§36-1686. Application for Approval of Insurance Business Transfer
2,764 words·~13 min read·
/ok/title-36-insurance/36-1686·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Plan.
A. Application to the Commissioner for Approval of Insurance Business Transfer Plan.
1. An Insurance Business Transfer Plan must be filed by the applicant with the Insurance Commissioner for his or her review and approval. The Plan must contain the information set forth below or an explanation as to why the information is not included. The Plan may be supplemented or revised with additional, updated, or other information as it becomes available or when deemed necessary by the Commissioner:
a. the name, address and telephone number of the
transferring insurer and the assuming insurer and
their respective direct and indirect controlling
persons, if any,
b. summary of the Insurance Business Transfer Plan,
c. identification and description of the subject
business,
d. most recent audited financial statements and statutory
annual and quarterly reports of the transferring
insurer and assuming insurer filed with their
domiciliary regulator,
e. the most recent actuarial report and opinion that
quantify the liabilities associated with the subject
business,
f. pro-forma financial statements showing the projected
statutory balance sheet, results of operations and
cash flows of the assuming insurer for the three
years following the proposed transfer and novation,
g. officers' certificates of the transferring insurer and
the assuming insurer attesting that each has obtained
all required internal approvals and authorizations
regarding the Insurance Business Transfer Plan and
completed all necessary and appropriate actions
relating thereto,
h. proposal for Plan implementation and administration,
i. form of notice to be provided under the Insurance
Business Transfer Plan to any policyholder whose
policy is part of the subject business including full
description as to how such notice shall be provided,
j. description of any reinsurance arrangements that will
pass to the assuming insurer under the Insurance
Business Transfer Plan,
k. description of any guarantees or additional
reinsurance that will cover the subject business
following the transfer and novation,
l. a statement describing the assuming insurer's proposed
investment policies and any contemplated third-party
claims management and administration arrangements,
m. evidence of approval or nonobjection of the transfer
from the chief insurance regulator of the state of the
transferring insurer's domicile, and
n. an opinion report from an independent expert, which
shall provide the following:
(1)a statement of the independent expert's
professional qualifications and descriptions of
the experience that qualifies him or her as an
expert suitable for the engagement,
(2)whether the independent expert has, or has had,
direct or indirect interest in the transferring
or assuming insurer or any of their respective
affiliates,
(3)the scope of the report,
(4)a summary of the terms of the Insurance Business
Transfer Plan to the extent relevant to the
report,
a listing and summaries of documents, reports and
other material information the independent expert
has considered in preparing the report and
whether any information requested was not
provided,
(6)the extent to which the independent expert has
relied on information provided by and the
judgment of others,
(7)the people upon whom the independent expert has
relied and why, in his or her opinion, such
reliance is reasonable,
(8)the independent expert's opinion of the likely
effects of the Insurance Business Transfer Plan
on policyholders, reinsurers, and claimants,
distinguishing between:
(a)transferring policyholders, reinsurers, and
claimants,
(b)policyholders, reinsurers, and claimants of
the transferring insurer whose policies will
not be transferred, and
(c)policyholders, reinsurers, and claimants of
the assuming insurer,
(9)for each opinion that the independent expert
expresses in the report the facts and
circumstances supporting the opinion, and
(10)consideration as to whether the security position
of policyholders that are affected by the
Insurance Business Transfer are materially
adversely affected by the transfer.
2. The independent expert's opinion report as required by subparagraph n of paragraph 1 of this subsection shall include, but not be limited to, a review of the following:
a. analysis of the transferring insurer's actuarial
review of reserves for the subject business to
determine the reserve adequacy,
b. analysis of the financial condition of the
transferring insurer and assuming insurer and the
effect the Insurance Business Transfer will have on
the financial condition of each insurance company,
c. review of the plans or proposals the assuming insurer
has with respect to the administration of the policies
subject to the plan,
d. whether the proposed transfer has a material adverse
effect on the policyholders, reinsurers, and claimants
of the transferring and the assuming insurers,
e. analysis of the assuming insurer's corporate
governance structure to ensure proper board and
management oversight and expertise to manage the
subject business, and
f. any other information the Commissioner requests in
order to review the Insurance Business Transfer.
3. The Commissioner shall have sixty
(60)business days from the date of receipt of a complete Insurance Business Transfer Plan to review the Plan to determine if the applicant is authorized to submit it to the court. The Commissioner may extend the sixty-day review period for an additional thirty
(30)business days.
4. The Commissioner shall authorize the submission of the Plan to the court unless he or she finds that the Insurance Business Transfer will cause a material adverse effect on the interests of policyholders, reinsurers, or claimants that are part of the subject business.
