. Law 12-86,  1218, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1247.
 315318. Investments. A domestic society shall invest its funds only in investments authorized by the laws of the District for the investment of assets of life insurers and subject to the limitations therein. Any foreign or alien society permitted or seeking to do business in the District which invests its funds in accordance with the laws of the state, district, territory, country or province in which it is incorporated, shall be held to meet the requirements of this section for the investment of funds.  (Apr. 29, 1998, D.C. Law 12-86,  1219, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1248.
 315319. Funds. (a) All assets shall be held, invested and disbursed for the use and benefit of the society and no member or beneficiary shall have or acquire individual rights therein or become entitled to any apportionment on the surrender of any part thereof, except as provided in the benefit contract. (b) A society may create, maintain, invest, disburse and apply any special fund or funds necessary to carry out any purpose permitted by the laws of the society. (c) A society may, pursuant to resolution of its supreme governing body, establish and operate one or more separate accounts and issue contracts on a variable basis, subject to the provisions of law regulating life insurers establishing such accounts and issuing such contracts. To the extent the society deems it necessary in order to comply with any applicable federal or state laws, or any rules issued thereunder, the society may adopt special procedures for the conduct of the business and affairs of a separate account, may, for persons having beneficial interests therein, provide special voting and other rights, including without limitation special rights and procedures relating to investment policy, investment advisory services, selection of certified public accountants, and selection of a committee to manage the business and affairs of the account, and may issue contracts on a variable basis which  31-5316(b) and (d) shall not apply.  (Apr. 29, 1998, D.C. Law 12-86,  1220, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1249.
 315320. Taxation. Every society organized or licensed under this chapter is hereby declared to be a charitable and benevolent institution, and all of its funds shall be exempt from all and every state, county, district, municipal and school tax other than taxes on real estate and office equipment.  (Apr. 29, 1998, D.C. Law 12-86,  1221, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1250.
 315321. Applicability of provisions. Except as herein provided, societies shall be governed by this chapter and shall be exempt from all other provisions of the insurance laws of the District unless they are expressly designated therein, or unless they are specifically made applicable by this chapter.  (Apr. 29, 1998, D.C. Law 12-86,  1222, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1251.
 315322. Valuation standards for certificates. (a) Standards of valuation for certificates issued prior to one year after April 29, 1998 shall be those provided by the laws applicable immediately prior to April 29, 1998. (b)(1) The minimum standards of valuation for certificates issued on or after one year from April 29, 1998 shall be based on the following tables: (A) For certificates of life insurance, the Commissioners 1941 Standard Ordinary Mortality Table, the Commissioners 1941 Standard Industrial Table, the Commissioners 1958 Standard Ordinary Mortality Table, the Commissioners 1980 Standard Mortality Table, or any more recent table made applicable to life insurers in the District; and (B) For annuity and pure endowment certificates, for total and permanent disability benefits, for accidental death benefits, and for noncancelable accident and health benefits, such tables as are authorized for use by life insurers in the District. (2) The valuation methods and standards (including interest assumptions) set forth in paragraph (1) of this subsection shall be in accordance with the laws of the District applicable to life insurers issuing policies containing like benefits. (c) The Commissioner may, in his or her discretion, accept other standards for valuation if the Commissioner finds that the reserves produced thereby will not be less in the aggregate than reserves computed in accordance with the minimum valuation standard herein prescribed. The Commissioner may, in his or her discretion, vary the standards of mortality applicable to all benefit contracts on substandard lives or other extra hazardous lives by any society authorized to do business in the District. (d) Any society, with the consent of the Commissioner of the state of domicile of the society and under such conditions, if any, which the Commissioner may impose, may establish and maintain reserves on its certificates in excess of the reserves required thereunder, but the contractual rights of any benefit member shall not be affected thereby.  (Apr. 29, 1998, D.C. Law 12-86,  1223, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1252. Section References This section is referenced in  31-5323.
 315323. Reports. (a) Every society transacting business in the District shall annually, on or before March 1, unless for cause shown the time has been extended by the Commissioner, file with the Commissioner a true statement of its financial condition, transactions, and affairs for the preceding calendar year and pay a filing fee of $50. The statement shall be in general form and context as approved by the National Association of Insurance Commissioners for fraternal benefit societies and as supplemented by additional information required by the Commissioner. (b) As part of the annual statement, each society shall, on or before March 1, file with the Commissioner a valuation of its certificates in force on the preceding December 31. The Commissioner may, in his or her discretion for cause shown, extend the time for filing the valuation for not more than 2 calendar months. The valuation shall be done in accordance with the standards specified in  31-5322. The valuation and underlying data shall be certified by a qualified actuary or, at the expense of the society, verified by the actuary of the department of insurance of the state of domicile of the society. (c) A society neglecting to file the annual statement in the form and within the time provided by this section shall forfeit $100 for each day during which the neglect continues, and, upon notice by the Commissioner to that effect, its authority to do business in the District shall cease while the default continues.  (Apr. 29, 1998, D.C. Law 12-86,  1224, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1253.
 315324. Annual license. Societies which are now authorized to transact business in the District, and all societies hereafter licensed, may continue such business until March 1 next succeeding April 29, 1998. The authority of the societies and all societies hereafter licensed, may thereafter be renewed annually, but in all cases to terminate on the succeeding March 1. However, a license so issued shall continue in full force and effect until a renewal of the license has been specifically refused. For each such license or renewal the society shall pay the Commissioner a fee of $50. A duly certified copy or duplicate of the license shall be prima facie evidence that the licensee is a fraternal benefit society within the meaning of this chapter.  (Apr. 29, 1998, D.C. Law 12-86,  1225, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1254.
 315325. Examination of societies; no adverse publications. (a) The Commissioner, or any person he or she may appoint, may examine any domestic, foreign, or alien society transacting or applying for admission to transact business in the District in the same manner as authorized for examination of domestic, foreign, or alien insurers. Requirements of notice and an opportunity to respond before findings are made public as provided in the laws regulating insurers shall also be applicable to the examination of societies. (b) The expense of each examination and of each valuation, including compensation and actual expense of examiners, shall be paid by the society examined or whose certificates are valued, upon statements furnished by the Commissioner.  (Apr. 29, 1998, D.C. Law 12-86,  1226, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1255.
 315326. Foreign or alien society; admission. No foreign or alien society shall transact business in the District without a certificate of authority issued by the Commissioner in accordance with  31-4501 and 31-4502 and  31-2502.21.  (Apr. 29, 1998, D.C. Law 12-86,  1227, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1256.
 315327. Injunction; liquidation; receivership of domestic society. (a) When the Commissioner, upon investigation, finds that a domestic society has exceeded its powers; has failed to comply with any provision of this chapter; is not fulfilling its contracts in good faith; has a membership of less than 90 after an existence of one year or more; or is conducting business fraudulently or in a manner hazardous to its members, creditors, the public, or the business, the Commissioner shall notify the society of such deficiency and state in writing the reasons for his or her dissatisfaction. The Commissioner shall immediately issue a written notice to the society requiring that the deficiency be corrected. After such notice the society shall have a 30-day period in which to comply with the Commissioners request for correction. If the society fails to comply, the Commissioner shall notify the society of such findings of noncompliance and require the society to show cause on a date named why it should not be enjoined from carrying on any business until the violation complained of shall have been corrected, or why an action in quo warranto should not be commenced against the society. (b) If on such date the society does not present good and sufficient reasons why it should not be so enjoined or why such action should not be commenced, the Commissioner may present the facts relating thereto to the Corporation Counsel of the District who shall, if he or she deems the circumstances warrant, commence an action to enjoin the society from transacting business or in quo warranto. (c) The court shall thereupon notify the officers of the society of a hearing. If after a full hearing it appears that the society should be so enjoined or liquidated or a receiver appointed, the court shall enter the necessary order. No society so enjoined shall have the authority to do business until the: (1) Commissioner finds that the violation complained of has been corrected; (2) Costs of such action shall have been paid by the society if the court finds that the society was in default as charged; (3) Court has dissolved its injunction; and (4) Commissioner has reinstated the certificate of authority. (d) If the court orders the society liquidated, it shall be enjoined from carrying on any further business, whereupon the receiver of the society shall proceed immediately to take possession of the books, papers, money, and other assets of the society and, under the direction of the court, proceed forthwith to close the affairs of the society and to distribute its funds to those entitled thereto. (e) No action under this section shall be recognized in any court of the District unless brought by the Corporation Counsel upon request of the Commissioner. Whenever a receiver is to be appointed for a domestic society, the court shall appoint the Commissioner as such receiver. (f) The provisions of this section relating to hearing by the Commissioner, action by the Corporation Counsel at the request of the Commissioner, hearing by the court, injunction and receivership shall be applicable to a society which voluntarily determines to discontinue business.  (Apr. 29, 1998, D.C. Law 12-86,  1228, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1257.
 315328. Suspension; revocation or refusal of license of foreign or alien society. (a) When the Commissioner, upon investigation, finds that a foreign or alien society transacting or applying to transact business in the District has exceeded its powers; has failed to comply with any of the provisions of this chapter; is not fulfilling its contracts in good faith; or is conducting its business fraudulently or in a manner hazardous to its members, creditors, or the public, the Commissioner shall notify the society of the deficiency or deficiencies and state in writing the reasons for his or her dissatisfaction. The Commissioner shall immediately issue a written notice to the society requiring that the deficiency or deficiencies which exist are corrected. After the notice, the society shall have a 30-day period in which to comply with the Commissioners request for correction. If the society fails to comply, the Commissioner shall notify the society of the findings of noncompliance and require the society to show cause on a date named why its license should not be suspended, revoked, or refused. (b) If on such date the society does not present good and sufficient reason why its authority to do business in the District should not be suspended, revoked, or refused, the Commissioner may suspend or refuse the license of the society to do business in the District until satisfactory evidence is furnished to the Commissioner that such suspension or refusal should be withdrawn or the Commissioner may revoke the authority of the society to do business in the District. (c) Nothing contained in this section shall be taken or construed as preventing any such society from continuing in good faith all contracts made in the District during the time such society was legally authorized to transact business herein.  (Apr. 29, 1998, D.C. Law 12-86,  1229, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1258.
 315329. Injunction. No application or petition for injunction against any domestic, foreign or alien society, or lodge thereof, shall be recognized in any court of the District unless made by the Corporation Counsel upon request of the Commissioner.  (Apr. 29, 1998, D.C. Law 12-86,  1230, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1259.
 315330. Licensing of agents. (a) Agents of societies shall be licensed in accordance with the provisions of the laws regulating the licensing, revocation, suspension, or termination of license of resident and nonresident agents. No written or other examination shall be required of a person who is certified by a society as having been its full-time agent prior to April 29, 1998. (b) No examination or license shall be required of any regular salaried officer, employee, or member of a licensed society who devotes substantially all of his or her services to activities other than the solicitation of fraternal insurance contracts from the public, and who receives for the solicitation of such contracts no commission or other compensation directly dependent upon the amount of business obtained. (c) Any agent, representative, or member of a society who devotes, or intends to devote, less than 50% of such persons time to the solicitation and procurement of insurance contracts for such society shall be exempt from the requirements of subsection (a) of this section. Any person who, in the preceding calendar year, has received or will receive a commission or other compensation for soliciting and procuring the type of contracts listed in paragraphs (1) through (5) of this subsection on behalf of an individual society, shall be presumed to be devoting, or intending to devote, 50% of the persons time to the solicitation or procurement of insurance contracts for such society: (1) Life insurance contracts that, in the aggregate, exceed $200,000 of coverage for all lives insured for the preceding calendar year; (2) A permanent life insurance contract offering more than $10,000 of coverage on an individual life; (3) A term life insurance contract offering more than $50,000 of coverage on an individual life; (4) Any insurance contracts other than life that the fraternal benefit society may write that insure the individual lives of more than 23 individuals; or (5) Any variable life insurance or variable annuity contract.  (Apr. 29, 1998, D.C. Law 12-86,  1231, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1260.
 315331. Unfair methods of competition; unfair and deceptive acts and practices. Every society authorized to do business in the District and its agents shall be subject to the provisions of law applicable to life, accident, and health insurers relating to unfair and deceptive practices; provided, however, that nothing in such provisions shall be construed as applying to or affecting the right of any society to determine its eligibility requirements for membership, or be construed as applying to or affecting the offering of benefits exclusively to members or persons eligible for membership in the society by a subsidiary corporation or affiliated organization of the society.  (Apr. 29, 1998, D.C. Law 12-86,  1232, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1261.
 315332. Penalties. (a) Any person who makes a false or fraudulent statement in or relating to an application for membership or for the purpose of obtaining money from a benefit in any society shall, upon conviction, be fined not less than $100 nor more than $5,000 or be subject to imprisonment not less than 30 days nor more than one year, or both. (b) Any person who solicits membership for, or in any manner assists in procuring membership in, any society not licensed to do business in the District shall, upon conviction thereof, be punished by a fine of not less than $50 nor more than $200, or by imprisonment for not less than 30 days nor more than one year, or both, in the discretion of the court. (c) Any person convicted of a willful violation of, or neglect or refusal to comply with, any provision of this chapter for which a penalty is not otherwise prescribed shall, upon conviction, be punished by a fine not exceeding $5,000. (d) Any person who willfully makes a false or fraudulent statement in any verified report or declaration under oath required or authorized by this chapter, or of any material fact or thing contained in a sworn statement concerning the death or disability of an insured for the purpose of procuring payment of a benefit named in the certificate, shall be guilty of perjury and shall be subject to the penalties prescribed by law.  (Apr. 29, 1998, D.C. Law 12-86,  1233, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1262.
 315333. Exemption of certain societies. (a) Nothing contained in this chapter shall be construed as to affect or apply to: (1) Grand or subordinate lodges of societies, orders, or associations now doing business in the District which provide benefits exclusively through local or subordinate lodges; (2) Orders, societies, or associations which admit to membership only persons engaged in one or more crafts or hazardous occupations, in the same or similar lines of business, insuring only their own members and their families, and the ladies societies or ladies auxiliaries to such orders, societies, or associations; (3) Domestic societies which limit their membership to employees of a particular city or town, designated firm, business house or corporation which provide for a death benefit of not more than $700 or disability benefits of not more than $650 to any person in any one year, or both; (4) Domestic societies or associations of a purely religious, charitable or benevolent description, which provide for a death benefit of not more than $400 or for disability benefits of not more than $350 to any one person in any one year, or both; or (5) Grand or subordinate lodges of the Independent Order of Odd Fellows, nor any grand or subordinate lodge, or other body of Free and Accepted Masons, the National Council or any subordinate council of the Junior Order United American Mechanics, the National Council or any subordinate council of the Daughters of America, the Supreme Council of the Knights of Columbus or any subordinate council thereof, or similar orders, associations, or societies that do not have as their principal object the issuance of benefit certificates of membership in case of death or the payment of sick, funeral, or death benefits exceeding in amount $100. (b) Any such society or association described in subsection (a)(3) or (4) of this section which provides for death or disability benefits for which benefit certificates are issued, and any such society or association included in subsection (a)(4) of this section which has more than 1000 members, shall not be exempted from the provisions of this chapter but shall comply with all requirements thereof. (c) No society which is exempt from the requirements of this chapter, except any society described in subsection (a)(2) of this section, shall give or allow, or promise to give or allow, to any person any compensation for procuring new members. (d) Every society which provides for benefits in case of death or disability resulting solely from accident, and which does not obligate itself to pay natural death or sick benefits shall have all of the privileges and be subject to all the applicable provisions and regulations of this chapter except that the provisions thereof relating to medical examination, valuations of benefit certificates, and incontestability, shall not apply to such society. (e) The Commissioner may require from any society or association, by examination or otherwise, such information as will enable the Commissioner to determine whether the society or association is exempt from the provisions of this chapter. (f) Societies, exempted under the provisions of this section, shall also be exempt from all other provisions of the insurance laws of the District.  (Apr. 29, 1998, D.C. Law 12-86,  1234, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1263. Section References This section is referenced in  31-5301.
 315334. Review. All decisions and findings of the Commissioner made under the provisions of this chapter shall be subject to review as provided by subchapters I and II of Chapter 2 of Title 5.  (Apr. 29, 1998, D.C. Law 12-86,  1235, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1264.
 315335. Severability. If any provision of this chapter or the application of such provision to any circumstance is held invalid, the remainder of this chapter or the application of the provision to other circumstances, shall not be affected thereby.  (Apr. 29, 1998, D.C. Law 12-86,  1236, 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1265.
 315401. Definitions. For the purposes of this chapter, the term: (1) Account means either of the 2 accounts created under  31-5403. (2) Association means the District of Columbia Life and Health Insurance Guaranty Association created under  31-5403. (2A) Benefit plan means a specific employee, union, or association of natural persons benefit plan. (2B) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking. (3) Contractual obligation means any obligation under a policy or contract or certificate under a group policy or contract, or portion thereof for which coverage is provided under  31-5402. (4) Covered policy means any policy, contract or group certificate within the scope of  31-5402. (4A) Extra-contractual claims shall include claims relating to bad faith in the payment of claims, punitive or exemplary damages, or attorneys' fees and costs. (5) Impaired insurer means a member insurer which, after July 22, 1992, is not an insolvent insurer, and (A) is deemed by the Mayor to be potentially unable to fulfill its contractual obligations, or (B) is placed under an order of rehabilitation or conservation by a court of competent jurisdiction. (6) Insolvent insurer means a member insurer which, after July 22, 1992, is placed under an order of liquidation by a court of competent jurisdiction with a finding of insolvency. (7) Mayor means the Mayor of the District of Columbia or the Mayors designee. (8) Member insurer means any insurer licensed or holding a certificate of authority after July 22, 1992, in the District of Columbia to sell any kind of insurance for which coverage is provided under  31-5402. The term member insurer shall include Group Hospitalization and Medical Services, Inc., as well as any insurer whose license or certificate of authority in the District of Columbia may have been suspended, revoked, not renewed, or voluntarily withdrawn, but does not include: (A) A nonprofit hospital or medical service organization; (B) A health maintenance organization; (C) A fraternal benefit society; (D) A mandatory state pooling plan; (E) A mutual assessment company or any entity that operates on an assessment basis; (F) A risk retention group; (G) An insurance exchange; or (G-i) An organization that has a certificate or license limited to the issuance of charitable gift annuities; or (H) Any entity similar to any of the above. (9) Moodys Corporate Bond Yield Average means the Monthly Average Corporates as published by Moodys Investors Services, Inc., or any successor thereto. (9A) Owner of a policy or contract and policy owner and contract owner mean the person who is identified as the legal owner under the terms of the policy or contract or who is otherwise vested with legal title to the policy or contract through a valid assignment completed in accordance with the terms of the policy or contract and properly recorded as the owner on the books of the insurer, and does not include persons with a mere beneficial interest in a policy or contract. (10) Person means any individual, corporation, partnership, association, or voluntary organization. (10A) Plan sponsor means: (A) The employer in the case of a benefit plan established or maintained by a single employer; (B) The employee organization in the case of a benefit plan established or maintained by an employee organization; or (C) In the case of a benefit plan established or maintained by 2 or more employers or jointly by one or more employers and one or more employee organizations, the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the benefit plan. (11) Premiums means amounts (or consideration by whatever name called) received on covered policies or contracts, or for the portions of policies or contracts, less premiums, considerations, deposits returned, dividends, and experience credits. The term premiums shall not include: (A) Any amounts received for policies or contracts for which coverage is not provided under  31-5402(b), except that assessable premiums shall not be reduced on account of  31-5402(b)(2)(C) relating to interest limitations, and  31-5402(c)(2) relating to limitations with respect to any one individual, any one participant, and any one contract holder; or (B) With respect to multiple non-group policies of life insurance owned by one owner, whether the policy owner is an individual, firm, corporation, or other person, and whether the persons insured are officers, managers, employees or other persons, premiums in excess of $ 5,000,000 with respect to these policies or contracts, regardless of the number of policies or contracts held by the owner. (11A)(A) Principal place of business means the single state in which the natural persons who establish the policy for the direction, control, and coordination of the operations of the entity as a whole primarily exercise that function, determined by the Association in its reasonable judgment by considering the following factors: (i) The state in which the primary executive and administrative headquarters of the entity is located; (ii) The state in which the principal office of the chief executive officer of the entity is located; (iii) The state in which the entitys board of directors (or similar governing person or persons) conducts the majority of its meetings; (iv) The state in which the executive or management committee of the entitys board of directors (or similar governing person or persons) conducts the majority of its meetings; (v) The state from which the management of the overall operations of the entity is directed; and (vi) In the case of a benefit plan sponsored by affiliated companies comprising a consolidated corporation, the state in which the holding company or controlling affiliate has its principal place of business as determined using the factors set forth in sub-subparagraphs (i) through (v) of this subparagraph; provided, that in the case of a plan sponsor, if more than 50% of the participants in the benefit plan are employed in a single state, that state shall be deemed to be the principal place of business of the plan sponsor. (B) The principal place of business of a plan sponsor of a benefit plan described in paragraph (10A)(C) of this section shall be deemed to be the principal place of business of the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the benefit plan that, in lieu of a specific or clear designation of a principal place of business, shall be deemed to be the principal place of business of the employer or employee organization that has the largest investment in the benefit plan in question. (11B) Receivership court means the court in the insolvent or impaired insurers state having jurisdiction over the conservation, rehabilitation, or liquidation of the insurer. (12) Resident means any person who resides in the District of Columbia on the date of the entry of a court order determining a member insurer to be an impaired insurer or an insolvent insurer, and to whom the member insurer owes a contractual obligation. A person may reside in only one state, which, in the case of a person other than a natural person, shall be its principal place of business. Citizens of the United States that are either residents of foreign countries, or residents of United States possessions, territories, or protectorates that do not have an association similar to the Association established by this chapter, shall be deemed residents of the state of domicile of the insurer that issued the policies or contracts. (12A) State means a state, the District of Columbia, Puerto Rico, or a United States possession, territory, or protectorate. (12B) Structured settlement annuity means an annuity purchased in order to fund periodic payments for a plaintiff or other claimant in payment for or with respect to personal injury suffered by the plaintiff or other claimant. (13) Repealed. (14) Supplemental contract means any agreement entered into for the distribution of policy or proceeds. (15) Unallocated annuity contract means an annuity contract or group annuity certificate which is not issued to and owned by an individual, except to the extent of any annuity benefits guaranteed to an individual by an insurer under the contract or certificate.  (July 22, 1992, D.C. Law 9-129,  2, 39 DCR 4036; May 21, 1997, D.C. Law 11-268,  10(u), 44 DCR 1730; June 11, 2004, D.C. Law 15-166,  4(gg), 51 DCR 2817; July 23, 2014, D.C. Law 20-130,  2(a), 61 DCR 5900.)  Prior Codifications 1981 Ed.,  35-1941. Effect of Amendments D.C. Law 15-166, in par. (13), substituted Commissioner of the Department of Insurance, Securities, and Banking for Commissioner of Insurance and Securities. The 2014 amendment by D.C. Law 20-130 added (2A), (2B), and (4A); added after July 22, 1992 in the introductory paragraph of (8); made a minor stylistic change in (8)(G); and added (8)(G-1), (9A) and (10A); rewrote (11); added (11A) and (11B); rewrote (12); added (12A) and (12B); repealed (13); and added (15). Emergency Legislation For temporary (90 day) amendment of section, see  4(gg) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653). Delegation of Authority Delegation of authority under D.C. Law 9-129, the Life and Health Insurance Guaranty Association Act of 1992, see Mayors Order 92-120, October 13, 1992.
 315402. Coverage and limitations. (a) Coverage shall be provided for the policies and contracts issued to: (1) Persons who, regardless of where they reside (except for nonresident certificate holders under group policies or contracts), are the beneficiaries, assignees or payees of the persons covered under paragraph (2) of this subsection; (2) Persons who are owners of, or certificate holders under, such policies or contracts (other than structured settlement annuities), and who: (A) Are residents; or (B) Are not residents, subject to the following conditions: (i) The insurers which issued and delivered the policies or contracts are domiciled in the District of Columbia; (ii) The state in which the persons reside have associations similar to the Association created by this chapter; and (iii) The persons are not eligible for coverage by an association in any other state due to the fact that the insurer was not licensed in the state at the time specified in the state's guaranty association law. (3) For structured settlement annuities specified in subsection (b) of this section, with the exception of subsection (a) of this section, which shall not apply, a person who is a payee under a structured settlement annuity or beneficiary of a payee if the payee is deceased, if the payee: (A) Is a resident, regardless of where the contract owner resides; or (B) Is not a resident, but only under the following conditions: (i) The contract owner of the structured settlement annuity is a resident or the contract owner of the structured settlement annuity is not a resident but the insurer that issued the structured settlement annuity is domiciled in the District and the state in which the contract owner resides has an association similar to the Association established by this chapter; and (ii) Neither the payee, beneficiary, or contract owner is eligible for coverage by the association of the state in which the payee or contract owner resides; (4) A person who is a payee or beneficiary of a contract owner that is a resident of the District so long as the payee or beneficiary is not afforded any coverage by the association of another state; and (5) Any person for whom coverage has been determined, when the application of this chapter could result in coverage by the association of more than one state, whether as an owner, payee, beneficiary, or assignee, and this chapter has been construed in conjunction with the other states laws to result in coverage by only one association. (b)(1) Coverage shall be provided to the persons specified in subsection (a) of this section for direct, non-group life, health, annuity, and supplemental policies or contracts, and for certificates under direct group policies or contracts, except as limited by this chapter. Annuity contracts and certificates under group annuity contracts include, but are not limited to, allocated funding agreements, structured settlement annuities, lottery contracts, and any immediate or deferred annuity contracts. (2) Coverage shall not be provided for: (A) Any portion of a policy or contract not guaranteed by the insurer, or under which the risk is borne by the owner of the policy, contract, or certificate; (B) Any policy or contract of reinsurance, unless assumption certificates have been issued and delivered pursuant to the reinsurance policy or contract; (C) Any portion of a policy, contract, or certificate, to the extent of the rate of interest on which it is based, or the interest rate, crediting rate, or similar factor determined by the use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value: (i) Averaged over the 4-year period prior to the date on which the Association becomes obligated with respect to the policy, contract, or certificate, exceeds a rate of interest determined by subtracting 2 percentage points from Moodys Corporate Bond Yield Average averaged for that same 4-year period or for a lesser period if the policy, contract, or certificate was issued and delivered less than 4 years before the Association became obligated; and (ii) On and after the date on which the Association becomes obligated with respect to the policy, contract, or certificate, exceeds the rate of interest determined by subtracting 3 percentage points from the most recent Moodys Corporate Bond Yield Average; (D) Any portion of a policy or contract issued to a plan or program of an employer, association, or similar entity to provide life, health, or annuity benefits to its employees or members to the extent that the plan or program is self-funded or uninsured, including, but not limited to, benefits payable by an employer, association, or similar entity under: (i) A Multiple Employer Welfare Arrangement as defined in section 514 of the Employee Retirement Income Security Act of 1974 (29 U.S.C.  1144), as amended; (ii) A minimum premium group insurance plan; (iii) A stop-loss group insurance plan; or (iv) An administrative services only contract; (E) Any portion of a policy or contract that provides for: (i) Dividends or experience rating credits; (ii) Voting rights; or (iii) Payment of fees or allowances to any person, including the policy or contract owner, in connection with the service or administration of the policy or contract; (F) Any policy, contract, or certificate issued and delivered in the District of Columbia by a member insurer at a time when it was not licensed or did not have a certificate of authority to issue and deliver the policy, contract, or certificates in the District of Columbia; (G) Any unallocated annuity contract; (H) Any portion of a policy or contract to the extent the assessments required by  31-5406 with respect to the policy or contract are preempted by federal or state law; (I) Any obligation that does not arise under the express written terms of the policy or contract issued by the insurer to the contract owner or policy owner, including: (i) Claims based on marketing materials; (ii) Claims based on side letters, riders, or other documents that were issued by the insurer without meeting applicable policy form filing or approval requirements; (iii) Misrepresentations of or regarding policy benefits; (iv) Extra-contractual claims; or (v) A claim for penalties or consequential or incidental damages; (J) Any contractual agreement that establishes the member insurers obligations to provide a book value accounting guaranty for defined contribution benefit plan participants by reference to a portfolio of assets that is owned by the benefit plan or its trustee, which in each case is not an affiliate of the member insurer; (K) Any portion of a policy or contract that provides for interest or other changes in value to be determined by the use of an index or other external reference stated in the policy or contract, but have not been credited to the policy or contract, or as to which the policy or contract owners rights are subject to forfeiture, as of the date the member insurer becomes an impaired or insolvent insurer under this chapter, whichever is earlier. If a policy or contracts interest or changes in value are credited less frequently than annually, then for purposes of determining the values that has been credited and are not subject to forfeiture under this subsection, the interest or change in value determined by using the procedures defined in the policy or contract shall be credited as if the contractual date of crediting interest or changing values was the date of impairment or insolvency, whichever is earlier, and will not be subject to forfeiture; or (L) Any policy or contract providing any hospital, medical, prescription drug, or other health care benefits pursuant to the Balanced Budget Act of 1997, approved August 11, 1997 (111 Stat. 251; 42 U.S.C.  1395w-21 et seq.), and the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, approved December 8, 2003 (117 Stat. 2066; 42 U.S.C.  1395w-101 et seq.) (referred to as Medicare Parts C & D respectively), or any regulations issued pursuant to those acts. (c) The benefits for which the Association may become liable shall in no event exceed the lesser of: (1) The contractual obligations for which the insurer is liable or would have been liable if it were not an impaired or insolvent insurer; or (2)(A) With respect to any 1 life, regardless of the number of policies, contracts, or certificates: (i) $300,000 in life insurance death benefits, but not more than $100,000 in net cash surrender and net cash withdrawal values for life insurance; (ii) In health insurance benefits: (I) $ 100,000 for coverage not defined as disability insurance or basic hospital, medical, and surgical insurance or major medical insurance or long- term care insurance, including any net cash surrender and net cash withdrawal values; (II) $ 300,000 for disability insurance; (III) $ 300,000 for long-term care insurance; and (IV) $ 500,000 for basic hospital, medical, and surgical insurance or major medical insurance; or (iii) $300,000 in the present value of annuity benefits, including net cash surrender and net cash withdrawal values. (A-i) With respect to each payee of a structured settlement annuity (or beneficiary or beneficiaries of the payee if deceased), $ 300,000 in present value annuity benefits, in the aggregate, including net cash surrender and net cash withdrawal values, if any. (A-ii) The Association shall not be obligated to cover: (i) More than an aggregate of $ 300,000 in benefits with respect to any one life under subparagraphs (A) and (A-i) of this paragraph except with respect to benefits for basic hospital, medical, and surgical insurance and major medical insurance under subparagraph (A)(ii) of this paragraph, in which case the aggregate liability of the Association shall not exceed $ 500,000 with respect to any one individual; or (ii) With respect to one owner of multiple non-group policies of life insurance, whether the policy owner is an individual, firm, corporation, or other person, and whether the persons insured are officers, managers, employees, or other persons, more than $ 5,000,000 in benefits, regardless of the number of policies and contracts held by the owner; (A-iii)(i) The limitations set forth in this subsection are limitations on the benefits for which the Association is obligated before taking into account either its subrogation and assignment rights or the extent to which those benefits could be provided out of the assets of the impaired or insolvent insurer attributable to covered policies. (ii) The costs of the Associations obligations under this chapter may be met by the use of assets attributable to covered policies or reimbursed to the Association pursuant to its subrogation and assignment rights. (B) The liability of the Association shall be limited strictly by the express terms of the policies or contracts and by this chapter, and shall not be affected by the contents of any brochures, illustrations, advertisements in print or electronic media, or other advertising material used in connection with the sale of the policies or contracts, or by oral statements made by agents or other sales representatives in connection with the sale of the policies or contracts. The Association shall not be liable for extra-contractual damages, punitive damages, attorney fees, or interest other than as provided for by the terms of the policies or contracts as limited by this chapter, that might be awarded by any court or governmental agency in connection with the policies or contracts. (c-1) In performing its obligations to provide coverage under   31-5405, the Association shall not be required to guarantee, assume, reinsure, or perform, or cause to be guaranteed, assumed, reinsured, or performed, the contractual obligations of the insolvent or impaired insurer under a covered policy or contract that do not materially affect the economic values or economic benefits of the covered policy or contract. (d) Repealed.  (July 22, 1992, D.C. Law 9-129,  3, 39 DCR 4036; July 23, 2014, D.C. Law 20-130,  2(b), 61 DCR 5900.)  Prior Codifications 1981 Ed.,  35-1942. Section References This section is referenced in  31-5401,  31-5405, and  31-5416. Effect of Amendments The 2014 amendment by D.C. Law 20-130 deleted and at the end of (a)(1); added other than structured settlement annuities in the introductory language of (a)(2); rewrote (a)(2)(B)(ii) and (a)(2)(B)(iii); added (a)(3), (a)(4), and (a)(5); substituted structured settlement annuities for structured settlement agreements in (b)(1); substituted owner for holder in (b)(2)(A); added pursuant to the reinsurance policy or Contract in (b)(2)(B); rewrote the introductory language of (b)(2)(C); substituted Any portion of a policy or contract issued to a for Any in (b)(2)(D); rewrote (b)(2)(E); made minor stylistic changes in (b)(2)(F) and (b)(2)(G); added (b)(2)(H)-(b)(2)(L); rewrote (c)(2)(A)(ii); added (c)(2)(A-i), (c)(2)(A-ii), and (c)(2)(A-iii); added (c-1); and repealed (d).
 315403. Creation of the Association. (a)(1) There is created a nonprofit legal entity to be known as the District of Columbia Life and Health Insurance Guaranty Association. (2) All member insurers shall be and shall continually remain members of the Association as a condition of their authority to transact insurance business in the District of Columbia. (3) The Association shall perform its functions under the plan of operation established and approved under  31-5407 and shall exercise its powers through a board of directors established under  31-5404. (4) For purposes of administration and assessment the Association shall maintain 2 accounts: (A) The life insurance and annuity account which shall include the following subaccounts: (i) Life insurance account; and (ii) Annuity account; and (B) The health insurance account. (b) The Association shall come under the immediate supervision of the Mayor and shall be subject to the applicable provisions of the insurance laws of the District of Columbia.  (July 22, 1992, D.C. Law 9-129,  4, 39 DCR 4036.)  Prior Codifications 1981 Ed.,  35-1943. Section References This section is referenced in  31-5401.
 315404. Board of Directors. (a)(1) The Board of Directors of the Association (Board or Board of Directors) shall consist of no less than 5 and no more than 9 member insurers serving terms as established in the plan of operation. (2) The members of the Board shall be selected by member insurers subject to the approval of the Mayor. (3) Vacancies on the Board shall be filled for the remaining period of the term by a majority vote of the remaining Board members, subject to the approval of the Mayor. (b) The Mayor shall give notice to all member insurers of the time and place of the organizational meeting to select the initial Board of Directors, and to initially organize the Association. (c) In determining voting rights at the organizational meeting, each member insurer shall be entitled to 1 vote in person or by proxy. (d) If the Board of Directors is not selected within 60 days after notice of the organizational meeting, the Mayor may appoint the initial members. (e) In approving selections or in appointing members to the Board, the Mayor shall consider, among other things, whether all member insurers are fairly represented. (f) Members of the Board may be reimbursed from the assets of the Association for expenses incurred by them as members of the Board of Directors, but shall not otherwise be compensated by the Association for their services.  (July 22, 1992, D.C. Law 9-129,  5, 39 DCR 4036.)  Prior Codifications 1981 Ed.,  35-1944. Section References This section is referenced in  31-5403 and  31-5407.
 315405. Powers and duties of the Association. (a) If a member insurer is an impaired domestic insurer, the Association may, in its discretion and subject to any conditions imposed by the Association that do not impair the contractual obligations of the impaired insurer that are approved by the Mayor, and that are, except in cases of court-ordered conservation or rehabilitation, also approved by the impaired insurer: (1) Guarantee, assume, or reinsure, or cause to be guaranteed, assumed, or reinsured, any or all of the policies, contracts, or certificates of the impaired insurer; (2) Provide monies, pledges, notes, guarantees, or other proper means to effectuate paragraph (1) of this subsection and assure payment of the contractual obligations of the impaired insurer pending action under paragraph (1) of this subsection; or (3) Loan money to the impaired insurer. (b)(1) If a member insurer is an impaired insurer, whether domestic, foreign, or alien, and the insurer is not paying claims timely, then subject to the preconditions specified in paragraph (2) of this subsection, the Association shall, in its discretion, either: (A) Take any of the actions specified in subsection (a) of this section, subject to the conditions therein; or (B) Provide substitute benefits in lieu of the contractual obligations of the impaired insurer solely for health claims, periodic annuity benefit payments, death benefits, supplemental benefits, and cash withdrawals for policy or contract owners who petition for them under claims of emergency or hardship in accordance with standards proposed by the Association and approved by the Mayor. (2) The Association shall be subject to the requirements of paragraph (1) of this subsection only: (A) If the laws of the member insurers state of domicile provide that until all payments of or on account of the impaired insurers contractual obligation by all guaranty associations, along with all expenses and interest on all payments and expenses, shall have been repaid to the guaranty associations or a plan of repayment by the impaired insurer shall have been approved by the guaranty associations: (i) The delinquency proceeding shall not be dismissed; (ii) Neither the impaired insurer nor its assets shall be returned to the control of its shareholders or private management; and (iii) It shall not be permitted to solicit or accept new business or have any suspended or revoked license restored; and (B) If the impaired insurer is a domestic insurer, it has been placed under an order of rehabilitation by a court of competent jurisdiction in the District of Columbia; or (C) If the impaired insurer is a foreign or alien insurer: (i) It has been prohibited from soliciting or accepting new business in the District of Columbia; (ii) Its certificate of authority has been suspended or revoked in the District of Columbia; and (iii) A petition for rehabilitation or liquidation has been filed in a court of competent jurisdiction in its state of domicile by the commissioner of insurance of the state. (c) If a member insurer is an insolvent insurer, the Association shall, in its discretion: (1)(A) Guarantee, assume, or reinsure, or cause to be guaranteed, assumed, or reinsured, the policies, contracts, and certificates of the insolvent insurer; or (B) Assure payment of the contractual obligations of the insolvent insurer; and (C) Provide the monies, pledges, guarantees, or other means as are reasonably necessary to discharge the duties; or (2) With respect only to life and health insurance policies and certificates, provide benefits and coverages in accordance with subsection (d) of this section. (d) When proceeding under subsection (b)(1)(B) or (c)(2) of this section, the Association shall, with respect only to life and health insurance policies and certificates: (1) Assure payment of benefits for premiums identical to the premiums and benefits, except for terms of conversion and renewability, that would have been payable under the policies of the insolvent insurer for claims incurred. The payment of benefits required by this paragraph shall be made: (A) With respect to group policies, not later than the earlier of the next renewal date under the policies or 45 days, but in no event less than 30 days after the date on which the Association becomes obligated with respect to the policies; or (B) With respect to individual policies, not later than the earlier of the next renewal date, if any, under the policies or 1 year, but in no event less than 30 days from the date on which the Association becomes obligated with respect to the policies; (2) Make diligent efforts to provide all known insureds group policy and certificate holders with respect to group policies 30-days notice of the termination of the benefits provided; and (3) Make available, with respect to individual policies, to each known insured, or owner if other than the insured; with respect to an individual formerly insured under a group policy who is not eligible for replacement group coverage, make available substitute coverage on an individual basis in accordance with the provisions of subsection (e) of this section, if the insureds had a right under law or the terminated policy to convert coverage to individual coverage or to continue an individual policy in force until a specified age or for a specified time during which the insurer had no right unilaterally to make changes in any provision of the policy or had a right only to make changes in premium by class. (e)(1) In providing the substitute coverage required under subsection (d)(3) of this section, the Association may offer to reissue the terminated coverage or to issue an alternative policy. (2) Alternative or reissued policies shall be offered without requiring evidence of insurability, and shall not provide for any waiting period or exclusion that would not have applied under the terminated policies. (3) The Association may reinsure any alternative or reissued policy. (f)(1) Alternative policies adopted by the Association shall be subject to the approval of the Mayor. The Association may adopt alternative policies of various types for future issuance without regard to any particular impairment or insolvency. (2) Alternative policies shall contain at least the minimum statutory provisions required in the District of Columbia and provide benefits that shall not be unreasonable in relation to the premium charged. The Association shall set the premium in accordance with a table of rates which it shall adopt. The premium shall reflect the amount of insurance to be provided and the age and class of risk of each insured, but shall not reflect any changes in the health of the insured after the original policy was last underwritten. (3) Alternative policies issued and delivered by the Association shall provide coverage of a type similar to that of the policies issued and delivered by the impaired or insolvent insurer, as determined by the Association. (g) If the Association elects to reissue terminated coverage at a premium rate different from that charged under the terminated policy, the premium shall be set by the Association in accordance with the amount of insurance provided and the age and class of risk, subject to prior approval of the Mayor or by a court of competent jurisdiction. (h) The Associations obligations with respect to coverage under policies of the impaired or insolvent insurer or under any reissued or alternative policies shall cease on the date the policies are replaced by other similar policies by either the policyholder, the insured, or the Association. (i) When proceeding under subsection (b)(1)(B) or (c) of this section with respect to any policy or contract carrying guaranteed minimum interest rates, the Association shall assure the payment or crediting of a rate of interest consistent with  31-5402(b)(2)(C). (j) Nonpayment of premiums within 31 days after the date required under the terms of any guaranteed, assumed, alternative, or reissued policy or contract or substitute coverage shall terminate the Associations obligations under the policy or coverage, except with respect to any claims incurred or any net cash surrender value which may be due in accordance with the provisions of this chapter. (k) Premiums due for coverage after entry of an order of liquidation of an insolvent insurer shall belong to and be payable at the direction of the Association, and the Association shall be liable for unearned premiums due to policy or contract owners arising after the entry of the order. (l) The protection provided by this chapter shall not apply where any guaranty protection is provided to residents of the District of Columbia by the laws of the domiciliary state or jurisdiction of the impaired or insolvent insurer, other than the District of Columbia. (m) In carrying out its duties under subsections (b) and (c) of this section, the Association may, subject to approval by the court: (1) Impose permanent policy or contract liens in connection with any guarantee, assumption, or reinsurance agreement, if the Association finds that the amounts which can be assessed under this chapter are less than the amount needed to assure full and prompt performance of the Associations duties under this chapter, or that the economic or financial conditions as they affect member insurers are sufficiently adverse to render the imposition of a permanent policy or contract lien, to be in the public interest; or (2) Impose temporary moratoriums on liens on payments of cash values and policy loans, or any other right to withdraw funds held in conjunction with policies or contracts, in addition to any contractual provisions for deferral of cash or policy loan value. In the event of a temporary moratorium or moratorium charge imposed by the receivership court on payment of cash values or policy loans, or on any other right to withdraw funds held in conjunction with policies or contracts, out of the assets of the impaired or insolvent insurer, the Association may defer the payment of cash values, policy loans or other rights by the Association for the period of the moratorium or moratorium charge imposed by the receivership court, except for claims covered by the Association to be paid in accordance with a hardship procedure established by the liquidator or rehabilitator and approved by the receivership court. (m-1) A deposit in the District held pursuant to law or required by the Commissioner for the benefit of creditors, including policy owners, not turned over to the domiciliary liquidator upon the entry of a final order of liquidation or order approving a rehabilitation plan of an insurer domiciled in the District or in a reciprocal state, pursuant to Chapter 13 of this title [  31-1301 et seq.], shall be promptly paid to the Association. The Association shall be entitled to retain a portion of any amount so paid to it equal to the percentage determined by dividing the aggregate amount of policy owners claims related to that insolvency for which the Association has provided statutory benefits by the aggregate amount of all policy owners claims in this state related to that insolvency and shall remit to the domiciliary receiver the amount so paid to the Association less the amount retained pursuant to this subsection. Any amount so paid to the Association and retained by it shall be treated as a distribution of the liquidators assets pursuant to Chapter 13 of this title [  31-1301 et seq.], dealing with early access disbursements. (n) If the Association fails to act within a reasonable period of time under subsections (b)(1)(B), (c), and (d) of this section, the Mayor shall assume the powers and duties of the Association under this chapter with respect to impaired or insolvent insurers. (o) The Association may render assistance and advice to the Mayor, upon request, concerning rehabilitation, payment of claims, continuance of coverage, or the performance of other contractual obligations of any impaired or insolvent insurer. (p) The Association shall have standing to appear or intervene before any court in the District of Columbia with jurisdiction over an impaired or insolvent insurer for which the Association is or may become obligated under this chapter or with jurisdiction over any person or property against which the Association may have rights through subrogation or otherwise. Standing shall extend to all matters germane to the powers and duties of the Association, including, but not limited to, proposals for reinsuring, modifying, or guaranteeing the policies or contracts of the impaired or insolvent insurer and the determination of the policies or contracts and contractual obligations. The Association shall also have the right to appear or intervene before a court in another state with jurisdiction over an impaired or insolvent insurer for which the Association is or may become obligated or a court with jurisdiction over any person or property against whom the Association may have rights through subrogation or otherwise of the insurers policyholders. (q)(1) Any person receiving benefits under this chapter shall be deemed to have assigned the rights under, and any causes of action against any person for losses arising under, resulting from, or otherwise relating to, the covered policy or contract to the Association, whether the benefits are payments of, or on account of, contractual obligations, continuation of coverage, or provision of substitute or alternative coverages. The Association may require an assignment to it of the rights and causes of action by any payee, policy or contract owner, beneficiary, insured, or annuitant as a condition precedent to the receipt of any rights or benefits conferred by this chapter upon such a person. (2) The subrogation rights of the Association under this subsection shall have the same priority against the assets of the impaired or insolvent insurer as that possessed by the person entitled to receive benefits under this chapter. (3) In addition to paragraphs (1) and (2) of this subsection, the Association shall have all common law rights of subrogation and any other equitable or legal remedy which would have been available to the impaired or insolvent insurer or holder of a policy or contract with respect to the policy or contracts. (4) If the preceding provisions of this subsection are invalid or ineffective with respect to any person or claim for any reason, the amount payable by the Association with respect to the related covered obligations shall be reduced by the amount realized by any other person with respect to the person or claim that is attributable to the policies (or portion thereof) covered by the Association. (5) If the Association has provided benefits with respect to a covered obligation and a person recovers amounts as to which the Association has rights as described in the preceding paragraphs of this subsection, the person shall pay to the Association the portion of the recovery attributable to the policies (or portion thereof) covered by the Association. (r) The Association may: (1) Enter into contracts necessary or proper to carry out the provisions and purposes of this chapter; (2) Sue or be sued, including taking any legal actions necessary or proper to recover any unpaid assessments under  31-5406 and to settle claims or potential claims against it; (3) Borrow money to carry out the purposes of this chapter; any notes or other evidence of indebtedness of the Association not in default shall be legal investments for domestic insurers and may be carried as admitted assets; (4) Employ or retain persons necessary to handle the financial transactions of the Association, and to perform other functions necessary or proper under this chapter; (5) Take legal action necessary to avoid payment of improper claims; (6) Exercise, for the purposes of this chapter and to the extent approved by the Mayor, the powers of a domestic life or health insurer, but in no case may the Association issue insurance policies or annuity contracts other than those issued to perform its obligations under this chapter; and (7) Take other necessary or appropriate action to discharge its duties and obligations under this chapter or to exercise its powers under this chapter. (s) The Association may join an organization of 1 or more other state associations of similar purposes to further the purposes and administration of the powers and duties of the Association. (t)(1)(A) At any time within 180 days of the date of the order of liquidation, the Association may elect to succeed to the rights and obligations of the ceding member insurer that relate to policies or annuities covered, in whole or in part, by the Association, in each case under any one or more reinsurance contracts entered into by the insolvent insurer and its reinsurers and selected by the Association. Any such assumption shall be effective as of the date of the order of liquidation. The election shall be effected by the Association or the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA) on its behalf sending written notice, return receipt requested, to the affected reinsurers. (B) To facilitate the earliest practicable decision about whether to assume any of the contracts of reinsurance, and in order to protect the financial position of the estate, the receiver and each reinsurer of the ceding member insurer shall make available upon request to the Association or to NOLHGA on its behalf as soon as possible after commencement of formal delinquency proceedings: (i) Copies of in-force contracts of reinsurance and all related files and records relevant to the determination of whether such contracts should be assumed; and (ii) Notices of any defaults under the reinsurance contracts or any known event or condition which with the passage of time could become a default under the reinsurance contracts. (C) The following provisions shall apply to reinsurance contracts so assumed by the Association: (i) The Association shall be responsible for all unpaid premiums due under the reinsurance contracts for periods both before and after the date of the order of liquidation, and shall be responsible for the performance of all other obligations to be performed after the date of the order of liquidation, which relate to policies or annuities covered, in whole or in part, by the Association. The Association may charge policies or annuities covered in part by the Association, through reasonable allocation methods, the costs for reinsurance in excess of the obligations of the Association and shall provide notice and an accounting of these charges to the liquidator. (ii) The Association shall be entitled to any amounts payable by the reinsurer under the reinsurance contracts with respect to losses or events that occur in periods after the date of the order of liquidation and that relate to policies or annuities covered, in whole or in part, by the Association; provided, that upon receipt of any such amounts, the Association shall be obliged to pay to the beneficiary under the policy or annuity on account of which the amounts were paid a portion of the amount equal to the lesser of: (I) The amount received by the Association; and (II) The excess of the amount received by the Association over the amount equal to the benefits paid by the Association on account of the policy or annuity, less the retention of the insurer applicable to the loss or event. (iii) Within 30 days following the Associations election (election date), the Association and each reinsurer under contracts assumed by the Association shall calculate the net balance due to or from the Association under each reinsurance contract as of the election date with respect to policies or annuities covered, in whole or in part, by the Association, which calculation shall give full credit to all items paid by either the insurer or its receiver or the reinsurer before the election date. The reinsurer shall pay the receiver any amounts due for losses or events before the date of the order of liquidation, subject to any set-off for premiums unpaid for periods before the date, and the Association or reinsurer shall pay any remaining balance due the other, within 5 days of the completion of the aforementioned calculation. Any disputes over the amounts due to either the Association or the reinsurer shall be resolved by arbitration pursuant to the terms of the affected reinsurance contracts or, if the contract contains no arbitration clause, as otherwise provided by law. If the receiver has received any amounts due the Association pursuant to sub-subparagraph (ii) of this subparagraph, the receiver shall remit the same to the Association as promptly as practicable. (iv) If the Association or receiver, on the Associations behalf, within 60 days of the election date, pays the unpaid premiums due for periods both before and after the election date that relate to policies or annuities covered, in whole or in part, by the Association, the reinsurer shall not be entitled to terminate the reinsurance contracts for failure to pay the premium insofar as the reinsurance contracts relate to policies or annuities covered, in whole or in part, by the Association, and shall not be entitled to set off any unpaid amounts due under other contracts, or unpaid amounts due from parties other than the Association, against amounts due the Association. (2) During the period from the date of the order of liquidation until the election date or, if the election date does not occur, until 180 days after the date of the order of liquidation: (A) Neither the Association nor the reinsurer shall have any rights or obligations under reinsurance contracts that the Association has the right to assume under paragraph (1) of this subsection, whether for periods before or after the date of the order of liquidation; provided, that once the Association has elected to assume a reinsurance contract, the parties rights and obligations shall be governed by paragraph (1) of this subsection; and (B) The reinsurer, the receiver, and the Association shall, to the extent practicable, provide each other data and records reasonably requested. (3) If the Association does not elect to assume a reinsurance contract by the election date pursuant to paragraph (1) of this subsection, the Association shall have no rights or obligations, in each case for periods both before and after the date of the order of liquidation, with respect to the reinsurance contract. (4) When policies or annuities, or covered obligations with respect thereto, are transferred to an assuming insurer, reinsurance on the policies or annuities may also be transferred by the Association, in the case of contracts assumed under paragraph (1) of this subsection, subject to the following: (A) Unless the reinsurer and the assuming insurer agree otherwise, the reinsurance contract transferred shall not cover any new policies of insurance or annuities in addition to those transferred; (B) The obligations described in paragraph (1) of this subsection shall no longer apply with respect to matters arising after the effective date of the transfer; and (C) Notice shall be given in writing, return receipt requested, by the transferring party to the affected reinsurer not less than 30 days before the effective date of the transfer. (5) The provisions of subsection (t) of this section shall supersede the provisions of any District law and any affected reinsurance contract that provides for or requires any payment of reinsurance proceeds, on account of losses or events that occur in periods after the date of the order of liquidation, to the receiver of the insolvent insurer or any other person. The receiver shall remain entitled to any amounts payable by the reinsurer under the reinsurance contracts with respect to losses or events that occur in periods before the date of the order of liquidation, subject to applicable setoff provisions. (6) Except as otherwise provided, nothing in this subsection shall: (A) Alter or modify the terms and conditions of any reinsurance contract; (B) Abrogate or limit any rights of any reinsurer to claim that it is entitled to rescind a reinsurance contract; (C) Give a policyholder or beneficiary an independent cause of action against a reinsurer that is not otherwise set forth in the reinsurance contract; (D) Limit or affect the Associations rights as a creditor of the estate against the assets of the estate; or (E) Apply to reinsurance agreements covering property or casualty risks. (u) The Board of Directors of the Association shall have discretion and may exercise reasonable business judgment to determine the means by which the Association is to provide the benefits of this chapter in an economical and efficient manner. (v) Where the Association has arranged or offered to provide the benefits of this chapter to a covered person under a plan or arrangement that fulfills the Associations obligations under this chapter, the person shall not be entitled to benefits from the Association in addition to or other than those provided under the plan or arrangement. (w) Venue in a suit against the Association arising under the chapter shall be in the District. The Association shall not be required to give an appeal bond in an appeal that relates to a cause of action arising under this chapter.  (July 22, 1992, D.C. Law 9-129,  6, 39 DCR 4036; Mar. 24, 1998, D.C. Law 12-81,  31(a), 45 DCR 745; July 23, 2014, D.C. Law 20-130,  2(c), 61 DCR 5900; Mar. 11, 2015, D.C. Law 20-235,  5, 62 DCR 461.)  Prior Codifications 1981 Ed.,  35-1945. Section References This section is referenced in  31-5406,  31-5407, and  31-5411. Effect of Amendments The 2014 amendment by D.C. Law 20-130 added or at the end of (c)(1)(A); substituted incurred for insured in (d)(1); added the last sentence in (m)(2); added (m-1); in (p), added or with jurisdiction over any person or property against which the Association may have rights through subrogation or otherwise and substituted appear or intervene for appear, any person or property for ard [sic] party, and subrogation or otherwise for subrogation; added against any person for losses arising under, resulting from, or otherwise in (q)(1); rewrote (q)(3); added (q)(4) and (q)(5); made minor stylistic changes in (r)(5) and (r)(6); and added (r)(7), (t), (u), (v), and (w). The 2015 amendment by D.C. Law 20-235 rewrote (q)(3). Editor's Notes Subsection (e) of this section, referred to in (d)(3), was substituted for the language paragraph (4) of this subsection which appeared in  6 of D.C. Law 9-129.
