Definitions

As used in this article, the term: (1) ‘‘Affiliate,’’ including the term ‘‘affiliate of ’’ or ‘‘person affiliated with’’ a specific person, means a person who directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with the person specified. (2) ‘‘Commissioner’’ means the Commissioner of Insurance, the Commissioner’s deputies, or the Department of Insurance, as appropriate. (3) ‘‘Control,’’ including the terms ‘‘controlling,’’ ‘‘controlled by,’’ and ‘‘under common control with,’’ means the direct or indirect possession of the power to direct or cause the direction of the management and policies of a person whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position or corporate office held by the person. Control shall be presumed to exist if any person directly or indirectly owns, controls, holds with the power to vote, or holds proxies representing 10 percent or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided by subsection (k) of Code Section 33-13-4 that control does not exist in fact. The Commissioner may determine after furnishing all persons in interest notice and opportunity to be heard and after making specific findings of fact to support such determination that control exists in fact, notwithstanding the absence of a presumption to that effect. (4) ‘‘Enterprise risk’’ means any activity, circumstance, event, or series of events involving one or more affiliates of an insurer that, if not remedied promptly, is likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole, including, but not limited to, anything that would cause the insurer’s risk-based capital to fall into company action level as set forth in Chapter 56 of this title or 578 33-13-1 would cause the insurer to be in hazardous financial condition based on the standards prescribed by the Commissioner’s rules and regulations. (4.1) ‘‘Group-wide supervisor’’ means the regulatory official authorized to engage in conducting and coordinating group-wide supervision activities who is determined or acknowledged by the Commissioner under Code Section 33-13-7.1 to have sufficient significant contacts with an internationally active insurance group. (5) ‘‘Insurance holding company system’’ means two or more affiliated persons, one or more of which is an insurer. (6) ‘‘Insurer’’ shall have the same meaning as set forth in Code Section 33-1-2, except that it shall not include agencies, authorities, or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state. (6.1) ‘‘Internationally active insurance group’’ means an insurance holding company system that includes an insurer registered under Code Section 33-13-4 and that meets the following criteria: (A) Premiums written in at least three countries; (B) The percentage of gross premiums written outside the United States is at least 10 percent of the insurance holding company system’s total gross written premiums; and (C) Based on a three-year rolling average, the total assets of the insurance holding company system are at least $50 billion or the total gross written premiums of the insurance holding company system are at least $10 billion. (7) ‘‘Person’’ means an individual, a corporation, a limited liability company, a partnership, an association, a joint-stock company, a trust, an unincorporated organization, any similar entity, or any combination of the foregoing acting in concert, but shall not include any joint venture partnership exclusively engaged in owning, managing, leasing, or developing real or tangible personal property. (8) ‘‘Subsidiary’’ means an affiliate controlled by a specified person directly or indirectly through one or more intermediaries. (9) ‘‘Voting security’’ shall include any security convertible into or evidencing a right to acquire a voting security. History. — Code 1933, § 56-3401, enacted by Ga. L. 1970, p. 257, § 1; Ga. L. 1982, p. 3, § 33; Ga. L. 1992, p. 6, § 33; Ga. L. 2013, p. 802, § 1/HB 312; Ga. L. 2015, p. 608, § 3/SB 108; Ga. L. 2019, p. 337, §§ 1-62, 1-93/SB 132; Ga. L. 2019, p. 1045, § 1/HB 491. The 2019 amendments. — The first 2019 amendment, effective July 1, 2019, substituted ‘‘Department of Insurance’’ for 579 ‘‘Insurance Department’’ in paragraph (2); and deleted ‘‘Chapter 120-2-54 of ’’ following ‘‘standards prescribed by’’ near the end 33-13-2 of paragraph (4). The second 2019 amendment, effective July 1, 2019, added paragraphs (4.1) and (6.1). 33-13-2. Acquisition or organization of subsidiaries by domestic insurers; conduct of business by subsidiaries; investment by insurers in securities of subsidiaries. (a) Any domestic insurer either by itself or in cooperation with one or more persons may organize or acquire one or more subsidiaries. The subsidiaries may conduct any kind of business or businesses permitted by the Constitution and laws of this state; and their authority to do so shall not be limited by reason of the fact that they are subsidiaries of a domestic insurer. (b) In addition to investments in common stock, preferred stock, debt obligations, and other securities permitted under all other Code sections of this title, a domestic insurer may also: (1) Invest in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries amounts which do not exceed the lesser of 10 percent of the insurer’s assets or 50 percent of the insurer’s surplus as regards policyholders, provided that after the investments the insurer’s surplus as regards policyholders will be reasonable in relation to the insurer’s outstanding liabilities and adequate to its financial needs. In calculating the amount of such investments, investments in domestic or foreign insurance subsidiaries and health maintenance organizations shall be excluded, and there shall be included: (A) Total net moneys or other consideration expended and obligations assumed in the acquisition or formation of a subsidiary, including all organizational expenses and contributions to capital and surplus of the subsidiary whether or not represented by the purchase of capital stock or issuance of other securities; and (B) All amounts expended in acquiring additional common stock, preferred stock, debt obligations, and other securities and all contributions to the capital or surplus of a subsidiary subsequent to its acquisition or formation; (2) Invest any amount in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer, provided that each subsidiary agrees to limit its investments in any asset so that the investments will not cause the amount of the total investment of the insurer to exceed any of the investment limitations applicable to the insurer as specified in Chapter 11 of this title. For the purpose of this paragraph, ‘‘the total investment of the insurer’’ shall include: 580 33-13-2 (A) Any direct investment by the insurer in an asset; and (B) The insurer’s proportionate share of any investment in an asset by any subsidiary of the insurer which shall be calculated by multiplying the amount of the subsidiary’s investment by the percentage of the insurer’s ownership of such subsidiary; and (3) Invest any amount in common stock, preferred stock, debt obligations, or other securities of one or more subsidiaries with the approval of the Commissioner, provided that after the investment the insurer’s surplus as regards policyholders will be reasonable in relation to the insurer’s outstanding liabilities and adequate to its financial needs. (c) Investments in common stock, preferred stock, debt obligations, or other securities of subsidiaries made pursuant to subsection (b) of this Code section shall not be subject to any of the otherwise applicable restrictions or prohibitions contained in this title applicable to the investments of insurers. (d) Whether any investment pursuant to subsection (b) of this Code section meets the applicable requirements of that subsection is to be determined before the investment is made, by calculating the applicable investment limitations as though the investment had already been made, taking into account the then outstanding principal balance on all previous investments in debt obligations, and the value of all previous investments in equity securities as of the day they were made, net of any return of capital invested, not including dividends. (e) If an insurer ceases to control a subsidiary, it shall dispose of any investment in the subsidiary made pursuant to this Code section within three years from the time of the cessation of control or within any further time as the Commissioner may prescribe unless at any time after the investment shall have been made the investment shall have met the requirements for investment under any other Code section of this title and the insurer notifies the Commissioner that the requirement has been met. History. — Code 1933, § 56-3402, enacted by Ga. L. 1970, p. 257, § 1; Ga. L. 1982, p. 3, § 33; Ga. L. 2000, p. 136, § 33; Ga. L. 2013, p. 802, § 1/HB 312.