AS Title 21, Chapter 9: Authorization, Corporate Governance Requirements

Chapter 09. Authorization, Corporate Governance Requirements. Article 1. Authorization of Insurers and General Requirements. Sec. 21.09.010. Certificate of authority required. (a) A person may not act as an insurer and an insurer may not transact insurance in this state except as authorized by a subsisting certificate of authority issued to it by the director, except as to transactions that are expressly otherwise provided for in this title. (b) An insurer may not have or maintain in this state an office, representative, or other facility for the solicitation or servicing of any kind of insurance in another state unless the insurer is authorized to transact the same kind of insurance in this state. Sec. 21.09.020. Exception from certificate of authority requirement. A certificate of authority is not required of an insurer, not otherwise authorized in this state, with regard to (1) transactions relative to its policies lawfully written in the state, or liquidation of assets and liabilities of the insurer, other than collection of new premiums, resulting from its former authorized operations in the state; (2) related transactions subsequent to issuance of a policy covering only subjects of insurance not resident, located, or expressly to be performed in the state at time of issuance, and which coverage was lawfully solicited, written, and delivered outside the state; (3) transactions under surplus lines coverages lawfully written under AS 21.34 ; (4) reinsurance, except as to domestic reinsurers; or (5) transactions relative to policies issued in another state, but only if (A) the insurer does not market insurance in this state; (B) the laws of the state of issue apply to this state's residents covered under the policies; and (C) the insurer complies with other requirements the director adopts by regulation to qualify for an exception under this paragraph. Sec. 21.09.030. Admission for investment only. A foreign insurer may transact business in this state without a certificate of authority, for the purpose and to the extent only of investing its funds in real estate in this state or in securities secured thereby by complying with the applicable laws of this state other than this title. Such an insurer is not subject to any other provision of this title. Sec. 21.09.040. General eligibility of insurers. To qualify for and hold authority to transact insurance in this state an insurer shall comply with this title and with its charter powers and shall be an incorporated stock insurer, an incorporated mutual insurer, or a reciprocal insurer, all of the same general type as may be formed as a domestic insurer under this title, except that (1) a foreign insurer may not be authorized to transact insurance in this state that does not maintain reserves as required by AS 21.18 applicable to the kind or kinds of insurance transacted by the insurer, wherever transacted in the United States; or that transacts business anywhere in the United States on the assessment plan, or stipulated premium plan, or any similar plan; (2) a foreign insurer that is directly or indirectly owned or controlled in whole or in substantial part by a government or governmental agency may not be authorized to transact insurance in this state; membership or subscribership in a mutual or reciprocal insurer by virtue of being a policyholder thereof, or ownership of stock or other security that does not have voting rights with respect to the management of the insurer, or supervision of an insurer by public authority, is not considered to be an ownership or control of the insurer for the purposes of this provision. Sec. 21.09.050. Name of insurer. (a) An insurer may not be authorized to transact insurance in this state that has or uses a name so similar to that of another authorized insurer that the name is likely to mislead the public. (b) A life insurer may not be authorized that has or uses a name deceptively similar to that of another insurer authorized to transact insurance in this state within the preceding 10 years if life insurance policies originally issued by the other insurer are still outstanding in this state. (c) An insurer may not be authorized that has or uses a name that tends to deceive or mislead the public as to the type of organization of the insurer. (d) In case of a conflict of names between two insurers, or a conflict otherwise prohibited under (a) — (c) of this section, the director may permit or require the more recently authorized insurer to use in this state a supplementation or modification of its name or a business name that may reasonably be necessary to avoid the conflict. Sec. 21.09.060. Combinations of insuring powers in one insurer. An insurer that otherwise qualifies may be authorized to transact any one kind or combination of kinds of insurance as defined in AS 21.12 , except that (1) a life insurer may also grant annuities, but is not authorized to transact any other kind of insurance than health; except that if the insurer is otherwise qualified, the director shall continue to authorize a life insurer that, immediately before July 1, 1966, was lawfully authorized to transact in this state a kind or kinds of insurance in addition to life and health; (2) a reciprocal insurer may not transact life insurance; (3) a title insurer must be a stock insurer; (4) a property or casualty insurer may not transact life insurance and may not grant annuities. Sec. 21.09.070. Capital funds required of foreign insurers and new domestic insurers. (a) To qualify for authority to transact any one kind of insurance as defined in AS 21.12 , or combination of kinds of insurance as shown below, a foreign insurer, or a domestic insurer applying for its original certificate of authority in this state, after having withdrawn from this state for any cause, shall possess and after that maintain unimpaired basic paid-in capital stock if a stock insurer, or unimpaired basic surplus if a foreign mutual insurer or foreign reciprocal insurer, that is unavailable for dividends of any kind, and shall possess when first so authorized, and maintain after that, additional money in surplus, as follows: Kind or Kindsof InsuranceBasic Capital or Basic GuaranteeSurplusAdditional Surplus When First AuthorizedAdditional Maintained Surplus Life$1,000,000$1,000,000$750,000 Health1,000,0001,000,000750,000 Life and Health1,250,0001,250,0001,000,000 Property1,000,0001,000,000750,000 Casualty excluding vehicle1,000,0001,000,000750,000 Vehicle1,000,0001,000,000750,000 Marine & transportation1,000,0001,000,000750,000 Surety1,000,0001,000,000750,000 Title500,000500,000250,000 Any three or more of the following kinds of insurance: property, marine and transportation, vehicle, casualty excluding vehicle, surety, and health3,000,0003,000,0002,250,000 Legal expenses1,000,0001,000,000750,000 Mortgage Guarantee1,000,0001,000,000750,000 (b) Capital and surplus requirements are based upon all the kinds of insurance transacted by the insurer in all areas in which it operates or proposes to operate, whether or not only a portion of the kinds of insurance are to be transacted in this state. After a hearing, the director may for the protection of the public require an insurer to maintain funds in excess of the amounts required under (a) of this section, due to the amount, kind, or combination of kinds of insurance transacted by the insurer. Failure of an insurer to maintain funds as ordered by the director is grounds for suspension or revocation of the insurer's certificate of authority. (c) After January 1, 1992, an insurer may not renew and continue its certificate of authority unless the insurer possesses at least the basic capital or basic surplus, and additional surplus required under this section. (d) As to surplus required for qualification to transact one or more kinds of insurance and thereafter to be maintained, domestic mutual insurers formed after July 1, 1966, are governed by AS 21.69 and domestic reciprocal insurers formed after July 1, 1966, are governed by AS 21.75 . (e) A life insurer may also grant annuities without additional capital or additional surplus. (f) On or after January 1, 1991, a domestic property or casualty insurer may assume reinsurance, either new or renewal, (1) only of the kinds of risks, and to retain risks, within the limits it is otherwise authorized to insure; and (2) only if, in the absence of prior written approval from the director, it maintains, notwithstanding (a) of this section, in policyholder surplus at least $10,000,000 as of December 31, 1990, $15,000,000 as of December 31, 1991, and $20,000,000 as of December 31, 1992. This subsection does not apply to reinsurance that is required to be assumed by applicable law or regulation or is assumed under an intracompany pooling arrangement between affiliated insurers. (g) Notwithstanding (a) of this section and AS 21.09.080 (a), a domestic insurer admitted in this state before May 16, 1990, and that has not had an ownership change after May 15, 1990, shall maintain capital and surplus of at least $4,000,000 as of January 1, 1992; $4,250,000 as of January 1, 1993; $4,500,000 as of January 1, 1994; $4,750,000 as of January 1, 1995; $5,000,000 as of January 1, 1996; and $5,250,000 as of January 1, 1997, if the domestic insurer (1) is not affiliated with any other insurer or group of insurers; (2) has capital and surplus of less than $5,250,000 on December 31, 1991; (3) transacts any three or more of the following kinds of insurance: property, marine and transportation, vehicle; casualty, excluding vehicle; surety; and health; and (4) has obtained the prior written approval of the director. Sec. 21.09.080. Capital funds required of old domestic insurers. (a) In order for a domestic insurer to renew and continue the insurer's certificate of authority after January 1, 1992, the insurer must possess at least the basic capital, basic guarantee surplus, and additional maintained surplus required under AS 21.09.070 (a). (b) [Repealed, § 85 ch 50 SLA 1990.] (c) [Repealed, § 85 ch 50 SLA 1990.] (d) Notwithstanding the provisions of this section, a domestic life insurer duly licensed and capitalized on December 31, 1984, shall have and maintain the capital and surplus required under the laws of this state on December 31, 1984, as if the laws had continued in force. This subsection does not apply to a domestic life insurer if the ownership of the insurer is changed, or the class, line, and volume of the business written is materially changed from that written on December 31, 1984. Sec. 21.09.090. Deposit requirement. (a) This section applies to all insurers. (b) The director may not authorize an insurer to transact insurance in this state unless it makes and thereafter maintains in trust in this state through the director for the protection of all its policyholders or of all its policyholders and creditors, a deposit of cash or securities eligible for deposit under AS 21.24.030 in the amount of no less than $300,000, except that (1) from foreign insurers, in lieu of the deposit or part thereof in this state, the director may accept the certificate in proper form of the