§ 3696. Groupwide supervisor; internationally active insurance group
(a)(1) The Commissioner is authorized to act as the groupwide supervisor for any internationally
active insurance group. The Commissioner, however, may acknowledge another regulatory
official as the supervisor, provided the group:
(A) does not have substantial insurance operations in the United States;
(B) has substantial insurance operations in the United States, but not in Vermont; or
(C) has substantial insurance operations in the United States and in Vermont, but the
Commissioner has determined, pursuant to the factors in subsections (b) and (g) of
this section, that such other regulatory official is the appropriate supervisor.
(2) An insurance holding company system that does not otherwise qualify as an internationally
active insurance group under subdivision 3681(9) of this subchapter may request that
the Commissioner make a determination or acknowledgment as to a supervisor pursuant
to this section.
(b)(1) In cooperation with other state, federal, and international regulatory agencies, the
Commissioner shall identify a single groupwide supervisor for a group. The Commissioner
may determine that he or she is the appropriate supervisor for a group if the group
conducts substantial insurance operations in Vermont, or the Commissioner may acknowledge
that a regulatory official from another jurisdiction is the appropriate supervisor
for such group. The Commissioner shall consider the following factors when making
a determination or acknowledgment under this subsection:
(A) the place of domicile of the insurers within the group that hold the largest share
of the group’s written premiums, assets, or liabilities;
(B) the place of domicile of the top-tiered insurers in the insurance holding company
system of the group;
(C) the location of the executive offices or largest operational offices of the group;
(D) whether another regulatory official is acting or is seeking to act as the supervisor
under a regulatory system the Commissioner determines to be:
(i) substantially similar to the system of regulation provided under Vermont law; or
(ii) otherwise sufficient in terms of providing for supervision, enterprise risk analysis,
and cooperation with other regulatory officials; and
(E) whether another regulatory official acting or seeking to act as the supervisor provides
the Commissioner with reasonably reciprocal recognition and cooperation.
(2) A commissioner identified under this subsection as the groupwide supervisor may determine
that it is appropriate to acknowledge another supervisor to serve as the groupwide
supervisor. The acknowledgment of the supervisor shall be made after consideration
of the factors listed in subdivisions (1)(A) through (E) of this subsection, and shall
be made in cooperation with and subject to the acknowledgment of other regulatory
officials involved with supervision of the members of the group, and in consultation
with the group itself.
(c) Notwithstanding any other provision of law to the contrary, when another regulatory
official is acting as the groupwide supervisor of an internationally active insurance
group, the Commissioner shall acknowledge such official as the supervisor. However,
the Commissioner shall make a determination or acknowledgment as to the appropriate
supervisor for such group pursuant to subsection (b) of this section in the event
of a material change in the group that results in:
(1) the group’s insurers domiciled in Vermont holding the largest share of the group’s
premiums, assets, or liabilities; or
(2) Vermont’s becoming the place of domicile of the top-tiered insurers in the insurance
holding company system of the group.
(d) Pursuant to section 3686 of this subchapter, the Commissioner is authorized to collect
from any insurer registered under section 3684 of this subchapter all information
necessary to determine whether the Commissioner shall act as the groupwide supervisor
of an internationally active insurance group or, instead, acknowledge another regulatory
official to act as supervisor.
(e) Prior to issuing a determination that a group is subject to supervision by the Commissioner,
the Commissioner shall notify the insurer registered pursuant to section 3684 of this
subchapter of the pending determination, including the ultimate controlling person
within the group. The group shall have not less than 30 days to provide the Commissioner
with any additional information it deems relevant to the determination. The Commissioner
shall publish on its website the identity of internationally active insurance groups
subject to supervision by him or her.
(f) If the Commissioner is the supervisor for a group, the Commissioner is authorized
to engage in any of the following groupwide supervision activities:
(1) Assess the enterprise risks within the group to ensure that:
(A) the material financial condition and liquidity risks to the members of group engaged
in the business of insurance are identified by management; and
(B) reasonable and effective mitigation measures are in place.
(2) Request, from any member of a group subject to the Commissioner’s supervision, information
necessary and appropriate to assess enterprise risk, including information about the
members of the group regarding:
(A) governance, risk assessment, and management;
(B) capital adequacy; and
(C) material intercompany transactions.
(3) 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 members of the group engaged in the business of insurance.
(4) Communicate with other state, federal, and international regulatory agencies of members
within group and share relevant information, subject to the confidentiality provisions
of section 3687 of this subchapter, through supervisory colleges as provided in section
3695 of this subchapter or otherwise.
(5) Enter into agreements with or obtain documentation from any insurer registered under
section 3684 of this subchapter, any member of the group, and any other state, federal,
and international regulatory agencies of members of the group, providing the basis
for or otherwise clarifying the Commissioner’s role as groupwide supervisor, including
provisions for resolving disputes with other regulatory officials. Such agreements
or documentation shall not serve as evidence in any proceeding that any insurer or
person within an insurance holding company system not domiciled or incorporated in
Vermont is doing business in Vermont or is otherwise subject to Vermont jurisdiction.
(6) Engage in other groupwide supervision activities, consistent with this subsection,
as deemed necessary by the Commissioner.
(g) If the Commissioner acknowledges another regulatory official from a jurisdiction not
accredited by the NAIC as the groupwide supervisor, the Commissioner is authorized
to reasonably cooperate, through supervisory colleagues or otherwise, with groupwide
supervision undertaken by the supervisor, provided:
(1) The Commissioner’s cooperation is in compliance with Vermont law.
(2) The regulatory official acknowledged as the supervisor also recognizes and cooperates
with the Commissioner’s activities as a groupwide supervisor for other internationally
active insurance groups where applicable. When such recognition and cooperation is
not reasonably reciprocal, the Commissioner is authorized to refuse recognition and
cooperation.
(h) The Commissioner is authorized to enter into agreements with or obtain documentation
from any insurer registered under section 3684 of this subchapter, any affiliate of
the insurer, and other state, federal, and international regulatory agencies for members
of the internationally active insurance group that provide the basis for or otherwise
clarify a regulatory official’s role as groupwide supervisor.
(i) The Commissioner may adopt rules necessary for the administration of this section.
(j) A registered insurer subject to this section is liable for and shall pay the reasonable
expenses of the Commissioner’s participation in the administration of this section,
including the engagement of attorneys, actuaries, and any other professionals, as
well as all reasonable travel expenses. (Added 2015, No. 15, § 4, eff. May 1, 2015.)