b'TABLE OF CONTENTSInsurance Business Transfers and Corporate Divisions Gather SteamAs has been the trend over the past few years,To date, Arkansas, Oklahoma, Rhode Island and US jurisdictions have begun adopting legislationVermont have adopted IBT legislation. The details allowing solvent insurers (and reinsurers) toof the IBT legislation vary among these states, restructure blocks of insurance business. Theseparticularly with respect to required approvals for US state laws have their roots in Part VII of thethe transaction and which lines of business insurers UKs Financial Services and Markets Act of 2000.are authorized to transfer in an IBT transaction. Since 2000, UK insurers have had the ability toArkansas and Oklahoma appear to be the most transfer portfolios of in-force insurance policiespermissive jurisdictions, allowing for the transfer of to other legal entities (commonly referred to asall suitable lines of insurance business. aPart VII Transfer ). While the US basedConversely, Rhode Island and Vermont maintain regulators were historically resistant to suchtighter limitations on which types of business an legislation, a handful of US jurisdictions haveinsurer may transferRhode Island restricts now seen the value in offering insurers moretransfers to commercial property and casualty options with respect to management of their(P&C) business and non-life reinsurance, while in-force business.Vermont restricts transfers to non-admitted commercial P&C business. Two Types ofWith respect to CD legislation, the states that have Restructuring Mechanismadopted CD laws include Arizona, Colorado, US insurer restructuring legislation comes in twoConnecticut, Georgia, Illinois, Iowa, Michigan and distinct varietieslegislation allowing insurers toPennsylvania. Again, similar to IBT legislation, the engage in an Insurance Business Transfer (IBT)details of the legislation, including required and legislation allowing insurers to undergo aapprovals, vary among the states. However, given Corporate Division (CD). IBT transactions arethat CD transactions involve the creation of new most similar to UK Part VII Transfers in that theylegal entities to house the insurance business of the allow the insurer to transfer blocks of insurancedividing insurer, there are very few (if any) policies to a different insurer. CD transactions, onlimitations on which lines of business can be the other hand, allow the insurer to divide itself intoinvolved in a CD transaction. two or more legal entities, with assets and liabilitiesIn addition to individual states interests in (and insurance policies) split among the insurersrestructuring legislation, various interest groups, resulting from the division.including the NAIC and the National Council of Insurance Legislators (NCOIL), are actively MAYER BROWN |79'