Disclosure of Material Transaction
To: All California Domiciled Insurers
Attention: Chief Financial Officer and Interested Parties
Subject: California Insurance Code (CIC) Sections 1185-1187 Disclosure of Material Transactions
The California Insurance Code (CIC), under Article 3.5, commencing with Section 1185, requires domestic incorporated insurers to file a report with the Insurance Commissioner disclosing material acquisitions and dispositions of assets or material non-renewals, cancellations or revisions of ceded reinsurance agreements. Whether they are with an affiliated or non-affiliated entity.
Due Date: Within 15 days after the end of each calendar month in which the transactions occur.
Pursuant to CIC Sections 1185(a), 1186(a) and 1187(a), no report is required to be filed with the Insurance Commissioner disclosing material acquisitions and dispositions of assets or material non-renewals, cancellations, or revisions of ceded reinsurance agreements if they have been submitted to the Commissioner for review, approval, or information purposes pursuant to other provisions of this code, laws, regulations, or other requirements. Also, a report is not required for acquisitions and dispositions of assets or non-renewals, cancellations, or revisions of ceded reinsurance agreements that are not material.
Material Acquisitions and Dispositions of Assets
CIC Section 1186(a) described in part: "...A material acquisition (or the aggregate of any series of related acquisitions during any 30-day period) or disposition (or the aggregate of any series of related dispositions during any 30-day period) is one that is nonrecurring and not in the ordinary course of business and involves more than 5 percent of the reporting insurers total admitted assets..."
Material Non-renewals, Cancellations or Revisions of Ceded Reinsurance Agreements
The report shall be filed on a non-consolidated basis unless the insurer is part of a consolidated group of insurers, which utilizes a pooling agreement or 100 percent reinsurance agreement.
Pursuant to CIC Section 1185(d): "All reports obtained by, or disclosed to the commissioner pursuant to this article, shall be given confidential treatment and shall not be subject to subpoena and shall not be made public by the commissioner, the National Association of Insurance Commissioners, or any other person, except to insurance departments of otherstates..."
All required documents must be submitted online utilizing the Online Assistance System for Insurer Submittals ("OASIS").
Additionally, please submit a paper copy to:
California Department of Insurance
Financial Analysis Division, Financial Records Unit
300 South Spring Street, South Tower, 13th Floor
Los Angeles, CA 90013
National Association of Insurance Commissioners
2301 McGee, Suite 800
Kansas City, MO64108-2604
Deputy Insurance Commissioner
Financial Surveillance Branch