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2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2013 - Act; applicability.

44-2013.
Act; applicability.
The Unauthorized Insurers Process Act shall not apply to any action, suit, or proceeding against any nonadmitted foreign or alien insurer arising out of any contract of insurance (1) effected in accordance with the Surplus Lines Insurance Act, (2) covering reinsurance, ocean marine, aircraft, or railway insurance risks, (3) against legal liability arising out of the ownership, operation, or maintenance of any property having a permanent situs outside this state, or (4) against loss of or damage to any property having a permanent situs outside this state, when such contract of insurance contains a provision designating a Nebraska resident agent duly licensed under the Surplus Lines Insurance Act to be the true and lawful attorney of such nonadmitted insurer upon whom may be served all lawful process in any action, suit, or proceeding instituted by or on behalf of an insured or beneficiary arising out of any such contract of insurance or when the insurer enters a general appearance in any action, suit, or proceeding.
Source
Laws 1949, c. 134, § 5, p. 353;
Laws 1969, c. 359, § 6, p. 1270;
Laws 1969, c. 360, § 2, p. 1283;
Laws 1983, LB 447, § 56;
R.S.1943, (1988), § 44-137.08;
Laws 1989, LB 92, § 26;
Laws 1992, LB 1006, § 17.
Cross References
Surplus Lines Insurance Act, see section 44-5501.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2120 - Act, how cited.

44-2120.
Act, how cited.
Sections 44-2120 to 44-2155 shall be known and may be cited as the Insurance Holding Company System Act.
Source
Laws 1991, LB 236, § 1;
Laws 2012, LB887, § 3;
Laws 2016, LB772, § 10.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2122 - Subsidiaries of insurers; authorized.

44-2122.
Subsidiaries of insurers; authorized.
In addition to the authority granted in Chapter 44, any domestic insurer, either by itself or in cooperation with one or more persons, may, subject to the limitations set forth in the Insurance Holding Company System Act, organize or acquire one or more subsidiaries engaged in the following kinds of business:
(1) Any kind of insurance business authorized by the jurisdiction in which it is incorporated;
(2) Acting as an insurance broker or as an insurance agent for its parent or for any subsidiaries of its parent which are insurers;
(3) Investing, reinvesting, or trading in securities for its own account or that of its parent, any subsidiary of its parent, or any affiliate or subsidiary;
(4) Management of any investment company subject to or registered pursuant to the Investment Company Act of 1940, as amended, including related sales and services;
(5) Acting as a broker-dealer subject to or registered pursuant to the Securities Exchange Act of 1934, as amended;
(6) Rendering investment advice to governments, government agencies, corporations, or other organizations or groups;
(7) Rendering other services related to the operations of an insurance business, including actuarial, loss prevention, safety engineering, data processing, accounting, claims, appraisal, and collection services;
(8) Ownership and management of assets which the parent could itself own or manage. The aggregate investment by the insurer and its subsidiaries acquired or organized pursuant to this section shall not exceed the limitations applicable to such investments by the insurer;
(9) Acting as administrative agent for a governmental instrumentality which is performing an insurance function;
(10) Financing of insurance premiums, agents, and other forms of consumer financing;
(11) Any other business activity determined by the director to be reasonably ancillary to an insurance business; or
(12) Owning a corporation or corporations engaged or organized to engage exclusively in one or more of the businesses specified in this section.
Source
Laws 1991, LB 236, § 3.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2123 - Additional investments authorized.

44-2123.
Additional investments authorized.
In addition to investments in common stock, preferred stock, debt obligations, and other securities permitted under Chapter 44, a domestic insurer may also:
(1) Invest, in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries, amounts which do not exceed the lesser of five percent of such insurer's assets or fifty percent of such insurer's policyholders surplus if, after such investments, the insurer's policyholders surplus will be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs. In calculating the amount of such investments, investments in domestic or foreign insurance subsidiaries shall be excluded and there shall be included:
(a) Total net funds 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 such 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 one or more subsidiaries engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer if each such subsidiary agrees to limit its investments in any asset so that such investments will not cause the amount of the total investment of the insurer to exceed any of the investment limitations specified in subdivision (1) of this section or in Chapter 44 applicable to the insurer. For purposes of this subdivision, the total investment of the insurer shall include:
(a) Any direct investment by the insurer in an asset; and
(b) The insurer's proportionate share of any investment in an asset by any subsidiary of the insurer, which share shall be calculated by multiplying the amount of the subsidiary's investment by the percentage of the ownership of such subsidiary; and
(3) With the approval of the director, invest any greater amount in common stock, preferred stock, debt obligations, or other securities of one or more subsidiaries if after such investment the insurer's policyholders surplus will be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs.
Source
Laws 1991, LB 236, § 4;
Laws 1993, LB 583, § 83.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2124 - Additional investments; qualification; when determined.

