New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 1 - ADMINISTRATION › Subchapter 28 - FORMATION OF A DOMESTIC PROPERTY AND CASUALTY INSURANCE CORPORATION STOCK OR MUTUAL OR RECIPROCAL INSURANCE EXCHANGE › Section 11:1-28.9 - Organization examination

Current through Register Vol. 56, No. 14, July 15, 2024
(a) A stock company shall deposit the whole amount of capital stock set forth in the certificate of incorporation and the required minimum surplus in cash, and a mutual company shall deposit the amount of cash equal to the required minimum net assets, for all lines of insurance such stock or mutual company is authorized to write pursuant to its certificate of incorporation. A reciprocal insurance exchange shall deposit the required minimum capital and surplus requirements pursuant to 17:50-5.
(b) All applicants shall also submit a security deposit pursuant to 17:20-1, 17:46B-7 and 17:50-6, as applicable, registered in the following format:
"Commissioner of Banking and Insurance of the State of New Jersey, as trustee, in trust for the benefit and security of the policyholders of (Name of company F.I.D. No.)."
(c) After the required capital and surplus amounts have been deposited and credited in cash to the applicant and a security deposit has been filed with the Commissioner pursuant to (a) and (b) above, the applicant shall notify the Commissioner in writing that such deposits have taken place. Within 30 days after such notification the Department will contact the applicant and arrange for an organization examination to be conducted on the site of the applicant's home office.
(d) The applicant shall make available to the Department for review and copy as necessary to conduct an organization exam the following, without limitation:
1. The Certificate of Incorporation;
2. Certified copies of the incorporators', stockholders', company's and attorney in fact's organization resolutions, as applicable;
3. The names, home addresses (including zip codes) and occupations of directors elected;
4. The names and titles of the applicant's officers;
5. The name and address of the bank in which the securities are deposited and the person to contact to verify securities owned;
6. The name of the applicant's registered agent and the resolution authorizing him to accept service of process;
7. A complete ownership chart depicting a diagram of ultimate control in the format of Schedule Y--Organization Chart contained in the Annual Statement;
i. For the purposes of the ownership chart, control exists if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing five percent or more of the voting securities of any other person;
ii. In the case of reciprocal insurance exchanges, the ownership chart shall show the interrelationship between the parent and all affiliates of the attorney in fact engaged in the business of insurance and shall also show the relationship of the attorney in fact to the ultimate parent and illustrate all intermediate parent(s) having control of the attorney in fact as the term control is defined in (d)7i above;
8. An audited financial statement of the intermediate and ultimate parent(s) or attorney in fact, as applicable, prepared by a certified public accountant;
i. For the purposes of the audited financial statement, intermediate and ultimate parent means any person, directly or indirectly, who owns, controls, holds with power to vote, or holds proxies representing 10 percent or more of the voting securities of any other person;
ii. In the case of an attorney in fact, the Commissioner may accept a report other than an audited financial statement if, in his or her opinion, the structure of the attorney in fact is such that an audited financial statement is not prepared in the normal course of business;
9. A pro forma balance sheet of the company certified by an officer of the applicant;
10. A certified copy of the by-laws of the proposed insurer or reciprocal insurance exchange, as applicable;
11. A copy of the applicant's stock certificate if applicable;
12. Complete copies of the biographical sketches of the applicant's incorporators, directors and officers;
13. Any financing agreements with a bank or other financial institution;
14. Management, operating or expense sharing agreements;
15. An original affidavit of the officers and directors completed and signed in the format of Appendix C appended to this subchapter, which is hereby incorporated by reference as part of these rules;
16. Reinsurance agreements or proposed reinsurance programs;
17. A detailed written outline from the applicant explaining its plan of operations containing the information specified in 11:1-28.5(b)1, and a summary of the applicant's initial rating system which shall include:
i. Rates by lines of business;
ii. Statistical agent;
iii. Independent filings; and
iv. The rating bureau (if any);
18. A five year projection certified by a qualified actuary containing the information required by 11:1-28.5(b)3; and
19. Documents pertaining to authority to write workers' compensation insurance (if applicable).