 315406. Assessments. (a) The Board of Directors shall assess the member insurers for the amounts necessary to carry out the powers and duties of the Association. Assessments shall be made separately for the life insurance and annuity account and for the health insurance account and shall be maintained in a District of Columbia bank, which is subject to the District of Columbia Community Development Program under the supervision of the District of Columbia Office of Banking and Financial Institutions. Assessments shall be due not less than 30 days after prior written notice to the member insurers and shall accrue interest monthly until paid. (b) There shall be 2 assessments, as follows: (1) Class A assessments shall be made for the purposes of meeting administrative and legal costs and other expenses and examinations conducted under the authority of  31-5409(e). Class A assessments may be made whether or not related to a particular impaired or insolvent insurer. (2) Class B assessments shall be made to the extent necessary to carry out the powers and duties of the Association under  31-5405 with regard to an impaired or insolvent insurer. (c)(1) The amount of any Class A assessment shall be determined by the Board and may be made on a pro rata or non-pro rata basis. If pro rata, the Board may provide that it be credited against future Class B assessments. The amount of any Class B assessment shall be allocated for assessment purposes among the accounts pursuant to an allocation formula which may be based on the premiums or reserves of the impaired or insolvent insurer or any other standard deemed by the Board in its sole discretion as being fair and reasonable under the circumstances. (2) Class B assessments against member insurers for each account and subaccount shall be in the same proportion as the premiums received on business in the District of Columbia by each assessed member insurer on policies and contracts covered by each account for the 3 most recent calendar years, for which information is available, preceding the year in which the insurer became impaired or insolvent bears to the premiums received on business in the District of Columbia for these calendar years by all assessed member insurers. (3) Assessments for funds to meet the requirements of the Association with respect to an impaired or insolvent insurer shall not be authorized or called until necessary to implement the purposes of this chapter. Classification of assessments under subsection (b) of this section and computation of assessments under this subsection shall be made with a reasonable degree of accuracy, recognizing that exact determinations may not always be possible. (d)(1) The Association may abate or defer, in whole or in part, the assessment of a member insurer if the Board concludes that payment of the assessment would endanger the ability of the member insurer to fulfill its contractual obligations. (2) In the event an assessment against a member insurer is abated or deferred in whole or in part, the amount by which the assessment is abated or deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in this section. (e)(1) The total of all assessments upon a member insurer for the life and annuity account and for each subaccount thereunder shall not in any 1 calendar year exceed 2% and for the health account shall not in any 1 calendar year exceed 2% of the insurers average premiums received in the District of Columbia on the policies and contracts covered by the account during the 3 calendar years preceding the year in which the insurer is declared impaired or insolvent. If the maximum assessment, together with the other assets of the Association in any account, does not provide in any 1 year in either account an amount sufficient to carry out the responsibilities of the Association, the necessary additional funds shall be assessed as soon thereafter as permitted by this chapter. (2) The Board may provide in the plan of operation a method of allocating funds among claims, whether relating to 1 or more impaired or insolvent insurers, when the maximum assessment will be insufficient to cover anticipated claims. (3) If the maximum assessment for any subaccount of the life and annuity account in any 1 year does not provide an amount sufficient to carry out the responsibilities of the Association, then pursuant to subsection (c)(2) of this section, the Board shall assess all subaccounts of the life and annuity account for the necessary additional amount, subject to the maximum stated in paragraph (1) of this subsection. (f)(1) The Board may, by an equitable method as established in the plan of operation, refund to member insurers, in proportion to the contribution of each insurer to that account, the amount by which the assets of the account exceed the amount the Board finds is necessary to carry out, during the coming year, the obligations of the Association with regard to that account, including assets accruing from assignments, subrogation, net realized gains, and income from investments. (2) A reasonable amount may be retained in any account in a District of Columbia bank, which is subject to the District of Columbia Community Development Program under the supervision of the District of Columbia Office of Banking and Financial Institutions, to provide funds for the continuing expenses of the Association and for future losses. (g) It shall be proper for any member insurer, in determining its premium rates and policyholder dividends for any kind of insurance within the scope of this chapter, to consider the amount reasonably necessary to meet its assessment obligations under this chapter. (h) The Association shall issue to each insurer paying an assessment under this chapter, other than a Class A assessment, a certificate of contribution, in a form prescribed by the Mayor, for the amount of the assessment so paid. All outstanding certificates shall be of equal value, dignity, and priority without references to amounts or dates of issue. A certificate of contribution may be shown by the insurer in its financial statement as an asset in the form and for the amount, if any, and period of time as the Mayor may approve. (i) For the purposes of this section, the term: (1) Authorized means, when used in the context of assessments, a resolution by the Board of Directors that has been passed by which an assessment will be called immediately or in the future from member insurers for a specified amount. An assessment is authorized when the resolution is passed. (2) Called means, when used in the context of assessments, that a notice has been issued by the Association to member insurers requiring that an authorized assessment be paid within the time frame set forth within the notice. An authorized assessment becomes a called assessment when notice is mailed by the Association to member insurers.  (July 22, 1992, D.C. Law 9-129,  7, 39 DCR 4036; July 23, 2014, D.C. Law 20-130,  2(d), 61 DCR 5900.)  Prior Codifications 1981 Ed.,  35-1946. Section References This section is referenced in  31-205,  31-5405,  31-5407, and  31-5410. Effect of Amendments The 2014 amendment by D.C. Law 20-130 substituted authorized or called for made in (c)(3); substituted the maximum assessment for a 1% assessment in (e)(3); and added (i). Cross References Premium tax liability offsets, see  31-205.
 315407. Plan of operation. (a)(1) The Association shall submit to the Mayor a plan of operation, and any subsequent amendments that are necessary or suitable, to assure the fair, reasonable, and equitable administration of the Association. The plan of operation, and any amendments, shall become effective 30 days following its submission to the Mayor, unless the Mayor has issued written disapproval of the plan within the 30 days. (2) If the Association fails to submit a suitable plan of operation within 120 days following July 22, 1992, or if at any time thereafter the Association fails to submit suitable amendments to the plan, the Mayor shall, after notice and hearing, adopt and promulgate reasonable rules as necessary or advisable to carry out the provisions of this chapter. These rules shall continue in force until modified by the Mayor or superseded by a plan submitted by the Association and approved by the Mayor. (b) All member insurers shall comply with the plan of operation. (c) The plan of operation, in addition to requirements enumerated elsewhere in this chapter, shall: (1) Establish procedures for handling the assets of the Association; (2) Establish the amount and method of reimbursement of members of the Board of Directors under  31-5404; (3) Establish regular places and times for meetings, including telephone conference calls, of the Board of Directors; (4) Establish procedures for records to be kept of all financial transactions of the Association, its agents, and the Board of Directors; (5) Establish the procedures whereby nominations to the Board of Directors will be made and submitted to the Mayor for approval; (6) Establish any additional procedures necessary for assessments under  31-5406; and (7) Contain additional provisions necessary or proper for the execution of the powers and duties of the Association. (d)(1) The plan of operation may provide that any or all powers and duties of the Association, except those under  31-5405(q)(3) and  31-5406, are delegated to a corporation, association, or other organization which performs or will perform functions similar to those of this Association, or its equivalent in 2 or more states. (2) Such a corporation, association, or organization shall be reimbursed for any payments made on behalf of the Association and shall be paid for its performance of any function of the Association. (3) A delegation under this subsection shall take effect only with the approval of the Board of Directors and the Mayor, and may be made only to a corporation, association, or organization which extends protection not substantially less favorable and effective than that provided by this chapter.  (July 22, 1992, D.C. Law 9-129,  8, 39 DCR 4036.)  Prior Codifications 1981 Ed.,  35-1947. Section References This section is referenced in  31-5403.
 315408. Duties and powers of the Mayor. (a) In addition to the duties and powers enumerated elsewhere in this chapter, the Mayor shall: (1) Upon request of the Board of Directors, provide the Association with a statement of the premiums in the District of Columbia and any other appropriate states for each member insurer; and (2) When an impairment is declared and the amount of the impairment is determined, serve a demand upon the impaired insurer to make good the impairment within a reasonable time. Notice to the impaired insurer to comply promptly with such a demand shall not excuse the Association from the performance of its powers and duties under this chapter. (b) In addition to the duties and powers enumerated elsewhere in this chapter, the Mayor may: (1) Suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in the District of any member insurer which fails to pay an assessment when due or fails to comply with the plan of operation; or (2) Levy a forfeiture on any member insurer that fails to pay an assessment when due; provided, that the forfeiture shall not exceed 5% of the unpaid assessment per month, and no forfeiture shall be less than $100 per month. (c) A final action of the board of directors or the Association may be appealed to the Mayor by a member insurer if the appeal is taken within 60 days of its receipt of notice of the final action being appealed. A final action or order of the Mayor shall be subject to judicial review in a court of competent jurisdiction in accordance with District laws that apply to the actions or orders of the Mayor. (d) The liquidator, rehabilitator, or conservator of an impaired or insolvent insurer may notify all interested persons of the effect of this chapter.  (July 22, 1992, D.C. Law 9-129,  9, 39 DCR 4036; July 23, 2014, D.C. Law 20-130,  2(e), 61 DCR 5900.)  Prior Codifications 1981 Ed.,  35-1948. Effect of Amendments The 2014 amendment by D.C. Law 20-130 designated the existing language as (a); and added (b), (c), and (d).
 315409. Prevention of insolvencies. (a) To aid in the detection and prevention of insurer impairments or insolvencies, the Mayor shall: (1) Transmit written notices to the insurance commissioners of all the other states and territories of the United States, within 30 days following the date any action is taken, when the Mayor takes any of the following actions against a member insurer: (A) Revocation of license; (B) Suspension of license; or (C) Issuance of any formal order that the company restrict its premium writing, obtain additional contributions to surplus, withdraw from the District of Columbia, reinsure all or any part of its business, or increase capital, surplus, or any other account for the security of policyholders or creditors; (2) Report to the Board of Directors when the Mayor has taken any of the actions set forth in paragraph (1) of this subsection or has received a report from any insurance commissioner indicating that any similar action has been taken in another state. The report shall contain all significant details of the action taken, or shall include the report received from another insurance commissioner; (3) Report to the Board of Directors when the Mayor has reasonable cause to believe, from any examination, whether completed or in process, of any member insurer, that the insurer may be an impaired or insolvent insurer; and (4) Furnish to the Board of Directors the ratios developed by the National Association of Insurance Commissioners Insurance Regulatory Information System, and listings of companies not included in the ratios. The Board may use the information contained therein in carrying out its duties and responsibilities under this section. The report and the information shall be kept confidential by the Board of Directors until it is made public by the Mayor or other lawful authority. (b) The Mayor may seek the advice and recommendations of the Board of Directors concerning any matter affecting the Mayors duties and responsibilities regarding the financial condition of member insurers and companies seeking admission to transact insurance business in the District of Columbia. (c) The Board of Directors may, upon majority vote, make reports and recommendations to the Mayor upon any matter germane to the solvency, liquidation, rehabilitation, or conservation of any member insurer, or germane to the solvency of any company seeking to transact insurance business in the District of Columbia. These reports and recommendations shall be internal working documents, and, consequently, shall not be considered public documents. (d) It shall be the duty of the Board of Directors, upon majority vote, to notify the Mayor of any information indicating whether any member insurer may be an impaired or insolvent insurer. (e)(1) The Board of Directors may, upon majority vote, request that the Mayor order an examination of any member insurer which the Board, in good faith, believes may be an impaired or insolvent insurer. (2) Within 30 days of receipt of such a request, the Mayor shall begin the examination. (3) The examination may be conducted as a National Association of Insurance Commissioners examination, or may be conducted by persons designated by the Mayor. (4) The cost of the examination shall be paid by the Association and the examination report shall be treated the same as other examination reports. (5) In no event shall the examination report be released to the Board of Directors prior to its release to the public, except in compliance with subsection (a) of this section. (6) The Mayor shall notify the Board of Directors when the examination is completed. (7) The request for an examination shall be kept on file by the Mayor, but it shall not be open to public inspection prior to the release of the examination report to the public. (f) The Board of Directors may, upon majority vote, make recommendations to the Mayor for the detection and prevention of insurer insolvencies. (g) The Board of Directors, at the conclusion of any insurer insolvency in which the Association was obligated to pay covered claims, shall: (1) Prepare and submit a written report to the Mayor containing all information it possesses bearing on the history and causes of the insolvency; and (2) Cooperate with the boards of directors of guaranty associations in other states in preparing reports on the history and causes of insolvency of a particular insurer. The Association may adopt by reference any report prepared by other associations.  (July 22, 1992, D.C. Law 9-129,  10, 39 DCR 4036; July 23, 2014, D.C. Law 20-130,  2(f), 61 DCR 5900.)  Prior Codifications 1981 Ed.,  35-1949. Section References This section is referenced in  31-5406. Effect of Amendments The 2014 amendment by D.C. Law 20-130 substituted insurer for company throughout (a)(3).
 315410. Credits for assessments paid. (a) A member insurer may offset against its premium taxes an assessment described in  31-5406(h) to the extent of 10% of the amount of the assessment for each of the 10 calendar years following the year in which the assessment was paid. In the event a member insurer should cease doing business, all uncredited assessments may be credited against the premium taxes for the year it ceases doing business. (b) Any sums which are acquired by refund, pursuant to  31-5406(f) from the Association by member insurers, and which theretofore have been offset against premium taxes as provided in subsection (a) of this section, shall be paid by member insurers to the District of Columbia in accordance with requirements of the District of Columbia Department of Finance and Revenue. The Association shall notify the Commissioner that the refunds have been made.  (July 22, 1992, D.C. Law 9-129,  11, 39 DCR 4036; May 21, 1997, D.C. Law 11-268,  10, 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81,  31(b), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-1950. Section References This section is referenced in  31-205. Cross References Premium tax liability offsets, see  31-205. References in Text Pursuant to the Office of the Chief Financial Officers Notice of Public Interest published in the April 18, 1997, issue of the District of Columbia Register ( 44 DCR 2345) the Office of Tax and Revenue assumed all of the duties and functions previously performed by the Department of Finance and Revenue, as set forth in Commissioners Order 69-96, dated March 7, 1969. This action was made effective January 22, 1997, nunc pro tunc.
 315411. Miscellaneous. (a) Nothing in this chapter shall be construed to reduce the liability for unpaid assessments of the insureds of an impaired or insolvent insurer operating under a plan with assessment liability. (b)(1) Records shall be kept of all negotiations and meetings in which the Association or its representatives are involved in discussing the activities of the Association in carrying out its powers and duties under  31-5405. (2) Records of negotiations or meetings shall be made public only upon the termination of a liquidation, rehabilitation, or conservation proceeding involving the impaired or insolvent insurer, upon the termination of the impairment or insolvency of the insurer, or upon the order of a court of competent jurisdiction. (3) Nothing in this subsection shall limit the duty of the Association to render a report of its activities under this section. (c)(1) For the purpose of carrying out its obligations under this chapter, the Association shall be deemed to be a creditor of the impaired or insolvent insurer to the extent of assets attributable to covered policies reduced by any amounts to which the Association is entitled as subrogee pursuant to  31-5405(m). (2) Assets of the impaired or insolvent insurer attributable to covered policies shall be used to continue all covered policies and pay all contractual obligations of the impaired or insolvent insurer as required by this chapter. (3) For the purposes of this subsection, assets attributable to covered policies are that proportion of the assets which the reserves that should have been established for the policies bear to the reserves that should have been established for all policies of insurance written by the impaired or insolvent insurer. (c-1) As a creditor of the impaired or insolvent insurer as established in subsection (c) of this section and consistent with Chapter 13 of this title [ 31-1301 et seq.], the Association and other similar associations shall be entitled to receive a disbursement of assets out of the marshaled assets, as the assets become available to reimburse it, as a credit against contractual obligations under this chapter. If the liquidator has not, within 120 days of a final determination of insolvency of an insurer by the receivership court, made an application to the court for the approval of a proposal to disburse assets out of marshaled assets to guaranty associations having obligations because of the insolvency, then the Association shall be entitled to make application to the receivership court for approval of its own proposal to disburse the assets. (d)(1) Prior to the termination of any liquidation, rehabilitation, or conservation proceeding, the court may take into consideration the contribution of the respective parties, including the Association, the shareholders, and policyholders of the insolvent insurer, and any other party with a bona fide interest, in making an equitable distribution of the ownership rights of the insolvent insurer. In such a determination, consideration shall be given to the welfare of the policyholders of the continuing or successor insurer. (2) No distribution to stockholders, if any, of an impaired or insolvent insurer shall be made until the total amount of valid claims of the Association, with interest, for funds expended in carrying out its powers and duties under  31-5405 with respect to the insurer have been fully recovered by the Association. (e)(1) If an order for liquidation or rehabilitation of an insurer domiciled in the District of Columbia has been entered, the receiver appointed under the order shall have a right to recover on behalf of the insurer, from any affiliate that controlled it, the amount of distributions, other than stock dividends paid by the insurer on its capital stock, made at any time during 5 years preceding the petition for liquidation or rehabilitation subject to the limitations of paragraphs (2) through (4) of this subsection. (2) No distribution shall be recoverable if the insurer shows that, when paid, the distribution was lawful and reasonable, and that the insurer did not know, and could not reasonably have known, that the distribution might adversely affect the ability of the insurer to fulfill its contractual obligations. (3)(A) Any person who was an affiliate that controlled the insurer at the time the distributions were paid shall be liable up to the amount of distributions he or she received. (B) Any person who was an affiliate that controlled the insurer at the time the distributions were declared shall be liable up to the amount of distributions he or she would have received if they had been paid immediately. (C) If 2 or more persons are liable with respect to the same distributions, they shall be jointly and severally liable. (4) The maximum amount recoverable under this subsection shall be the amount needed in excess of all other available assets of the insolvent insurer to pay the contractual obligations of the insolvent insurer. (5) If any person liable under paragraph (3) of this subsection is insolvent, all its affiliates that controlled it at the time the distribution was paid shall be jointly and severally liable for any resulting deficiency in the amount recoverable from the insolvent affiliate.  (July 22, 1992, D.C. Law 9-129,  12, 39 DCR 4036; July 23, 2014, D.C. Law 20-130,  2(g), 61 DCR 5900.)  Prior Codifications 1981 Ed.,  35-1951. Effect of Amendments The 2014 amendment by D.C. Law 20-130 added (c-1).
 315412. Examination of the Association; annual report. (a) The Association shall be subject to examination and regulation by the Mayor. (b) The Board of Directors shall submit to the Mayor each year, not later than 120 days after the end of the Associations fiscal year, a financial report in a form approved by the Mayor and a report of its activities during the preceding fiscal year.  (July 22, 1992, D.C. Law 9-129,  13, 39 DCR 4036.)  Prior Codifications 1981 Ed.,  35-1952.
 315413. Tax exemptions. The Association shall be exempt from payment of all fees and all taxes levied by the District of Columbia.  (July 22, 1992, D.C. Law 9-129,  14, 39 DCR 4036.)  Prior Codifications 1981 Ed.,  35-1953.
 315414. Immunity. (a) There shall be no liability on the part of, and no cause of action shall arise against, any member insurer or its agents or employees, the Association or its agents or employees, members of the Board of Directors, or the Mayor or the Mayors representatives, for any action or omission by them in performance of their powers and duties under this chapter, except in the case of willful misconduct, gross negligence, or criminal activity on the part of these persons. (b) The immunity established by subsection (a) of this section shall extend to the participation in any organization of 1 or more state associations of similar purposes and to any organization and its agents or employees.  (July 22, 1992, D.C. Law 9-129,  15, 39 DCR 4036.)  Prior Codifications 1981 Ed.,  35-1954.
 315415. Stay of proceedings; reopening default judgments. (a) All proceedings in which the insolvent insurer is a party in any court in the District of Columbia shall be stayed 180 days from the date an order of liquidation, rehabilitation, or conservation is final to permit proper legal action by the Association on any matters germane to its powers or duties. (b) As to judgment under any decision, order, verdict, or finding based on default, the Association may apply to have the judgment set aside by the same court that made the judgment and shall be permitted to defend against the suit on the merits.  (July 22, 1992, D.C. Law 9-129,  16, 39 DCR 4036; July 23, 2014, D.C. Law 20-130,  2(h), 61 DCR 5900.)  Prior Codifications 1981 Ed.,  35-1955. Effect of Amendments The 2014 amendment by D.C. Law 20-130 substituted 180 days for 60 days in (a).
 315416. Prohibited advertisement of Association act in insurance sale; notice to policyholders. (a)(1) No person, including an insurer, agent, or affiliate of an insurer shall make, publish, disseminate, circulate, or place before the public, or cause directly or indirectly, to be made, published, disseminated, circulated or placed before the public, in any newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio station or television station, or in any other way, any advertisement, announcement or statement, written or oral, which uses the existence of the District of Columbia Life and Health Insurance Guaranty Association for the purpose of sales, solicitation, or inducement to purchase any form of insurance covered by this chapter. (2) This subsection shall not apply to the Association or any other entity which does not sell or solicit insurance. (b)(1) Within 180 days of July 22, 1992, the Association shall prepare a summary document describing the general purposes and current limitations of this chapter, which document shall be submitted to the Mayor for approval. (2) Sixty days after the summary document is approved by the Mayor, no insurer may deliver a policy or contract described in  31-5402(b)(1) to a policy or contract holder unless the summary document is delivered to the policy or contract holder prior to or at the time of delivery of the policy or contract except as provided in subsection (d) of this section. (3) The delivery or contents or interpretation of the summary document shall not mean that either the policy or the contract or the holder of either would be covered in the event of the impairment or insolvency of a member insurer. (4) The summary document shall be revised by the Association as amendments to this chapter may require. (5) Failure to receive this document does not give the policy holder, contract holder, certificate holder, or insured any greater rights than the rights stated in this chapter. (c) The summary document prepared under subsection (b) of this section shall contain a clear and conspicuous disclaimer on its face. The Mayor shall promulgate rules establishing the form and content of the disclaimer, which at a minimum shall: (1) State the name and address of the Association and the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking]; (2) Prominently warn the policy or contract holder that the Association may not cover the policy, or, if coverage is available, it will be subject to substantial limitations and exclusions and conditioned on continued residence in the District of Columbia; (3) State that the insurer and its agents are prohibited by law from using the existence of the Association for the purpose of sales, solicitation, or inducement to purchase any form of insurance; (4) Emphasize that the policy or contract holder should not rely on coverage under the Life and Health Insurance Guaranty Association when selecting an insurer; and (5) Provide additional information as directed by the Mayor. (d) No insurer or agent may deliver a policy or contract described in  31-5402(b)(1) and excluded under  31-5402(b)(2)(A) from coverage under this chapter unless the insurer or agent, prior to or at the time of delivery, gives the policy or contract holder a separate written notice which clearly and conspicuously discloses that the policy or contract is not covered by the Life and Health Insurance Guaranty Association. The Mayor, by rule, shall specify the form and content of the notice.  (July 22, 1992, D.C. Law 9-129,  17, 39 DCR 4036; May 21, 1997, D.C. Law 11-268,  10(u), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-1956.
 315501. Definitions. For the purposes of this chapter, the term: (1) Account means any 1 of the 3 accounts created by  31-5503. (2) Affiliate means a person who, directly or indirectly, through 1 or more intermediaries, controls, is controlled by, or is under common control with an insolvent insurer on December 31st of the year next preceding the date the insurer becomes an insolvent insurer. (3) Association means the District of Columbia Insurance Guaranty Association created pursuant to  31-5503. (4) Claimant means any insured making a first-party claim or any person instituting a liability claim, provided that no person who is an affiliate of the insolvent insurer may be a claimant. (5) Control means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, 10% or more of the voting securities of any other person. This presumption may be rebutted by a showing that control does not exist in fact. (6) Covered claim means an unpaid claim, including one for unearned premiums, submitted by a claimant, which arises out of and is within the coverage and is subject to the applicable limits of an insurance policy to which this chapter applies issued by an insurer, if such an insurer becomes an insolvent insurer after October 21, 1993, and: (A) The claimant or insured is a resident of the District at the time of the insured event, provided that for entities other than an individual, the principal place of business of the claimant or insured is located in the District at the time of the insured event; or (B) The property from which the claim arises is permanently located in the District. The term covered claim shall not include any amount awarded as punitive or exemplary damages, sought as a return of premium under any retrospective rating plan, or due any reinsurer, insurer, insurance pool, or underwriting association as subrogation recoveries or otherwise. (7) District means the District of Columbia. (8) Insolvent insurer means an insurer licensed to transact insurance in the District of Columbia, either at the time the policy was issued or when the insured event occurred, and against whom an order of liquidation with a finding of insolvency has been entered after October 21, 1993, by a court of competent jurisdiction in the insurers state of domicile or of the District under  31-1316, and which order of liquidation has not been stayed or been the subject of a writ of supersedeas or other comparable order. (9) Member insurer means any person who: (A) Writes any kind of insurance to which this chapter applies under  31-5502, including the exchange of reciprocal or interinsurance contracts; and (B) Is licensed to transact insurance in the District. (10) Net direct written premiums means direct gross premiums written in the District on insurance policies to which this chapter applies, less return premiums and dividends paid or credited to policyholders on the direct business. The term net direct written premiums does not include premiums on contracts between insurers or reinsurers. (11) Person means any individual, corporation, partnership, association, or voluntary organization.  (Oct. 21, 1993, D.C. Law 10-51,  2, 40 DCR 6120; May 16, 1995, D.C. Law 10-255,  33, 41 DCR 5193.)  Prior Codifications 1981 Ed.,  35-3901. Section References This section is referenced in  31-5503. Delegation of Authority Delegation of authority pursuant to D.C. Law 10-51, the Property and Liability Insurance Guaranty Association Act of 1993, see Mayors Order 94-54, March 7, 1994 ( 41 DCR 1433).
 315502. Applicability. This chapter shall apply to all kinds of direct insurance, but shall not be applicable to the following: (1) Life, annuity, health, or disability insurance; (2) Mortgage guaranty, financial guaranty, or other forms of insurance offering protection against investment risks; (3) Fidelity or surety bonds, or any other bonding obligations; (4) Credit insurance, vendors single interest insurance, or collateral protection insurance or any similar insurance protecting the interests of a creditor arising out of a creditor-debtor transaction; (5) Insurance of warranties or service contracts; (6) Title insurance; (7) Ocean marine insurance; (8) Any transaction or combination of transactions between a person, including affiliates of such a person, and an insurer, including affiliates of such an insurer, which involves the transfer of investment or credit risk unaccompanied by transfer of insurance risk; or (9) Any insurance provided by or guaranteed by government.  (Oct. 21, 1993, D.C. Law 10-51,  3, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-3902. Section References This section is referenced in  31-5501.
 315503. Creation of the Association. There is created a nonprofit unincorporated legal entity to be known as the District of Columbia Insurance Guaranty Association. All insurers defined as member insurers in  31-5501(9) shall be and remain members of the Association as a condition of their authority to transact insurance in the District. The Association shall perform its functions under a plan of operation established and approved under  31-5506 and shall exercise its powers through a board of directors established under  31-5504. For purposes of administration and assessment, the Association shall be divided into 3 separate accounts: (1) The workmens compensation insurance account; (2) The automobile insurance account; and (3) The account for all other insurance to which this chapter applies.  (Oct. 21, 1993, D.C. Law 10-51,  4, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-3903. Section References This section is referenced in  31-5501.
 315504. Board of directors. (a) The board of directors of the Association shall consist of not fewer than 5 nor more than 9 persons serving terms as established in the plan of operation. The members of the board shall be selected by member insurers subject to the approval of the Mayor. Vacancies on the board shall be filled for the remainder of the term by a majority vote of the remaining board members subject to the approval of the Mayor. If no members are selected within 60 days after October 21, 1993, the Mayor may appoint the initial members of the board of directors. (b) In approving selections to the board of directors, the Mayor shall consider, among other things, whether all member insurers are fairly represented. (c) Members of the board of directors may be reimbursed from the assets of the Association for expenses incurred by them as members of the board of directors.  (Oct. 21, 1993, D.C. Law 10-51,  5, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-3904. Section References This section is referenced in  31-5503 and  31-5506.
 315505. Powers and duties of the Association. (a) The Association shall: (1) Be obligated to pay covered claims existing prior to the determination of the insolvency arising within 30 days after the determination of insolvency, or before the policy expiration date if less than 30 days after the determination of insolvency, or before the insured replaces the policy or causes its cancellation, if the insured does so within 30 days of the determination. The obligation shall extend to covered claims reported pursuant to an optional extended period to report claims sold to the insured by the liquidator. The obligation as to covered claims shall be satisfied by paying to the claimant an amount as follows: (A) The full amount of a covered claim for benefits under a workers compensation insurance coverage; (B) An amount not exceeding $10,000 per policy for a covered claim for the return of unearned premium; or (C) An amount not exceeding $300,000 per claimant for all other covered claims. In no event shall the Association be obligated to pay a claimant an amount in excess of the obligation of the insolvent insurer under the policy from which the claim arises. Notwithstanding any other provision of this chapter, a covered claim shall not include any claim filed with the Guaranty Fund after the earlier of the final date for the filing of claims against the liquidator or receiver of an insolvent insurer or 18 months after the order of liquidation. The Association shall pay only that amount of each unearned premium which is in excess of $100; (2) Be deemed the insurer to the extent of its obligation on the covered claims and to such extent shall have all rights, duties, and obligations of the insolvent insurer as if the insurer had not become insolvent; (3) Allocate claims paid and expenses incurred among the 3 accounts separately, and assess member insurers, separately for each account, amounts necessary to pay the obligations of the Association under paragraph (1) of this subsection subsequent to an insolvency, the expenses of handling covered claims subsequent to an insolvency, and other expenses authorized by this chapter. The assessments of each member insurer shall be in the proportion that the net direct written premiums of the member insurer for the calendar year preceding the assessment on the kinds of insurance in the account bears to the net direct written premiums of all member insurers for the calendar year preceding the assessment on the kinds of insurance in the account. Each member insurer shall be notified of the assessment not later than 30 days before it is due. No member insurer may be assessed in any one year on any account an amount greater than 2% of that member insurers net direct written premiums for the calendar year preceding the assessment on the kinds of insurance in the account. If the maximum assessment, together with the other assets of the Association in any account, does not provide in any one year in any account an amount sufficient to make all necessary payments from that account, the funds available shall be prorated and the unpaid portion shall be paid as soon thereafter as funds become available. The Association shall pay claims in any order which it deems reasonable, including the payment of claims as they are received from the claimants or in groups or categories of claims. The Association may exempt or defer, in whole or in part, the assessment of any member insurer, if the assessment would cause the member insurers financial statement to reflect amounts of capital or surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in which the member insurer is authorized to transact insurance; provided, however, that during the period of deferment, no dividends shall be paid to shareholders or policyholders. Deferred assessments shall be paid when such a payment will not reduce capital or surplus below required minimums. These payments shall be refunded to those companies receiving larger assessments by virtue of such a deferment, or at the election of any company, credited against future assessments. Each member insurer may set off, against any assessment, authorized payments made on covered claims and expenses incurred in the payment of these claims by the member insurer if they are chargeable to the account for which the assessment is made; (4) Investigate claims brought against the Association and adjust, compromise, settle, and pay covered claims to the extent of the Associations obligation and deny all other claims. The Association may review settlements, releases, and judgments to which the insolvent insurer or its insureds were parties to determine the extent to which the settlements, releases, and judgments may be properly contested; (5) Notify those persons the Mayor directs under  31-5507(b)(1); (6) Handle claims through its employees or through 1 or more insurers or other persons designated as servicing facilities. Designation of a servicing facility is subject to the approval of the Mayor, but the designation may be declined by a member insurer; and (7) Reimburse each servicing facility for obligations of the Association paid by the facility and for expenses incurred by the facility while handling claims on behalf of the Association and shall pay the other expenses of the Association authorized by this chapter. (b) The Association may: (1) Employ or retain those persons necessary to handle claims and perform other duties of the Association; (2) Borrow funds necessary to effect the purposes of this chapter in accord with the plan of operation; (3) Sue or be sued; (4) Negotiate and become a party to those contracts necessary to carry out the purposes of this chapter; (5) Perform any other acts necessary or proper to effectuate the purposes of this chapter; and (6) Refund to the member insurers, in proportion to the contribution of each member insurer to that account, that amount by which the assets of the account exceed the liabilities, if at the end of any calendar year, the board of directors finds that the assets of the Association in any account exceed the liabilities of that account as estimated by the board of directors for the coming year.  (Oct. 21, 1993, D.C. Law 10-51,  6, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-3905. Section References This section is referenced in  31-5506.
 315506. Plan of operation. (a)(1) The Association shall submit to the Mayor a plan of operations, and any amendments thereto, necessary or suitable to assure the fair, reasonable, and equitable administration of the Association. The plan of operation and any amendments thereto shall become effective upon approval in writing by the Mayor. (2) If the Association fails to submit a suitable plan of operation within 90 days following October 21, 1993, or if at any time thereafter the Association fails to submit suitable amendments to the plan, the Mayor shall, after notice and hearing, issue those reasonable rules necessary or advisable to effectuate the provisions of this chapter. These rules shall continue in force until modified by the Mayor or superseded by a plan submitted by the Association and approved by the Mayor. (b) All member insurers shall comply with the plan of operation. (c) The plan of operation shall: (1) Establish the procedures whereby all the powers and duties of the Association under  31-5505 will be performed; (2) Establish procedures for handling assets of the Association; (3) Establish the amount and method of reimbursing members of the board of directors under  31-5504; (4) Establish procedures by which claims may be filed with the Association and establish acceptable forms of proof of covered claims. Notice of claims to the receiver or liquidator of the insolvent insurer shall be deemed notice to the Association or its agent and a list of claims shall be periodically submitted to the Association or similar organization in another jurisdiction by the receiver or liquidator; (5) Establish regular places and times for meetings of the board of directors; (6) Establish procedures for records to be kept of all financial transactions of the Association, its agents, and the board of directors; (7) Provide that any member insurer aggrieved by any final action or decision of the Association may appeal to the Mayor within 30 days after the action or decision; (8) Establish the procedures whereby selections for the board of directors will be submitted to the Mayor; and (9) Contain additional provisions necessary and proper for the execution of the powers and duties of the Association. (d) The plan of operation may provide that any or all powers and duties of the Association, except those under  31-5505(a)(3) and (b)(2), are delegated to a corporation, association, or other organization which performs, or will perform, functions similar to those of this Association or its equivalent in 2 or more states. Such a corporation, association, or organization shall be reimbursed as a servicing facility would be reimbursed and shall be paid for its performance of any other functions of the Association. A delegation under this subsection shall take effect only with the approval of both the board of directors and the Mayor, and may be made only to a corporation, association, or organization which extends protection not substantially less favorable and effective than that provided by this chapter.  (Oct. 21, 1993, D.C. Law 10-51,  7, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-3906. Section References This section is referenced in  31-5503.
 315507. Powers and duties of the Mayor. (a) The Mayor shall: (1) Notify the Association of the existence of an insolvent insurer not later than 3 days after he or she receives notice of the determination of the insolvency. The Association shall be entitled to a copy of any complaint seeking an order of liquidation with a finding of insolvency against a member company at the same time that the complaint is filed with a court of competent jurisdiction; and (2) Upon request of the board of directors, provide the Association with a statement of the net direct written premiums of each member insurer. (b) The Mayor may: (1) Require that the Association notify the insureds of the insolvent insurer and any other interested parties of the determination of insolvency and of their rights under this chapter. Notification shall be by mail at their last known address, where available, but if sufficient information for notification by mail is not available, notice by publication in a newspaper of general circulation in the District shall be sufficient; (2) Suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in the District of any member insurer which fails to pay an assessment when due or fails to comply with the plan of operation. As an alternative, the Mayor may levy a fine on any member insurer which fails to pay an assessment when due. Such a fine shall not exceed 5% of the unpaid assessment per month, except that no fine shall be less than $100 per month; or (3) Revoke the designation of any servicing facility if the Mayor finds claims are being handled unsatisfactorily. (c) Any final action or order of the Mayor under this chapter shall be subject to judicial review in accordance with  2-510.  (Oct. 21, 1993, D.C. Law 10-51,  8, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-3907. Section References This section is referenced in  31-5505.
 315508. Effect of paid claims. (a) Any person recovering under this chapter shall be deemed to have assigned his or her rights under the policy to the Association to the extent of his or her recovery from the Association. Every insured or claimant seeking the protection of this chapter shall cooperate with the Association to the same extent as that person would have been required to cooperate with the insolvent insurer. The Association shall have no cause of action against the insured of the insolvent insurer for any sums it has paid out except those causes of action as the insolvent insurer would have had if such sums had been paid by the insolvent insurer and except as provided in subsection (b) of this section. In the case of an insolvent insurer operating on a plan with assessment liability, payments of claims of the Association shall not operate to reduce the liability of the insureds to the receiver, liquidator, or statutory successor for unpaid assessments. (b) The Association shall have the right to recover from the following persons the amount of any covered claim paid on behalf of such a person pursuant to the chapter: (1) Any insured whose net worth on December 31st of the year next preceding the date the insurer becomes an insolvent insurer exceeds $50 million and whose liability obligations to other persons are satisfied in whole or in part by payments made under this chapter; and (2) Any person who is an affiliate of the insolvent insurer and whose liability obligations to other persons are satisfied in whole or in part by payments made under this chapter. (c) The receiver, liquidator, or statutory successor of an insolvent insurer shall be bound by settlements of covered claims by the Association or a similar organization in another jurisdiction. The court having jurisdiction shall grant these claims priority equal to that which the claimant would have been entitled in the absence of this chapter against the assets of the insolvent insurer. The expenses of the Association or similar organization in handling claims shall be accorded the same priority as the liquidators expenses. (d) The Association shall periodically file, with the receiver or liquidator of the insolvent insurer, statements of the covered claims paid by the Association and estimates of anticipated claims on the Association which shall preserve the rights of the Association against the assets of the insolvent insurer.  (Oct. 21, 1993, D.C. Law 10-51,  9, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-3908.
 315509. Nonduplication of recovery. (a) Any person having a claim against an insurer under any provision in an insurance policy, other than a policy of an insolvent insurer which is also a covered claim, shall be required to exhaust first his or her right under such a policy. Any amount payable on a covered claim under this chapter shall be reduced by the amount of any recovery under such an insurance policy. (b) Any person having a claim which may be recovered under more than one insurance guaranty association or its equivalent shall seek recovery first from the Association of the place of residence of the insured, except that if it is a first-party claim for damage to property with a permanent location, he or she shall seek recovery first from the Association of the location of the property, and if it is a workers compensation claim, he or she shall seek recovery first from the Association of the residence of the claimant. Any recovery under this chapter shall be reduced by the amount of recovery from any other insurance guaranty association or its equivalent.  (Oct. 21, 1993, D.C. Law 10-51,  10, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-3909.
 315510. Prevention of insolvencies. To aid in the detection and prevention of insurer insolvencies: (1) The board of directors may, upon majority vote: (A) Make recommendations to the Mayor for the detection and prevention of insurer insolvencies; and (B) Respond to requests by the Mayor to discuss and make recommendations regarding the status of any member insurer whose financial condition may be hazardous to policyholders or the public. The recommendations shall not be considered public documents. (2) The board of directors may, at the conclusion of any domestic insurer insolvency in which the Association was obligated to pay covered claims, prepare a report on the history and causes of the insolvency, based on the information available to the Association, and submit the report to the Mayor.  (Oct. 21, 1993, D.C. Law 10-51,  11, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-3910.
 315511. Examination of the Association. The Association shall be subject to examination and regulation by the Mayor. The board of directors shall submit, not later than March 30th of each year, a financial report for the preceding calendar year in a form approved by the Mayor.  (Oct. 21, 1993, D.C. Law 10-51,  12, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-3911.
 315512. Tax exemption. The Association shall be exempt from payment of all fees and all taxes levied by the District, except taxes levied on real or personal property.  (Oct. 21, 1993, D.C. Law 10-51,  13, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-3912.
 315513. Recognition of assessments in rates. The rates and premiums charged for insurance policies to which this chapter applies shall include amounts sufficient to recoup a sum equal to the amounts paid to the Association by the member insurer less any amounts returned to the member insurer by the Association, and these rates shall not be deemed excessive because they contain an amount reasonably calculated to recoup assessments paid by the member insurer.  (Oct. 21, 1993, D.C. Law 10-51,  14, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-3913.
 315514. Immunity from liability. There shall be no liability on the part of, and no cause of action of any nature shall arise against any member insurer, the Association or its agents or employees, the board of directors, or the Mayor or his or her representatives for any action taken or any failure to act by them in the performance of their powers and duties under this chapter.  (Oct. 21, 1993, D.C. Law 10-51,  15, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-3914.
 315515. Stay of proceedings; access to records. (a) All proceedings in which the insolvent insurer is a party or is obligated to defend a party in any court in the District of Columbia shall be stayed for 6 months, and any additional time thereafter as may be determined by the court, from the date the insolvency is determined or an ancillary proceeding is instituted in the District, whichever is later, to permit proper defense by the Association of all pending causes of action. As to any covered claims arising from a judgment under any decision, verdict, or finding based on the default of the insolvent insurer or its failure to defend an insured, the Association, either on its own behalf or on behalf of the insured, may apply to have the judgment, order, decision, verdict, or finding set aside by the same court or administrator that made the judgment, order, decision, verdict, or finding and shall be permitted to defend the claim on the merits. (b) The liquidator, receiver, or statutory successor of an insolvent insurer covered by this chapter shall permit access by the board of directors or its authorized representative, to any of the insolvent insurers records which are necessary for the board of directors in carrying out its functions under this chapter with regard to covered claims. In addition, the liquidator, receiver, or statutory successor shall provide the board of directors, or its representative, with copies of the records upon the request by the board and at the expense of the board.  (Oct. 21, 1993, D.C. Law 10-51,  16, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-3915.
