§ 27-56-2 - Acquisitions and dispositions of assets. - Rhode Island Statutes

SECTION 27-56-2

   § 27-56-2  Acquisitions and dispositions ofassets. – (a) Materiality. No acquisitions or dispositions of assets need to bereported pursuant to § 27-56-1 if the acquisitions or dispositions are notmaterial. For the purposes of this chapter, a material acquisition (or theaggregate of any series of related acquisitions during any thirty-day period)or disposition (or the aggregate of any series of related dispositions duringany thirty-day period) is one that is non-recurring and not in the ordinarycourse of business and involves more than five percent (5%) of the reportinginsurer's total admitted assets as reported in its most recent statutorystatement filed with the insurance department of the insurer's state ofdomicile.

   (b) Scope. (1)  Asset acquisitions subjectto this chapter include every purchase, lease, exchange, merger, consolidation,succession or other acquisition other than the construction or development ofreal property by or for the reporting insurer or the acquisition of materialsfor that purpose.

   (2) Asset dispositions subject to this chapter include everysale, lease, exchange, merger, consolidation, mortgage, hypothecation,assignment (whether for the benefit of creditors or otherwise), abandonment,destruction or other disposition.

   (c) Information to be Reported. (1)  Thefollowing information is required to be disclosed in any report of a materialacquisition or disposition of assets:

   (i) Date of the transaction;

   (ii) Manner of acquisition or disposition;

   (iii) Description of the assets involved;

   (iv) Nature and amount of the consideration given or received;

   (v) Purpose of, or reason for, the transaction;

   (vi) Manner by which the amount of consideration wasdetermined;

   (vii) Gain or loss recognized or realized as a result of thetransaction; and

   (viii) Name(s) of the person(s) from whom the assets wereacquired or to whom they were disposed.

   (2) Insurers are required to report material acquisitions anddispositions on a non-consolidated basis unless the insurer is part of aconsolidated group of insurers which utilizes a pooling arrangement or onehundred percent (100%) reinsurance agreement that affects the solvency andintegrity of the insurer's reserves and the insurer ceded substantially all ofits direct and assumed business to the pool. An insurer is deemed to have cededsubstantially all of its direct and assumed business to a pool if the insurerhas less than one million dollars ($1,000,000) total direct plus assumedwritten premiums during a calendar year that are not subject to a poolingarrangement, and the net income of the business not subject to the poolingarrangement represents less than five percent (5%) of the insurer's capital andsurplus.