5. If the Commissioner determines that the Insurance Business Transfer will cause a material adverse effect on the interests of policyholders, reinsurers, or claimants that are part of the subject business, the Commissioner shall notify the applicant and specify any modifications, supplements or amendments and any additional information or documentation with respect to the Plan that must be provided to the Commissioner before he or she will allow the applicant to proceed with the court filing.
6. The applicant shall have thirty
(30)days from the date the Commissioner notifies him or her, pursuant to paragraph 5 of this subsection, to file an amended Insurance Business Transfer Plan providing the modifications, supplements or amendments and additional information or documentation as requested by the Commissioner. If necessary the applicant may request in writing an extension of time of thirty
(30)days. If the applicant does not make an amended filing within the time period provided for in this paragraph including any extension of time granted by the Commissioner, the Insurance Business Transfer Plan filing will terminate and a subsequent filing by the applicant will be considered a new filing which shall require compliance with all provisions of this act as if the prior filing had never been made.
7. The Commissioner's review period in paragraph 3 of this subsection shall recommence when the modification, supplement, amendment or additional information requested in paragraph 5 of this subsection is received.
8. If the Commissioner determines that the applicant may proceed with filing a petition with the court seeking approval and implementation of the Plan, the Commissioner shall confirm that fact in writing to the applicant.
B. Petition to the court for approval and implementation of the Insurance Business Transfer Plan.
1. Within thirty
(30)days after the filing and transmission of the Commissioner's order determining the Plan satisfies the
requirements of this act, the assuming insurer, transferring insurer, or reinsurer may file a petition with the court seeking an order of approval and implementation of the Insurance Business Transfer Plan. Upon written request by the applicant to the Commissioner, the period for filing a petition under this subsection with the court may be extended for an additional thirty
(30)days.
2. The petition shall include:
a. relief sought,
b. information, arguments, and authorities supporting the
requested relief including information and analysis
which will support the court's finding that the plan
will not result in a material adverse effect to
policyholders, reinsurers, or claimants,
c. the Insurance Business Transfer Plan,
d. preliminary list of witnesses and exhibits which the
petitioner reasonably intends to present to the court,
and
e. request for the court to enter judgment in favor of
the petitioner, which shall include finding of fact,
conclusion of law, order of approval and
implementation of the Plan, and retention of
jurisdiction to allow the parties to request such
orders regarding incidental, consequential, and
supplementary matters necessary to assure the full and
effective implementation of the Plan.
3. The Commissioner shall be a party to the proceedings before the court concerning the petition and shall be served with copies of all filings pursuant to subsection D of Section 2005 of Title 12 of the Oklahoma Statutes and the Rules for District Courts of Oklahoma.
4. The Commissioner's position in the proceeding shall not be limited by his or her initial review of the Plan.
5. Within thirty
(30)days after the filing of the petition, the petitioner shall file a request for the court to enter a preliminary scheduling order, which shall include a date and time for a status conference. The status conference shall occur no less than fourteen
(14)days after the conclusion of the sixty
(60)day comment period required in paragraph 8 of this subsection.
6. Within forty-five
(45)days after the court enters the preliminary scheduling order, the petitioner shall cause the transmission and publication of a notice of the matter before the court in accordance with the notice provisions of Section 1685 of this title.
7. The notice shall include:
a. the date and time of the status conference required in
paragraph 5 of this subsection,
b. the name, address and telephone number of the assuming
insurer, transferring insurer, and Commissioner for
policyholders to contact to obtain further
information,
c. procedures and deadlines for policyholders, claimants,
and third parties to submit comments, objections, and
requests to be heard at trial regarding the Plan,
d. procedure for policyholders to request the petitioner
provide one
(1)hard copy, free of charge, to
policyholders unable to access or acquire an
electronic copy of the Plan and associated
information, if any,
e. a summary of the order entered by the Commissioner
pursuant to paragraph 8 of subsection A of this
section including the effect the plan will have on the
policy holders, if any,
f. name and location of the court in which the petition
is filed,
g. case number, parties, and other identifying
information of the matter in the petition,
h. relief sought in the petition,
i. procedure to access an electronic copy of the Plan and
associated information, if any,
j. further notice of filings, schedules, orders, and
other information will only be provided pursuant to
paragraph 10 of this subsection, and
k. if the Plan is approved by the court, the court shall
enter judgment consistent with paragraph 3 of
subsection C of this section.
8. The last date of transmission and publication of the notice shall be followed by a comment period no less than sixty
(60)days.
9. Any person including by their legal representative, who provides written notice within the sixty
(60)day comment period identified in paragraph 8 of this subsection, and states the person considers himself, herself or itself to be materially adversely affected by the approval and implementation of the Plan may present evidence or comments to the court at trial. However, such comment or evidence shall not confer standing as a party on any person. Any person participating in any pretrial proceeding or the trial of petitioner's request for approval and implementation of the Plan must follow the process established by the court and shall bear his or her own costs and attorney fees.
