SB 800 — Relating to insurance holding company systems

Enr CS for SB 800 §33-27-5.

CS for SB 800 (2) Agreements for cost-sharing services and management shall include such provisions as required by rule;

and (6) The insurer’s surplus as regards policyholders following any dividends or distributions to shareholder affiliates shall be reasonable in relation to the insurer’s outstanding liabilities and adequate to its financial needs;

Enr CS for SB 800 In determining whether a deposit or a bond is required, the commissioner should consider whether concerns exist with respect to the affiliated person’s ability to fulfill the contract(s) or agreement(s) if the insurer were to be put into liquidation.

Once the insurer is deemed to be in a hazardous financial condition or a condition that would be grounds for supervision, conservation, or a delinquency proceeding, and a deposit or bond is necessary, the commissioner has discretion to determine the amount of the deposit or bond, not to exceed the value of the contract(s) or CS for SB 800 agreement(s) in any one year, and whether such deposit or bond should be required for a single contract, multiple contracts, or a contract only with a specific person(s);

Enr CS for SB 800 (b) Adequacy of surplus.

CS for SB 800 (2) The extent to which the insurer’s business is diversified among the several lines of insurance;

(7) The recent past and projected future trend in the size of the insurer’s surplus as regards policyholders investment portfolio;

Enr CS for SB 800 (2) For purposes of this section, an extraordinary dividend or distribution includes any dividend or distribution of cash or other property, whose fair market value together with that of other dividends or distributions made within the preceding 12 months exceeds the lesser of:

or (B) The net gain from operations of such insurer, if such insurer is a life insurer, or the net income, if the insurer is not a life insurer, not including realized capital gains, for the 12-month CS for SB 800 period ending December 31, next preceding, but shall not include pro rata distributions of any class of the insurer’s own securities.

(3) (4) Notwithstanding any other provision of law, an insurer may declare an extraordinary dividend or distribution which is conditional upon the commissioner’s approval, and the declaration shall confer no rights upon shareholders until:

(d) The following transactions involving a domestic insurer and any person in its insurance holding company system, including amendments or modifications of affiliate agreements previously filed pursuant to this section, that are subject to any materiality standards contained in subdivisions (1) through (5) (7) of this subsection, may not be entered into unless the insurer has notified the commissioner in writing of its intention to enter into the transaction at least 30 days Enr CS for SB 800 prior thereto, or such shorter period as the commissioner may permit, and the commissioner has not disapproved it within that period:

Informal notice shall be reported, within 30 days after a termination of a CS for SB 800 previously filed agreement, to the commissioner for determination of the type of filing required, if any.

(1) Sales, purchases, exchanges, loans, or extensions of credit, guarantees or investments, provided such transactions are equal to or exceed:

and (B) With respect to life insurers, three percent of the insurer’s admitted assets as of December 31, next preceding;

(A) With respect to nonlife insurers, the lesser of three percent of the insurer’s admitted assets or 25 percent of surplus as regards policyholders each as of December 31, next preceding;

and Enr CS for SB 800 (B) Agreements in which the reinsurance premium or a change in the insurer’s liabilities, or the projected reinsurance premium or a change in the insurer’s liabilities in any of the next three years, equals or exceeds five percent of the insurer’s surplus as regards policyholders, as of December 31, next preceding, including those agreements which may require as consideration the transfer of assets from an insurer to a nonaffiliate, if an agreement or understanding exists between the insurer and nonaffiliate that any portion of the assets will be transferred to one or more affiliates of the insurer;

CS for SB 800 (4) All management agreements, service contracts, tax allocation agreements, guarantees, and all cost-sharing arrangements;

Provided, That a guarantee that is quantifiable as to amount is not subject to the notice requirements of this subdivision subsection unless it exceeds the lesser of one half of one percent of the insurer’s admitted assets or 10 percent of surplus as regards policyholders as of December 31, next preceding:

Provided, however, That all guarantees that are not quantifiable as to amount are subject to the notice requirements of this subdivision subsection;

Direct or indirect acquisitions or investments in subsidiaries acquired pursuant to §33-27-2a of this code or authorized under any other section of this chapter, or in nonsubsidiarynon-subsidiary insurance affiliates that are subject to the provisions of this article, are exempt from this requirement;

(e) A domestic insurer may not enter into transactions which are part of a plan or series of like transactions with persons within the insurance holding company system if the purpose of those separate transactions is to avoid the statutory threshold amount and thus avoid the review Enr CS for SB 800 that would occur otherwise.