public official having supervision over insurers in any other state to the effect that a like deposit or part thereof by the insurer is being maintained in public custody or control under the law in that state in trust for the protection generally of the insurer's policyholders or its policyholders and creditors, in the United States; (2) from alien insurers, in lieu of the deposit or part thereof in this state, the director may accept evidence satisfactory to the director that the insurer maintains within the United States by way of trust deposits with public depositaries, or in trust institutions acceptable to the director, assets available for discharge of its United States insurance obligations, which assets shall be in an amount not less than the outstanding liabilities of the insurer arising out of its insurance transactions in the United States together with a surplus equal to the larger of the following sums: (A) the largest deposit required by this title to be made by a foreign insurer transacting like kinds of insurance; or (B) $300,000; which surplus shall for all purposes under this title be considered to be the capital or surplus of the insurer. (c) Deposits of foreign insurers, or deposits of alien insurers under (b)(2)(A) or (B) of this section in another state shall be in cash or securities of substantially as high quality as those eligible for deposit in this state under AS 21.24.030 . (d) All such deposits in this state are subject to the applicable provisions of AS 21.24 . Sec. 21.09.100. Management and affiliations. The director may not grant or continue authority to transact insurance in this state to an insurer whose principal management personnel is found by the director for good cause shown to be untrustworthy or not of good character, or so lacking in insurance company managerial experience as to make the proposed operation hazardous to the insurance-buying public or to its stockholders; or that the director has good reason to believe is affiliated directly or indirectly through ownership, control, management, reinsurance transactions, or other insurance or business relations with a person or persons whose business operations, to the detriment of insurers, stockholders, or creditors, are or have been marked by manipulation of assets, of accounts, or of reinsurance, or by bad faith. Sec. 21.09.110. Application for certificate of authority. (a) To apply for an original certificate of authority, an insurer shall file with the director its application, accompanied by the applicable fees set under AS 21.06.250 , showing its name, location of its home office, or principal office in the United States if an alien insurer, kinds of insurance to be transacted, date of organization or incorporation, form of organization, state or country of domicile, and additional information that the director may reasonably require, together with the following documents, as applicable: (1) if a foreign insurer, a copy of its corporate charter or articles of incorporation, with all amendments certified by the public officer with whom the originals are on file in the state or country of domicile; (2) if a reciprocal insurer, copies of the power of attorney of its attorney-in-fact and of its subscribers' agreement, if any, certified by its attorney-in-fact; (3) a copy of its financial statement as of the preceding December 31 and all subsequent quarterly financial statements, sworn to by at least two executive officers of the insurer or certified by the public insurance supervisory official of the insurer's state of domicile or of entry into the United States; (4) a copy of the report of last examination, if any, made of the insurer, issued by the insurance supervisory official of its state of domicile or of entry into the United States; (5) appointment of the director under AS 21.09.180 as its attorney to receive service of legal process; (6) if a foreign or alien insurer, a certificate of the public official having supervision of insurance in its state or country of domicile, or state of entry into the United States, showing that it is authorized to transact the kinds of insurance proposed to be transacted in this state; (7) if an alien insurer, a copy of the appointment and authority of its United States manager, certified by its officer having custody of its records; and (8) if a foreign insurer, a certificate as to deposit if it is to be tendered under AS 21.09.090 . (b) Policy forms and rates that require filing under AS 21.39 or AS 21.42 shall be submitted under AS 21.39.041 , 21.39.220, or AS 21.42.120 (b) and may not be submitted with the application for a certificate of authority. Sec. 21.09.120. Issuance, refusal, and ownership of certificate. (a) If, upon completion of its application, the director finds that the insurer has met the requirements for and is entitled to a certificate under this title, the director shall issue to the insurer a proper certificate of authority; if the director does not so find, the director shall issue an order refusing the certificate. The director shall act upon an application for a certificate of authority within 60 days after its completion. (b) The certificate, if issued, shall specify the kind or kinds of insurance the insurer is authorized to transact in this state. At the insurer's request, the director may issue a certificate of authority limited to particular types of insurance or insurance coverages within the scope of a kind of insurance defined in AS 21.12 . (c) Although issued to the insurer, the certificate of authority is at all times the property of the state. Upon the expiration, suspension, or termination of the certificate of authority the insurer shall promptly deliver it to the director. Sec. 21.09.130. Continuance, expiration, reinstatement, and amendment of certificate. (a) A certificate of authority issued or renewed under this title continues in force as long as the insurer is entitled to it under this title and until suspended or revoked, or otherwise terminated, subject, however, to continuance of the certificate by the insurer each year by payment before June 30 of the continuation fee set under AS 21.06.250 . The method of payment must be by electronic or other payment method specified by the director by regulation under AS 21.06.250 . (b) If not continued by the insurer, its certificate of authority shall be suspended at midnight on June 30 following the failure of the insurer to continue it in force. The certificate of authority shall expire on June 30 one year following its suspension due to failure to continue the certificate of authority. The director shall promptly notify the insurer of the occurrence of a failure that may result in suspension of its certificate of authority. (c) The director may reinstate a certificate of authority that the insurer has inadvertently permitted to expire, after the insurer has fully cured all its failures that resulted in the expiration and upon payment by the insurer of the fee for reinstatement in addition to the current continuation fee, set under AS 21.06.250 . Otherwise, the insurer shall be granted another certificate of authority only after filing an application and meeting all other requirements as for an original certificate of authority in this state. (d) The director may amend a certificate of authority at any time to accord with changes in the insurer's charter of insuring powers. Sec. 21.09.135. Voluntary surrender of certificate of authority. (a) A foreign admitted insurer may apply for voluntary surrender of its certificate of authority and the director may accept the application, if the foreign admitted insurer (1) is in compliance with the applicable sections of this title, or the director waives in writing each condition of noncompliance; (2) provides written confirmation that obligations incurred before the voluntary surrender of the certificate of authority shall be paid to guarantee funds or insurance pools established by law; and (3) is domiciled in a state that is (A) accredited by the National Association of Insurance Commissioners at the time of the request for voluntary surrender; or (B) not accredited by the National Association of Insurance Commissioners at the time of the request and agrees in writing to be subject to (i) AS 21.09.200 and 21.09.205 for a period of two years, including payment of any fee related to filing information with the director; and (ii) any other provision of this title that may be required in writing by the director and for the period of time the director may specify. (b) If a foreign admitted insurer who surrenders a certificate of authority ceases to exist, all business written and in force relative to a risk resident, located, or to be performed in this state shall be lawfully cancelled or reinsured. A reinsurance agreement covering all or a part of a risk described in this subsection shall be approved by the director before accepting the certificate of authority for surrender if the agreement meets the following criteria: (1) insurance coverage has not deteriorated from the policies existing at the time of the transfer; (2) the assuming insurer is of equal or better financial standing; and (3) the assuming insurer is admitted to do business in this state unless this requirement is waived by the director. Sec. 21.09.140. Mandatory revocation or suspension of certificate. (a) The director shall suspend or revoke an insurer's certificate of authority (1) if the action is required by a provision of this title; (2) if the insurer no longer meets the requirements for the authority granted, on account of the insurer becoming impaired or insolvent or otherwise; or (3) if the insurer's authority to transact insurance is suspended or revoked by its state of domicile, or state of entry into the United States if an alien insurer. (b) Except in cases of insolvency or impairment of required capital or surplus, or suspension or revocation by another state as referred to in (a)(3) of this section, the director shall give the insurer at least 15 days' notice in advance of a suspension or revocation under this section. Sec. 21.09.150. Suspension or revocation for violations and special grounds. (a) The director may suspend or revoke an insurer's certificate of authority if, after a hearing, the director finds that the insurer has violated a lawful order of the director or a provision of this title other than those for which suspension or revocation is mandatory or has not paid any annual service fees assessed under AS 23.05.067 . (b) The director shall, after a hearing, suspend or revoke an insurer's certificate of authority if the director finds that the insurer (1) is in unsound condition, or in a condition, or using methods or practices in the conduct of its business, that render its further transaction of insurance in this state injurious or hazardous to its policyholders or to the public; (2) has refused to be examined or to produce its accounts, records, and files for examination or that any of its officers have refused to give information with respect to its affairs, when required by the director; (3) has failed to pay a final judgment rendered against it in this state within 30 days after the judgment