Or. Admin. R. 410-141-5190 - CAPITALIZATION: Surplus Notes

Current through Register Vol. 60, No. 12, December 1, 2021

(1) With the prior approval of the Authority, a CCO may issue one or more surplus notes in order to secure funding needed to comply with minimum capital and surplus requirements and/or minimum risk-based capital requirements under these rules, or otherwise to provide additional funding required for the CCO's operations.
(2) Approval by the Authority of the issuance and sale of a surplus note by a CCO, including the form and terms of the surplus note and the purchaser of the surplus note, is required and shall be at the sole discretion of the Authority.
(3) The issuance and sale of a surplus note, and the form and terms of the surplus note, shall comply with the standards for the issuance of surplus notes set forth in the Accounting Practices and Procedures Manual published by the NAIC, as well as the following requirements:
(a) A surplus note shall be sold only in return for cash or marketable securities having readily determinable values and liquidity satisfactory to the Authority.
(b) Commissions, promotion expenses or finders' fees may not be paid in connection with a surplus note sale except for commissions, expenses and fees customarily incurred within the context of public or private placement offerings underwritten by an investment banking or similar entity.
(c) Payment of principal or interest on a surplus note may not be made without the prior written approval of the Authority. The issuer shall provide the Authority with written notice at least thirty days prior to the intended date of the payment of principal or interest on a surplus note or such shorter period as the Authority may permit.
(d) Payment of principal or interest on a surplus note shall be subordinated to payment of all other liabilities of the issuer.
(e) Payment of interest on a surplus note may be made only from the unassigned funds of the issuer.
(f) Surplus notes shall not be assignable or negotiable without the prior written approval of the Authority.

Notes

Or. Admin. R. 410-141-5190
DMAP 59-2019, adopt filed 12/18/2019, effective 1/1/2020

Statutory/Other Authority: ORS 413.042, 414.615, 414.625, 414.635 & 414.651

Statutes/Other Implemented: ORS 414.610 - 414.685

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