 315601.01. Definitions. For the purposes of this chapter, the term: (1) Accredited investor shall have the same meaning as in section 2(a)(15) of the Securities Act of 1933, approved May 27, 1933 (48 Stat. 74; 15 U.S.C.  77b(a)(15)), or any other person that the Securities and Exchange Commission may so designate by rule, regulation, or order. (1A) Advertisement means a publicly disseminated, written, or printed communication, including by radio, television, Internet, or other public media, used in connection with a sale or purchase, or an offer to sell or purchase, a security. (2) Affiliate of, or a person affiliated with, a specified person, means a person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the person specified. (3)(A) Agent means an individual, other than a broker-dealer, who represents a broker-dealer or issuer in effecting, or attempting to effect, purchases or sales of securities. The term agent shall not include: (i) An individual who represents a broker in effecting transactions in the District of Columbia (District) limited to transactions described in section 15(h)(2) of the Securities Exchange Act of 1934 [15 U.S.C.  78o(h)(2)]; (ii) An individual who represents an issuer in effecting transactions in a security exempted by  31-5604.01(1), (2), (3), (4), (5), (6), (7), (8), (9), or (10); (iii) An individual who represents an issuer in effecting transactions exempted by  31-5604.02; (iv) An individual who represents an issuer in effecting a transaction in a covered security as described in section 18(b)(3) and (b)(4)(D) of the Securities Act of 1933 [15 U.S.C.  77r]; (v) An individual who represents an issuer in effecting transactions with existing employees, partners, or directors of the issuer if no commission or other remuneration is paid or given, directly or indirectly, for soliciting a person in the District; or (vi) A person not within the intent of this paragraph as the Commissioner may, by rule or order, determine. (B) A partner, including a general partner, officer, or director of a broker-dealer or issuer, or a person occupying a similar status or performing similar functions, is an agent only if (i) the person otherwise comes within this definition, and (ii) any compensation that he or she receives is directly or indirectly related to purchases or sales of securities. (4) Broker-dealer means a person engaged in the business of effecting offers, purchases, or sales in securities for the account of others or for his or her own account. The term broker-dealer shall not include: (A) An agent; (B) An issuer, except when effecting purchases, offers, or sales other than with respect to the offer or sale of the issuers own securities; (C) A depository institution to the extent that the depository institution is a bank under section 3(a)(4)(B) and (C) of the Securities Exchange Act of 1934, approved June 6, 1934 (48 Stat. 881; 15 U.S.C.  78c(a)(4)(B) and (C)); or (D) A person who has no place of business in the District if: (i) The person effects, whether acting for itself or as trustee, transactions in the District exclusively with or through the issuers of the securities involved in the transactions; a depository institution; another broker-dealer; an insurance company; an investment company as defined in the Investment Company Act of 1940; a pension or profit-sharing trust; or other financial institution or institutional investor; or (ii) The person is licensed under the securities law of a state in which the person maintains a place of business and the person offers and sells in the District to a person who is an existing customer of the person. (4A) Canadian broker-dealer means a broker-dealer that has its principal office in a province or territory of Canada. (5) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking. (6) Commodity Exchange Act means the Commodity Exchange Act, approved September 21, 1922 (42 Stat. 998; 7 U.S.C.  1 et seq.). (7) Control, including the terms controlling, controlled by, and under common control with, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract, or otherwise. (8) Department means the Department of Insurance, Securities, and Banking. (9)(A) Depository institution means: (i) A person that is organized, chartered, or holds an authorization certificate under the laws of a state or of the United States to receive deposits, including a savings, share, certificate, or deposit account, and that is supervised and examined for the protection of depositors by an official or agency of a state or the United States; and (ii) A trust company or other institution that is authorized by federal or state law to exercise fiduciary powers of the type that a national bank is permitted to exercise under the authority of the Comptroller of the Currency and is supervised and examined by an official or agency of a state or the United States. (B) The term depository institution shall not include an insurance company or other organization primarily engaged in the insurance business or a Morris Plan bank, industrial loan company, or a similar bank or company unless its deposits are insured by a federal agency. (10) Federal covered adviser means a person who is registered, or required to be registered, under section 203 [ 31-5602.03] of the Investment Advisers Act of 1940. The term federal covered adviser shall not include a person who is not an investment adviser as defined under paragraph 17(B)(ii) through (xiii) of this section. (11) Federal covered security means a security which is a covered security under section 18(b) of the Securities Act of 1933 [15 U.S.C.  77r] or the rules and regulations promulgated thereunder. (12) Filed means the actual delivery of a document or application to the Commissioner or designee of the Commissioner or to the principal office of the Commissioner. (13) Financial or institutional investor means any of the following, whether acting for itself or others in a fiduciary capacity: (A) A depository institution; (B) An insurance company; (C) A separate account of an insurance company; (D) An investment company registered under the Investment Company Act of 1940; (E) A business development company as defined in the Investment Company Act of 1940; (F) An employee pension, profit-sharing, or benefit plan if: (i) The plan has total assets in excess of $5 million; or (ii) Its investment decisions are made by a named fiduciary, as defined in the Employee Retirement Income Security Act of 1974, that is either a broker-dealer registered under the Securities Exchange Act of 1934, an investment adviser registered or exempt from registration under the Investment Advisers Act of 1940, a depository institution, or an insurance company; (G) A qualified institutional buyer as defined in SEC Rule 144A, 17 C.F.R.  230.144A; (H) A broker-dealer; (I) An accredited investor as defined in SEC Rule 501(a), 17 C.F.R.  230.501(a); (J) A limited liability company with net assets of at least $500,000. (K) Repealed. (14) Fraud, deceit, and defraud are not limited to common law fraud or deceit. (15) Guaranteed means guaranteed as to payment of all, or substantially all, of principal and interest or dividends. (16) Insured means insured as to payment of all, or substantially all, of principal and interest or dividends. (17)(A) Investment adviser means a person who, for compensation (i) engages in the business of advising others as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or (ii) as a part of a regular business, issues or promulgates analyses or reports concerning securities. The term investment adviser shall include financial planners or other persons who, as an integral component of other financially related services, provide investment advisory services to others for compensation, or as a part of a business, hold themselves out as providing investment advisory services to others for compensation. (B) The term investment adviser shall not include: (i) A federal covered adviser; (ii) An investment adviser representative; (iii) A depository institution or a person employed by, or directly associated with, a depository institution; (iv) A lawyer, accountant, engineer, insurance agent or broker, or teacher whose performance of investment advisory services is solely incidental to the practice of the persons profession; (v) A broker-dealer or agent whose performance of investment advisory services is solely incidental to the conduct of business as a broker-dealer and who receives no special compensation for the investment advisory services; (vi) A publisher, employee, or columnist of a bona fide newspaper, magazine, or business or financial publication or service, whether communicated in printed form, by electronic means, or otherwise, with a regular paid circulation; (vii) A publisher of a securities advisory newsletter, whether communicated in printed form, by electronic means, or otherwise, with a regular paid circulation who does not provide advice to subscribers on the basis of their specific investment situations; (viii) An author of material included in a newspaper, magazine, publication, or newsletter who is not otherwise an investment adviser or investment adviser representative as defined under this section; (ix) A person who provides investment advisory services solely while acting as an investment banker or business broker on behalf of one or more parties to, and in connection with, a transaction or proposed transaction for the transfer of a controlling interest in a business enterprise; (x) An official, employee, or representative of the United States, a state, a political subdivision of a state, or an agency or a corporate or other instrumentality of the United States or a state, while acting in such persons official capacity on behalf of such entity; (xi) A person excluded from the definition of investment adviser under  31-5602.02(a)(11)(A) through (F) of the Investment Advisers Act of 1940; (xii) A licensed real estate broker or salesperson whose advice to clients relates only to the investment in, or acquisition of, real property; and (xiii) Any other person or class of persons not within the intent of this paragraph as the Commissioner, by rule or order, may designate. (18) Investment adviser representative means: (A) With respect to an investment adviser licensed or required to be licensed under this chapter, a partner, officer, director, or person occupying a similar status or performing similar functions, or other individual employed by or associated with an investment adviser, except clerical or administrative personnel, who performs any of the following functions: (i) Makes any recommendations or otherwise renders advice regarding securities; (ii) Manages accounts or portfolios of clients; (iii) Determines which recommendation or advice regarding securities should be given; (iv) Solicits, offers, or negotiates for the sale of, or sells, investment advisory services; or (v) Supervises employees who perform any of the foregoing functions; (B) With respect to a federal covered adviser, an individual employed by, or associated with, a federal covered adviser who is an investment adviser representative and who has a place of business in the District, as those terms are defined by rules promulgated by the Securities and Exchange Commission. (19) Investment Advisers Act of 1940 means the Investment Advisers Act of 1940, approved August 22, 1940 (54 Stat. 847; 15 U.S.C.  80b-1 et seq.). (20) Investment Company Act of 1940 means the Investment Company Act of 1940, approved August 22, 1946 (54 Stat. 789; 15 U.S.C.  80a-1 et seq.). (21) Issuer means a person who issues, or proposes to issue, a security; provided, that with respect to certificates of deposit, voting-trust certificates, collateral-trust certificates, or certificates of interest or shares in an unincorporated investment trust not having a board of directors or persons performing similar functions or of the fixed, restricted management, or unit type, the term issuer means the person performing the acts and assuming the duties of depositor or manager under the provisions of the trust or other agreement or instrument under which the security is issued. (22) Non-issuer transaction means a transaction not directly or indirectly for the benefit of the issuer. (23) Person means an individual, a corporation, a partnership, an association, a joint-stock company, a limited liability company, a trust where the interests of the beneficiaries are evidenced by a security, an unincorporated organization, a government, or a political subdivision of a government. (24) Price amendment means the final federal amendment which includes a statement of: the offering price; underwriting and selling discounts or commissions; amount of proceeds; conversion rates; call prices; and other matters dependent upon the offering price. (25) Promoter includes: (A) A person who, acting alone or in concert with one or more other persons, takes the entrepreneurial initiative in founding or organizing the business or enterprise of an issuer; (B) An officer or director owning securities of an issuer or a person who owns, beneficially or of record, 10% or more of a class of securities of the issuer if the officer, director, or person acquires any of those securities in a transaction within 3 years before the filing by the issuer of a registration statement under this chapter and the transaction does not possess the indicia of arms-length bargaining; and (C) A member of the immediate family of a person identified in subparagraphs (A) or (B) of this paragraph if the family member receives securities of the issuer from that person in a transaction within 3 years before the filing by the issuer of a registration statement under this chapter and the transaction does not possess the indicia of arms-length bargaining. (26) Public Utility Holding Company Act of 1935 means the Public Utility Holding Company Act of 1935, approved August 26, 1935 (49 Stat. 838; 15 U.S.C.  79a et seq.). (27) Sale or sell includes every contract to sell, exchange, or dispose of a security or interest in a security for value. In this context: (A) Offer or offer to sell includes every attempt or offer to dispose of, or solicitation of an offer to buy, a security or interest in a security for value; (B) Offer to purchase includes every attempt or offer to obtain, or solicitation of an offer to sell, a security or interest in a security for value, but the term shall not include a transaction that is subject to section 14(d) of the Securities Exchange Act of 1934 [15 U.S.C.  78n]; (C) A security given or delivered with, or as a bonus on account of, a purchase of securities or any other thing is considered to constitute part of the subject of the purchase and to have been offered and sold for value; (D) A gift of assessable stock is deemed to involve an offer and sale; (E) A sale or offer of a warrant or right to purchase or subscribe to another security of the same or another issuer, or a sale or offer of a security which gives the holder a present or future right or privilege to convert into another security of the same or another issuer, shall be considered to include an offer of the other security; and (F) The terms offer, offer to sell, sale, and sell shall not include: (i) The creation of a security interest or a loan; (ii) A stock dividend, whether the corporation distributing the dividend is the issuer of the stock or not, if nothing of value is given by stockholders for the dividend other than the surrender of a right to a cash or property dividend when each stockholder may elect to take the dividend in cash or property or in stock; (iii) An act incident to a vote by security holders, pursuant to the certificate of incorporation or the applicable corporation statute or other controlling statute, a partnership agreement, or the controlling agreement among security holders, on a merger; triangular merger; exchange of securities for securities; consolidation; reclassification of securities; reorganization; or sale of corporate assets in consideration of the issuance of securities of another person other than an individual; (iv) An act incident to a judicially approved reorganization in which a security is issued in exchange for one or more bona fide outstanding securities, claims, or property interests, or partly in such exchange and partly for cash; or (v) An act as to which the Commissioner finds, by rule or order, that application of this paragraph is not necessary or appropriate for the protection of investors, and the finding is consistent with the public interest and the purposes fairly intended by the policy and provisions of this chapter. (28) Securities Act of 1933 means the Securities Act of 1933, approved May 27, 1933 (48 Stat. 74; 15 U.S.C.  77a et seq.). (29) Securities Exchange Act of 1934 means the Securities Exchange Act of 1934, approved June 6, 1934 (48 Stat. 881; 15 U.S.C.  78a et seq.). (30) Securities and Exchange Commission means the United States Securities and Exchange Commission. (31) Security means any note; stock; treasury stock; bond; debenture; evidence of indebtedness; certificate of interest or participation in a profit-sharing agreement; a limited partnership interest; collateral-trust certificate; preorganization certificate or subscription; transferable share; investment contract; voting-trust certificate; certificate of deposit for a security; fractional undivided interest in an oil, gas, or other mineral lease or in payments out of production under a lease, right, or royalty; a put, call, straddle, or option entered into a national securities exchange relating to foreign currency; a put, call, straddle, or option on a security, certificate of deposit, or group or index of securities, including an interest in or based on the value of any of the foregoing; or an interest or instrument commonly known as a security; or certificate of interest or participation in, temporary or interim certificate for, receipt for, whole or partial guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. The term security shall not include: (A) An insurance or endowment policy or annuity contract under which an insurance company promises to pay a fixed sum of money in a lump sum, periodically for life, or for some other specified period; or (B) An interest in a contributory or non-contributory pension or welfare plan subject to the Employee Retirement Income Security Act of 1974, approved September 2, 1974 (88 Stat. 832; 29 U.S.C.  1001 et seq.). (32) Self-regulatory organization means a national securities exchange registered under section 6 of the Securities Exchange Act of 1934 [15 U.S.C.  78f]; a national securities association of brokers and dealers registered under section 15A of the Securities Exchange Act of 1934 [15 U.S.C.  78o-3]; the Municipal Securities Rulemaking Board established under section 15B(b)(1) of the Securities Exchange Act of 1934 [15 U.S.C.  78o-4]; a clearing agency registered under section 17A of the Securities Exchange Act of 1934 [15 U.S.C.  78q-1]; or a futures association under section 21 of the Commodity Exchange Act [7 U.S.C.  21]. (33) State means a state, territory, or possession of the United States, and Puerto Rico. (34) Underwriter means a person who has purchased from an issuer with a view to, or sells for an issuer in connection with, the distribution of a security; participates, or has a direct or indirect participation in, such undertaking; or participates, or has a participation in, the direct or indirect underwriting of such undertaking. The term underwriter shall not include a person whose interest is limited to a commission from an underwriter or dealer not in excess of the usual and customary distributors or sellers commission. As used in this paragraph, the term issuer shall include a person directly or indirectly controlling, or controlled by, the issuer or a person under direct or indirect common control with the issuer.  (Oct. 26, 2000, D.C. Law 13-203,  101, 47 DCR 7837; June 25, 2002, D.C. Law 14-150,  2(a), 49 DCR 4238; Oct. 19, 2002, D.C. Law 14-213,  22, 49 DCR 8140; June 11, 2004, D.C. Law 15-166,  4(hh), 51 DCR 2817.)  Section References This section is referenced in  29-511,  31-631,  31-3932.02, and  31-5606.05. Effect of Amendments D.C. Law 14-150 rewrote par. (1); added par. (1A); in par. (3)(A)(ii), substituted (8), (9), or (10); for (8) or (9);; in par. (4)(C), substituted to the extent that the depository institution is a bank under section 3(a)(4)(B) and (C) of the Securities Exchange Act of 1934, approved June 6, 1934 (48 Stat. 881; 15 U.S.C.  78c(a)(4)(B) and (C)); or for ; or; in par. (4)(D)(i), substituted financial institution or institutional investor for financial institution or institutional buyer, and made a nonsubstantive change; in par. (4)(D)(ii), deleted and whose residence is not in the District; added par. (4A); in par. (13)(J), made a nonsubstantive change; repealed par. (13)(K); in par. (21), substituted security; provided, that with for security, except that: (A) with, made a nonsubstantive change, and repealed subpar. (B). D.C. Law 14-213, in par. (31)(A), inserted a comma following lump sum. D.C. Law 15-166, in pars. (5) and (8), substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities Regulation. Emergency Legislation For temporary (90 day) amendment of section, see  4(hh) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
 315601.02. Purpose and coordination with federal law. (a) The purpose of this chapter is to protect investors and maintain public confidence in securities markets while avoiding unreasonable burdens on participants in capital markets. This chapter is remedial in nature and is to be broadly construed to effectuate its purposes. (b) This chapter and the rules and regulations promulgated hereunder shall be coordinated with the federal acts and statutes to which references are made in this chapter and the rules and regulations promulgated under those federal acts and statutes to the extent that coordination is consistent with both the purposes and the provisions of this chapter.  (Oct. 26, 2000, D.C. Law 13-203,  102, 47 DCR 7837.)  Section References This section is referenced in  31-5604.06.
 315602.01. Licensing of broker-dealer and agent. (a) No person shall transact business in the District of Columbia (District) as a broker-dealer or agent unless the person is licensed or exempt from licensure under this chapter. (b) No broker-dealer or issuer shall employ an agent to represent the broker-dealer or issuer unless the agent is licensed or exempt from licensure under this chapter. The license of an agent shall not be effective during any period when the agent is not associated with a specified broker-dealer licensed under this chapter or with a specified issuer. (c) No agent shall at any time represent more than one broker-dealer or issuer without the written consent of each broker-dealer or issuer. If an agent begins or terminates an association with a broker-dealer or issuer, or begins or terminates those activities which make the person an agent, the agent and the broker-dealer or issuer shall promptly notify the Commissioner. (d) Unless sooner terminated under this chapter or renewed, the license of a broker-dealer or agent shall expire on December 31. (e) No broker-dealer licensed under this chapter shall transact business in the District unless it registers at least one agent with the Department.  (Oct. 26, 2000, D.C. Law 13-203,  201, 47 DCR 7837.)  Section References This section is referenced in  31-5605.01,  31-5606.05, and  31-5608.01.
 315602.02. Licensing of investment adviser and investment adviser representative. (a) No person shall transact business in the District as an investment adviser or as an investment adviser representative unless the person is licensed, or exempt from licensure, under this chapter, or the person has no place of business in the District, and: (1) The persons only clients in the District are other investment advisers, federal covered advisers, broker-dealers, investment companies as defined in the Investment Company Act of 1940, depository institutions, insurance companies, employee benefit plans with assets of not less than $1 million, governmental agencies or instrumentalities (whether acting for themselves or as trustees with investment control), or other institutional investors as are designated by rule or order of the Commissioner; or (2) During the preceding 12 months, the person has had no more than 5 clients who are residents of the District and are not the types of clients described in paragraph (1) of this subsection. (b) No person shall: (1) In the case of a licensed investment adviser, employ an investment adviser representative unless the investment adviser representative is licensed under this chapter; provided, that the license of an investment adviser representative shall not be effective during any period when the investment adviser representative is not employed by a licensed investment adviser; or (2) In the case of a federal covered adviser, employ, supervise, or associate with an investment adviser representative having a place of business located in the District unless the investment adviser representative is licensed under this chapter or is exempt from licensure. (c) When an investment adviser representative begins or terminates employment with a licensed investment adviser or federal covered adviser, the investment adviser or the investment adviser representative shall promptly notify the Commissioner. (d) Except for advisers whose only clients are those described in subsection (a) of this section, a federal covered adviser shall not conduct advisory business in the District unless the federal covered adviser complies with  31-5602.03(e). (e) Unless sooner terminated under this chapter or renewed, the license of an investment adviser and investment adviser representative, and the notice filing of each federal covered adviser, shall expire on December 31. (f) No investment adviser representative may be registered with more than one investment adviser unless the investment advisers which employ or associate with the investment adviser representative are under common ownership or control.  (Oct. 26, 2000, D.C. Law 13-203,  202, 47 DCR 7837.)  Section References This section is referenced in  31-5601.01,  31-5602.03,  31-5604.02,  31-5605.01, and  31-5606.05.
 315602.03. License and notice filing procedure. (a) A broker-dealer, agent, investment adviser, or investment adviser representative may obtain an initial or renewal license by filing with the Commissioner an application and the consent to service of process required under  31-5607.06. The application shall contain whatever information the Commissioner may, by rule, require, including: (1) The applicants form and place of organization; (2) The applicants proposed method of doing business; (3) The qualifications and business history of the applicant, and in the case of a broker-dealer or investment adviser, the qualifications and business history of any partner, officer, or director; any person occupying a similar status or performing similar functions; or any person directly or indirectly controlling the broker-dealer or investment adviser; (4) Any injunction or administrative order or conviction of a misdemeanor involving a security or any aspect of the securities business and any conviction of a felony; (5) The applicants financial condition and history for 10 years; and (6) If the applicant is an investment adviser, any information to be furnished or disseminated to a client or prospective client. (b) If no denial order is in effect and no proceeding is pending under  31-5602.07, the license shall become effective no later than noon on the 30th day after the application is filed. If the application is incomplete, the Commissioner may request additional information from the applicant and delay the effective date for 30 days from the date of receipt of the requested information. The Commissioner shall consider the application withdrawn if the requested information is not received by noon on the 90th day after the request. (c) The licensing of a broker-dealer shall constitute the licensing of any agent who is a partner, officer, or director, or a person occupying a similar status or performing similar functions. The licensing of an investment adviser shall constitute the licensing of any investment adviser representative who is a partner, officer, or director, or a person occupying a similar status or performing similar functions. (d)(1) Except for a federal covered adviser whose only clients are those described in  31-5602.02(a), a person shall not transact business as a federal covered adviser unless the person has made a notice filing with the Commissioner, which filing shall consist of: (A) A copy of those documents that have been filed with the Securities and Exchange Commission that the Commissioner may, by rule or order, require; (B) The consent to service of process required under  31-5607.06; and (C) A fee that the Commissioner may, by rule, prescribe. (2) A notice filing shall be effective from the date of its receipt by the Commissioner until the following December 31st and may be renewed by filing with the Commissioner those documents that have been filed with the Securities and Exchange Commission that the Commissioner requires, by rule or order and a fee to be established by the Commissioner. (3) The Commissioner may, by rule or order, require a federal covered adviser who has made a notice filing under this section to file with the Commissioner copies of any amendments to documents filed with the Securities and Exchange Commission. (4) A notice filing may be terminated by a filing notice of termination with the Commissioner. A notice of termination shall be effective upon receipt by the Commissioner. (e)(1) An applicant for an initial or renewal license as a broker-dealer or agent shall pay a license filing fee as the Commissioner may, by rule, require. The applicant shall not be entitled to a refund of the fee in the event of a withdrawal or denial of the application or the failure to provide additional information requested by the Commissioner. (2) An applicant for an initial or renewal as an investment adviser or an investment adviser representative who is required to obtain a license shall pay a license filing fee as the Commissioner may, by rule, require. The applicant shall not be entitled to a refund of the fee in the event of a withdrawal or denial of the application or the failure to provide additional information requested by the Commissioner. (3) A person acting as a federal covered adviser in the District, except a federal covered adviser whose only clients are those described in  31-5602.02(a), shall pay an initial and renewal notice filing fee as the Commissioner may, by rule, require. (f) The Commissioner may, by rule or order, require a minimum net capital for a licensed broker-dealer, subject to the limitations of section 15 of the Securities Exchange Act of 1934 [15 U.S.C.  78o], and establish minimum financial requirements for an investment adviser, subject to the limitations of section 222 of the Investment Advisers Act of 1940 [15 U.S.C.  80b-18a]. The Commissioner may prescribe different requirements for those investment advisers who maintain custody of clients funds or securities or have discretionary authority over these funds or securities and those investment advisers who do not have such custody or authority. (g)(1) The Commissioner may, by rule or order: (A) Require a licensed broker-dealer or agent, or a licensed investment adviser or representative who has custody of or discretionary authority over client funds or securities, to post a surety bond or deposit cash or any other equivalent form of security in such amounts as the Commissioner may require, subject to the limitations of section 15 of the Securities Exchange Act of 1934 [15 U.S.C.  78o] in the case of a broker-dealer, and section 222 of the Investment Advisers Act of 1940 [15 U.S.C.  80b-18a] in the case of an investment adviser; and (B) Determine the conditions of such bond or equivalent security. (2) A surety bond or equivalent form of security shall provide that: (A) No action may be maintained to enforce a liability on the bond or equivalent form of security unless brought within 2 years after the contract of sale or other act on which the action is based; and (B) The liability of the surety on the bond or equivalent form of security to all persons aggrieved shall not exceed, in the aggregate, the penal sum of the bond.  (Oct. 26, 2000, D.C. Law 13-203,  203, 47 DCR 7837.)  Section References This section is referenced in  31-5601.01,  31-5602.02, and  31-5606.05.
 315602.04. Post-licensing requirements. (a)(1) A licensed broker-dealer shall make and keep such accounts, correspondence, memoranda, papers, books, and other records as the Commissioner may, by rule, require. (2) The authority of the Commissioner to adopt rules under paragraph (1) of this subsection shall be subject to the limitations of section 15 of the Securities Exchange Act 1934 [15 U.S.C.  78o]. (3) A licensed investment adviser shall make and keep such accounts, correspondence, memoranda, papers, books, and other records as the Commissioner may by rule require. (4) The authority of the Commissioner to adopt rules under paragraph (3) of this subsection shall be subject to the limitations of section 222 of the Investment Advisers Act of 1940 [15 U.S.C.  80b-18a]. (b)(1) With respect to investment advisers, the Commissioner may, by rule or order, require that certain information be furnished or disseminated as appropriate in the public interest or for the protection of investors and advisory clients. (2) Information furnished to clients or prospective clients of a licensed investment adviser that complies with the Investment Advisers Act of 1940 and the rules promulgated under that Act may be used in whole or partial satisfaction of the requirement in paragraph (1) of this subsection. (c) A licensed broker-dealer or investment adviser shall file such financial reports as the Commissioner may, by rule or order, prescribe, except as provided by section 15 of the Securities Exchange Act 1934 [15 U.S.C.  78o] in the case of a broker-dealer and section 222 of the Investment Advisers Act of 1940 [15 U.S.C.  80b-18a] in the case of an investment adviser. (d) If the information contained in any document filed with the Commissioner is, or becomes, inaccurate or incomplete in any material respect, a licensed broker-dealer or investment adviser shall promptly file a correcting amendment with the Commissioner, and a federal covered adviser shall file a correcting amendment when required to do so with the Securities and Exchange Commission.  (Oct. 26, 2000, D.C. Law 13-203,  204, 47 DCR 7837.)  Section References This section is referenced in  31-5607.03.
 315602.05. Licensing of successor firms. (a) A licensed broker-dealer or investment adviser or federal covered adviser shall file an application for the license or a notice filing, as applicable, of a successor, whether or not the successor is then in existence. There shall be no fee for the license or notice filing of the successor. (b) If a broker-dealer or investment adviser succeeds to, and continues the business of, a licensed broker-dealer or investment adviser, or a federal covered adviser succeeds to and continues the business of, a federal covered adviser who has made a notice filing, and the successor files an application for a license or a notice filing, as applicable, within 30 days after the succession, the license or notice filing of the predecessor remains effective as the license or notice filing of the successor for 60 days after the succession. (c) The licensing of a licensed agent of the broker-dealer filing an application under subsections (a) or (b) of this section continues without a separate filing or fee upon the licensing of the successor.  (Oct. 26, 2000, D.C. Law 13-203,  205, 47 DCR 7837.) 
 315602.06. Power of inspection, examination and audit. (a) The Commissioner may, in a manner reasonable under the circumstances, examine, audit, or inspect the books and records, within or without the District, of a licensed broker-dealer, agent, investment adviser, or investment adviser representative as the Commissioner considers necessary or appropriate in the public interest or for the protection of investors or to determine compliance with this chapter. All licensed broker-dealers, agents, and investment advisers shall make their books and records available to the Commissioner in legible form. (b) The Commissioner may copy records, or require a licensed person to copy records and provide the copies to the Commissioner, to the extent and in a manner reasonable under the circumstances. (c) The Commissioner may impose a reasonable fee for the expense of conducting an examination, inspection, or audit under this section. (d) For the purpose of avoiding unnecessary duplication of examinations, the Commissioner may cooperate with the securities administrators of other states, the Securities and Exchange Commission, or any self-regulatory organization.  (Oct. 26, 2000, D.C. Law 13-203,  206, 47 DCR 7837.) 
 315602.07. Grounds for denial, suspension, or revocation. (a) The Commissioner may, by order, deny, suspend, or revoke a license if the Commissioner finds that the order is in the public interest and the applicant or licensed person or, in the case of a broker-dealer or investment adviser, a partner, officer, or director, or a person occupying a similar status or performing similar functions, or a person directly or indirectly controlling the broker-dealer or investment adviser: (1) Has filed an application for licensure with the Commissioner which, as of its effective date, or as of any date after filing in the case of an order denying effectiveness, was incomplete in any material respect or contained a statement that was, in light of the circumstances under which it was made, false or misleading with respect to any material fact; (2) Has violated or failed to comply with this chapter, the District of Columbia Securities Act, approved August 30, 1964 (78 Stat. 620;  3-3601 et seq.) (1964 Act), the Investment Advisers Act of 1992, effective March 17, 1993 (D.C. Law 9-216;  3-3701 et seq.) (1992 Act), or any insurance law in the District, or a rule or order promulgated under this chapter, the 1964 Act, the 1992 Act, or any insurance law in the District; (3) Has been convicted within the past 10 years of a felony or of an offense that: (A) Involves making a false statement under oath, making a false report, bribery, perjury, theft, or attempt or conspiracy to commit any of these offenses; (B) Arises out of the conduct of business as, employment by, or association with, a broker-dealer, investment adviser, depository institution, insurer, agency, fiduciary, accountant, real estate broker, or an entity or person required to be registered under the Commodity Exchange Act; or (C) Involves larceny, theft, robbery, extortion, forgery, counterfeiting, fraudulent concealment, embezzlement, fraudulent conversion, misappropriation of funds or securities, or an attempt or conspiracy to commit any of these offenses; (4) Is permanently or temporarily enjoined by a court of competent jurisdiction from engaging in or continuing any conduct or practice (A) as an investment adviser, underwriter, broker-dealer, or as an affiliated person or employee of an investment company, depository institution, or insurance company, or from (B) in connection with any of the foregoing activities or any aspect of the securities business; (5) Is the subject of an order of the Commissioner denying, suspending, or revoking the persons license as a broker-dealer, agent, investment adviser, or investment adviser representative; (6) Is the subject of an order entered within the past 10 years by a securities administrator or any other financial services regulator of another state, by the Securities and Exchange Commission, or by the National Association of Securities Dealers, suspending, denying or revoking the license or registration as a broker-dealer, investment adviser, investment adviser representative, or agent, or the substantial equivalent of these terms as defined in this chapter, or any other financial services license or registration; (7) Is the subject of an order by the Commodity Futures Trading Commission denying, suspending, or revoking registration under the Commodity Exchange Act; is the subject of a United States Postal Service fraud order; or is suspended or expelled from membership in, or association with a member of, a self-regulatory organization; (8) Is the subject of an order of a court of competent jurisdiction finding that the person has willfully violated the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, the Investment Company Act of 1940, the Commodity Exchange Act, or the securities or insurance law of another state, but only if the act constituting the violation of that states law would violate this chapter if the act occurred in the District; (9) Has engaged in an unethical or dishonest practice in the securities business as the Commissioner may, by rule, define; (10) Never had or has failed to maintain the minimum net capital required by SEC Rule 15c3-1, 17 C.F.R.  240.15c3-1. (11) Is determined by the Commissioner, in accordance with  31-5602.08, not to be qualified because of lack of training, experience, knowledge of the securities or insurance business, or failure to comply with the continuing education requirements established by the New York Stock Exchange, other self-regulatory agency, or National Association of Securities Dealers; (12) Has failed reasonably to supervise a sales representative or employee; (13) Has failed to pay the proper filing fee within 30 days after being notified by the Commissioner of a deficiency; provided, that the Commissioner shall vacate an order under this paragraph when the deficiency is corrected; or (14) In the conduct of his or her affairs under the license, the licensee has shown himself or herself to be incompetent, untrustworthy, or financially irresponsible. (b) The Commissioner shall not begin a proceeding to revoke or suspend a license under this section on the basis of a fact or transaction known to the Commissioner when the license became effective unless the proceeding is begun within 90 days after the license became effective. (c) If the Commissioner finds that an applicant or licensed person is no longer in existence, has ceased to do business as a broker-dealer, agent, investment adviser, or investment adviser representative, is adjudicated mentally incompetent or subjected to the control of a committee, conservator, or guardian, or cannot be located after reasonable search, the Commissioner may, by order, deny the application or revoke the license.  (Oct. 26, 2000, D.C. Law 13-203,  207, 47 DCR 7837; June 25, 2002, D.C. Law 14-150,  2(b), 49 DCR 4238.)  Section References This section is referenced in  31-5602.03,  31-5602.09, and  31-5602.10. Effect of Amendments D.C. Law 14-150, in subsec. (a)(11), substituted established by the New York Stock Exchange, other self-regulatory agency, or for established by the; and rewrote subsec. (a)(10) which had read as follows: (10) Is insolvent, either because liabilities exceed assets or because obligations cannot be met as they mature, but the Commissioner may not enter an order against a broker-dealer or investment adviser under this paragraph without a finding of insolvency as to the broker-dealer or investment adviser;
 315602.08. Denial, suspension, or revocation on grounds of lack of qualification. A determination by the Commissioner that an applicant or licensed person lacks qualification shall be made subject to the following limitations and considerations: (1) The Commissioner may not enter an order against a broker-dealer on the basis of the lack of qualification of a person other than the broker-dealer if the broker-dealer is an individual. (2) The Commissioner may not enter an order against an investment adviser on the basis of the lack of qualification of a person other than the investment adviser if the investment adviser is an individual. (3) The Commissioner may not enter an order solely because of lack of experience of the applicant or licensed person if the applicant or licensed person is qualified by training or knowledge. (4) An agent who will work under the supervision of a licensed broker-dealer need not have the same qualifications as a broker-dealer and an investment adviser representative who will work under the supervision of a licensed investment adviser need not have the same qualifications as an investment adviser. (5) An investment adviser is not qualified solely on the basis of experience as a broker-dealer or agent. If the Commissioner finds an applicant for initial or renewal licensure as a broker-dealer is not qualified as an investment adviser, the Commissioner may, by order, condition the applicants licensure as a broker-dealer upon the broker-dealer not transacting business in the District as an investment adviser. (6) The Commissioner may, by rule, provide for an examination, which may be written, oral, or both, to be taken by any class of, or all, applicants. The Commissioner may, by rule or order, waive the examination requirement as to a person or class of persons if the Commissioner determines that the examination is not necessary or appropriate in the public interest or for the protection of investors.  (Oct. 26, 2000, D.C. Law 13-203,  208, 47 DCR 7837.)  Section References This section is referenced in  31-5602.07.
 315602.09. Withdrawal. (a) Withdrawal from licensing as a broker-dealer, agent, investment adviser, or investment adviser representative shall be effective 30 days after the receipt by the Commissioner of an application to withdraw or within any shorter period the Commissioner, by order, determines, unless: (1) A revocation or suspension proceeding is pending when the withdrawal application is filed; or (2) A proceeding to revoke or suspend or to impose conditions upon the withdrawal is instituted within 30 days after the withdrawal application is filed. (b) If a proceeding is pending or instituted, the withdrawal shall be effective at the time and upon the conditions that the Commissioner, by order, determines. If no proceeding is pending or instituted and the withdrawal becomes effective, the Commissioner may institute a proceeding under  31-5602.07 within one year after the withdrawal became effective and enter an order as of the last date on which the license was effective.  (Oct. 26, 2000, D.C. Law 13-203,  209, 47 DCR 7837.) 
 315602.10. Limited registration of Canadian broker-dealers and agents. (a) A Canadian broker-dealer may be licensed under this section if the broker-dealer: (1) Has its principal office located in a province or territory of Canada that provides at least equivalent registration for a broker-dealer that is resident in the United States; (2) Is resident in Canada and does not have an office or physical presence in the United States; (3) Files an application in the form required by the jurisdiction in which the broker-dealer has its principal office; (4) Files a written consent to service of process under  31-5607.06; (5) Is registered as a broker or dealer in good standing in the jurisdiction from which the broker-dealer is effecting transactions in the District and files evidence of the registration; and (6) Is a member of a self-regulating organization or stock exchange in Canada. (b) An agent may be licensed under this section if the agent represents a Canadian broker-dealer that is licensed under this section, and the agent: (1) Files an application in the form required by the jurisdiction in which the broker-dealer has its principal office; (2) Files a written consent to service of process under section  31-5607.06; and (3) Is registered and files evidence of good standing in the jurisdiction from which the agent is effecting transactions into the District. (c) If no denial order is in effect and no proceeding is pending under  31-5602.07, the license shall become effective no later than noon on the 30th day after an application is filed. If the application is incomplete, the Commissioner may request additional information from the applicant and delay the effective date for 30 days from the date of receipt of the request for information. (d)(1) A broker-dealer licensed under this section may effect transactions in securities with or for or induce or attempt to induce the purchase or sale of a security by a person from Canada who is: (A) Temporarily resident in the District and with whom the Canadian broker-dealer had a bona fide broker-dealer-client relationship before the person entered the United States; or (B) A resident in the District and whose transactions are in a self- directed tax-advantaged retirement plan in Canada of which the person is the holder or contributor. (2) A Canadian broker-dealer or agent licensed under this section shall not effect transactions in the District unless it is: (A) Authorized in paragraph (1) of this subsection; (B) With or through: (i) The issuers of the securities involved in the transactions; (ii) Other broker-dealers; or (iii) Banks, savings institutions, trust companies, insurance companies, investment companies as defined in the Investment Company Act of 1940, approved August 22, 1946 (54 Stat. 789; 15 U.S.C.  80a-1 et seq.), pension or profit-sharing trusts, or other financial institutions or institutional investor, whether acting for themselves or as trustees; or (C) As otherwise permitted by the Commissioner in any rule or order. (e) An agent licensed under this section may effect transactions in securities in the District of Columbia as permitted for the Canadian broker-dealer licensed under this section. (f) A Canadian broker-dealer licensed under this section shall: (1) Maintain provincial or territorial registration and membership in good standing in a self-regulating organization or stock exchange; (2) Provide the Commissioner on request with books and records relating to its business in the District as a broker-dealer; (3) Inform the Commissioner promptly of any criminal action taken against the broker-dealer or of any finding or sanction imposed on the broker-dealer as a result of regulatory action, including that of a self-regulating organization, involving fraud, theft, deceit, misrepresentation, or similar conduct; and (4) Disclose to its clients in the District that the broker-dealer and its agents are not subject to the full regulatory requirements of the District. (g) An agent of a Canadian broker-dealer licensed under this section shall: (1) Maintain provincial or territorial registration in good standing; and (2) Inform the Commissioner promptly of any criminal action taken against the agent or of any finding or sanction imposed on the broker-dealer or agent as a result of regulatory action, including that of a self-regulating organization, involving fraud, theft, deceit, misrepresentation, or similar conduct. (h) Renewal applications for Canadian broker-dealers and agents under this section shall be filed annually before December 1 and may be made by filing the most recent renewal application, if any, filed in the jurisdiction in which the broker-dealer has its principal office or, if a renewal application is not required, the most recent application filed under subsection (a)(1) or (b)(1) of this section. (i) An applicant for an initial license or renewal under this section shall pay the fee for broker-dealers and agents required by rules issued by the Commissioner. (j) A Canadian broker-dealer or agent licensed under this section and acting in accordance with the limitations in subsection (d) or (e) of this section shall be exempt from all of the requirements of this chapter, except the provisions of subchapters V and VI.  (Oct. 26, 2000, D.C. Law 13-203,  210; as added June 25, 2002, D.C. Law 14-150,  2(c), 49 DCR 4238.) 
 315602.11. Continuing education. The Commissioner may, by rule or order, establish continuing education requirements for investment adviser representatives.  (Oct. 26, 2000, D.C. Law 13-203,  211; as added June 25, 2002, D.C. Law 14-150,  2(d), 49 DCR 4238.) 
 315603.01. Registration requirement. No person shall offer or sell a security in the District unless the security is registered under this chapter, the security or transaction is exempt under  31-5604.01 or  31-5604.02, or the security is a federal covered security.  (Oct. 26, 2000, D.C. Law 13-203,  301, 47 DCR 7837.)  Section References This section is referenced in  31-5603.08,  31-5604.01,  31-5604.02,  31-5604.03,  31-5604.04,  31-5605.01,  31-5606.05, and  31-5608.01. Editor's Notes Section 806 of D.C. Law 13-203 provided: Titles III and IV shall apply as of June 1, 2001.
 315603.02. Registration by notification. (a) The following securities may be registered by notification, whether or not the securities are also eligible for registration by coordination under  31-5603.03: (1) A security whose issuer, and any predecessor (by merger, consolidation or acquisition of assets), has been in continuous operation for at least 5 years if: (A) There has been no default within the past 3 calendar years in the payment of principal, interest, or dividends on any security of the issuer with a fixed maturity or a fixed interest or dividend provision; and (B) The issuer and any predecessor during the past 3 calendar years have had average net earnings, determined in accordance with generally accepted accounting principles, which: (i) Are applicable to all securities without a fixed maturity or a fixed interest or dividend provision outstanding on the date that the registration statement is filed and equal at least 5% of the amount of these outstanding securities, as measured by the maximum cash offering price or the market price on a day selected by the registrant, within 30 days before the date of filing the registration statement, whichever is higher, or book value, on a day selected by the registrant within 90 days of the date of filing the registration statement, to the extent that there is not a readily determinable market price or a cash offering price; or (ii) If the issuer and any predecessor has not had a security of the type specified in sub-subparagraph (i) of this subparagraph outstanding for 3 full calendar years, equal at least 5% of the amount, as measured in sub-subparagraph (i) of this subparagraph, of all securities which will be outstanding if all the securities being offered or proposed to be offered, whether or not they are proposed to be registered or offered in the District, are issued; and (2) A security, other than a certificate of interest or participation in an oil, gas, or mining title or lease or in payments out of production under such a title or lease, registered for nonissuer distribution if: (A) A security of the same class has ever been registered under this chapter; or (B) The security being registered was originally issued pursuant to an exemption under this chapter. (b) In addition to the information specified in  31-5603.06(c) and the consent to service of process required under  31-5607.06, a registration statement under this section shall contain the following information and be accompanied by the following documents,: (1) A statement demonstrating eligibility for registration by notification; (2) With respect to the issuer and any significant subsidiary: (A) The name, address, and form of organization; (B) The state or jurisdiction of its organization and the date of its organization; and (C) The general character and location of its business; (3) With respect to a person on whose behalf a part of the offering is to be made in a non-issuer distribution: (A) The persons name and address; (B) The amount of the issuers securities held by the person as of the date of the filing of the registration statement; and (C) A statement of the persons reasons for making the offering; (4) A description of the security being registered; (5) The information and documents specified in  31-5603.04(b)(2), (4), (7), (8), (9), (10), and (12); (6) A balance sheet of the issuer as of a date within 4 months before the filing of the registration statement; (7) A summary of earnings: (A) For each of the 2 calendar years preceding the date of the balance sheet and for any period between the close of the last calendar year and the date of the balance sheet; or (B) For the period of existence of the issuer and any predecessor, if less than 2 years; and (8) Two copies of the prospectus required by subsection (c) of this section. (c)(1) As a condition of registration under this section, a prospectus containing any designated part of the information specified in subsection (b) of this section shall be sent or given to each person to whom an offer is made before or concurrently with the first to occur of: (A) The first written offer to the person, other than by means of a public advertisement, by or for the account of the issuer or any other person on whose behalf the offering is being made, or by any underwriter or broker-dealer who is offering part of an unsold allotment or subscription taken by the underwriter or broker-dealer as a participant in the distribution; (B) The confirmation of a sale made by or for the account of the person; (C) Payment under the sale; or (D) Delivery of the security under the sale. (2) Paragraph (1)(A) of this subsection may be satisfied by the use of a preliminary prospectus, so designated and bearing the legend which the Commissioner prescribes, if a final prospectus is sent or given to each recipient of the preliminary prospectus before or concurrently with whichever event in paragraph (1)(B), (C), and (D) first occurs. (d) If a stop order is not in effect and a proceeding is not pending under  31-5603.06, a registration statement under this section shall become effective at: (1) Three oclock p.m. eastern standard time or eastern daylight savings time, as applicable, of the 10th full business day after the filing of the registration statement or the last amendment; or (2) At any earlier time which the Commissioner determines by rule or order.  (Oct. 26, 2000, D.C. Law 13-203,  302, 47 DCR 7837; June 25, 2002, D.C. Law 14-150,  2(e), 49 DCR 4238.)  Section References This section is referenced in  31-5603.06,  31-5604.01,  31-5604.02, and  31-5605.01. Effect of Amendments D.C. Law 14-150, in subsec. (b), substituted 31-5603.06(c) for 31-5603.05(c).
 315603.03. Registration by coordination. (a) A security for which a registration statement has been filed under the Securities Act of 1933 in connection with the offering of the security may be registered by coordination. (b) In addition to the information specified in  31-5603.06(c) and the consent to service of process required under  31-5607.06, a registration statement under this section shall contain the following information and be accompanied by the following documents: (1) Two copies of the latest prospectus or offering circular filed under the Securities Act of 1933; (2) If the Commissioner, by rule or order, requires: (A) A copy of the articles of incorporation and by-laws, or their substantial equivalents, as currently in effect; (B) A copy of any agreement with or among underwriters; (C) A copy of any indenture or other instrument governing the issuance of the security to be registered; and (D) A specimen, copy, or description of the security; (3) If the Commissioner requests, any other information or copies of any document filed under the Securities Act of 1933; and (4) An undertaking to forward all future amendments to the federal prospectus, other than an amendment which merely delays the effective date of the registration statement, promptly and not later than the first business day after the day on which they are forwarded to or filed with the Securities and Exchange Commission, whichever occurs first. (c) A registration statement under this section shall become effective at the time that the federal registration statement becomes effective if all of the following conditions are satisfied: (1) A stop order is not in effect and a proceeding is not pending under  31-5603.06; (2) The registration statement has been on file with the Commissioner for at least 10 business days; and (3) A statement of the maximum and minimum proposed offering prices and the maximum underwriting discounts and commissions has been on file for 2 full business days, or any shorter period which the Commissioner permits by rule or otherwise, and the offering is made within those limitations. (d) The registrant shall promptly notify the Commissioner, in writing, facsimile transmission, or other means considered acceptable by the Commissioner, of the date and time when the federal registration statement became effective and the content of the price amendment, if any, and shall promptly file a post-effective amendment containing the information and documents in the price amendment. (e) Upon failure to receive the required notification and post-effective amendment with respect to the price amendment, the Commissioner may enter a stop order, without notice or hearing, retroactively the denying the effectiveness of the registration statement or suspending its effectiveness until there is compliance with subsection (d) of this section if the Commissioner promptly notifies the registrant by telephone or otherwise, and promptly confirms by letter, facsimile transmission, or otherwise if the Commissioner notifies by telephone, of the issuance of the order. If the registrant proves compliance with the requirements of subsection (d) of this section as to notice and post-effective amendment, the stop order shall be void as of the time of its entry. (f) The Commissioner may, by rule or otherwise, waive either or both of the conditions specified in subsection (c)(2) or (3) of this section. (g) If the federal registration statement becomes effective before all of the conditions in subsection (c) of this section are satisfied and they are not waived, the registration statement shall become effective when all the conditions are satisfied. If the registrant advises the Commissioner of the date when the federal registration statement is expected to become effective, the Commissioner shall promptly advise the registrant by telephone, facsimile, or otherwise, at the registrants expense, whether all of the conditions are satisfied and whether the Commissioner then contemplates the institution of a proceeding under  31-5603.06. This advice by the Commissioner shall not preclude the institution of a proceeding for a stop order suspending the effectiveness of the registration statement. (h) The Commissioner may, by rule or order, waive or modify the application of a requirement of this section if a provision, or an amendment, repeal, or other alteration of the securities registration provisions, of the Securities Act of 1933, or the regulations adopted thereunder, render the waiver or modification appropriate for further coordination of District and federal law.  (Oct. 26, 2000, D.C. Law 13-203,  303, 47 DCR 7837; June 25, 2002, D.C. Law 14-150,  2(f), 49 DCR 4238.)  Section References This section is referenced in  31-5603.02,  31-5603.05,  31-5603.06,  31-5603.07,  31-5604.01,  31-5605.01, and  31-5607.08. Effect of Amendments D.C. Law 14-150, in subsec. (b), substituted 31-5603.06(c) for 31-5603.05(c).
 315603.04. Registration by qualification. (a) A security may be registered by qualification. (b) In addition to the information specified in  31-5603.06(c) and the consent to service of process required under  31-5607.06, a registration statement under this section shall contain the following information and be accompanied by the following documents: (1) With respect to the issuer and any significant subsidiary: (A) The name, address, and form of its organization; (B) The state or foreign jurisdiction and date of its organization; (C) The general character and location of its business; (D) A description of its physical properties and equipment; (E) A statement of the general competitive conditions in the industry or business in which it is or will be engaged; and (F) Certified copies of its articles of incorporation; (2) With respect to every director and officer of the issuer, or person occupying a similar status or performing similar functions: (A) The name, address, and principal occupation for the past 5 years; (B) The amount of securities of the issuer held by the person as of a specified date within 30 days of the filing of the registration statement; (C) The amount of the securities covered by the registration statement to which the person has indicated an intention to subscribe; and (D) A description of any material interest in any material transaction that the person has effected, or proposed to effect, with the issuer or any significant subsidiary of the issuer within the past 3 years; (3) With respect to persons covered under paragraph (2) of this subsection, the remuneration paid during the past 12 months and estimated to be paid during the next 12 months, directly or indirectly, by the issuer, including all its predecessors, parents, subsidiaries, and affiliates, to all these persons in the aggregate; (4) With respect to a person owning of record, or beneficially if known, 10% or more of the outstanding shares of any class of equity security of the issuer, the information specified in paragraph (2) of this subsection other than the persons occupation; (5) With respect to every promoter if the issuer was organized within the past 3 years, the information specified in paragraph (2) of this subsection, any amount paid, or intended to be paid, to the promoter within the 3-year period or intended to be paid to the promoter and a description of the services or other consideration provided in return for the payment; (6) With respect to a person on whose behalf a part of the offering is to be made in a non-issuer distribution: (A) The persons name and address; (B) The amount of securities of the issuer held by the person as of the date of the filing of the registration statement; (C) A description of any material interest in any material transaction that the person has effected, or proposed to effect, with the issuer or any significant subsidiary of the subsidiary within the past 3 years; and (D) A statement of the persons reasons for making the offering; (7)(A) The capitalization and long-term debt, on both a current and pro forma basis, of the issuer and any significant subsidiary, including a description of each security outstanding or being registered or otherwise offered; and (B) A statement of the amount and kind of consideration, whether in the form of cash, physical assets, services, patents, goodwill, or anything else, for which the issuer or any subsidiary has issued any of its securities within the past 2 years or is obligated to issue any of its securities; (8)(A) The amount and kind of securities to be offered; the proposed offering price or method by which it shall be computed, and any variation from the offering price at which a proportion of the offering is to be made to a person or class of persons other than the underwriters, with a specification of the person or class; and the basis upon which the offering is to be made if otherwise than for cash; (B) The estimated aggregate underwriting and selling discounts or commissions and finders fees, separately stating the amount of cash, securities, contracts, or anything else of value to accrue to the underwriters or finders in connection with the offering, or, if the selling discounts or commissions are variable, the basis of determining them and their maximum and minimum amounts; (C) The estimated amounts of other selling expenses, including legal, engineering, and accounting charges, the name and address of every underwriter and every recipient of a finders fee, and a copy of any underwriting or selling group agreement under which the distribution is to be made or the proposed form of the agreement whose terms have not yet been determined; and (D) A description of the plan of distribution of securities which are to be offered otherwise than through an underwriter; (9)(A) The estimated cash proceeds to be received by the issuer from the offering, the purposes for which the proceeds are to be used by the issuer, and the amount to be used for each purpose; (B) The order or priority in which the proceeds will be used for the purposes stated, the amounts of any funds to be raised from other sources to achieve the purposes stated, and the sources of such funds; and (C) If any part of the proceeds is to be used to acquire property, including goodwill, otherwise than in the ordinary course of business: (i) The names and addresses of the vendors; (ii) The purchase price; (iii) The names of persons who have received commissions in connection with the acquisition; and (iv) The amount of the commissions and any other expense in connection with the acquisition, including the cost of borrowing money to finance the acquisition; (10) A description of stock options or other security options outstanding, or to be created in connection with the offering, and the amount of such options held, or to be held, by a person required to be named in paragraphs (2), (4), (5), (6), or (8) of this subsection and by a person who holds, or will hold, 10% or more, in the aggregate, of any such options; (11)(A) The dates of, parties to, and general effect, concisely stated of, every management or other material contract made, or to be made, otherwise than in the ordinary course of business if it is to be performed in whole or in part at or after the filing of the registration statement or was made within the past 2 years, together with a copy of the contract; and (B) A description of any pending litigation or proceeding to which the issuer is a party and which materially affects its business or assets, including any litigation or proceeding known to be contemplated by governmental authorities; (12) Two copies of any prospectus, pamphlet, circular, form letter, advertisement, or other sales literature intended, as of the effective date, to be used in connection with the offering; (13) A specimen, copy, or description of the security being registered; a certified copy of the issuers articles of incorporation and a certified copy of its bylaws, or their substantial equivalents, as currently in effect; and a copy of any indenture or other instrument covering the security to be registered; (14) A signed or conformed copy of an opinion of counsel as to the legality of the security being registered, with an English translation if it is in a foreign language, which opinion shall state whether the security when sold will be legally issued, fully paid, and non-assessable, and, if a debt security, a binding obligation of the issuer; (15) The written consent of an accountant, engineer, appraiser, or other person whose profession gives authority to a statement made by the person, if the person is named as having prepared or certified a report or valuation, other than a public and official document or statement, which is used in connection with the registration statement; (16) A certified statement of financial condition of the issuer as of a date within 4 months prior to the filing of the registration statement; a balance sheet, profit and loss statement, and analysis of surplus for each of the 3 calendar years preceding the date of the statement of financial condition and for any period between the close of the last calendar year and the date of the statement of financial condition, or for the period of the issuers and any predecessors existence if less than 3 years, and if any part of the proceeds of the offering is to be applied to the purchase of any business, the same financial statements which would be required if that business were the registrant; and (17) Any additional information the Commissioner may require by rule or order. (c) A registration statement under this section shall become effective no later than 60 calendar days after the date of the registration statement or the last statement other than a price amendment is filed if: (1) No stop order is in effect and no proceeding is pending under  31-5603.06; (2) The Commissioner has not ordered under subsection (d) of this section that effectiveness be delayed; and (3) The registrant has not requested that effectiveness be delayed. (d) The Commissioner may delay effectiveness for a single period not to exceed 90 days if the Commissioner determines that the registration statement is not complete in all material respects and promptly notifies the registrant of the determination. The Commissioner may delay effectiveness for a single period not to exceed 30 days if the Commissioner determines that delay is necessary, whether or not the Commissioner previously delayed effectiveness under this subsection.  (Oct. 26, 2000, D.C. Law 13-203,  304, 47 DCR 7837; June 25, 2002, D.C. Law 14-150,  2(g), 49 DCR 4238.)  Section References This section is referenced in  31-5603.02,  31-5603.06,  31-5604.01,  31-5604.02, and  31-5605.01. Effect of Amendments D.C. Law 14-150, in subsec. (b), substituted 31-5603.06(c) for 31-5603.05(c).
