1185-1187

INSURANCE CODE
SECTION 1185-1187




1185.  (a) Every domestic incorporated insurer shall file a report
with the commissioner disclosing material acquisitions and
dispositions of assets or material nonrenewals, cancellations, or
revisions of ceded reinsurance agreements unless the acquisitions and
dispositions of assets or material nonrenewals, cancellations, or
revisions of ceded reinsurance agreements have been submitted to the
commissioner for review, approval, or information purposes pursuant
to other provisions of this code, laws, regulations, or other
requirements.
   (b) The report shall be filed within 15 days after the end of the
calendar month in which any of the foregoing transactions occur.
   (c) One complete copy of the report, including any exhibits or
other attachments filed as part thereof, shall be filed with the
department and the National Association of Insurance Commissioners.
   (d) All reports obtained by, or disclosed to the commissioner
pursuant to this article, shall be given confidential treatment and
shall not be subject to subpoena and shall not be made public by the
commissioner, the National Association of Insurance Commissioners, or
any other person, except to insurance departments of other states,
without the prior written consent of the insurer to which it pertains
unless the commissioner, after giving the insurer who would be
affected thereby, notice and an opportunity to be heard, determines
that the interest of policyholders, shareholders, or the public will
be served by the publication thereof, in which event the commissioner
may publish all or any part thereof in such manner as he or she may
deem appropriate.



1186.  (a) No acquisitions or dispositions of assets shall be
reported pursuant to Section 1185 if the acquisitions or dispositions
are not material. For purposes of this article, a material
acquisition (or the aggregate of any series of related acquisitions
during any 30-day period) or disposition (or the aggregate of any
series of related dispositions during any 30-day period) is one that
is nonrecurring and not in the ordinary course of business and
involves more than 5 percent of the reporting insurer's total
admitted assets as reported in its most recent statutory statement
filed with the insurance department of the insurer's state of
domicile.
   (b) Asset acquisitions subject to this article include every
purchase, lease, exchange, merger, consolidation, succession, or
other acquisition other than the construction or development of real
property by or for the reporting insurer or the acquisition of
materials for that purpose. Asset dispositions also include every
sale, lease, exchange, merger, consolidation, mortgage,
hypothecation, assignment (whether for the benefit of creditors or
otherwise), abandonment, destruction, or other disposition.
   (c) The following information is required to be disclosed in any
report of a material acquisition or disposition of assets:
   (1) Date of the transaction.
   (2) Manner of acquisition or disposition.
   (3) Description of the assets involved.
   (4) Nature and amount of the consideration given or received.
   (5) Purpose of, or reason for, the transaction.
   (6) Manner by which the amount of consideration was determined.
   (7) Gain or loss recognized or realized as a result of the
transaction.
   (8) Name of the person from whom the assets were acquired or to
whom they were disposed.
   (d) Insurers shall report material acquisitions and dispositions
on a nonconsolidated basis unless the insurer is part of a
consolidated group of insurers which utilizes a pooling arrangement
or 100 percent reinsurance agreement that affects the solvency and
integrity of the insurer's reserves and that insurer ceded
substantially all of its direct and assumed business to the pool. An
insurer is deemed to have ceded substantially all of its direct and
assumed business to a pool if the insurer has less than one million
dollars ($1,000,000) total direct plus assumed written premiums
during a calendar year that are not subject to a pooling arrangement
and the net income of the business not subject to the pooling
arrangement represents less than 5 percent of the insurer's capital
and surplus.



1187.  (a) No nonrenewals, cancellations, or revisions of ceded
reinsurance agreements shall be reported pursuant to Section 1185 if
the nonrenewals, cancellations, or revisions are not material. For
purposes of this article, a material nonrenewal, cancellation, or
revision is one that affects for property and casualty business,
including accident and health business when written as such, more
than 50 percent of an insurer's ceded written premium, or for life,
annuity, and accident and health business, more than 50 percent of
the total reserve credit taken for business ceded, on an annualized
basis as indicated in the insurer's most recently filed statutory
statement; provided, however, that no filing is required if the
insurer's ceded written premium or the total reserve credit taken for
business ceded represents, on an annualized basis, less than 10
percent of direct plus assumed written premium or 10 percent of the
statutory reserve requirement prior to any cession, respectively.
   (b) Subject to the criteria specified in subdivision (a), a report
is to be filed without regard to which party has initiated the
nonrenewal, cancellation, or revision of ceded reinsurance whenever
one or more of the following conditions exist:
   (1) The entire cession has been canceled, nonrenewed, or revised
and ceded indemnity and loss adjustment expense reserves after any
nonrenewal, cancellation, or revision represent less than 50 percent
of the comparable reserves that would have been ceded had the
nonrenewal, cancellation, or revision not occurred.
   (2) An authorized or accredited reinsurer has been replaced on an
existing cession by an unauthorized reinsurer.
   (3) Collateral requirements previously established for
unauthorized reinsurers have been reduced; for example, the
requirement to collateralize incurred but not reported (IBNR) claim
reserves has been waived with respect to one or more unauthorized
reinsurers newly participating in an existing cession.
   (4) Subject to the materiality criteria, for purposes of
paragraphs (2) and (3), a report shall be filed if the result of the
revision affects more than 10 percent of the cession.
   (c) The following information is required to be disclosed in any
report of a material nonrenewal, cancellation, or revision of ceded
reinsurance agreements:
   (1) Effective date of the nonrenewal, cancellation, or revision.
   (2) The description of the transaction with an identification of
the initiator thereof.
   (3) Purpose of, or reason for, the transaction.
   (4) If applicable, the identity of the replacement reinsurers.
   (d) Insurers shall report all material nonrenewals, cancellations,
or revisions of ceded reinsurance agreements on a nonconsolidated
basis unless the insurer is part of a consolidated group of insurers
which utilizes a pooling arrangement or 100 percent reinsurance
agreement that affects the solvency and integrity of the insurer's
reserves and the insurer ceded substantially all of its direct and
assumed business to the pool. An insurer is deemed to have ceded
substantially all of its direct and assumed business to a pool if the
insurer has less than one million dollars ($1,000,000) total direct
plus assumed written premiums during a calendar year that are not
subject to a pooling arrangement and the net income of the business
not subject to the pooling arrangement represents less than 5 percent
of the insurer's capital and surplus.