became final; a judgment appealed from is not final until determined by the appellate court; (4) with a frequency that indicates its general business practice in this state, has without just cause refused to pay proper claims arising under its policies, whether the claim is in favor of an insured or is in favor of a third person, or without just cause delays adjustment of claims, or compels the insured or claimant to accept less than the amount due them or to employ attorneys or to bring suit against the insurer or an insured to secure full payment or settlement of claims; (5) is affiliated with and under the same general management or interlocking directorate or ownership as another insurer that transacts direct insurance in this state without having a certificate of authority, except as permitted for surplus line insurance under AS 21.34 ; (6) has failed, after written request by the director, to remove or discharge an officer or director who has been convicted of a felony involving fraud, dishonesty, or moral turpitude. (c) The director may, without advance notice or a hearing, immediately suspend the certificate of authority of an insurer against which proceedings for receivership, conservatorship, rehabilitation, or other delinquency proceedings, have been commenced in any state. Sec. 21.09.160. Notice of suspension or revocation and effect upon agent's authority. (a) Upon suspending or revoking an insurer's certificate of authority, the director shall immediately give notice to the insurer and shall also publish notice of the revocation in one or more newspapers of general circulation in this state. (b) The suspension or revocation shall automatically suspend or revoke, as the case may be, the authority of all its agents and managing general agents to act as agents or managing general agents of the insurer in this state, and the insurer shall so state in the notice to agents and managing general agents provided for in (c) of this section. (c) Upon notification of suspension or revocation of an insurer's certificate of authority, the insurer shall immediately give notice of the suspension or revocation to its agents and managing general agents operating in this state. Sec. 21.09.170. Duration of suspension, insurer's obligations, and reinstatement. (a) Suspension of an insurer's certificate of authority shall be for a fixed period of time determined by the director, or until the occurrence of a specific event necessary for remedying the reasons for suspension. The director may modify, rescind, or reverse a suspension under this section. (b) During the period of suspension, the insurer (1) may not solicit or write any new business in this state; (2) shall file its annual statement and pay fees, licenses, and taxes required under this title; and (3) may service its outstanding business in force in this state as if the certificate had continued in full force. (c) If the suspension of the certificate of authority is for a fixed period of time and the certificate of authority has not been otherwise terminated, upon expiration of the suspension period, the insurer's certificate of authority shall be reinstated unless the director finds that the insurer is not in compliance with the requirements of this title. The director shall promptly notify the insurer of any reinstatement, and the insurer may not consider its certificate of authority reinstated until notified by the director. If not reinstated, the certificate of authority expires at the end of the suspension period or at the time the insurer fails to continue the certificate during the suspension period under (b) of this section, whichever event occurs first. (d) If the suspension of the certificate of authority continues until the occurrence of a specific event and the certificate of authority has not been otherwise terminated, upon the presentation of evidence satisfactory to the director that the specific event has occurred, the insurer's certificate of authority shall be reinstated unless the director finds that the insurer is not in compliance with the requirements of this title. The director shall promptly notify the insurer of any reinstatement, and the insurer may not consider its certificate of authority reinstated until notified by the director. If satisfactory evidence as to the occurrence of the specific event has not been presented to the director within five years after the date of suspension, the certificate of authority expires five years from the date of suspension or upon failure of the insurer to continue the certificate during the suspension period under (b) of this section, whichever occurs first. (e) The authority of the agents in this state to represent the insurer is reinstated upon reinstatement of the insurer's certificate of authority. (f) The director shall promptly notify an insurer's agents in this state, as shown by records of the director, of any reinstatement. Sec. 21.09.175. Determination of impairment. If the director determines that an insurer transacting business in this state is impaired or in imminent danger of becoming impaired, the director may order an insurer to limit or change the insurer's business practices, increase the insurer's capital and surplus, or file additional reports with the director. If an insurer is aggrieved by an order under this section, the insurer may request a hearing under AS 21.06.170 — 21.06.230. Sec. 21.09.180. Director attorney for service of process. (a) Each insurer applying for authority to transact insurance in this state shall appoint the director as its attorney to receive service of legal process issued against it in this state. The appointment shall be made on a form designated and furnished by the director. The appointment shall be irrevocable, shall bind the insurer and any successor in interest to the assets or liabilities of the insurer, and shall remain in effect as long as there is in force in this state a contract made by the insurer or obligations arising from it. (b) Service of process against a foreign or alien insurer shall be made only by service of process upon the director or upon a deputy or other person in charge of the office during the absence of the director. Service of process against a domestic insurer may be made either upon the director or upon the insurer corporation in the manner provided by laws applying to corporations generally, or upon the insurer's attorney-in-fact if a domestic reciprocal insurer. (c) Each insurer at the time of application for a certificate of authority shall file with the director the name and address of the person to whom process against it served upon the director is to be forwarded. The insurer may change the designation by a new filing. Sec. 21.09.190. Service of process. (a) Duplicate copies of legal process against an insurer for whom the director is attorney under AS 21.09.180 shall be served upon the director, or upon a deputy of the director or other person in charge of the office during the absence of the director. At the time of service the plaintiff shall pay to the director a fee set under AS 21.06.250 , taxable as costs in the action. Upon receiving service the director shall promptly forward a copy by certified mail with return receipt requested to the person last designated by the insurer to receive it. (b) Process served upon the director and the copy forwarded as provided in this section constitutes service upon the insurer. Sec. 21.09.200. Annual statement; audited financial report. (a) Each authorized insurer shall annually, before March 2, file with the director or the director's designee a full and true statement of its financial condition, transactions, and affairs as of the preceding December 31. The reporting format for a given year is the most recently approved National Association of Insurance Commissioners' annual financial statement blank form and instructions, supplemented for additional information as required by the director. The director may require the statement to be filed on electronic media. The statement shall be verified by the oath of the insurer's president or vice-president, and secretary, or, if a reciprocal insurer, by oath of the attorney-in-fact or its like officers if a corporation unless verification is waived by the director of insurance. The filing locations must be published by the director at least annually. (b) The statement of an alien insurer shall relate only to its transactions and affairs in the United States unless the director requires otherwise. If the director requires a statement concerning an alien insurer's affairs throughout the world, the insurer shall file the statement with the director as soon as is reasonably possible. The statement shall be verified by the insurer's United States manager or other authorized officer. (c) The director may refuse to accept a fee for continuance of the insurer's certificate of authority, as provided in AS 21.09.130 , or may suspend or revoke the certificate of authority of an insurer failing to file its annual statement when due. (d) At the time of filing, the insurer shall pay to the director a fee for filing its statement, set under AS 21.06.250 . The method of payment must be by electronic or other payment method specified by the director by regulation under AS 21.06.250 . (e) An insurer shall pay to the division $100 for each day the insurer fails to file a statement or report in the form and location required and within the time established in this section. The authority of the insurer to enter into new obligations or issue new or renewal policies of insurance in this state may be suspended by the director if a statement or report required by this section has not been filed by the due date. (f) In addition to the requirements of (a) of this section, an authorized insurer shall file its annual statement with the National Association of Insurance Commissioners on electronic media acceptable to the association by the due date established by the association and shall pay the applicable filing fee. The director may waive the filing requirement if the insurer only transacts business in this state and only accepts risks relative to a subject resident, located, or to be performed in this state. An insurer that fails to comply with this subsection is subject to the penalties specified in (e) of this section, calculated from the filing and fee due date established by the National Association of Insurance Commissioners. (g) An insurer shall file with the director or the director's designee an annual audited financial report for the previous year by June 1 of each year unless, under a regulation adopted by the director, the director grants an exemption based on a finding that filing an annual audited financial report would constitute a financial or organizational hardship on the insurer. The filing date for the annual audited financial report may be extended by the director upon showing that the standards established by regulation have been met. If the director gives the insurer 90 days' advance notice, and for good cause, the director may require an insurer to file an audited financial report earlier than June 1 of each year. The annual audited financial report must be prepared