 315603.05. Offer and sale of an indefinite amount of securities. (a) A face-amount certificate company, an open-end management company, a closed-end management company that is not a federal covered security under section 18(b)(1) of the Securities Act of 1933, or a unit investment trust, as those terms are defined in the Investment Company Act of 1940, shall comply with the requirements of this section if the company or trust files: (1) A notice under  31-5603.08 of the offer or sale in the District of an indefinite amount of federal covered securities specified in section 18(b)(2) of the Securities Act of 1933 [15 U.S.C.  77r]; or (2) An application to register under  31-5603.03 the offer or sale in the District of an indefinite amount of securities. (b)(1) A face-amount certificate company or an open-end management company, at the time of filing, shall pay an initial fee established by the Commissioner. (2) Within 60 days after the issuers fiscal year end during which its registration statement is effective or notice required by  31-5603.08 is filed, a face-amount certificate company or an open-end management company shall: (A) Pay a fee in an amount established by rule; or (B) File a report, on a form that the Commissioner, by rule, adopts for the reporting of all sales of securities to persons within the District during the fiscal year, and pay a fee based upon the maximum aggregate offering price at which the securities were sold in the District in accordance with a formula established by rule. (3)(A) To calculate the net amount due under paragraph (2)(B) of this subsection, the initial fee paid in accordance with paragraph (1) of this subsection shall be deducted from the aggregate fee. (B) Except as provided in subsection (d) of this section, the aggregate fee due under this subsection may not exceed the maximum aggregate fee established by rule. (C) If the aggregate fee due under paragraph (2)(B) of this subsection is less than the initial fee, no additional amount shall be payable and no credit or refund shall be allowed or returned. (c)(1) At the time of the filing, a unit investment trust or a closed-end management company that is not a federal covered security under section 18(b)(1) of the Securities Act of 1933 [15 U.S.C.  77r] shall pay an initial fee established by rule. (2) Within 60 days after the anniversary of the date on which the issuers offer became effective or its notice filed under  31-5603.08 was accepted, a unit investment trust or closed-end management fund that is not a federal covered security under section 18(b)(1) of the Securities Act of 1933 [15 U.S.C.  77r] shall: (A) Pay a fee in an amount established by rule; or (B) File a report, on a form that the Commissioner, by rule, adopts for the reporting of all sales of securities to persons within the District during the effective period of the registration statement or the acceptance period of the notice filed under  31-5603.08; and pay a fee based upon the maximum aggregate offering price at which the securities were sold in the District in accordance with a formula established by rule. (3)(A) To calculate the net amount due under paragraph (2)(B) of this subsection, the initial fee paid in accordance with paragraph (2) of this subsection shall be deducted from the aggregate fee. (B) Except as provided in subsection (d) of this section, the aggregate fee due under paragraph (2)(B) of this subsection may not exceed the maximum aggregate fee established by rule. (C) If the aggregate fee under paragraph (2)(B) of this subsection is less than the initial fee, no additional amount shall be payable and no credit or refund shall be allowed or returned. (d)(1) The Commissioner may, by rule or order, extend the length of the renewal period to a period not exceeding 2 years for the effectiveness of a registered offering or for a notice filed under  31-5603.08. (2) If the Commissioner extends a renewal period in excess of one year, the fee shall be prorated for the extended renewal period.  (Oct. 26, 2000, D.C. Law 13-203,  305, 47 DCR 7837; June 25, 2002, D.C. Law 14-150,  2(h), 49 DCR 4238.)  Section References This section is referenced in  31-5603.07 and  31-5606.05. Effect of Amendments D.C. Law 14-150, in subsec. (a), substituted open-end for open; and in subsec. (c)(3)(B)(iii), substituted (C) If for (iii) If.
 315603.06. Provisions applicable to registration generally. (a) A registration statement may be filed by the issuer, any other person on whose behalf the offering is to be made, or a broker-dealer licensed under this chapter. (b) A person filing a registration statement shall pay a filing fee in an amount established by rule. If a registration statement is withdrawn or abandoned before the effective date, or if a pre-effective stop order is entered under  31-5603.06, the Commissioner shall retain the fee. (c) Every registration statement shall specify: (1) The amount of securities to be offered in the District; (2) The states in which a registration statement or similar document in connection with the offering has been or is to be filed; and (3) Any adverse order, judgment, or decree entered in connection with the offering by the regulatory authorities in any state, by any court, or by the Securities and Exchange Commission. (d) A document filed under this chapter may be incorporated by reference in the registration statement to the extent that the document is currently accurate. (e) The Commissioner may, by rule or order, permit the omission of an item of information or document from a registration statement. (f) In the case of a non-issuer offering, the Commissioner may not require information under  31-5603.04 unless it is known to the person filing the registration statement or on whose behalf the offering is to be made or can be furnished by the person without unreasonable effort or expense. (g) The Commissioner may, by rule or order, require as a condition of registration by coordination under  31-5603.03, and registration by qualification under  31-5603.04, for an issuer that has no public market for its shares or no significant earnings from continuing operations during the last 5 years or any shorter period of its existence: (1) That any security to be issued for a consideration substantially different from the public offering price, or to any person for a consideration other than cash, be deposited in escrow; and (2) That the proceeds from the sale of the registered security in the District be impounded until the issuer receives a specified amount from the sale of the security either in the District or elsewhere. (h) The Commissioner may, by rule or order, require as a condition of registration that any security registered by qualification or coordination be sold only on a specified form of subscription or sale contract, and that a signed or conformed copy of each contract be filed with the Commissioner or preserved for a period, not to exceed 3 years, specified in the rule or order. (i) Except during the time of stop order is in effect under  31-5603.07, a registration statement shall be effective for one year from its effective date, or any longer period during which the security is being offered or distributed in a non-exempt transaction by or for the account of the issuer or other person on whose behalf the offering is being made, or by any underwriter or broker-dealer who is still offering part of an unsold allotment or subscription taken by the underwriter or broker-dealer as a participant in the distribution. (j) During the period that a registration statement is effective, the Commissioner may, by rule or order, require the person who filed the registration statement to file reports, not more often than quarterly, to keep reasonably current the information contained in the registration statement and to disclose the progress of the offering. (k) A registration statement may be amended after its effective date to increase the securities specified to be offered and sold if the public offering price and the underwriters discounts and commissions are not changed from the respective amounts of which the Commissioner was informed. The amendment shall become effective when the Commissioner so orders. A person filing an amendment shall pay an amendment fee in the amount established by rule. The amendment shall relate back to the date of the sale of the additional securities being registered; provided, that within 6 months of the date of the sale, the amendment is filed and the additional fee is paid. (l) The Commissioner may, by rule or order, require as a condition of registration under  31-5603.02,  31-5603.03 or  31-5603.04 that a prospectus be sent or given to each person to whom an offer is made in accordance with the prospectus delivery requirements of the Securities Act of 1933. The Commissioner may require that a prospectus containing any part of the information specified in  31-5603.04(b) be sent or given to each person to whom an offer is made before the sale of the security.  (Oct. 26, 2000, D.C. Law 13-203,  306, 47 DCR 7837.)  Section References This section is referenced in  31-5603.02,  31-5603.03,  31-5603.04, and  31-5603.09.
 315603.07. Denial, suspension, and revocation of registration. (a) The Commissioner may issue a stop order denying effectiveness to, or suspending or revoking the effectiveness of, a registration statement if the Commissioner finds the order is in the public interest, and: (1) The registration statement as of its effective date (or any earlier date in the case of an order denying effectiveness), any amendment under  31-5603.05(k) as of its effective date, or any report under  31-5603.05(j) is incomplete in any material respect or contains any statement which was, in the light of the circumstances under which it was made, false or misleading with respect to any material fact; (2) This chapter or any rule, order, or condition lawfully imposed under this chapter has been willfully violated in connection with the offering by: (A) The person filing the registration statement; (B) The issuer, any partner, officer, or director of the issuer, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling or controlled by the issuer, but only if the person filing the registration statement is directly or indirectly controlled by or acting for the issuer; or (C) An underwriter; (3) The security registered, or sought to be registered, is the subject of an administrative stop order or similar order or a permanent or temporary injunction of a court of competent jurisdiction entered under a federal or state act applicable to the offering; provided, that the Commissioner shall not: (A) Institute a proceeding against an effective registration statement under this subsection more than one year from the date of the order or injunction relied on; and (B) Enter an order under this subsection on the basis of an order or injunction entered under the law of a state unless the order or injunction was based on facts which would constitute a basis for a stop order under this subsection; (4) The issuers enterprise or method of business includes, or would include, activities which are illegal where performed; (5) The offering has worked, or tended to work, a fraud upon purchasers or would so operate; (6) The offering has been, or would be made, with an unreasonable amount of underwriters and sellers discounts, commissions, or other compensation, or promoters profits or participation, or unreasonable amount or kind of options; (7) If a security is sought to be registered by notification, it is not eligible for such registration; or (8) If a security is sought to be registered by coordination, there has been a failure to comply with the undertaking required by  31-5603.03(b)(4). (b) If an applicant or registrant has failed to pay the proper filing fee and the Commissioner finds that it is in the public interest, the Commissioner may enter a denial order for a registration statement and shall vacate the order when the deficiency has been corrected. (c) The Commissioner shall not institute a stop order proceeding against an effective registration statement on the basis of a fact or transaction known to the Commissioner when the registration statement became effective unless the proceeding is instituted within 30 days after the registration statement became effective. (d) The Commissioner may, by order, summarily postpone or suspend the effectiveness of the registration statement pending the final determination of a proceeding under this section. Upon the entry of the order, the Commissioner shall promptly notify each person specified in subsection (e) of this section that it has been entered, of the reasons therefor, and that, within 30 days after the receipt of a written request, the matter will be scheduled for hearing. If no hearing is requested and none is ordered by the Commissioner, the order will remain in effect until it is modified or vacated by the Commissioner. If a hearing is requested or ordered, the Commissioner, after notice of an opportunity for hearing to each person specified in subsection (e) of this section, may modify or vacate the order or extend it until final determination. (e) No stop order may be entered under this section, except the first sentence of subsection (d) of this section, without: (1) Appropriate prior notice to the applicant or registrant, the issuer, and the person on whose behalf the securities are to be, or have been, offered; (2) Opportunity for a hearing; and (3) Written findings of fact and conclusions of law. (f) The Commissioner may vacate or modify a stop order if he or she finds that the conditions which prompted its entry have changed or it is otherwise in the public interest to do so.  (Oct. 26, 2000, D.C. Law 13-203,  307, 47 DCR 7837.)  Section References This section is referenced in  31-5603.06,  31-5604.01,  31-5604.02,  31-5604.03, and  31-5604.04.
 315603.08. Federal covered securities. (a) This section shall apply to a federal covered security that is not otherwise exempt from the requirements of  31-5603.01 pursuant to  31-5604.01 or  31-5604.02. (b) A security that is a federal covered security under section 18(b)(2) of the Securities Act of 1933 may be offered for sale and sold into, from, or within the District upon: (1)(A) The filing with the Commissioner a copy of the registration statement filed by the issuer with the Securities and Exchange Commission under the Securities Act of 1933; or (B) In lieu of filing a copy of the registration statement, the filing of a notice as prescribed by the Commissioner by rule or order; (2) The filing of the consent to service of process required under  31-5607.06; and (3) The payment of a filing fee in the amount established by rule, per class, or per series. (c)(1) A notice filing under this section shall be effective for one year commencing upon the later of the date the notice or registration statement, as applicable, is received by the Commissioner or the date the offering is effective with the Securities and Exchange Commission. A notice filing may be renewed by filing, before the expiration of an effective notice filing, the documents and fees required by subsection (b) of this section. A renewal notice filing shall be effective upon the expiration of the previous notice filing. (2) A previously filed consent to service of process may be incorporated by reference in a renewal filing to the extent that the previously filed consent to service of process is currently accurate. (3) After the initial offer of the federal covered security in the District, all documents that are part of an amendment to a federal registration statement filed with the Securities and Exchange Commission under the Securities Act of 1933 shall be filed promptly with the Commissioner upon request. A notice filing may be terminated by an issuer upon notice to the Commissioner of such termination. (d) The Commissioner may, by rule or order, require the issuer of a security that is a federal covered security under section 18(b)(4)(D) of the Securities Act of 1933 [15 U.S.C.  77r] to: (1) File a notice on a Form D as adopted by the Securities and Exchange Commission; (2) File the consent to service of process required under  31-5607.06 no later than 15 days after the first sale in the District of the federal covered security; and (3) Pay a filing fee in the amount established by rule. (e) The Commissioner may, by rule or order, require the filing of a document filed with the Securities and Exchange Commission under the Securities Act of 1933 for a security that is a federal covered security under section 18(b)(3) or (4) of the Securities Act of 1933 [15 U.S.C.  77r] and the payment of a filing fee in the amount established by rule. (f) Except for a security covered by section 18(b)(1) of the Securities Act of 1933 [15 U.S.C.  77r], the Commissioner may issue a stop order suspending the offer and sale of a federal covered security in the District if the Commissioner finds the order is in the public interest and there is a failure to comply with a requirement of this section. The Commissioner may, by rule or order, waive any or all of the provisions of this section.  (Oct. 26, 2000, D.C. Law 13-203,  308, 47 DCR 7837; Oct. 3, 2001, D.C. Law 14-28,  2902, 48 DCR 6981.)  Section References This section is referenced in  31-5603.05. Effect of Amendments D.C. Law 14-28, in subsec. (b)(3), deleted for unit investment trusts following series.
 315603.09. Withdrawal and abandonment. (a) A registration statement may be withdrawn, at the discretion of the Commissioner, after receipt by the Commissioner of an application to withdraw, unless a revocation or suspension proceeding is pending when the withdrawal application is filed. (b) If a proceeding is pending or instituted, withdrawal shall be effective at the time and upon the conditions that the Commissioner, by order, determines. If no proceeding is pending or instituted and withdrawal becomes effective, the Commissioner may institute a proceeding under  31-5603.06 and enter an order as of the last date on which the registration was effective. (c) A registration statement that has not been made effective within one year of the initial filing may be deemed abandoned by the Commissioner.  (Oct. 26, 2000, D.C. Law 13-203,  309, 47 DCR 7837.) 
 315604.01. Exempt securities. The following securities shall be exempt from the requirements of  31-5603.01, 31-5603.07, and 31-5604.05: (1) A security, including a revenue obligation, issued or guaranteed by the United States; an international agency or corporate or other instrumentality of which the United States and one or more foreign governments are members; a state; a political subdivision of a state; or any agency or corporate or other instrumentality of one or more of the foregoing; or a certificate of deposit for any of the foregoing; (2) A security issued, insured, or guaranteed by Canada; a Canadian province; a political subdivision of an agency or other instrumentality of one or more of the foregoing; or an foreign government with which the United States currently maintains diplomatic relations, if the security is recognized as a valid obligation by the issuer, insurer, or guarantor. (3) A security issued by and representing an interest in, or a direct obligation of, or guaranteed by, a depository institution or credit union organized under the laws of the United States or a depository institution or credit union organized and supervised under the laws of any state if the deposit or share accounts of the depository institution or credit union are insured by the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation, the National Credit Union Share Insurance Fund, or a successor to one of the foregoing; (4) A security issued by and representing an interest in, or a direct obligation of, or insured or guaranteed by, an insurance company organized under the laws of any state or the District and authorized to do business in the District; provided, that this exemption shall not apply to an annuity contract, investment contract, or similar security under which the promised payments or rate of return are not fixed in dollars but are substantially dependent upon the investment results of a segregated fund or account invested in securities; (5) A security issued or guaranteed by a railroad, other common carrier, public utility, or holding company that is: (A) Subject to the jurisdiction of the Interstate Commerce Commission or a successor agency; (B) A registered holding company under the Public Utility Holding Company Act of 1935 or a subsidiary of such a company within the meaning of that Act; (C) Regulated with respect to its rates and charges by a governmental authority of the United States or any state; or (D) Regulated with respect to the issuance or guarantee of the security by a governmental authority of the United States, any state, the District, Canada, or a Canadian province; (6)(A) A security which is listed or approved for listing upon notice of issuance on the New York Stock Exchange, the American Stock Exchange, the Philadelphia Stock Exchange, the Midwest Stock Exchange, the Pacific stock exchange, or any other exchange which the Commissioner designates by rule to have substantially the same standards for listing as these exchanges, or designated for trading on the National Association of Securities Dealers Automated Quotation System or any other electronic trading system which the Commissioner designates by rule to have substantially the same standards for listing or trading; (B) Any other security of the same issuer which is of senior or substantially equal rank; (C) A security called for by subscription rights or warrants so listed or approved; or (D) A warrant or right to purchase or subscribe to any of the foregoing; (7) An option issued by a clearing agency registered under the Securities Exchange Act of 1934, other than an off-exchange futures contract or substantially similar arrangement, if the security, currency, commodity, or other interest underlying the option: (A) Is registered under  31-5603.02,  31-5603.03, or  31-5603.04; (B) Is exempt under this section; or (C) Is not otherwise required to be registered under this chapter; (8) A security issued by a person organized and operated not for private profit but exclusively for a religious, educational, benevolent, charitable, fraternal, social, athletic, or reformatory purpose or as a chamber of commerce or trade or professional association, and no part of the net earnings of the issuer inures to the benefit of any private shareholder or individual; provided, that at least 10 calendar days before a sale of the security, the person has filed with the Commissioner a notice setting forth the material terms of the proposed sale and copies of any sales and advertising literature to be used and the Commissioner, by order, does not disallow the exemption within the next 5 calendar days; (9)(A) A promissory note, draft, bill of exchange, or bankers acceptance that evidences an obligation to pay cash within 9 months after the date of issuance, exclusive of days of grace, that is issued in denominations of at least $50,000, and that receives a rating in one of the 3 highest rating categories from a nationally recognized statistical rating organization; (B) A renewal of such an obligation that is likewise limited; or (C) A guarantee of such an obligation or of a renewal; (10) A security issued in connection with: (A) A written compensatory benefit plan, including a stock purchase, savings, option, bonus, stock appreciation, profit sharing, thrift, incentive, pension, or similar employees benefit plan, and interests in such plans established by one or more of the issuers thereof or its parents or affiliates or controlled subsidiaries, for the participation of their employees, directors, general partners, or trustees if the issuer is a business trust, officers, or consultants or advisers of such issuers or their parents or controlled subsidiaries; provided, that bona fide services are rendered by consultants or advisers and the services are not in connection with the offer and sale of securities in a capital-raising transaction; or (B) A written contract relating to the compensation of such participating persons; (11) Equipment trust certificates for equipment leased or conditionally sold to a person if securities issued by the person would be exempt under this section; and (12) A membership or equity interest in, or a retention certificate or like security given in lieu of a cash patronage dividend issued by, a cooperative organized and operated as a nonprofit membership cooperative under the cooperative laws of the District or any state if not traded to the public. (13) Repealed.  (Oct. 26, 2000, D.C. Law 13-203,  401, 47 DCR 7837; Oct. 26, 2001, D.C. Law 14-42,  29(a), 48 DCR 7612; June 25, 2002, D.C. Law 14-150,  2(i), 49 DCR 4238.)  Section References This section is referenced in  31-5601.01,  31-5603.01,  31-5603.08,  31-5604.04,  31-5604.05,  31-5604.06, and  31-5605.02. Effect of Amendments D.C. Law 14-42 repealed par. (13). D.C. Law 14-150, in par. (10)(A), substituted general partners, or for general partners; made nonsubstantive changes in pars. (11) and (12); and repealed par. (13) which was previously repealed by D.C. Law 14-42. Temporary Repeal of Section For temporary (225 day) repeal of section, see  2 of Securities Temporary Amendment Act of 2001 (D.C. Law 14-62, February 6, 2002, law notification 49 DCR 2272). Emergency Legislation For temporary (90 day) amendment of section, see  2 of Securities Emergency Amendment Act of 2001 (D.C. Act 14-81, July 9, 2001, 48 DCR 6351). For temporary (90 day) amendment of section, see  2 of Securities Legislative Review Emergency Amendment Act of 2001 (D.C. Act 14-180, November 19, 2001, 48 DCR 11066). For temporary (90 day) amendment of section, see  2 of Securities Congressional Review Emergency Amendment Act of 2001 (D.C. Act 14-217, December 21, 2001, 49 DCR 390). Editor's Notes Section 806 of D.C. Law 13-203 provided: Titles III and IV shall apply as of June 1, 2001. Section 29(b) of D.C. 14-42 provided: Subsection (a) of this section repealing par. (13) shall apply as of May 31,
 315604.02. Exempt transactions. The following transactions are exempt from  31-5603.01, 31-5603.07, and 31-5604.05: (1) An isolated nonissuer transaction, whether or not effected through a broker-dealer; (2) A nonissuer transaction by a licensed agent of a licensed broker-dealer, and a resale transaction by a sponsor of a unit investment trust registered under the Investment Company Act of 1940, in a security of a class that has been outstanding and publicly held for at least 90 days; provided, that at the time of the transaction: (A) The issuer of the security is actually engaged in business and not in the organizational stage or in bankruptcy or receivership and is not a blank check, blind pool, or shell company whose primary plan of business is to engage in a merger or combination of the business with, or an acquisition of, an unidentified person; (B) The security is sold at a price reasonably related to the current market price of the security; (C) The security does not constitute the whole or part of an unsold allotment to, or a subscription or participation by, the broker-dealer as an underwriter of the security; (D) A nationally recognized securities manual designated by rule or order of the Commissioner or a document filed with the Securities and Exchange Commission which is publicly available through the Securities and Exchange Commissions Electronic Data Gathering and Retrieval System contains: (i) A description of the business and operations of the issuer; (ii) The names of the issuers officers and directors, if any, or, in the case of a non-United States issuer, the corporate equivalents of such persons in the issuers country of domicile; (iii) An audited balance sheet of the issuer as of a date within 18 months, or in the case of a reorganization or merger where parties to the reorganization or merger had an audited balance sheet, a pro forma balance sheet as of a date within 18 months; (iv) An audited income statement for each of the issuers immediately preceding 2 fiscal years or for the period of existence of the issuer, if in existence for less than 2 years or, in the case of a reorganization or merger where the parties to the reorganization or merger had an audited income statement, a pro forma income statement; and (E) The issuer of the security has a class of equity securities listed on a national securities exchange registered under the Securities Exchange Act of 1934, or designated for trading on the National Association of Securities Dealers Automated Quotation System or any other electronic trading system which the Commissioner designates by rule to have substantially the same standards for listing or trading, unless: (i) The issuer of the security is a unit investment trust registered under the Investment Company Act of 1940; (ii) The issuer of the security has been engaged in continuous business (including predecessors) for at least 3 years; or (iii) The issuer of the security has total assets of at least $2 million based on an audited balance sheet as of a date within 18 months or, in the case of a reorganization or merger where parties to the reorganization or merger had an audited balance sheet, a pro forma balance sheet; (3) A nonissuer transaction in a security by a licensed agent of a licensed broker-dealer if: (A) The issuer of the security is actually engaged in business and not in the organizational stage or in bankruptcy or receivership and is not a blank check, blind pool, or shell company whose primary plan of business is to engage in a merger or combination of the business with, or an acquisition of, an unidentified person; and (B) The security is senior in rank to the common stock of the issuer both as to payment of dividends or interest and upon dissolution or liquidation of the issuer, the security has been outstanding at least 3 years, and the issuer or any predecessors has not defaulted within the current fiscal year or the 3 immediately preceding fiscal years in the payment of a dividend, interest, principal, or sinking fund installment on the security when due and payable; (4) A nonissuer transaction in an outstanding security if the issuer of the security has a class of securities subject to registration under section 12 of the Securities Exchange Act 1934 [15 U.S.C.  78l] and has been subject to the reporting requirements of sections 13 or 15(d) of the Securities Exchange Act of 1934 [15 U.S.C.  78m or 15 U.S.C.  78o(d)] for not less than 90 days next preceding the transaction, or has filed and maintained with the Commissioner for not less than 90 days preceding the transaction information, in the form that the Commissioner, by rule, specifies, substantially comparable to the information that the issuer would be required to file under section 12(b) or (g) [15 U.S.C.  78l] of the Securities Exchange Act of 1934 if the issuer had a class of its securities registered under section 12 of the Securities Exchange Act of 1934 [15 U.S.C.  78l]; (5) A nonissuer transaction in a security that has a fixed maturity or a fixed interest or dividend provision and for which there has been no default in the payment of principal, interest, or dividends on the security during the current fiscal year or within the 3 past years, or, if less than 3 years, during the existence of the issuer and any predecessors; (6) A nonissuer transaction effected by or through a licensed broker-dealer under an unsolicited order or offer to purchase, if either the confirmation of the transaction delivered to the customer clearly states that the transaction was unsolicited, or the broker-dealer obtains a written acknowledgment signed by the customer that the transaction was unsolicited, and a copy of the confirmation or the acknowledgment is preserved by the broker-dealer for such period as the Commissioner may, by rule, require; (7) A transaction between the issuer or other person on whose behalf the offering of a security is made and an underwriter, or a transaction among underwriters; (8) A transaction in a bond or other evidence of indebtedness secured by a real estate mortgage, deed of trust, personal property security agreement, or by an agreement for the sale of real estate or personal property, if the entire mortgage, deed of trust, or agreement, together with all the bonds or other evidences of indebtedness secured thereby, is offered and sold as a unit; (9) A transaction by an executor, administrator, sheriff, marshal, receiver, trustee in bankruptcy, guardian, or conservator; (10) A transaction executed by a bona fide secured party without any purpose of evading this chapter; (11) An offer to sell, or the sale of a, security to a financial institution or institutional investor or to a broker-dealer, whether the purchaser is acting for itself or in some fiduciary capacity; (11A) An offer to sell, or the sale of a security, by an issuer to an accredited investor; (12)(A) Subject to subparagraph (B) of this paragraph, a transaction pursuant to an offer directed by the offeror to not more than 25 persons, other than those designated in  31-5602.02(a)(1), in the District during any period of 12 consecutive months, whether or not the offeror, or any of the offerees, is then present in the District at the time of the transaction, if: (i) The seller reasonably believes that all the purchasers in the District are purchasing for investment; and (ii) No commission or other remuneration is paid or given directly or indirectly for soliciting a prospective purchaser in the District except to a licensed broker-dealer or a licensed agent. (B) The Commissioner may, by rule or order, as to a security or transaction or any type of security or transaction, withdraw or further condition this exemption, increase or decrease the number of purchasers permitted, or waive one or more of the conditions in this paragraph; (13) To the extent permitted by rule or order of the Commissioner, an offer or sale within the District by an issuer now or hereafter exempt from section 5 of the Securities Act of 1933 [15 U.S.C.  77e] by a rule or regulation adopted by the Securities and Exchange Commission under section 3(b) or section 4(2) of that Act [15 U.S.C.  77c or 15 U.S.C.  77d] if the issuer files with the Commissioner a notice of intent to claim exemption under this paragraph, at such time, in such form, and containing such information as the Commissioner determines; (14) An offer or sale of a preorganization certificate or subscription if: (A) No commission or other remuneration is paid or given directly or indirectly for soliciting any prospective subscriber; (B) The number of subscribers does not exceed 10; and (C) No payment is made by a subscriber; (15) A transaction pursuant to an offer to existing security holders of the issuer, including persons who at the time of the transaction are holders of convertible securities, nontransferable warrants, or transferable warrants exercisable within not more than 90 days of their issuance, if no commission or other remuneration, other than a standby commission, is paid or given directly or indirectly for soliciting a security holder in the District except to a licensed or exempt broker-dealer; (16) A transaction involving an offer to sell, but not a sale, of a security if: (A) A registration statement or offering statement or similar document as required under the Securities Act of 1933 has been filed with the Securities and Exchange Commission, but is not effective; (B) A registration statement, if required, has been filed under  31-5603.02, but is not effective; and (C) No stop order of which the offeror is aware has been entered by the Commissioner or the Securities and Exchange Commission; (17) The issuance of a security dividend, whether the corporation distributing the dividend is the issuer of the security or not, if nothing of value is given by security holders for the distribution other than the surrender of a right to a cash dividend where the security holder can elect to take a dividend in cash or in a security; (18) A transaction involving an offer to sell, but not a sale, of a security if: (A) A registration statement has been filed under  31-5603.04, but is not effective; and (B) No stop order of which the offeror is aware has been entered by the Commissioner or the Securities and Exchange Commission; (19) A transaction incident to a right of conversion or a statutory or judicially approved reclassification, recapitalization, reorganization, quasi-reorganization, stock split, reverse stock split, merger, triangular merger, consolidation, sale of assets, or exchange of securities; and (20) An offer or sale of units of fractional undivided interests in a unit investment trust registered under the Investment Company Act of 1940 if: (A) The units have been the subject of a previously effective registration statement under this chapter or were exempt from registration; (B) The units are offered or sold by a broker-dealer licensed under this chapter; and (C) The broker-dealer is a sponsor or depositor of the unit investment trust or is an affiliate of the sponsor or depositor.  (Oct. 26, 2000, D.C. Law 13-203,  402, 47 DCR 7837; June 25, 2002, D.C. Law 14-150,  2(j), 49 DCR 4238.)  Section References This section is referenced in  31-5601.01,  31-5603.01,  31-5603.08,  31-5604.04,  31-5604.05,  31-5604.06, and  31-5605.02. Effect of Amendments D.C. Law 14-150, in par. (11), substituted financial institution for financial; added par. (11A); and in par. (12)(A), substituted subparagraph (B) of this paragraph for paragraph (2) of this subsection.
 315604.03. Additional exemptions. The Commissioner may, by rule or order, exempt any other security or transaction or class of securities or transactions from  31-5603.01,  31-5603.07, or  31-5604.05. The Commissioner may, by rule or order, adopt a limited offering transactional exemption that will further the objectives of compatibility with the exemptions from securities registration under the Securities Act of 1933 and uniformity among the states.  (Oct. 26, 2000, D.C. Law 13-203,  403, 47 DCR 7837.)  Section References This section is referenced in  31-5604.06.
 315604.04. Revocation of exemptions. (a) The Commissioner may, by order, deny or revoke an exemption specified in  31-5604.01(7), (8), (10) or (12) or in  31-5604.02 for any security or transaction. (b) An order issued under this section shall not be retroactive. A person shall not violate  31-5603.01,  31-5603.07, or  31-5604.05 by reason of an offer to sell or sale effected after the entry of an order under this section if the person did not know and, in the exercise of reasonable care could not have known, of the order.  (Oct. 26, 2000, D.C. Law 13-203,  404, 47 DCR 7837.) 
 315604.05. Filing of sales and advertising literature. The Commissioner may, by rule or order, require the filing of a prospectus, pamphlet, circular, form letter, advertisement, or other sales literature or advertising communication, whether communicated in printed form, by electronic means, or otherwise, addressed or intended for distribution to prospective investors, including clients or prospective clients of an investment adviser, unless the security or transaction is exempt under  31-5604.01 or  31-5604.02, the security is a federal covered security, the transaction concerns a federal covered security or a federal covered adviser, or the transaction concerns a broker-dealer registered under the Securities Exchange Act of 1934.  (Oct. 26, 2000, D.C. Law 13-203,  405, 47 DCR 7837.)  Section References This section is referenced in  31-5604.01,  31-5604.02,  31-5604.03,  31-5604.04, and  31-5606.05.
 315604.06. Coordination of exemptions. (a) In furtherance of the policy stated in  31-5601.02(b), the exemptions under  31-5604.01, 31-5604.02, and 31-5604.03 shall be coordinated with exemptions for securities and transactions under the Securities Act of 1933 so that an offering registered under the Securities Act of 1933 shall be subject to registration by filing under this chapter in the absence of an exemption under this chapter, and an offering exempt from registration under the Securities Act of 1933, other than under the exemption for intrastate offerings, shall be exempt from registration under this chapter. (b) The Commissioner may make, amend, and rescind rules and regulations for exemptions under  31-5604.01 and 31-5604.02, or added by the Commissioner under  31-5604.03, but not contained in the Securities Act of 1933 or any of the rules and regulations promulgated thereunder.  (Oct. 26, 2000, D.C. Law 13-203,  406, 47 DCR 7837.) 
 315605.01. Unlicensed or unregistered activity. A person shall not: (1) Offer or sell a security except in accordance with this chapter; (2) Deliver to a purchaser a security required to be registered under  31-5603.01 unless accompanied or preceded by a registration statement that meets the requirements of  31-5603.02(b),  31-5603.03(b), or  31-5603.04(b); (3) Act as a broker-dealer, agent, investment adviser, or investment adviser representative unless licensed as required under  31-5602.01 or  31-5602.02; or (4) Fail to file with the Commissioner an application, report, or document required to be filed under this chapter, or any rule or regulation adopted by the Commissioner under this chapter, or to fail to comply with the terms of an order issued by the Commissioner issued under this chapter.  (Oct. 26, 2000, D.C. Law 13-203,  501, 47 DCR 7837.)  Section References This section is referenced in  31-5606.04 and  31-5608.01.
 315605.02. Fraudulent transactions. (a) A person shall not: (1) In connection with the rendering of investment advice or in connection with the offer, sale, or purchase of an investment or security, including a security exempt under  31-5604.01 sold in a transaction exempt under  31-5604.02, directly or indirectly: (A) Employ a device, scheme, or artifice to defraud; (B) Obtain money or property by means of an untrue statement of a material fact or an omission to state a material fact in order to make the statements made, in the light of the circumstances under which they are made, not misleading; or (C) Engage in a transaction, practice, or course of business which operates, or would operate, as a fraud or deceit upon a person; (2) Except as provided in subsection (b) of this section, publish, give publicity to, or circulate a notice, circular, advertisement, newspaper, article, letter, investment service, communication, or broadcast which, though not purporting to offer a security for sale, describes the security for a consideration received or to be received directly or indirectly from an issuer, underwriter, or dealer, or an agent or employee of an issuer, underwriter, or dealer, without fully disclosing the receipt, whether past or prospective, of the consideration and the amount of the consideration; (3) In a matter within the jurisdiction of the Commissioner, falsify, conceal, or cover up, by a trick, scheme, or device, a material fact, make any false, fictitious, or fraudulent statement or representation, or make or use any false writing or document, knowing the same to contain a false, fictitious, or fraudulent statement or entry; or (4) Except as provided in subsections (b) and (h) of this section, when acting as principal for the persons own account, knowingly sell a security to, or purchase a security from, a client, or acting as broker for a person other than the client, or knowingly effect a sale or purchase of a security for the account of the client, without disclosing to the client in writing before the completion of such transaction the capacity in which the person is acting and obtaining the consent of the client to the transaction. (b) The prohibition of subsection (a)(2) of this section shall not apply to any information published or circulated relating to a federal covered security. The prohibition of subsection (a)(4) of this section shall not apply to a transaction with a federal covered adviser or to a transaction with a customer of a broker-dealer if the broker-dealer is not acting as an investment adviser in relation to the transaction. (c) For purposes of this section, the term investment means a commitment of money or property principally induced by a representation that an economic benefit may be derived from the commitment; provided, that the term investment shall not include a commitment of money or property for: (1) The purchase of a business opportunity, a business enterprise, or real property; or (2) The purchase of tangible personal property through a person not engaged in telephone solicitation if there are no specific representations or guarantees made by the offeror or seller as to the economic benefit to be derived from the purchase. (d) In the solicitation of, or dealings with, advisory clients, a person shall not knowingly make an untrue statement of a material fact, or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading. (e) Except as may be permitted by rule or order of the Commissioner, an investment adviser shall not enter into, extend, or renew an investment advisory contract unless it provides in writing that: (1) Except as provided in subsections (f)(1) and (h) of this section, the investment adviser shall not be compensated on the basis of a share of capital gains upon, or capital appreciation of, the funds or a portion of the funds of the client; (2) Except as provided in subsection (h) of this section, no assignment of the contract may be made by the investment adviser without the consent of the other party to the contract; and (3) Except as provided in subsection (h) of this section, the investment adviser, if a partnership, shall notify the other party to the contract of a change in the membership of the partnership within a reasonable time after the change. (f)(1) The requirement of subsection (e)(1) of this section shall not prohibit an investment advisory contract which provides for compensation based upon the total value of a fund averaged over a definite period, as of definite dates, or taken as of a definite date. (2) The term assignment, as used in subsection (e)(2) of this section, includes any direct or indirect transfer or pledge without delivery or possession of an investment advisory contract by the assignor or of a controlling block of the assignors outstanding voting securities by a security holder of the assignor; provided, that if the investment adviser is a partnership, no assignment of an investment advisory contract shall be considered to result from the death or withdrawal of a minority of the members of the investment adviser having only a minority interest in the business of the investment adviser or from the admission to the investment adviser of one or more members who, after admission, will constitute a minority of the members and will own a minority interest in the business. (g) An investment adviser shall not take or have custody of any securities or funds of a client if: (1) The Commissioner, by rule, prohibits custody; or (2) In the absence of rule, the investment adviser fails to notify the Commissioner that he or she has custody. (h) The Commissioner may, by rule or order, adopt exemptions from subsections (a)(4), (e)(1), (e)(2), and (e)(3) of this section if the exemptions are consistent with the public interest and within the purposes fairly intended by the policy and provisions of this chapter.  (Oct. 26, 2000, D.C. Law 13-203,  502, 47 DCR 7837.)  Section References This section is referenced in  31-5606.04,  31-5606.05, and  31-5608.01.
 315605.03. Manipulation of market. (a) A person shall not, directly or indirectly, in the District: (1) Quote a fictitious price for a security; (2) Effect a transaction in a security which involves no change in the beneficial ownership of the security for the purpose of creating a false or misleading appearance of active trading in a security or for the market for the security; (3) Enter an order for the purchase of a security with the knowledge that an order of substantially the same size and at substantially the same time and price for the sale of the security has been, or will be, entered by or for the same, or an affiliated, person for the purpose of creating a false or misleading appearance of active trading in a security or with respect to the market for the security; (4) Enter an order for the sale of a security with knowledge that an order of substantially the same size and at substantially the same time and price for the purchase of the security has been or will be entered by or for the same or different parties for the purpose of creating a false or misleading appearance of active trading in a security or with respect to the market for the security; or (5) Employ any other deceptive or fraudulent device, scheme, or artifice to manipulate the market in a security. (b) A transaction effected in compliance with, or conduct that does not violate, the applicable provisions of the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder, shall not constitute a violation of subsection (a) of this section.  (Oct. 26, 2000, D.C. Law 13-203,  503, 47 DCR 7837.)  Section References This section is referenced in  31-5606.04.
 315605.04. Misleading filings. A person shall not make, or cause to be made, in a document filed with the Commissioner or in any proceeding under this chapter, a statement which is, at the time and in the light of the circumstances under which it is made, false or misleading in any material respect.  (Oct. 26, 2000, D.C. Law 13-203,  504, 47 DCR 7837.)  Section References This section is referenced in  31-5606.04.
 315605.05. Unlawful representations concerning licensing, registration, notice filing, or exemption. (a) The filing of an application for a registration or notice filing under subchapter II, the filing of a registration statement or notice filing under subchapter III, or registration of a person or security shall not constitute a finding by the Commissioner that any document filed under this chapter is true, complete, and not misleading. Such filings, licensure, or registration, or that an exemption or exception is available for a security or a transaction, shall not mean the Commissioner has passed upon the merits or qualifications of, or recommended or given approval to, a person, security, or transaction. (b) A person shall not make, or cause to be made, to a prospective purchaser, customer, or client a representation inconsistent with subsection (a) of this section.  (Oct. 26, 2000, D.C. Law 13-203,  505, 47 DCR 7837.)  Section References This section is referenced in  31-5606.04,  31-5606.05, and  31-5608.01.
 315606.01. Investigation; subpoena power. (a) The Commissioner may: (1) Make public or private investigations inside or outside of the District as he considers necessary to determine whether a person has violated, or is about to violate, any provision of this chapter, or any rule or order hereunder, to aid in the enforcement of this chapter, or to aid in the prescribing of rules and forms to implement this chapter. The Commissioner may require the person to pay the reasonable costs and expenses of the investigation; (2) Require or permit the person to file a statement in writing, under oath or otherwise as the Commissioner determines, as to all the facts and circumstances concerning the matter to be investigated; and (3) Publish information concerning a violation of this chapter or any rule or order adopted under this chapter. (b) For purposes of an investigation or proceeding under this chapter, the Commissioner may administer oaths and affirmations, subpoena witnesses and compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records which the Commissioner deems relevant or material to the inquiry. (c) In case of contumacy by, or refusal to obey a subpoena issued to, a person, the Superior Court of the District of Columbia, upon application by the Commissioner, may issue to the person an order requiring the person to appear before the Commissioner to produce documentary evidence, or to give evidence touching the matter under investigation or in question. Failure to obey the order of the court may be punished as a contempt of court. (d) No person shall be excused from attending and testifying or from producing a document or record before the Commissioner, in obedience to the subpoena of the Commissioner, or in any proceeding instituted by the Commissioner, on the ground that the testimony or evidence, documentary or otherwise, required of the person may tend to incriminate the person or subject the person to a penalty or forfeiture; provided, that no individual may be prosecuted or subjected to a penalty or forfeiture for or on account of a specific subject concerning which the individual is compelled, after claiming his privilege against self-incrimination as to the specific subject, to testify or produce evidence, documentary or otherwise; provided further, that the individual testifying shall not be exempt from prosecution and punishment for perjury or contempt committed in testifying. (e) The Commissioner may issue and apply to enforce subpoenas in the District at the request of a securities agency or administrator of another state if the activities constituting an alleged violation for which the information is sought would violate this chapter if the activities had occurred in the District.  (Oct. 26, 2000, D.C. Law 13-203,  601, 47 DCR 7837.)  Section References This section is referenced in  31-5607.03.
 315606.02. Enforcement  Administrative. (a) Whenever the Commissioner determines that a person has engaged, or is about to engage, in an act or practice constituting a violation of any provision of this chapter or any rule or order hereunder, and that immediate action against such person is in the public interest, the Commissioner may issue, without a hearing, a summary order directing the person to cease and desist from engaging in such activity; provided, that the summary cease and desist order shall give the person: (1) Notice of the opportunity for a hearing before the Commissioner to determine whether the summary cease and desist order should be vacated, modified, or entered as final; and (2) Notice that the summary cease and desist order will be entered as final if the person does not request a hearing within 15 days of the receipt of the summary cease and desist order. (b) Whenever the Commissioner determines after notice and a hearing, unless the right to a hearing is waived, that a person has engaged in an act or practice constituting a violation of this chapter or any rule or order adopted under this chapter, the Commissioner may, in addition to taking any other action authorized under this chapter: (1) Issue a cease and desist order against the person; (2) Censure the person if the person is licensed under this chapter; (3) Bar the person from engaging in the securities business or investment advisory business in the District; (4) Issue an order against the person imposing a civil penalty up to $10,000 for any single violation of this chapter; or (5) Issue an order requiring the person to pay restitution and reasonable costs of the hearing.  (Oct. 26, 2000, D.C. Law 13-203,  602, 47 DCR 7837; June 25, 2002, D.C. Law 14-150,  2(k), 49 DCR 4238.)  Section References This section is referenced in  31-5607.08. Effect of Amendments D.C. Law 14-150, in subsec. (b), deleted , or his or her designee, following Whenever the Commissioner.
 315606.03. Enforcement  Judicial. (a) Whenever it appears to the Commissioner that a person is about to engage in any act or practice constituting a violation of any provision of this chapter or any rule or order adopted under this chapter, the Commissioner may request the Corporation Counsel to bring an action in the Superior Court of the District of Columbia to obtain one or more of the following remedies: (1) Temporary restraining order; or (2) Temporary or permanent injunction. (b) Whenever it appears to the Commissioner that a person has engaged in any act or practice constituting a violation of any provision of this chapter or any rule or order hereunder, the Commissioner may request the Corporation Counsel to bring an action in the Superior Court of the District of Columbia to obtain one or more of the following remedies: (1) Temporary restraining order; (2) Temporary or permanent injunction; (3) A civil penalty not to exceed $10,000 for a single violation; (4) A declaratory judgment; (5) Appointment of a receiver or conservator for the defendant or the defendants assets; (6) A freeze of the defendants assets; or (7) Any other relief as the court deems just, such as rescission, restitution, or disgorgement. (c) The court shall not require the Commissioner to post a bond in any action under this section.  (Oct. 26, 2000, D.C. Law 13-203,  603, 47 DCR 7837.) 
 315606.04. Criminal penalties. (a) Any person who violates  31-5605.01 shall be guilty of a misdemeanor and, upon conviction thereof, shall pay a fine of not more than $1,000, be imprisoned for not more than one year, or both. All prosecutions under this subsection shall be upon information filed in the Superior Court of the District of Columbia in the name of the District by the Corporation Counsel or any of his or her assistants. (b) Any person who knowingly or intentionally violates any of the provisions of  31-5605.02,  31-5605.03,  31-5605.04, or  31-5605.05(b), shall be guilty of fraud in the second degree, as defined in  22-3221(b). (c) Any person who knowingly or intentionally violates any of the provisions of  31-5605.02,  31-5605.03,  31-5605.04, or  31-5605.05(b), by use of a plan, program, or campaign that is conducted using one or more telephones or other electronic means of communication for the purpose of inducing the purchase or sale of securities, shall be guilty of fraud in the first degree, as defined in  22-3221(a). (d) No prosecution for a violation of this chapter shall bar, or be barred by, a prosecution for the violation of any other law. All prosecutions under this chapter, or based upon any provision of this chapter, shall be commenced within 3 years after the violation upon which the prosecution is based. If the accused person has intentionally concealed evidence of a violation of  31-5605.02,  31-5605.03,  31-5605.04, or  31-5605.05(b), the period of limitation prescribed in this subsection shall be extended up to an additional 2 years after the prosecuting officer becomes aware of the offense. (e) Nothing in this chapter shall limit the power of the District to punish a person for conduct constituting a crime under other law.  (Oct. 26, 2000, D.C. Law 13-203,  604, 47 DCR 7837.) 
