INSURANCE DEPARTMENT

6.6.3714 FILING OF FORM D--TRANSACTIONS SUBJECT TO PRIOR NOTICE An insurer required to give notice of a proposed transaction pursuant to 33-2-1113, MCA, shall furnish the required information on Form D, which is made a part of these rules. Agreements for cost sharing services and…

6.6.3715 EXTRAORDINARY DIVIDENDS AND OTHER DISTRIBUTIONS Requests for approval of extraordinary dividends or any other extraordinary distribution to shareholders must include the following: the amount of the proposed dividend; the date established for payment of the dividend; a s…

6.6.3716 ADEQUACY OF SURPLUS The factors set forth in 33-2-1113(6), MCA, are not intended to be an exhaustive list. In determining the adequacy and reasonableness of an insurer's surplus, no single factor will necessarily be controlling. The commissioner will consider the net eff…

6.6.3717 FORMS The following forms apply to this subchapter. FORM A STATEMENT REGARDING THE ACQUISITION OF CONTROL OF OR MERGER WITH A DOMESTIC INSURER Name of Domestic Insurer BY _________________________________ Name of Acquiring Person (Applicant) Filed with the Office of the …

6.6.3718 ENTERPRISE RISK REPORT The ultimate controlling person of an insurer required to file an enterprise risk report pursuant to 33-2-1111(7), MCA, shall furnish the required information on Form F, found in ARM 6.6.3717. Authorizing statute(s): 33-1-313, 33-2-1517, MCA Implem…

6.6.3719 GROUP CAPITAL CALCULATION The lead state commissioner has the discretion to exempt the ultimate controlling person from filing the annual group capital calculation if the lead state commissioner makes a determination that the insurance holding company system meets all of…

6.6.3801 DEFINITIONS (REPEALED) Authorizing statute(s): 33-1-313, 33-2-1517, MCA Implementing statute(s): 33-2-1216, 33-2-1517, MCA History: NEW, 1993 MAR p. 2408, Eff. 10/15/93; REP, 2016 MAR p. 2186, Eff. 11/26/16.

6.6.3802 TRUST AGREEMENT CONDITIONS (REPEALED) Authorizing statute(s): 33-1-313, 33-2-1517, MCA Implementing statute(s): 33-2-1216, 33-2-1517, MCA History: NEW, 1993 MAR p. 2408, Eff. 10/15/93; AMD, 1996 MAR p. 415, Eff. 2/9/96; REP, 2016 MAR p. 2186, Eff. 11/26/16.

6.6.3803 CONDITIONS APPLICABLE TO REINSURANCE AGREEMENTS (REPEALED) Authorizing statute(s): 33-1-313, 33-2-1517, MCA Implementing statute(s): 33-2-1216, 33-2-1517, MCA History: NEW, 1993 MAR p. 2408, Eff. 10/15/93; AMD, 1996 MAR p. 415, Eff. 2/9/96; REP, 2016 MAR p. 2186, Eff. 11…

6.6.3804 RESTRICTIONS ON AMENDMENT OF TRUST AGREEMENTS (REPEALED) Authorizing statute(s): 33-1-313, 33-2-1517, MCA Implementing statute(s): 33-2-1216, 33-2-1517, MCA History: NEW, 1993 MAR p. 2408, Eff. 10/15/93; REP, 2016 MAR p. 2186, Eff. 11/26/16.

6.6.3805 FINANCIAL REPORTING (REPEALED) Authorizing statute(s): 33-1-313, 33-2-1517, MCA Implementing statute(s): 33-2-1216, 33-2-1517, MCA History: NEW, 1993 MAR p. 2408, Eff. 10/15/93; REP, 2016 MAR p. 2186, Eff. 11/26/16.

6.6.3806 EFFECT OF FAILURE TO IDENTIFY BENEFICIARY (REPEALED) Authorizing statute(s): 33-1-313, 33-2-1517, MCA Implementing statute(s): 33-2-1216, 33-2-1517, MCA History: NEW, 1993 MAR p. 2408, Eff. 10/15/93; REP, 2016 MAR p. 2186, Eff. 11/26/16.

6.6.3807 EFFECT OF LOSS OF ACCREDITATION BY ASSUMING REINSURER (REPEALED) Authorizing statute(s): 33-1-313, 33-2-1517, MCA Implementing statute(s): 33-2-1216, 33-2-1517, MCA History: NEW, 1993 MAR p. 2408, Eff. 10/15/93; REP, 2016 MAR p. 2186, Eff. 11/26/16.

6.6.3808 SURPLUS DETERMINATION OF A GROUP OF INCORPORATED INSURERS UNDER COMMON ADMINISTRATION (REPEALED) Authorizing statute(s): 33-1-313, 33-2-1517, MCA Implementing statute(s): 33-2-1216, 33-2-1517, MCA History: NEW, 1993 MAR p. 2408, Eff. 10/15/93; REP, 2016 MAR p. 2186, Eff.…

6.6.3809 THE PERIOD FOR PAYMENT OF TRUST FUNDS SUBJECT TO CLAIMS (REPEALED) Authorizing statute(s): 33-1-313, 33-2-1517, MCA Implementing statute(s): 33-2-1216, 33-2-1517, MCA History: NEW, 1993 MAR p. 2408, Eff. 10/15/93; REP, 2016 MAR p. 2186, Eff. 11/26/16.

