SSB 3062

This bill relates to financial reporting by insurance holding company systems (holding companies). The bill requires the ultimate controlling person (person) of every insurer subject to registration to concurrently file with the registration an annual group capital calculation, completed in accordance with the group capital calculation instructions, and filed with the lead state commissioner (lead commissioner) of the holding company as determined by the procedures in the most recent financial analysis handbook (handbook) published by the national association of insurance commissioners (NAIC). “Group capital calculation instructions” are defined in the bill as the most recent instructions adopted by the NAIC group capital calculation working group or its successor, and as published or amended by the NAIC in accordance with procedures adopted by the NAIC. _____ holding companies, as detailed in the bill, are exempt from filing the calculation. The bill also requires the person of every insurer subject to registration, and that meets the scope criteria, to file the results of a liquidity stress test (stress test) for each data year that the insurer is subject to the liquidity stress test framework (framework). The filing shall be made to the lead commissioner of the holding company as determined by the procedures in the most recent handbook published by the NAIC. An insurer that meets at least one threshold of the scope criteria shall be subject to the framework for the specified data year unless the lead commissioner, in consultation with the NAIC financial stability task force (task force), determines that the insurer is exempt. An insurer that does not meet at least one threshold of the scope criteria for a specified data year may be subject to the framework if the lead commissioner, in consultation with the NAIC task force, determines that the insurer shall be subject to the framework for that data year. “Scope criteria” and “liquidity stress test framework” are defined in the bill. The performance of, and the filing of, the results from a specific year’s stress test must comply with the requirements detailed in the bill. Any change to the framework, or to the data year for which the scope criteria is to be measured, shall be effective on January of the calendar year immediately following the calendar year that the change to the framework or to the data year is adopted by the NAIC. All information reported or provided to the commissioner shall be considered a confidential record and be recognized and protected as a trade secret, and is subject to disclosure or prohibited from disclosure as detailed in the bill. _____ and group liquidity risks, respectively, and shall not be construed as a means to rank insurers or holding companies. Except as otherwise required under the bill, an insurer, a broker, or other person engaged in the business of insurance shall be prohibited from making an announcement to the public. “Announcement to the public” is defined in the bill as the use, directly or indirectly, of any print media, broadcast media, electronic media, subscription internet site, internet site available to the public, or any other means to make a representation or statement related to an insurer’s or an insurer group’s filings as detailed in the bill. The bill provides that if an insurer or an insurer group is able to demonstrate to the commissioner with substantial proof the material falsity or inappropriateness of an announcement made to the public by an insurer, broker, or other person engaged in the business of insurance, the insurer or insurer group may publish an announcement in a written publication if the sole purpose of the announcement is to rebut the materially false or inappropriate announcement made to the public by the insurer, broker, or other person engaged in the business of insurance.3(2)(a)(12).