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Alaska Statutes.

Title 21. Insurance

Chapter 9. Authorization of Insurers and General Requirements

Section 310. Authorization of United States Branches of Alien Insurers and General Requirements.

AS 21.09.310. Authorization of United States Branches of Alien Insurers and General Requirements.

(a) This section applies to all United States branches of alien insurers using this state as a state of entry to transact the business of insurance in the United States. Except as provided elsewhere in this title, a United States branch is subject to all state laws applicable to an insurer domiciled in this state.

(b) An alien insurer may apply for a certificate of authority to use this state as a state of entry to transact the business of insurance in the United States by

(1) qualifying as an insurer licensed to do business in this state;

(2) establishing a trust under a trust agreement approved in writing by the director with a United States bank acceptable to the director in an amount not less than the greater of

(A) the minimum basic capital or basic guarantee surplus and additional maintained surplus required under AS 21.09.070 ; or

(B) the authorized control level risk based capital under AS 21.14;

(3) submitting a copy of its charter and bylaws, if any, currently in force, and other documents necessary to show the kind of business it is authorized to transact in its domiciliary jurisdiction; documents submitted under this paragraph must be attested to as accurate and complete by the insurance supervisory official in the domiciliary jurisdiction, and must include an English translation, if in a language other than English;

(4) submitting a full statement, subscribed and affirmed as true by two officers or equivalent responsible representatives in a manner that the director prescribes, of its financial condition as of the close of its latest fiscal year, showing its assets, liabilities, income disbursements, business transacted, and other facts required to be shown in its annual statement, as reported to the insurance supervisory official in its domiciliary jurisdiction; all documents submitted under this paragraph must include an English translation if in a language other than English;

(5) submitting to an examination under AS 21.06.120 (b) at its principal office within the United States, and elsewhere if necessary, unless the director accepts a report of the insurer's recent examination and the report has been issued by the insurance supervisory official of the insurer's domiciliary jurisdiction; and

(6) payment of fees established under AS 21.06.250 .

(c) Before issuing or renewing a certificate of authority for a United States branch, the director may require satisfactory proof that the insurer does not intend to transact insurance business in violation of the provisions of this title or that is not authorized by its charter. Proof required under this subsection may include the alien insurer's charter, an agreement evidenced by a duly certified resolution of its board of directors, or other proof that the director may require.

(d) The director may renew a certificate of authority for a United States branch if satisfied, by proof the director may require, that the insurer is not delinquent with respect to a requirement or qualification imposed by this title and that its continuance to transact the business of insurance in this state will not be hazardous or prejudicial to the best interest of the people of this state.

(e) A United States branch may not receive or renew a certificate of authority in this state

(1) to transact a kind of insurance or a combination of kinds of insurance that are not permitted to be transacted by domestic insurers in this state;

(2) if it transacts business other than the business of insurance anywhere else within the United States unless the business, in the opinion of the director, is necessarily or properly incidental to the kind of insurance that it is authorized to transact in this state;

(3) if it fails to keep full and correct entries of its transactions; records of entries shall at all times be maintained in its principal office within this state; or

(4) if it fails to comply with a requirement or limitation of this title that it is not exempted from by another provision of this title and that is applicable to similar domestic insurers and if, in the judgment of the director, the requirement or limitation is necessary to protect the interest of the policyholders.

(f) A United States branch that transacts a kind or combination of kinds of insurance outside this state that is not permitted to be done in this state by similar domestic insurers may not have a certificate of authority issued or renewed in this state unless, in the judgment of the director, the transaction of that kind of insurance is not prejudicial to the best interest of the people of this state.

(g) A United States branch shall maintain assets in a trust account in an amount not less than the United States branch's reserves and other liabilities, plus the greater of

(1) the minimum basic capital or basic guaranteed surplus and additional maintained surplus required under AS 21.09.070 ; or

(2) the authorized control level risk based capital under AS 21.14.

(h) A written trust agreement must contain provisions that

(1) vest legal title to trusteed assets in the trustees, and their lawfully appointed successors;

(2) require that all assets deposited in the trust be continuously kept within the United States;

(3) provide for substitution of a new trustee in case of a vacancy by death, resignation, or other reason, subject to the prior written approval of the director;

(4) require that the trustee continuously maintain a record sufficient to identify the assets of the trust fund;

(5) require that trusteed assets consist only of cash, investments eligible for investment of the funds of domestic insurers, and accrued interest on the assets, if collectible by the trustee, subject to the limits on investment of funds by domestic insurers under this title;

(6) require that the trust be for the exclusive benefit, security, and protection of the policyholders, or policyholders and creditors, of the United States branch in the United States and that the trust be maintained as long as there is an outstanding liability of the alien insurer arising out of its transaction of insurance in the United States; and

(7) provide that withdrawal of an asset may not be made or permitted by a trustee without the prior written approval of the director except

(A) to make deposits required by law in a state for the security or benefit of all policyholders, or policyholders and creditors, of the United States branch in the United States;

(B) to withdraw funds deposited in another state under (A) of this paragraph if

(i) the written trust agreement requires prior written approval of the insurance supervising official of that other state;

(ii) written notice of the nature and extent of the withdrawal is provided to the director within 30 days of the withdrawal; and

(iii) the total trusteed assets remaining are in excess of the total assets required to be maintained in trust under (g) of this section;

(C) upon the specific written direction of the United States manager, who is duly authorized and is acting under either general or specific written authority previously given or delegated by the board of directors, to substitute other assets as permitted by this title if the substituted assets are of at least equal value and quality to those withdrawn;

(D) to transfer assets to an official liquidator or rehabilitator under an order of a court of competent jurisdiction; or

(E) if provided under the terms of the written trust agreement, to pay over to the United States manager of the United States branch, upon request, income, dividends, or interest accumulations of the assets of the trust fund that are in excess of the total assets required to be maintained in trust under (g) of this section.