CS for SB 800 (g) The commissioner shall be notified within 30 days of any investment of the domestic insurer in any one corporation if the total investment in that corporation by the insurance holding company system exceeds 10 percent of such corporation’s voting securities.

(4) The board of directors of a domestic insurer shall establish one or more committees comprised solely of directors who are not officers or employees of the insurer or of any entity Enr CS for SB 800 controlling, controlled by, or under common control with the insurer and who are not beneficial owners of a controlling interest in the voting stock of the insurer or any such entity.

CS for SB 800 (5) The provisions of subdivisions (3) and (4) of this subsection do not apply to a domestic insurer if the person controlling the insurer, such as an insurer, a mutual insurance holding company, or a publicly held corporation, has a board of directors and committees thereof that meet the requirements of such subdivisions with respect to such controlling entity.

Enr CS for SB 800 (A) Are an integral part of the insurer’s operations, including, but not limited to, management, administrative, accounting, data processing, marketing, underwriting, claims handling, investment, or any other similar functions;

(2) The commissioner may require that an agreement or contract pursuant to §33-27- 5(d)(4) of this code for the provision of services described in §33-27-5(i)(1)(A) and §33-27- CS for SB 800 5(i)(1)(B) of this code specify that the affiliate consents to the jurisdiction as set forth in this subsection.

For Enr CS for SB 800 purposes of this section, a supervisory college may be convened as either a temporary or permanent forum for communication and cooperation between the regulators charged with the supervision of the insurer or its affiliates, and the commissioner may establish a regular assessment to the insurer for the payment of such expenses.

(b) (c) Supervisory college.

— In order to assess the business strategy, financial position, legal and regulatory position, risk exposure, risk management, and governance processes, and CS for SB 800 as part of the examination of individual insurers in accordance with §33-27-6 of this code, the commissioner may participate in a supervisory college with other regulators charged with supervision of the insurer or its affiliates, including other state, federal, and international regulatory agencies.

(a) Documents, materials or other information in the possession or control of the commissioner that are obtained by or disclosed to the commissioner or any other person in the course of an examination or investigation made pursuant to §33-27-6 of this code and all information reported or provided to the commissioner pursuant to §33-27-3(b)(12), §33-27- 3(b)(13), §33-27-4, §33-27-5, or §33-27-6b of this code is confidential by law and privileged, is exempt from disclosure pursuant to chapter 29-b 29B of this code, is not open to public inspection, is not subject to subpoena, is not subject to discovery or admissible in evidence in any criminal, private civil, or administrative action, and is not subject to production pursuant to court order:

The commissioner may not otherwise make the documents, Enr CS for SB 800 materials, or other information public without the prior written consent of the insurer to which it pertains unless the commissioner, after giving the insurer and its affiliates who would be affected thereby notice and opportunity to be heard, determines that the interests of policyholders, shareholders, or the public will be served by the publication thereof, in which event he or she may publish all or any part thereof in any manner as he or she may consider appropriate.

CS for SB 800 (1) For purposes of the information reported and provided to the commissioner pursuant to §33-27-4(l)(2) of this code, the commissioner shall maintain the confidentiality of the group capital calculation and group capital ratio produced within the calculation and any group capital information received from an insurance holding company supervised by the Federal Reserve Board or any United States group-wide supervisor.

(1) May share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to subsection (a) of this section, with other state, federal, and international regulatory agencies, with the National Association of Insurance Commissioners (NAIC) and its affiliates and subsidiaries, with any third-party consultants designated by the commissioner, and with state, federal, and international law-enforcement Enr CS for SB 800 authorities, including members of any supervisory college described in §33-27-6a of this code, if the recipient agrees in writing to maintain the confidentiality and privileged status of the document, material, or other information, and has verified in writing the legal authority to maintain confidentiality;

CS for SB 800 (2) Notwithstanding subdivision (1) of this subsection, the commissioner may only share confidential and privileged documents, material, or information reported pursuant to §33-27-4(l)§33-27- §33-27-4(l)(1)4(l)(1) of this code, with commissioners of states having statutes or regulations substantially similar to subdivision (1) of this subsection (a) of this section and who have agreed in writing not to disclose such information;

(3) May receive documents, materials, or information, including otherwise confidential and privileged documents, materials, or information from the National Association of Insurance Commissioners NAIC and its affiliates and subsidiaries and from regulatory and law-enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information;

and (4) Shall enter into written agreements with the National Association of Insurance Commissioners NAIC and any third-party consultant designated by the commissioner governing sharing and use of information provided pursuant to this article consistent with this subsection that shall:

(A) Specify procedures and protocols regarding the confidentiality and security of information shared with the National Association of Insurance Commissioners NAIC and its affiliates and subsidiaries or a third-party consultant designated by the commissioner pursuant to this article, including procedures and protocols for sharing by the National Association of Insurance Commissioners NAIC with other state, federal, or international regThetors.regulators.

