Section 18.07.01.055 - REGULATION - COMPLIANCE01.Wavier of Compliance. No regulatory standards are waived during the pendency of a Plan application.02.Merger or Acquisition. MHC mergers and acquisitions are subject to Director approval. If a MHC is to acquire more than fifty percent (50%) of a stock insurance company, then the applicant files a plan describing the insurer's policyholders' membership interests in the MHC.03.Annual Financial Statement. A MHC will annually file a financial statement by June 1 including: c. A cash flow statement;d. The status of any closed block formed because of the Plan;e. An asset investment plan; andf. A statement disclosing any intention to pledge, borrow against, alienate, hypothecate, or otherwise encumber MHC assets.04.Subsidiary Investment Obligations. At least fifty percent (50%) of the MHC's generally accepted accounting practices (GAAP) basis net worth will be invested in insurance company subsidiaries.05.Distributions to Policyholders. Policy credits, dividends or other distributions to a MHC's policyholder members will be fair and equitable and are subject to Director approval and the public hearing process in Chapter 38, Title 41, Idaho Code.Idaho Admin. Code r. 18.07.01.055