Code of Massachusetts Regulations › 211 CMR - DIVISION OF INSURANCE › Title 211 CMR 7.00 - Massachusetts Insurance Holding Company System › Section 7.07 - Transactions Subject to Prior Notice - Notice Filing (Form D)

Current through Register 1525, July 5, 2024
(1) An insurer required to give notice of a
			 proposed transaction pursuant to M.G.L. c. 175, § 206C(n) shall furnish
			 the information required by Form D, hereby made a part of
			 211 CMR
			 7.00.
(2)
			 Agreements for cost sharing services and management services shall at a minimum
			 and as applicable:
(a) Identify the person
			 providing services and the nature of such services;
(b) Set forth the methods to allocate
			 costs;
(c) Require timely
			 settlement, not less frequently than on a quarterly basis, and compliance with
			 the requirements in the National Association of Insurance Commissioners'
			 Accounting Practices and Procedures Manual;
(d) Prohibit advancement of funds by the
			 insurer to the affiliate except to pay for services defined in the
			 agreement;
(e) State that the
			 insurer will maintain oversight for functions provided to the insurer by the
			 affiliate and that the insurer will monitor services annually for quality
			 assurance;
(f) Define records and
			 data of the insurer to include all records and data developed or maintained
			 under or related to the agreement that are otherwise the property of the
			 insurer, in whatever form maintained including, but not limited to, claims and
			 claim files, policyholder lists, application files, litigation files, premium
			 records, rate books, underwriting manuals, personnel records, financial records
			 or similar records within the possession, custody or control of the
			 affiliate;
(g) Specify that all
			 records and data of the insurer are and remain the property of the insurer,
			 and:
1. Are subject to control of the
			 insurer;
2. Are identifiable;
			 and
3. Are segregated from all
			 other persons' records and data or are readily capable of segregation at no
			 additional cost to the insurer;
(h) State that all funds and invested assets
			 of the insurer are the exclusive property of the insurer, held for the benefit
			 of the insurer and are subject to the control of the insurer;
(i) Include standards for termination of the
			 agreement with and without cause;
(j) Include provisions for indemnification of
			 the insurer in the event of gross negligence or willful misconduct on the part
			 of the affiliate providing the services and for any actions by the affiliate
			 that violate provisions of the agreement required in
			 211
			 CMR 7.07(b)(11),
			 211
			 CMR 7.07(b)(12),
			 211
			 CMR 7.07(b)(13),
			 211
			 CMR 7.07(b)(14)  and
			 211
			 CMR 7.07(b)(15)  of
			 211 CMR
			 7.00;
(k)
			 Specify that if the insurer is placed in supervision, seizure, conservatorship
			 or receivership pursuant to M.G.L. c. 175, §§ 180A to 180L1/2:
1. All of the rights of the insurer under the
			 agreement extend to the receiver or Commissioner to the extent permitted by
			 M.G.L. c. 175, §§ 180A to 180L1/2;
2. All records and data of the insurer shall
			 be identifiable and segregated from all other persons' records and data or
			 readily capable of segregation at no additional cost to the receiver or the
			 Commissioner;
3. A complete set of
			 records and data of the insurer will immediately be made available to the
			 receiver or the Commissioner, shall be made available in a usable format and
			 shall be turned over to the receiver or Commissioner immediately upon the
			 receiver or the Commissioner's request, and the cost to transfer data to the
			 receiver or the Commissioner shall be fair and reasonable; and
4. The affiliated person(s) will make
			 available all employees essential to the operations of the insurer and the
			 services associated therewith for the immediate continued performance of the
			 essential services ordered or directed by the receiver or
			 Commissioner;
(l) Specify
			 that the affiliate has no automatic right to terminate the agreement if the
			 insurer is placed into supervision, seizure, conservatorship or receivership
			 pursuant to M.G.L. c. 175, §§ 180A to 180L1/2;
(m) Specify that the affiliate will provide
			 the essential services for a minimum period of time, as specified in the
			 agreement, after termination of the agreement, if the insurer is placed into
			 supervision, seizure, conservatorship or receivership pursuant to M.G.L. c.
			 175, §§ 180A to 180L1/2, as ordered or directed by the receiver or
			 Commissioner. Performance of the essential services will continue to be
			 provided without regard to pre-receivership unpaid fees, so long as the
			 affiliate continues to receive timely payment for post-receivership services
			 rendered, and unless released by the receiver, Commissioner or supervising
			 court;
(n) Specify that the
			 affiliate will continue to maintain any systems, programs or other
			 infrastructure, notwithstanding supervision, seizure, conservatorship or
			 receivership pursuant to M.G.L. c. 175, §§ 180A to 180L1/2, and will
			 make them available to the receiver or Commissioner as ordered or directed by
			 the receiver or Commissioner for so long as the affiliate continues to receive
			 timely payment for post-receivership services rendered, and unless released by
			 the receiver, Commissioner or supervising court; and
(o) Specify that, in furtherance of the
			 cooperation between the receiver and the affected guaranty association(s) and
			 subject to the receiver's authority over the insurer, if the insurer is placed
			 into supervision, seizure, conservatorship or receivership pursuant to M.G.L.
			 c. 175, §§ 180A to 180L1/2, and portions of the insurer's policies or
			 contracts are eligible for coverage by one or more guaranty associations, the
			 affiliate's commitments under
			 211
			 CMR 7.07(b)(11),
			 211
			 CMR 7.07(b)(12),
			 211
			 CMR 7.07(b)(13)  and
			 211
			 CMR 7.07(b) (14)  of
			 211 CMR
			 7.00 will extend to such guaranty
			 association(s).