by a qualified independent certified public accountant. An insurer shall notify the director of the certified public accountant engaged to conduct the audit and issue the annual audited financial report. (h) Within 60 days after filing the annual audited financial report under (g) of this section, the insurer shall file a written report on any unremediated material weakness in internal control over financial reporting noted during the audit. (i) The director may adopt regulations that require the insurer to file a report from management describing internal control over financial reporting. An insurer shall file the report on internal control by the date specified by the director. (j) If the director requires the submission of additional information, the insurer shall supplement the reports required by (h) and (i) of this section by the date specified by the director. The reports on internal control filed with the director under (h) and (i) of this section are confidential and subject to the provisions of AS 21.06.060 . (k) In accordance with regulations adopted by the director, an insurer shall designate an audit committee to engage a qualified independent certified public accountant to conduct the annual audit. The audit committee shall oversee services performed by the certified public accountant. If an insurer does not designate an audit committee, the entire governing board of the insurer is considered to be the audit committee for purposes of this subsection. (l) The certified public accountant conducting the annual audit required by (g) of this section shall notify the governing board of the insurer or the audit committee in writing of a determination by the certified public accountant that the insurer has materially misstated its financial condition as reported to the director or that the insurer does not meet the minimum capital requirements and surplus requirements of this title as of the date of the balance sheet currently under audit. An insurer that has received a report under this subsection shall forward a copy to the director. The certified public accountant shall also forward the report to the director unless the insurer provides evidence satisfactory to the certified public accountant that the report has been forwarded to the director. Sec. 21.09.205. Quarterly statement. (a) The director may require an insurer to file quarterly financial statements. If required, the statements must follow for a given quarter the reporting format specified in the quarterly financial statement blank form and instructions most recently approved by the National Association of Insurance Commissioners. (b) A quarterly financial statement, if required, is due 45 days after the end of the quarter to which it applies. (c) An insurer shall pay to the division $100 for each day the insurer fails to file the quarterly statement in the form required or within the time established in (b) of this section. (d) In addition to the requirements of (a) of this section, an authorized insurer shall file its quarterly statement with the National Association of Insurance Commissioners on electronic media acceptable to the association by the due date established by the association, and shall pay the applicable filing fee. The director may waive the filing requirement if the insurer only transacts business in this state and only accepts risks relative to a subject resident, located, or to be performed in this state. An insurer that fails to comply with this subsection is subject to the penalties specified in (c) of this section, calculated from the filing and fee due date established by the National Association of Insurance Commissioners. Sec. 21.09.207. Statement of actuarial opinion and supporting documentation. (a) An insurer authorized to write property, casualty, surety, marine, wet marine, transportation, or mortgage guaranty insurance shall file annually with the director a statement of actuarial opinion, unless the insurer is exempt or otherwise not required to file an opinion in the insurer's state of domicile. The statement of actuarial opinion must (1) be issued by an actuary appointed by the insurer; (2) follow, for a given year, the reporting format and requirements specified in the annual financial statement instructions most recently approved by the National Association of Insurance Commissioners; and (3) be supplemented with additional information as may be required by the director. (b) A domestic insurer that is required to file a statement under (a) of this section shall file annually with the director an actuarial opinion summary written by the insurer's appointed actuary. A foreign insurer that is required to file a statement under (a) of this section shall, on written request of the director, file an actuarial opinion summary with the director. The actuarial opinion summary must follow, for a given year, the reporting format and requirements specified in the annual financial statement instructions most recently approved by the National Association of Insurance Commissioners and must be supplemented with additional information as required by the director. (c) An insurer that is required to file a statement under (a) of this section shall prepare an actuarial report and work papers to support each statement of actuarial opinion as required by the annual financial statement instructions most recently approved by the National Association of Insurance Commissioners. If an insurer fails to provide a supporting actuarial report or work papers at the request of the director, or the director determines that the supporting actuarial report or work papers provided by the insurer are incomplete or otherwise unacceptable to the director, the director may engage a qualified actuary at the expense of the insurer to review the statement of actuarial opinion and the basis for the statement and to prepare the supporting actuarial report or work papers. (d) An actuarial report, actuarial opinion summary, or work paper provided in support of a statement of actuarial opinion and any other information provided by an insurer to the director in connection with the statement of actuarial opinion, the actuarial opinion summary, or the actuarial report issued under this section is confidential; however, nothing in this section limits the director's authority to release the documents to a national professional organization that disciplines actuaries that is recognized by the director, as long as the material is required for the purpose of professional disciplinary proceedings and the national professional organization establishes procedures satisfactory to the director for preserving the confidentiality of the documents. (e) In this section, (1) “appointed actuary” means a qualified actuary who is appointed or retained by a company to provide a statement of actuarial opinion and the related actuarial opinion summary, actuarial report, and work papers; (2) “qualified actuary” means a member in good standing of the (A) Casualty Actuarial Society; or (B) American Academy of Actuaries who has been approved as qualified for signing casualty loss reserve opinions by the Casualty Practice Council of the American Academy of Actuaries. Sec. 21.09.210. Tax on insurers. (a) Each authorized insurer, and each formerly authorized insurer with respect to premiums written while an authorized insurer in this state, shall file with the director, on or before March 1 in each year, a report of all insurance business written or contracted in the state, with proper proportionate allocation of premium for the property, subjects, or risks in the state insured under policies or contracts covering property, subjects, or risks located or resident in more than one state, during the preceding year ending December 31. The report must show (1) the amounts paid policyholders on losses; (2) the total direct premium income including policy membership and other fees, premiums paid by application of dividends, refunds, savings coupon, and similar returns or credits to payment of premiums for new or additional or extended or renewed insurance, charges for payment of premium in installments, and all other consideration for insurance from all kinds and classes of insurance whether designated a premium or otherwise; (3) the amounts paid policyholders as returned premiums; (4) the amounts paid policyholders as dividends. (b) Each insurer, and each formerly authorized insurer with respect to premiums written while an authorized insurer in this state, shall pay a tax on the total direct premium written during the year ending on the preceding December 31 and paid for the insurance of property or risks resident or located in the state, other than wet marine and transportation insurance, after deducting from the total direct premium income the applicable cancellations, returned premiums, the unabsorbed portion of any deposit premium, all policy dividends, unabsorbed premiums refunded to policyholders, refunds, savings, savings coupons, and other similar returns paid or credited to policyholders with respect to their policies. Deductions may not be made of cash surrender value of policies. Considerations received on annuity contracts are not included in the direct premium income and are not subject to tax. The tax shall be paid to the director at least annually but not more often than once each quarter on the dates specified by the director. The method of payment must be by the electronic or other payment method specified by the director. Except as provided under (m) of this section, the tax is computed at the rate of (1) for domestic and foreign insurers, except hospital and medical service corporations, 2.7 percent; (2) for hospital and medical service corporations, six percent of their gross premiums less claims paid. (c) [Repealed, § 48 ch 29 SLA 1987.] (d) An authorized insurer shall, with respect to all wet marine and transportation contracts written in this state during the preceding calendar year, pay to the director a tax of three-quarters of one percent on its gross underwriting profit. The director shall specify the dates that payment is due and the electronic or other method by which payment is to be made. The gross underwriting profit is computed by deducting, from the net premiums on wet marine and transportation insurance contracts, the net losses paid during the calendar year under the contracts. In the case of an insurer issuing participating contracts, the gross underwriting profit may not include, for computation of the tax prescribed by this section, the amounts refunded or paid as participation dividends by the insurers to the holders of the contracts. In this subsection, (1) “net losses” means gross losses less salvage and recoveries on reinsurance ceded; (2) “net premiums” means gross premiums less all return premiums and premiums for reinsurance. (e) Payment to the director by an insurer of the tax upon its premiums required by this section shall be in lieu of all other taxes imposed by the state upon premiums, franchise, privilege, or other taxes measured by income of the insurer. (f) The state hereby pre-empts the field of imposing excise, privilege, franchise, income, license, permit, registration, and