Transactions with affiliates. Material transactions by registered insurers with their affiliates are subject to all of the following standards:
1. The terms must be fair and reasonable.
2. Charges or fees for services performed must be reasonable.
3. Expenses incurred and payment received must be allocated to the insurer in conformity with customary accounting practices concerning insurance consistently applied.
4. The books, accounts and records of each party must be so maintained as to disclose clearly and accurately the precise nature and details of the transactions.
5. The insurer’s surplus as regards policyholders following any dividends or distributions to shareholder affiliates must be reasonable in relation to the insurer’s outstanding liabilities and adequate to its financial needs.
Last modified: February 27, 2006