Section 80. Transactions subject to prior notice filing

A. An insurer required to give notice of a proposed transaction pursuant to § 38.2-1330 B of the Act 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 shall at a minimum and as applicable:

1. Identify the person providing services and the nature of such services;

2. Set forth the methods to allocate costs;

3. Require timely settlement, not less frequently than on a quarterly basis, and compliance with the requirements in the National Association of Insurance Commissioners Accounting Practices and Procedures Manual, As of March 2014;

4. Prohibit advancement of funds by the insurer to the 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 the affiliate and that the insurer will monitor services annually for quality assurance;

6. Define books and records of the insurer to include all books and records developed or maintained under or related to the agreement;

7. Specify that all books and records of the insurer are and remain the property of the insurer and are subject to control of 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;

11. Specify that, if the insurer is placed in receivership or seized 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 of the rights of the insurer under the agreement extend to the receiver or commission; and

b. All books and records will immediately be made available to the receiver or the commission, and shall be turned over to the receiver or commission immediately upon the receiver or the commission's request;

12. Specify that the affiliate has no automatic right to terminate the agreement if the insurer is placed in receivership pursuant to Chapter 15 of Title 38.2 of the Code of Virginia; and

13. Specify that the affiliate will continue to maintain any systems, programs, or other infrastructure notwithstanding a seizure by the commission under Chapter 15 of Title 38.2 of the Code of Virginia, and will make them available to the receiver for so long as the affiliate continues to receive timely payment for services rendered.

C. The approval of any material transactions pursuant to § 38.2-1330 B of the Act shall be deemed an amendment to an insurer's registration statement under § 38.2-1329 C 6 of the Act without further filing other than written confirmation under oath or affirmation by registrant that the transaction as approved by the commission has been consummated. The confirmation shall be filed within two business days following consummation of the approved transaction.

Historical Notes

Derived from Regulation 14, Case No. 20159, § 8, eff. January 1, 1980; amended, Volume 11, Issue 07, eff. January 1, 1995; Volume 23, Issue 02, eff. October 2, 2006; Volume 31, Issue 09, eff. January 1, 2015.

Statutory Authority

§§ 12.1-13 and 38.2-223 of the Code of Virginia.