similar taxes, licenses, and fees upon insurers and their general agents, agents, and representatives as such; and on the intangible property of insurers or agents; and all political subdivisions of agencies in the state, including home rule boroughs or cities, are prohibited from imposing or levying upon insurers, or upon their general agents, agents, and representatives as such, any tax, license, or fee. However, this subsection shall not be construed as prohibiting the imposition by political subdivisions of taxes upon real and tangible personal property of insurers and their general agents, agents, and representatives. (g) An insurer shall pay to the division a late payment fee of $50 a month plus five percent of the tax due each calendar month or part of a month during which the insurer fails to pay the full amount of the tax, or a portion of the tax, and interest at the rate of one percent of the tax due each calendar month or part of a month for the period the insurer fails to pay the premium tax in this section or in AS 21.09.270 . The late payment fee, not including interest, may not exceed $250 plus 25 percent of the tax due. The tax payment shall be made in the form required by the director, or a penalty shall be added to the tax of 25 percent of the tax due, not to exceed $2,000, with a minimum penalty of $100. In addition to any other penalty provided by law, a civil penalty may be assessed of not more than $10,000 if an insurer wilfully violates this section. The director may suspend or revoke the certificate of authority of an insurer that fails to pay taxes, a penalty, or a late payment fee as required under this section. (h) The provisions of this section do not apply to title insurance companies. A premium tax on title insurance companies shall be levied in accordance with the provisions of AS 21.66.110 . (i) Premiums paid by the state for insurance policies and contracts purchased under the provisions of AS 39.30 are exempt from taxation under this section. An insurer may not include the tax imposed under this section in a premium charged on an insurance policy or contract purchased by the state under the provisions of AS 39.30 . An insurer may claim the exemption on forms provided by the division of insurance. (j) The provisions of AS 21.96.070 apply to a taxpayer who is required to pay a tax due under this section. (k) If, within three years after the date the tax under this section was due, an insurer discovers a mistake or misinterpretation that resulted in an overpayment of the tax in an amount exceeding $250 in any one calendar year, the insurer may make a written request to the director for a refund. If the director determines a valid mistake or misinterpretation has occurred, the director shall refund to the insurer the amount of the excess tax by granting, at the director's discretion, a monetary refund or premium tax credit.

A premium tax credit shall be used in the next calendar year to the extent possible and any unused credit shall be paid as a monetary refund. A premium tax credit may not reduce the payable tax, calculated without use of the credit, to less than zero. (l) A premium tax credit granted under (k) of this section may not carry over as an attribute in a transaction under AS 21.69.610 , 21.69.620, AS 21.78 , or a similar transaction entered into by a foreign insurer. (m) The tax imposed under this section for an individual life insurance policy shall be computed at the rate of (1) 2.7 percent of policy year premium up to $100,000; and (2) 0.08 percent of policy year premium exceeding $100,000. (n) Premiums on which taxes are paid under (m)(2) of this section are not subject to AS 21.09.270 . (o) A qualified insurer is entitled to a premium tax credit under AS 21.55.220 . (p) In this section, “premium tax credit” means an amount that an insurer may use as an offset against a premium tax payment. Secs. 21.09.220 — 21.09.240. Resident agent's counter signature; exception; affidavit requirement. [Repealed, § 2 ch 41 SLA 1984.] Sec. 21.09.242. Cooperation with the Department of Health. (a) An insurer, including a pharmacy benefits manager, with respect to medical assistance programs under AS 47.07 , shall cooperate with the Department of Health to (1) provide, with respect to an individual who is eligible for or is provided medical assistance under AS 47.07 , on the request of the department, information to determine during what period the individual or the individual's spouse or dependents may be or may have been covered by the insurer and the nature of the coverage that is or was provided by the insurer, including the name and address of the insurer and the identifying number of the health care insurance plan; (2) accept the department's right of recovery and the assignment to the department of any right of an individual or other entity to payment from the party for an item or service for which payment has been made under AS 47.07 ; (3) respond to any inquiry by the department regarding a claim for payment for any health care item or service that is submitted not later than three years after the date of the provision of the health care item or service; and (4) agree not to deny a claim submitted by the department solely on the basis of the date of submission of the claim, the type or format of the claim form, or a failure to present proper documentation at the point-of-sale that is the basis of the claim if (A) the claim is submitted by the department within the three-year period beginning on the date on which the item or service was furnished; and (B) any action by the department to enforce its rights with respect to the claim is commenced within six years after the department's submission of the claim. (b) An assessable entity, as defined in AS 18.09.990 , shall provide information and assessments to the Department of Health and the State Vaccine Assessment Council established under AS 18.09.210 as necessary for the statewide immunization program established under AS 18.09.200 . Sec. 21.09.245. Required notice. (a) If an insurer intends to change the insurer's name, domicile, or other information provided on the certificate of authority, the insurer shall file a notice of the change with the director within 30 days before or after the intended change takes effect. (b) If an insurer changes the insurer's articles of incorporation, bylaws, business address, phone number, electronic mailing address, or other information maintained by the director, the insurer shall file a notice of the change with the director not later than 90 days after the effective date of the change. (c) Failure by an insurer to provide notification required by this section may result in a civil penalty of up to $1,000 and, additionally, a civil penalty of up to $50 for each day that the information is withheld from the director. Sec. 21.09.247. Biographical affidavits. A domestic insurer shall file with the director a complete affidavit of biographical information not later than 30 days after the appointment of an officer or director of the insurer. If requested by the director, a foreign insurer shall file with the director an affidavit of biographical information for the appointment of an officer or director of the insurer. A filing under this section must be on a form approved by the director. A filing is not required if a biographical affidavit of the officer or director has been submitted to the director within one year before the date of appointment. A biographical affidavit filed under this section is confidential and not subject to public inspection. Sec. 21.09.250. Prohibited acts. An insurer doing business in this state may not make, write, place, or cause to be made, written, or placed in this state a policy, duplicate policy, or contract of insurance of any kind or character, or general or floating policy upon persons or property resident, situated, or located in this state, from or through a person required to be licensed who has not secured a license in this state. An insurer may not pay a commission or any form of remuneration to a person, firm, or organization for the writing or placing of insurance coverage in this state unless that person, firm, or organization holds a license issued by the director. Sec. 21.09.260. Penalties. An insurer that the director determines, following an appropriate hearing as provided in AS 21.06.170 — 21.06.230, has violated the provisions of AS 21.09.250 is subject to a civil penalty of not more than $2,500 for each violation. The director may suspend or revoke the license of the insurer for a violation of AS 21.09.250 , but violation does not invalidate the insurance contract. Sec. 21.09.270. Retaliation. (a) If, under the laws of another state or foreign country, taxes, licenses, and other fees, in the aggregate, and fines, penalties, deposit requirements, or other material obligations, prohibitions, or restrictions are or would be imposed upon Alaska insurers, or upon their agents or representatives, that are in excess of the taxes, licenses, and other fees, in the aggregate, or that are in excess of the fines, penalties, deposit requirements, or other obligations, prohibitions, or restrictions directly imposed upon similar insurers, or upon their agents or representatives, of another state or country under the statutes of this state, as long as the laws of the other state or country continue in force or are applied, the same taxes, licenses, and other fees, in the aggregate, or fines, penalties, or deposit requirements or other material obligations, prohibitions, or restrictions of whatever kinds shall be imposed by the director upon the insurers, or upon their agents or representatives, of the other state or country doing business or seeking to do business in this state. A tax, license or other fee or other obligation imposed by a city, county, or other political subdivision or agency of another state or country on Alaska insurers or their agents or representatives shall be considered to be imposed by the state or country within the meaning of this section. (b) This section does not apply to personal income taxes, to ad valorem taxes on real or personal property, or to special purpose obligations or assessments imposed by another state in connection with particular kinds of insurance other than property insurance; except that deductions from premium taxes or other taxes otherwise payable allowed on accounts of real estate or personal property taxes paid shall be taken into consideration by the director in determining the propriety and extent of retaliatory action under this section. (c) For the purposes of this section the domicile of an alien insurer, other than insurers formed under the laws of Canada or a province of Canada, shall be that state designated by the insurer in writing filed with the director at the time of admission to this state or within six months after July 1, 1966, whichever date is the later, and may be any one of the following states: (1) that in which the insurer was first authorized to transact insurance; (2) that in which is located the insurer's principal place of business in the United States; (3) that in which is held the larger deposit of trusteed assets