2023 New York Laws › ISC - Insurance › Article 15 - Holding Companies › 1505 - Transactions Within a Holding Company System Affecting Controlled Insurers.

§  1505.  Transactions  within  a  holding  company  system  affecting
controlled insurers. (a) Transactions within a holding company system to
which a controlled insurer is a party shall be subject to the following:
(1) the terms shall be fair and equitable;
(2) charges or fees for services performed shall be reasonable; and
(3) expenses incurred and payments received shall be allocated to  the
insurer  on  an  equitable  basis in conformity with customary insurance
accounting practices consistently applied.
(b) The books,  accounts  and  records  of  each  party  to  all  such
transactions  shall  be  so  maintained  as  to  clearly  and accurately
disclose the nature and  details  of  the  transactions  including  such
accounting  information as is necessary to support the reasonableness of
the charges or fees to the respective parties.
(c) The superintendent's prior approval  shall  be  required  for  the
following  transactions  between  a  domestic controlled insurer and any
person in its holding company system: sales, purchases, exchanges, loans
or extensions of credit, or investments, involving five percent or  more
of the insurer's admitted assets at last year-end.
(d)  The  following transactions between a domestic controlled insurer
and any person in its holding company system may  not  be  entered  into
unless  the  insurer  has  notified the superintendent in writing of its
intention to enter into any such transaction at least thirty days  prior
thereto,  or  with regard to reinsurance treaties or agreements at least
forty-five  days  prior  thereto,  or  such  shorter   period   as   the
superintendent may permit, and the superintendent has not disapproved it
within such period:
(1)  sales,  purchases,  exchanges,  loans or extensions of credit, or
investments involving less than five percent of the  insurer's  admitted
assets  at  last  year-end,  provided  the  transactions are equal to or
exceed:
(A) the lesser of three percent of the insurer's  admitted  assets  or
twenty-five percent of capital and surplus at last year-end, with regard
to  an accident and health insurance company or a corporation subject to
article forty-three of this chapter;
(B) three percent of the insurer's admitted assets at  last  year-end,
with regard to a life insurance company; or
(C)  the  lesser  of three percent of the insurer's admitted assets or
twenty-five percent of surplus to policyholders at last  year-end,  with
regard  to  an  insurer other than as specified in subparagraphs (A) and
(B) of this paragraph;
(2) reinsurance treaties or agreements;
(3) rendering of services on a regular or systematic basis; or
(4) any  material  transaction,  specified  by  regulation,  that  the
superintendent  determines  may  adversely  affect  the interests of the
insurer's policyholders or shareholders.
Nothing herein contained shall be deemed to authorize  or  permit  any
transaction  that,  in  the  case  of a non-controlled insurer, would be
otherwise contrary to law.
(e)  The  superintendent,  in  reviewing  transactions   pursuant   to
subsections  (c) and (d) hereof, shall consider whether they comply with
the standards set forth in subsections (a) and (b)  hereof  and  whether
they may adversely affect the interests of policyholders.
(f)  This  section  shall not apply to transactions subject to article
sixteen or article seventeen or section one thousand four hundred  eight
or  any  sections  of  this  chapter  which  impose  notice  or approval
requirements greater than those in this section.