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than it does in assets supporting its accumulation annuities.
Petitioner's accumulation annuities comprise approximately 99
percent of petitioner's annuity contracts arising from its U.S.
branch and approximately 50 percent of the contracts arising from
its Canadian office.
E. Flow of Funds
Petitioner collects premiums arising from its U.S. branch
business in U.S. currency (U.S. dollars). Upon receipt, for
administrative convenience, petitioner transfers the premium
payments into a U.S. dollar-denominated account with Toronto-
Dominion Bank in Vancouver, British Columbia (Toronto bank). The
Toronto bank pays nominal interest on balances in the account in
excess of $250,000.
Washington State law requires foreign insurance companies to
maintain a trust account (trusteed assets) in order to qualify to
transact insurance in the State. Wash. Rev. Code Ann. sec.
48.05.090 (West Supp. 1990). Petitioner maintains a trust
account and an operating account at Seattle First National Bank
in Seattle, Washington (Seattle bank). Periodically, petitioner
transfers the premiums and interest from the Toronto bank account
to the Seattle bank accounts. Petitioner transfers the majority
of such funds to the trust account and the balance to the
operating account. Petitioner pays commissions, claims, and
operating expenses from its operating account. The Seattle bank
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