 315606.05. Civil liability. (a)(1) A person shall be civilly liable to another person who buys a security if the person: (A) Offers or sells a security in violation of  31-5602.01,  31-5603.01, or  31-5605.05, of a rule or order under  31-5604.05 which requires the affirmative approval of sales literature, or of a condition imposed under  31-5603.05(g) or (h); or (B) Offers or sells a security by means of an untrue statement of a material fact or an omission to state a material fact necessary in order to make the statement made, in the light of the circumstances under which made, not misleading, the buyer does not know of the untruth or omission and the offeror or seller does not sustain the burden of proof that the offeror or seller did not know, and in the exercise of reasonable care could not have known, of the untruth or omission. (2) A person shall be civilly liable to another person who sells a security if the person offers to purchase or purchases the security by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statement made, in the light of the circumstances under which it is made, not misleading, the seller does not know of the untruth or omission, and the purchaser does not sustain the burden of proof that the purchaser did not know, and in the exercise of reasonable care could not have known, of the untruth or omission. (3) A person shall be civilly liable to another person if the person: (A) Acts as an investment adviser or representative in violation of  31-5602.02, 31-5605.02, 31-5605.05(b), or of any rule or order adopted under  31-5604.05; or (B)(i) Receives directly or indirectly any consideration from the other person for advice as to the value of securities or their purchase or sale or for acting as an investment adviser or representative under  31-5601.01(17) or (18), whether through the issuance of analyses, reports or otherwise, and (ii) Employs an device, scheme, or artifice to defraud the other person or engages in an act, practice, or course of business which operates or would operate as a fraud or deceit on the other person. (b)(1) In an action brought under subsection (a)(1) of this section, a buyer may sue at law or in equity: (A) To recover the consideration paid for the security, interest at the rate used in the Superior Court of the District of Columbia from the date of payment, costs, and reasonable attorneys fees, less the amount of any income received on the security, upon the tender of the security and any income received on it; or (B) For damages if the buyer no longer owns the security. The amount of damages shall be the amount that would be recoverable on a tender less the value of the security when the buyer disposed of it, plus interest at the rate used in the Superior Court of the District of Columbia from the date of disposition. (2) In an action under subsection (a)(2) of this section, a seller may sue at law or in equity: (A) On tender of the consideration paid for the security, to recover the security, the amount of any income received on the security, costs, and reasonable attorneys fees; or (B) For damages if the buyer no longer owns the security. (3) In an action brought under subsection (a)(3) of this section, a person may sue at law or in equity for the rescission of the advisory contract and any damages resulting from the violation, interest at the rate used in the Superior Court of the District of Columbia from the date of payment of the consideration plus costs and reasonable attorneys fees, less the amount of any income received from such advice. (c) A person who directly or indirectly controls a person liable under subsection (a) of this section; a partner, officer, or director of the person liable; a person occupying a similar status or performing similar functions; an employee of the person liable who materially aids in the conduct giving rise to the liability; and a broker-dealer or agent who materially aids in the conduct shall be liable jointly and severally with, and to the same extent as the person liable, unless her or she is able to sustain the burden of proof that he or she did not know, and in exercise of reasonable care could not have known, of the existence of the facts by reason of which the liability is alleged to exist. There shall be contribution among the several persons so liable. (d) A tender specified in this section may be made at any time before entry of judgment. (e) A cause of action under this chapter shall survive the death of any person who might have been a plaintiff or defendant. (f)(1) A person may not sue under subsection (a)(1) and (2) of this section after the earlier of 3 years after the contract of sale or purchase, or the time specified in paragraph (2) of this subsection. (2) An action may not be maintained: (A) To enforce any liability under subsection (a)(1)(A) of this section unless brought within one year after the violation on which it is based; or (B) To enforce a liability under subsections (a)(1)(B) or (a)(2) of this section unless brought within one year after the discovery of the untrue statement or omission or after the discovery should have been made by the exercise of reasonable diligence. (3) A person may not sue under subsection (a)(3) of this section after the earlier of 3 years after the date of the advisory contract or the rendering of investment advice, or the expiration of 2 years after the discovery of the facts constituting the violation. (g) No person may sue under this section if: (1) The buyer received a written offer, before suit and at a time when the buyer owned the security or asset, to refund the consideration paid, and interest at the rate used in the Superior Court of the District of Columbia from the date of payment, less the amount of any income received on the security or asset, and the buyer failed to accept the offer within 30 days of its receipt; (2) The buyer received such an offer before suit and at a time when the buyer did not own the security or asset, unless the buyer rejected the offer in writing within 30 days of its receipt; or (3) The seller received a written offer from the buyer, before suit, to return the security or asset, together with the amount of any income received on the security, and interest at the rate used by the Superior Court of the District of Columbia from the date of payment, and the seller failed to accept the offer within 30 days of its receipt. (h) No person may sue on a contract if the person has made or engaged in the performance of the contract in violation of this chapter or any rule or order adopted under this chapter, or has acquired any purported right under the contract with knowledge of the facts by reason of which its making or performance violated this chapter or a rule or order adopted under this chapter. (i) A condition, stipulation, or provision that binds a person who acquires a security or asset, or receives a investment advice, to waive compliance with a provision of this chapter or a rule or order adopted under this chapter shall be void. (j) The rights and remedies provided by this chapter shall be in addition to any other rights or remedies that may exist at law or in equity, but this chapter does not create a cause of action not specified in this section or authorized under the bonding requirements of  31-5602.03(h).  (Oct. 26, 2000, D.C. Law 13-203,  605, 47 DCR 7837.)  Section References This section is referenced in  31-5608.01.
 315607.01. Administration of chapter. This chapter shall be administered by the Commissioner.  (Oct. 26, 2000, D.C. Law 13-203,  701, 47 DCR 7837.) 
 315607.02. Prohibitions on use of information. The Commissioner or an employee of the Commissioner shall not use for personal gain or benefit information filed with or obtained by the Commissioner which is not public information. The Commissioner or an employee of the Commissioner shall not conduct securities dealings based upon information filed with or obtained by the Commissioner, even though public, if there has not been sufficient time for the securities markets to assimilate the information.  (Oct. 26, 2000, D.C. Law 13-203,  702, 47 DCR 7837.) 
 315607.03. Public information; confidentiality. (a) Except as provided in subsection (b) of this section, information and documents filed with, or obtained by, the Commissioner shall be available for public examination under subchapter II of Chapter 5 of Title 2. (b) The following information and documents shall not constitute public information under subsection (a) of this section: (1) Information or documents obtained by the Commissioner in connection with an investigation under  31-5606.01; and (2) Information or documents filed with the Commissioner in connection with a registration statement under subchapter III of this chapter or a report under  31-5602.04 constituting trade secrets or commercial or financial information of a person for which a person is entitled to a claim of confidentiality or privilege.  (Oct. 26, 2000, D.C. Law 13-203,  703, 47 DCR 7837.) 
 315607.04. Cooperation with other agencies. (a) To encourage uniform interpretation and administration of this chapter and effective securities regulation and enforcement, the Commissioner may cooperate with the securities agencies or administrators of one or more states, Canadian provinces or territories, or another country, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Securities Investor Protection Corporation, any self-regulatory organization, any national or international organization of securities officials or agencies, and any governmental law enforcement or regulatory agency. (b) The cooperation authorized by subsection (a) shall include the following actions: (1) Establishing a central depository for registration under this chapter and for documents or records required or allowed to be maintained under this chapter; (2) Making a joint registration examination or investigation; (3) Holding a joint administrative hearing; (4) Filing and prosecuting a joint civil or administrative proceeding; (5) Sharing and exchanging personnel; (6) Sharing and exchanging information and documents; and (7) Formulating rules or proposed rules, statements of policy, guidelines, and interpretative opinions and releases.  (Oct. 26, 2000, D.C. Law 13-203,  704, 47 DCR 7837.) 
 315607.05. Rules, forms, and orders. (a) In addition to specific authority otherwise granted by this chapter, the Commissioner: (1) Shall adopt, as a rule, a description of the general course and method of where and how a person may obtain information or make a submission or request; (2) Shall adopt rules of practice setting forth the nature and requirements of all formal and informal procedures available to a person, including all forms that are to be used by a person dealing with the Commissioner; (b) To keep rules adopted by the Commissioner in harmony with the regulations adopted by the Securities and Exchange Commission under the federal securities laws and to encourage uniformity with the rules of securities agencies and administrators in other states, the Commissioner, so far as is consistent with this chapter, shall take into consideration the regulations adopted by the Securities and Exchange Commission and the rules of securities agencies and administrators in other states which have enacted a law comparable to this chapter. (c) Unless specifically provided in this chapter to the contrary, a rule or order may not be adopted, amended, or repealed unless the Commissioner determines that the action is in the public interest and appropriate for the protection of investors and is consistent with the purposes fairly intended by the policy and provisions of this chapter. (d) The Commissioner may, by rule or order, prescribe the form and content of financial statements required under this chapter, the circumstances under which consolidated financial statements must be filed, and whether a required financial statement must be certified and by whom. Unless the Commissioner provides, by rule or order, otherwise, and subject to the limitations of section 15 of the Securities Exchange Act of 1934 [15 U.S.C.  78o] and section 222 of the Investment Advisers Act of 1940 [15 U.S.C.  80b-18a], a financial statement required under this chapter must be prepared in accordance with generally accepted accounting principles or other accounting principles as are prescribed for the issuer of the financial statement by the Securities and Exchange Commission.  (Oct. 26, 2000, D.C. Law 13-203,  705, 47 DCR 7837.) 
 315607.06. Consent to service of process. (a) An applicant for licensure or registration under this chapter, and every issuer that proposes to offer a security in the District through any person acting as an agent, shall file with the Commissioner, in such form as may be prescribed by rule, an irrevocable consent appointing the Commissioner to be the persons attorney to receive service of any lawful process in any non-criminal suit, action, or proceeding against the person or the persons successor, executor or administrator which arises under this chapter, or any rule or order hereunder, after the consent is filed, with the same force and validity as if served personally on the person filing the consent. (b) A person who has filed a consent complying with subsection (a) of this section in connection with a previous application for licensing, registration, or notice filing need not file an additional consent. (c) If any person, including a nonresident of the District, engages in conduct prohibited or made actionable by this chapter or a rule or order hereunder, and the person has not filed a consent to service of process under subsection (a) of this section, and personal jurisdiction over the person cannot otherwise be obtained in the District, the conduct shall be deemed the persons appointment of the Commissioner to be the persons attorney to receive service of any lawful process in any non-criminal suit, action, or proceeding against the person or the persons successor, executor or administrator, which grows out of the conduct and which is brought under this chapter, or a rule or order adopted under this chapter, with the same force and validity as if served on the person personally. (d) Service under subsection (a) or (c) of this section may be made by leaving a copy of the process in the Commissioners office, but it shall not be effective unless: (1) The plaintiff, who may be the Commissioner in a suit, action, or proceeding instituted by the Commissioner, sends notice of the service and a copy of the process by registered or certified mail to the defendant or respondent at that persons last address on file with the Commissioner, or takes other steps reasonably calculated to give actual notice; and (2) The plaintiffs affidavit of compliance with this subsection is filed on or before the return day of the process, if any, or within such further time as the court or the Commissioner, in a proceeding before the Commissioner, allows. (e) Service as provided in subsection (d) of this section may be utilized in a proceeding before the Commissioner or by the Commissioner in a proceeding in which the Commissioner is the moving party. (f) When process is served under this section, the court, or the Commissioner, in a proceeding before the Commissioner, shall order such continuance as may be necessary to afford the defendant or respondent reasonable opportunity to defend.  (Oct. 26, 2000, D.C. Law 13-203,  706, 47 DCR 7837.)  Section References This section is referenced in  31-5602.03,  31-5602.10,  31-5603.02,  31-5603.03,  31-5603.04, and  31-5603.08.
 315607.07. Administrative files and records. (a) The Commissioner shall keep one or more registers of all applications for licensing and registration under this chapter, all notice filings, licenses and registration statements that become effective under this chapter, all disciplinary and enforcement orders issued and reports of investigation made under this chapter, all declaratory orders and rulings issued under this chapter, and all other orders issued under this chapter. (b) The Commissioner shall retain: (1) All licenses and related applications and all registration statements and notice filings currently effective or that have been effective within the last 5 years; (2) All licenses and related applications and all registration statements that have been denied, suspended, or revoked within the last 5 years and the order of suspension, denial, or revocation; (3) All investigatory files under this chapter that are open or that have been closed within the last 5 years and any disciplinary or closure orders pertaining to the files; (4) The transcript or record of all administrative hearings held during the last 5 years; and (5) All other orders of the Commissioner entered under this chapter. (c) All records required to be maintained pursuant to subsections (a) and (b) of this section may be maintained in any form of data storage. Upon request, the Commissioner shall certify under the seal of the Department a copy as being a true and correct copy of the records maintained by the Department. The Commissioner may, by rule, establish reasonable charges for furnishing or certifying copies. In an investigation or proceeding, a copy so certified shall be prima facie evidence of the contents of the records certified.  (Oct. 26, 2000, D.C. Law 13-203,  707, 47 DCR 7837.) 
 315607.08. Provisions applicable to administrative proceedings. (a) All actions of the Commissioner, including administrative proceedings, adoption of rules, and issuance of orders shall be governed by subchapter I of Chapter 5 of Title 2; provided, that: (1) The issuance of a stop order under  31-5603.03(e) shall be governed by  31-5603.03(e); and (2) The issuance of a summary order under  31-5606.02(a) shall be governed by  31-5606.02(a).  (Oct. 26, 2000, D.C. Law 13-203,  708, 47 DCR 7837.) 
 315607.09. Electronic filings. (a) The Commissioner may, by rule or order, prescribe acceptable methods for filing applications, forms, notices, prospectuses, registration statements, or other documents with the Department in electronic form. (b) The Commissioner may, by rule or order, prescribe acceptable methods for executing electronic signatures or otherwise for documents filed with the Department in electronic form. (c) An electronic signature used in connection with an electronic filing shall have the same legal effect as a manual signature.  (Oct. 26, 2000, D.C. Law 13-203,  709; as added June 25, 2002, D.C. Law 14-150,  2(l), 49 DCR 4238.) 
 315608.01. Scope of Chapter. (a) Sections 31-5602.01, 31-5603.01, 31-5605.01, or 31-5605.02, 31-5605.05, and 31-5606.05 shall apply to a person who sells, or offers to sell, when an offer to sell is made in the District or an offer to purchase is made and accepted in the District. (b) Sections 31-5602.01, 31-5605.01, or 31-5605.02, and 31-5605.05 shall apply to a person who purchases, or offers to purchase, when an offer to purchase, is made in the District or an offer to sell is made and accepted in the District. (c) For the purpose of this section, an offer to sell or to purchase is made in the District, whether or not either person is present in the District, if the offer originates in the District, or is directed by the offeror to a destination in the District and received where it is directed or at a post office in the District if the offer is mailed. (d) For the purpose of this section, an offer to purchase or to sell is accepted in the District if the acceptance is communicated to the offeror in the District and has not previously been communicated to the offeror, orally or in writing, outside the District. The acceptance is communicated to the offeror in the District, whether or not either party is then present in the District, when the offeree directs it to the offeror in the District reasonably believing the offeror to be in the District and it is received at the place to which it is directed or at any post office in the District in the case of a mailed acceptance. (e) An offer to sell or purchase is not made in the District when the publisher circulates, or there is circulated on the publishers behalf, in the District a bona fide newspaper or other publication of general, regular, and paid circulation which is not published in the District, or which is published in the District, but has had more than 2/3 of its circulation outside the District during the last 12 months, or a radio or television program originating outside the District is received in the District.  (Oct. 26, 2000, D.C. Law 13-203,  801, 47 DCR 7837.) 
 315608.02. District of Columbia Securities Advisory Committee. [Repealed] Repealed.  (Oct. 26, 2000, D.C. Law 13-203,  802, 47 DCR 7837; May 2, 2015, D.C. Law 20-271,  261, 62 DCR 1884.)  Emergency Legislation For temporary (90 days) repeal of this section, see  261 of the New Columbia Statehood Initiative, Omnibus Boards and Commissions, and Election Transition Reform Emergency Amendment Act of 2014 (D.C. Act 20-481, Nov. 18, 2014, 61 DCR 12133, 20 STAT 4405). For temporary (90 days) repeal of this section, see  261 of the New Columbia Statehood Initiative, Omnibus Boards and Commissions, and Election Transition Reform Congressional Review Emergency Amendment Act of 2015 (D.C. Act 21-7, Feb. 26, 2015, 62 DCR 2646, 21 STAT 807).
 315608.03. Judicial review. (a) If a hearing is conducted under the contested case procedure in accordance with  2-509, a person suffering a legal wrong, or adversely affected or aggrieved, by an order or decision may appeal to the District of Columbia Court of Appeals in accordance with  2-510. (b) The filing of an appeal under this section shall not stay the application of a rule, regulation, order, or other action of the Commissioner to the appealing party unless the court, after giving the appealing party notice and an opportunity to be heard, determines that failure to grant a stay would be detrimental to the interest of policyholders, shareholders, creditors, or the public.  (Oct. 26, 2000, D.C. Law 13-203,  803, 47 DCR 7837; June 19, 2001, D.C. Law 13-313,  22, 48 DCR 1873; June 25, 2002, D.C. Law 14-150,  2(m), 49 DCR 4238.)  Effect of Amendments D.C. Law 13-313 rewrote subsec. (a) which had read: (a) A person aggrieved by an act, determination, rule, regulation, order, or any other action of the Mayor, may appeal to the District of Columbia Court of Appeals in accordance with  2-510. D.C. Law 14-150 substituted Commissioner for Mayor throughout the section.
 315608.04. Repeal and transition provisions. (a) Chapters 36 and 37 of Title 3 (prior law), are repealed, subject to the transition provisions of subsections (b) through (e) of this section. (b) Prior law shall govern all suits, actions, prosecutions, or proceedings which are pending or may be initiated on the basis of facts or circumstances occurring before October 26, 2000. (c) A civil suit or action shall not be maintained to enforce a liability under prior law unless brought within the period of limitation which applied when the cause of action accrued and, in any event, no later than 2 years after October 26, 2000. (d) All effective registrations and notice filings under prior law, all administrative orders relating to such registrations and notice filings, and all conditions imposed upon such registrations shall apply to the extent they would have applied under prior law. (e) All no-action and opinion letters, administrative orders, and waivers issued under prior law or regulation shall apply to the extent they would have applied under prior law.  (Oct. 26, 2000, D.C. Law 13-203,  804, 47 DCR 7837.) 
 315701. Definition; authorized benefits and funds; governing provisions [Repealed] Repealed.  (Mar. 3, 1901, 31 Stat. 1310, ch. 854,  749; Dec. 20, 1928, 45 Stat. 1055, ch. 40,  1; Mar. 13, 1993, D.C. Law 9-181,  2, 39 DCR 8081; Mar. 16, 1993, D.C. Law 9-193,  2, 39 DCR 9009; Apr. 29, 1998, D.C. Law 12-86,  1237(a), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1201. 1973 Ed.,  35-901.
 315702. Authority of existing associations to continue business. [Repealed] Repealed.  (Mar. 3, 1901, 31 Stat. 1310, ch. 854,  750; May 21, 1997, D.C. Law 11-268,  10(n), 44 DCR 1730; Apr. 29, 1998, D.C. Law 12-86,  1237(a), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1202. 1973 Ed.,  35-902. Editor's Notes Department of Insurance abolished: The Department of Insurance, including the Superintendent, was abolished and the functions thereof transferred to the Board of Commissioners of the District of Columbia by Reorganization Plan No. 5 of 1952. Reorganization Order No. 43, dated June 23, 1953, as amended, established, under the direction and control of a Commissioner, a Department of Insurance headed by a Superintendent. The Order provided for the organization of the Department, abolished the previously existing Department of Insurance, and provided that all functions and positions of the previous Department would be transferred to the new Department of Insurance, including the duties, powers, and authorities of all officers and employees; and that all personnel, property, records and unexpended balances relating to the functions and positions transferred would also be transferred to the new Department. The executive functions of the Board of Commissioners were transferred to the Commissioner of the District of Columbia by  401 of Reorganization Plan No. 3 of 1967. The functions of the Superintendent of Insurance were transferred to the Department of Consumer and Regulatory Affairs by Reorganization Plan No. 1 of 1983, effective March 31, 1983. Pursuant to the provisions of D.C. Law 11-268, the Department of Insurance and Securities Regulation was established and the duties of the Superintendent of Insurance and the Insurance Administration were assumed by the Commissioner of Insurance and Securities and the Insurance Administration in the Department of Consumer and Regulatory Affairs was abolished.
 315703. Nonresident associations; filing requirements; required showing of authority; examinations. [Repealed] Repealed.  (Mar. 3, 1901, 31 Stat. 1310, ch. 854,  751; Mar. 21, 1995, D.C. Law 10-233,  5, 42 DCR 24; May 21, 1997, D.C. Law 11-268,  10(n), 44 DCR 1730; Apr. 29, 1998, D.C. Law 12-86,  1237(a), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1203. 1973 Ed.,  35-903. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-5702.
 315704. Required annual reports; contents. [Repealed] Repealed.  (Mar. 3, 1901, 31 Stat. 1311, ch. 854,  752; May 21, 1997, D.C. Law 11-268,  10(n), 44 DCR 1730; Apr. 29, 1998, D.C. Law 12-86,  1237(a), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1204. 1973 Ed.,  35-904. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-5702.
 315705. Service of process on nonresident associations. [Repealed] Repealed.  (Mar. 3, 1901, 31 Stat. 1312, ch. 854,  753; May 21, 1997, D.C. Law 11-268,  10(n), 44 DCR 1730; Apr. 29, 1998, D.C. Law 12-86,  1237(a), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1205. Editor's Notes Former  35-1205 1981 Ed. had also been amended by D.C. Law 10-128. D.C. Law 11-268,  10(n) ( 44 DCR 1730), eff. May 21, 1997, amends  35-1205 1981 Ed. without reference to its prior repeal.
 315706. Issuance of permit to do business. [Repealed] Repealed.  (Mar. 3, 1901, 31 Stat. 1312, ch. 854,  754; June 14, 1994, D.C. Law 10-128,  402(b), 41DCR 2096; May 21, 1997, D.C. Law 11-268, 10(n), 44 DCR 1730; Apr. 29, 1998, D.C. Law 12-86,  1237(a), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1206. 1973 Ed.,  35-906. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-5702. D.C. Law 12-261, title II,  2003(gg)(2) ( 46 DCR 3142), eff. April 20, 1999, amended  35-1206 31-5706, 2001 Ed. without reference to its prior repeal.
 315707. Formation procedure. [Repealed] Repealed.  (Mar. 3, 1901, 31 Stat. 1313, ch. 854,  755; Oct. 5, 1962, 76 Stat. 752, Pub. L. 87-757,  2; Apr. 29, 1998, D.C. Law 12-86,  1237(a), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1207. 1973 Ed.,  35-907.
 315708. Reincorporation or continuance of powers of existing corporations. [Repealed] Repealed.  (Mar. 3, 1901, 31 Stat. 1313, ch. 854,  756; Apr. 29, 1998, D.C. Law 12-86,  1237(a), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1208. 1973 Ed.,  35-908.
 315709. Incorporation of subordinate bodies. [Repealed] Repealed.  (Mar. 3, 1901, 31 Stat. 1314, ch. 854,  757; Apr. 29, 1998, D.C. Law 12-86,  1237(a), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1209. 1973 Ed.,  35-909.
 315710. Payment of assessments and/or dues by beneficiary. [Repealed] Repealed.  (Mar. 3, 1901, 31 Stat. 1314, ch. 854,  758; Apr. 29, 1998, D.C. Law 12-86,  1237(a), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1210. 1973 Ed.,  35-910.
 315711. Exemption of benefits from legal process. [Repealed] Repealed.  (Mar. 3, 1901, 31 Stat. 1314, ch. 854,  759; Apr. 29, 1998, D.C. Law 12-86,  1237(a), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1211. 1973 Ed.,  35-911.
 315712. Meetings. [Repealed] Repealed.  (Mar. 3, 1901, 31 Stat. 1314, ch. 854,  760; Apr. 29, 1998, D.C. Law 12-86,  1237(a), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1212. 1973 Ed.,  35-912.
 315713. Fraudulent representations. [Repealed] Repealed.  (Mar. 3, 1901, 31 Stat. 1315, ch. 854,  761; June 30, 1902, 32 Stat. 534, ch. 1329,  761; Apr. 29, 1998, D.C. Law 12-86,  1237(a), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1213. 1973 Ed.,  35-913.
 315714. Violations of provisions or injunction. [Repealed] Repealed.  (Mar. 3, 1901, 31 Stat. 1315, ch. 854,  762; Oct. 5, 1985, D.C. Law 6-42,  470(g), 32 DCR 4450; May 21, 1997, D.C. Law 11-268, 10(n), 44 DCR 1730; Apr. 29, 1998, D.C. Law 12-86,  1237(a), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1214. 1973 Ed.,  35-914. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-5702. Change in Government This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 401 of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to a single Commissioner. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11, abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 315715. Individual violations of provisions. [Repealed] Repealed.  (Mar. 3, 1901, 31 Stat. 1315, ch. 854,  763; Oct. 5, 1985, D.C. Law 6-42,  470(h), 32 DCR 4450; May 21, 1997, D.C. Law 11-268,  10, 44 DCR 1730; Apr. 29, 1998, D.C. Law 12-86,  1237(a), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1215. 1973 Ed.,  35-915. Editor's Notes Section 35-1215  31-5715, 2001 Ed. was also amended by D.C. Law 12-81 to validate a previously made technical correction. Department of Insurance abolished: See Historical and Statutory Notes following  31-5702.
 315716. Exceptions for associations for profit, certain specified organizations. [Repealed] Repealed.  (Mar. 3, 1901, 31 Stat. 1316, ch. 854,  764; Dec. 12, 1928, 45 Stat. 1021, ch. 24; Apr. 29, 1998, D.C. Law 12-86,  1237(a), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1216. 1973 Ed.,  35-916.
 315717. Exceptions to provisions  Associations or individuals using name of previously existing corporation. [Repealed] Repealed.  (Mar. 3, 1901, 31 Stat. 1316, ch. 854,  765; Apr. 29, 1998, D.C. Law 12-86,  1237(a), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1217. 1973 Ed.,  35-917.
 315718. Insurance and/or annuities upon lives of children; applications. [Repealed] Repealed.  (May 29, 1928, 45 Stat. 953, ch. 862,  2; Apr. 29, 1998, D.C. Law 12-86,  1237(b), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1218. 1973 Ed.,  35-918.
 315719. Insurance and/or annuities upon lives of children; applications  Computation of contributions. [Repealed] Repealed.  (May 29, 1928, 45 Stat. 953, ch. 862,  3; Apr. 29, 1998, D.C. Law 12-86,  1237(b), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1219. 1973 Ed.,  35-919.
 315720. Insurance and/or annuities upon lives of children; applications  Required reserve. [Repealed] Repealed.  (May 29, 1928, 45 Stat. 953, ch. 862,  4; Apr. 29, 1998, D.C. Law 12-86,  1237(b), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1220. 1973 Ed.,  35-920.
 315721. Insurance and/or annuities upon lives of children; applications  Powers of society. [Repealed] Repealed.  (May 29, 1928, 45 Stat. 953, ch. 862,  5; Apr. 29, 1998, D.C. Law 12-86,  1237(b), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1221. 1973 Ed.,  35-921.
 315722. Separation of fraternal and insurance activities; corporations affected. [Repealed] Repealed.  (Apr. 12, 1930, 46 Stat. 158, ch. 135,  1; May 21, 1997, D.C. Law 11-268,  10(o), 44 DCR 1730; Apr. 29, 1998, D.C. Law 12-86, 1237(c), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1222. 1973 Ed.,  35-922. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-5702.
 315723. Separation of fraternal and insurance activities  Certificate of corporation to be filed; contents. [Repealed] Repealed.  (Apr. 12, 1930, 46 Stat. 158, ch. 135,  2; May 21, 1997, D.C. Law 11-268,  10, 44 DCR 1730; Apr. 29, 1998, D.C. Law 12-86,  1237(c), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1223. 1973 Ed.,  35-923. Editor's Notes This section was also amended by D.C. Law 12-81 to validate previously made technical corrections. Department of Insurance abolished: See Historical and Statutory Notes following  31-5702.
 315724. Separation of fraternal and insurance activities  Approval and certificates of Commissioner required. [Repealed] Repealed.  (Apr. 12, 1930, 46 Stat. 159, ch. 135,  3; May 21, 1997, D.C. Law 11-268,  10(o), 44 DCR 1730; Apr. 29, 1998, D.C. Law 12-86, 1237(c), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1224. 1973 Ed.,  35-924. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-5702.
 315725. Separation of fraternal and insurance activities  General powers, duties, liabilities and structure of activities. [Repealed] Repealed.  (Apr. 12, 1930, 46 Stat. 159, ch. 135,  4; May 21, 1997, D.C. Law 11-268,  10, 44 DCR 1730; Apr. 29, 1998, D.C. Law 12-86,  1237(c), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1225. 1973 Ed.,  35-925. Editor's Notes This section was also amended by D.C. Law 12-81 to validate previously made technical corrections. Department of Insurance abolished: See Historical and Statutory Notes following  31-5702.
 315726. Separation of fraternal and insurance activities  Continuation and supervision of original corporation. [Repealed] Repealed.  (Apr. 12, 1930, 46 Stat. 160, ch. 135,  5; May 21, 1997, D.C. Law 11-268,  10(o), 44 DCR 1730; Apr. 29, 1998, D.C. Law 12-86, 1237(c), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1226. 1973 Ed.,  35-926. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-5702.
 315727. Separation of fraternal and insurance activities  Existing contracts preserved; Congressional powers reserved. [Repealed] Repealed.  (Apr. 12, 1930, 46 Stat. 160, ch. 135,  6; Apr. 29, 1998, D.C. Law 12-86,  1237(c), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1227. 1973 Ed.,  35-927.
 315728. Separation of fraternal and insurance activities  Applicability of state and District laws. [Repealed] Repealed.  (Apr. 12, 1930, 46 Stat. 160, ch. 135,  7; Apr. 29, 1998, D.C. Law 12-86,  1237(c), 45 DCR 1172.)  Prior Codifications 1981 Ed.,  35-1228. 1973 Ed.,  35-928.
 315801. Definitions [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-44,  17, 40 DCR 6027.)  Prior Codifications 1981 Ed.,  35-2001 to 35-2015.
 315802. Subsidiaries of domestic insurers [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-44,  17, 40 DCR 6027.)  Prior Codifications 1981 Ed.,  35-2001 to 35-2015.
 315803. Acquisition of control of or merger with domestic insurer [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-44,  17, 40 DCR 6027.)  Prior Codifications 1981 Ed.,  35-2001 to 35-2015.
 315804. Registration of insurers [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-44,  17, 40 DCR 6027.)  Prior Codifications 1981 Ed.,  35-2001 to 35-2015.
 315805. Transactions by insurers [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-44,  17, 40 DCR 6027.)  Prior Codifications 1981 Ed.,  35-2001 to 35-2015.
 315806. Examination of insurers [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-44,  17, 40 DCR 6027.)  Prior Codifications 1981 Ed.,  35-2001 to 35-2015.
 315807. Confidential treatment of information and documents of insurers [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-44,  17, 40 DCR 6027.)  Prior Codifications 1981 Ed.,  35-2001 to 35-2015.
 315808. Rules; regulations and orders [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-44,  17, 40 DCR 6027.)  Prior Codifications 1981 Ed.,  35-2001 to 35-2015.
 315809. Violations of chapter  Civil remedies [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-44,  17, 40 DCR 6027.)  Prior Codifications 1981 Ed.,  35-2001 to 35-2015.
 315810. Violations of chapter  Criminal proceedings [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-44,  17, 40 DCR 6027.)  Prior Codifications 1981 Ed.,  35-2001 to 35-2015.
 315811. Violations of chapter  Takeover of insurer by Mayor [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-44,  17, 40 DCR 6027.)  Prior Codifications 1981 Ed.,  35-2001 to 35-2015.
 315812. Violations of chapter  Suspension, revocation, or nonrenewal of insurers license [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-44,  17, 40 DCR 6027.)  Prior Codifications 1981 Ed.,  35-2001 to 35-2015.
 315813. Judicial remedies of persons aggrieved by actions of Mayor [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-44,  17, 40 DCR 6027.)  Prior Codifications 1981 Ed.,  35-2001 to 35-2015.
 315814. Chapter to supersede other laws [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-44,  17, 40 DCR 6027.)  Prior Codifications 1981 Ed.,  35-2001 to 35-2015.
 315815. Separability [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-44,  17, 40 DCR 6027.)  Prior Codifications 1981 Ed.,  35-2001 to 35-2015.
 315901. Required licenses for agents or brokers; compensation to unlicensed agents prohibited; violations [Repealed] Repealed.  (April 9, 1997, D.C. Law 11-227,  16(b), 44 DCR 140.)  Prior Codifications 1981 Ed.,  35-1301, 35-1302. Editor's Notes Former  35-1301 was also amended by  10(p) of D.C. Law 11-268, became effective on May 21, 1997. The amendment by D.C. Law 11-268, substituted Commissioner of Insurance and Securities for Superintendent of Insurance of the District in the first sentence.
 315902. Exemption of fraternal associations from provisions; licenses required for authorized solicitors; assignment of licenses; violations [Repealed] Repealed.  (April 9, 1997, D.C. Law 11-227,  16(b), 44 DCR 140.)  Prior Codifications 1981 Ed.,  35-1301, 35-1302. Editor's Notes Former  35-1301 was also amended by  10(p) of D.C. Law 11-268, became effective on May 21, 1997. The amendment by D.C. Law 11-268, substituted Commissioner of Insurance and Securities for Superintendent of Insurance of the District in the first sentence.
 31601. Definition. As used in this chapter, unless the context otherwise requires, domestic stock insurance company means a stock insurance company incorporated or organized under the laws of the District of Columbia.  (Apr. 18, 1966, 80 Stat. 123, Pub. L. 89-402,  1.)  Prior Codifications 1981 Ed.,  35-211. 1973 Ed.,  35-221.
 31602. Rules and regulations with respect to proxies, consents, and authorizations; violations; exemptions. (a) The Council of the District of Columbia shall promulgate rules and regulations with respect to the solicitation and voting of proxies, consents, and authorizations of domestic stock insurance companies in conformity, as nearly as may be practicable, with those prescribed by the National Association of Insurance Commissioners. The Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking] (hereinafter Commissioner) shall have power to revoke or suspend the certificate of authority to transact business in the District of Columbia of any such company which has failed or refused to comply with the rules and regulations promulgated by the Council. (b) The Commissioner shall not revoke nor suspend the certificate of authority of any such company until he has given the company not less than 30 days notice of the proposed revocation or suspension and of the grounds alleged therefor, and has afforded the company an opportunity for a full hearing; provided, that if the Commissioner shall find upon examination that the further transaction of business by the company would be hazardous to the public or to the policyholders or creditors of the company in the District, he may suspend such authority without giving notice as herein required; provided further, that in lieu of revoking or suspending the certificate of authority of any company, after hearing as herein provided, the Commissioner may subject such company to a penalty of not more than $500 when, in his judgment, he finds that the public interest would be best served by the continued operation of the company. The amount of any such penalty shall be paid by the company through the office of the Commissioner to the Mayor of the District of Columbia. At any hearing provided by this section, the Commissioner shall have authority to administer oaths to witnesses. Anyone testifying falsely after having been administered such an oath shall be subject to the penalties of perjury. (c) The provisions of subsections (a) and (b) of this section shall not apply to securities of a domestic stock insurance company if such securities shall be registered, or shall be required to be registered, pursuant to  12 of the Securities Exchange Act of 1934, as amended ( 781 of Title 15, United States Code).  (Apr. 18, 1966, 80 Stat. 123, Pub. L. 89-402,  2; May 21, 1997, D.C. Law 11-268,  10(f), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-212. 1973 Ed.,  35-222. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-5201. Change in Government This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 402(418) of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to the District of Columbia Council, subject to the right of the Commissioner as provided in  406 of the Plan. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 31603. Statements to be filed by beneficial owners, directors, or officers; sales restrictions; exemptions; equity security defined; rules and regulations; violations; effective date. (a) Every person who is directly or indirectly the beneficial owner of more than 10% of any class of any equity security of a domestic stock insurance company, or who is a director or an officer of such company, shall file in the office of the Commissioner on or before the 31st day of December 1965, or within 10 days after he becomes such beneficial owner, director, or officer, a statement, in such form as the Commissioner may prescribe, of the amount of all equity securities of such company of which he is the beneficial owner, and within 10 days after the close of each calendar month thereafter, if there has been a change in such ownership during such month, shall file in the office of the Commissioner a statement, in such form as the Commissioner may prescribe, indicating his ownership at the close of the calendar month and such changes in his ownership as have occurred during such calendar month. (b) For the purpose of preventing the unfair use of information which may have been obtained by such beneficial owner, director, or officer by reason of his relationship to such company, any profit realized by him from any purchase and sale, or any sale and purchase, of any equity security of such company within any period of less than 6 months, unless such security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the company, irrespective of any intention on the part of such beneficial owner, director, or officer in entering into such transaction of holding the security purchased or of not repurchasing the security sold for a period exceeding 6 months. Suit to recover such profit may be instituted at law or in equity in any court of competent jurisdiction by the company, or by the owner of any security of the company in the name and in behalf of the company if the company shall fail or refuse to bring such suit within 60 days after request or shall fail diligently to prosecute the same thereafter; but no such suit shall be brought more than 2 years after the date such profit was realized. This section shall not be construed to cover any transaction where such beneficial owner was not such both at the time of the purchase and sale, or the sale and purchase, of the security involved, or any transaction or transactions which the Council of the District of Columbia by rules and regulations may exempt as not comprehended within the purpose of this section. (c) It shall be unlawful for any such beneficial owner, director, or officer, directly or indirectly, to sell any equity security of such company if the person selling the security or his principal: (1) does not own the security sold; or (2) if owning the security, does not deliver it against such sale within 20 days thereafter, or does not within 5 days after such sale deposit it in the mails or other usual channels of transportation; but no person shall be deemed to have violated this section if he proves that, notwithstanding the exercise of good faith, he was unable to make such delivery or deposit within such time, or that to do so would cause undue inconvenience or expense. (d) The provisions of subsection (b) of this section shall not apply to any purchase and sale, or sale and purchase, and the provisions of subsection (c) of this section shall not apply to any sale, of an equity security of a domestic stock insurance company not then or theretofore held by him in an investment account, by a dealer in the ordinary course of his business and incident to the establishment or maintenance by him of a primary or secondary market (otherwise than on an exchange as defined in the Securities Exchange Act of 1934) for such security. The Council of the District of Columbia may, by such rules and regulations as it deems necessary or appropriate in the public interest, define and prescribe terms and conditions with respect to securities held in an investment account and transactions made in the ordinary course of business and incident to the establishment or maintenance of a primary or secondary market. (e) The provisions of subsections (a), (b), and (c) of this section shall not apply to foreign or domestic arbitrage transactions unless made in contravention of such rules and regulations as the Council of the District of Columbia may adopt in order to carry out the purposes of this section. (f) The term equity security when used in this section means any stock or similar security; or any security convertible with or without consideration, into such a security, or carrying any warrant or right to subscribe to or purchase such a security; or any such warrant or right; or any other security which the Council of the District of Columbia shall deem to be of similar nature and consider necessary or appropriate, by such rules and regulations as it may prescribe in the public interest or for the protection of investors, to treat as an equity security. (g) The provisions of subsections (a), (b), and (c) of this section shall not apply to securities of a domestic stock insurance company if: (1) Such securities shall be registered, or shall be required to be registered, pursuant to  12 of the Securities Exchange Act of 1934, as amended ( 781 of Title 15, United States Code); or (2) Such domestic stock insurance company shall not have any class of its equity securities held of record by 100 or more persons on the last business day of the year next preceding the year in which equity securities of the company would be subject to the provisions of subsections (a), (b), and (c) of this section except for the provisions of this paragraph. (h) The Council of the District of Columbia shall make such rules and regulations as may be necessary for the execution of the functions vested in the Commissioner by subsections (a) through (g) of this section, and may for such purpose classify domestic stock insurance companies, securities, and other persons or matters within his jurisdiction. No provisions of subsection (a), (b), or (c) of this section imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule or regulation of the Council notwithstanding that such rule or regulation may, after such act or omission, be amended or rescinded or determined by judicial or other authority to be invalid for any reason. (i) Any person who willfully violates any provision of this section, or any rule or regulation thereunder, the violation of which is made unlawful by this section or the observance of which is required under the terms of this section, or any person who willfully and knowingly makes, or causes to be made, any statement in any application, report, or document required to be filed under this section, which statement was false or misleading with respect to any material fact, shall upon conviction be fined not more than $1,000, or be imprisoned not more than 30 days, or both. Civil fines, penalties, and fees may be imposed as alternative sanctions for any infraction of the provisions of this chapter, or any rules or regulations issued under the authority of this chapter, pursuant to Chapter 18 of Title 2. Adjudication of any infraction of this chapter shall be pursuant to Chapter 18 of Title 2. (j) This section shall take effect 30 days after April 18, 1966.  (Apr. 18, 1966, 80 Stat. 123, Pub. L. 89-402,  3; Oct. 5, 1985, D.C. Law 6-42,  429, 32 DCR 4450; May 21, 1997, D.C. Law 11-268,  10(f), 44 DCR 1730; March 24, 1998, D.C. Law 12-81,  20, 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-213. 1973 Ed.,  35-223. Section References This section is referenced in  31-735 and  31-756. Cross References Domestic mutual insurance holding company membership interest as security, see  31-735. Mutual insurance holding company membership interest, status as equity security, see  31-756. References in Text The Securities Exchange Act of 1934, referred to in subsection (d) of this section, is classified to 15 U.S.C.  77b to 77e, 77j, 77k, 77m, 77o, 77s, and 78a to 78hh. The definition of an exchange appears in 15 U.S.C.  78c. Editor's Notes Department of Insurance abolished: See Historical and Statutory Notes following  31-5201. Change in Government This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 402 (419), (420), and (421) of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to the District of Columbia Council, subject to the right of the Commissioner as provided in  406 of the Plan. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 31604. Authority and functions of government entities. Nothing in this chapter shall be construed so as to affect the authority vested in the Mayor of the District of Columbia by Reorganization Plan No. 5 of 1952 (66 Stat. 824). The performance of any function vested by this chapter in the Mayor or in any office or agency under the jurisdiction and control of said Mayor may be delegated by said Mayor in accordance with  3 of such Plan.  (Apr. 18, 1966, 80 Stat. 125, Pub. L. 89-402,  4.)  Prior Codifications 1981 Ed.,  35-214. 1973 Ed.,  35-224. Change in Government This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 402 (419), (420), and (421) of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to the District of Columbia Council, subject to the right of the Commissioner as provided in  406 of the Plan. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818,  711 ( D.C. Code,  1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to  714(a) of such Act ( D.C. Code,  1-207.14(a)), appropriate changes in terminology were made in this section.
 316001. Purposes of chapter [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-51,  17, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-1901 to 35-1917.
 316002. Applicability of chapter [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-51,  17, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-1901 to 35-1917.
 316003. Definitions [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-51,  17, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-1901 to 35-1917.
 316004. Creation; composition; performance of functions; exercise of powers; organization [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-51,  17, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-1901 to 35-1917.
 316005. Board of directors [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-51,  17, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-1901 to 35-1917.
 316006. Powers and duties of Association [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-51,  17, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-1901 to 35-1917.
 316007. Plan of operation; notice of claims against insurers [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-51,  17, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-1901 to 35-1917.
 316008. Powers and duties of Mayor [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-51,  17, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-1901 to 35-1917.
 316009. Effect of paid claims [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-51,  17, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-1901 to 35-1917.
 316010. Nonduplication of recovery [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-51,  17, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-1901 to 35-1917.
 316011. Detection and prevention of insolvencies [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-51,  17, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-1901 to 35-1917.
 316012. Examination and regulation of Association [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-51,  17, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-1901 to 35-1917.
 316013. Exemption from fees and taxes [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-51,  17, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-1901 to 35-1917.
 316014. Policy rates and premiums [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-51,  17, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-1901 to 35-1917.
 316015. Immunity from liability [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-51,  17, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-1901 to 35-1917.
 316016. Proceedings involving insolvent insurers; reopening default judgments [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-51,  17, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-1901 to 35-1917.
 316017. Termination of operations and accounts; expiration of chapter [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-51,  17, 40 DCR 6120.)  Prior Codifications 1981 Ed.,  35-1901 to 35-1917.
 316101. Definitions [Repealed] Repealed.  (Mar. 8, 1991, D.C. Law 8-244,  12, 38 DCR 360.)  Prior Codifications 1981 Ed.,  35-2201 to 35-2209. Temporary Legislation Temporary repeal of chapter: Section 12 of D.C. Law 8-68, effective February 22, 1990, and section 12 of D.C. Law 8-218, effective March 6, 1991, repealed this chapter.
 316102. Applicability and scope [Repealed] Repealed.  (Mar. 8, 1991, D.C. Law 8-244,  12, 38 DCR 360.)  Prior Codifications 1981 Ed.,  35-2201 to 35-2209. Temporary Legislation Temporary repeal of chapter: Section 12 of D.C. Law 8-68, effective February 22, 1990, and section 12 of D.C. Law 8-218, effective March 6, 1991, repealed this chapter.
 316103. Policy definitions and terms [Repealed] Repealed.  (Mar. 8, 1991, D.C. Law 8-244,  12, 38 DCR 360.)  Prior Codifications 1981 Ed.,  35-2201 to 35-2209. Temporary Legislation Temporary repeal of chapter: Section 12 of D.C. Law 8-68, effective February 22, 1990, and section 12 of D.C. Law 8-218, effective March 6, 1991, repealed this chapter.
 316104. Prohibited policy provisions [Repealed] Repealed.  (Mar. 8, 1991, D.C. Law 8-244,  12, 38 DCR 360.)  Prior Codifications 1981 Ed.,  35-2201 to 35-2209. Temporary Legislation Temporary repeal of chapter: Section 12 of D.C. Law 8-68, effective February 22, 1990, and section 12 of D.C. Law 8-218, effective March 6, 1991, repealed this chapter.
 316105. Notice of free examination [Repealed] Repealed.  (Mar. 8, 1991, D.C. Law 8-244,  12, 38 DCR 360.)  Prior Codifications 1981 Ed.,  35-2201 to 35-2209. Temporary Legislation Temporary repeal of chapter: Section 12 of D.C. Law 8-68, effective February 22, 1990, and section 12 of D.C. Law 8-218, effective March 6, 1991, repealed this chapter.
 316106. Minimum benefit standards [Repealed] Repealed.  (Mar. 8, 1991, D.C. Law 8-244,  12, 38 DCR 360.)  Prior Codifications 1981 Ed.,  35-2201 to 35-2209. Temporary Legislation Temporary repeal of chapter: Section 12 of D.C. Law 8-68, effective February 22, 1990, and section 12 of D.C. Law 8-218, effective March 6, 1991, repealed this chapter.
 316107. Loss ratio standards [Repealed] Repealed.  (Mar. 8, 1991, D.C. Law 8-244,  12, 38 DCR 360.)  Prior Codifications 1981 Ed.,  35-2201 to 35-2209. Temporary Legislation Temporary repeal of chapter: Section 12 of D.C. Law 8-68, effective February 22, 1990, and section 12 of D.C. Law 8-218, effective March 6, 1991, repealed this chapter.
 316108. Required disclosure provisions [Repealed] Repealed.  (Mar. 8, 1991, D.C. Law 8-244,  12, 38 DCR 360.)  Prior Codifications 1981 Ed.,  35-2201 to 35-2209. Temporary Legislation Temporary repeal of chapter: Section 12 of D.C. Law 8-68, effective February 22, 1990, and section 12 of D.C. Law 8-218, effective March 6, 1991, repealed this chapter.
 316109. Requirements for replacement [Repealed] Repealed.  (Mar. 8, 1991, D.C. Law 8-244,  12, 38 DCR 360.)  Prior Codifications 1981 Ed.,  35-2201 to 35-2209. Temporary Legislation Temporary repeal of chapter: Section 12 of D.C. Law 8-68, effective February 22, 1990, and section 12 of D.C. Law 8-218, effective March 6, 1991, repealed this chapter.
 316201. Definitions [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-40,  13(b), 40 DCR 6009.)  Prior Codifications 1981 Ed.,  35-1601 to 35-1609. Editor's Notes D.C. Law 11-268,  10(s) ( 44 DCR 1730), eff. May 21, 1997, amends these sections subsequent to repeal.
 316202. Applicability of provisions [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-40,  13(b), 40 DCR 6009.)  Prior Codifications 1981 Ed.,  35-1601 to 35-1609. Editor's Notes D.C. Law 11-268,  10(s) ( 44 DCR 1730), eff. May 21, 1997, amends these sections subsequent to repeal.
 316203. Adjustment of rates; removal of discriminations; right of aggrieved party to administrative or judicial hearing [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-40,  13(b), 40 DCR 6009.)  Prior Codifications 1981 Ed.,  35-1601 to 35-1609. Editor's Notes D.C. Law 11-268,  10(s) ( 44 DCR 1730), eff. May 21, 1997, amends these sections subsequent to repeal.
 316204. Rating Bureau [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-40,  13(b), 40 DCR 6009.)  Prior Codifications 1981 Ed.,  35-1601 to 35-1609. Editor's Notes D.C. Law 11-268,  10(s) ( 44 DCR 1730), eff. May 21, 1997, amends these sections subsequent to repeal.
 316205. Conformance of policies to requirements of Superintendent; excess rates [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-40,  13(b), 40 DCR 6009.)  Prior Codifications 1981 Ed.,  35-1601 to 35-1609. Editor's Notes D.C. Law 11-268,  10(s) ( 44 DCR 1730), eff. May 21, 1997, amends these sections subsequent to repeal.
 316206. Records required to be kept [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-40,  13(b), 40 DCR 6009.)  Prior Codifications 1981 Ed.,  35-1601 to 35-1609. Editor's Notes D.C. Law 11-268,  10(s) ( 44 DCR 1730), eff. May 21, 1997, amends these sections subsequent to repeal.
 316207. Examination of records; required reports [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-40,  13(b), 40 DCR 6009.)  Prior Codifications 1981 Ed.,  35-1601 to 35-1609. Editor's Notes D.C. Law 11-268,  10(s) ( 44 DCR 1730), eff. May 21, 1997, amends these sections subsequent to repeal.
 316208. Filing requirements [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-40,  13(b), 40 DCR 6009.)  Prior Codifications 1981 Ed.,  35-1601 to 35-1609. Editor's Notes D.C. Law 11-268,  10(s) ( 44 DCR 1730), eff. May 21, 1997, amends these sections subsequent to repeal.
 316209. Violations [Repealed] Repealed.  (Oct. 21, 1993, D.C. Law 10-40,  13(b), 40 DCR 6009.)  Prior Codifications 1981 Ed.,  35-1601 to 35-1609. Editor's Notes D.C. Law 11-268,  10(s) ( 44 DCR 1730), eff. May 21, 1997, amends these sections subsequent to repeal.
 31631. Definitions. For the purposes of this chapter, the term: (1) Applicant means an individual, or other person designated by the Commissioner by rule, applying for any of the following: (A) An initial license as a resident insurance producer pursuant to Chapter 11A of this title [ 31-1131.01 et seq.], or public insurance adjuster pursuant to Chapter 16A of this title [ 31-1631.01 et seq.]; (B) A license or registration to be an agent, broker-dealer, investment adviser, or investment adviser representative pursuant to Chapter 56 of this title [ 31-5601.01 et seq.]; (C) A charter to open and operate a new bank pursuant to Chapter 7 of Title 26 [ 26-701 et seq.]; or (D) A license, charter, or registration, other than those designated in subparagraphs (A) through (C) of this paragraph, as designated by the Commissioner by rule. (2) Commissioner means the Commissioner of the Department of Insurance, Securities, and Banking. (3) Fingerprint means an impression of the lines on the finger taken for the purpose of identification. The impression may be electronic or in ink converted to an electronic format.  (June 20, 2012, D.C. Law 19-143,  101, 59 DCR 4069.) 