of the insurer for the protection of its policyholders and creditors in the United States. (d) If the insurer makes no designation, its domicile shall be considered to be that state in which its principal place of business in the United States is located. (e) If an insurer is formed under the laws of Canada or a province of Canada, its domicile is the province in which its head office is located. (f) For purposes of the application of (a) of this section, a health care insurer, as defined in AS 21.54.500 , may not include taxes, assessments, or other similar obligations on health care insurance premiums received from the state, a municipality, a city or borough school district, a regional educational attendance area, the University of Alaska, or a community college operated by the University of Alaska. Sec. 21.09.280. General agents. [Repealed, § 47 ch 51 SLA 1990.] Sec. 21.09.290. Risk retention groups. (a) A risk retention group formed in this state shall (1) comply with 15 U.S.C. 3901 — 3906 (Liability Risk Retention Act); and (2) qualify for and hold in good standing a certificate of authority under AS 21.09.010 — 21.09.320, limited to liability insurance only. (b) A risk retention group shall submit with its application for a certificate of authority (1) the identity of (A) the initial members of the risk retention group; (B) all persons who organized the risk retention group; (C) all persons who will provide administrative services to the risk retention group; (D) all persons who will influence or control the activities of the risk retention group; (2) the amount and nature of initial capitalization; (3) a plan of operation or a feasibility study that includes the coverage, deductible, coverage limit, rate, and rating classification system for the type or class of liability insurance the group intends to offer; and (4) the states in which the risk retention group intends to operate. (c) At least 30 days before a domestic risk retention group implements a material change or revision to an approved plan of operation or feasibility study, the material change or revision shall be filed with the director. A material change or revision may not be implemented unless the domestic risk retention group receives the director's written approval. In this subsection, “material change or revision” includes an offering of an additional type or class of liability insurance. (d) In this section, (1) “liability” means legal liability for damages, including costs of defense, legal costs and fees, and other claims expenses, because of injury to another person, damage to property, or other damage or loss to a person resulting from or arising out of a business, whether profit or nonprofit, trade, product, service, including a professional service, or an activity of a state or local government, or an agency or political subdivision of a state or local government; “liability” does not include personal risk liability or employer's liability with respect to its employees other than legal liability under 45 U.S.C. 51 (Federal Employers' Liability Act); (2) “personal risk liability” means liability for damages because of injury to a person, damage to property, or other loss or damage resulting from a personal, familial, or household responsibility or activity and that is not a responsibility or activity described under (1) of this subsection. Sec. 21.09.300. Disclosure of material transactions. (a) A domestic insurer shall file a report with the director disclosing a material acquisition and disposition of assets or a material nonrenewal, cancellation, or revision of ceded reinsurance agreements unless the acquisition and disposition of assets or material nonrenewal, cancellation, or revision of ceded reinsurance agreements have been submitted to the director for review, approval, or information purposes as required by this title. (b) The report required under (a) of this section is due 15 days after the end of the calendar month in which a reportable transaction occurs. (c) Except as provided in this section, a report obtained by or disclosed to the director under this section is confidential, is not subject to subpoena, and may not be made public by the director, or another person, without the prior written consent of the insurer submitting the report. A report under this section may be disclosed to an insurance regulatory agency of another state or to the National Association of Insurance Commissioners, with notice of the disclosure sent to the insurer. If the director, after giving an insurer notice and an opportunity to be heard, determines that the interest of policyholders, shareholders, or the public will be served by publication of the report, the director may publish all or any part of the report in a manner the director determines appropriate. (d) A domestic insurer's report of an acquisition or disposition of an asset (1) shall be made under (a) of this section if the acquisition or disposition is material; for purposes of this subsection, an acquisition or disposition, or the aggregate of a series of related acquisitions or related dispositions during any 30-day period is material if it is nonrecurring, not in the ordinary course of business, and involves more than five percent of the reporting insurer's total admitted assets as reported in its most recent financial statement required by law that is filed with the division; (2) shall be made on asset acquisition, including a purchase, lease, exchange, merger, consolidation, succession, or other acquisition other than the (A) construction or development of real property by or for the reporting insurer; or (B) acquisition of material for construction or development of real property; (3) shall be made on asset disposition including a sale, lease, exchange, merger, consolidation, mortgage, hypothecation, assignment for the benefit of creditors, or abandonment; (4) must include information on the (A) date of transaction; (B) manner of acquisition or disposition; (C) description of the assets involved; (D) nature and amount of the consideration given or received; (E) purpose of, or reason for, the transaction; (F) manner by which the amount of consideration was determined; (G) gain or loss recognized or realized as a result of the transaction; and (H) names of persons from whom the assets were acquired or to whom the assets were disposed. (e) A domestic insurer's report of nonrenewal, cancellation, or revision of a ceded reinsurance agreement (1) shall be made under (a) of this section if the nonrenewal, cancellation, or revision is material; for purposes of this subsection, a material nonrenewal, cancellation, or revision is one that affects (A) for property and casualty business, including accident and health business when written as property and casualty business, more than 50 percent of an insurer's ceded written premium; or (B) for life, annuity, and accident and health business, more than 50 percent of the total reserve credit taken for business ceded, on an annualized basis as indicated in the insurer's most recently filed statutory statement; however, a filing is not required if the insurer's ceded written premium or the total reserve credit taken for business ceded represents, on an annual basis, less than 10 percent of direct written premiums and assumed written premiums or 10 percent of the statutory reserve requirement before a cession; (2) shall be filed without regard to which party has initiated the nonrenewal, cancellation, or revision of ceded reinsurance whenever any of the following conditions exist: (A) the entire cession has been cancelled, nonrenewed, or revised and ceded indemnity and loss adjustment expense reserves after a nonrenewal, cancellation, or revision represent less than 50 percent of the comparable reserves that would have been ceded had the nonrenewal, cancellation, or revision not occurred; (B) an admitted or accredited reinsurer has been replaced on an existing cession by an unauthorized reinsurer; however, a report shall be filed only if the result of the revision affects more than 10 percent of the cession; or (C) collateral requirements previously established for unauthorized reinsurers have been reduced; however, a report shall be filed only if the result of the revision affects more than 10 percent of the cession; and (3) must include (A) the effective date of the nonrenewal, cancellation, or revision; (B) a description of the transaction with an identification of the initiator of the transaction; (C) the purpose of, or reason for, the transaction; and (D) if applicable, the identity of the replacement reinsurers. (f) An insurer is required to report under (a) of this section on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers that utilizes a pooling arrangement or 100 percent reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is presumed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than $1,000,000 total direct written premiums and assumed written premiums during a calendar year that is not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than five percent of the insurer's capital and surplus. Sec. 21.09.310. Authorization of United States branches of alien insurers and general requirements. (a) This section applies to all United States branches of alien insurers using this state as a state of entry to transact the business of insurance in the United States. Except as provided elsewhere in this title, a United States branch is subject to all state laws applicable to an insurer domiciled in this state. (b) An alien insurer may apply for a certificate of authority to use this state as a state of entry to transact the business of insurance in the United States by (1) qualifying as an insurer licensed to do business in this state; (2) establishing a trust under a trust agreement approved in writing by the director with a United States bank acceptable to the director in an amount not less than the greater of (A) the minimum basic capital or basic guarantee surplus and additional maintained surplus required under AS 21.09.070 ; or (B) the authorized control level risk based capital under AS 21.14 ; (3) submitting a copy of its charter and bylaws, if any, currently in force, and other documents necessary to show the kind of business it is authorized to transact in its domiciliary jurisdiction; documents submitted under this paragraph must be attested to as accurate and complete by the insurance supervisory official in the domiciliary jurisdiction, and must include an English translation, if in a language other than English; (4) submitting a full statement, subscribed and affirmed as true by two officers or equivalent responsible representatives in a manner that the director prescribes, of its financial condition as of the close of its latest fiscal year, showing its assets, liabilities, income disbursements, business transacted, and other facts required to be shown in its annual statement, as reported to the insurance supervisory official in its domiciliary jurisdiction; all documents submitted under this paragraph must include an English translation if in a language other than English; (5) submitting to an examination under AS 21.06.120 (b) at its principal