(i) A written trust agreement and all amendments to it shall be authenticated in a form and manner that the director may prescribe and may not take effect until approved by the director. The director may not approve a trust agreement unless the director makes a written finding that

(1) the written trust agreement or its amendments are sufficient in form and in conformity with law;

(2) a person designated as a trustee is eligible to act in that capacity; and

(3) the written trust agreement is adequate to protect the interests of the beneficiaries of the trust.

(j) The director may approve written modifications of, or variations in, a written trust agreement upon a finding that the proposed changes are not prejudicial to the interests of the people of this state or the United States policyholders and creditors of the United States branch.

(k) The director may conduct examinations of the trusteed assets of an authorized United States branch at the insurer's expense and may require the trustee or trustees to file a statement, in a form as prescribed by the director, certifying the assets and amounts of the trust fund.

(l) The director, upon finding that the requisites for the approval of the trust agreement no longer exist, may issue an order that withdraws approval of a written trust agreement and amendments to it. An order issued under this subsection takes effect 10 days after being issued.

(m) In addition to all other actions permitted under this title, refusal or neglect of a trustee to comply with the requirements of this title is a cause for suspension or revocation of the United States branch's certificate of authority or the liquidation of the alien insurer's United States branch.

(n) Annual statements under AS 21.09.200 and quarterly statements under AS 21.09.205 (1) may only relate to and must include all insurance transactions and affairs within the United States, assets held by or for the United States branch for the protection of policyholders and creditors within the United States, and liabilities incurred against those assets; and (2) may not contain a statement in regard to assets and business transacted in a place not described in this subsection. The annual and quarterly statements shall be signed and verified by the United States manager, attorney-in-fact, or a duly empowered assistant United States manager of the United States branch.

(o) In a form prescribed by the director, an authorized United States branch shall file with its annual and quarterly statements a statement of trusteed surplus covering the same time period. The trusteed surplus shall consist of the aggregate value of the United States branch's general state deposits and assets deposited with a trustee under this section, plus accrued interest income if the interest were collected by the states for the trustees, less the aggregate net amount of all its reserves and other liabilities in the United States as determined under this subsection. The items of securities and other property held under trust deeds shall be certified by the United States trustee. To determine the net amount of the United States branch's liabilities in the United States to be reported in the statement of trusteed surplus, the United States branch shall adjust its total liabilities reported on its accompanying annual or quarterly statement as follows:

(1) by adding back liabilities used to offset admitted assets reported in the accompanying annual or quarterly statement; and

(2) by deducting

(A) unearned premiums on agent's balances or uncollected premiums not more than 90 days past due;

(B) reinsurance on losses with authorized insurers, less unpaid reinsurance premiums;

(C) reinsurance recoverables on paid losses from unauthorized insurers that are included as an asset in the annual statement, but only to the extent a liability for unauthorized recoverables as described in this paragraph are included in the liabilities report in the trusteed surplus statement;

(D) special state deposits held for the exclusive benefit of policyholders, or policyholders and creditors, of a particular state not exceeding net liabilities reported for that state;

(E) secured accrued retrospective premiums;

(F) if a life insurer,

(i) the amount of its policy loans to policyholders within the United States, not exceeding the amount of legal reserve required on an affected policy; and

(ii) the net amount of uncollected and deferred premiums; and

(G) other nontrusteed assets, upon a written finding by the director that the other nontrusteed assets secure liabilities in a substantially similar manner to those permitted under this subsection.

(p) In addition to the annual and quarterly statements and the statements of trusteed surplus, the director may require additional information relating to total business or assets, or any portion of them, of the alien insurer or its United States branch.

(q) In addition to the general statement of the financial condition of the United States branch, a report of examination must include a trusteed surplus statement as of the date of the examination.

(r) In this section,

(1) "trusteed assets" are the assets maintained in a trust account under (g) of this section;

(2) "United States branch" means the business unit through which business is transacted within the United States by an alien insurer and the assets and liabilities of the insurer within the United States applicable to that business.

Note to HTML Version:

This version of the Alaska Statutes is current through December, 2004. The Alaska Statutes were automatically converted to HTML from a plain text format. Every effort has been made to ensure their accuracy, but this can not be guaranteed. If it is critical that the precise terms of the Alaska Statutes be known, it is recommended that more formal sources be consulted. For statutes adopted after the effective date of these statutes, see, Alaska State Legislature If any errors are found, please e-mail Touch N' Go systems at E-mail. We hope you find this information useful.

Last modified 9/3/2005