44-2124.
Additional investments; qualification; when determined.
Whether any investment pursuant to section 44-2123 meets the applicable requirements thereof shall be determined before such 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.
Source
Laws 1991, LB 236, § 5.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2125 - Investments in subsidiary; disposal; when.

44-2125.
Investments in subsidiary; disposal; when.
If an insurer ceases to control a subsidiary, it shall dispose of any investment made in the subsidiary pursuant to sections 44-2122 to 44-2124 within three years from the time of the cessation of control or within such further time as the director may prescribe unless, at any time after such investment has been made, such investment has met the requirements for investment under any other provision of Chapter 44 and the insurer has notified the director thereof.
Source
Laws 1991, LB 236, § 6.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2128 - Merger; acquisition; exempt transactions.

44-2128.
Merger; acquisition; exempt transactions.
Section 44-2126 shall not apply to:
(1) Any transaction which is subject to the provisions of the Nebraska Model Business Corporation Act and sections 44-224.01 to 44-224.10, except as otherwise provided in Chapter 44, dealing with the merger or consolidation of two or more insurers; or
(2) Any offer, request, invitation, agreement, or acquisition which the director by order shall exempt therefrom 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 section 44-2126.
Source
Laws 1991, LB 236, § 9;
Laws 1995, LB 109, § 221;
Laws 2014, LB749, § 287.
Cross References
Nebraska Model Business Corporation Act, see section 21-201.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2129 - Acquisition; divestiture; merger; prohibited acts.

44-2129.
Acquisition; divestiture; merger; prohibited acts.
(1) It shall be a violation of section 44-2126 to fail to file any statement, amendment, or other material required to be filed under such section.
(2) It shall be a violation of section 44-2127 to effectuate or attempt to effectuate an acquisition of control of, divestiture of, or merger with a domestic insurer unless the director has given his or her approval thereto.
Source
Laws 1991, LB 236, § 10;
Laws 2012, LB887, § 7.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2130 - Merger; acquisition; jurisdiction; consent to service of process.

44-2130.
Merger; acquisition; jurisdiction; consent to service of process.
The courts of this state are hereby vested with jurisdiction over every person not resident, domiciled, or authorized to do business in this state who files a statement with the director under section 44-2126 and over all actions involving such person arising out of violations of section 44-2126 or 44-2127, and each such person shall be deemed to have performed acts equivalent to and constituting an appointment by such a person of the director to be such person's attorney upon whom may be served all lawful process in any action, suit, or proceeding arising out of violations of such sections. Copies of all such lawful process shall be served on the director and transmitted by registered or certified mail by the director to such person at his or her last-known address.
Source
Laws 1991, LB 236, § 11.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2131 - Fees.

44-2131.
Fees.
The total fee for filing the documents required by sections 44-2126 to 44-2130 and all amendments to such filings shall be one thousand dollars. The initial fee for registration required by the provisions of section 44-2132 shall be one thousand dollars, and an additional fee of two hundred dollars shall be payable on May 1 of each calendar year thereafter so long as such registration continues. The fees provided for by this section shall be payable to the Department of Insurance and shall be remitted to the State Treasurer for credit to the Department of Insurance Cash Fund.
Source
Laws 1991, LB 236, § 34;
Laws 1993, LB 583, § 84;
Laws 2005, LB 119, § 10.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2134 - Extraordinary dividends and distributions.

