Senate Bill Report on SB 6048 — Group-Wide Supervision of Internationally Active Insurance Groups

Summary

A Senate Bill Report on SB 6048, as of January 8, 2020, for the Senate Committee on Financial Institutions, Economic Development & Trade, showing committee activity on 1/14/20. The bill is an act relating to the group-wide supervision of internationally active insurance groups, sponsored by Senators Das, Lovelett, Nguyen, Saldaña and Kuderer by request of the Insurance Commissioner. The brief summary states that it grants the Office of the Insurance Commissioner the authority to supervise internationally active insurance groups or defer authority to another appropriate regulatory official. The summary of the bill states that the Office must publish the identity of the groups it supervises in the Washington State Register and on the OIC website. The report lists Appropriation: None.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Issuer: Congressional materials
Document type: Report
Date: 2020-01-14
Case: 2020 01 14 A26164 D208661 Bill Report 6048 Sba Fiet 20

Cite this document

“Senate Bill Report on SB 6048 — Group-Wide Supervision of Internationally Active Insurance Groups.” Original at app.leg.wa.gov, dated 2020-01-14. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2020-01-14-2020-01-14-a26164-d208661-bill-report-6048-sba-fiet-20/, SHA-256 e11f6cdd6a44bcf4833640b3cd51c44d46357de55e1939fcfb0e18f74998673c.

Full text

SENATE BILL REPORT
SB 6048

As of January 8, 2020

Title: An act relating to the group-wide supervision of internationally active insurance groups.

Brief Description: Addressing the group-wide supervision of internationally active insurance
groups.

Sponsors: Senators Das, Lovelett, Nguyen, Saldaña and Kuderer; by request of Insurance
Commissioner.

Brief History:
Committee Activity: Financial Institutions, Economic Development & Trade: 1/14/20.

Brief Summary of Bill
Grants the Office of the Insurance Commissioner the authority to
supervise internationally active insurance groups or defer authority to
another appropriate regulatory official.

SENATE COMMITTEE ON FINANCIAL INSTITUTIONS, ECONOMIC
DEVELOPMENT & TRADE

Staff: Kellee Gunn (786-7429)

Background: In response to the 2008 financial crisis, the National Association of Insurance
Commissioners (NAIC) updated the NAIC Holding Company Model Act. The intent of the
act was to provide a stronger domestic legal structure under which holding companies are
supervised. An insurance holding company system (IHCS) is a system consisting of two or
more affiliated persons, one or more of which is an insurer. Washington enacted legislation
in 2015 that incorporated those updates, making changes to the Insurer Holding Company
Act.

Soon after adopting the updates to the act in 2010, the NAIC discovered some gaps in legal
authority and the power of a state supervising internationally active insurance groups
(IAIGs). An IAIG is an IHCS that has:
premiums written in at least three countries;

––––––––––––––––––––––
This analysis was prepared by non-partisan legislative staff for the use of legislative
members in their deliberations. This analysis is not a part of the legislation nor does it
constitute a statement of legislative intent.

Senate Bill Report -1- SB 6048
at least 10 percent of total gross written premiums written outside the United States;
and
total assets of the system based on a three-year rolling average that are at least $50
billion, or total gross written premiums of $10 billion.

In December 2014, the NAIC adopted additional changes to clarify the legal authority and
power of a state to act as a group-wide supervisor for IAIGs, as well as the authority for
domestic regulators to cooperate in requiring certain actions by an IHCS. The new changes
were put forth as NAIC’s Holding Company Model Act (#440).

The NAIC is an association composed of elected and appointed insurance regulators from the
states and territories of the Unites States. The Office of the Insurance Commissioner (OIC)
is a member of the NAIC.

Summary of Bill: The provisions of the Insurer Holding Company Act are amended to
include the NAIC’s Holding Company Model Act (#440), as required for accreditation by the
NAIC.

The OIC is authorized to act as a group-wide supervisor. As a group-wide supervisor for
IAIGs, the OIC must engage in certain supervision activities including assessing the
enterprise risk of the IAIG. The OIC may acknowledge another regulatory official as the
group-wide supervisor if there are no substantial insurance operations by the IAIG in
Washington State or the United States, or it is determined that another group-wide supervisor
is the appropriate regulatory official.

If there is a material change in where the IAIG is domiciled, or where the largest share of the
group's premiums, assets, or liabilities are, the OIC will determine the group-wide supervisor.
The OIC shall publish the identity of IAIGs that are supervised by the OIC in the Washington
State Register and on the OIC website.

An IAIG must be a registered insurer and is liable for, and must pay, reasonable expenses for
administering their supervision.

Appropriation: None.

Fiscal Note: Requested on January 8, 2020.

Creates Committee/Commission/Task Force that includes Legislative members: No.

Effective Date: Ninety days after adjournment of session in which bill is passed.

Senate Bill Report -2- SB 6048

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Original: app.leg.wa.gov