The agreement shall provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the documents, materials, or other information, and has verified in writing the legal authority to maintain such confidentiality;

Enr CS for SB 800 (B) Specify that ownership of information shared with the National Association of Insurance Commissioners NAIC and its affiliates and subsidiaries or a third-party consultant CS for SB 800 designated by the commissioner pursuant to this article remains with the commissioner, and the National Association of Insurance Commissioners’ NAIC’s or third-party consultant’s use of the information is subject to the direction of the commissioner;

(C) (D) Require prompt notice to be given to an insurer whose confidential information in the possession of the National Association of Insurance Commissioners NAIC or a third-party consultant designated by the commissioner pursuant to this article is subject to a request or subpoena to the National Association of Insurance Commissioners NAIC or third-party consultant for disclosure or production;

and (D) (E) Require the National Association of Insurance Commissioners NAIC and its affiliates and subsidiaries or a third-party consultant designated by the commissioner to consent to intervention by an insurer in any judicial or administrative action in which the National Association of Insurance Commissioners NAIC and its affiliates and subsidiaries or third-party consultant may be required to disclose confidential information about the insurer shared with the National Association of Insurance Commissioners NAIC and its affiliates and subsidiaries or third-third-party party consultant pursuant to this article;

CS for SB 800 (e) No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information occurs as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subsection (c) of this section.

Enr CS for SB 800 (f) Documents, materials, or other information in the possession or control of the National Association of Insurance Commissioners NAIC and its affiliates and subsidiaries or a third-party consultant designated by the commissioner pursuant to this article is confidential by law and privileged, is exempt from disclosure pursuant to chapter 29B of this code, is not subject to subpoena, and is not subject to discovery or admissible in evidence in any private civil action.

Provided, That if any materially false statement with respect to the group capital calculation, resulting group capital ratio, an inappropriate comparison of any amount to an insurer’s or insurance group’s group capital calculation or resulting group capital ratio, liquidity stress test result, supporting disclosures CS for SB 800 for the liquidity stress test, or an inappropriate comparison of any amount to an insurer’s or insurance group’s liquidity stress test result or supporting disclosures is published in any written publication and the insurer is able to demonstrate to the commissioner with substantial proof the Enr CS for SB 800 falsity of such statement or the inappropriateness, as the case may be, then the insurer may publish announcements in a written publication if the sole purpose of the announcement is to rebut the materially false statement.

— Whenever it appears to the commissioner that any person insurer or any director, officer, employee, or agent thereof has committed or is about to commit a violation of this article or of any rule, regulation, or order issued by the commissioner hereunder, the commissioner may apply to the circuit court for the county in which the principal officer of the insurer or, if the insurer has no office in this state, then to the circuit court of Kanawha County for an order enjoining such person insurer or such director, officer, employee, or agent thereof from violating or continuing to violate this chapter article or any such rule, regulation, or order, and for such other equitable relief astheas the nature of the case and the interests of the insurer’s policyholders, creditors, and shareholders or the public may require.

If an insurer or the commissioner has reason to believe that any security of the insurer has been or CS for SB 800 is about to be acquired in contravention of the provisions of this article or of any rule, regulation, or order issued by the commissioner hereunder, the insurer or the commissioner may apply to the circuit court for the county in which the insurer has its principle place of business to enjoin any Enr CS for SB 800 offer, request, invitation, agreement, or acquisition made in contravention of section four of this article §33-27-3 of this code, or any rule, regulation, or order issued by the commissioner thereunder to enjoin the voting of any security so acquired, to void any vote of such security already cast at any meeting of shareholders, and for such other equitable relief as the nature of the case and the interests of the insurer’s policyholders, creditors, and shareholders or the public may require.

28Enr CS for SB 800 The Clerk of the Senate and the Clerk of the House of Delegates hereby certify that the foregoing bill is correctly enrolled.

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Clerk of the Senate ...............................................................

Clerk of the House of Delegates Originated in the Senate.

To take effect January 1, 2026.

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President of the Senate ...............................................................

Speaker of the House of Delegates __________ The within is ................................................

this the...........................................

Day of ..........................................................................................................., 2025.

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Governor 29