 31632. Fingerprinting and criminal history record background checks. (a) The Commissioner shall require state and national criminal history record background checks of each applicant for the purpose of determining eligibility for a license, registration, or charter. In order for the Commissioner to obtain and receive national criminal history records from the Federal Bureau of Investigations Criminal Justice Information Services Division, the Commissioner shall require each applicant to submit a full set of fingerprints, including a scanned electronic or digital fingerprint or a hard copy fingerprint. (b) The applicant shall bear the cost of administering and processing the fingerprinting and criminal history record background checks. The Commissioner shall establish, by rule, fees to cover the costs associated with the fingerprinting and criminal history record background checks. (c) The Commissioner may contract for the collection and transmission of fingerprints authorized under this chapter, including any administrative functions related thereto. (d) The Commissioner may exchange the fingerprints and other information with, and receive criminal history record background information from, the Metropolitan Police Department and the Federal Bureau of Investigation for the purpose of facilitating determinations regarding eligibility for licensure under this chapter. The Metropolitan Police Department may exchange this fingerprint data with the Federal Bureau of Investigation.  (June 20, 2012, D.C. Law 19-143,  102, 59 DCR 4069.) 
 31633. Confidentiality. (a) The Commissioner shall: (1) Treat and maintain applicants fingerprints and any criminal history record background information obtained under this chapter as confidential; (2) Apply security measures consistent with the Criminal Justice Information Services Division of the Federal Bureau of Investigations standards for the electronic storage of fingerprints and necessary identifying information; and (3) Limit the use of records solely for the purposes authorized by this chapter. (b) For the purposes of this chapter, any such records shall: (1) Not be deemed to be a public record within the meaning of  2-502(18); (2) Not be subject to disclosure, except pursuant to a subpoena issued by order of a court of competent jurisdiction; (3) Be kept confidential by law and privileged; and (4) Not be subject to discovery or admissible in any private civil action.  (June 20, 2012, D.C. Law 19-143,  103, 59 DCR 4069.) 
 31634. Rules. The Commissioner, pursuant to Chapter 5 of Title 2 [ 2-501 et seq.], may issue rules to implement the provisions of this chapter.  (June 20, 2012, D.C. Law 19-143,  104, 59 DCR 4069.)  Editor's Notes Because of the enactment by D.C. Law 11-159 of subchapter II of Chapter 37 of Title 35 [subchapter II of Title 31, 2001 Ed.], the preexisting text, including  35-3701 through 35-3714 [ 31-701 through 31-714, 2001 Ed.], was designated as subchapter I.
 31651.01. Definitions. For the purposes of this chapter, the term: (1) Delivered by electronic means means delivery to an electronic mail address at which a party has consented to receive notices or documents or the posting on an electronic network or site accessible via the Internet, mobile application, computer, mobile device, tablet, or any other electronic device, together with separate notice of the posting, which shall be provided by electronic mail to the address at which the party has consented to receive notice or by any other delivery method that has been consented to by the party. (2) Insurance document means any notice or document required in an insurance transaction or that is evidence of insurance coverage. (3) Party means a recipient of an insurance document, including an applicant, an insured, a policyholder, or an annuity contract holder.  (Mar. 10, 2015, D.C. Law 20-201,  2, 61 DCR 12565.) 
 31651.02. Electronic notices and documents. (a) An insurance document may be delivered, stored, and presented by electronic means; provided, that it meets the requirements of Chapter 49 of Title 28. (b) Delivery of an insurance document in accordance with this section shall be considered the equivalent to any delivery method required under applicable law, including delivery by first class mail; first class mail, postage prepaid; certified mail; certificate of mail; or certificate of mailing. (c) An insurance document may be delivered by electronic means to a party under this section if: (1) The party has affirmatively consented to that method of delivery and has not withdrawn consent to such delivery; (2) The party, before giving consent, is provided with a clear and conspicuous statement informing the party: (A) Of the right or option of the party to have an insurance document provided or made available in paper or another non-electronic form; (B) The right of the party to withdraw consent to have an insurance document delivered by electronic means and of any conditions or consequences that may be imposed on the party if consent is withdrawn; (C) That no fees may be imposed as a condition or consequence of withdrawal of consent; (D) As to whether the partys consent applies only to the particular transaction or to identified categories of insurance documents that may be delivered by electronic means during the course of the relationship between the sender of the insurance documents and the party; (E) Of the means, after consent for delivery by electronic means is given, by which a party may also obtain a paper copy of an insurance document and a statement that no fee shall be imposed for providing the requested paper copy; and (F) Of the procedure a party must follow to withdraw consent to have any or all insurance documents delivered by electronic means and of how to update information needed to contact the party electronically; (3) The party: (A) Before giving consent, is provided with a statement of the hardware and software requirements for access to and retention of an insurance document delivered by electronic means; and (B) Consents electronically, or confirms consent electronically, in a manner that reasonably demonstrates that the party can access information in the electronic form that will be used for insurance documents delivered by electronic means; and (4) After consent of the party is given, in the event a change in the hardware or software requirements needed to access or retain an insurance document delivered by electronic means creates a material risk that the party will not be able to access or retain a subsequent insurance document to which the partys consent applies, the insurer: (A) Provides the party with a statement regarding the revised hardware and software requirements that will be necessary for access to and retention of an insurance document delivered by electronic means and of the right of the party to withdraw consent without the imposition of any fee, condition, or consequence that was not disclosed under paragraph (2)(B) of this subsection; and (B) Complies with paragraph (2) of this subsection. (d) This section shall not affect requirements related to content or timing of any insurance document required under applicable law. (e) If a provision of this chapter or applicable law requiring an insurance document to be provided to a party expressly requires verification or acknowledgement of receipt of the insurance document, the insurance document may be delivered by electronic means only if the method used provides for verification or acknowledgement of receipt. (f) The legal effectiveness, validity, or enforceability of any contract or policy of insurance executed by a party shall not be denied solely because of the failure to obtain electronic consent or confirmation of consent of the party in accordance with subsection (c)(3)(B) of this section. (g)(1) A withdrawal of consent by a party does not affect the legal effectiveness, validity, or enforceability of an insurance document delivered by electronic means to the party before the withdrawal of consent is effective. (2) A withdrawal of consent by a party is effective within a reasonable period of time after receipt by the insurer of a partys withdrawal of consent that insurance documents may be delivered by electronic means. (3) Failure by an insurer to comply with subsection (c)(4) of this section may be treated, at the election of the party, as a withdrawal of consent pursuant to this section. (h) This section does not apply to an insurance document delivered by an insurer in an electronic form to a party who before March 10, 2015, had consented to receive notices or documents pertaining to an insurance transaction in an electronic form allowed by a law other than this chapter. (i) If the consent of a party to receive certain notices or documents in an electronic form is on file with the insurer before March 10, 2015, and, pursuant to this section, an insurer intends to deliver additional notices or documents electronically, the insurer shall notify the party of: (1) The insurance documents that may be delivered by electronic means pursuant to this section that were not previously delivered electronically; and (2) The partys right to withdraw consent to have insurance documents delivered by electronic means. (j)(1) Except as otherwise provided by law, if an oral communication has been recorded and can be reliably stored and reproduced by an insurer, the oral communication or recording may qualify as an insurance document delivered by electronic means pursuant to this section. (2) If a provision of this chapter or other applicable law requires a signature or for an insurance document to be notarized, acknowledged, verified, or executed under oath, the requirement shall be satisfied if the electronic signature of the person authorized to perform the action, together with all other information required to be included, is attached to or logically associated with the signature and the insurance document. (k) This section shall not be construed to modify, limit, or supersede the provisions of the Electronic Signatures in Global and National Commerce Act, approved June 30, 2000 (114 Stat. 464; 15 U.S.C.  7001).  (Mar. 10, 2015, D.C. Law 20-201,  3, 61 DCR 12565.) 
 31651.03. Posting of policies on the Internet. Notwithstanding any provision of  31-651.02, standard property and casualty insurance policies and endorsements that do not contain personally identifiable information may be mailed, delivered, or posted on the insurers website. If the insurer elects to post insurance policies and endorsements on its website in lieu of mailing or delivering them to the insured, the insurer shall: (1) Ensure that the policy and endorsements are accessible and remain that way for as long as the policy is in force; (2) After the expiration of the policy, archive its expired policies and endorsements for a period of 5 years and make them available upon request; (3) Post the policies and endorsements in a manner that enables an insured to print and save the policy and endorsements using programs or application that are widely available on the Internet and free to use; (4) Provide the following information in, or simultaneous with, each declaration page provided at the time of issuance of the initial policy and any renewals of that policy: (A) A description of the exact policy and endorsement forms purchased by the insured; (B) A method by which the insured may obtain, upon request and without charge, a paper copy of their policy; and (C) The Internet address where the policy and endorsements are posted; and (5) Provide notice, in the format preferred by the insured, of any changes to the forms or endorsements, the insureds right to obtain, upon request and without charge, a paper copy of the forms or endorsements, and the Internet address where the forms or endorsements are posted.  (Mar. 10, 2015, D.C. Law 20-201,  4, 61 DCR 12565.) 
 31701. Definitions. For the purposes of this subchapter, the term: (1) Affiliate means a person that directly, or indirectly through 1 or more intermediaries, controls, or is controlled by, or is under common control with, the person specified. (1A) Commissioner means the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking]. (2) Control, including the terms controlling, controlled by, and under common control with, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing 10% or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided by  31-705(k) that control does not exist in fact. The Mayor may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support such a determination, that control exists in fact, notwithstanding the absence of a presumption to that effect. (3) District means the District of Columbia. (3A) Enterprise risk means any activity, circumstance, event, or series of events involving one or more affiliates of an insurer that if not remedied promptly is likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole, including anything that would cause the insurers risk-based capital to fall into company action level as set forth in Chapter 20 of this title [ 31-2001 et seq.], and Chapter 34A of title [ 31-.01 et seq.], or would cause the insurer to be in hazardous financial condition as provided in  31-2101. (3B) "Group-wide supervisor" means the regulatory official authorized to engage in conducting and coordinating group-wide supervision activities who is determined and acknowledged by the Commissioner under  31-706.01 to have sufficient significant contacts with the internationally active insurance group. (3C) Hospital service plan means a plan for providing hospital and related services by hospitals and others which entitles a subscriber to certain hospital and related services, or to benefits and indemnification for such services. (4) Insurance holding company system means an arrangement which consists of 2 or more affiliated persons, one or more of whom is an insurer. (5) Insurer includes any company defined by  31-2501.03 and 31-4202, authorized to do the business of insurance in the District, except that it shall not include agencies, authorities, or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District, or a state or political subdivision of a state. (5A) "Internationally active insurance group" means an insurance holding company system that includes an insurer registered pursuant to  31-704 that: (A) Writes premiums in at least 3 countries; (B) Has a percentage of gross premiums written outside the United States that is at least10% of its total gross written premiums; and (C) Based on a 3-year rolling average, has total assets that are at least $50 billion or total gross written premiums of at least $10 billion. (5B) Medical service plan means a plan for providing medical services and related services by physicians and others which entitles a subscriber to certain medical and related services, or to benefits and indemnification for such services. (5C) "NAIC" means the National Association of Insurance Commissioners. (5D) Party means the Mayor and any person or District government agency named or admitted as a party, or properly seeking and entitled as of right to be admitted as a party, in any proceeding before the Mayor or an agency, but nothing herein shall be construed to prevent the Mayor or an agency from admitting the Mayor or any person or agency as a party for limited purposes. (6) Person means an individual, a corporation, a partnership, an association, a joint stock company, a trust, an unincorporated organization, any similar entity, or any combination of the foregoing acting in concert, but shall not include any joint venture partnership exclusively engaged in owning, managing, leasing, or developing real or tangible personal property. (7) Securityholder means an individual who owns any security of a specified person, including common stock, preferred stock debt obligations, and any other security convertible into or evidencing the right to acquire any of the foregoing. (8) Subsidiary means an affiliate controlled by a specified person directly or indirectly through 1 or more intermediaries. (9) Repealed. (10) Voting security means any security convertible into or evidencing a right to acquire a voting security.  (Oct. 21, 1993, D.C. Law 10-44,  2, 40 DCR 6027; May 21, 1997, D.C. Law 11-268,  10(gg)(1), 44 DCR 1730; Dec. 9, 2003, D.C. Law 15-56,  2(a), 50 DCR 9188; Apr. 13, 2005, D.C. Law 15-354,  41, 52 DCR 2638; Mar. 11, 2015, D.C. Law 20-235,  2(a) 62 DCR 461; Apr. 11, 2019, D.C. Law 22-292,  101(a), 66 DCR 1691.)  Prior Codifications 1981 Ed.,  35-3701. Section References This section is referenced in  31-301,  31-401,  31-704,  31-1371.05,  31-1371.06,  31-3510, and  31-5031.13. Effect of Amendments D.C. Law 15-56 added pars. (3A), (4A), and (5A). D.C. Law 15-354, in subsec. (a), validated a previously made technical correction. The 2015 amendment by D.C. Law 20-235 redesignated former (3A) as (3B); and added (3A). Cross References Business transacted with producer controlled insurer, see  31-401 et seq. Applicability  Section 401 of D.C. Law 22-292 provided that the changes made to this section by D.C. Law 22-292 shall apply to all insurance policies issued or renewed in the District 90 days after April 11, 2019.  Emergency Legislation For temporary (90 day) amendment of section, see  2(a) of Department of Insurance and Securities Regulation Merger Review Emergency Amendment Act of 2002 (D.C. Act 14-457, July 23, 2002, 48 DCR 8132). For temporary (90 day) amendment of section, see  2(a) of Department of Insurance and Securities Regulation Merger Review Congressional Review Emergency Amendment Act of 2002 (D.C. Act 14-513, October 23, 2002, 49 DCR 10475). For temporary (90 day) amendment of section, see  2(a) of Department of Insurance and Securities Regulation Merger Review Congressional Review Emergency Amendment Act of 2003 (D.C. Act 15-8, January 27, 2003, 50 DCR 1473). For temporary (90 day) amendment of section, see  2(a) of Department of Insurance and Securities Regulation Merger Review Emergency Amendment Act of 2003 (D.C. Act 15-205, October 24, 2003, 50 DCR 9845). For temporary (90 day) amendment of section, see  2(a) of Department of Insurance and Securities Regulation Merger Review Second Congressional Review Emergency Amendment Act of 2003 (D.C. Act 15-257, November 25, 2003, 50 DCR 11006). Temporary Legislation For temporary (225 day) amendment of section, see  2(a) of Department of Insurance and Securities Regulation Merger Review Temporary Amendment Act of 2002 (D.C. Law 14-217, March 25, 2003, law notification 50 DCR 2730). Editor's Notes Because of the codification of D.C. Law 11-159 as subchapter II of Chapter 37 of Title 35 [subchapter II of Chapter 7 of Title 31, 2001 Ed.[, and the designation of the preexisting text as subchapter I, subchapter has been substituted for chapter in the introductory language. Delegation of Authority Delegation of authority pursuant to D.C. Law 10-44, the Holding Company System Act of 1993, see Mayors Order 94-54, March 7, 1994 ( 41 DCR 1433).
 31702. Subsidiaries of insurers. (a) Any domestic insurer, either by itself or in cooperation with 1 or more persons, may organize or acquire 1 or more subsidiaries. The subsidiaries may conduct any kind of business and their authority to do so shall not be limited by reason of the fact that they are subsidiaries of a domestic insurer. (b) In addition to investments in common stock, preferred stock, debt obligations, and other securities permitted under the insurance laws of the District, a domestic insurer may also: (1) Invest, in common stock, preferred stock, debt obligations, and other securities of 1 or more subsidiaries, amounts which do not exceed the lesser of 10% of the insurers assets or 50% of the insurers surplus as regards policyholders; provided that after these investments, the insurers surplus as regards policyholders will be reasonable in relation to the insurers outstanding liabilities and adequate to its financial needs. In calculating the amount of these investments, investments in domestic or foreign insurance subsidiaries shall be excluded, and there shall be included: (A) Total net monies or other consideration expended and obligations assumed in the acquisition or formation of a subsidiary, including all organizational expenses and contributions to capital and surplus of the subsidiary whether or not represented by the purchase of capital stock or issuance of other securities; and (B) All amounts expended in acquiring additional common stock, preferred stock, debt obligations, and other securities and all contributions to the capital or surplus, of a subsidiary subsequent to its acquisition or formation; (2) Invest any amount in common stock, preferred stock, debt obligations, and other securities of 1 or more subsidiaries engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer, provided, that each subsidiary agrees to limit its investments in any asset so that the investments will not cause the amount of the total investment of the insurer to exceed any of the investment limitations specified in or in paragraph (1) of this subsection or in  31-2502.18 [repealed], or in  31-4435 [repealed] and 31-4442, applicable to the insurer. For the purposes of this paragraph, the term the total investment of the insurer shall include: (A) Any direct investment by the insurer in an asset; and (B) The insurers proportionate share of any investment in an asset by any subsidiary of the insurer, which shall be calculated by multiplying the amount of the subsidiarys investment by the percentage of the ownership of such a subsidiary; or (3) With the approval of the Mayor, invest any greater amount in common stock, preferred stock, debt obligations, or other securities of 1 or more subsidiaries; provided, that after the investment the insurers surplus as regards policyholders will be reasonable in relation to the insurers outstanding liabilities and adequate to its financial needs. (c) Investments in common stock, preferred stock, debt obligations, or other securities of subsidiaries made pursuant to subsection (b) of this section shall not be subject to any of the otherwise applicable restrictions or prohibitions contained in the insurance laws of the District applicable to the investments of insurers. (d) Whether any investment pursuant to subsection (b) of this section meets the applicable requirements is to be determined before the investment is made by calculating the applicable investment limitations as though the investment had already been made, taking into account the then outstanding principal balance on all previous investments in debt obligations, and the value of all previous investments in equity securities as of the day they were made, net of any return of capital invested, not including dividends. (e) If an insurer ceases to control a subsidiary, it shall dispose of any investment therein made pursuant to this section within 3 years from the time of the cessation of control or within any further time the Mayor may prescribe, unless at any time after the investment shall have been made, the investment shall have met the requirements for investment under any other section of the insurance laws of the District, and the insurer has notified the Mayor.  (Oct. 21, 1993, D.C. Law 10-44,  3, 40 DCR 6027; Mar. 24, 1998, D.C. Law 12-81,  40(a), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-3702. Section References This section is referenced in  31-755 and  31-1371.03.
 31703. Acquisition of control of or merger with domestic insurer. (a)(1) No person other than the issuer shall make a tender offer for or a request or invitation for tenders of, enter into any agreement to exchange securities, or seek to acquire, or acquire, in the open market or otherwise, any voting security of a domestic insurer, if, after consummation, the person would, directly or indirectly (or by conversion or by exercise of any right to acquire) be in control of the insurer. (2) No person shall enter into an agreement to merge with or otherwise to acquire control of a domestic insurer or any person controlling a domestic insurer unless, at the time the offer, request, or invitation is made or any agreement is entered into, or prior to the acquisition of the securities if no offer or agreement is involved, the person has filed with the Mayor and has sent to the insurer, a statement containing the information required by this section and the offer, request, invitation, agreement, or acquisition has been approved by the Mayor in the manner prescribed by this subchapter. (3) For the purposes of this section, any controlling person of a domestic insurer seeking to divest its controlling interest in the domestic insurer, in any manner, shall file with the Mayor, with a copy to the insurer, confidential notice of its proposed divestiture at least 30 days before the cessation of control. The Mayor shall determine those instances in which the party or parties seeking to divest or to acquire a controlling interest in an insurer will be required to file for and obtain approval of the transaction. The information shall remain confidential until the conclusion of the transaction unless the Mayor, in the Mayors discretion, determines that confidential treatment will interfere with enforcement of this subchapter. If the statement referred to in paragraph (2) of this subsection is otherwise filed, this paragraph shall not apply. (b)(1) For purposes of this section, the term domestic insurer shall include any person controlling a domestic insurer unless the person, as determined by the Mayor, is either directly or through its affiliates primarily engaged in business other than the business of insurance. However, such a person shall file a preacquisition notification with the Mayor containing the information set forth in  31-704(c) 30 days prior to the proposed effective date of the acquisition. Failure to file is subject to  31-704(e). (2) For the purposes of this section, the term person shall not include any securities broker holding, in the usual and customary brokers function, less than 20% of the voting securities of an insurance company or of any person who controls an insurance company. (c) The statement to be filed with the Mayor shall be made under oath or affirmation and shall contain the following information: (1) The name and address of each person by whom or on whose behalf the merger or other acquisition of control referred to in subsections (a) and (b) of this section is to be effected (hereinafter called acquiring party): (A) If the person is an individual, his or her principal occupation and all offices and positions held during the past 5 years, and any conviction of crimes, other than minor traffic violations, during the past 10 years; or (B) If the person is not an individual, a report of the nature of its business operations during the past 5 years or for any lesser period the person and any predecessors shall have been in existence; an informative description of the business intended to be done by the person and the persons subsidiaries; and a list of all individuals who are or who have been selected to become directors or executive officers of the person, or who perform or will perform functions appropriate to these positions. The list shall include for each individual the information required by subparagraph (A) of this paragraph; (2) The source, nature, and amount of the consideration used, or to be used, in effecting the merger or other acquisition of control, a description of any transaction wherein funds were or are to be obtained for this purpose (including any pledge of the insurers stock, or the stock of any of its subsidiaries or controlling affiliates), and the identity of persons furnishing the consideration; provided, however, that where a source of the consideration is a loan made in the lenders ordinary course of business, the identity of the lender shall remain confidential, if the person filing the statement so requests; (3) Fully audited financial information as to the earnings and financial condition of each acquiring party for the preceding 5 fiscal years of each acquiring party (or for any lesser period as the acquiring party and any predecessors shall have been in existence), and similar unaudited information as of a date not earlier than 90 days prior to the filing of the statement; (4) Any plans or proposals which each acquiring party may have to liquidate the insurer, to sell its assets or merge or consolidate it with any person, or to make any other material change in its business or corporate structure or management; (5) The number of shares of any security referred to in subsections (a) and (b) of this section which each acquiring party proposes to acquire, the terms of the offer, request, invitation, agreement, or acquisition referred to in subsections (a) and (b) of this section, and a statement as to the method by which the fairness of the proposal was determined; (6) The amount of each class of any security referred to in subsections (a) and (b) of this section which is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party; (7) A full description of any contracts, arrangements, or understandings with respect to any security referred to in subsections (a) and (b) of this section in which any acquiring party is involved, including, but not limited to, transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies. The description shall identify the persons with whom any contracts, arrangements, or understandings have been entered into; (8) A description of the purchase of any security referred to in subsections (a) and (b) of this section during the 12 calendar months preceding the filing of the statement by any acquiring party, including the dates of purchase, names of the purchasers, and consideration paid or agreed to be paid; (9) A description of any recommendations to purchase any security referred to in subsections (a) and (b) of this section made during the 12 calendar months preceding the filing of the statement by any acquiring party, or by anyone based upon interviews or at the suggestion of the acquiring party; (10) Copies of all tender offers for, requests, or invitations for tenders of, exchange offers for, and agreements to acquire or exchange any securities referred to in subsections (a) and (b) of this section, and, if distributed, all additional related soliciting material; (11) The terms of any agreement, contract, or understanding made with or proposed to be made with any broker-dealer as to solicitation of securities referred to in subsections (a) and (b) of this section for tender, and the amount of any resulting fees, commissions, or other compensation to be paid to broker-dealers; (11A) An agreement by the person required to file the statement referred to in subsection (a) of this section that it will provide the annual report, specified in  31-705(k-1), for so long as control exists; (11B) An acknowledgement by the person required to file the statement referred to in subsection (a) of this section that the person and all subsidiaries within its control in the insurance holding company system will provide information to the Mayor upon request as necessary to evaluate enterprise risk to the insurer; and (12) Any additional information as the Mayor may by rule or regulation prescribe as necessary or appropriate for the protection of policyholders of the insurer or in the public interest. (d) If the person required to file the statement referred to in subsections (a) and (b) of this section is a partnership, limited partnership, syndicate or other group, the Mayor may require that the information called for by subsection (c)(1) through (12) of this section shall be given with respect to each partner of the partnership or limited partnership, each member of the syndicate or group, and each person who controls the partner or member. If any partner, member, or person is a corporation, or the person required to file the statement referred to in subsections (a) and (b) of this section is a corporation, the Mayor may require that the information called for by subsection (c)(1) through (12) of this section shall be given with respect to the corporation, each officer and director of the corporation, and each person who is directly or indirectly the beneficial owner of more than 10% of the outstanding voting securities of the corporation. (e) If any material change occurs in the facts set forth in the statement filed with the Mayor and sent to the insurer pursuant to this section, an amendment setting forth the change, together with copies of all documents and other material relevant to the change, shall be filed with the Mayor and sent to the insurer within 2 business days after the person learns of the change. (f) If any offer, request, invitation, agreement, or acquisition referred to in subsections (a) and (b) of this section is proposed to be made by means of a registration statement under the Securities Act of 1933 (15 U.S.C.  77a et seq.), or in circumstances requiring the disclosure of similar information under the Securities Exchange Act of 1934 (15 U.S.C.  78a et seq.), or under a state law requiring similar registration or disclosure, the person required to file the statement referred to in subsections (a) and (b) of this section may utilize the documents in furnishing the information called for by that statement. (g)(1)(A) If the acquiring company proposes to acquire a domestic insurer which is not a nonprofit hospital service plan or medical service plan, the Mayor shall approve any merger or other acquisition of control referred to in subsections (a) and (b) of this section unless, after a public hearing, the Mayor finds that: (i) After the change of control, the domestic insurer referred to in subsections (a) and (b) of this section would not be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed; (ii) The effect of the merger or other acquisition of control would be substantially to lessen competition in insurance in the District or tend to create a monopoly. In applying the competitive standard in this sub-subparagraph: (I) The informational requirements of  31-704(c)(1) and the standards of  31-704(d)(2) shall apply; (II) The merger or other acquisition shall not be disapproved if the Mayor finds that any of the situations meeting the criteria provided by  31-704(d)(3) exist; and (III) The Mayor may condition the approval of the merger or other acquisition on the removal of the basis of disapproval within a specified period of time; (iii) The financial condition of any acquiring company is such as might jeopardize the financial stability of the insurer, or prejudice the interest of its policyholders; (iv) The plans or proposals which the acquiring company has to liquidate the insurer, sell its assets, or consolidate or merge it with any person, or to make any other material change in its business or corporate structure or management are unfair and unreasonable to policyholders of the insurer or are not in the public interest; (v) The competence, experience, and integrity of those persons who would control the operation of the insurer are such that it would not be in the interest of policyholders of the insurer and of the public to permit the merger or other acquisition of control; or (vi) The acquisition is likely to be hazardous or prejudicial to the insurance buying public. (B)(i) If an acquiring company proposes to acquire a domestic insurer which is a nonprofit hospital plan or medical service plan, the same procedure shall apply as provided in subparagraph (A) of this paragraph; provided, that the acquiring company shall have the burden of establishing that the proposed merger or acquisition of control does not result in the existence of any of the conditions set forth in sub-subparagraphs (i) through (vi) of subparagraph (A). (ii) The determination made by the Mayor as provided in subparagraph (A) of this paragraph shall not become effective until 90 days after the Mayor makes the determination. (2) The public hearing referred to in paragraph (1) of this subsection shall be held within 120 days after the statement required by subsections (a) and (b) of this section is filed, and at least 20-days notice shall be given by the Mayor to the person filing the statement; provided, that the Mayor may extend the 120-day period if all parties consent to the extension. Not less than 7-days notice of the public hearing shall be given by the person filing the statement to the insurer and to any other persons designated by the Mayor. The Mayor shall make a determination within 120 days after the conclusion of the hearing; provided, that the Mayor may extend this period if all parties consent to the extension. At the hearing, the person filing the statement, the insurer, and any party shall have the right to present evidence, examine and cross-examine witnesses, and offer oral and written arguments, and shall be entitled to conduct discovery proceedings in the same manner as is presently allowed in the Superior Court of the District of Columbia. All discovery proceedings shall be concluded not later than 3 days prior to the commencement of the public hearing. (3) The Mayor may retain, at the acquiring persons expense, any attorneys, actuaries, accountants, and other experts not otherwise a part of the Mayors staff as may be reasonably necessary to assist the Mayor in reviewing the proposed acquisition of control. For this purpose, the Mayor shall be exempt from the provisions of Unit A of Chapter 3 of Title 2. (4)(A) If the proposed acquisition of control will require the approval of more than one commissioner, the public hearing referred to in paragraph (1) of this subsection may be held on a consolidated basis upon request of the person filing the statement referred to in subsection (a) of this section. A person shall file the statement referred to in subsection (a) of this section with the National Association of Insurance Commissioners within 5 days of making the request for a public hearing. (B) A commissioner may opt out of a consolidated hearing, and shall provide notice to the applicant of the opt-out within 10 days of the receipt of the statement referred to in subsection (a) of this section. (C) A hearing conducted on a consolidated basis shall be public and shall be held within the United States before the commissioners of the states in which the insurers are domiciled. (D) The commissioners shall hear and receive evidence. A commissioner may attend a hearing in person or by telecommunication. (h) The provisions of this section shall not apply to: (1) Any transaction which is subject to the laws of the District dealing with the merger or consolidation of 2 or more insurers; or (2) Any offer, request, invitation, agreement, or acquisition which the Mayor by order shall exempt as: (A) Not having been made or entered into for the purpose and not having the effect of changing or influencing the control of a domestic insurer; or (B) Otherwise not comprehended within the purposes of this section. (i) The following shall be violations of this section: (1) The failure to file any statement, amendment, or other material required to be filed pursuant to subsection (a), (b), or (c) of this section; and (2) The effectuation, or any attempt to effectuate, an acquisition of control of, divestiture of, or merger with, a domestic insurer unless the Mayor has given approval. (j) Every person not resident, domiciled, or authorized to do business in the District who files a statement with the Mayor under this section shall be deemed to have performed acts equivalent to and constituting an appointment by such a person of the Mayor to be his or her true and lawful attorney upon whom may be served all lawful process in any action, suit, or proceeding arising out of violations of this section. Copies of all lawful process shall be served on the Mayor and transmitted by registered or certified mail by the Mayor to the person at his or her last known address.  (Oct. 21, 1993, D.C. Law 10-44,  4, 40 DCR 6027; Mar. 24, 1998, D.C. Law 12-81,  40(b), 45 DCR 745; Mar. 25, 2003, D.C. Law 14-236,  2, 49 DCR 10483; Dec. 9, 2003, D.C. Law 15-56,  2(b), 50 DCR 9188; Mar. 11, 2015, D.C. Law 20-235,  2(b), 62 DCR 461.)  Prior Codifications 1981 Ed.,  35-3703. Section References This section is referenced in  31-704,  31-709,  31-731,  31-732,  31-752,  31-753, and  31-755. Effect of Amendments D.C. Law 14-236, in subsec. (g)(3), added the last sentence. D.C. Law 15-56, in subsec. (g), rewrote par. (1), and in par. (2), substituted The public hearing referred to in paragraph (1) of this subsection shall be held within 120 days after the statement required by subsections (a) and (b) of this section is filed, and at least 20-days notice shall be given by the Mayor to the person filing the statement; provided, that the Mayor may extend the 120-day period if all parties consent to the extension. for The public hearing referred to in paragraph (1) of this subsection shall be held within 30 days after the statement required by subsections (a) and (b) of this section is filed, and at least 20-days notice shall be given by the Mayor to the person filing the statement., substituted The Mayor shall make a determination within 120 days after the conclusion of the hearing; provided, that the Mayor may extend this period if all parties consent to the extension. for The Mayor shall make a determination within 30 days after the conclusion of the hearing., and substituted and any party for any person to whom notice of hearing was sent, and any other person whose interest may be affected. The 2015 amendment by D.C. Law 20-235 added (a)(3); added (c)(11A) and (c)(11B) and made related changes; added (g)(4); and added divestiture of in (i)(2). Emergency Legislation For temporary (90 day) amendment of section, see  2 of Department of Insurance and Securities Regulation Procurement Emergency Act of 2002 (D.C. Act 14-314, March 26, 2002, 49 DCR 3451). For temporary (90 day) amendment of section, see  2(b) of Department of Insurance and Securities Regulation Merger Review Emergency Amendment Act of 2002 (D.C. Act 14-457, July 23, 2002, 48 DCR 8132). For temporary (90 day) amendment of section, see  2(b) of Department of Insurance and Securities Regulation Merger Review Congressional Review Emergency Amendment Act of 2002 (D.C. Act 14-513, October 23, 2002, 49 DCR 10475). For temporary (90 day) amendment of section, see  2(b) of Department of Insurance and Securities Regulation Merger Congressional Review Emergency Act of 2003 (D.C. Act 15-8, January 27, 2003, 50 DCR 1473). For temporary (90 day) amendment of section, see  2 of Department of Insurance and Securities Regulation Procurement Congressional Review Emergency Act of 2003 (D.C. Act 15-9, January 27, 2003, 50 DCR 1478). For temporary (90 day) amendment of section, see  2(b) of Department of Insurance and Securities Regulation Merger Review Emergency Amendment Act of 2003 (D.C. Act 15-205, October 24, 2003, 50 DCR 9845). For temporary (90 day) amendment of section, see  2(b) of Department of Insurance and Securities Regulation Merger Review Second Congressional Review Emergency Amendment Act of 2003 (D.C. Act 15-257, November 25, 2003, 50 DCR 11006). Temporary Legislation For temporary (225 day) amendment of section, see  2 of Department of Insurance and Securities Regulation Procurement Temporary Act of 2002 (D.C. Law 14-159, June 25, 2002, law notification 49 DCR 6495). For temporary (225 day) amendment of section, see  2(b) of Department of Insurance and Securities Regulation Merger Review Temporary Amendment Act of 2002 (D.C. Law 14-217, March 25, 2003, law notification 50 DCR 2730). Editor's Notes Because of the codification of D.C. Law 11-159 as subchapter II of Chapter 37 of Title 35 [subchapter II of Chapter 7 of Title 31, 2001 Ed.], and the designation of the preexisting text as subchapter I, subchapter has been substituted for chapter in (a)(2).
 31704. Acquisitions involving insurers not otherwise covered. (a) For the purposes of this section, the term: (1) Acquisition means any agreement, arrangement, or activity the consummation of which results in a person acquiring, directly or indirectly, the control of another person, and includes, but is not limited to, the acquisition of voting securities, the acquisition of assets, bulk reinsurance, and mergers. (2) Involved insurer means an insurer that either acquires or is acquired, is affiliated with an acquirer or acquired, or is the result of a merger. (b)(1) Except as provided in paragraph (2) of this subsection, this section applies to any acquisition in which there is a change in control of an insurer authorized to do business in the District. (2) This section shall not apply to the following: (A) Repealed; (B) A purchase of securities solely for investment purposes as long as the securities are not used by voting or otherwise to cause, or attempt to cause, the substantial lessening of competition in any insurance market in the District. If a purchase of securities results in a presumption of control as defined in  31-701(2), it is not solely for investment purposes unless the Commissioner of Insurance or other appropriate official of the insurers state of domicile accepts a disclaimer of control or affirmatively finds that control does not exist and the disclaimer action or affirmative finding is communicated by the domiciliary Commissioner to the Mayor; (C) The acquisition of a person by another person when both persons are neither directly nor through affiliates primarily engaged in the business of insurance, if preacquisition notification is filed with the Mayor in accordance with subsection (c)(1) of this section 30 days prior to the proposed effective date of the acquisition. This preacquisition notification is not required for exclusion from this section if the acquisition would otherwise be excluded from this section by any other subparagraph of paragraph (2) of this subsection; (D) The acquisition of already affiliated persons; (E)(i) An acquisition if, as an immediate result of the acquisition: (I) In no market would the combined market share of the involved insurers exceed 5% of the total market; (II) There would be no increase in any market share; or (III) In no market would the combined market share of the involved insurers exceed 12% of the total market, and the market share increases by more than 2% of the total market. (ii) For the purposes of this subparagraph, the term market means direct written insurance premium in the District for a line of business as contained in the annual statement required to be filed by insurers licensed to do business in the District; (F) An acquisition for which a preacquisition notification would be required pursuant to this section due solely to the resulting effect on the ocean marine insurance line of business; and (G) An acquisition of an insurer whose domiciliary state insurance commissioner or other appropriate official affirmatively finds that the insurer is in failing condition, there is a lack of a feasible alternative to improving the condition, the public benefits of improving the insurers condition through the acquisition exceed the public benefits that would arise from not lessening competition, and these findings are communicated by the domiciliary state insurance commissioner or other appropriate official to the Mayor. (c)(1) An acquisition covered by subsection (b) of this section may be subject to an order pursuant to subsection (e) of this section unless the acquiring person files a preacquisition notification and the waiting period has expired. The acquired person may file a preacquisition notification. The Mayor shall give confidential treatment to information submitted under this subsection in the same manner as provided in  31-708. (2) The preacquisition notification shall be in the form and contain the information prescribed by the National Association of Insurance Commissioners relating to those markets which, under subsection (b)(2)(E) of this section, cause the acquisition not to be exempted from the provisions of this section. The Mayor may require any additional material and information the Mayor deems necessary to determine whether the proposed acquisition, if consummated, would violate the competitive standard of subsection (d) of this section. The required information may include an opinion of an economist as to the competitive impact of the acquisition in the District accompanied by a summary of the education and experience of such person indicating his or her ability to render an informed opinion. (3) The waiting period required shall begin on the date of receipt by the Mayor of a preacquisition notification and shall end on the earlier of the 30th day after the date of the receipt or termination of the waiting period by the Mayor. Prior to the end of the waiting period, the Mayor, on a one-time basis, may require the submission of additional needed information relevant to the proposed acquisition, in which event the waiting period shall end on the earlier of the 30th day after receipt of the additional information by the Mayor or termination of the waiting period by the Mayor. (d)(1) The Mayor may enter an order under subsection (e)(1) of this section with respect to an acquisition if there is substantial evidence that the effect of the acquisition may be to lessen substantially competition in any line of insurance in the District, or tend to create a monopoly therein, or if the insurer fails to file adequate information in compliance with subsection (c) of this section. (2) In determining whether a proposed acquisition would violate the competitive standard of paragraph (1) of this subsection, the Mayor shall consider the following: (A) Any acquisition covered under subsection (b) of this section involving 2 or more insurers competing in the same market is prima facie evidence of violation of the competitive standards if the market is highly concentrated and the involved insurers possess the following shares of the market: Insurer A Insurer B 4% 4% or more 10% 2% or more 15% 1% or more  or, if the market is not highly concentrated and the involved insurers possess the following shares of the market: Insurer A Insurer B 5% 5% or more 10% 4% or more 15% 3% or more 19% 1% or more.  (B) There is a significant trend toward increased concentration when the aggregate market share of any grouping of the largest insurers in the market, from the 2 largest to the 8 largest, has increased by 7% or more of the market over a period of time extending from any base year 5 to 10 years prior to the acquisition up to the time of the acquisition. Any acquisition or merger covered under subsection (b) of this section involving 2 or more insurers competing in the same market is prima facie evidence of violation of the competitive standard in paragraph (1) of this subsection if: (i) There is a significant trend toward increased concentration in the market; (ii) One of the insurers involved is one of the insurers in a grouping of large insurers showing the requisite increase in the market share; and (iii) Another involved insurers market is 2% or more. (C) For the purposes of this paragraph, the term: (i) Insurer includes any company or group of companies under common management, ownership, or control. (ii) Market means the relevant product and geographical markets. In determining the relevant product and geographical markets, the Mayor shall give due consideration to, among other things, the definitions or guidelines, if any, promulgated by the National Association of Insurance Commissioners and to information, if any, submitted by parties to the acquisition. In the absence of sufficient information to the contrary, the relevant product market is assumed to be the direct written insurance premium for a line of business, the line being that used in the annual statement required to be filed by insurers doing business in the District, and the relevant geographical market is assumed to be the District. (D) The burden of showing prima facie evidence of violation of the competitive standard rests upon the Mayor. (E) Even though an acquisition is not prima facie violative of the competitive standard under subparagraphs (A) and (B) of this paragraph, the Mayor may establish the requisite anticompetitive effect based upon other substantial evidence. Even though an acquisition is prima facie violative of the competitive standard under subparagraphs (A) and (B) of this paragraph, a party may establish the absence of the requisite anticompetitive effect based upon other substantial evidence. Relevant factors in making a determination under this paragraph include, but are not limited to, the following: market shares, volatility of ranking of market leaders, number of competitors, concentration, trend of concentration in the industry, and ease of entry and exit into the market. A highly concentrated market is one in which the share of the 4 largest insurers is 75% or more of the market. Percentages not shown in the tables are interpolated proportionately to the percentages that are shown. If more than 2 insurers are involved, exceeding the total of the 2 columns in the table is prima facie evidence of violation of the competitive standard in paragraph (1) of this subsection. For the purposes of this subparagraph, the insurer with the largest share of the market shall be deemed to be Insurer A. (3) An order may not be entered under subsection (e)(1) through (4) of this section if: (A) The acquisition will yield substantial economies of scale or economies in resource utilization that feasibly cannot be achieved in any other way, and the public benefits which would arise from these economies exceed the public benefits which would arise from not lessening competition; or (B) The acquisition will substantially increase the availability of insurance, and the public benefits of this increase exceed the public benefits which would arise from not lessening competition. (e)(1) If an acquisition violates the standards of this section, the Mayor may enter an order: (A) Requiring an involved insurer to cease and desist from doing business in the District with respect to the line or lines of insurance involved in the violation; or (B) Denying the application of an acquired or acquiring insurer for a license to do business in the District. (2) An order under this subsection shall not be entered unless: (A) There is a hearing; (B) Notice of the hearing is issued prior to the end of the waiting period and not less than 15 days prior to the hearing; and (C) The hearing is concluded and the order is issued no later than 60 days after the end of the waiting period. Every order shall be accompanied by a written decision of the Mayor setting forth findings of fact and conclusions of law. (3) An order entered under this subsection shall not become final earlier than 30 days after it is issued, during which time the involved insurer may submit a plan to remedy the anticompetitive impact of the acquisition within a reasonable time. Based upon such a plan or other information, the Mayor shall specify the conditions, if any, under the time period during which the aspects of the acquisition causing a violation of the standards of this section would be remedied and the order vacated or modified. (4) An order pursuant to this subsection shall not apply if the acquisition is not consummated. (5) Any person who violates a cease and desist order of the Mayor under paragraph (1) of this subsection while such an order is in effect may, after notice and hearing and upon order of the Mayor, be subject, at the discretion of the Mayor, to any one or more of the following: (A) A monetary administrative penalty of not more than $10,000 for every day of violation; or (B) Suspension or revocation of the persons license. (6) Any insurer or other person who fails to make any filing required by this section, and who also fails to demonstrate a good faith effort to comply with any filing requirement, shall be subject to an administrative fine of not more than $50,000. (f) Sections 31-709(b) and (c) and 31-711 do not apply to acquisitions covered under subsection (b) of this section.  (Oct. 21, 1993, D.C. Law 10-44,  5, 40 DCR 6027; May 16, 1995, D.C. Law 10-255,  32(a), 41 DCR 5193; Apr. 18, 1996, D.C. Law 11-110,  42, 43 DCR 530; Mar. 11, 2015, D.C. Law 20-235,  2(c), 62 DCR 461.)  Prior Codifications 1981 Ed.,  35-3704. Section References This section is referenced in  31-703. Effect of Amendments The 2015 amendment by D.C. Law 20-235 repealed (b)(2)(A).
 31705. Registration of insurers. (a)(1) Every insurer which is authorized to do business in the District and which is a member of an insurance holding company system shall register with the Mayor, except 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 the following provisions of this subchapter: (A) This section; (B) Section 31-706(a)(1), (b), and (d); and (C) Either  31-706(a)(2) or a provision like 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 15 days after the end of the month in which it learns of each change or addition. (2) Any insurer which is subject to registration under this section shall register within 15 days after it becomes subject to registration, and annually thereafter by April 30 of each year, unless the Mayor for good cause shown extends the time for registration, and then within the extended time. The Mayor may require any insurer authorized to do business in the District which is a member of a 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 (c) of this section or other information filed by the insurance company with the insurance regulatory authority of domiciliary jurisdiction. (b) Every insurer subject to registration shall file the registration statement on a form prescribed by the NAIC, which shall contain the following current information: (1) The capital structure, general financial condition, ownership, and management of the insurer and any person controlling the insurer; (2) The identity and relationship of every member of the insurance holding company system; (3) The following agreements in force, and transactions currently outstanding or which have occurred during the last calendar year between the insurer and its affiliates: (A) Loans, other investments, or purchases, sales, or exchange of securities of the affiliates by the insurer or of the insurer by its affiliates; (B) Purchases, sales, or exchange of assets; (C) Transactions not in the ordinary course of business; (D) Guarantees or undertakings for the benefit of an affiliate which result in an actual contingent exposure of the insurers assets to liability, other than insurance contracts entered into in the ordinary course of the insurers business; (E) All management agreements, service contracts, and all cost-sharing arrangements; (F) Reinsurance agreements; (G) Dividends and other distributions to shareholders; and (H) Consolidated tax allocation agreements; (4) Any pledge of the insurers stock, including stock of any subsidiary or controlling affiliate, for a loan made to any member of the insurance holding company system; (4A) If requested by the Mayor, the insurer shall include financial statements of or within an insurance holding company system, including all affiliates. Financial statements may include annual audited financial statements filed with the U.S. Securities and Exchange Commission (SEC) pursuant to the Securities Act of 1933, approved May 27, 1933 (48 Stat. 74; 15 U.S.C.  77a et seq.), or the Securities Exchange Act of 1934, approved June 6, 1934 (48 Stat. 881; 15 U.S.C.  78a et seq.). An insurer required to file financial statements pursuant to this paragraph may satisfy the request by providing the Mayor with the most recently filed parent corporation financial statements that have been filed with the SEC; (5) 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 Mayor; (6) Statements that the insurers board of directors oversees corporate governance and internal controls and that the insurers officers or senior management have approved, implemented, and continue to maintain and monitor corporate governance and internal control procedures; and (7) Any other information required by the Mayor by rule or regulation. (c) All registration statements shall contain a summary outlining all items in the current registration statement which are different from the prior registration statement. (d) No information need be disclosed on the registration statement filed pursuant to subsection (b) of this section if the information is not material for the purposes of this section. Unless the Mayor by rule, regulation, or order provides otherwise, sales, purchases, exchanges, loans or extensions of credit, investments, or guarantees involving one-half of 1% or less of an insurers admitted assets as of the 31st day of December next preceding shall not be deemed material for purposes of this section. (e) Subject to  31-706(b), each registered insurer shall report to the Mayor all dividends and other distributions to shareholders within 15 business days following their declaration. (f) Any person within an insurance holding company system subject to registration shall be required to provide complete and accurate information to an insurer, where the information is reasonably necessary to enable the insurer to comply with the provisions of this subchapter. (g) The Mayor shall terminate the registration of any insurer which demonstrates that it no longer is a member of an insurance holding company system. (h) The Mayor may require or allow 2 or more affiliated insurers subject to registration to file a consolidated registration statement. (i) The Mayor may allow an insurer which is authorized to do business in the District 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 (a) of this section and to file all information and material required to be filed under this section. (j) The provisions of this section shall not apply to any insurer, information, or transaction if and to the extent that the Mayor by rule, regulation, or order shall exempt the same from the provisions of this section. (k) Any person may file with the Mayor a disclaimer of affiliation with any authorized insurer or the disclaimer may be filed by the insurer or any member of an insurance holding company system. The disclaimer shall fully disclose all material relationships and bases for affiliation between the person and the insurer as well as the basis for disclaiming the affiliation. A disclaimer of affiliation shall be deemed to have been granted, unless the Mayor, within 30 days following receipt of a complete disclaimer, notifies the filing party that the disclaimer is disallowed. In the event of disallowance, the disclaiming party may request an administrative hearing, which shall be granted. The disclaiming party shall be relieved of its duty to register under this section if approval of the disclaimer has been granted by the Mayor or has been deemed approved. (k-1) 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 persons 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 lead state commissioner of the insurance holding company system as determined by the procedures within the Financial Analysis Handbook adopted by the National Association of Insurance Commissioners. (l) The failure to file a registration statement or any summary of the registration statement or enterprise risk filing required by this section within the time specified for such a filing shall be a violation of this section.  (Oct. 21, 1993, D.C. Law 10-44,  6, 40 DCR 6027; May 16, 1995, D.C. Law 10-255,  32(b), 41 DCR 5193; Apr. 9, 1997, D.C. Law 11-255,  43, 44 DCR 1271; Mar. 11, 2015, D.C. Law 20-235,  2(d), 62 DCR 461.)  Prior Codifications 1981 Ed.,  35-3705. Section References This section is referenced in  31-701,  31-707,  31-708, and  31-710. Effect of Amendments The 2015 amendment by D.C. Law 20-235 added (b)(4A), (b)(6), and (b)(7) and made related changes; rewrote (k); added (k-1); and substituted statement or enterprise risk filing required for statement required in (l). Editor's Notes Because of the codification of D.C. Law 11-159 as subchapter II of Chapter 37 of Title 35 [subchapter II of Chapter 7 of Title 31, 2001 Ed.], and the designation of the preexisting text as subchapter I, subchapter has been substituted for chapter in the introductory language of (a)(1) and in (f).