10. Only parties to this matter and those persons and other third parties who file a request to provide comments, objections, or requests to be heard pursuant to paragraph 8 of this subsection shall receive further notice and copies of filings with the court, pursuant to subsection D of Section 2005 of Title 12 of the Oklahoma Statutes and the Rules for District Courts of Oklahoma; provided, however, all persons and other third parties shall receive notice
pursuant to subparagraph d of paragraph 3 of subsection C of this section.
11. Within forty-five
(45)days of the status conference required pursuant to paragraph 5 of this subsection, the petitioner shall file a motion for a scheduling order and to enter this matter on the court's trial docket.
C. Approval by the court of the Insurance Business Transfer Plan.
1. Pursuant to a scheduling order set forth in paragraph 11 of subsection B of this section, and other orders by the court, the petitioner shall present the Insurance Business Transfer Plan, evidence, and arguments to the court for approval and implementation of the Plan.
2. At any time before the court issues judgment, the petitioner may withdraw the petition without prejudice to refiling.
3. If the court finds that the approval and implementation of the Insurance Business Transfer Plan will not materially adversely affect the interests of policyholders or claimants of policies which are part of the subject business, the court shall enter judgment in favor of the petitioner. The judgment and order shall include:
a. findings of fact,
b. conclusion of law,
c. approval and implementation of the Plan including:
(1)simultaneous transfer and novation from the
transferring insurer to the assuming insurer of
the subject business with respect to all
policyholders, reinsurers, claimants and their
respective policies, and reinsurance agreements
under the subject business,
(2)simultaneous transfer and novation from the
transferring insurer and the assuming insurer of
all property, rights, obligations, and
liabilities including, but not limited to, the
ceded reinsurance of transferred policies and
contracts included in the subject business,
notwithstanding any nonassignment provisions in
any such reinsurance contracts or other
agreements,
(3)assuming insurer shall have all of transferring
insurer's rights, obligations, and liabilities
regarding the subject business as if it were the
original insurer of such policies including the
same standing as the transferring insurer
pursuant to contract, statute, and
interpretation, relating back to the issuance of
such policies, and
policyholders' and claimants' rights obligations
and liabilities, if any, under their respective
policies which are part of the subject business
shall not be enlarged, extended, limited, or
reduced; provided, however, the policyholders and
claimants may not pursue or be pursued by the
transferring insurer to satisfy their respective
rights, obligations, and liabilities, but instead
the policyholders and claimants may pursue or be
pursued by the assuming insurer,
d. petitioner to provide notice of the judgment including
the resulting transfer and novation in accordance with
the notice provisions in Section 1685 of this title,
e. make such other orders and provisions with respect to
incidental, consequential and supplementary matters as
are necessary to assure the full and effective
implementation of the Insurance Business Transfer
Plan, and
f. retain jurisdiction of the matter to allow the parties
to request such additional orders regarding
incidental, consequential, and supplemental matters
necessary to assure the full and effective
implementation of the Plan.
4. If the court finds that the Insurance Business Transfer Plan should not be approved, the court by its order may:
a. deny the petition, or
b. provide the petitioner leave to file an amended
petition including an amended Insurance Business
Transfer Plan and petition.
5. Nothing in this section in any way affects the right of appeal of any party.
D. An unexpired and in-force policy issued to a policyholder who resides in a state other than Oklahoma shall not be transferred and novated unless or until the assuming insurer is licensed, authorized, permitted, or otherwise legally allowed to administer the subject business in the same manner as the transferring insurer in the state of the policyholder's residence.
E. The court may approve the requested transfer and novation of the subject business, with effectiveness of all or part of the implementation deferred until the assuming insurer can satisfy the requirements pursuant to subsection D of this section.
F. Rules.
The Commissioner shall have the authority to promulgate rules to effectuate the provisions of the Insurance Business Transfer Act.
G. All testimony, documents, exhibits, analysis, communications, or other information or evidence submitted to the Commissioner or independent expert in contemplation of an
application, submitted to the court in support of a petition, or developed by the Commissioner or independent expert in connection with such application, or petition for approval and implementation of an Insurance Business Transfer Plan, shall be treated for purposes of confidentiality as an examination of the financial condition and/or market conduct of the transacting companies under Sections 309.1 through 309.7 of this title. Added by Laws 2018, c. 232, § 6, eff. Nov. 1, 2018. Amended by Laws 2019, c. 381, § 3, eff. Nov. 1, 2019; Laws 2022, c. 126, § 4, emerg. eff. April 29, 2022.