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Flashcards in Porter Ch 6 Deck (9)
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1

2 criteria that DOIs look at when insurers are seeking a
license:

1. Location of books and records - usually seeks assurance the insurer will retain books and records in the state
2. Principal ofice - many DOIs require insurer to maintain an
oce in the state

2

2 reasons that regulators would prefer that insurer maintain an office in the state:

1. Create jobs
2. Give regulator easier access

3

What do regulators examine during an organizational
exam of an insurer applying for a license:

-Verify minimum capitalization is on deposit at an approved
financial institution
-Verify that management team in place
-Corporate records are in good order
-Policy forms and rates have department approval
-Gives employees chance to review with the examiners the
various DOI expectations for reporting

4

Briefly describe a domestic insurer, foreign insurer, and
alien insurer

-Domestic - Incorporated in the state writing insurance
business
-Foreign - Licensed to operate in a state but incorporated in
another state
-Alien - Licensed in a U.S. state but incorporated in another
country

5

2 advantages that foreign insurers have when applying
for a license:

1. If a strong performer with solid nancial record, more likely
to receive approval
2. Already gone through rigors of the domiciliary jurisdiction's
review

6

List some differences in the licensing application
between a foreign and domestic insurer:

Foreign also has to provide:
-Charter and bylaws - reviews to evaluate the terms of its
operations as a legal entity
-Annual Statements - reviews for previous 2-3 years
-Examination report - most recent report of financial
examination
-Financial statements - SAP and sometimes GAAP
-Certicates of compliance - evidence that in compliance with domiciliary state
-Holding insurer registration statement - if applicant is
member of an insurer holding system

7

List an additional requirement if seeking to be licensed
in state where an affiliate already writing:

May require u/w guidelines to ensure parent insurer does not
shift business back and forth between aliated insurers

8

Some regulators require that the insurer be seasoned to
obtain a license. List some exceptions to this requirement:

-insurer has substantial capital
-owned by an insurer with lengthy history
-department is satisfied with the application for other reasons

9

What additional requirements does an alien insurer
have when filing for a license:

-Appointment of U.S. manager
-Provide a Trust agreement - contract in which one party
transfers ownership of property to another party that will
administer the property for a third party's benefit
-Certicate of alien funds on deposit