6.6.3810 METHODS OF ALLOWING CREDIT FOR REINSURANCE These rules implement the statutory provisions allowing for credit for reinsurance. Credit for reinsurance is allowed only where a method set out in statute has been followed, including the following methods: assuming insurer is…

6.6.3811 DEFINITIONS For the purposes of this subchapter, the following definitions apply: "Beneficiary" includes any successor by operation of law of the named beneficiary, including without limitation any liquidator, rehabilitator, receiver, or conservator. "Grantor" means the …

6.6.3812 REINSURANCE TRANSACTIONS AFFECTED All new and renewal reinsurance transactions entered into after October 1, 1993, shall conform to the requirements of 33-2-1201, 33-2-1202, 33-2-1203, 33-2-1204, 33-2-1205, 33-2-1206, 33-2-1207, 33-2-1208, 33-2-1209, 33-2-1210, 33-2-1211…

6.6.3813 REQUIREMENTS FOR REINSURANCE CONTRACTS OR AGREEMENTS Credit will not be granted, nor an asset or reduction from liability allowed, to a ceding insurer for reinsurance pursuant to 33-2-1216, or 33-2-1217, MCA, and these rules unless the reinsurance contract or agreement i…

6.6.3814 FORMS The following forms (and related instructions) are found on the web site of the Commissioner of Securities and Insurance, Office of the State Auditor: Form AR-1; Form CR-1; Form RJ-1; Form CR-F; and Form CR-S. Authorizing statute(s): 33-1-313, 33-2-1216, 33-2-1517,…

6.6.3815 CREDIT FOR UNENCUMBERED FUNDS A ceding insurer may take credit for unencumbered funds withheld by the ceding insurer in the United States subject to withdrawal solely by the ceding insurer and under its exclusive control. Authorizing statute(s): 33-1-313, 33-2-1517, MCA …

6.6.3821 ASSUMING INSURER THAT MAINTAINS A TRUST FUND - PERIOD FOR PAYMENT OF TRUST FUNDS SUBJECT TO CLAIMS Contested claims under 33-2-1216(5)(c), MCA, shall be valid and enforceable out of funds in trust to the extent remaining unsatisfied 30 days after entry of the final order…

6.6.3822 ASSUMING INSURER THAT MAINTAINS A TRUST FUND - DEFINITION OF LIABILITIES For the purposes of 33-2-1216(5)(b), MCA, the term "liabilities" means the assuming insurer's gross liabilities attributable to reinsurance ceded by United States domiciled insurers, excluding liabi…

6.6.3823 ASSUMING INSURER THAT MAINTAINS A TRUST FUND - INSUFFICIENT TRUST FUNDS OR TRUST FUND GRANTOR DECLARED INSOLVENT OR PLACED INTO RECEIVERSHIP, REHABILITATION, LIQUIDATION, OR SIMILAR PROCEEDINGS If the trust fund is inadequate because it contains an amount less than requi…

6.6.3824 ASSUMING INSURER THAT MAINTAINS A TRUST FUND - VALUATION OF TRUST ASSETS Assets deposited in trusts established pursuant to 33-2-1216(5), MCA, shall be valued according to their current fair market value and shall consist only of: cash in U.S. dollars; certificates of de…

6.6.3825 ASSUMING INSURER THAT MAINTAINS A TRUST FUND - RESTRICTION ON PERCENTAGE OF TRUST INVESTMENT SHARED BY GRANTOR OR BENEFICIARY For purposes of 33-2-1216(5), MCA, there can be no more than five percent of the total investments of the trust that involve investments in, or i…

6.6.3826 ASSUMING INSURER THAT MAINTAINS A TRUST FUND - ALLOWABLE GOVERNMENT OBLIGATIONS For purposes of 33-2-1216(5), MCA, government obligations are allowable if they are not in default as to principal or interest, are valid and legally authorized, and are issued, assumed, or g…

6.6.3827 ASSUMING INSURER THAT MAINTAINS A TRUST FUND - ALLOWABLE NONGOVERNMENT OBLIGATIONS For purposes of 33-2-1216(5), MCA, nongovernment obligations are allowable if they are: issued in the United States; dollar-denominated and issued in a non-United States market by a solven…

6.6.3828 ASSUMING INSURER THAT MAINTAINS A TRUST FUND - ADDITIONAL RESTRICTIONS ON GOVERNMENT OBLIGATIONS AND NONGOVERNMENT OBLIGATIONS The following apply to allowable government and nongovernment obligations used to fulfill the requirements of 33-2-1216, MCA, trust fund investm…