 31706.01. Group-wide supervision of internationally active insurance groups. (a)(1) The Commissioner shall be the group-wide supervisor for any internationally active insurance group in accordance with the provisions of this section; provided, that the Commissioner may acknowledge another regulatory official as the group-wide supervisor where the internationally active insurance group: (A) Does not have substantial insurance operations in the United States; (B) Has substantial insurance operations in the United States, but not in the District; or (C) Has substantial insurance operations in the United States and the District, but the Commissioner has determined pursuant to the factors set forth in subsections (b) and (f) of this section that the other regulatory official is the appropriate group-wide supervisor. (2) An insurance holding company system that does not otherwise qualify as an internationally active insurance group may request that the Commissioner make a determination or acknowledgment as to the appropriate group-wide supervisor. (b)(1) In cooperation with other state, federal, and international regulatory agencies, the Commissioner shall identify a single group-wide supervisor for an internationally active insurance group. (2) The Commissioner may determine that the Commissioner is the appropriate group-wide supervisor for an internationally active insurance group that conducts substantial insurance operations concentrated in the District; provided, that the Commissioner may acknowledge that a regulatory official from another jurisdiction is the appropriate group-wide supervisor for the internationally active insurance group. (3) The Commissioner shall consider the following factors when making a determination or acknowledgment of who is appropriate as group-wide supervisor: (A) The place of domicile of the insurers within the internationally active insurance group that holds the largest share of the group's written premiums, assets, or liabilities; (B) The place of domicile of the top-tiered insurers in the insurance holding company system of the internationally active insurance group; (C) The location of the executive offices or largest operational offices of the internationally active insurance group; (D) Whether another regulatory official is acting or seeking to act as the group-wide supervisor under a regulatory system that the Commissioner determines to be: (i) Substantially similar to the system of regulation provided under the laws of the District; or (ii) Otherwise sufficient in terms of providing for group-wide supervision, enterprise risk analysis, and cooperation with other regulatory officials; and (E) Whether another regulatory official acting or seeking to act as the group-wide supervisor provides the Commissioner with reasonably reciprocal recognition and cooperation. (c)(1) A regulatory official identified under this section as the group-wide supervisor may determine that it is appropriate to acknowledge another supervisor to serve as the group-wide supervisor. (2) The acknowledgment of the group-wide supervisor shall be made after consideration of the factors listed in this subsection (b) of this section and in cooperation with and subject to the acknowledgment of other regulatory officials involved with supervision of members of the internationally active insurance group, and in consultation with the internationally active insurance group. (d) Notwithstanding any other provision of law, when another regulatory official is acting as the group-wide supervisor of an internationally active insurance group, the Commissioner shall acknowledge that regulatory official as the group-wide supervisor; provided, that, in the event of a material change in the internationally active insurance group that results in the internationally active insurance group's insurers domiciled in the District holding the largest share of the group's premiums, assets, or liabilities or the District being the place of domicile of the top-tiered insurers in the insurance holding company system of the internationally active insurance group, the Commissioner shall make a determination or acknowledgment as to the appropriate group-wide supervisor for such an internationally active insurance group pursuant to subsection (b) of this section. (e)(1) Pursuant to  31-706, the Commissioner is authorized to collect from any insurer registered pursuant to  31-705 all information necessary to determine whether the Commissioner may act as the group-wide supervisor of an internationally active insurance group or if the Commissioner may acknowledge another regulatory official to act as the group-wide supervisor. (2) Before issuing a determination that an internationally active insurance group is subject to group-wide supervision by the Commissioner, the Commissioner shall notify the insurer registered pursuant to  31-705 and the ultimate controlling person within the internationally active insurance group. The internationally active insurance group shall have, at a minimum, 30 days to provide the Commissioner with additional information pertinent to the pending determination. (3) The Commissioner shall publish in the District of Columbia Register and on the website for the Department of Insurance, Securities and Banking the identity of internationally active insurance groups that the Commissioner has determined are subject to group-wide supervision by the Commissioner. (f) If the Commissioner is the group-wide supervisor for an internationally active insurance group, the Commissioner shall be authorized to engage in any of the following group-wide supervision activities: (1) Assess the enterprise risks within the internationally active insurance group to ensure that: (A) The material financial condition and liquidity risks to the members of the internationally active insurance group that are engaged in the business of insurance are identified by management; and (B) Reasonable and effective mitigation measures are in place; and (2) Request from any member of an internationally active insurance group subject to the Commissioner's supervision information necessary and appropriate to assess enterprise risk, including information about the members of the internationally active insurance group regarding: (A) Governance, risk assessment, and management; (B) Capital adequacy; and (C) Material intercompany transactions; (3) Coordinate, and, through the authority of the regulatory officials of the jurisdictions where members of the internationally active insurance group are domiciled, compel development and implementation of reasonable measures designed to ensure that the internationally active insurance group is able to timely recognize and mitigate enterprise risks to members of such internationally active insurance group that are engaged in the business of insurance; (4) Communicate with other state, federal, and international regulatory agencies for members within the internationally active insurance group and share relevant information, subject to the confidentiality provisions of  31-708, through supervisory colleges as set forth in  31-707.01; (5) Enter into agreements with or obtain documentation from any insurer registered under  31-705, any member of the internationally active insurance group, and any other state, federal, and international regulatory agencies for members of the internationally active insurance group, providing the basis for or otherwise clarifying the Commissioner's role as group-wide supervisor, including provisions for resolving disputes with other regulatory officials; provided, that such agreements or documentation shall not serve as evidence in any proceeding that any insurer or person within an insurance holding company system not domiciled or incorporated in the District, doing business in the District, or otherwise subject to jurisdiction in the District; and (6) Other group-wide supervision activities, consistent with the authorities and purposes enumerated above, as considered necessary by the Commissioner. (g) If the Commissioner acknowledges that another regulatory official from a jurisdiction that is not accredited by the NAIC is the group-wide supervisor, the Commissioner is authorized to reasonably cooperate, through supervisory colleges or otherwise, with group-wide supervision undertaken by the group-wide supervisor; provided, that: (1) The Commissioner's cooperation is in compliance with the laws of the District; and (2) The regulatory official acknowledged as the group-wide supervisor also recognizes and cooperates with the Commissioner's activities as a group-wide supervisor for other internationally active insurance groups where applicable; provided, that where such recognition and cooperation is not reasonably reciprocal, the Commissioner is authorized to refuse recognition and cooperation. (h) The Commissioner is authorized to enter into agreements with or obtain documentation from any insurer registered under  31-705, any affiliate of the insurer, and other state, federal, and international regulatory agencies for members of the internationally active insurance group that provide the basis for or otherwise clarify a regulatory official's role as group-wide supervisor. (i ) A registered insurer subject to this section shall pay the reasonable expenses of the Commissioner's participation in the administration of this section, including the engagement of attorneys, actuaries, and any other professionals and all reasonable travel expenses. (j) The Commissioner is authorized to promulgate rules and regulations necessary to implement the provisions of this section.  (Oct. 21, 1993, D.C. Law 10-44,  7a; as added Apr. 11, 2019, D.C. Law 22-292,  101(b), 66 DCR 1691.)  Applicability  Section 401 of D.C. Law 22-292 provided that this section, as created by D.C. Law 22-292, shall apply to all insurance policies issued or renewed in the District 90 days after April 11, 2019. 
 31706. Standards and management of an insurer within a holding company system. (a)(1) Transactions within a holding company system to which an insurer subject to registration is a party shall be subject to the following standards: (A) The terms shall be fair and reasonable; (A-i) Agreements for cost sharing services and management shall include such provisions as required by rules and regulations issued by the Mayor; (B) Charges or fees for services performed shall be reasonable; (C) Expenses incurred and payment received shall be allocated to the insurer in conformity with customary insurance accounting practices consistently applied; (D) The books, accounts, and records of each party to all the transactions shall be so maintained as to clearly and accurately disclose the nature and details of the transactions, including any accounting information necessary to support the reasonableness of the charges or fees to the respective parties; and (E) The insurers surplus as regards policyholders following any dividends or distributions to shareholder affiliates shall be reasonable in relation to the insurers outstanding liabilities and adequate to its financial needs. (2) The following transactions involving a domestic insurer and any person in its holding company system, including amendments or modifications of affiliate agreements previously filed pursuant to this section, which are subject to any materiality standards contained in subparagraphs (A) through (E) of this paragraph, may not be entered into unless the insurer has notified the Mayor in writing of its intention to enter into such a transaction at least 30 days before execution of the transaction, or any shorter period as the Mayor may permit, and the Mayor has not disapproved it within such a period. The notice for amendments or modifications shall include the reasons for the change and the financial impact on the domestic insurer. Informal notice shall be reported to the Mayor within 30 days after termination of a previously filed agreement for determination of the type of filing required, if any: (A) Sales, purchases, exchanges, loans, or extensions of credit, guarantees, or investments provided the transactions are equal to or exceed: (i) With respect to nonlife insurers, the lesser of 3% of the insurers admitted assets or 25% of surplus as regards policyholders as of December 31st next preceding; or (ii) With respect to life insurers, 3% of the insurers admitted assets as of December 31st next preceding; (B) Loans or extensions of credit to any person who is not an affiliate, where the insurer makes the loans or extensions of credit with the agreement or understanding that the proceeds of the transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of, or to make investments in, any affiliate of the insurer making the loans or extensions of credit, provided the transactions are equal to or exceed: (i) With respect to nonlife insurers, the lesser of 3% of the insurers admitted assets or 25% of surplus as regards policyholders as of December 31st next preceding; or (ii) With respect to life insurers, 3% of the insurers admitted assets as of December 31st next preceding; (C) Reinsurance agreements or modifications, including: (i) All reinsurance pooling agreements; and (ii) Agreements in which the reinsurance premium or a change in the insurers liabilities, or the projected reinsurance premium or a change in the insurers liabilities in any of the next 3 years, equals or exceeds 5% of the insurers surplus as regards policyholders, as of the 31st day of December next preceding, including those agreements that may require as consideration the transfer of assets from an insurer to a non-affiliate, if an agreement or understanding exists between the insurer and non-affiliate that any portion of the assets will be transferred to one or more affiliates of the insurer; (D) All management agreements, service contracts, tax allocation agreements, guarantees, and all cost-sharing arrangements; and (E) Any material transactions, specified by regulation, which the Mayor determines may adversely affect the interests of the insurers policyholders. (3) Nothing contained in paragraph (2) of this subsection shall be deemed to authorize or permit any transactions which, in the case of an insurer not a member of the same holding company system, would be otherwise contrary to law. (4) A domestic insurer may not enter into transactions which are part of a plan or series of like transactions with persons within the holding company system if the purpose of those separate transactions is to avoid the statutory threshold amount and thus avoid the review that would occur otherwise. If the Mayor determines that any separate transactions were entered into over any 12-month period for that purpose, the Mayor may exercise authority provided under  31-710. (5) The Mayor, in reviewing transactions pursuant to subsection (a)(2) of this section, shall consider whether the transactions comply with the standards set forth in subsection (a)(1) of this section and whether they may adversely affect the interests of policyholders. (6) The Mayor shall be notified within 30 days of any investment of the domestic insurer in any one corporation if the total investment in such corporation by the insurance holding company system exceeds 10% of such corporations voting securities. (b)(1) No domestic insurer shall pay any extraordinary dividend or make any other extraordinary distribution to its shareholders until: (A) Thirty days after the Mayor has received notice of the declaration and has not within this period disapproved the payment; or (B) The Mayor shall have approved the payment within the 30-day period. (2) For purposes of this section, an extraordinary dividend or distribution includes any dividend or distribution of cash or other property, whose fair market value together with that of other dividends or distributions made within the preceding 12 months exceeds the lesser of 10% of the insurers surplus as regards policyholders as of the 31st day of December next preceding, or the net gain from operations of the insurer, if the insurer is a life insurer, or the net income, if the insurer is not a life insurer, not including realized capital gains, for the 12-month period ending the 31st day of December next preceding, but shall not include pro rata distributions of any class of the insurers own securities. In determining whether a dividend or distribution is extraordinary, an insurer other than a life insurer may carry forward net income from the previous 2 calendar years that has not already been paid out as dividends. This carry-forward shall be computed by taking the net income from the second and third preceding calendar years, not including realized capital gains, less dividends paid in the second and immediate preceding calendar years. (3) Notwithstanding any other provision of law, an insurer may declare an extraordinary dividend or distribution which is conditional upon the Mayors approval, and such a declaration shall confer no rights upon shareholders until the Mayor has approved the payment of such a dividend or distribution, or the Mayor has not disapproved the payment within the 30-day period referred to above. (c)(1) Notwithstanding the control of a domestic insurer by any person, the officers and directors of the insurer shall not thereby be relieved of any obligation or liability to which they would otherwise be subject by law, and the insurer shall be managed so as to assure its separate operating identity consistent with this subchapter. (2) Nothing herein shall preclude a domestic insurer from having or sharing a common management or cooperative or joint use of personnel, property, or services with 1 or more other persons under arrangements meeting the standards of subsection (a)(1) of this section. (3) Not less than 1/3 of the directors of a domestic insurer and not less than 1/3 of the members of each committee of the board of directors of any domestic insurer shall be persons who are not officers or employees of the insurer or of any entity controlling, controlled by, or under common control with the insurer and who are not beneficial owners of a controlling interest in the voting stock of the insurer or such an entity. At least 1 such person must be included in any quorum for the transaction of business at any meeting of the board of directors or any committee. (4) The board of directors of a domestic insurer shall establish 1 or more committees comprised solely of directors who are not officers or employees of the insurer or of any entity controlling, controlled by, or under common control with the insurer, and who are not beneficial owners of a controlling interest in the voting stock of the insurer or any such entity. The committee or committees shall have responsibilities of nominating candidates for director for election by shareholders or policyholders, evaluating the performance of officers deemed to be principal officers of the insurer, and recommending to the board of directors the selection and compensation of the principal officers. (5) The provisions of paragraphs (3) and (4) of this subsection shall not apply to a domestic insurer if the person controlling the insurer is an insurer, a mutual insurance holding company, or a publicly held corporation that has a board of directors and committees that meet the requirements of paragraphs (3) and (4) of this subsection. (6) An insurer may make application to the Mayor for a waiver from the requirements of this subsection, if the insurers annual direct written and assumed premium, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, is less than $300 million. An insurer may also make application to the Commissioner for a waiver from the requirements of this subsection based upon unique circumstances. The Mayor may consider various factors, including the type of business entity, volume of business written, availability of qualified board members, and the ownership or organizational structure of the entity. (d) For purposes of this subchapter, in determining whether an insurers surplus as regards policyholders is reasonable in relation to the insurers outstanding liabilities and adequate to its financial needs, the following factors, among others, shall be considered: (1) The size of the insurer as measured by its assets, capital and surplus, reserves, premium writings, insurance in force, and other appropriate criteria; (2) The extent to which the insurers business is diversified among the several lines of insurance; (3) The number and size of risks insured in each line of business; (4) The extent of the geographical dispersion of the insurers insured risks; (5) The nature and extent of the insurers reinsurance program; (6) The quality, diversification, and liquidity of the insurers investment portfolio; (7) The recent past and projected future trend in the size of the insurers investment portfolio; (8) The surplus as regards policyholders maintained by other comparable insurers; (9) The adequacy of the insurers reserves; and (10) The quality and liquidity of investments in affiliates. The Mayor may treat such an investment as a disallowed asset for purposes of determining the adequacy of surplus as regards policyholders whenever in his or her judgment such an investment so warrants.  (Oct. 21, 1993, D.C. Law 10-44,  7, 40 DCR 6027; Apr. 26, 1994, D.C. Law 10-103,  8, 41 DCR 1005; Feb. 27, 1996, D.C. Law 11-90,  8(a), 8(b), 42 DCR 7155; Mar. 11, 2015, D.C. Law 20-235,  2(e), 62 DCR 461.)  Prior Codifications 1981 Ed.,  35-3706. Section References This section is referenced in  31-705,  31-708,  31-710,  31-3518,  31-3523, and  31-5031.10. Effect of Amendments The 2015 amendment by D.C. Law 20-235 added (a)(1)(A-i); rewrote the introductory language of (a)(2); rewrote (a)(2)(C); added tax allocation agreements, guarantees in (a)(2)(D); substituted responsibilities of for responsibility for recommending the selection of independent certified public accountants, reviewing the insurers financial condition, the scope and results of the independent audit and any internal audit in (c)(4); substituted insurer, a mutual insurance holding company, or a publicly held corporation that has for insurer having in (c)(5); and added (c)(6). Cross References Hospital and medical services corporations, directors and trustees, see  31-3518. Emergency Legislation For temporary amendment of section, see  9(a) and (b) of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and  8(a) and (b) of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844). Temporary Legislation For temporary (225 day) amendment of section, see  8 of the Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17 1994, law notification 41 DCR 1626). For temporary (225 day) amendment of section, see  8(a), (b) of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305). Editor's Notes Because of the codification of D.C. Law 11-159 as subchapter II of Chapter 37 of Title 35 [subchapter II of Chapter 7 of Title 31, 2001 Ed.], and the designation of the preexisting text as subchapter I, subchapter has been substituted for chapter in (c)(1) and (d).
 31707.01. Supervisory Colleges. (a) With respect to any insurer registered under  31-705, and in accordance with subsection (c) of this section, the Mayor shall have the power to participate in a supervisory college for any domestic insurer that is part of an insurance holding company system with international operations in order to determine compliance by the insurer with this subchapter. The powers of the Mayor with respect to supervisory colleges shall include the following: (1) Initiating the establishment of a supervisory college; (2) Clarifying the membership and participation of other supervisors in the supervisory college; (3) Clarifying the functions of the supervisory college and the role of other regulators, including the establishment of a group-wide supervisor; (4) Coordinating the ongoing activities of the supervisory college, including planning meetings, supervisory activities, and processes for information sharing; and (5) Establishing a crisis management plan. (b) Each registered insurer subject to this section shall be liable for and shall pay the reasonable expenses of the Mayors participation in a supervisory college in accordance with subsection (c) of this section, including reasonable travel expenses. For the purposes of this section, a supervisory college may be convened as either a temporary or permanent forum for communication and cooperation between the regulators charged with the supervision of the insurer or its affiliates, and the Mayor may establish a regular assessment to the insurer for the payment of these expenses. (c) To assess the business strategy, financial position, legal and regulatory position, risk exposure, risk management, and governance processes, and as part of the examination of individual insurers, in accordance with  31-707, the Mayor may participate in a supervisory college with other regulators charged with supervision of the insurer or its affiliates, including other state, federal, and international regulatory agencies. The Mayor may enter into agreements in accordance with  31-708(c) providing the basis for cooperation between the Mayor and the other regulatory agencies, and the activities of the supervisory college. (d) Nothing in this section shall delegate to the supervisory college the authority of the Mayor to regulate or supervise the insurer or its affiliates within its jurisdiction.  (Oct. 21, 1993, D.C. Law 10-44,  8a; as added Mar. 11, 2015, D.C. Law 20-235,  2(g), 62 DCR 461.) 
 31707. Examination. (a) Subject to the limitation contained in this section and in addition to the powers that the Mayor has under the insurance laws of the District relating to the examination of insurers, the Mayor shall have the power to examine any insurer registered under  31-705 and the insurers affiliates to ascertain the financial condition of the insurer, including the enterprise risk to the insurer by the ultimate controlling party, any entity or combination of entities within the insurance holding company system, or the insurance holding company system on a consolidated basis. (a-1)(1) The Mayor may order any insurer registered under  31-705 to produce such records, books, or other information in the possession of the insurer or its affiliates as are reasonably necessary to determine compliance with this subchapter. (2) To determine compliance with this subchapter, the Mayor may order any insurer registered under  31-705 to produce information not in the possession of the insurer if the insurer can obtain access to the information pursuant to contractual relationships, statutory obligations, or other method. If the insurer cannot obtain the information requested by the Mayor, the insurer shall provide the Mayor a detailed explanation of the reason that the insurer cannot obtain the information and the identity of the holder of information. Whenever it appears to the Mayor that the detailed explanation is without merit, the Mayor may require, after notice and hearing, the insurer to pay a penalty of $100 for each days delay, or may suspend or revoke the insurers license. (b) The Mayor may retain, at the registered insurers expense, those attorneys, actuaries, accountants and other experts not otherwise a part of the Mayors staff reasonably necessary to assist in the conduct of the examination under subsection (a) of this section. Any person so retained shall be under the direction and control of the Mayor and shall act in a purely advisory capacity. (c) Each registered insurer producing records, books and papers for examination pursuant to subsection (a) of this section shall be liable for and shall pay the expense of the examination in accordance with Chapter 14 of this title governing cost of examinations. (d) If the insurer fails to comply with an order issued pursuant to this section, the Mayor shall have the power to examine the records, books, or other information in the possession of the insurers affiliates to obtain the relevant information. The Mayor shall also have the power to issue subpoenas, to administer oaths, and to examine under oath any person for purposes of determining compliance with this section. Upon the failure or refusal of any person to obey a subpoena, the Mayor may petition a court of competent jurisdiction, and upon proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence. Failure to obey the court order shall be punishable as contempt of court. Every person shall be obliged to attend as a witness at the place specified in the subpoena, when subpoenaed, anywhere within the District. A person shall be entitled to the same fees and mileage, if claimed, as a witness in the Superior Court of the District of Columbia, which fees, mileage, and actual expense, if any, necessarily incurred in securing the attendance and testimony of witness shall be itemized and charged against, and be paid by, the company being examined.  (Oct. 21, 1993, D.C. Law 10-44,  8, 40 DCR 6027; Mar. 11, 2015, D.C. Law 20-235,  2(f), 62 DCR 461.)  Prior Codifications 1981 Ed.,  35-3707. Section References This section is referenced in  31-708. Effect of Amendments The 2015 amendment by D.C. Law 20-235 rewrote (a); and added (a-1) and (d). Editor's Notes Because of the codification of D.C. Law 11-159 as subchapter II of Chapter 37 of Title 35 [subchapter II of Chapter 7 of Title 31, 2001 Ed.], and the designation of the preexisting text as subchapter I, subchapter has been substituted for chapter in (a).
 31708.01. Rules. The Mayor shall, pursuant to subchapter I of Chapter 5 of Title 2 [ 2-501 et seq.], issue rules to implement the provisions of this subchapter.  (Oct. 21, 1993, D.C. Law 10-44,  10, 40 DCR 6027.) 
 31708. Confidential treatment. (a) Documents, materials, or other information in the possession or control of the Department of Insurance, Securities, and Banking that are obtained by or disclosed to the Commissioner or any other person in the course of an examination or investigation made under  31-707, and all information reported under  31-705 and 31-706, shall be confidential and privileged; shall not be subject to subchapter II of Chapter 5 of Title 2; shall not be subject to subpoena; and shall not be subject to discovery or admissible in evidence in a private civil action; provided, that: (1) The Commissioner may use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the Commissioners official duties. (2) The Commissioner may make the documents, materials, or other information public with the prior written consent of the insurer to which it pertains. (3) If the Commissioner, after giving the insurer and its affiliates who would be affected notice and opportunity to be heard, determines that the interest of policyholders, shareholders or the public will be served by the publication of the documents, materials, or other information, the Commissioner may publish all or any part of the documents, materials, or other information in the manner that the Commissioner considers appropriate. (b) The Commissioner or any person who received documents, materials, or other information while acting under the authority of the Commissioner or any person with whom such documents, materials, or other information are shared pursuant to this subchapter shall not be permitted or required to testify in a private civil action concerning confidential documents, materials, or other information subject to subsection (a) of this section. (c) To assist in the performance of the Commissioners duties, the Commissioner: (1) May share documents, materials, or other information, including confidential and privileged documents, materials, or other information subject to subsection (a) of this section, with other state, federal, and international regulatory agencies; with the National Association of Insurance Commissioners, including its affiliates and subsidiaries; and with state, federal, and international law enforcement authorities, including members of any supervisory college as described in  31-707.01; provided, that the recipient agrees in writing, and has the legal authority, to maintain the confidentiality and privileged status of the documents, materials, or other information, and has verified in writing the legal authority to maintain confidentiality; (1A) Notwithstanding paragraph (1) of this subsection, the Commissioner may only share confidential and privileged documents, material, or information reported pursuant to  31-705 or  31-706 with commissioners of states having statutes or regulations substantially similar to the provisions set forth in subsection (a) of this section and who have agreed in writing not to disclose such information. (2) May receive documents, materials, or other information, including confidential and privileged documents, materials, or other information, from the National Association of Insurance Commissioners, including its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or other information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or other information; or (3) Shall enter into written agreements with the National Association of Insurance Commissioners (NAIC) governing the sharing and use of information provided pursuant to this subchapter and consistent with this subsection that shall: (A) Specify procedures and protocols regarding the confidentiality and security of information shared with the NAIC and its affiliates and subsidiaries pursuant to this chpater, including procedures and protocols for sharing that information by the NAIC with other state, federal, or international regulators; (B) Specify that ownership of information shared with the NAIC and its affiliates and subsidiaries pursuant to this subchapter remains with the Mayor and that the use of the information by the NAIC shall be subject to the direction of the Mayor; (C) Require prompt notice to be given to an insurer whose confidential information in the possession of the NAIC pursuant to this subchapter is subject to a request or subpoena to the NAIC for disclosure or production; and (D) Require the NAIC and its affiliates and subsidiaries to consent to intervention by an insurer in any judicial or administrative action in which the NAIC and its affiliates and subsidiaries may be required to disclose confidential information about the insurer shared with the NAIC and its affiliates and subsidiaries pursuant to this subchapter. (c-1) The sharing of information by the Mayor pursuant to this subchapter shall not constitute a delegation of regulatory authority or rulemaking. The Mayor shall be solely responsible for the administration, execution. and enforcement of the provisions of this subchapter. (d) No waiver of an applicable privilege or claim of confidentiality in the documents, materials, or other information shall occur as a result of disclosure to the Commissioner under this section or of sharing as authorized in subsection (c) of this section. Nothing in this section shall require an insurer to disclose documents, materials, or other information that is not otherwise required by law to be disclosed. (d-1) Documents, materials, or other information in the possession or control of the NAIC pursuant to this subchapter shall be confidential by law and privileged, shall not be subject to subchapter II of Chapter 5 of Title 2 [ 2-531 et seq.], shall not be subject to subpoena, and shall not be subject to discovery or admissible into evidence in any private civil action.  (Oct. 21, 1993, D.C. Law 10-44,  9, 40 DCR 6027; Oct. 21, 2000, D.C. Law 13-191,  3, 47 DCR 7311; June 11, 2004, D.C. Law 15-166,  4(e), 51 DCR 2817; Mar. 11, 2015, D.C. Law 20-235,  2(h), 62 DCR 461.)  Prior Codifications 1981 Ed.,  35-3708. Section References This section is referenced in  31-704. Effect of Amendments D.C. Law 13-191 rewrote this section which formerly provided: All information, documents, and copies obtained by or disclosed to the Mayor or any other person in the course of an examination or investigation made pursuant to  35-3707 and all information reported pursuant to  35-3705 and 35-3706 shall be given confidential treatment, shall not be subject to subpoena, and shall not be made public by the Mayor, the National Association of Insurance Commissioners, or any other person, except to insurance departments of other states, without the prior written consent of the insurer to which it pertains, unless the Mayor, after giving the insurer and its affiliates who would be affected notice and opportunity to be heard, determines that the interest of policyholders, shareholders, or the public will be served by publication, in which event the Mayor may publish all or any part in such a manner as he or she deems appropriate. D.C. Law 15-166, in subsec. (a), substituted Department of Insurance, Securities, and Banking for Department of Insurance and Securities Regulation. The 2015 amendment by D.C. Law 20-235 substituted Commissioner or any person with whom such documents, materials, or other information are shared pursuant to this chapter for Commissioner in (b); in (c)(1), added including members of any supervisory college as described in  31-707.01, substituted recipient agrees in writing for recipient agrees and added and has verified in writing the legal authority to maintain confidentiality; added (c)(1A); rewrote (c)(3); and added (c-1) and (d-1). Emergency Legislation For temporary (90 day) amendment of section, see  4(e) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
 31709. Injunctions, prohibitions against voting securities, sequestration of voting securities. (a) Whenever it appears to the Mayor that any insurer or any director, officer, employee, or agent has committed, or is about to commit, a violation of this subchapter or of any rule, regulation, or order issued by the Mayor, the Mayor may apply to the Superior Court of the District of Columbia for an order enjoining the insurer or the director, officer, employee, or agent from violating or continuing to violate this subchapter or any rule, regulation, or order, and for any other equitable relief as the nature of the case and the interest of the insurers policyholders, creditors, and shareholders or the public may require. (b)(1) No security which is the subject of any agreement or arrangement regarding acquisition, or which is acquired, or to be acquired, in contravention of the provisions of this subchapter, or of any rule, regulation, or order issued by the Mayor pursuant to this subchapter, may be voted at any shareholders meeting, or may be counted for quorum purposes, and any action of shareholders requiring the affirmative vote of a percentage of shares may be taken as though the securities were not issued and outstanding; but no action taken at such a meeting shall be invalidated by the voting of these securities, unless the action would materially affect control of the insurer or unless the courts of the District of Columbia have so ordered. (2) If an insurer or the Mayor has reason to believe that any security of the insurer has been, or is about to be, acquired in contravention of the provisions of this subchapter or of any rule, regulation, or order issued by the Mayor pursuant to this subchapter, the insurer or the Mayor may apply to the Superior Court of the District of Columbia to enjoin any offer, request, invitation, agreement, or acquisition made in contravention of  31-703 or any rule, regulation, or order issued by the Commissioner to enjoin the voting of any security so acquired, to void any vote of such a security already cast at any meeting of shareholders, and for any other equitable relief as the nature of the case and the interest of the insurers policyholders, creditors, and shareholders or the public may require. (c) In any case where a person has acquired, or is proposing to acquire, any voting securities in violation of this subchapter or any rule, regulation, or order issued by the Mayor pursuant to this subchapter, the Superior Court of the District of Columbia may, on that notice the court deems appropriate and upon the application of the insurer or the Mayor, seize or sequester any voting securities of the insurer owned directly or indirectly by the person, and issue an order appropriate to effectuate the provisions of this subchapter. (d) Notwithstanding any other provisions of law, for the purposes of this subchapter the sites of the ownership of the securities of domestic insurers shall be deemed to be in the District.  (Oct. 21, 1993, D.C. Law 10-44,  11, 40 DCR 6027; Sept. 8, 1995, D.C. Law 11-36,  8(c), 42 DCR 3257; Feb. 27, 1996, D.C. Law 11-90,  8(c), 42 DCR 7155; May 21, 1997, D.C. Law 11-268,  10(gg)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-3709. Section References This section is referenced in  31-704. Emergency Legislation For temporary amendment of section, see  9(c) of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and  8(c) of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844). Temporary Legislation For temporary (225 day) amendment of section, see  8(c) of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305). Editor's Notes Because of the codification of D.C. Law 11-159 as subchapter II of Chapter 37 of Title 35 [subchapter II of Chapter 7 of Title 31, 2001 Ed.], and the designation of the preexisting text as subchapter I, subchapter has been substituted for chapter throughout the section.
 31710. Sanctions. (a)(1) Any insurer failing, without just cause, to file any registration statement as required in this subchapter shall be required, after notice and hearing, to pay an administrative penalty of $1,000 for each days delay, to be recovered by the Mayor and the penalty so recovered shall be paid into the District of Columbia Treasury. The maximum penalty under this section shall be $100,000. (2) The Mayor may reduce the penalty if the insurer demonstrates to the Mayor that the imposition of the penalty would constitute a financial hardship to the insurer. (3) Adjudication of infractions under this section shall be pursuant to Chapter 18 of Title 2. (b)(1) Every director or officer of an insurance holding company system who knowingly violates, participates in, or assents to, or who knowingly permits any of the officers or agents of the insurer to engage in transactions or make investments which have not been properly reported or submitted pursuant to  31-705(a) or  31-706(a)(2) or (b), or which violate this subchapter, shall pay, in their individual capacity, a civil administrative penalty of not more than $1,000 per violation, after notice and hearing before the Mayor. (2) In determining the amount of the civil administrative penalty, the Mayor shall take into account the appropriateness of the forfeiture with respect to the gravity of the violation, the history of previous violations, and such other matters as justice may require. (3) Adjudication of any infraction of this subsection shall be pursuant to Chapter 18 of Title 2. (c)(1) Whenever it appears to the Mayor that any insurer subject to this subchapter, or any director, officer, employee, or agent, has engaged in any transaction or entered into a contract which is subject to  31-706 and which would not have been approved had approval been requested, the Mayor may order the insurer to immediately cease and desist any further activity under that transaction or contract. (2) After notice and hearing the Mayor may also order the insurer to void any contracts and restore the status quo if that action is in the best interest of the policyholders, creditors, or the public. (d)(1) Whenever it appears to the Mayor that any insurer, or any director, officer, employee, or agent, has committed a willful violation of this subchapter, the Mayor may cause criminal proceedings to be instituted in the Superior Court of the District of Columbia against the insurer or the responsible director, officer, employee, or agent. (2) Any insurer that willfully violates this subchapter may be fined not more than $1,000,000. (3) Any individual who willfully violates this subchapter may be fined in his or her individual capacity not more than $750,000 or be imprisoned for not more than 1 to 3 years, or both. (e) Any officer, director, or employee of an insurance holding company system who willfully and knowingly subscribes to, or makes or causes to be made, any false statements, false reports, or false filings with the intent to deceive the Mayor in the performance of his or her duties under this subchapter, upon conviction, shall be imprisoned for not more than 3 to 5 years or fined $100,000, or both. Any fines imposed shall be paid by the officer, director, or employee in his or her individual capacity. (e-1) Whenever it appears to the Mayor that a person has committed a violation of  31-703, which prevents the full understanding of the enterprise risk to the insurer by affiliates or by the insurance holding company system, the violation may serve as an independent basis for disapproving dividends or distributions and for placing the insurer under an order of supervision in accordance with the insurance laws of the District of Columbia. (f) Civil fines, penalties, and fees may be imposed as alternative sanctions for any infraction of the provisions of this subchapter, or any rules or regulations issued under the authority of this subchapter, pursuant to Chapter 18 of Title 2. Adjudication of any infraction of this subchapter shall be pursuant to Chapter 18 of Title 2.  (Oct. 21, 1993, D.C. Law 10-44,  12, 40 DCR 6027; Mar. 11, 2015, D.C. Law 20-235,  2(i), 62 DCR 461.)  Prior Codifications 1981 Ed.,  35-3710. Section References This section is referenced in  31-706. Effect of Amendments The 2015 amendment by D.C. Law 20-235 added (e-1). Editor's Notes Because of the codification of D.C. Law 11-159 as subchapter II of Chapter 37 of Title 35 [subchapter II of Chapter 7 of Title 31, 2001 Ed.], and the designation of the preexisting text as subchapter I, subchapter has been substituted for chapter throughout the section.
 31711. Receivership. Whenever it appears to the Mayor that any person has committed a violation of this subchapter which so impairs the financial condition of a domestic insurer as to threaten insolvency or make the further transaction of business by it hazardous to its policyholders, creditors, shareholders, or the public, the Commissioner may proceed as provided under the insurance laws of the District to take possession of the property of such a domestic insurer and to conduct its business, or take any other actions as the Mayor, at the Mayors discretion, deems appropriate.  (Oct. 21, 1993, D.C. Law 10-44,  13, 40 DCR 6027; May 21, 1997, D.C. Law 11-268,  10(gg)(2), 44 DCR 1730.)  Prior Codifications 1981 Ed.,  35-3711. Section References This section is referenced in  31-704. Editor's Notes Because of the codification of D.C. Law 11-159 as subchapter II of Chapter 37 of Title 35 [subchapter II of Chapter 7 of Title 31, 2001 Ed.], and the designation of the preexisting text as subchapter I, subchapter has been substituted for chapter in this section.
 31712. Recovery. (a) If an order for liquidation or rehabilitation of a domestic insurer has been entered, the receiver appointed under the order shall have a right to recover on behalf of the insurer, (i) from any parent corporation or holding company or person or affiliate who otherwise controlled the insurer, the amount of distributions (other than distributions of shares of the same class of stock) paid by the insurer on its capital stock, or (ii) any payment in the form of a bonus, termination settlement, or extraordinary lump sum salary adjustment made by the insurer or its subsidiary to a director, officer, or employee, where the distribution or payment pursuant to clause (i) or (ii) of this subsection is made at any time during the 1 year preceding the petition for liquidation, conservation, or rehabilitation, as the case may be, subject to the limitations of subsections (b), (c), and (d) of this section. (b) No distribution shall be recoverable if the parent or affiliate shows that when paid the distribution was lawful and reasonable, and that the insurer did not know, and could not reasonably have known, that the distribution might adversely affect the ability of the insurer to fulfill its contractual obligations. (c)(1) Any person that was a parent corporation, holding company, or a person who otherwise controlled the insurer or affiliate at the time the distributions were paid shall be liable, under subsection (a) of this section, up to the amount of distributions or payments such a person received. (2) Any person that otherwise controlled the insurer at the time the distributions were declared shall be liable up to the amount of distributions the person would have received if they had been paid immediately. (3) If 2 or more persons are liable with respect to the same distributions, they shall be jointly and severally liable. (d) The maximum amount recoverable under this section shall be the amount needed in excess of all other available assets of the impaired or insolvent insurer to pay the contractual obligations of the impaired or insolvent insurer and to reimburse any guaranty funds. (e) To the extent that any person liable under subsection (c) of this section is insolvent or otherwise fails to pay claims due from it, its parent corporation, holding company, or person who otherwise controlled it at the time the distribution was paid shall be jointly and severally liable for any resulting deficiency in the amount recovered from the parent corporation, holding company, or person who otherwise controlled it.  (Oct. 21, 1993, D.C. Law 10-44,  14, 40 DCR 6027; July 25, 1995, D.C. Law 11-30,  8, 42 DCR 1547.)  Prior Codifications 1981 Ed.,  35-3712.
 31713. Revocation, suspension, or nonrenewal of insurers license. Whenever it appears to the Mayor that any person has committed a violation of this subchapter which makes the continued operation of an insurer contrary to the interests of policyholders or the public, the Mayor may, after giving notice and an opportunity to be heard, suspend, revoke, or refuse to renew the insurers license or authority to do business in the District for such a period as the Mayor finds is required for the protection of policyholders or the public. Any determination shall be accompanied by specific findings of fact and conclusions of law.  (Oct. 21, 1993, D.C. Law 10-44,  15, 40 DCR 6027.)  Prior Codifications 1981 Ed.,  35-3713. Editor's Notes Because of the codification of D.C. Law 11-159 as subchapter II of Chapter 37 of Title 35 [subchapter II of Chapter 7 of Title 31, 2001 Ed.], and the designation of the preexisting text as subchapter I, subchapter has been substituted for chapter in this section.
 31714. Judicial review; mandamus. (a) Any person aggrieved by any act, determination, rule, regulation, or order or any other action of the Mayor pursuant to this subchapter may appeal to the District of Columbia Court of Appeals, in accordance with  2-510. (b) The filing of an appeal pursuant to this section shall not stay the application of any such rule, regulation, order, or other action of the Mayor to the appealing party unless the court, after giving the appealing party notice and an opportunity to be heard, determines that failure to grant such a stay would be detrimental to the interest of policyholders, shareholders, creditors, or the public. (c) Any person aggrieved by any failure of the Mayor to act or make a determination required by this subchapter may petition the Superior Court of the District of Columbia for a writ in the nature of a mandamus or a peremptory mandamus directing the Mayor to act or make such determination forthwith.  (Oct. 21, 1993, D.C. Law 10-44,  16, 40 DCR 6027.)  Prior Codifications 1981 Ed.,  35-3714. Editor's Notes Because of the codification of D.C. Law 11-159 as subchapter II of Chapter 37 of Title 35 [subchapter II of Chapter 7 of Title 31, 2001 Ed.[, and the designation of the preexisting text as subchapter I, subchapter has been substituted for chapter in (a) and (c).
 31731. Formation of a mutual holding company. (a) A domestic mutual insurance company, upon approval of the Commissioner, may reorganize by directly or indirectly forming an insurance holding company based upon a mutual plan. The reorganized insurance company shall continue, without interruption, its corporate existence as a stock insurance company subsidiary to the mutual insurance holding company or as a stock insurance company subsidiary to an intermediate holding company which is subsidiary to the mutual insurance holding company. (b) The Commissioner, after a public hearing as provided in  31-703(g)(1), if satisfied that the interests of the policyholders are properly protected and that the plan of reorganization is fair and equitable to the policyholders, shall approve the proposed plan of reorganization and may require as a condition of approval such modifications of the proposed plan of reorganization as the Commissioner finds necessary for the protection of the policyholders interests. The Commissioner may retain consultants as provided in  31-703(g)(3). A reorganization pursuant to this section is subject to  31-703(a), (b), and (c). The Commissioner shall retain jurisdiction over a mutual insurance holding company organized pursuant to this section to assure that policyholder interests are protected. (c) All of the initial shares of the capital stock of the reorganized insurance company shall be issued to the mutual insurance holding company. The membership interests of the policyholders of the reorganized insurance company shall become membership interests in the mutual insurance holding company. (d) Policyholders of the reorganized insurance company shall be members of the mutual insurance holding company in accordance with the articles of incorporation and bylaws of the mutual insurance holding company. The mutual insurance holding company shall at all times own a majority of the voting shares of the capital stock of the reorganized insurance company.  (Sept. 20, 1996, D.C. Law 11-159,  2, 43 DCR 3714; Mar. 24, 1998, D.C. Law 12-81,  41(a), 45 DCR 745; Mar. 26, 1999, D.C. Law 12-188,  2(a), 45 DCR 7807.)  Prior Codifications 1981 Ed.,  35-3721. Section References This section is referenced in  31-734 and  31-735. Emergency Legislation For temporary addition of  35-3721 through 35-3728 1981 Ed., see  2-9 of the Mutual Holding Company Emergency Act of 1996 (D.C. Act 11-288, July 1, 1996, 43 DCR 3707). For temporary addition of  35-3721 through 35-3728 1981 Ed., see  2-9 of the Mutual Holding Company Congressional Review Emergency Act of 1996 (D.C. Act 11-368, August 21, 1996, 43 DCR 3721). For temporary repeal of the Mutual Holding Company Emergency Act of 1996 (D.C. Act 11-288, July 1, 1996, 43 DCR 3707), see  12 of the Mutual Holding Company Congressional Review Emergency Act of 1996 (D.C. Act 11-368, August 21, 1996, 43 DCR 4633). For temporary amendment of section, see  2(a) of the Mutual Holding Company Mergers and Acquisition Emergency Amendment Act of 1998 (D.C. Act 12-295, March 4, 1998, 45 DCR 1764),  2(a) of the Mutual Holding Company Mergers and Acquisition Congressional Review Emergency Amendment Act of 1998 (D.C. Act 12-364, June 5, 1998, 45 DCR 3875), and  2(a) of the Mutual Holding Company Mergers and Acquisition Second Congressional Review Emergency Amendment Act of 1998 (D.C. Act 12-550, December 18, 1998, 46 DCR 512). Temporary Legislation For temporary (225 day) amendment of section, see  2(a) of the Mutual Holding Company Mergers and Acquisition Temporary Amendment Act of 1998 (D.C. Law 12-119, June 11, 1998, law notification 45 DCR 4036).
 31732. Merger of policyholder membership interests. (a) A domestic mutual insurance company, upon the approval of the Commissioner, may reorganize by merging its policyholders membership interests into a mutual insurance holding company formed pursuant to this section and continuing the corporate existence of the reorganizing insurance company as a stock insurance company or as a stock insurance company subsidiary to an intermediate holding company which is a subsidiary to the mutual insurance holding company. (b) The Commissioner, after a public hearing as provided in  31-703(g)(1), if satisfied that the interests of the policyholders are properly protected and that the merger is fair and equitable to the policyholders, shall approve the proposed merger and may require as a condition of approval such modifications of the proposed merger as the Commissioner finds necessary for the protection of the policyholders interests. The Commissioner may retain consultants as provided in  31-703(g)(3). A merger pursuant to this section is subject to  31-703(a), (b), and (c). The Commissioner shall retain jurisdiction over the mutual insurance holding company organized pursuant to this section to assure that policyholder interests are protected. (c) All of the initial shares of the capital stock of the reorganized insurance company shall be issued to the mutual insurance holding company. The membership interests of the policyholders of the reorganized insurance company shall become membership interests in the mutual insurance holding company. Policyholders of the reorganized insurance company shall be members of the mutual insurance holding company in accordance with the articles of incorporation and bylaws of the mutual insurance holding company. The mutual insurance holding company shall at all times own a majority of the voting shares of the capital stock of the reorganized insurance company. A merger of policyholders membership interests in a mutual insurance company into a mutual insurance holding company shall be deemed to be a merger of insurance companies pursuant to  31-703 and  31-703 is also applicable.  (Sept. 20, 1996, D.C. Law 11-159,  3, 43 DCR 3714; Mar. 24, 1998, D.C. Law 12-81,  41(b), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-3722. Section References This section is referenced in  31-734 and  31-735. Emergency Legislation See notes to  35-3721.
 31733. Incorporation of holding company; amendment of articles of incorporation. (a) A mutual insurance holding company resulting from a reorganization of a domestic mutual insurance company organized under Chapter 44 of this title shall be incorporated pursuant to Chapter 44 of this title. The articles of incorporation and any amendments to such articles of the mutual insurance holding company shall be subject to approval of the Commissioner and Corporation Counsel of the District in the same manner as those of an insurance company. The Commissioner and Corporation Counsel shall promptly examine the articles of incorporation, and if they find that the articles of incorporation comply with the law, the Commissioner and Corporation Counsel shall endorse their approval upon each of the originals, place one on file in the Commissioners office, and return the remaining sets to the incorporators. The incorporators shall promptly file such endorsed articles of incorporation with the D.C. Office of Corporations. The endorsed articles of incorporation shall be deemed effective as of the effective date of a reorganization accomplished pursuant to this act [this subchapter], upon the filing of the articles with the D.C. Office of Corporations. (b) A domestic mutual insurance holding company may amend its articles of incorporation by vote of 2/3rds of those members who vote either in person or by proxy at a lawful meeting of its members, if the notice given members included due notice of the proposal to amend. Upon adoption of an amendment, the mutual holding company shall make under its corporate seal a certificate thereof, setting forth the amendment and the date and manner of the adoption thereof, which certificate shall be executed by the mutual insurance holding companys president or vice president and secretary or assistant secretary, and acknowledged before an officer authorized to take acknowledgments. The mutual insurance holding company shall deliver the originals of the certificate to the Commissioner and Corporation Counsel. The Commissioner and Corporation Counsel shall promptly examine the certificate of amendment, and, if the Commissioner and Corporation Counsel find that the certificate and the amendment comply with law, the Commissioner and Corporation Counsel shall endorse their approvals upon each of the originals, place one on file in the Commissioners office, and return the remaining sets to the mutual insurance holding company. The mutual insurance holding company shall promptly file such endorsed certificates of amendment with the D.C. Office of Corporations. The D.C. Office of Corporations shall accept the endorsed certificates of amendment without further review or approval. The amendment shall be effective when filed with the D.C. Office of Corporations.  (Sept. 20, 1996, D.C. Law 11-159,  4, 43 DCR 3714; Mar. 24, 1998, D.C. Law 12-81,  41(c), 45 DCR 745; Mar. 26, 1999, D.C. Law 12-188,  2(b), 45 DCR 7807.)  Prior Codifications 1981 Ed.,  35-3723. Emergency Legislation See notes to  35-3721. For temporary amendment of section, see  2(b) of the Mutual Holding Company Mergers and Acquisition Emergency Amendment Act of 1998 (D.C. Act 12-295, March 4, 1998, 45 DCR 1764),  2(b) of the Mutual Holding Company Mergers and Acquisition Congressional Review Emergency Amendment Act of 1998 (D.C. Act 12-364, June 5, 1998, 45 DCR 3875), and  2(b) of the Mutual Holding Company Mergers and Acquisition Second Congressional Review Emergency Amendment Act of 1998 (D.C. Act 12-550, December 18, 1998, 46 DCR 512). Temporary Legislation For temporary (225 day) amendment of section, see  2(b) of the Mutual Holding Company Mergers and Acquisition Temporary Amendment Act of 1998 (D.C. Law 12-119, June 11, 1998, law notification 45 DCR 4036). References in Text This act, referred to in (a), is D.C. Law 12-188.
 31734. Insurers rehabilitation and liquidation. (a) A mutual insurance holding company is deemed to be an insurer subject to Chapter 13 of this title, and shall automatically be a party to any proceeding under Chapter 13 of this title involving an insurance company, which as a result of a reorganization pursuant to  31-731 or  31-732 is a subsidiary of the mutual insurance holding company. In any proceeding under Chapter 13 of this title involving the reorganized insurance company, the assets of the mutual insurance holding company are deemed to be assets of the estate of the reorganized insurance company for purposes of satisfying the claims of the reorganized insurance companys policyholders. (b) A mutual insurance holding company shall not dissolve or liquidate without the approval of the Commissioner or as ordered by the District Court pursuant to Chapter 13 of this title.  (Sept. 20, 1996, D.C. Law 11-159,  5, 43 DCR 3714; Mar. 24, 1998, D.C. Law 12-81,  41(d), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-3724. Emergency Legislation See notes to  35-3721.
 31735. Applicability; membership interest; powers. (a) Section 19 of the Life Insurance Act is not applicable to a reorganization or merger pursuant to this section. (b) A membership interest in a domestic mutual insurance holding company shall not constitute a security as defined in  31-603. (c) A mutual holding company created under this subchapter shall have the same powers to borrow or assume liability as a mutual insurance company organized under the provisions of District law. (d) The requirement of  31-4421 that every director of a stock company organized under Chapter 44 of this title shall be a stockholder thereof is not applicable to a mutual insurance holding company, any intermediate insurance holding company, or any reorganized insurance company established pursuant to this subchapter. Every director of a mutual insurance holding company, any intermediate holding company, and any reorganized insurance company shall be a policyholder of the reorganized insurance company, having purchased a policy in a manner that shall not unfairly discriminate in favor of such director, either before or after the reorganization pursuant to  31-731 or  31-732. (e)(1) A mutual insurance holding company shall not be authorized to pay dividends or make distributions to any mutual insurance holding company member except as may be expressly provided by the Commissioner. (2) Neither the adoption nor the implementation of a plan of reorganization, or a plan of merger or other affiliation, involving a mutual insurance holding company, shall be deemed to give rise to any obligation by or on behalf of a mutual insurance company or a mutual insurance holding company to make any distribution or payment to any member or policyholder, or to any other person, fund, or entity of any nature whatsoever, in connection with the ownership, control, benefits, policies, purpose, or nature of a mutual insurance company or a mutual insurance holding company, or otherwise, except as expressly provided in a plan of reorganization, a plan of merger or other affiliation involving a mutual insurance holding company, or as expressly approved by the Commissioner. (f) A mutual insurance holding company created under this subchapter shall exercise any other power or engage in any activity permitted to a mutual insurance company organized under District laws.  (Sept. 20, 1996, D.C. Law 11-159,  6, 43 DCR 3714; Mar. 26, 1999, D.C. Law 12-188,  2(c), 45 DCR 7807.)  Prior Codifications 1981 Ed.,  35-3725. Cross References Life Insurance Act, see  31-4201. Emergency Legislation See notes to  35-3721. For temporary amendment of section, see  2(c) of the Mutual Holding Company Mergers and Acquisition Emergency Amendment Act of 1998 (D.C. Act 12-295, March 4, 1998, 45 DCR 1764),  2(c) of the Mutual Holding Company Mergers and Acquisition Congressional Review Emergency Amendment Act of 1998 (D.C. Act 12-364, June 5, 1998, 45 DCR 3876), and  2(c) of the Mutual Holding Company Mergers and Acquisition Second Congressional Review Emergency Amendment Act of 1998 (D.C. Act 12-550, December 18, 1998, 46 DCR 512). Temporary Legislation For temporary (225 day) amendment of section, see  2(c) of the Mutual Holding Company Mergers and Acquisition Temporary Amendment Act of 1998 (D.C. Law 12-119, June 11, 1998, law notification 45 DCR 4036). References in Text Section 19 of the Life Insurance Act, which is referred to in (a), is probably a reference to former  35-418 [ 31-4318, 2001 Ed.]; it may also be a reference to  31-4419.
