Chapter 03 - Insurers-General Requirements

Chapter 03 - Insurers-General Requirements

29.0301 Required.

(a) No person may transact insurance in American Samoa as an insurer without a certificate of authority issued by the Commissioner and when the certificate is issued that person may not transact any class of insurance which is not specifically authorized by his certificate.

(b) The certificate may not be granted by the Commissioner until the applicant conforms to the applicable requirements of this title and of the other laws of American Samoa, prerequisite to its issue. After a certificate is granted, the insurer shall continue to comply with the requirements pertaining to it as set forth in this title and in the other laws of American Samoa.

29.0302 Application.

Any person desiring to transact insurance business in American Samoa as an insurer shall file with the Commissioner an application for a certificate stating the class or classes of insurance which it proposes to transact accompanied by the following:

(1) a copy of its charter, articles of association, articles of incorporation, or other controlling instruments, certified by the official who is required to keep or record the same in the jurisdiction under the laws of which the insurer is organized, or incorporated;

(2) a resolution adopted by its governing body in accordance with its bylaws or other internal laws, consenting that service of process upon the Commissioner in any action or proceedings against the insurer brought or pending in American Samoa upon any cause of action arising in or growing out of business transacted in American Samoa shall be valid personal service upon the insurer, irrevocable so long as a policy of the company shall remain in force in American Samoa, or any loss remains unpaid therein;

(3) a statement setting forth the location and post office address of its principal office, and it shall continue until changed by a similar statement filed with the Commissioner;

(4) a statement of its financial condition and business in such form as prescribed by, or ac-ceptable to, the Commissioner, signed and sworn to by the president and secretary or other principal officers of the insurer; if an alien insurer, the statement shall comprise only its condition and business in the United States and shall be signed and sworn to, in addition to its principal officers, by its United States manager;

(5) if a foreign insurer, a copy of the last report of examination certified to by the Commissioner, or like officer, of the political subdivision in which the insurer is organized, or if alien, of the political subdivision in which the United States branch is located, or other proper supervisory official;

(6) a good and sufficient bond, with a surety company approved by the Commissioner with the applicant as principal, in a form to be approved by the Commissioner, and running to the Commissioner and his successor in office in the sum of $50,000, with the condition that the surety on the bond shall be answerable up to the amount of the bond for all judgments, decrees, or orders given, made or rendered against the principal on the bond by the High Court of American Samoa for the payment of money; in case of any breach of the condition of any bond, the Commissioner may, and upon demand and receipt of satisfactory assurance for the payment of costs shall, enforce the bond either in his own name or in the name of the interested party thereto for the use and benefit of any person injured by the breach; the surety on the above bond may withdraw from the same upon giving to the Commissioner written notice of such intention not less than 60 days prior to the date on which the then existing certificate of the principal insurer is to expire, the withdrawal to then be effective on the date of expiration of the certificate; in lieu of the bond as required by this section, the applicant may deposit with the Commissioner acceptable unencumbered securities or other unencumbered assets of the value of $50,000 as surety subject to the same conditions as the bond;

(7) a resolution adopted by its governing body in accordance with its bylaws or other internal laws consenting to be sued by the injured person or his heirs or representatives in a direct action on any policy of liability insurance in accordance with 29.1537, whether or not the policy of insurance sued upon was written or delivered in American Samoa, and whether or not the policy contains a provision forbidding direct action, provided that the cause of action arose in American Samoa;

(8) such further information as the Commissioner shall require by regulation specifically request from the applicant

29.0303 Continuance.

Unless revoked by the Commissioner, every certificate shall continue in force subject to the payment of continuance fees on or before 1 April of each year and the filing of an affidavit setting forth that the insurer has continued to comply with all applicable provisions of this part and other information as the Commissioner may require by regulation or request specifically from the insurer.

29.0304 Issuance or refusal.

(a) The Commissioner shall issue to an insurer a certificate of authority if upon completion of the application for a certificate of authority by the insurer the Commissioner finds, from the application and any other investigation and information he may acquire, that the insurer is fully qualified and entitled thereto under the insurance law.

(b) The Commissioner shall take all necessary action and shall either issue or refuse to issue a certificate of authority within a reasonable time after the completion of the application for the certificate.

(c) The certificate of authority, if issued, shall specify the class or classes of insurance the insurer is authorized to transact. The Commissioner may issue authority limited to particular subclasses of insurance or types of insurance coverage within the scope of a class of insurance.

29.0305 Evidence and ownership.

(a) An insurer’s subsisting certificate of authority is evidence of its authority to transact the class or classes of insurance specified therein, either as direct insurer or as reinsurer or as both.

