(a) Insurance business transfer plan — Fee and contents.

1. (1) An insurance business transfer plan must be filed by the applicant with the Insurance Commissioner for his or her review and approval.
2. (2) At the time of filing its application with the commissioner for review and approval of a plan, the applicant shall pay a nonrefundable fee to the State Insurance Department in the amount of ten thousand dollars ($10,000).

3. (3)

   1. (A) The plan must contain the information set forth below or an explanation as to why the information is not included:

(i) The name, address, and telephone number of the transferring insurer and the assuming insurer and their respective direct and indirect controlling persons, if any;

1. (ii) Summary of the plan;

   1. (iii) Identification and description of the subject business;

      1. (iv) Most recent audited financial statements and statutory annual and quarterly reports of the transferring insurer and assuming insurer filed with their domiciliary regulator;
      2. (v) The most recent actuarial report and opinion that quantify the liabilities associated with the subject business, including the assuming company’s report or opinion;
      3. (vi) Pro forma financial statements showing the projected statutory balance sheet, results of operations, and cash flows of the assuming insurer for the three (3) years following the proposed transfer and novation;
      4. (vii) Officers’ certificates of the transferring insurer and the assuming insurer attesting that each has obtained all required internal approvals and authorizations regarding the plan and completed all necessary and appropriate actions relating thereto;
      5. (viii) Proposal for implementation and administration of the plan, including the form of notice to be provided under the plan to any policyholder whose policy is part of the subject business;
      6. (ix) Full description as to how such notice shall be provided;
      7. (x) Description of any reinsurance arrangements that would pass to the assuming insurer under the insurance business transfer plan;
      8. (xi) Description of any guarantees or additional reinsurance that will cover the subject business following the transfer and novation;
      9. (xii) A statement describing the assuming insurer's proposed investment policies and any contemplated third-party claims management and administration arrangements;
      10. (xiii) Evidence of approval or nonobjection of the transfer from the chief insurance regulator of the state of the transferring insurer's domicile; and
      11. (xiv)

(b) (b) Should the commissioner, in his or her sole discretion, reject the nominees, he or she may appoint the independent expert.

1. (B) The plan may be supplemented by other information deemed necessary by the commissioner.

(b) Independent expert opinion report — Contents. The independent expert opinion report shall provide the following:

1. (1) A statement of the independent expert's professional qualifications and descriptions of the experience that qualifies him or her as an expert suitable for the engagement;
2. (2) Whether the independent expert has, or has had, direct or indirect interest in the transferring or assuming insurer or any of their respective affiliates;
3. (3) The scope of the report;
4. (4) A summary of the terms of the plan to the extent relevant to the report;
5. (5) Documents, reports, and other material information the independent expert has considered in preparing the report and whether any information requested was not provided;
6. (6) The extent to which the independent expert has relied on information provided by and the judgment of others;
7. (7) The people on whom the independent expert has relied and why, in his or her opinion, such reliance is reasonable;

8. (8) The independent expert's opinion of the likely effects of the insurance business transfer plan on policyholders and claimants, distinguishing between:

   1. (A) Transferring policyholders and claimants;
   2. (B) Policyholders and claimants of the transferring insurer whose policies will not be transferred; and
   3. (C) Policyholders and claimants of the assuming insurer;
9. (9) For each opinion that the independent expert expresses in the report the facts and circumstances supporting the opinion;
10. (10) Consideration as to whether the security position of policyholders that are affected by the insurance business transfer are adversely materially affected by the transfer; and

11. (11) The independent expert's opinion report shall include, but not be limited to, a review of the following:

    1. (A) Analysis of the transferring insurer's actuarial review of reserves for the subject business to determine the reserve adequacy;
    2. (B) Analysis of the financial condition of the transferring and assuming insurers and the effect the transfer will have on the financial condition of each company;
    3. (C) Review of the plans or proposals the assuming insurer has with respect to the administration of the policies subject to the proposed transfer;
    4. (D) Whether the proposed transfer has an adverse material impact on the policyholders and claimants of the transferring and the assuming insurers;
    5. (E) Analysis of the assuming insurer's corporate governance structure to ensure that there is proper board and management oversight and expertise to manage the subject business;
    6. (F) The business purposes of the proposed transfer;
    7. (G) Capital adequacy and risk-based capital, including consideration of the effects of asset quality, nonadmitted assets, and actuarial stresses to reserve assumptions;
    8. (H) Cash flow and reserve adequacy testing, including consideration of the effects of diversification on policy liabilities;
    9. (I) Business plans;
    10. (J) The impact, if any, of concentration of lines of business following the proposed transfer;
    11. (K) Management’s competence, experience, and integrity; and

    12. (L) Any other information that the commissioner requests in order to review the insurance business transfer.

        1. (c) Within five (5) days of receiving a completed application for an insurance business transfer, the commissioner shall provide general notice by:
12. (1) Posting an acknowledgment of the application on the department’s website; and
13. (2) Transmitting it via the department’s routine email distribution system to interested parties in the industry.