 31736. Failure to give notice. If the mutual company complies substantially and in good faith with the notice requirements of this subchapter, the mutual companys failure to give any member or members any required notice does not impair the validity of any action taken under this subchapter.  (Sept. 20, 1996, D.C. Law 11-159,  7, 43 DCR 3714.)  Prior Codifications 1981 Ed.,  35-3726. Emergency Legislation See notes to  35-3721.
 31737.01. Mergers and acquisitions. (a) Subject to applicable requirements of this subchapter and subchapter I of this chapter, a mutual insurance holding company may: (1) Merge or consolidate with, or acquire the assets of, a mutual insurance holding company licensed pursuant to this subchapter or any similar entity organized pursuant to laws of any other state; (2) Either alone or together with one or more intermediate stock holding companies, or other subsidiaries, directly or indirectly acquire the stock of a stock insurance company or a mutual insurance company that reorganizes under this subchapter or the law of its state of organization; (3) Together with one or more of its stock insurance company subsidiaries, acquire the assets of a stock insurance company or a mutual insurance company; (4) Acquire a stock insurance company through the merger of such stock insurance company with a stock insurance company or interim stock insurance company subsidiary of the mutual insurance holding company; or (5) Acquire the stock or assets of any other person to the same extent as would be permitted for any District stock corporation or, if the mutual insurance holding company writes insurance, a mutual insurance company. (b) A merger or acquisition pursuant to this section is subject to the applicable procedures prescribed by the District laws applying to mutual insurance companies, except as otherwise provided in this subsection. The Commissioner may retain, at the expense of the mutual insurance company, any attorneys, actuaries, accountants, and other experts not otherwise a part of the Commissioners staff as may be reasonably necessary to assist the Commissioner in reviewing the proposed merger or acquisition. (1) The plan and agreement for merger shall be submitted to and approved by vote of 2/3rds of those members of any domestic mutual insurance holding company involved in the merger who vote either in person or by proxy thereon at a lawful meeting called for the purpose pursuant to such reasonable notice and procedure as has been approved by the Commissioner. (2) No such merger shall be effectuated unless in advance thereof, the plan and agreement therefor have been filed with the Commissioner and approved by him. The Commissioner shall give such approval unless he finds such plan or agreement: (A) Is inequitable to the policyholders of any domestic insurer involved in the merger or the members of any domestic mutual insurance holding company involved in the merger; or (B) Would substantially reduce the security of and service to be rendered to policyholders of a domestic insurer in the District.  (September 20, 1996, D.C. Law 11-159,  8a; as added Mar. 26, 1999, D.C. Law 12-188,  2(e), 45 DCR 7807.)  Prior Codifications 1981 Ed.,  35-3727.1. Emergency Legislation For temporary addition of section, see  2(e) of the Mutual Holding Company Mergers and Acquisition Emergency Amendment Act of 1998 (D.C. Act 12-295, March 4, 1998, 45 DCR 1764),  2(e) of the Mutual Holding Company Mergers and Acquisition Congressional Review Emergency Amendment Act of 1998 (D.C. Act 12-364, June 5, 1998, 45 DCR 3877), and  2(e) of the Mutual Holding Company Mergers and Acquisition Second Congressional Review Emergency Amendment Act of 1998 (D.C. Act 12-550, December 18, 1998, 46 DCR 512). Temporary Legislation For temporary (225 day) addition, see  2(e) of the Mutual Holding Company Mergers and Acquisition Temporary Amendment Act of 1998 (D.C. Law 12-119, June 11, 1998, law notification 45 DCR 4036).
 31737. Limitations of actions. Any action challenging the validity of or arising out of acts taken or proposed to be taken under this subchapter shall be commenced within 30 days after the date of the issuance of any order by the Commissioner pursuant to this subchapter. In any action challenging the validity of or arising out of acts taken or proposed to be taken under this subchapter, or charging that the directors of the mutual insurance holding company or any of its subsidiaries have acted improperly in connection with any aspect of the acts taken or proposed to be taken under this subchapter, the mutual insurance holding company or any of its subsidiaries in whose right such action is brought, or the defendant(s) shall be entitled at any state of the proceedings before final judgment to require the plaintiff(s) to give security for the reasonable expenses, including attorney fees, which may be incurred by the mutual insurance holding company or any of its subsidiaries or any other defendant(s) in connection with such action. Thereafter, the amount of such security, from time to time, may be increased or decreased in the discretion of the court having jurisdiction of such action upon a showing that the security provided has or may become inadequate or excessive.  (Sept. 20, 1996, D.C. Law 11-159,  8, 43 DCR 3714; Apr. 9, 1997, D.C. Law 11-202,  4, 43 DCR 6054; Mar. 26, 1999, D.C. Law 12-188,  2(d), 45 DCR 7807.)  Prior Codifications 1981 Ed.,  35-3727. Emergency Legislation See notes to  35-3721. For temporary amendment of  8 of the Mutual Holding Company Act of 1996 (D.C. Act 11-290) to conform with this section, see  11 of the Mutual Holding Company Congressional Review Emergency Act of 1996 (D.C. Act 11-368, August 21, 1996, 43 DCR 4633). For temporary amendment of section, see  2 of the Mutual Holding Company Congressional Adjournment Emergency Amendment Act of 1996 (D.C. Act 11-449, December 10, 1996, 43 DCR 6866), and  2 of the Mutual Holding Company Congressional Review Emergency Amendment Act of 1997 (D.C. Act 12-6, March 3, 1997, 44 DCR 1619). For temporary amendment of section, see  2(d) of the Mutual Holding Company Mergers and Acquisition Emergency Amendment Act of 1998 (D.C. Act 12-295, March 4, 1998, 45 DCR 1764),  2(d) of the Mutual Holding Company Mergers and Acquisition Congressional Review Emergency Amendment Act of 1998 (D.C. Act 12-364, June 5, 1998, 45 DCR 3877), and  2(d) of the Mutual Holding Company Mergers and Acquisition Second Congressional Review Emergency Amendment Act of 1998 (D.C. Act 12-550, December 18, 1998, 46 DCR 512). Temporary Legislation For temporary (225 day) amendment of section, see  2(d) of the Mutual Holding Company Mergers and Acquisition Temporary Amendment Act of 1998 (D.C. Law 12-119, June 11, 1998, law notification 45 DCR 4036).
 31738. Rulemaking. The Mayor, pursuant to subchapter I of Chapter 5 of Title 2, may issue rules and regulations to implement the provisions of this subchapter.  (Sept. 20, 1996, D.C. Law 11-159,  9, 43 DCR 3714.)  Prior Codifications 1981 Ed.,  35-3728. Emergency Legislation See notes to  35-3721.
 31751. Definitions. For the purposes of this subchapter, the term: (1) Reciprocal insurance company includes an interinsurance exchange but shall not include a risk retention group as defined in  31-4101(12). (2) Voting shares means shares entitling the holder to vote for the election of directors of the issuer except that shares which can be voted only in the case of the occurrence of an event or an extraordinary action are not voting shares.  (May 12, 1998, D.C. Law 12-112,  2, 45 DCR 1792.)  Prior Codifications 1981 Ed.,  35-3741. Emergency Legislation For temporary addition of this subchapter, comprised of  35-3741 through 35-3750 1981 Ed. see  2-11 of the Reciprocal Insurance Company Conversion Emergency Amendment Act of 1998 (D.C. Act 12-298, March 4, 1998, 45 DCR 1775).
 31752. Formation of a mutual insurance holding company from a reciprocal insurance company. (a) Upon approval of the Commissioner, a domestic reciprocal insurance company may form a mutual insurance holding company that directly or indirectly owns the insurance company, based upon a conversion plan. The reorganized insurance company shall continue, without interruption, its existence as a stock insurance company subsidiary of the mutual insurance holding company or as a stock insurance company subsidiary to an intermediate holding company which is a subsidiary of the mutual insurance holding company. (b) The Commissioner, after a public hearing as provided in  31-703(g)(1), if satisfied that the interests of the policyholders are properly protected and that the conversion plan is fair and equitable to the policyholders, shall approve the proposed conversion plan and may require as a condition of approval such modifications of the proposed conversion plan as the Commissioner finds necessary for the protection of the policyholders interests. The Commissioner may retain consultants as provided in  31-703(g)(3). A conversion pursuant to this section shall be subject to  31-703(a), (b), and (c). The Commissioner shall retain jurisdiction over a mutual insurance holding company organized pursuant to this section to assure that policyholder interests are protected. (c) All of the initial shares of the capital stock of the reorganized insurance company shall be issued to the mutual insurance holding company. The membership interests of the policyholders of the reorganized insurance company shall become membership interests in the mutual insurance holding company. (d) Policyholders of the reorganized insurance company shall be members of the mutual insurance holding company in accordance with the articles of incorporation and bylaws of the mutual insurance holding company. The mutual insurance holding company shall at all times own a majority of the voting shares of the capital stock of the reorganized insurance company.  (May 12, 1998, D.C. Law 12-112,  3, 45 DCR 1792.)  Prior Codifications 1981 Ed.,  35-3742. Emergency Legislation See Historical and Statutory Notes following  31-751.
 31753. Merger of policyholder membership interests. (a) Upon approval of the Commissioner, a domestic or foreign reciprocal or mutual insurance company may merge its policyholders membership interests into a mutual insurance holding company formed pursuant to this section and continue, without interruption, the existence of the insurance company as a stock insurance company subsidiary of the mutual insurance holding company or as a stock insurance company subsidiary of an intermediate holding company which is a subsidiary of the mutual insurance holding company. (b) The Commissioner, after a public hearing as provided in  31-703(g)(1), if satisfied that the interests of the policyholders are properly protected and that the merger is fair and equitable to the policyholders, shall approve the proposed merger and may require as a condition of approval such modifications of the proposed merger as the Commissioner finds necessary for the protection of the policyholders interests. The Commissioner may retain consultants as provided in  31-703(g)(3). A merger pursuant to this section shall be subject to  31-703(a), (b), and (c). The Commissioner shall retain jurisdiction over the mutual insurance holding company organized pursuant to this section to assure that policyholder interests are protected. (c) All of the initial shares of the capital stock of the reorganized insurance company shall be issued to the mutual insurance holding company. The membership interests of the policyholders of the reorganized insurance company shall become membership interests in the mutual insurance holding company. (d) Policyholders of the reorganized insurance company shall be members of the mutual insurance holding company in accordance with the articles of incorporation and bylaws of the mutual insurance holding company. The mutual insurance holding company shall at all times directly or indirectly own a majority of the voting shares of the capital stock of the reorganized insurance company. A merger of policyholders membership interests in a reciprocal or mutual insurance company into a mutual insurance holding company shall be deemed to be a merger of insurance companies pursuant to  31-703 which shall be applicable.  (May 12, 1998, D.C. Law 12-112,  4, 45 DCR 1792.)  Prior Codifications 1981 Ed.,  35-3743. Emergency Legislation See Historical and Statutory Notes following  31-751.
 31754. Incorporation of holding company. A mutual insurance holding company resulting from a conversion of a domestic reciprocal insurance company shall be incorporated pursuant to Chapter 3 of Title 29 and shall be subject to Chapters 1, 2, and 3 of Title 29 to the extent that those provisions are not in conflict with this subchapter. The articles of incorporation and any amendments to such articles of incorporation of the mutual insurance holding company shall be subject to approval of the Commissioner and Corporation Counsel of the District in the same manner as those of an insurance company.  (May 12, 1998, D.C. Law 12-112,  5, 45 DCR 1792; July 2, 2011, D.C. Law 18-378,  3(u), 58 DCR 1720.)  Prior Codifications 1981 Ed.,  35-3744. Effect of Amendments D.C. Law 18-378 substituted Chapter 3 of Title 29 and shall be subject to Chapters 1, 2, and 3 of Title 29 for Chapter 1 of Title 29 (Business Corporation Act), and shall be subject to the provisions of the Business Corporation Act. Emergency Legislation See Historical and Statutory Notes following  31-751.
 31755. Insurers rehabilitation and liquidation. (a) A mutual insurance holding company shall be deemed to be an insurer subject to Chapter 13 of this title (Insurers Rehabilitation and Liquidation Act), and shall automatically be a party to any proceeding under the Insurers Rehabilitation and Liquidation Act involving an insurance company, which as a result of a conversion or merger pursuant to  31-702 or  31-703 is directly or indirectly a subsidiary of the mutual insurance holding company. In any proceeding under the Insurers Rehabilitation and Liquidation Act involving the converted or merged insurance company, the assets of the mutual insurance holding company shall be deemed to be assets of the estate of the converted or merged insurance company for purposes of satisfying the claims of the converted or merged insurance companys policyholders. (b) A mutual insurance holding company shall not dissolve or liquidate without the approval of the Commissioner or as ordered by a District of Columbia court pursuant to the Insurers Rehabilitation and Liquidation Act.  (May 12, 1998, D.C. Law 12-112,  6, 45 DCR 1792.)  Prior Codifications 1981 Ed.,  35-3745. Emergency Legislation See Historical and Statutory Notes following  31-751.
 31756. Applicability; membership interest; powers. (a) A membership interest in a mutual insurance holding company shall not constitute an equity security as defined in  31-603. (b) A mutual insurance holding company created under this subchapter shall have the same powers to borrow or assume liability as a reciprocal insurance company organized under District law.  (May 12, 1998, D.C. Law 12-112,  7, 45 DCR 1792.)  Prior Codifications 1981 Ed.,  35-3746. Emergency Legislation See Historical and Statutory Notes following  31-751.
 31757. Failure to give notice. If the reciprocal insurance company complies substantially and in good faith with the notice requirements of this subchapter, the reciprocal insurance companys failure to give any member or members any required notice shall not impair the validity of any action taken under this subchapter.  (May 12, 1998, D.C. Law 12-112,  8, 45 DCR 1792.)  Prior Codifications 1981 Ed.,  35-3747. Emergency Legislation See Historical and Statutory Notes following  31-751.
 31758. Limitations of actions. Any action challenging the validity of, or arising out of acts taken or proposed to be taken under, this subchapter shall be commenced within 30 days after the effective date of any plan submitted for approval pursuant to this subchapter.  (May 12, 1998, D.C. Law 12-112,  9, 45 DCR 1792.)  Prior Codifications 1981 Ed.,  35-3748. Emergency Legislation See Historical and Statutory Notes following  31-751.
 31759. Conversion of mutual insurance holding company. Chapter 9 of this title shall be applicable to the conversion of a mutual insurance holding company formed under this subchapter to a stock company as if the mutual insurance holding company were a mutual insurance company.  (May 12, 1998, D.C. Law 12-112,  10, 45 DCR 1792.)  Prior Codifications 1981 Ed.,  35-3749. Emergency Legislation See Historical and Statutory Notes following  31-751.
 31760. Rulemaking. The Mayor, pursuant to subchapter I of Chapter 5 of Title 2 may issue rules and regulations to implement the provisions of this subchapter.  (May 12, 1998, D.C. Law 12-112,  11, 45 DCR 1792.)  Prior Codifications 1981 Ed.,  35-3750. Emergency Legislation See Historical and Statutory Notes following  31-751.
 31801. Definitions. [Repealed] Repealed.  (Apr. 9, 1997, D.C. Law 11-227,  2, 44 DCR 140; Mar. 27, 2003, D.C. Law 14-264,  20, 50 DCR 260.)  Prior Codifications 1981 Ed.,  35-1321.
 31802. Duties of agents and brokers. [Repealed] Repealed.  (Apr. 9, 1997, D.C. Law 11-227,  3, 44 DCR 140; Mar. 27, 2003, D.C. Law 14-264,  20, 50 DCR 260.)  Prior Codifications 1981 Ed.,  35-1322.
 31803. General license requirements. [Repealed] Repealed.  (Apr. 9, 1997, D.C. Law 11-227,  4, 44 DCR 140; Oct. 21, 2000, D.C. Law 13-188,  2(a), 47 DCR 7075; Mar. 27, 2003, D.C. Law 14-264,  20, 50 DCR 260.)  Prior Codifications 1981 Ed.,  35-1323.
 31804. Licensing procedure. [Repealed] Repealed.  (Apr. 9, 1997, D.C. Law 11-227,  5, 44 DCR 140; Oct. 21, 2000, D.C. Law 13-188,  2(b), 47 DCR 7075; Mar. 27, 2003, D.C. Law 14-264,  20, 50 DCR 260.)  Prior Codifications 1981 Ed.,  35-1324.
 31805. Exemption from examination and prelicensing education requirements. [Repealed] Repealed.  (Apr. 9, 1997, D.C. Law 11-227,  6, 44 DCR 140; Mar. 27, 2003, D.C. Law 14-264,  20, 50 DCR 260.)  Prior Codifications 1981 Ed.,  35-1325.
 31806. License denial, nonrenewal, or termination. [Repealed] Repealed.  (Apr. 9, 1997, D.C. Law 11-227,  7, 44 DCR 140; Mar. 27, 2003, D.C. Law 14-264,  20, 50 DCR 260.)  Prior Codifications 1981 Ed.,  35-1326.
 31807. License continuation; expiration. [Repealed] Repealed.  (Apr. 9, 1997, D.C. Law 11-227,  8, 44 DCR 140; Oct. 21, 2000, D.C. Law 13-188,  2(c), 47 DCR 7075; Mar. 27, 2003, D.C. Law 14-264,  20, 50 DCR 260.)  Prior Codifications 1981 Ed.,  35-1327.
 31808. Hearings. [Repealed] Repealed.  (Apr. 9, 1997, D.C. Law 11-227,  9, 44 DCR 140; Mar. 27, 2003, D.C. Law 14-264,  20, 50 DCR 260.)  Prior Codifications 1981 Ed.,  35-1328.
 31809. Surrender of license; loss or destruction of license. [Repealed] Repealed.  (Apr. 9, 1997, D.C. Law 11-227,  10, 44 DCR 140; Mar. 27, 2003, D.C. Law 14-264,  20, 50 DCR 260.)  Prior Codifications 1981 Ed.,  35-1329.
 31810. Termination reports. [Repealed] Repealed.  (Apr. 9, 1997, D.C. Law 11-227,  11, 44 DCR 140; Mar. 27, 2003, D.C. Law 14-264,  20, 50 DCR 260.)  Prior Codifications 1981 Ed.,  35-1330.
 31811. Representatives of fraternal benefit societies. [Repealed] Repealed.  (Apr. 9, 1997, D.C. Law 11-227,  12, 44 DCR 140; Mar. 27, 2003, D.C. Law 14-264,  20, 50 DCR 260.)  Prior Codifications 1981 Ed.,  35-1331.
 31812. Countersignature and related laws. [Repealed] Repealed.  (Apr. 9, 1997, D.C. Law 11-227,  13, 44 DCR 140; Mar. 27, 2003, D.C. Law 14-264,  20, 50 DCR 260.)  Prior Codifications 1981 Ed.,  35-1332.
 31813. Temporary licensing. [Repealed] Repealed.  (Apr. 9, 1997, D.C. Law 11-227,  14, 44 DCR 140; Mar. 27, 2003, D.C. Law 14-264,  20, 50 DCR 260.)  Prior Codifications 1981 Ed.,  35-1333.
 31814. Rules and regulations. [Repealed] Repealed.  (Apr. 9, 1997, D.C. Law 11-227,  15, 44 DCR 140; Mar. 27, 2003, D.C. Law 14-264,  20, 50 DCR 260.)  Prior Codifications 1981 Ed.,  35-1334.
 31851. Definitions. For the purposes of this chapter, the term: (1) Commissioner means the Commissioner of Insurance and Securities Regulation [Commissioner of the Department of Insurance, Securities, and Banking]. (2) Company means all insurance companies or carriers that are licensed in the District and subject to the regulatory authority of the Commissioner. (3) District means the District of Columbia. (4) Insurance compliance audit means a voluntary internal evaluation, review, assessment, or audit by a company not otherwise expressly required by law. An insurance compliance audit may be conducted by the company, its employees, or by independent contractors. (5)(A) Insurance compliance self-evaluative audit document means a document prepared as a result of or in connection with, and not prior to, an insurance compliance audit. An insurance compliance self-evaluation audit document may include: (i) A written response to the findings of an insurance compliance audit; (ii) Field notes and records of observations, findings, opinions, suggestions, conclusions, drafts, memoranda, drawings, photographs, exhibits, computer-generated or electronically recorded information, maps, charts, graphs, and surveys; provided, that this supporting information is collected or developed for the primary purpose of, and in connection with, an insurance compliance audit; (iii) An insurance compliance audit report prepared by an auditor who may be an employee of the company or an independent contractor, which report may include the scope of the audit, information produced by the audit, and conclusions and recommendations, with exhibits and appendices; (iv) Memoranda and documents analyzing portions or all of the insurance compliance audit report and discussing potential implementation issues; (v) An implementation plan that addresses correcting past noncompliance, improving current compliance, and preventing future noncompliance; or (vi) Analytic data generated in the course of conducting the insurance compliance audit. (B) Insurance compliance self-evaluative audit document shall not include documents, communications, data, reports, or other information created as a result of a claim involving personal injury or workers compensation made against an insurance policy. (6) Privilege means the insurance compliance self-evaluative privilege created by  31-853(a).  (Apr. 11, 2003, D.C. Law 14-293,  2, 50 DCR 296.) 
 31852. Scope. Nothing in this chapter shall limit, waive, or abrogate the scope or nature of any statutory or common law privilege, including work product, the attorney-client privilege, or the subsequent remedial measures exclusion.  (Apr. 11, 2003, D.C. Law 14-293,  3, 50 DCR 296.) 
 31853. Privilege. (a)(1) An insurance compliance self-evaluative audit document shall be privileged information and shall not be admissible as evidence in any legal action in a civil, criminal, or administrative proceeding, except as provided in subsections (b), (c), and (d) of this section and  31-854 and 31-855. (2) The privilege shall not extend to: (A) Documents, communications, data, reports, or other information required to be collected, developed, maintained, reported, or otherwise made available to a regulatory agency under a District or federal law, rule, or order; (B) Information obtained by observation or monitoring by any regulatory agency; or (C) Information obtained from a source independent of the insurance compliance audit. (b) If, in connection with examinations conducted under the insurance laws, a company voluntarily submits an insurance compliance self-evaluative audit document to the Commissioner, as delegate of the Mayor, as a confidential document, the provisions of  31-1403(f) shall not apply to the insurance compliance self-evaluative audit document so voluntarily submitted. (c) To the extent that the Commissioner has the authority to compel the disclosure of an insurance compliance self-evaluative audit document under other provisions of applicable law, the document furnished to the Commissioner shall not be provided to any other persons or entities and shall be accorded the same confidentiality and other protections as provided above for voluntarily submitted documents. Any use of an insurance compliance self-evaluative audit document furnished as a result of a request by the Commissioner under a claim of authority to compel disclosure shall be limited to determining whether or not any disclosed defects in an insurers policies and procedures or inappropriate treatment of customers has been remedied or that an appropriate plan for their remedy is in place. (d) The privilege shall not apply to the extent that it is expressly waived by the company that prepared, or caused to be prepared, the insurance compliance self-evaluative audit document.  (Apr. 11, 2003, D.C. Law 14-293,  4, 50 DCR 296.)  Section References This section is referenced in  31-851.
 31854. Civil or administrative proceedings. A court may, after an in camera review, require disclosure of material for which the privilege is asserted if the court determines: (1) The privilege is asserted for fraudulent purposes; (2) The material is not subject to the privilege; or (3) Even if subject to the privilege, the material shows evidence of noncompliance with District or federal statutes, rules, or orders and the company failed to take reasonable corrective action or eliminate the noncompliance within a reasonable time.  (Apr. 11, 2003, D.C. Law 14-293,  5, 50 DCR 296.)  Section References This section is referenced in  31-853,  31-856, and  31-857.
 31855. Criminal proceedings. A court may, after an in camera review, require disclosure of material for which the privilege is asserted, if the court determines: (1) The privilege is asserted for a fraudulent purpose; (2) The material is not subject to the privilege; (3) Even if subject to the privilege, the material shows evidence of noncompliance with District or federal statutes, rules, or orders and the company failed to undertake reasonable corrective action or eliminate the noncompliance within a reasonable time; or (4) The material contains evidence relevant to the commission of a criminal offense under District law, and: (A) The Commissioner, Corporation Counsel, or U.S. Attorney has a compelling need for the information; (B) The information is not otherwise available; and (C) The Commissioner, Corporation Counsel, or U.S. Attorney is unable to obtain the substantial equivalent of the information by any means without incurring unreasonable cost and delay.  (Apr. 11, 2003, D.C. Law 14-293,  6, 50 DCR 296.)  Section References This section is referenced in  31-853,  31-856, and  31-857.
 31856. Requests for disclosure. (a) The Commissioner, Corporation Counsel, or U.S. Attorney may request, in writing by certified mail, disclosure of an insurance compliance self-evaluative audit document within 30 days after the service of the request. The company that prepared the document or caused the document to be prepared may file with the appropriate court a petition requesting an in camera hearing to determine whether the insurance compliance self-evaluative audit document or portions of the document are privileged or subject to disclosure. Failure by the company to file a petition waives the privilege for that particular document. A company asserting the insurance compliance self-evaluative privilege in response to a request for disclosure under this subsection shall include in its request the information set forth in subsection (d) of this section. (b) Upon the filing of a petition under this section, the court shall issue an order scheduling, within 45 days after the filing of the petition, an in camera hearing to determine whether the insurance compliance self-evaluative audit document or portions of the document are privileged or subject to disclosure. (c) The court, after an in camera review, may require disclosure of material for which the privilege is asserted in accordance with  31-854 or  31-855. The court shall compel only the disclosure of those portions of an insurance compliance self-evaluative audit document relevant to issues in dispute in the underlying proceeding. A compelled disclosure shall not be considered to be a public document or be deemed to be a waiver of the privilege for any other civil, criminal, or administrative proceeding. A company unsuccessfully opposing disclosure may apply to the court for an order protecting the document from further disclosure. (d) A company asserting the privilege in response to a request for disclosure under this section shall provide to the Commissioner, Corporation Counsel, or U.S. Attorney, as the case may be, at the time of filing any objection to the disclosure that: (A) The date and time that the insurance compliance self-evaluative audit document was prepared; (B) The identity of the entity conducting the audit; (C) The general nature of the activities covered by the insurance compliance audit; and (D) An identification of the portions of the insurance compliance self evaluative audit document for which the privilege is being asserted.  (Apr. 11, 2003, D.C. Law 14-293,  7, 50 DCR 296.) 
 31857. Burden of proof. (a) A company asserting the privilege shall have the burden of demonstrating the applicability of the privilege. If a company has established the applicability of the privilege, a party seeking disclosure under  31-854 shall have the burden of proving that the privilege is asserted for a fraudulent purpose or that the company failed to undertake reasonable corrective action or eliminate the noncompliance within a reasonable time. The Commissioner, Corporation Counsel, or U. S. Attorney seeking disclosure under  31-855 shall have the burden of proof. (b) The parties may at any time agree to entry of an order directing that specific information contained in an insurance compliance self-evaluative audit document be disclosed.  (Apr. 11, 2003, D.C. Law 14-293,  8, 50 DCR 296.) 
 31858. Applicability. The privilege shall apply to all litigation or administrative proceedings pending on April 11, 2003, or filed subsequent to April 11, 2003.  (Apr. 11, 2003, D.C. Law 14-293,  9, 50 DCR 296.) 
 31901. Definitions. For the purposes of this chapter, the term: (1) Converted stock company means a District of Columbia domiciled stock company that converted from a District of Columbia mutual company pursuant to this chapter. (1A) Commissioner means the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking]. (2) District means the District of Columbia. (3) Eligible member means a member whose policy is in force as of the date the mutual companys board of directors adopts a plan of conversion. (A) A person insured under a group policy is not an eligible member, unless: (i) The person is insured or covered under a group life policy or group annuity contract under which funds are accumulated and allocated to the respective covered person; (ii) The person has the right to direct the application of the funds so allocated; (iii) The group policyholder makes no contribution to the premiums or deposits for the policy or contract; and (iv) The mutual company has the names and addresses covered under the group policy or group annuity contract. (B) A person whose policy is issued after the board of directors adopts the plan but before the plans effective date is not an eligible member, but shall have those rights set forth in  31-910. (4) Plan of conversion or plan means a plan adopted by a District of Columbia domestic mutual companys board of directors pursuant to this chapter to convert the mutual company into a District of Columbia domiciled stock company. (5) Policy includes an annuity contract. (6) Repealed.  (May 24, 1996, D.C. Law 11-126,  2, 43 DCR 1551; Mar. 24, 1998, D.C. Law 12-81,  43(a), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-4201.
 31902. Adoption of the plan of conversion by the board of directors. (a) A mutual company seeking to convert to a stock company shall, by the affirmative vote of a majority of its board of directors, adopt a plan of conversion consistent with the requirements of  31-906. (b) At any time before approval of a plan by the Commissioner, the mutual company, by the affirmative vote of a majority of its board of directors, may amend or withdraw the plan.  (May 24, 1996, D.C. Law 11-126,  3, 43 DCR 1551; Mar. 24, 1998, D.C. Law 12-81,  43(b), 45 DCR 745; Apr. 3, 2001, D.C. Law 13-214,  2(a), 47 DCR 9580.)  Prior Codifications 1981 Ed.,  35-4202. Effect of Amendments D.C. Law 13-214 substituted a majority for 2/3 in subsecs. (a) and (b).
 31903. Approval of the plan of conversion by the Commissioner of the Department of Insurance, Securities, and Banking. (a) After adoption by the mutual companys board of directors, the plan shall be submitted to the Commissioner for review and approval. The Commissioner shall approve the plan upon finding that: (1) The provisions of this section have been complied with; (2) The plan will not prejudice the interests of the members; and (3) The plans method of allocating subscription rights is fair and equitable. (a-1) The Commissioner, in his discretion, may order that a hearing on the plan be held, which hearing shall be conducted in accordance with the contested case procedures set forth in  2-509. (a-2) A decision or order of the Commissioner, after a hearing conducted in accordance with the contested case procedures as set forth in subsection (a-1) of this section, may be reviewed as provided in  2-510. (b) Prior to the members approval of the plan, a mutual company seeking the Commissioners approval of a plan shall file the following documents with the Commissioner for review and approval: (1) The plan of conversion, including the independent evaluation of pro forma market value required by  31-906(f); (2) The form of notice required by  31-904(b) for eligible members of the meeting to vote on the plan; (3) Any proxies to be solicited from eligible members pursuant to  31-904(c); (4) The form of notice required by  31-910(a) for persons whose policies are issued after adoption of the plan but before its effective date; and (5) The proposed articles of incorporation and bylaws of the converted stock company. Once filed, these documents shall be approved or disapproved by the Commissioner within a reasonable time. (c) After the members have approved the plan, the converted stock company shall file the following documents with the Commissioner: (1) The minutes of the meeting of the members at which the plan was voted upon; and (2) The revised articles of incorporation and bylaws of the converted stock company. (d) The Commissioner may retain, at the mutual companys expense, any qualified expert not otherwise a part of the Commissioners staff to assist in reviewing the plan and the independent evaluation of the pro forma market value which is required by  31-906(i).  (May 24, 1996, D.C. Law 11-126,  4, 43 DCR 1551; Mar. 24, 1998, D.C. Law 12-81,  43(c), 45 DCR 745; Apr. 3, 2001, D.C. Law 13-214,  2(b), 47 DCR 9580; Oct. 19, 2002, D.C. Law 14-213,  19, 49 DCR 8140.)  Prior Codifications 1981 Ed.,  35-4203. Section References This section is referenced in  31-1371.05. Effect of Amendments D.C. Law 13-214 inserted subsecs. (a-1) and (a-2). D.C. Law 14-213, in subsec. (a-2), validated a previously made technical correction.
 31904. Approval of the plan by the members. (a) All eligible members shall be given notice of and an opportunity to vote upon the plan. (b) All eligible members shall be given notice of the members meeting to vote upon the plan. A copy of the plan or a summary of the plan shall accompany the notice. The notice shall be mailed to each members last known address, as shown on the mutual companys records, within 45 days of the Commissioners approval of the plan. The meeting to vote upon the plan shall not be set for a date less than 10 days and no more than 60 days after the date when the notice of the meeting is mailed by the mutual company. If the meeting to vote upon the plan is held coincident with the mutual companys annual meeting of policyholders, only one combined notice of meeting is required. (c) After approval by the Commissioner, the plan shall be adopted upon receiving the affirmative vote of at least a majority of the votes cast by eligible members. Members entitled to vote upon the proposed plan may vote in person or by proxy. Any proxies to be solicited from eligible members shall be filed with and approved by the Commissioner. The number of votes each eligible member may cast shall be determined by the mutual company bylaws. If the bylaws are silent, each eligible member may cast one vote.  (May 24, 1996, D.C. Law 11-126,  5, 43 DCR 1551; Mar. 24, 1998, D.C. Law 12-81,  43(d), 45 DCR 745; Apr. 3, 2001, D.C. Law 13-214,  2(c), 47 DCR 9580.)  Prior Codifications 1981 Ed.,  35-4204. Section References This section is referenced in  31-903. Effect of Amendments D.C. Law 13-214, in subsec. (b), substituted 10 days and no more than 60 days for 60 days.
 31905.01. Acquiring, offering securities issued in connection with a plan of conversion. Prior to implementation of a plan of conversion adopted by a mutual company, no person shall knowingly acquire, or make any offer, or make any announcement of an offer, for any security issued, or to be issued, by the mutual company in connection with its plan of conversion, or for any security issued by any other company authorized as an alternative for purposes of effecting the conversion pursuant to  31-906(e), except in compliance with the maximum purchase limitations imposed by  31-906(l) or the terms of the plan of conversion as approved by the Commissioner.  (May 24, 1996, D.C. Law 11-126,  6a, 43 DCR 1551; as added July 17, 1999, D.C. Law 13-13,  2(a), 46 DCR 4428.) 
 31905. Adoption of revised articles of incorporation. (a) Adoption of the revised articles of incorporation of the converted stock company is necessary to implement the plan and shall be governed by the applicable provisions of District law. (b) For a Class 1 mutual company, the members may adopt the revised articles of incorporation at the same meeting at which the members approve the plan. (c) For a Class 2 or 3 mutual company, the revised articles of incorporation may be adopted solely by the board of directors or trustees, as provided by District law.  (May 24, 1996, D.C. Law 11-126,  6, 43 DCR 1551.)  Prior Codifications 1981 Ed.,  35-4205. Emergency Legislation For temporary amendment of section, see  2(a) of the Insurance Demutualization Emergency Amendment Act of 1998 (D.C. Act 12-528, December 16, 1998, 45 DCR 476). For temporary (90-day) amendment of section, see  2(a) of the Insurance Demutualization Congressional Review Emergency Amendment Act of 1999 (D.C. Act 13-35, March 18, 1999, 46 DCR 3004). Temporary Legislation For temporary (225 day) amendment of section, see  2(a) of the Insurance Demutualization Temporary Amendment Act of 1998 (D.C. Law 12-221, April 13, 1999, law notification 46 DCR 3843).
 31906. Required provisions in a plan of conversion. (a) The plan shall set forth the reasons for the proposed conversion. (b) The plan shall provide that all policies in force on the effective date of conversion shall continue to remain in force under the terms of those policies, except that any voting rights of the policyholders provided for under the policies or under District law and any contingent liability policy provisions of the type described in District law shall be extinguished on the effective date of the conversion. (c) The plan shall further provide that the holders of participating policies in effect on the date of conversion shall continue to have the right to receive dividends as provided in the participating policies, if any. (d) Except mutual companys life policies, guaranteed reviewable accident and health policies, and noncancelable accident and health policies, the converted stock company may issue the insured a nonparticipating policy as a substitute for the participating policy upon the renewal date of a participating policy. (e)(1) The plan shall provide that each eligible member is to receive, without payment, nontransferable subscription rights to purchase a portion of the capital stock of the converted stock company. As an alternative to subscription rights in the converted stock company, the plan may provide that each eligible member is to receive, without payment, nontransferable subscription rights to purchase a portion of the capital stock of a corporation organized and owned by the mutual company for the purpose of purchasing and holding all the stock of the converted stock company, or a stock insurance company owned by the mutual company into which the mutual company will be merged. (2) In the case of the conversion of an existing mutual insurance holding company to a stock company, if shares of common stock in an intermediate stock holding company have previously been issued to persons other than the mutual holding company, the plan of conversion shall provide that such common stockholders shall receive an ownership interest in the converted mutual insurance holding company equal to the percentage ownership in the intermediate stock holding company immediately before the conversion, with the subscription rights to the balance of the shares to be distributed as provided under paragraph (1) of this subsection. (f) The subscription rights shall be allocated in whole shares among the eligible members using a fair and equitable formula. This formula may, but need not, take into account how the different classes of policies of the eligible members contributed to the surplus of the mutual company. (g) The plan shall provide a fair and equitable means for the allocation of shares of capital stock in the event of an oversubscription to shares by eligible members exercising subscription rights received pursuant to subsection (e) of this section. (h) The plan shall provide that any shares of capital stock not subscribed to by eligible members exercising subscription rights received under subsections (e) and (f) of this section shall be sold in a public offering through an underwriter. If the shares of capital stock not subscribed to by eligible members is so small in number as to not warrant the expense of a public offering, the plan of conversion may provide for the purchase of the unsubscribed shares by a private placement or other alternative method approved by the Commissioner that is fair and equitable to the eligible members. (i) The plan shall set the total price of the capital stock equal to the estimated pro forma market value of the converted stock company based upon an independent evaluation by a qualified person. The pro forma market value may be the value or range of values that is estimated to be necessary to attract full subscription for shares as indicated by the independent evaluation. (j) The plan shall set the purchase price of each share of capital stock equal to any reasonable amount that will not inhibit the purchase of shares by members. The purchase price of each share shall be uniform for all purchasers. (k) The plan shall provide for a closed block of business for participating life policies of a Class 1 mutual company. (1) The plan shall provide that a Class 1 mutual companys participating life policies in force on the effective date of the conversion shall be operated by the converted stock company for dividend purposes as a closed block of participating business, except that any or all classes of group participating policies may be excluded from the closed block. (2) The plan shall establish one or more segregated accounts for the benefit of the closed block of business and shall allocate to those segregated accounts enough assets of the mutual company so that the assets together with the revenue from the closed block of business are sufficient to support the closed block, including, but not limited to, the payment of claims, expenses, taxes, and any dividends that are provided for under the terms of the participating policies, with appropriate adjustments in the dividends for experience changes. The plan shall be accompanied by an opinion of a qualified actuary or an appointed actuary who meets the standards set forth in the insurance laws or regulations for the submission or actuarial opinions as to the adequacy of reserves or assets. The opinion shall relate to the adequacy of the assets allocated to the segregated accounts in support of the closed block of business. The actuarial opinion shall be based on a method of analysis deemed appropriate for those purposes by the Actuarial Standards Board. (3) The amount of assets allocated to the segregated accounts of the closed block shall be based upon the mutual companys last annual statement that is updated to the effective date of the conversion. (4) The converted stock company shall keep a separate accounting for the closed block and shall make and include in the annual statement to be filed with the Commissioner each year a separate statement showing the gains, losses, and expenses properly attributable to the closed block. (5) Periodically, upon the Commissioners approval, those assets allocated to the closed block, as provided in paragraph (2) of this subsection, that are in excess of the amount of assets necessary to support the remaining policies in the closed block shall revert to the benefit of the converted stock company. (6) The Commissioner may waive the requirement for the establishment of a closed block of business if the Commissioner deems it to be in the best interest of the participating policyholders of the mutual insurer to do so. (l) The plan shall provide that any one person or group of persons acting in concert may not acquire, through public offering or subscription rights, more than 5% of the capital stock of the converted stock company for a period of 5 years from the effective date of the plan except with the approval of the Commissioner. This limitation does not apply to any entity that is to purchase 100% of the capital stock of the converted company as part of the plan of conversion approved by the Commissioner or to a purchase of stock by a tax-qualified employee benefit plan pursuant to subscription rights granted to that plan as authorized under  31-907(b) and to a purchase of unsubscribed stock pursuant to subsection (h) of this section.  (May 24, 1996, D.C. Law 11-126,  7, 43 DCR 1551; Mar. 24, 1998, D.C. Law 12-81,  43(e), 45 DCR 745; Apr. 3, 2001, D.C. Law 13-214,  2(d), 47 DCR 9580.)  Prior Codifications 1981 Ed.,  35-4206. Section References This section is referenced in  31-902,  31-903,  31-905.01,  31-907, and  31-913. Effect of Amendments D.C. Law 13-214 designated the existing text of subsec. (e) as par. (1) and added par. (2); and rewrote subsecs. (i) and (j) which had read: (i) The plan shall set the total price of the capital stock equal to the estimated pro forma market value of the converted stock company based upon an independent evaluation by a qualified person. The pro forma market value may be the value that is estimated to be necessary to attract full subscription for shares as indicated by the independent evaluation. (j) The plan shall set the purchase price of each share of capital stock equal to any reasonable amount that will not inhibit the purchase of shares by members. The purchase price of each share shall be uniform for all purchasers, except the price may be modified by the Commissioner by reason of his or her consideration of a plan for the purchase of unsubscribed stock pursuant to subsection (h) of this section.
 31907. Optional provisions in a plan of conversion. (a) The following provisions may be included in the plan: (1) The plan may provide that the directors and officers of the mutual company shall receive, without payment, nontransferable subscription rights to purchase capital stock of the converted stock company or the stock of another corporation that is participating in the conversion plan as provided in  31-906(e). Those subscription rights shall be allocated among the directors and officers by a fair and equitable formula. (2) The total number of shares that may be purchased under subsection (a)(1) of this section may not exceed 85% of the total number of shares to be issued in the case of a mutual company with total assets of less than $50 million, or 25% of the total shares to be issued in the case of a mutual company with total assets or more than $500 million. For mutual companies with total assets between $50 million and $500 million, the total number of shares that may be purchased shall be interpolated. (3) Stock purchased by a director or officer under subsection (a)(1) of this section shall not be sold within one year following the effective date of the conversion. (4) The plan may also provide that a director or officer or person acting in concert with a director or officer of the mutual company may not acquire any capital stock of the converted stock company for 3 years after the effective date of the plan, except through a broker or dealer, without the permission of the Commissioner. That provision may not apply to prohibit the directors and officers from purchasing stock through subscription rights received in the plan under subsection (a)(1) of this section. (b) The plan may allocate to a tax-qualified employee benefit plan nontransferable subscription rights to purchase up to 10% of the capital stock of the converted stock company, or the stock of another corporation that is participating in the conversion plan as provided in  31-906(e) and (l). The employee benefit plan shall be entitled to exercise its subscription rights regardless of the amount of shares purchased by other persons.  (May 24, 1996, D.C. Law 11-126,  8, 43 DCR 1551; Mar. 24, 1998, D.C. Law 12-81,  43(f), 45 DCR 745; July 17, 1999, D.C. Law 13-13,  2(b), 46 DCR 4428.)  Prior Codifications 1981 Ed.,  35-4207. Section References This section is referenced in  31-906. Effect of Amendments D.C. Law 13-13 in subsecs. (a) and (b) modified the statutory referents. Emergency Legislation For temporary amendment of section, see  2(b) of the Insurance Demutualization Emergency Amendment Act of 1998 (D.C. Act 12-528, December 16, 1998, 45 DCR 476). For temporary (90-day) amendment of section, see  2(b) of the Insurance Demutualization Congressional Review Emergency Amendment Act of 1999 (D.C. Act 13-35, March 18, 1999, 46 DCR 3004).
 31908. Alternative plan of conversion. The board of directors may adopt a plan of conversion that does not rely in whole or in part upon the issuance to members of nontransferable subscription rights to purchase stock of the converted stock company if the Commissioner finds that the plan does not prejudice the interest of the members, is fair and equitable, and is based upon an independent appraisal of the market value of the mutual company by a qualified person and a fair and equitable allocation of any consideration to be given eligible members. The Commissioner may retain, at the mutual companys expense, any qualified expert not otherwise a part of the Commissioners staff to assist in reviewing whether the plan may be approved by the Commissioner.  (May 24, 1996, D.C. Law 11-126,  9, 43 DCR 1551; Mar. 24, 1998, D.C. Law 12-81,  43(g), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-4208.
 31909. Effective date of the plan. A plan shall become effective when the Commissioner has approved the plan.  (May 24, 1996, D.C. Law 11-126,  10, 43 DCR 1551; Mar. 24, 1998, D.C. Law 12-81,  43(h), 45 DCR 745; Apr. 3, 2001, D.C. Law 13-214,  2(e), 47 DCR 9580.)  Prior Codifications 1981 Ed.,  35-4209. Effect of Amendments D.C. Law 13-214 rewrote the section which had read: A plan shall become effective when the Commissioner has approved the plan, the members have approved the plan, and the revised articles of incorporation have been filed.
 31910. Rights of members whose policies are issued after adoption of the plan and before its effective date. (a) All members whose policies are issued after the proposed plan has been adopted by the board of directors and before the effective date of the plan shall be given written notice of the plan of conversion. The notice shall specify the members right to terminate that policy as provided in subsection (b) of this section within 30 days after the effective date of the plan. A copy of the plan or a summary of the plan shall accompany the notice. The form of the notice shall be filed with and approved by the Commissioner. (b) Any member entitled to receive the notice described in subsection (a) of this section shall be entitled to terminate his or her policy and receive a pro rata refund of any amounts paid for the policy or contract within 15 days after receipt of the notice.  (May 24, 1996, D.C. Law 11-126,  11, 43 DCR 1551; Mar. 24, 1998, D.C. Law 12-81,  43(i), 45 DCR 745; Apr. 3, 2001, D.C. Law 13-214,  2(f), 47 DCR 9580.)  Prior Codifications 1981 Ed.,  35-4210. Section References This section is referenced in  31-901 and  31-903. Effect of Amendments D.C. Law 13-214, in subsec. (a), substituted terminate for rescind, and substituted 30 for 45; and rewrote subsec. (b) which had read: (b) Any member entitled to receive the notice described in subsection (a) of this section shall be entitled to rescind his or her policy and receive a full refund of any amounts paid for the policy or contract within 10 days after the receipt of the notice.
 31911. Corporate existence. (a) Upon the conversion of a mutual company to a converted stock company according to provisions of this chapter, the corporate existence of the mutual company shall be continued in the converted stock company. All the rights, franchises, and interest of the mutual company in and to every type of property, real, personal, and mixed, and things in action thereunto belonging, is deemed transferred to and vested in the converted stock company without any deed or transfer. Simultaneously, the converted stock company is deemed to have assumed all the obligations and liabilities of the mutual company. (b) The directors and officers of the mutual company, unless otherwise specified in the plan of conversion, shall serve as directors and officers of the converted stock company until new directors and officers of the converted stock company are duly elected pursuant to the articles of incorporation and bylaws of the converted stock company.  (May 24, 1996, D.C. Law 11-126,  12, 43 DCR 1551.)  Prior Codifications 1981 Ed.,  35-4211.
 31912. Conflict of interest. No director, officer, agent, or employee of the mutual company, or any other person, shall receive any fee, commission, or other valuable consideration, other than his or her usual regular salary and compensation, for in any manner aiding, promoting, or assisting in the conversion except as set forth in the plan approved by the Commissioner. This provision does not prohibit the payment of reasonable fees and compensation to attorneys, accountants, and actuaries for services performed in the independent practice of their professions, even if the attorney, accountant, or actuary is also a director of the mutual company.  (May 24, 1996, D.C. Law 11-126,  13, 43 DCR 1551; Mar. 24, 1998, D.C. Law 12-81,  43(j), 45 DCR 745.)  Prior Codifications 1981 Ed.,  35-4212.
 31913. Costs and expenses. All costs and expenses connected with a plan of conversion shall be paid for or reimbursed by the mutual company or the converted stock company from the proceeds of the offering; provided, that if the plan provides either for a holding company to acquire the stock of the converted stock company or for the merger of the mutual company into a stock insurance company as provided in  31-906(h), the acquiring holding company or the stock insurance company shall pay for or reimburse all the costs and expenses connected with the plan.  (May 24, 1996, D.C. Law 11-126,  14, 43 DCR 1551; Apr. 3, 2001, D.C. Law 13-214,  2(g), 47 DCR 9580.)  Prior Codifications 1981 Ed.,  35-4213. Effect of Amendments D.C. Law 13-214 rewrote the section which had read: All the costs and expenses connected with a plan of conversion shall be paid for or reimbursed by the mutual company or the converted stock company except where the plan provides either for a holding company to acquire the stock of the converted stock company or for the merger of the mutual company into a stock insurance company as provided in  31-906(e). In those cases, the acquiring holding company or the stock insurance company shall pay for or reimburse all the costs and expenses connected with the plan.
 31914. Failure to give notice. If the mutual company complies substantially and in good faith with the notice requirements of this chapter, the mutual companys failure to give any member or members any required notice does not impair the validity of any action taken under this chapter.  (May 24, 1996, D.C. Law 11-126,  15, 43 DCR 1551.)  Prior Codifications 1981 Ed.,  35-4214.
 31915. Limitation of actions. Any action challenging the validity of or arising out of acts taken or proposed to be taken under this chapter shall be commenced within 30 days after the effective date of the plan.  (May 24, 1996, D.C. Law 11-126,  16, 43 DCR 1551.)  Prior Codifications 1981 Ed.,  35-4215.