44-2134.
Extraordinary dividends and distributions.
(1) No domestic insurer shall pay any extraordinary dividend or make any other extraordinary distribution to its shareholders until (a) thirty days after the director has received notice of the declaration thereof and the director has not within such period disapproved such payment or (b) the director has approved such payment within such thirty-day period.
(2) For purposes of this section, an extraordinary dividend or distribution shall include any dividend or distribution of cash or other property the fair market value of which together with that of other dividends or distributions made within the preceding twelve months exceeds the greater of (a) ten percent of such insurer's policyholders surplus as of December 31 next preceding or (b) the net gain from operations of such insurer if such insurer is a life insurer or the net income if such insurer is not a life insurer, not including realized capital gains, for the twelve-month period ending December 31 next preceding but shall not include pro rata distributions of any class of the insurer's 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 two calendar years that has not already been paid out as dividends. This carryforward 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 director's approval thereof, and such a declaration shall confer no rights upon shareholders until (a) the director has approved the payment of such a dividend or distribution or (b) the director has not disapproved such payment within the thirty-day period referred to in subsection (1) of this section.
Source
Laws 1991, LB 236, § 14;
Laws 1996, LB 689, § 3.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2135 - Management of domestic insurer.

44-2135.
Management of domestic insurer.
(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 the Insurance Holding Company System Act.
(2) Nothing in this section shall preclude a domestic insurer from having or sharing a common management or cooperative or joint use of personnel, property, or services with one or more other persons under arrangements meeting the standards of subsection (1) of section 44-2133.
(3) Not less than one-third of the directors of a domestic insurer which is a member of an insurance holding company system shall be persons who are not officers or employees of such insurer or of any entity controlling, controlled by, or under common control with such insurer and who are not beneficial owners of a controlling interest in the voting stock of such insurer or any such entity. At least one such person shall be included in any quorum for the transaction of business at any meeting of the board of directors.
(4) Subsection (3) of this section shall not apply to a domestic insurer if the person controlling such insurer, such as an insurer, a mutual insurance holding company, or a publicly held corporation, has a board of directors that meets the requirements of such subsection with respect to such controlling entity.
(5) An insurer may make application to the director for a waiver from the requirements of this section if the insurer's annual direct written and assumed premium, excluding premiums reinsured with the Federal Crop Insurance Corporation and the national flood insurance program as defined in section 31-1014, is less than three hundred million dollars. An insurer may also make application to the director for a waiver from the requirements of this section based upon unique circumstances. The director may consider various factors including, but not limited to, the type of business entity, volume of business written, availability of qualified board members, or ownership or organizational structure of the entity.
Source
Laws 1991, LB 236, § 15;
Laws 2012, LB887, § 10.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2136 - Adequacy of surplus; factors.

44-2136.
Adequacy of surplus; factors.
For purposes of the Insurance Holding Company System Act, in determining whether an insurer's policyholders surplus is reasonable in relation to the insurer's 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 insurer's 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 insurer's insured risks;
(5) The nature and extent of the insurer's reinsurance program;
(6) The quality, diversification, and liquidity of the insurer's investment portfolio;
(7) The recent past and projected future trend in the size of the insurer's investment portfolio;
(8) The policyholders surplus maintained by other comparable insurers;
(9) The adequacy of the insurer's reserves; and
(10) The quality and liquidity of investments in affiliates. The director may treat any such investment as a disallowed asset for purposes of determining the adequacy of policyholders surplus whenever in his or her judgment such investment so warrants.
Source
Laws 1991, LB 236, § 16.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2137.01 - Director; participate in supervisory college; powers; insurer; payment of expenses.

44-2137.01.
Director; participate in supervisory college; powers; insurer; payment of expenses.
(1) With respect to any insurer registered under section 44-2132 and in accordance with subsection (3) of this section, the director may 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 with Chapter 44 by the insurer. The powers of the director with respect to supervisory colleges include, but are not limited to, the following:
(a) Initiating the establishment of a supervisory college;
(b) Clarifying the membership and participation of other supervisors in the supervisory college;
(c) Clarifying the functions of the supervisory college and the role of other regulators, including the establishment of a group-wide supervisor;
(d) Coordinating the ongoing activities of the supervisory college, including planning meetings, supervisory activities, and processes for information sharing; and
(e) Establishing a crisis management plan.
(2) Each insurer subject to this section shall be liable for and shall pay the reasonable expenses of the director's participation in a supervisory college in accordance with subsection (3) of this section, including reasonable travel expenses.
(3) In order 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 section 44-2137, the director 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 director may enter into agreements in accordance with section 44-2138 providing the basis for cooperation between the director and the other regulatory agencies and the activities of the supervisory college.
(4) For 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 director may establish a regular assessment to the insurer for the payment of such expenses.
(5) Nothing in this section shall delegate to the supervisory college the authority of the director to regulate or supervise the insurer or its affiliates within its jurisdiction.
Source
Laws 2012, LB887, § 12.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2139 - Director; rules and regulations.

