Virginia Administrative Code › Title 14 - INSURANCE › Agency 5 - STATE CORPORATION COMMISSION, BUREAU OF INSURANCE › Chapter 260 - RULES GOVERNING INSURANCE HOLDING COMPANIES › Section 14VAC5-260-80 - Transactions subject to prior notice filing

Current through Register Vol. 40, No. 24, July 15, 2024
A. An insurer
				required to give notice of a proposed transaction pursuant to § 38.2-1330
				B of the Code of Virginia shall furnish the required information in the format
				designated on Form D, as specified in the instructions of that form, which is a
				part of this chapter.
B. Agreements
				for cost-sharing services and management services must:
1. Identify the person providing services and
				the nature of such services;
2. Set
				forth the methods to allocate costs;
3. Require timely settlement on at least a
				quarterly basis and compliance with the requirements in the NAIC Accounting
				Practices and Procedures Manual, March 2022;
4. Prohibit advancement of funds by the
				insurer to an affiliate except to pay for services defined in the
				agreement;
5. State that the
				insurer will maintain oversight for functions provided to the insurer by an
				affiliate and that the insurer will monitor services annually for quality
				assurance;
6. 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 (i) claims and claim files,
				(ii) policyholder lists, (iii) application files, (iv) litigation files, (v)
				premium records, (vi) rating manuals and rating algorithms, (vii) underwriting
				manuals, (viii) personnel records, (ix) financial records, or (x) similar
				records within the possession, custody, or control of the affiliate;
7. Specify that all records and data of the
				insurer are and remain the property of the insurer and are (i) subject to
				control of the insurer, (ii) identifiable, and (iii) segregated from all other
				persons' records and data or readily capable of segregation at no additional
				cost to the insurer;
8. 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 subject to the control of the
				insurer;
9. Include standards for
				termination of the agreement with and without cause;
10. 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 subdivisions 11 through 15
				of this subsection;
11. Specify if
				the insurer is placed in supervision, seizure, conservatorship, or receivership
				by the commission under the Rehabilitation and Liquidation of Insurers statute
				(Chapter 15 (§ 38.2-1500 et seq.) of Title 38.2 of the Code of Virginia):
a. All rights of the insurer under the
				agreement extend to the receiver or commission pursuant to Title 38.2 of the
				Code of Virginia;
b. All records
				and data of the insurer must be identifiable and segregated from all other
				persons' records and data or must be readily capable of segregation at no
				additional cost to the receiver or the commission;
c. A complete set of records and data of the
				insurer will be provided to the receiver or the commission immediately in a
				usable format upon the receiver or the commission's request, and any cost to
				transfer data to the receiver or the commission shall be fair and reasonable;
				and
d. Affiliates will make
				available all employees essential to the operations of the insurer and the
				services associated with the operations of the insurer for the immediate
				continued performance of the essential services ordered or directed by the
				receiver or commission;
12. Specify that an affiliate has no
				automatic right to terminate the agreement if the insurer is placed into
				supervision, seizure, conservatorship, or receivership pursuant to Chapter 15
				of Title 38.2 of the Code of Virginia;
13. Specify that an affiliate will provide
				essential services for a specific period of time after termination of the
				agreement if the insurer is placed into supervision, seizure, conservatorship,
				or receivership pursuant to Chapter 15 of Title 38.2 of the Code of Virginia as
				ordered or directed by the receiver or commission. Performance of the essential
				services will continue to be provided without regard to pre-receivership unpaid
				fees, as long as an affiliate continues to receive timely payment for
				post-receivership services rendered unless such affiliate is released by the
				receiver, commission, or supervising court;
14. Specify that an affiliate will continue
				to maintain any systems, programs, or other infrastructure notwithstanding
				supervision, seizure, conservatorship, or receivership under Chapter 15 of
				Title 38.2 of the Code of Virginia, and will make them available as ordered or
				directed by the receiver or commission as long as such affiliate continues to
				receive timely payment for post-receivership services rendered unless such
				affiliate is released by the receiver, commission, or supervising court;
				and
15. Specify that, in
				furtherance of the cooperation between the receiver and the affected guaranty
				association and subject to the receiver's authority over the insurer, if the
				insurer is placed into supervision, seizure, conservatorship, or receivership
				pursuant to Chapter 15 of Title 38.2 of the Code of Virginia and portions of
				the insurer's policies or contracts are eligible for coverage by one or more
				guaranty associations, the affiliate's commitments under subdivisions 11
				through 14 of this subsection will extend to such guaranty
				association.