office within the United States, and elsewhere if necessary, unless the director accepts a report of the insurer's recent examination and the report has been issued by the insurance supervisory official of the insurer's domiciliary jurisdiction; and (6) payment of fees established under AS 21.06.250 . (c) Before issuing or renewing a certificate of authority for a United States branch, the director may require satisfactory proof that the insurer does not intend to transact insurance business in violation of the provisions of this title or that is not authorized by its charter. Proof required under this subsection may include the alien insurer's charter, an agreement evidenced by a duly certified resolution of its board of directors, or other proof that the director may require. (d) The director may renew a certificate of authority for a United States branch if satisfied, by proof the director may require, that the insurer is not delinquent with respect to a requirement or qualification imposed by this title and that its continuance to transact the business of insurance in this state will not be hazardous or prejudicial to the best interest of the people of this state. (e) A United States branch may not receive or renew a certificate of authority in this state (1) to transact a kind of insurance or a combination of kinds of insurance that are not permitted to be transacted by domestic insurers in this state; (2) if it transacts business other than the business of insurance anywhere else within the United States unless the business, in the opinion of the director, is necessarily or properly incidental to the kind of insurance that it is authorized to transact in this state; (3) if it fails to keep full and correct entries of its transactions; records of entries shall at all times be maintained in its principal office within this state; or (4) if it fails to comply with a requirement or limitation of this title that it is not exempted from by another provision of this title and that is applicable to similar domestic insurers and if, in the judgment of the director, the requirement or limitation is necessary to protect the interest of the policyholders. (f) A United States branch that transacts a kind or combination of kinds of insurance outside this state that is not permitted to be done in this state by similar domestic insurers may not have a certificate of authority issued or renewed in this state unless, in the judgment of the director, the transaction of that kind of insurance is not prejudicial to the best interest of the people of this state. (g) A United States branch shall maintain assets in a trust account in an amount not less than the United States branch's reserves and other liabilities, plus the greater of (1) the minimum basic capital or basic guaranteed surplus and additional maintained surplus required under AS 21.09.070 ; or (2) the authorized control level risk based capital under AS 21.14 . (h) A written trust agreement must contain provisions that (1) vest legal title to trusteed assets in the trustees, and their lawfully appointed successors; (2) require that all assets deposited in the trust be continuously kept within the United States; (3) provide for substitution of a new trustee in case of a vacancy by death, resignation, or other reason, subject to the prior written approval of the director; (4) require that the trustee continuously maintain a record sufficient to identify the assets of the trust fund; (5) require that trusteed assets consist only of cash, investments eligible for investment of the funds of domestic insurers, and accrued interest on the assets, if collectible by the trustee, subject to the limits on investment of funds by domestic insurers under this title; (6) require that the trust be for the exclusive benefit, security, and protection of the policyholders, or policyholders and creditors, of the United States branch in the United States and that the trust be maintained as long as there is an outstanding liability of the alien insurer arising out of its transaction of insurance in the United States; and (7) provide that withdrawal of an asset may not be made or permitted by a trustee without the prior written approval of the director except (A) to make deposits required by law in a state for the security or benefit of all policyholders, or policyholders and creditors, of the United States branch in the United States; (B) to withdraw funds deposited in another state under (A) of this paragraph if (i) the written trust agreement requires prior written approval of the insurance supervising official of that other state; (ii) written notice of the nature and extent of the withdrawal is provided to the director within 30 days of the withdrawal; and (iii) the total trusteed assets remaining are in excess of the total assets required to be maintained in trust under (g) of this section; (C) upon the specific written direction of the United States manager, who is duly authorized and is acting under either general or specific written authority previously given or delegated by the board of directors, to substitute other assets as permitted by this title if the substituted assets are of at least equal value and quality to those withdrawn; (D) to transfer assets to an official liquidator or rehabilitator under an order of a court of competent jurisdiction; or (E) if provided under the terms of the written trust agreement, to pay over to the United States manager of the United States branch, upon request, income, dividends, or interest accumulations of the assets of the trust fund that are in excess of the total assets required to be maintained in trust under (g) of this section. (i) A written trust agreement and all amendments to it shall be authenticated in a form and manner that the director may prescribe and may not take effect until approved by the director. The director may not approve a trust agreement unless the director makes a written finding that (1) the written trust agreement or its amendments are sufficient in form and in conformity with law; (2) a person designated as a trustee is eligible to act in that capacity; and (3) the written trust agreement is adequate to protect the interests of the beneficiaries of the trust. (j) The director may approve written modifications of, or variations in, a written trust agreement upon a finding that the proposed changes are not prejudicial to the interests of the people of this state or the United States policyholders and creditors of the United States branch. (k) The director may conduct examinations of the trusteed assets of an authorized United States branch at the insurer's expense and may require the trustee or trustees to file a statement, in a form as prescribed by the director, certifying the assets and amounts of the trust fund. (l) The director, upon finding that the requisites for the approval of the trust agreement no longer exist, may issue an order that withdraws approval of a written trust agreement and amendments to it. An order issued under this subsection takes effect 10 days after being issued. (m) In addition to all other actions permitted under this title, refusal or neglect of a trustee to comply with the requirements of this title is a cause for suspension or revocation of the United States branch's certificate of authority or the liquidation of the alien insurer's United States branch. (n) Annual statements under AS 21.09.200 and quarterly statements under AS 21.09.205 (1) may only relate to and must include all insurance transactions and affairs within the United States, assets held by or for the United States branch for the protection of policyholders and creditors within the United States, and liabilities incurred against those assets; and (2) may not contain a statement in regard to assets and business transacted in a place not described in this subsection. The annual and quarterly statements shall be signed and verified by the United States manager, attorney-in-fact, or a duly empowered assistant United States manager of the United States branch. (o) In a form prescribed by the director, an authorized United States branch shall file with its annual and quarterly statements a statement of trusteed surplus covering the same time period. The trusteed surplus shall consist of the aggregate value of the United States branch's general state deposits and assets deposited with a trustee under this section, plus accrued interest income if the interest were collected by the states for the trustees, less the aggregate net amount of all its reserves and other liabilities in the United States as determined under this subsection. The items of securities and other property held under trust deeds shall be certified by the United States trustee. To determine the net amount of the United States branch's liabilities in the United States to be reported in the statement of trusteed surplus, the United States branch shall adjust its total liabilities reported on its accompanying annual or quarterly statement as follows: (1) by adding back liabilities used to offset admitted assets reported in the accompanying annual or quarterly statement; and (2) by deducting (A) unearned premiums on agent's balances or uncollected premiums not more than 90 days past due; (B) reinsurance on losses with authorized insurers, less unpaid reinsurance premiums; (C) reinsurance recoverables on paid losses from unauthorized insurers that are included as an asset in the annual statement, but only to the extent a liability for unauthorized recoverables as described in this paragraph are included in the liabilities report in the trusteed surplus statement; (D) special state deposits held for the exclusive benefit of policyholders, or policyholders and creditors, of a particular state not exceeding net liabilities reported for that state; (E) secured accrued retrospective premiums; (F) if a life insurer, (i) the amount of its policy loans to policyholders within the United States, not exceeding the amount of legal reserve required on an affected policy; and (ii) the net amount of uncollected and deferred premiums; and (G) other nontrusteed assets, upon a written finding by the director that the other nontrusteed assets secure liabilities in a substantially similar manner to those permitted under this subsection. (p) In addition to the annual and quarterly statements and the statements of trusteed surplus, the director may require additional information relating to total business or assets, or any portion of them, of the alien insurer or its United States branch. (q) In addition to the general statement of the financial condition of the United States branch, a report of examination must include a trusteed surplus statement as of the date of the examination. (r) In this section, (1) “trusteed assets” are the assets maintained in a trust account under (g) of this section; (2) “United States branch” means the business unit through which business is transacted within the United States by an alien insurer and the assets and liabilities of the insurer within the United States applicable to that business. Sec. 21.09.320. Maintenance of records; production; civil penalty. (a) A foreign insurer shall