(b) Although issued to the insurer the certificate of authority is at all times the property of the government. Upon any suspension, revocation or termination thereof, the insurer promptly shall deliver the certificate of authority to the Commissioner.

29.0306 Continuance, expiration, or reinstatement.

(a) A certificate of authority shall continue in force as long as the insurer is entitled thereto under the insurance law and until suspended or revoked by the Commissioner or terminated at the request of the insurer; subject, however, to continuance of the certificate by the insurer each year by:

(1) payment prior to 1 April of the continuation fee provided in 29.0320;

(2) due filing by the insurer of its annual statement for the calendar year preceding.

(b) If not so continued by the insurer, its certificate of authority shall expire at midnight on 30 April next following failure of the insurer to continue it in force. The Commissioner promptly shall notify the insurer of impending expiration of its certificate of authority.

(c) The Commissioner, in his discretion, upon the insurer’s request made within 3 months after expiration, may reinstate a certificate of authority which the insurer has permitted to expire after the insurer has cured all its failures which resulted in the expiration and has paid the fee for reinstatement specified in 29.0320. Otherwise the insurer shall be granted another certificate of authority only after filing application therefor and meeting all other requirements as for an original certificate of authority.

29.0307 Suspension or revocation-Mandatory grounds.

(a) The Commissioner shall refuse to continue, or shall suspend or revoke, an insurer’s certificate of authority if:

(1) as a foreign insurer, it no longer meets the requirements for the authority, or as a domestic insurer, it has failed to cure an impairment of required capitalization within the time allowed therefor by the Commissioner;

(2) the insurer knowingly exceeds its charter powers or powers granted under its certificate of authority; or

(3) as a foreign or alien insurer, its certificate of authority to transact insurance is suspended or revoked in its domicile.

(b) Except in cases of impairment of required capitalization or suspension or revocation by another domicile as referred to in paragraph (a) (3), the Commissioner shall refuse, suspend, or revoke the certificate of authority only after a hearing granted to the insurer unless the insurer waives the hearing in writing.

29.0308 Suspension or revocation- Discretionary and special grounds.

(a) The Commissioner may refuse to continue or may suspend or revoke an insurer’s certificate of authority if he finds after a hearing that the insurer:

(1) has management which is untrustworthy, or so lacking in insurance experience as to make the operation hazardous to the insurance buying public;

(2) has violated or failed to comply with any lawful order of the Commissioner, or any pro-vision of the insurance law other than those for which suspension or revocation is mandatory;

(3) is in unsound condition, or in such condition or using such methods and practices in the conduct of its business, as to render its further transaction of insurance hazardous or injurious to its policyholders or to the public;

(4) has failed, after written request by the Commissioner, to remove or discharge an officer or director who has been convicted in any jurisdiction of an offense which, if committed in American Samoa, constitutes a misdemeanor involving moral turpitude or a felony, or is punishable by death or imprisonment under the laws of the United States in any of which cases the record of his conviction shall be conclusive evidence;

(5) is affiliated with, and under the same general management, interlocking directorate or ownership as, another insurer that transacts direct insurance in American Samoa without having a certificate of authority therefor, except as permitted under the insurance law;

(6) refuses to be examined, or its directors, officers, employees or representatives refuse to submit to examination relative to its affairs, or to produce its accounts, records, and files for examination by the Commissioner when required, or refuses to perform any legal obligation relating to the examination;

(7) has failed to pay any final judgment rendered against it upon any policy, bond, recognizance, or undertaking issued or guaranteed by it, within 30 days after the judgment became final, or within 30 days after time for taking an appeal has expired or within 30 days after dismissal of an appeal before final determination, whichever date is the later.

(b) Without advance notice or a hearing thereon, the Commissioner may suspend immediately the certificate of authority of any insurer as to which proceedings for receivership, conservatorship, rehabilitation, or other delinquency proceedings has been commenced in any state by the public insurance supervisory official of that state.

29.0309 Suspension, revocation, or refusal-Order-Effect on agent’s authority.

(a) All suspensions or revocations of, or refusals to continue, an insurer’s certificate of authority shall be by the Commissioner’s order.

(b) Upon suspending, revoking, or refusing to continue the insurer’s certificate of authority, the Commissioner forthwith shall give notice thereof to the insurer’s agents of record in the division, and likewise shall suspend or revoke the authority of the agents to represent the insurer. The Commissioner also shall give notice to the insurance supervisory authority in jurisdictions in which the insurer is authorized, if a domestic insurer, or in its domicile if a foreign or alien insurer.