44-2139.
Director; rules and regulations.
The director may adopt and promulgate such rules and regulations and issue such orders as necessary to carry out the Insurance Holding Company System Act.
Source
Laws 1991, LB 236, § 19;
Laws 2012, LB887, § 14.
Annotations
The director of the Department of Insurance should not be impeded in choices of remedy and protective measures by the enumerated powers of the Insurance Holding Company System Act. The importance of the director's duties as a watchdog for policyholders, and the fact that the director is the only watchdog whose authority can bind domestic insurers, counsel in favor of a broad construction of the Insurance Holding Company System Act and the remedies provided therein. CenTra, Inc. v. Chandler Ins. Co., 248 Neb. 844, 540 N.W.2d 318 (1995).
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2140 - Injunctions.

44-2140.
Injunctions.
Whenever it appears to the director that any insurer or any director, officer, employee, or agent thereof has committed or is about to commit a violation of the Insurance Holding Company System Act or of any rule, regulation, or order of the director, the director may apply to the district court of Lancaster County for an order enjoining such insurer, director, officer, employee, or agent from violating or continuing to violate the act or any such rule, regulation, or order and for such other equitable relief as the nature of the case and the interest of the insurer's policyholders, creditors, and shareholders or the public may require.
Source
Laws 1991, LB 236, § 20.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2141 - Voting of securities; when prohibited; injunction.

44-2141.
Voting of securities; when prohibited; injunction.
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 Insurance Holding Company System Act or of any rule, regulation, or order of the director may be voted at any shareholder's 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 such securities were not issued and outstanding, but no action taken at any such meeting shall be invalidated by the voting of such securities unless the action would materially affect control of the insurer or unless the courts of this state have so ordered. If an insurer or the director has reason to believe that any security of the insurer has been or is about to be acquired in contravention of the act or of any rule, regulation, or order of the director, the insurer or the director may apply to the district court of Lancaster County for an order to enjoin any offer, request, invitation, agreement, or acquisition made in contravention of sections 44-2126 to 44-2130 or any rule, regulation, or order of the director to enjoin the voting of any security so acquired, to void any vote of such security already cast at any meeting of shareholders, and for such other equitable relief as the nature of the case and the interest of the insurer's policyholders, creditors, and shareholders or the public may require.
Source
Laws 1991, LB 236, § 21.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2142 - Seizure or sequestration of voting securities.

44-2142.
Seizure or sequestration of voting securities.
In any case when a person has acquired or is proposing to acquire any voting securities in violation of the Insurance Holding Company System Act or any rule, regulation, or order of the director, the district court of Lancaster County may, on such notice as the court deems appropriate, upon the application of the insurer or the director seize or sequester any voting securities of the insurer owned directly or indirectly by such person and issue such order with respect thereto as may be appropriate to effectuate the act. Notwithstanding any other provisions of law, for purposes of the act the sites of the ownership of the securities of domestic insurers shall be deemed to be in this state.
Source
Laws 1991, LB 236, § 22.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2143 - Prohibited acts; administrative penalties; unfair trade practice.

44-2143.
Prohibited acts; administrative penalties; unfair trade practice.
(1) Any insurer which fails, without just cause, to file any registration statement as required by section 44-2132 may be required by the director, after notice and hearing, to pay an administrative penalty of one hundred dollars for each day's delay not to exceed an aggregate penalty of ten thousand dollars. The director may reduce the penalty if the insurer demonstrates to the director that the imposition of the penalty would constitute a financial hardship to the insurer.
(2) Any insurer which fails to notify the director of any transaction, dividend, or distribution as required by sections 44-2132 to 44-2134 may be required by the director, after notice and hearing, to pay an administrative penalty of not more than two thousand five hundred dollars per violation.
(3) Any violation of sections 44-2132 to 44-2134 shall be an unfair trade practice in the business of insurance subject to the Unfair Insurance Trade Practices Act in addition to any other remedies and penalties available under the laws of this state.
Source
Laws 1991, LB 236, § 23;
Laws 1994, LB 978, § 28.
Cross References
Unfair Insurance Trade Practices Act, see section 44-1521.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2144 - Director or officer; administrative penalty; when.