keep at its principal place of business a complete record of its assets, transactions, and affairs in accordance with the methods and systems that are customary or suitable to the kind of business transacted. (b) To meet the requirements of (a) of this section, the insurer shall keep the records as required by the record maintenance requirements of the insurer's domicile jurisdiction. (c) The director may make a request in writing to review records under (a) of this section. An insurer shall, not later than 10 business days after the date of the request, provide the requested records to the director or make the records available for inspection and copying. All records inspected or examined under this subsection are confidential, but may be used by the director in a proceeding against the insurer. (d) Failure by an insurer to provide information required in this section may result in a civil penalty of up to $1,000 for each violation and an additional civil penalty of up to $50 for each day the information requested is not provided. Article 2. Corporate Governance Annual Disclosure. Sec. 21.09.400. Corporate governance annual disclosure scope. (a) AS 21.09.400 — 21.09.460 do not prescribe or impose a corporate governance standard or internal procedure beyond that required under AS 10 . Nothing in AS 21.09.400 — 21.09.460 limits the director's authority or the rights or obligations of a third party. (b) AS 21.09.400 — 21.09.460 apply to an insurer domiciled in this state. Sec. 21.09.410. Disclosure requirement. (a) An insurer, or an insurance group of which the insurer is a member, shall submit to the director not later than June 1 of each calendar year a corporate governance annual disclosure that contains the information described in AS 21.09.430 (b). In the event the director requests an insurer to submit a disclosure under (c) of this section and the insurer is a member of an insurance group, the insurer shall submit the disclosure to the lead state insurance regulator of the insurance group, under the laws of the lead state, in accordance with the procedures set out in the Financial Analysis Handbook adopted by the National Association of Insurance Commissioners. (b) A corporate governance annual disclosure must include a signature of the insurer's or insurance group's chief executive officer or corporate secretary attesting that, to the best of that individual's belief and knowledge, (1) the insurer has implemented the corporate governance practices required under AS 21.09.400 — 21.09.460; and (2) a copy of the corporate governance annual disclosure has been provided to the insurer's board of directors or the appropriate committee of the board. (c) An insurer not required to submit a corporate governance annual disclosure under (a) of this section shall submit a disclosure upon request of the director. (d) For purposes of completing a corporate governance annual disclosure, an insurer or insurance group, depending on the insurer's or insurance group's corporate governance structure, may provide information regarding corporate governance at (1) the ultimate controlling parent level; (2) an intermediate holding company level; (3) the individual legal entity level; or (4) the ultimate controlling parent level, an intermediate holding company level, and the individual legal entity level. (e) An insurer or insurance group (1) is encouraged to make the corporate governance annual disclosure at the level at which (A) the insurer's or insurance group's risk appetite is determined; (B) the earnings, capital, liquidity, operations, and reputation of the insurer are overseen collectively and at which the supervision of those factors are coordinated and exercised; or (C) legal liability for failure of general corporate governance duties would be placed; (2) shall, if determining the level of reporting based on the criteria under this section, (A) indicate which of the three criteria under (1) of this subsection was used to determine the level of reporting; and (B) explain any subsequent change in the level of reporting. (f) A review of the corporate governance annual disclosure and any additional requests for information shall be made through the lead state in accordance with the procedures set out in the Financial Analysis Handbook adopted by the National Association of Insurance Commissioners. (g) An insurer or insurance group providing information substantially similar to the information required under AS 21.09.400 — 21.09.460 in other documents provided to the director, including proxy statements filed in conjunction with Form B requirements under regulations of the division, or other state or federal filings provided to the division, is not required to duplicate that information in the corporate governance annual disclosure; however, the insurer or insurance group shall include in the disclosure a cross reference of the document in which the information is included. Sec. 21.09.420. Regulations and orders. To carry out the provisions of AS 21.09.400 — 21.09.460, the director may (1) adopt regulations, including regulations substantially similar to the regulations under the National Association of Insurance Commissioners' Corporate Governance Annual Disclosure Model Regulation; and (2) issue orders necessary to implement the provisions. Sec. 21.09.430. Contents of corporate governance annual disclosure. (a) An insurer or insurance group may have discretion in responding to a corporate governance annual disclosure inquiry if the insurer's or insurance group's disclosure contains the material necessary for the director to gain an understanding of the insurer's or insurance group's corporate governance structure, policies, and practices. The director may request additional information the director determines necessary for the director to have a clear understanding of the insurer's or insurance group's corporate governance policies, reporting or information system, or controls implementing those policies. (b) An insurer or insurance group shall prepare a corporate governance annual disclosure consistent with regulations adopted by the director under AS 21.09.420 . An insurer or insurance group shall maintain documents and supporting information used in preparing the insurer's or insurance group's disclosure and shall make the documents and supporting information available upon examination or request of the director. Sec. 21.09.440. Confidentiality. Documents, materials, or other information, including a corporate governance annual disclosure, in the possession or control of the division that are obtained by, created by, or disclosed to the director or any person under AS 21.09.400 — 21.09.460 are confidential and subject to the provisions of AS 21.06.060 . Sec. 21.09.450. Agreements with National Association of Insurance Commissioners and third-party consultants. (a) The director may retain, at the insurer's or insurance group's expense and as consistent with this section, third-party consultants, including attorneys, actuaries, accountants, and other experts not otherwise a part of the director's staff, as may be reasonably necessary to assist the director in reviewing the insurer's or insurance group's corporate governance annual disclosure and related information or the insurer's or insurance group's compliance with AS 21.09.400 — 21.09.460. (b) A person retained under (a) of this section is under the direction and control of the director and acts in a purely advisory capacity. (c) As part of the retention process, a third-party consultant must verify to the director in writing, with notice to the insurer or insurance group, that the consultant is free of a conflict of interest, has internal procedures in place to monitor compliance with a conflict, and will comply with the confidentiality standards and requirements under AS 21.09.400 — 21.09.460. (d) A written agreement with the National Association of Insurance Commissioners, a third-party consultant, or both, governing sharing and use of information provided under AS 21.09.400 — 21.09.460 must contain the following provisions and expressly require the written consent of the insurer or insurance group before making information under AS 21.09.400 — 21.09.460 public: (1) a provision stating that the National Association of Insurance Commissioners and third-party consultants are subject to the same confidentiality standards and requirements as the director under AS 21.22.120 and any other relevant law; (2) specific procedures and protocols for maintaining the confidentiality and security of information related to corporate governance annual disclosures that is shared with the National Association of Insurance Commissioners or the third-party consultant under AS 21.09.400 — 21.09.460; (3) procedures and protocols that ensure the National Association of Insurance Commissioners shares only with other state regulators from states in which the insurer or insurance group has domiciled insurers; the agreement must provide that the recipient agrees in writing to maintain the confidentiality of the documents, materials, or other information related to corporate governance annual disclosures and has verified in writing the legal authority to maintain confidentiality; (4) a provision specifying that ownership of information related to corporate governance annual disclosures that is shared with the National Association of Insurance Commissioners or a third-party consultant remains with the division, and the use of the information by the National Association of Insurance Commissioners or the third-party consultant is subject to the direction of the director; (5) a provision that prohibits the National Association of Insurance Commissioners or the third-party consultant from storing the information shared under AS 21.09.400 — 21.09.460 in a permanent database after the underlying analysis is completed; (6) a provision requiring the National Association of Insurance Commissioners or the third-party consultant to provide prompt notice to the director and the insurer or insurance group regarding any subpoena, request for disclosure, or request for production of information related to the insurer's or insurance group's corporate governance annual disclosure; (7) a requirement that the National Association of Insurance Commissioners or the third-party consultant consent to intervention by an insurer or insurance group in any judicial or administrative action in which the National Association of Insurance Commissioners or the third-party consultant may be required to disclose confidential information about the insurer or insurance group shared with the National Association of Insurance Commissioners or the third-party consultant under AS 21.09.400 — 21.09.460. Sec. 21.09.460. Penalties. Each day an insurer or insurance group fails, without just cause, to file the corporate governance annual disclosure in the time required under AS 21.09.410 (a), the insurer or insurance group shall pay $1,000, not to exceed $365,000. The director may reduce the penalty under this section if the insurer or insurance group demonstrates to the director that the imposition of the penalty is a financial hardship to the insurer or insurance group.