§ 58-7-162. Allowable or admitted assets.
§ 58‑7‑162. Allowable or admitted assets.
In any determination of thefinancial condition of an insurer, there shall be allowed as assets only thoseassets owned by an insurer and that consist of:
(1) Cash in thepossession of the insurer, or in transit under its control, and including thetrue balance of any deposit in a solvent United States bank, savings and loanassociation, or trust company, and the balance of any such deposit in aninsolvent United States bank, savings and loan association, or trust company,to the extent insured by a federal agency.
(2) Investments,securities, properties, and loans acquired or held in accordance with thisChapter.
(3) Premium notes,policy loans, and other policy assets and liens on policies and certificates oflife insurance and annuity contracts and accrued interest thereon, in an amountnot exceeding the legal reserve and other policy liabilities carried on eachindividual policy.
(4) The net amount ofuncollected and deferred premiums and annuity considerations in the case of alife insurer.
(5) Repealed by SessionLaws 2003‑212, s. 5, effective October 1, 2003.
(6) All premiums in thecourse of collection not more than 90 days past due, excluding commissionspayable thereon, due from any person that solely or in combination with theperson's affiliates owes the insurer an amount that equals or exceeds fivepercent (5%) of the insurer's surplus as regards policyholders, but only if:
a. The premiumscollected by the person or affiliates and not remitted to the insurer are heldin a trust account with a bank or other depository approved by theCommissioner. The funds shall be held as trust funds and may not be commingledwith any other funds of the person or affiliates. Disbursements from the trustaccount may be made only to the insurer, the insured, or, for the purpose ofreturning premiums, a person that is entitled to returned premiums on behalf ofthe insured. A written copy of the trust agreement shall be filed with andapproved by the Commissioner before becoming effective. The Commissioner shalldisapprove any trust agreement filed under this sub‑subdivision that doesnot assure the safety of the premiums collected. The investment income derivedfrom the trust may be allocated as the parties consider to be proper. Theperson or affiliates shall deposit premiums collected into the trust accountwithin 15 business days after collection; or
b. The person oraffiliates shall provide to the insurer, and the insurer shall maintain in itspossession, an unexpired, clean, irrevocable letter of credit, payable to theinsurer, issued for a term of no less than one year and in conformity with therequirements set forth in this sub‑subdivision, the amount of whichequals or exceeds the liability of the person or affiliates to the insurer, atall times during the period that the letter of credit is in effect, forpremiums collected by the person or affiliates. The letter of credit shall beissued under arrangements satisfactory to the Commissioner and the letter shallbe issued by a banking institution that is a member of the Federal ReserveSystem and that has a financial standing satisfactory to the Commissioner; or
c. The person oraffiliates shall provide to the insurer, and the insurer shall maintain in itspossession, evidence that the person or affiliates have purchased and havecurrently in effect a financial guaranty bond, payable to the insurer, issuedfor a term of not less than one year and that is in conformity with therequirements set forth in this sub‑subdivision, the amount of whichequals or exceeds the liability of the person or affiliates to the insurer, atall times during which the financial guaranty bond is in effect, for thepremiums collected by the person or persons. The financial guaranty bond shallbe issued under an arrangement satisfactory to the Commissioner and thefinancial guaranty bond shall be issued by an insurer that is authorized totransact that business in this State, that has a financial standingsatisfactory to the Commissioner, and that is neither controlled norcontrolling in relation to either the insurer or the person or affiliates forwhom the bond is purchased.
Premiumsreceivable under this subdivision will not be allowed as an admitted asset if afinancial evaluation by the Commissioner indicates that the person oraffiliates are unlikely to be able to pay the premiums as they become due. Thefinancial evaluation shall be based on a review of the books and records of thecontrolling or controlled person.
(7) Repealed by SessionLaws 2003‑212, s. 5, effective October 1, 2003.
(8) Notes and likewritten obligations not past due, taken for premiums other than life insurancepremiums, on policies permitted to be issued on that basis, to the extent ofthe unearned premium reserves carried thereon.
(9) The full amount ofreinsurance which is recoverable by a ceding insurer from a solvent reinsurerand is authorized under G.S. 58‑7‑21.
(10) Amounts receivable byan assuming insurer representing funds withheld by a solvent ceding insurerunder a reinsurance treaty.
(11) Deposits or equitiesrecoverable from underwriting associations, syndicates, and reinsurance funds,or from any suspended banking institution, to the extent considered by theCommissioner to be available for the payment of losses and claims and at valuesto be determined by the Commissioner.
(12) Electronic andmechanical machines, including operating and system software constituting amanagement information system.
(13) Other assets, notinconsistent with the provisions of this section, considered by theCommissioner to be available for the payment of losses and claims, at values tobe determined by the Commissioner. (1991, c. 681, s. 29; 1993, c. 452, s. 8; 1995 (Reg.Sess., 1996), c. 659, s. 1; 2003‑212, ss. 4‑6.)