44-2144.
Director or officer; administrative penalty; when.
Any director or officer of an insurance holding company system who knowingly violates or assents to or permits any officer or agent of the insurer to violate the requirements of subsection (1) of section 44-2132 or section 44-2133 or 44-2134 may be required by the director, after notice and hearing, to pay in his or her individual capacity an administrative penalty of not more than five thousand dollars per violation. In determining the amount of the penalty, the director shall take into account the appropriateness of the penalty with respect to the gravity of the violation, the history of previous violations, and such other matters as justice may require.
Source
Laws 1991, LB 236, § 24.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2145 - Cease and desist orders; other orders.

44-2145.
Cease and desist orders; other orders.
Whenever it appears to the director that any insurer or any director, officer, employee, or agent thereof has engaged in any transaction or entered into a contract which is subject to sections 44-2133 to 44-2136 and which would not have been approved had such approval been requested, the director may order the insurer to cease and desist immediately any further activity under that transaction or contract. After notice and hearing, the director may also order the insurer to void any such contracts and restore the status quo if such action is in the best interest of the policyholders, the creditors, or the public.
Source
Laws 1991, LB 236, § 25.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2146 - Violations; criminal penalty.

44-2146.
Violations; criminal penalty.
Any insurer which willfully violates the Insurance Holding Company System Act shall be guilty of a Class IV felony. Any director, officer, employee, or agent of an insurer who willfully violates the act shall be guilty of a Class IV felony.
Source
Laws 1991, LB 236, § 26.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2147 - False reporting; criminal penalty.

44-2147.
False reporting; criminal penalty.
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 director in the performance of his or her duties under the Insurance Holding Company System Act shall be guilty of a Class IV felony.
Source
Laws 1991, LB 236, § 27.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2147.01 - Violations; effect.

44-2147.01.
Violations; effect.
If it appears to the director that any person has committed a violation of sections 44-2126 to 44-2130 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 Nebraska Insurers Supervision, Rehabilitation, and Liquidation Act.
Source
Laws 2012, LB887, § 15.
Cross References
Nebraska Insurers Supervision, Rehabilitation, and Liquidation Act, see section 44-4862.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2148 - Insurer; supervision, rehabilitation, and liquidation.

44-2148.
Insurer; supervision, rehabilitation, and liquidation.
If it appears to the director that any person has committed a violation of the Insurance Holding Company System Act 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, or shareholders or the public, the director may proceed as provided in the Nebraska Insurers Supervision, Rehabilitation, and Liquidation Act to take possession of the property of such domestic insurer and to conduct the business thereof.
Source
Laws 1991, LB 236, § 28.
Cross References
Nebraska Insurers Supervision, Rehabilitation, and Liquidation Act, see section 44-4862.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2149 - Recovery by receiver.

44-2149.
Recovery by receiver.
(1) If an order for rehabilitation or liquidation of a domestic insurer has been entered, the receiver appointed under such order shall have a right to recover on behalf of the insurer (a) from any parent or holding company or person or affiliate who otherwise controlled the insurer, the amount of any distribution, other than distribution of shares of the same class of stock, paid by the insurer on its capital stock or (b) 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, when the distribution or payment pursuant to subdivision (a) or (b) of this subsection is made at any time during the one year preceding the filing of the petition for rehabilitation or liquidation subject to the limitations of subsections (2), (3), and (4) of this section.
(2) No such distribution or payment shall be recoverable if the parent or affiliate shows that when paid such distribution or payment was lawful and reasonable and that the insurer did not know and could not reasonably have known that such distribution or payment might adversely affect the ability of the insurer to fulfill its contractual obligations.
(3) Any person who was a parent or holding company or a person who otherwise controlled the insurer or affiliate at the time such distribution or payment was paid shall be liable up to the amount of distribution or payment under subsection (1) of this section such person received. Any person who otherwise controlled the insurer at the time such distribution or payment was declared shall be liable up to the amount of distribution or payment he would have received if it had been paid immediately. If two or more persons are liable with respect to the same distribution or payment, they shall be jointly and severally liable.
(4) The maximum amount recoverable under subsection (3) of 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.
(5) To the extent that any person liable under subsection (3) of this section is insolvent or otherwise fails to pay claims due from it pursuant to such subsection, its parent or holding company or the person who otherwise controlled it at the time the distribution or payment was paid shall be jointly and severally liable for any resulting deficiency in the amount recovered from such parent or holding company or person who otherwise controlled it.
Source
Laws 1991, LB 236, § 29.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2150 - Suspension, revocation, or nonrenewal of license or authority.

