Code of Massachusetts Regulations › 211 CMR - DIVISION OF INSURANCE › Title 211 CMR 54.00 - Procedure For Surrender And Non-renewal Of Licenses By Insurers Authorized To Write Motor Vehicle Insurance › Section 54.04 - Filing Requirements

Current through Register 1525, July 5, 2024
(1)
Effect of Filing
. An applicant's full compliance with
			 the procedures set forth in
			 211 CMR 54.00 shall not
			 preclude the Commissioner from initiating a proceeding pursuant to M.G.L. c.
			 175, § 22H against the applicant if necessary.
(2)
Timing
. An
			 applicant intending to surrender or non-renew any or all of its licenses shall
			 submit all documents required in 211 CMR 54.04(3) no less than seven months
			 before the intended effective date of the withdrawal. The Division shall review
			 and approve or disapprove forms of notices submitted pursuant to 211 CMR
			 54.04(3)(f) 1. and 5.a. through f. within 30 days of receiving an applicant's
			 complete withdrawal plan.
(3)
Material to be Submitted
. The applicant shall submit
			 to the Commissioner five copies of the following set of documents:
(a) An application to surrender or non-renew
			 any of the applicant's licenses, describing and documenting the applicant's
			 financial condition for the last three years, explaining the applicant's
			 reasons for seeking to withdraw from Massachusetts, including accounting,
			 actuarial and other materials relied upon in deciding to seek withdrawal, and
			 indicating the proposed effective date of such withdrawal.
(b) For a CAR assigned risk company or
			 servicing carrier, a copy of its petition to withdraw as an assigned risk
			 company or servicing carrier to be submitted to CAR pursuant to CAR Rule 38 or
			 Rule 16, as applicable.
(c) A
			 description of all licenses currently held by the applicant, indicating the
			 date on which such licenses were originally issued;
(d) An organizational chart and a narrative
			 description of the relationships, if any, among the applicant and its
			 affiliates, indicating at least:
1. the lines
			 of insurance which each entity is licensed to write;
2. the management relationships;
3. the financial relationships
(e.g.,
reinsurance agreements, pooling arrangements, common
			 investments);
4. the marketing
			 relationships;
5. the agency
			 relationships; and
6. the claims
			 handling relationships.
(e) A description, by line of insurance
			 written in Massachusetts, of the lines of insurance written by the applicant,
			 the premium written by the applicant for the last three years; estimated market
			 share, if known; the number of current policyholders; the number of current
			 producers; and the number of Massachusetts employees;
(f) A detailed narrative withdrawal plan,
			 with relevant supporting materials, which must include, but is not limited to:
1. copies of the forms of non-renewal notices
			 the applicant intends to send pursuant to M.G.L. c. 175, §§ 113F,
			 163, 187B, 187C, 187D, 193P, and any other notices of non-renewal or
			 cancellation, the intended date of the notice and a description of the
			 identities of the recipients of each such notice. All such notices shall
			 include the following statement:
"[Name of applicant] has submitted a withdrawal plan for
				approval by the Commissioner of Insurance. Should the withdrawal plan be
				revised or the effective date changed, you shall be notified."
2. a list of all of the
			 applicant's producers, including producers placing business with the applicant
			 through an assigned risk plan, as of the date of application. Include the name
			 and address of each producer, as well as the number of policies and the premium
			 volume handled by each producer, by line;
3. a copy of each sample form of contract
			 between the applicant and its producers, including any subsequent modifications
			 to those contracts;
4. copies of
			 all correspondence intended to be sent to the applicant's producers and
			 policyholders concerning the applicant's withdrawal;
5. copies of all correspondence and notices
			 to be sent to the following entities, as well as a description of all
			 agreements, which need not be in final form, reached with such entities as to
			 the applicant's financial obligations to such entities, as applicable:
a. CAR;
b. the Massachusetts Life and Health
			 Insurance Guaranty Fund, established by M.G.L. c. 175, § 146B;
c. the Massachusetts Medical Malpractice
			 Reinsurance Plan established by St. 1994, c. 330, § 10;
d. the Urban Area Insurance Placement
			 Facility (FAIR Plan), established by M.G.L. c. 175C;
e. the Massachusetts Insurers Insolvency
			 Fund, established by M.G.L. c. 175D; and
f. the assigned risk plan for workers'
			 compensation insurance established by M.G.L. c. 152, § 65A; and
6. the address of each of the
			 applicant's offices in Massachusetts, the total number of its Massachusetts
			 employees as of the application date, and in accordance with M.G.L. c. 175,
			 § HOD, a description of the applicant's plan with regard to the
			 termination of its Massachusetts employees. Include a description of the
			 employee benefits to be provided upon termination due to the applicant's
			 withdrawal;
(g) A
			 detailed description of the applicant's financial and other obligations to the
			 entities referred to above in 211 CMR 54.04(3)(f)5.a. through f. for the most
			 recently completed fiscal year or other accounting period, an estimate of such
			 obligations for the current year and an estimate of such obligations for one
			 year following the year in which the applicant files its withdrawal
			 plan;
(h) A statement, by line of
			 insurance written in Massachusetts, of all the applicant's current incurred
			 liabilities, including those incurred but not reported, as developed and
			 certified by an actuary, all as of a date not earlier than 30 days prior to
			 filing;
(i) A description of the
			 manner in which the applicant intends to handle claims arising from policies
			 issued to Massachusetts residents remaining in force after the applicant has
			 otherwise withdrawn from doing business in the Commonwealth. Provide a
			 description of the applicant's staff and adjusters to be used, including their
			 location and the procedures for consumer contact;
(j) A list of all the applicant's deposits
			 currently held by the Treasurer of the Commonwealth, if any;
(k) Written certification from a duly
			 authorized officer of the applicant, signed under the pains and penalties of
			 perjury, that, for as long as there exist any potential claims arising from any
			 policy written by the applicant and covering a Massachusetts resident:
1. the applicant shall fully honor its
			 obligations arising from any such policy;
2. the applicant shall fully service all
			 outstanding policies, bonds and surety lines of credit, which includes
			 processing all usual and customary endorsements requested by insureds during
			 the term of such policies, subject to the applicant's normal underwriting
			 standards;
3. in those cases in
			 which policies remaining in force provide for dividends to be paid, the insurer
			 shall not unfairly discriminate against Massachusetts policyholders in its
			 dividend practices;
4. the
			 applicant shall continue to submit annual statements to the Division and shall
			 continue to submit information to the entities identified in 211 CMR
			 54.04(3)(f)5.a. through f. upon request, for as long as the applicant has any
			 earned premium or has any paid or incurred losses. In addition, the applicant
			 shall remain subject to examination by the Division as deemed necessary by the
			 Commissioner and shall continue to operate in accordance with and submit to the
			 Commissioner's jurisdiction under M.G.L. c. 176D;
5. the applicant shall not accept surplus
			 lines placements for any type of business encompassed by the withdrawal plan to
			 avoid the regulatory requirements attendant to business operations pursuant to
			 a license, unless specifically permitted by the Commissioner;
6. the applicant shall maintain designation
			 of the Commissioner as its agent for service of process.