(a) Notice to policyholders, agents, and brokers.

(1)  The transferring insurer shall provide, or cause to be provided, to each policyholder a notice of transfer by first-class mail, addressed to the policyholder’s last known address or to the address to which premium notices or other policy documents are sent or, with respect to home service business, by personal delivery with acknowledged receipt. A notice of transfer shall also be sent to the transferring insurer’s agents or brokers of record on the affected policies.

(2)  The notice of transfer shall state or provide:

(i)  The date the transfer and novation of the policyholder’s contract of insurance is proposed to take place;

(ii)  The name, address, and telephone number of the assuming and transferring insurer;

(iii)  That the policyholder has the right to either consent to or reject the transfer and novation;

(iv)  The procedures and time limit for consenting to or rejecting the transfer and novation;

(v)  A summary of any effect that consenting to or rejecting the transfer and novation will have on the policyholder’s rights;

(vi)  A statement that the assuming insurer is licensed to write the type of business being assumed in the state where the policyholder resides, or is authorized, as provided in this section, to assume that business;

(vii)  The name and address of the person at the transferring insurer to whom the policyholder should send its written statement of acceptance or rejection of the transfer and novation; and

(viii)  The address and phone number of the insurance department where the policyholder resides so that the policyholder may write or call the insurance department for further information regarding the financial condition of the assuming insurer;

(ix)  The following financial data for both companies:

(A)  Ratings for the last five years (5), if available, or for any lesser period as is available from two (2) nationally recognized insurance rating services acceptable to the commissioner including the rating service’s explanation of the meaning of the ratings. If ratings are unavailable for any year of the five-year (5) period, this shall also be disclosed;

(B)  A balance sheet as of December 31 for the previous three (3) years, if available, or for any lesser period as is available and as of the date of the most recent quarterly statement;

(C)  A copy of the management’s discussion and analysis that was filed as a supplement to the previous year’s annual statement; and

(D)  An explanation of the reason for the transfer.

(3)  Notice in a form identical or substantially similar to § 27-53.1-8 shall be deemed to comply with the requirements of subsection (a)(2) of this section.

(4)  The notice of transfer shall include a pre-addressed, postage-paid response card, which a policyholder may return as its written statement of acceptance or rejection of the transfer and novation.

(5)  The notice of transfer shall be filed as part of the prior approval requirement set forth in subsection (b)(1) of this section.

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(b) Notification and prior approval requirements.

(1)  Prior approval by the commissioner is required for any transaction where an insurer domiciled in this state assumes or transfers obligations and/or risks on contracts of insurance under an assumption reinsurance agreement. No insurer licensed in this state shall transfer obligations or risks, or both, on contracts of insurance issued to or owned by residents of this state to any insurer that is not licensed in this state. An insurer domiciled in this state shall not assume obligations or risks, or both, on contracts of insurance issued to or owned by policyholders residing in any other state unless it is licensed in the other state, or the insurance regulatory official of that state has approved the assumption.

(2)  Any licensed foreign insurer that enters into an assumption reinsurance agreement which transfers the obligations or risks, or both, on contracts of insurance issued to or owned by residents of this state, shall file or cause to be filed with the commissioner of insurance of this state the assumption certificate, a copy of the notice of transfer and an affidavit that the transaction is subject to substantially similar requirements in the state of domicile of both the transferring and assuming insurer. If no such requirements exist in the domicile of either the transferring or assuming insurers, then the requirements of subsection (b)(3) of this section shall apply.

(3)  Any licensed foreign insurer that enters into an assumption reinsurance agreement that transfers the obligations or risks, or both, on contracts of insurance issued to or owned by residents of this state, shall obtain prior approval of the commissioner of insurance of this state and be subject to all other requirements of this chapter with respect to residents of this state, unless the transferring and assuming insurers are subject to assumption reinsurance requirements adopted by statute or regulation in the jurisdiction of their domicile that are substantially similar to those contained in this section.

(4)  The following factors, along with any other factors that the commissioner deems appropriate under the circumstances, shall be considered by the commissioner in reviewing a request for approval:

(i)  The financial condition of the transferring and assuming insurers and the effect the transaction will have on the financial condition of each company;

(ii)  The competence, experience, and integrity of those persons who control the operation of the assuming insurer;

(iii)  The plans or proposals the assuming party has with respect to the administration of the policies subject to the proposed transfer;

(iv)  Whether the transfer is fair and reasonable to the policyholders of both companies; and

(v)  Whether the notice of transfer to be provided by the insurer is fair, adequate, and not misleading.