44-2150.
Suspension, revocation, or nonrenewal of license or authority.
If it appears to the director that any person has committed a violation of the Insurance Holding Company System Act which makes the continued operation of an insurer contrary to the interests of policyholders or the public, the director may, after giving notice and an opportunity to be heard, determine to suspend, revoke, or refuse to renew such insurer's license or authority to do business in this state for such period as the director finds is required for the protection of policyholders or the public. Any such determination shall be accompanied by specific findings of fact and conclusions of law.
Source
Laws 1991, LB 236, § 30.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2151 - Appeal; writ of mandamus.

44-2151.
Appeal; writ of mandamus.
Any person aggrieved by any act, determination, order, or other action of the director pursuant to the Insurance Holding Company System Act may appeal. The appeal shall be in accordance with the Administrative Procedure Act.
Any person aggrieved by any failure of the director to act or make a determination required by the Insurance Holding Company System Act may petition the district court of Lancaster County for a writ in the nature of a mandamus or a peremptory mandamus directing the director to act or make such determination forthwith.
Source
Laws 1991, LB 236, § 31.
Cross References
Administrative Procedure Act, see section 84-920.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2153 - Act; cumulative.

44-2153.
Act; cumulative.
The powers, remedies, procedures, and penalties provided in the Insurance Holding Company System Act shall be in addition to, and not in limitation of, any other powers, remedies, procedures, and penalties provided by law.
Source
Laws 1991, LB 236, § 33.
Annotations
The director of the Department of Insurance should not be impeded in choices of remedy and protective measures by the enumerated powers of the Insurance Holding Company System Act. The importance of the director's duties as a watchdog for policyholders, and the fact that the director is the only watchdog whose authority can bind domestic insurers, counsel in favor of a broad construction of the Insurance Holding Company System Act and the remedies provided therein. CenTra, Inc. v. Chandler Ins. Co., 248 Neb. 844, 540 N.W.2d 318 (1995).
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2154 - International insurance group; criteria; determination by director.

44-2154.
International insurance group; criteria; determination by director.
The director may determine whether or not an insurance holding company system is an international insurance group. An insurance holding company system shall be considered an international insurance group if the insurance holding company system includes an insurer registered under section 44-2132 and:
(1) Meets the following criteria:
(a) The insurance holding company system has premiums written in at least three countries;
(b) The percentage of gross premiums written outside the United States is at least ten percent of the insurance holding company system's gross written premiums; and
(c) Based on a three-year rolling average, the total assets of the insurance holding company system are at least fifty billion dollars or the total gross written premiums of the insurance holding company system are at least ten billion dollars; or
(2) Does not meet the criteria in subdivision (1) of this section but is determined by the director to have significant international insurance business operations. Such a determination may be made anytime by the director or after a request by an insurance holding company system.
Source
Laws 2016, LB772, § 12.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2201 - Insurance corporation; variable annuities; issuance; certificate of authority; required; expiration.

44-2201.
Insurance corporation; variable annuities; issuance; certificate of authority; required; expiration.
An insurance corporation may be formed for the purpose of issuing variable annuities. Variable annuities are policies issued on an individual or group basis by which an insurer promises to pay a variable sum of money either in a lump sum or periodically for life or for some other specified period. No company shall issue or offer to issue variable annuities in this state until it has received a certificate of authority from the Director of Insurance to do so. The certificate of authority shall expire on the last day of April each year and shall be renewed annually if the company has continued to comply with the laws of this state and the rules and regulations adopted and promulgated by the director and the director has not issued an order suspending, revoking, or refusing to renew the company's certificate of authority.
Source
Laws 1969, c. 358, § 1, p. 1259;
Laws 1989, LB 92, § 192.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2202 - Insurance company; variable annuities; requirements.

