Ariz. Admin. Code § R20-6-303 - Termination of Certificate of Authority and Release of Deposit
A. Domestic
Insurers. To request termination of a certificate of authority and, if
applicable, release of statutory deposit, a domestic insurer shall file all of
the following with the director:
1. A written
request for termination of certificate of authority and release of
deposit;
2. The insurer's original
certificate of authority or an affidavit of lost certificate of
authority;
3. A statement of the
insurer's financial condition as of a date within 60 days of the filing date of
the request for termination that includes a written statement, signed by two
officers of the insurer as authorized on the jurat page of the insurer's most
recent annual statement, verifying that the statement of financial condition
reflects the insurer's financial position as of the date signed.
4. A plan of extinguishment for its
outstanding liabilities that satisfies the requirements of subsection (C) or a
sworn affidavit stating that the insurer has no outstanding liabilities to
policyholders or claimants under subsection (C);
5. A certified copy of the insurer's Board of
Directors resolution or other documentation of the insurer's official action
taken according to the insurer's statutorily required organizational documents
approving the insurer's:
a. Withdrawal from
the insurance business,
b.
Dissolution of the insurer,
c.
Merger with an insurer authorized in Arizona to transact the insurer's
previously written and active lines of business of the insurer requesting
termination, or
d. Transfer of
domicile to another state or country.
6. A copy of the insurer's Articles of
Dissolution, Articles of Merger, Articles of Amendment, Articles of
Redomestication, or other documentation that the insurer intends to file with
the Arizona Corporation Commission after issuance of the Director's order as
provided in subsection (D)(2);
7.
If requested by the director, a written agreement that guarantees payment of
substantially all liabilities of the domestic insurer, other than obligations
extinguished under subsection (C).
B. Foreign and Alien Insurers. To request
termination of its certificate of authority and, if applicable, release of its
deposit, a foreign or alien insurer shall file all of the following with the
director:
1. A written request for termination
of certificate of authority and release of deposit;
2. The insurer's original certificate of
authority or an affidavit of lost certificate of authority;
3. A statement of the insurer's financial
condition as of a date within 60 days of the filing date of the request for
termination that includes a written statement, signed by two officers of the
insurer as authorized on the jurat page of the insurer's most recent annual
statement, verifying that the statement of financial condition reflects the
insurer's financial position as of the date signed.
4. A plan of extinguishment for its Arizona
liabilities that satisfies the requirements of subsection (C) or a sworn
affidavit stating that the insurer has no Arizona liabilities under subsection
(C);
5. A copy of an order issued
by the insurance director or other appropriate regulatory authority in the
insurer's state or country of domicile that approves or authorizes either the
insurer's:
a. Withdrawal from the insurance
business,
b. Dissolution of the
insurer,
c. Merger (approval of the
merger from the states of domicile of the insurers), or
d. Transfer of domicile, if
applicable.
6. A copy of
the insurer's Articles of Dissolution, Articles of Merger, Articles of
Amendment, Articles of Redomestication or other required documentation that the
insurer filed in its state of domicile; and
7. If requested by the director, a written
agreement that guarantees payment of substantially all Arizona liabilities of
the insurer, other than obligations extinguished under subsection
(C).
C. Insurer's Plan
for Extinguishment of Liabilities.
1. To
extinguish substantially all liabilities under subsection (A)(4) or subsection
(B)(4) as applicable, an insurer may:
a.
Reinsure the insurer's business in force with another insurer by entering into
an agreement of bulk reinsurance that shall be effective when filed with and
approved in writing by the director.
i. The
agreement shall provide for assumption of all policyholder claims by the
reinsurer including claims incurred but unreported as of the effective date of
the agreement.
ii. The agreement
may include recapture provisions exercisable by the insurer in the event the
termination of its certificate of authority is not completed.
iii. Unless the director otherwise approves,
the agreement shall provide that the reinsurer be licensed in Arizona for the
particular lines of business reinsured.
b. Merge with another insurer that:
i. Assumes the liabilities of the
non-surviving insurer; and
ii. Is
authorized in Arizona for the previously written and active lines of business
assumed, unless otherwise approved by the director.
c. Use its deposit, any additional security
deposit or both to secure payment of former policyholder, policyholder, or
claimant liabilities that are not reinsured or otherwise secured.
2. For purposes of this Section,
"substantially all liabilities" under Title 20 means all policyholder and
claimant obligations reported by the insurer in the statement of financial
condition, whether or not liquidated in amount, and shall include former
policyholder claims and rights to refunds.
D. Consideration of the Request for
Termination of Certificate of Authority and Release of Deposit under
subsections (A) and (B).
1. If the director
determines that the insurer has extinguished substantially all liabilities as
required under this Section and has otherwise demonstrated compliance with this
Section and A.R.S. Title 20, the director shall grant the request to terminate
the certificate of authority and, if appropriate, release the insurer's
deposit, provided:
a. The insurer has no
fees, taxes, assessments or filings outstanding to the Department;
and
b. The insurer is not subject
of any pending investigation or examination under Title 20 by the
Department.
2. The
director's order shall condition the release of a domestic insurer's deposit
upon receipt by the director of evidence of the official filing with the
Arizona Corporation Commission of the documentation described in subsection
(A)(6).
3. If the director
determines that the insurer is unable to extinguish substantially all
liabilities as required under this Section, or otherwise has not complied with
this Section or with A.R.S. Title 20, the director shall notify the insured in
writing that the request has been denied and the reasons for the
denial.
E. Exclusions.
This Section does not apply to:
1. An
insurer's exchange and substitution of cash or eligible securities under A.R.S.
§
20-586;
2. An insurer's withdrawal of excess
deposits, either cash or eligible securities, under A.R.S. §§
20-587
and
20-588(A)(2);
or
3. Releases of deposits made
under A.R.S. §
20-588(A)(3).
Notes
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