Ala. Admin. Code r. 482-1-094-.07

Current through Register Vol. 43, No. 1, October 31, 2024

Section 482-1-094-.07 - Filing Requirements

(1) All surplus notes issued by an insurer are subject to the prior approval of the Commissioner, regardless of amount, and shall be filed at least 30 days prior to the proposed date of the loan.

(2) The payment of interest or repayment of principal is subject to the prior approval of the Commissioner, regardless of amount, and shall be filed at least 30 days prior to the date of the proposed payment.

(3) The written application for approval of the issuance of a surplus note shall include at least all of the following:

(a) The nature and purpose of the transaction.

(b) The identities of all parties to the transaction.

(c) A statement that no officers or directors of a party are pecuniarily interested in the transaction (neither stock ownership in, nor serving as an officer or director of the creditor shall constitute a prohibited pecuniary interest, but should not be disclosed).

(d) A copy of any agreement between the parties relating to the transaction.

(e) Evidence that the transaction will not adversely affect the interests of policyholders.

(4) The written application for approval of the payment of interest or the repayment of principal shall include at least all of the following:

(a) The amounts of any payments between the parties to the transaction.

(b) The identities of all parties to the transaction.

(c) Evidence that the repayment or payment is appropriate considering the financial condition of the insurer.

(5) A current financial statement dated not earlier than 60 days before the application date must be filed with the application for approval of the payment of interest or repayment of principal which demonstrates the existence of sufficient surplus in excess of the minimum surplus, and a statement by the chief executive officer of the insurer that the insurer's current total surplus is in such amount that payment or repayment as of the payment date will be only from surplus in excess of minimum surplus and will not adversely affect the insurer's current financial condition.

(6) Applications for approval of the issuance or payment of interest or the repayment of principal must meet the following standards:

(a) The terms shall be fair and equitable.

(b) The books, accounts, and records of each party shall be so maintained as to clearly and accurately disclose the precise nature and details of the transaction.

(c) Minimum surplus and the insurer's surplus as regards policyholders following such payment of interest or repayment of principal shall be reasonable in relation to the insurer's outstanding liabilities and adequate to satisfy its financial needs.

(7) Requests for the approval of surplus notes, or for the approval of the payment of interest or repayment of principal, shall be filed with the insurer's assigned analyst not less than thirty (30) days in advance.

Ala. Admin. Code r. 482-1-094-.07

New: December 18, 1992; effective January 1, 1993. Filed for codification in the Alabama Administrative Code by the Department of Insurance on November 14, 2005, pursuant to the Code of Ala. 1975, § 27-7-43.

Amended by Alabama Administrative Monthly Volume XLI, Issue No. 01, October 31, 2022, eff. 10/17/2022. Published October 31, 2022. Rule is not subject to the Alabama Administrative Procedure Act.

Author: Commissioner of Insurance

Statutory Authority:Code of Ala. 1975, §§ 27-27-40, 27-2-7, 27-2-17, 27-27-1, 27-27-2.