44-2202.
Insurance company; variable annuities; requirements.
Before a company may apply to issue variable annuities in this state, it must have an initial amount of capital and surplus, if a stock company, or an amount of surplus, if a mutual company, of at least two million dollars and shall maintain a surplus, if either a stock company or a mutual company, of at least one million five hundred thousand dollars. The Director of Insurance may make exceptions to this provision if he or she deems it in the public interest to do so. In addition to meeting the requirements of this section, a foreign company must be licensed to do a variable annuity or life insurance business in its state of domicile before it may apply to issue variable annuities in this state.
Source
Laws 1969, c. 358, § 2, p. 1260;
Laws 1991, LB 237, § 64.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2203 - Qualifications to issue variable annuities.

44-2203.
Qualifications to issue variable annuities.
A company, meeting the requirements of section 44-2202, that desires to make application to issue variable annuities in this state shall submit to the Director of Insurance:
(1) A certified copy of its articles of incorporation;
(2) A copy of its bylaws attested to by an officer of the applicant;
(3) A certified copy of a resolution adopted by the board of directors establishing one or more separate accounts;
(4) In the case of foreign companies, a copy of any management or service contract entered into between the company and a third party or between the separate account and a third party the terms of which contain provisions for the third party to provide services to the separate account or company;
(5) A copy of the applicant's latest report of examination and annual statement;
(6) A general description of the type of variable annuity business contemplated or in effect and as to variable annuities, commission schedules, a five-year sales and expense projection, a statement of reserving procedures, the kinds and types of investments to be made, and, in the case of foreign companies, a copy of the prospectus to be filed with the Securities and Exchange Commission, if applicable;
(7) In the case of foreign companies, written permission by a duly authorized representative of any third party rendering services to the insurer or separate account, that all books and records maintained in connection with the offer and sale of the variable annuity contracts are open to inspection by the director;
(8) In the case of foreign companies, the variable annuity laws and regulations of the company's home state, if requested by the director;
(9) Biographical statements, financial and character reports concerning officers and directors of the insurance company, management company or separate account if the same is requested by the director;
(10) A corporate certification that the applicant has the corporate authority to issue variable annuities;
(11) In the case of foreign companies, certification by the insurance director of the applicant's state of domicile that the applicant has a current license to do a life insurance or variable annuity business in such state;
(12) In the case of foreign companies, a copy of any sales material to be used in connection with the sale of variable annuities in this state, if requested by the director;
(13) A copy of the variable annuity contract and application and, in the case of a group contract, the certificate evidencing variable benefits issued pursuant to a master group contract; and
(14) The director may require any additional information that relates to the applicant's financial soundness, method of operation, trustworthiness or business reputation.
Source
Laws 1969, c. 358, § 3, p. 1260.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2204 - Applicant, defined.

44-2204.
Applicant, defined.
For purposes of sections 44-2201 to 44-2221, applicant shall be deemed to include all of the officers, directors, and shareholders.
Source
Laws 1969, c. 358, § 4, p. 1262;
Laws 1989, LB 92, § 193.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2205 - Shareholder, defined.

44-2205.
Shareholder, defined.
For purposes of sections 44-2201 to 44-2221, shareholder shall mean a person owning, directly or indirectly, whether through another person or a holding company, beneficial interest, including such interest of any member of his or her immediate family, of more than ten percent of the outstanding equity securities of the applicant.
Source
Laws 1969, c. 358, § 5, p. 1262;
Laws 1989, LB 92, § 194.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2206 - Order denying application for authority to issue variable annuities; conditions.

44-2206.
Order denying application for authority to issue variable annuities; conditions.
The Director of Insurance may issue an order denying the application for authority to issue variable annuities if:
(1) The applicant has failed to comply with any prerequisite of law for the issuance of such license;
(2) The applicant is insolvent or has failed to submit a satisfactory financial statement;
(3) The applicant's condition or method of operation in connection with the issuance of variable annuities is such as to render its operation hazardous to the public, its shareholders, or other policyholders;
(4) The applicant's previous conduct indicates that it is untrustworthy;
(5) The applicant has attempted to obtain such license through willful misrepresentation or fraud;
(6) The applicant has been denied a similar license in any other state; or
(7) The applicant's license to conduct a similar business has been suspended or revoked in any other state.
Source
Laws 1969, c. 358, § 6, p. 1262;
Laws 1989, LB 92, § 195.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2207 - Variable annuity contract; approval; requirements.

