North Carolina Administrative Code › Title 11 - INSURANCE › Chapter 11 - FINANCIAL EVALUATION DIVISION › Subchapter C - ANALYSIS AND EXAMINATIONS › Section .0100 - GENERAL PROVISIONS › Section 11C .0114 - CERTIFICATES OF CONTRIBUTION

Current through Register Vol. 39, No. 2, July 15, 2024
Every domestic insurance company may, upon petition to the
					 Commissioner and upon receipt of his approval thereof, issue certificates of
					 contribution of surplus for the reasons and purposes set forth in the petition
					 to the Commissioner.
Approval of the issuance of certificates of contributions
					 may be granted only upon the following conditions and will be effective only as
					 to transactions performed in conformity therewith:
(1) No certificate evidencing the
				  contribution under authorization hereof shall be issued except substantially in
				  the form and text as may be approved by the Commissioner.
(2) No commission, selling or other expense
				  is to be paid or incurred in respect to any transaction authorized, except that
				  regular salaried employees of the petitioner may perform any and all acts
				  necessary, convenient or advisable in connection with the transactions
				  authorized, fees may be paid for legal counsel, accounting and related
				  services, and petitioner may incur and pay other normal expense incurred in
				  connection with the issuance of the certificates of contribution.
(3) No advertisement, prospectus, or other
				  writing relating to the certificates of contribution, except regular business
				  correspondence relating to specific problems peculiar to the parties thereto,
				  shall be issued, circulated or published until after the same has been filed
				  with and authorized in writing by the Commissioner.
(4) At any time upon the request of the
				  Commissioner and in any event within 30 days from and after the issuance of any
				  certificate of contribution and after the completion of the transactions
				  authorized, petitioner shall make and file with said commissioner its verified
				  report setting forth the transactions accomplished pursuant to the authority
				  granted, and setting forth the date of issuance of the certificate of
				  contribution, the proceeds derived therefrom and the disposition of such
				  proceeds, and petitioner shall attach to such report a conformed copy of the
				  contribution certificates issued pursuant to said authorization.
(5) In any financial statement required by
				  law to be filed by petitioner with the Commissioner, or which may be published
				  or distributed by petitioner, the principal sum of and accrued interest of
				  these and any other outstanding certificates of contribution, which has not
				  become a liability in accordance with the terms thereof and is not reported in
				  such financial statement as a liability, shall be reported according to the
				  instructions for completing the appropriate NAIC financial statement blank.
				  Such amount shall be reported on the appropriate line on page 3 of the
				  financial statement as "certificates of contribution". Other descriptions, such
				  as "debentures", "surplus notes", "guaranty fund", or "guaranteed
				  certificates", are deemed misleading and are not permitted.
(6) The Commissioner may, from time to time,
				  for cause amend, continue or alter his approval or temporarily suspend the
				  rights of the petitioner hereunder or may revoke this authority.
(7) Unless revoked, suspended, or amended or
				  continued upon due petition therefor filed before the expiration date hereof
				  the authority granted hereunder is valid for a period of five years and such
				  authority shall automatically terminate on the close of business on the last
				  day of the month in which this authority was originally granted.
Certificates of contribution issued hereunder are not to be
					 construed as guaranty fund certificates as specifically provided for under
					 G.S.
					 58-12-1 and
					 58-8-20.
Authority
					 G.S.
					 58-2-40;
					 58-7-163;
Eff.
					 February 1, 1976;
Readopted Eff. February 28, 1978;
Amended Eff. April 1, 1993;
Pursuant to
					 G.S.
					 150B-21.3A, rule is necessary without
					 substantive public interest Eff. December 20,
					 2015.