6.6.3829 ASSUMING INSURER THAT MAINTAINS A TRUST FUND - ALLOWABLE EQUITY INTERESTS Investments in common shares or partnership interests of a solvent U.S. institution are permissible for purposes of 33-2-1216(5), MCA, if the equity interests of the institution (except an insuranc…

6.6.3830 ASSUMING INSURER THAT MAINTAINS A TRUST FUND - ALLOWABLE OBLIGATIONS ISSUED, ASSUMED, OR GUARANTEED BY MULTINATIONAL DEVELOPMENT BANK For purposes of 33-2-1216(5), MCA, obligations issued, assumed, or guaranteed by a multinational development bank, provided the obligatio…

6.6.3831 ASSUMING INSURER THAT MAINTAINS A TRUST FUND - ALLOWABLE INVESTMENT COMPANIES For purposes of 33-2-1216(5), MCA, securities of an investment company registered pursuant to the Investment Company Act of 1940, 15 U.S.C. section 80a, are permissible investments if the inves…

6.6.3832 ASSUMING INSURER THAT MAINTAINS A TRUST FUND - LETTERS OF CREDIT In order for a letter of credit to qualify as an asset of the trust, the trustee shall have the right and the obligation pursuant to the deed of trust or some other binding agreement (as duly approved by th…

6.6.3833 ASSUMING INSURER THAT MAINTAINS A TRUST FUND - APPLICATION OF SPECIFIC SECURITY A specific security provided to a ceding insurer by an assuming insurer pursuant to 33-2-1216(6), MCA shall be applied, until exhausted, to the payment of liabilities of the assuming insurer …

6.6.3841 CERTIFICATION OF ASSUMING INSURERS - ELIGIBILITY FOR CERTIFICATION To be eligible for certification by the department, the assuming insurer shall be domiciled and licensed to transact insurance or reinsurance in a qualified jurisdiction, as determined by the commissioner…

6.6.3842 CERTIFICATION OF ASSUMING INSURERS - INITIAL CERTIFICATION PROCEDURE The assuming insurer must submit an Application for Credit for Reinsurance and a properly executed Form CR-1. The forms and directions are found on the web site maintained by the commissioner. The commi…

6.6.3843 CERTIFICATION OF ASSUMING INSURERS - FILING REQUIREMENTS The assuming insurer must fulfill filing requirements as determined by the commissioner, both with respect to an initial application for certification and on an ongoing basis. All information submitted by assuming …

6.6.3844 CERTIFICATION OF ASSUMING INSURERS - RECOGNITION OF CERTIFICATION ISSUED BY AN NAIC-ACCREDITED JURISDICTION An assuming insurer that has submitted a properly executed Form CR-1 and such additional information as the commissioner requires, may request that the commissione…

6.6.3845 CERTIFICATION OF ASSUMING INSURERS - NOTICE OF CERTIFICATION The commissioner shall issue written notice to an assuming insurer that has made application and been approved as a certified reinsurer. The written notice shall include the rating assigned the certified reinsu…

6.6.3846 CERTIFIED ASSUMING INSURERS - CHANGE IN CERTIFICATION The commissioner has the authority to suspend, revoke, or otherwise modify a certified reinsurer's certification at any time if the certified reinsurer fails to meet its obligations or security requirements as stated …

6.6.3847 CERTIFICATION OF ASSUMING INSURERS - MANDATORY FUNDING CLAUSE IN REINSURANCE CONTRACTS OR AGREEMENTS Insurance contracts entered into or renewed under the commissioner's authority to certify an assuming reinsurer shall include a proper funding clause, which requires the …

6.6.3848 CERTIFIED REINSURERS - EFFECTIVE DATE OF CREDIT The credit allowed to a certified reinsurer pursuant to 33-2-1216, MCA, and this rule shall apply only to reinsurance contracts entered into or renewed on or after the effective date of the certification of the assuming ins…

6.6.3849 CERTIFIED REINSURERS - SECURITY RATING FOR CREDIT The credit allowed to a certified assuming insurer pursuant to 33-2-1216, MCA, shall be based upon the security held by or on behalf of the ceding insurer in accordance with a rating assigned to the certified reinsurer by…

6.6.3850 CERTIFIED ASSUMING INSURERS - LEGAL ENTITY SECURITY RATING Each certified reinsurer shall be rated on a legal entity basis, with due consideration being given to the group rating where appropriate, except that an association including incorporated and individual unincorp…

6.6.3851 CREDIT FOR REINSURANCE – RECIPROCAL JURISDICTIONS Pursuant to 33-2-1216, MCA, the commissioner shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that is licensed to write reinsurance by, and has its head office or is domiciled in, a re…

6.6.3860 ASSUMING INSURER - DEFINITION OF OBLIGATIONS "Obligations," as used in ARM 6.6.3861 through 6.6.3869, means: reinsured losses and allocated loss expenses paid by the ceding company, but not recovered from the assuming insurer; reserves for reinsured losses reported and o…

6.6.3861 ASSUMING INSURER - VALUATION OF ASSETS Either the reinsurance agreement or the trust agreement relevant to 33-2-1217, MCA, must stipulate that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cas…