44-2207.
Variable annuity contract; approval; requirements.
A variable annuity contract will not be approved by the Director of Insurance unless such contract indicates:
(1) The procedure to be used by the company in establishing the dollar amount of variable benefits or other variable contractual payments or variable values to be paid to the contract holder; that such benefits or other contractual payments or values may decrease or increase in accordance with such procedure; and that an increase in variable benefits is not in any way guaranteed;
(2) That in the event of default in the payment of any consideration beyond the period of grace allowed by the contract for the payment thereof, the company will make payment of the current value of the variable contract, commencing not later than the date contractual payments by the company were otherwise to have commenced in accordance with the contract;
(3) The expense, mortality and investment factors to be used in computing the dollar amount of variable benefits or other contractual payments or values are stipulated and a guarantee that expense and mortality results shall not adversely affect such dollar amounts;
(4) In an individual variable annuity contract sold in correlation with a life insurance policy or fixed annuity contract, there is a disclosure that shows the consideration paid for the variable annuity contract separately from all other charges and shows the value of such life insurance policy or fixed annuity separately from any other values; and
(5) In individual annuity contracts which provide for both fixed and variable dollar benefits, which are specified at the time of the sale of such contracts, there is indicated, separately, the consideration to be paid for the fixed dollar benefits and for the variable dollar benefits.
Source
Laws 1969, c. 358, § 7, p. 1262.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2208 - Illustrations of benefits payable under variable annuity contracts; conditions.

44-2208.
Illustrations of benefits payable under variable annuity contracts; conditions.
Illustrations of benefits payable under any variable annuity contract shall not involve projections of past investment experience into the future, nor shall they attempt predictions of future investment experience.
Source
Laws 1969, c. 358, § 8, p. 1263.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2209 - Variable annuity contract; disapproval; when.

44-2209.
Variable annuity contract; disapproval; when.
The Director of Insurance may disapprove any variable annuity contract, application or certificate issued pursuant to a group contract if it contains provisions which are contrary to law, unjust, unfair, inequitable, ambiguous or misleading, or which are likely to result in misrepresentation; or if the sales of such contracts are being solicited by any means of advertising, communication, or dissemination of information which involves misleading or inadequate descriptions of the provisions of the contract.
Source
Laws 1969, c. 358, § 9, p. 1263.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2210 - Insurance company; accounting; statement; contents.

44-2210.
Insurance company; accounting; statement; contents.
Every company licensed to sell variable annuities in this state must file with the Director of Insurance, on or before March 1 of each year, a statement under oath for the year ending December 31, immediately preceding, for the business of its separate accounts. Such statement shall be in a form as prescribed by the director and shall include as a minimum details as to all of the income, disbursements, assets and liability items associated with the separate accounts. The director shall not issue any license to any company, either domestic or foreign, until such company has complied with the provisions of this section. For good and sufficient cause shown, the director may grant a reasonable extension of time within which such statement may be filed, in no event to exceed thirty days.
Source
Laws 1969, c. 358, § 10, p. 1264.
2023 Nebraska Revised Statutes › Chapter 44 - Insurance › 44-2211 - Insurance company; reserve liability; requirements.

44-2211.
Insurance company; reserve liability; requirements.
The reserve liability for variable annuities shall be established pursuant to the requirements of the standard valuation law in accordance with actuarial procedures that recognize the variable nature of the benefits provided. To the extent that the company's reserve liability with regard to (1) benefits guaranteed as to dollar amount and duration, and (2) funds guaranteed as to principal amount or stated rate of interest is maintained in any separate account, a portion of the assets of such separate account at least equal to such reserve liability shall be, except as the Director of Insurance may otherwise approve, invested in accordance with the laws of this state governing the investments of life insurance companies.
Source
Laws 1969, c. 358, § 11, p. 1264.