Kansas Administrative Regulations

Agency 40. Insurance Department

Article 1. General

40-1-28 Insurance holding companies; information required; disclaimer of affiliation; termination of registration; acquisition of control.

National association of insurance commissioners insurance holding company system model regulation with reporting forms and instructions, June 1986 edition, is hereby adopted by reference, subject to the following exceptions:

(a)  Sections 1, 2 and 3 are not adopted;

(b)  section 4(b) is completed by inserting ``Two''; ``Kansas, 420 S.W. 9th Street, Topeka, Kansas''; ``Chief Examiner''; and, ``30'' respectively in the spaces provided;

(c)  section 4(a) is amended by substituting ``K.S.A. 40-3304 and 40-3305'' for ``Sections 3, 4 and 5 of this Act'' appearing in the first sentence;

(d)  section 6(b)(3) is completed by inserting ``30'' in the space provided;

(e)  section 8 is hereby amended by the addition of the following: ``The Act means the statutes relating to insurance holding companies contained in Article 33, Chapter 40 Kansas Statutes Annotated'';

(f)  section 9 is not adopted;

(g)  section 10 is amended by substituting ``K.S.A. 40-3304'' for ``Section 3 of the Act'';

(h)  section 12(a) is amended by substituting ``K.S.A. 40-3304(a)'' for ``Section 3(a)(1) of the Act'';

(i)  section 12(b) is amended by substituting ``K.S.A. 40-3304(a)'' for ``Section 3(a)(1)'';

(j)  section 13 is amended by substituting ``K.S.A. 40-3305'' for ``Section 4 of the Act'';

(k)  section 14 is amended by substituting ``K.S.A. 40-3305'' for ``Section 4 of the Act'';

(l)  section 15 is not adopted;

(m)  section 16(a) is amended by substituting ``K.S.A. 40-3305'' for ``Section 4 of the Act'' appearing in the first sentence;

(n)  section 16(d) is amended by substituting ``K.S.A. 40-3305(f) or K.S.A. 40-3305(g)'' for ``Section 4(h) or 4(i) of the Act'';

(o)  section 19(b) is not adopted;

(p)  section 20 is amended by substituting ``K.S.A. 40-3305(b)'' for ``Section 5(d) of the Act'';

(q)  section 21 is added as follows: ``Section 21 Acquisition of control--statement filing. (1) A person required to file a statement pursuant to K.S.A. 40-3304 shall, prior to committing any act towards the acquisition of control of a domestic insurer, file a letter with the commissioner of insurance indicating:

(A)  the person's interest in the possible acquisition of control;

(B)  the name of the domestic insurer to be acquired;

(C)  that the person is aware of and will comply with the applicable provisions of the Kansas insurance holding companies act; and

(D)  that all negotiations or agreements to acquire control of the domestic insurer will be conditioned upon the approval of the commissioner of insurance.

(2)  A person required to file a statement pursuant to K.S.A. 40-3304 shall furnish the required information on form A, hereby made a part of this regulation.''

(r)  item 12(b) and (c) of form A is amended to read as follows: ``(b) The financial statements shall include the annual financial statements of the persons identified in item 2(c) for the preceding five fiscal years or for such lesser period as such applicant and its affiliates and any predecessors thereof shall have been in existence, and similar information covering the period from the end of such person's last fiscal year, to a date not earlier than 90 days prior to the filing of the Form A. Such statements may be prepared on either an individual basis, or on a consolidated basis if such consolidated statements are prepared in the usual course of business.

Unless otherwise permitted by the commissioner, the annual financial statements of the applicant shall be accompanied by the certificate of an independent public accountant to the effect that such statements present fairly the financial position of the applicant and the results of its operations for the year then ended, in conformity with generally accepted accounting principles or with requirements of insurance or other accounting principles prescribed or permitted under law. If the applicant is an insurer which is actively engaged in the business of insurance, the financial statements need not be certified, if they are based on the annual statement of such person filed with the insurance department of the person's domiciliary state and are in accordance with the requirements of insurance or other accounting principles prescribed or permitted under the law and regulations of such state.

(c)  File as exhibits copies of all tender offers for, requests or invitations for, tenders of, exchange offers for, and agreements to acquire or exchange any voting securities of the insurer, and if distributed, of additional soliciting material relating thereto, any proposed employment, consultation, advisory or management contracts concerning the insurer, annual reports to the stockholders of the insurer and the applicant for the last two fiscal years, and any additional documents or papers required by form A or K.S.A. 40-3304.''

(s)  item 13 is amended by substituting ``K.S.A. 40-3304'' for ``Section 3 of the Act'';

(t)  the second sentence of item 2(c) of form A is not adopted;

(u)  the second sentence of item 2 of form B is not adopted;

(v)  item 5 of form B is amended by substituting ``K.S.A. 40-3305'' for ``Section 4 of the Act'';

(w)  item 10 of form B is amended by substituting ``K.S.A. 40-3305'' for ``Section 4 of the Act''; and

(x)  the signature section of form C is amended by substituting ``K.S.A. 40-3305'' for ``Section 4 of the Act.''

(Authorized by K.S.A. 40-103, 40-3309; implementing K.S.A. 40-3304(a) and (b), 40-3305 and 40-3306 as amended by 1991 SB 67, Secs. 4 & 5; effective May 1, 1976; amended May 1, 1979; amended May 1, 1986; amended May 1, 1988; amended May 15, 1989; amended, T-40-9-26-91, Sept. 26, 1991; amended Dec. 16, 1991.)