Own risk and solvency assessments, supervisory colleges, consolidated hearings for mergers of insurance companies, proxy voting by mutual policyholders, a presumption and exceptions with respect to the disclosure of insurance-related information, granting rule-making authority, and providing a penalty. (FE)

An insurer is exempt from the requirements of maintaining a risk management framework, conducting an ORSA, and filing a summary report if the insurer's annual direct written premium and assumed premium from unaffiliated insurers is less than $500,000,000 and, if the insurer is a member of an insurance holding company system, the insurance holding company system of which the insurer is a member has annual direct written premium and assumed premium from unaffiliated insurers of less than $1,000,000,000. If the insurer's premium qualifies the insurer for exemption but the premium of the insurance holding company system of which the insurer is a member does not qualify the insurance holding company system for exemption, the summary report must include every insurer in the insurance holding company system. If the insurer does not qualify for exemption but the insurance holding company system of which it is a member qualifies for exemption, only the summary report applicable to the insurer is required.

The bill sets out detailed confidentiality requirements with respect to documents, materials, and other information, including summary reports, that are obtained or created by, or disclosed to, the commissioner as a result of the new risk assessment requirements. Generally, the documents, materials, and other information, including summary reports, are confidential and privileged and are not subject to inspection, copying, subpoena, or discovery and are not admissible in evidence in any private civil action. The bill sets out the circumstances under which and to whom the documents, materials, and other information, including summary reports, may be disclosed, as well as procedures that must be used for the disclosure.

2. Under current law, the Office of the Commissioner of Insurance (OCI) may refuse to disclose testimony, reports, records, and information obtained, produced, or created in the course of examinations, investigations, and other inquiries with respect to persons regulated under the insurance statutes. The statutes specify how this privilege of nondisclosure may be waived. The bill creates a rebuttable presumption that documents and information provided to OCI by an insurer in response to an OCI request or in the course of an examination of the affairs or condition of the insurer are proprietary and confidential and that the potential for harm and competitive disadvantage to the insurer outweighs the public interest in the disclosure of the documents and information. The presumption may be rebutted by presenting clear and convincing evidence to a court that the public interest in the disclosure substantially outweighs the potential for harm or competitive disadvantage to the insurer. The bill also excludes from the statute related to nondisclosure of insurance information certain types of information or reports, including ORSA reports and information, enterprise risk filing and related information, and reports of internal control over financial reporting and related information, and provides that the information or reports are subject to confidentiality provisions that are specific to that information or those reports.

3. The bill authorizes the commissioner to participate in a supervisory college for any domestic insurer that is part of an insurance holding company system with international operations. A supervisory college is defined in the bill as a forum for communication and cooperation between regulators charged with the supervision of an insurer that is part of an insurance holding company system with international operations. The purpose for the commissioner's participation is to assess the business strategy, financial position, legal and regulatory position, risk exposure, risk management, and governance processes of the domestic insurer. The commissioner's participation may include initiating the establishment of a supervisory college, coordinating the ongoing activities of the supervisory college, establishing a crisis management plan, and entering into agreements for keeping information confidential. The commissioner may impose a regular assessment on affected insurers to pay the reasonable expenses of the commissioner's participation.

4. Under current law, the proxy voting provisions that apply to members of general nonstock corporations apply to policyholders of mutual insurance corporations (mutuals). The bill removes that applicability and sets out proxy voting rights that are specific to the policyholders of mutuals. Under the bill, a policyholder or the policyholder's authorized officer, director, employee, agent, or attorney-in-fact may appoint a proxy to vote or otherwise act for the policyholder at a meeting of policyholders or to consent or dissent in writing to any corporate action without a meeting. The appointment may be accomplished by affixing the policyholder's signature to an appointment form by any reasonable means or by transmitting an electric transmission, including by Internet, telephone, electronic mail, telegram, cablegram, or datagram, of the appointment to the person who will be appointed as proxy. An appointment of a proxy is effective when a signed appointment form or electronic transmission of the appointment is received by the officer or agent of the mutual authorized to tabulate votes and lasts 11 months unless a different period is expressly provided in the appointment. Unless the appointment form or electronic transmission states otherwise, appointment of a proxy may be revoked, which occurs if the policyholder appointing the proxy: a) attends a meeting and votes; or b) signs and delivers to the officer or agent of the mutual authorized to tabulate votes either a written statement that the proxy appointment is revoked or a subsequent proxy appointment form. The death or incapacity of the policyholder appointing the proxy does not affect the right of the mutual to accept the proxy's authority unless the officer or agent of the mutual authorized to tabulate votes receives notice of the death or incapacity before the proxy exercises his or her authority under the appointment.

5. Under current law, a plan of merger or for acquisition of control of a domestic stock insurance corporation, or a plan of merger between two or more mutuals, may not be executed unless it is approved by the commissioner after a hearing. Such plans are approved unless the commissioner finds that they would violate the law or be contrary to the interests of the insureds of a participating insurance corporation or mutual. The bill provides that, if a plan requires the approval of more than one commissioner because the insurance corporations involved are domiciled in different states, the hearing for approval may be held on a consolidated basis, if so requested by the person filing the plan, although the commissioner may opt out of a consolidated hearing. Any consolidated hearing must be public and held within the United States before the commissioners of the states in which the insurers involved in the merger or other acquisition of control are domiciled. The commissioners may hear and receive evidence and may attend the consolidated hearing in person or by telecommunication.

6. The bill requires the commissioner to promulgate rules requiring insurers to report their enterprise risk, including the form of the report and the manner and process for filing. Enterprise risk is defined in the bill as any activity, circumstance, or event involving one or more affiliates of the insurer that, if not remedied, is likely to have a material adverse effect on the financial condition or liquidity of the insurer or its insurance holding company system.