§ 31A-5-218. Subsidiaries.

(1) Subject to the limitations under Subsection 31A-18-106(1)(k), an insurance corporation may form or acquire subsidiaries to do any lawful insurance business.

(2) An insurance corporation may form or acquire subsidiaries to hold or manage any assets that it might hold or manage directly.

(3)

(a) An insurance corporation may form or acquire subsidiaries to perform functions or provide services that are ancillary to its insurance operations.

(b) A subsidiary is an ancillary subsidiary if it is engaged principally in one or more of the following:

(i) acting as an insurance producer;

(ii) investing, reinvesting, or trading in securities, or acting as a securities broker, dealer, or marketing representative;

(iii) managing investment companies registered under the federal Investment Company Act of 1940, as amended, including related sales and services;

(iv) providing investment advice and services;

(v) acting as administrative agent for a government instrumentality performing an insurance, public assistance, or related function;

(vi) providing services related to insurance operations, including accounting, actuarial, pension administration, appraisal, auditing, claims adjusting, collection, data processing, communications, loss prevention, premium financing, safety engineering, and underwriting services;

(vii) holding or managing property used by the corporation, alone or with its affiliates for the convenient transaction of its business;

(viii) engaging in the motor club business under Chapter 11, Motor Clubs;

(ix) engaging in the business of any institution subject to the jurisdiction of the Department of Financial Institutions under Title 7, Financial Institutions Act;

(x) providing similar services or performing similar activities which the commissioner declares ancillary by rule; and

(xi) owning corporations that would be authorized as subsidiaries under Subsections (3)(b)(i) through (3)(b)(ix) and under Subsections (1) and (2).

(4) An insurance corporation may form or acquire subsidiaries other than those under Subsections (1) through (3), but only to the extent the insurer has excess surplus as defined under Section 31A-1-301.

(5)

(a) An insurance corporation shall notify the commissioner immediately following the formation or acquisition of a subsidiary under this section.

(b) Chapter 16, Insurance Holding Companies, provides additional requirements that are applicable to the acquisition of certain subsidiaries.

Amended by Chapter 298, 2003 General Session