KRS 304.37-160: Identification of groupwide supervisor for internationally active

insurance company -- Commissioner's powers when acting as supervisor --

Cooperation with other regulatory officials -- Agreements and documentation -

- Commissioner's expenses.

(1) (a) The commissioner may:

1. Act as the groupwide supervisor for any internationally active insurance

group in accordance with this section; or

2. Acknowledge another regulatory official as the groupwide supervisor, if

the internationally active insurance group:

a. Does not have substantial insurance operations in the United

States;

b. Has substantial insurance operations in the United States, but not

in this state; or

c. Has substantial insurance operations in the United States and in

this state, but the commissioner determines under this section that

the other regulatory official is the appropriate groupwide

supervisor.

(b) An insurance holding company system that does not otherwise qualify as an

internationally active insurance group may request the commissioner to make

a determination or acknowledgment as to a groupwide supervisor under this

section.

(2) (a) In cooperation with other state, federal, and international regulatory agencies,

the commissioner shall identify a single groupwide supervisor f or an

internationally active insurance group.

(b) For an internationally active insurance group that conducts substantial

insurance operations in this state, the commissioner may:

1. Determine that he or she is the appropriate groupwide supervisor; or

2. Acknowledge a regulatory official from another jurisdiction as the

appropriate groupwide supervisor.

(c) In making a determination or acknowledgment of a groupwide supervisor, the

commissioner shall consider the following factors:

1. With regard to the internationally active insurance group:

a. The place of domicile of:

i. The insurers within the group that hold the largest share of

the group's written premiums, assets, or liabilities; and

ii. The top -tiered insurer or insurers in the insurance holding

company system of the group; and

b. The location of the executive officers or largest operational

officers of the group; and

2. Whether another regulatory official acting or seeking to act as the

groupwide supervisor:

a. Acts under a regulatory system that the commissioner determines

to be:

i. Substantially similar to the system of regulation provided

under the laws of this state; or

ii. Otherwise sufficient in terms of providing for groupwide

supervision, enterprise risk analysis, and cooperation with

other regulatory officials; and

b. Provides the commissioner with reasonably reciprocal recognition

and cooperation.

(d) If the commissioner is identified under this section as the groupwide

supervisor, he or she may determine that it is appropriate to acknowledge

another supervisor to serve as the groupwide supervisor. This

acknowledgement shall be made:

1. After consideration of the factors set forth in paragraph (c) of this

subsection;

2. In cooperation with and subject to the acknowledgement of other

regulatory officials involved with supervision of members of the

internationally active insurance group; and

3. In consultation with the internationally active insurance group.

(3) (a) Notwithstanding any other provision of law, when another regulatory official

is a cting as the groupwide supervisor of an internationally active insurance

group, the commissioner shall acknowledge that regulatory official as the

groupwide supervisor until there is a material change in the internationally

active insurance group that results in:

1. Insurers domiciled in this state holding the largest share of the group's

premiums, assets, or liabilities; or

2. This state being the place of domicile of the top-tiered insurer or insurers

in the insurance company holding system of the group.

(b) In the event of a material change under paragraph (a) of this subsection, the

commissioner shall make a determination or acknowledgement as to the

appropriate groupwide supervisor in accordance with subsection (2) of this

section.

(4) (a) Pursuant to KRS 304.37-040, the commissioner may collect from any insurer

registered under KRS 304.37 -020 all information necessary to make a

determination or acknowledgment of groupwide supervisor under this section.

(b) Prior to making a determination that he or she is the appropriate groupwide

supervisor for an internationally active insurance group, the commissioner

shall notify the insurer registered under KRS 304.37 -020 and the ultimate

controlling person within the group.

(c) The internationally active insurance group shall have at least thirty (30) days

to provide the commissioner with additional information pertinent to the

pending determination.

(d) The commissioner shall publish the identity of internationally active insurance

groups that the commissioner has determined are subject to groupwide

supervision by him or her.

(5) The commissioner may engage in any of following activities when acting as a

groupwide supervisor of an internationally active insurance group:

(a) Assess the enterprise risks within the group to ensure that:

1. The material financial condition and liquidity risks to the members of

the group engaged in the business of insurance are identified by

management; and

2. Reasonable and effective mitigation measures are in place;

(b) Request from any member of the group subject to the commissioner's

supervision information necessary and appropriate to assess enterprise risk,

including but not limited to information about the group member's:

1. Governance, risk assessment, and management;

2. Capital adequacy; and

3. Material intercompany transactions;

(c) Coordinate and, through the authority of the regulatory officials of the

jurisdictions where members of the group are domiciled, compel development

and implementation of reasonable measures designed to ensure that the group

is able to timely recognize and mitigate enterprise risks to group members that

are engaged in the business of insurance;

(d) Communicate with other state, federal, and international regulato ry agencies

for members of the group and share relevant information, subject to the

confidentiality provisions of KRS 304.37-050, through supervisory colleges as

set forth in KRS 304.37-055 or otherwise;

(e) Enter into agreements with or obtain documentati on from any insurer

registered under KRS 304.37 -020, any member of the group, and any other

state, federal, and international regulatory agencies for group members,

providing the basis for or otherwise clarifying the commissioner's role as

groupwide supervisor, including provisions for resolving disputes with other

regulatory officials. These agreements or documentation shall not serve or be

admissible as evidence in any proceeding seeking to establish that an insurer

or person within an insurance holding c ompany system not domiciled or

incorporated in this state is doing business or is otherwise subject to the

personal jurisdiction of a court in this state; and

(f) Other groupwide supervision activities, consistent with the authority and

purposes set forth in this section, considered necessary by the commissioner.

(6) If the commissioner acknowledges that another regulatory official from a

jurisdiction that is not accredited by the National Association of Insurance

Commissioners is the appropriate groupwide supervisor, the commissioner may

reasonably cooperate, through supervisory colleges or otherwise, with groupwide

supervision undertaken by the groupwide supervisor if:

(a) The commissioner's cooperation is in compliance with the laws of this state;

and

(b) The regulatory official acknowledged as the groupwide supervisor also

recognizes and cooperates with the commissioner's activities as a groupwide

supervisor for other internationally active insurance groups where applicable.

If recognition and cooperation is not reasonably reciprocal, the commissioner

may refuse recognition and cooperation.

(7) The commissioner may enter into agreements with or obtain documentation from:

(a) Any insurer registered under KRS 304.37 -020, including any affiliate of the

insurer; and

(b) Other state, federal, and international regulatory agencies for members of an

internationally active insurance group, if the regulatory officials for the state,

federal, or international agencies provide the basis for or otherwise clarify the

officials' roles as groupwide supervisors for the group.

(8) An insurer registered under KRS 304.37 -020 and subject to this section shall be

liable for and pay the reasonable expenses of the commissioner's participation in the

administration of this section, including:

(a) The engagement of attorneys, actuaries, and any other professionals; and

(b) All reasonable travel expenses.