Section 38a-138-13 - Transactions subject to prior notice - notice filing(a) An insurer required to give notice of a proposed transaction pursuant to section 38a-136 of the Connecticut General Statutes shall furnish the required information on Form D (Appendix D of sections 38a-138-1 to 38a-138-16, inclusive, of the Regulations of Connecticut State Agencies).(b) Agreements for cost sharing services and management services shall at a minimum and as applicable: (1) Identify the person providing the service and the nature of such services;(2) Set forth the methods to allocate costs;(3) Require timely settlement, not less frequently than on a quarterly basis, and compliance with the requirements in the NAIC Accounting Practices and Procedures Manual;(4) Prohibit advancement of funds by the insurer to the affiliate except to pay for services defined in the agreement;(5) State that the insurer will maintain oversight for functions provided to the insurer by the affiliate and that the insurer will monitor services annually for quality assurance;(6) Define books and records of the insurer to include all books and records developed or maintained under or related to the agreement that are otherwise the property of the insurer, in whatever form maintained, including, but not limited to, claims and claim files, policyholder lists, application files, litigation files, premium records, rate books, underwriting manuals, personnel records, financial records, or similar records within the possession, custody, or control of the affiliate;(7) Specify that all books and records of the insurer are and remain the property of the insurer and: (A) Are subject to control of the insurer;(C) Are segregated from all other persons' books and records or are readily capable of segregation at no additional cost to the insurer;(8) State that all funds and invested assets of the insurer are the exclusive property of the insurer, held for the benefit of the insurer and are subject to the control of the insurer;(9) Include standards for termination of the agreement with and without cause;(10) Include provisions for indemnification of the insurer in the event of gross negligence or willful misconduct on the part of the affiliate providing the services and for any actions by the affiliate that violate provisions of the agreement required in subdivision (11) to (15), inclusive, of this subsection ;(11) Specify that, if the insurer is placed in receivership or seized by the Commissioner under Chapter 704c of the Connecticut General Statutes:(A) All of the rights of the insurer under the agreement extend to the receiver or Commissioner; (B) All books and records of the insurer shall be identifiable and segregated from all other persons' books and records or readily capable of segregation at no additional cost to the receiver or the Commissioner;(C) A complete set of books and records shall be made immediately available to the receiver or Commissioner, be made available in a usable form and be turned over to the receiver or Commissioner immediately upon the receiver's or Commissioner's request, and the cost to transfer data to the receiver or Commissioner shall be fair and reasonable; and(D) The affiliate shall make available all employees essential to the operations of the insurer and the services associated therewith for the immediate continued performance of the essential services ordered or directed by the receiver or Commissioner;(12) Specify that the affiliate has no automatic right to terminate the agreement if the insurer is placed in supervision, seizure, conservatorship, or receivership pursuant to Chapter 704c of the Connecticut General Statutes; (13) Specify that the affiliate shall continue to maintain any systems, programs or other infrastructure notwithstanding supervision , seizure , conservatorship, or receivership by the Commissioner under Chapter 704c of the Connecticut General Statutes, and will make them available to the receiver or Commissioner as ordered or directed by the receiver or Commissioner , for as long as the affiliate continues to receive timely payment for post-receivership services rendered and unless released by the receiver, Commissioner or supervising court;(14) Specify that the affiliate shall provide the essential services for a minimum period of time as specified in the agreement after termination of the agreement, if the insurer is placed into supervision, seizure, conservatorship, or receivership pursuant to Chapter 704c of the Connecticut General Statutes, as ordered or directed by the receiver or Commissioner. Performance of the essential services will continue to be provided without regard to pre-receivership unpaid fees, so long as the affiliate continues to receive timely payment for post-receivership services rendered, and unless released by the receiver, Commissioner, or supervising court; and(15) Specify that, in furtherance of the cooperation between the receiver and the affected guaranty association or associations and subject to the receiver's authority over the insurer, if the insurer is placed into supervision, seizure, conservatorship or receivership pursuant to pursuant to Chapter 704c of the Connecticut General Statutes, and portions of the insurer's policies or contracts are eligible for coverage by one or more guaranty associations, the affiliate's commitments under subdivision (11) to (15), inclusive, of this subsection shall extend to such guaranty association(s).Conn. Agencies Regs. § 38a-138-13
Effective July 26, 1993; Amended June 27, 2013; Amended 12/3/2018; amended 2/28/2024