Current through Register Vol. 22-07, April 1, 2022
At a minimum, the notice sent to the
policyowner shall state the following in language easily understood by a
(a) The date upon which the
transfer of liabilities arising under the insurance contract is to take
(b) The name and address of
the proposed assuming company.
The fact that the policyowner has a legal right to either consent to the
proposed transfer, or to refuse to consent to it.
(d) The fact that if the policyowner wishes
to accept the proposed transfer, that person must affirmatively do so by
signing and returning the enclosed consent form.
(e) The fact that unless the policyowner
signs and returns the enclosed consent form, the proposed transfer will not
take place as to the insurance contract in his or her case, and that as a
result the liabilities arising under that insurance contract will remain with
the transferring company.
Depending upon the intent of the transferring company, the policyowner should
be told whether the transferring company will or may utilize the services of
the proposed assuming company or another entity for administratively servicing
the insurance contract, if consent to the transfer is not given, even though
the obligations and liabilities under the insurance contract will remain with
the transferring company. Examples of such servicing should be
(g) The reason or
reasons for the proposed transfer.
(h) Enough information about both the
transferring company and the assuming company for the policyowner to make an
informed choice about whether to consent to the proposed transfer or not.
Necessary information will vary from one situation to another. However, it
shall include, although it is not limited to, the following: The assets and
liabilities of each company, and the business experience of each, particularly
with respect to the kind of insurance involved in the proposed
(i) Whether the assuming
company holds a valid certificate of authority or registration for the kind of
insurance involved in the proposed transfer, issued by the state of which the
policyowner is a resident.
Whether the proposed transfer would have any effect upon availability and
extent of protection afforded by any state guaranty fund, in the event of
insolvency of the proposed assuming company.
(2) The notice and disclosure shall be
accompanied by a form by which the policyowner may consent to or reject the
proposed transfer. The form shall be worded in language easily understood by
the policyowner, and be accompanied by a postage prepaid return envelope, by
which it may be returned. All the forms shall be subject to the type size
(3) After processing, the transferring
company shall return to consenting policyowners a copy of the consent to
transfer for attachment to the insurance contract. The transferring company
shall retain the policyowner's written consent with its records pertaining to
each insurance contract.
notice and disclosure documents must also advise the policyowner that the
transferring company will not unfairly discriminate against those policyowners
who do not consent to the transfer.
(5) A certificate of assumption shall be
provided to each consenting policyowner. The certificate shall include, at a
minimum, the statement that the assuming company assumes all contractual
obligations under the insurance contract. It shall include the name of the
assuming company and its address to which communications relating to the
insurance contract should be sent. The certificate of assumption shall become a
part of the transferred contract. The form of certificate of assumption shall
be filed with the insurance commissioner pursuant to