(c) In his discretion, the Commissioner may publish notice of the suspension, revocation, or refusal in one or more newspapers of general circulation.

29.0310 Suspension-Duration-Insurer’s obligations-Reinstatement.

(a) Suspension of an insurer’s certificate of authority shall be for such period as the Commissioner specifies in the order of suspension, but not to exceed 1 year for any 1 suspension order. During the suspension, the Commissioner may rescind or shorten the suspension by his further order.

(b) During the suspension period, the insurer shall not solicit or write any new business, but shall file its annual statement and pay fees, licenses, and taxes as required under the insurance law, and may service its business already in force, as if the certificate of authority had continued in full force.

(c) Upon expiration of the suspension period, if within that period the certificate of authority has not terminated, the insurer’s certificate of authority automatically shall reinstate unless the Commissioner finds that the causes of the suspension have not terminated, or that the insurer is otherwise not in compliance with the requirements of the insurance law, and the Commissioner shall give the insurer notice thereof not less than 30 days in advance of the expiration of the suspension period.

(d) Upon reinstatement of the insurer’s certificate of authority, the authority of its agents to represent the insurer shall likewise reinstate. The Commissioner promptly shall notify the insurer and its agents of record in the division of the reinstatement. If pursuant to 29.0309, the Commissioner has published notice of suspension, in like manner he shall publish notice of the reinstatement.

29.0320 Fees.

(a) The Commissioner shall require the payment in advance of the following fees:

(1) filing of applicant for certificate or authority $100.00 (2) annual continuation fee 50.00

(3) filing of any other certificate, statement, paper or exhibit required by this part 10.00

(4) filing of new application after refusal to issue original certificate 75.00

(5) filing of application for issuance of certificate after revocation or expiration 250.00

(6) filing of application for withdrawal 10.00

(7) furnishing copies of papers filed, per page .50

(8) certifying copies of paper filed, per document 2.00

Fees paid in accordance with this section shall not be refundable under any circumstances.

(b) All funds deriving from this section shall be deposited in the general fund of the govern-ment.

29.0321 Maximum single risk.

The maximum single risk which may be assumed by any insurer, after deduction of any reinsurance taking effect simultaneously with the policy, shall be 10% of the paid-in capital and surplus of the insurer; provided, however, that a corporate insurer may assume any net single risk in excess of 10% of its capital and surplus if it deposits with the Commissioner, prior to the assumption of the risk, a collateral agreement and collateral security, both of which shall be subject to approval by the Commissioner, in an amount not less than that proportion in excess of the foregoing limitation.

29.0322 Required reserves.

Every insurer authorized to transact insurance, or transacting insurance, in American Samoa shall at all times maintain, in addition to reserves few all other liabilities, reserves as follows:

(1) loss or claim reserves in an amount estimated in the aggregate to provide for the payment of all losses or claims insured, whether reported or unreported, which are unpaid and for which such insurer may be liable, together with an amount estimated to provide for the expense of adjustment or settlement of such claims; and

(2) premium reserves equal to the unearned portions of the gross premiums charged on unexpired or undetermined risks and policies.

29.0323 Withdrawal from American Samoa-Procedure.

(a) An insurer who desires to withdraw from American Samoa must first make application to the Commissioner for an order granting permission to withdraw.

(b) The application shall be accompanied by an affidavit of its principal officer and general agent that:

(1) it desires to withdraw and to permanently discontinue the transaction of the insurance business in American Samoa;

(2) all its outstanding policies have either expired or have been reinsured, in which case it shall file an affidavit by the reinsuring company stating that it has reinsured certain policies of the withdrawing company and setting forth in detail the policies it has reinsured: and that

(3) all existing claims arising out of insurance transacted in American Samoa have been paid in full.

(c) It shall cause publication of a notice of its intention to withdraw in a newspaper of general circulation in American Samoa once a week for 4 consecutive weeks, and shall cause the newspaper to file affidavit of publication with the Commissioner.

(d) If any person objects to such withdrawal within 1 week from date of last publication, and gives good and sufficient cause thereof, the Commissioner may order that permission for the withdrawal be refused.

(e) If the insurer has complied with the provisions of this section and no objection has been made, or if objection is made, but without good and sufficient cause, the Commissioner shall order permission to withdraw, and the withdrawing insurer shall deliver to the Commissioner for cancellation its certificate of authority and current licenses of its agents and solicitors.

29.0324 Violation-Penalty.

Any person violating this chapter is guilty of a misdemeanor, and shall upon conviction be subject to a fine of not more than $1,000 if the person convicted is a natural person, a fine of not more than $500, or imprisonment of not more than 6 months, or both.