On January 25, 2018, the Insurance Commission (IC) issued Circular Letter (CL) No. 2018-11 which provides the following rules in relation to licensing requirements during the pendency of a merger or consolidation of insurance companies:

 

a. From the notification of the intent to merge or consolidate until such time that the existing Certificates of Authority of the concerned domestic insurance companies are surrendered pursuant to Section 13 of CL No. 2015-11 dated 18 March 2015, the concerned companies shall maintain their respective Certificates of Authority in order to be able to transact insurance business during the pendency of the merger or consolidation process.

 

b. lf either of the concerned merging or consolidating companies is found to be non-compliant with the statutory net worth requirements under the Insurance Code during the pendency of the merger or consolidation process, said company shall be deemed as a servicing company and its license shall be converted into a Servicing License under pertinent rules and regulations issued by the IC, if applicable.

 

c. lf both of the concerned merging or consolidating companies are found to be non-compliant with the statutory net worth requirements under the Insurance Code during the pendency of the merger or consolidation process, both companies shall be deemed as servicing companies and its licenses shall be converted into Servicing Licenses, respectively, under pertinent rules and regulations issued by the IC, if applicable.

 

d. This is without prejudice to any and all other regulatory actions that the IC may take by reason of the companies' non-compliance with the statutory net worth requirements during the pendency of the merger or consolidation process, if warranted; such as, but not limited to, the issuance of cease and desist orders and/or placement of the concerned company/ies under conservatorship.

 

The full text of CL No. 2018-11 is available here.