SEMINAR NAIC/ASSAL/SVS REGULATION & SUPERVISION OF MARKET CONDUCT © 2014 National Association of Insurance Commissioners Company Licensing

OVERVIEW  What is Company Licensing?  Uniform Licensing Component Processes  Regulators' Uniform Licensing Process  NAIC Available resources  Primary Application  Expansion Application  Form A  Corporate Amendment  Open Items 2

WHAT IS COMPANY LICENSING?  License is required for any risk bearing company to sell any insurance product.  Licenses are required for each jurisdiction.  The licensing process is an important function for state regulators.  The goal of state regulators is to reduce risk. 3

UNIFORM LICENSING COMPONENT PROCESSES  Administrative Filings  Receipt and processing of certain corporate documents that are needed to establish a corporate existence.  Analysis of Current Financial Condition  Documentation of the current operating condition of the company.  Analysis of Business Plan  Review of the company’s explanation for the proposed expansion and/or change in its operations and how those changes will effect the company’s operating condition. 4

UNIFORM LICENSING COMPONENT PROCESSES  Interstate Communication  Risk-Based Prioritization System  Category 1  Insurer appears sound in every aspect.  Category 2  Insurer appears neither an obvious candidate for approval nor for denial based on current overall condition.  Category 3  Insurer exhibits some degree of regulatory concern in one or more areas. 5

REGULATORS’ UNIFORM LICENSING PROCESS  Receipt of Uniform Certificate of Authority Application (UCAA)  Document Completeness of Application  Prepare Application Control Sheet  Distribute Application Sections  Receive Application Sections  Contact Domiciliary State  Analyze Current Condition  Analyze Business Plan  Make Recommendation  Prepare/Amend Certificate of Authority of Denial 6

NAIC AVAILABLE RESOURCES  U niform Certificate of Authority Application (UCAA)  UCAA Manual  Is a complete reference manual for the licensing process  Company Licensing Best Practices Handbook  Deals primarily with the qualitative processes  UCAA Website  Electronic application  State Licensing Requirements  Electronic Databases  Electronic UCAA  Form A  Use of other Financial and Market Regulation Databases 7

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NAIC AVAILABLE RESOURCES  U niform Certificate of Authority Application (UCAA)  UCAA Manual  Is a complete reference manual for the licensing process  Company Licensing Best Practices Handbook  Deal primarily with the qualitative processes  UCAA Website  Electronic application  State Licensing Requirements  Electronic Databases  Electronic UCAA  Form A  Use of other Financial and Market Regulation Databases 9

UCAA APPLICATION TYPES  The Primary Application  Used by newly formed companies seeking a Certificate of Authority in their domicile state and by companies wishing to re-domesticate to a uniform state.  The Expansion Application  Used by companies in good standing in their state of domicile that wish to expand their business into a uniform state.  The Corporate Amendments Application  Used by an existing insurer for requesting amendments to its certificate of authority. 10

PRIMARY APPLICATION  Items Reviewed  Name  Plan of operation  Narratives  Lines of Business  Financial Statements  Projections  Investment Plans  Reinsurance  Background of officers  Statutory memberships  State-specific Information  States have 90 days. (Only count days where work is being done.)  Hearing available if companies denied. 11

EXPANSION APPLICATION  Items Reviewed  Name  Plan of operation  Narratives  Lines of Business  Financial Statements  Projections  Investment Plans  Reinsurance  Background of officers  Statutory memberships  State-specific Information  History regarding insolvent entities and regulatory fines  States have 60 days. (Only count days where work is being done.)  Hearing available if companies denied. 12

FORM A  Items Reviewed  Name  Plan of operation  Narratives  Lines of Business  Financial Statements  Projections  Investment Plans  Reinsurance  Background of officers  Statutory memberships  State-specific Information  Hearing always conducted. 13

CORPORATE AMENDMENT  Items Reviewed  Name  Plan of operation  Narratives  Lines of Business  Financial Statements  Projections  Investment Plans  Reinsurance  Background of officers  Statutory memberships  State-specific Information  History regarding insolvent entities and regulatory fines  States have 60 days. (Only count days where work is being done.)  Hearing available if companies denied. 14

OPEN ITEMS  NAIC Working Group created a uniform Biographical Affidavit and Background Investigation process; goal is to have all states require/accept them.  NAIC rewriting Form A Database. 15

SUMMARY  What is Company Licensing?  Uniform Licensing Component Processes  Regulators’ Uniform Licensing Process  NAIC Available Resources  UCAA Application Types  Primary Application  Expansion Application  Form A  Corporate Amendment  Open Items 16

QUESTIONS/COMMENTS 17