Insurer Formation and Licensing

Question 1

initial free surplus

Answer 1

amount of surplus a new stock insurer must provide above minimum capital

Question 2

minimum required basic surplus

Answer 2

amount of surplus an existing insurer must hold to continue operating

Question 3

considerations for domestic insurer licensing (3)

Answer 3

• location of books and records
• principal office
• examination to verify:
  
  • minimum capital requirements
  • management team in place
  • corporate records in good order
  • policy forms and rates have DOI approval

Question 4

items reviewed for foreign insurer [ABCDEF]

Answer 4

• Annual statements
• By-laws and charters
• Certificates of compliance
• Domiciliary state Examination report
• Financial statements for controlling entity, if part of a holding system

Question 5

seasoning requirement for foreign insurer licensing

Answer 5

only insurers with 2-5 years of experience may apply for licensing

Question 6

requirements for alien insurer licensing (4)

Answer 6

• select a U.S. state to act as its port of entry
• appoint a U.S. manager
• trust agreement
• certificate of funds on deposit in U.S.