§ 1312. Trusteed surplus of alien insurers; impairment. (a) (1) In
addition to other requirements of this chapter every authorized alien
insurer shall, not later than the first day of March in each year, file
with the superintendent a statement (herein called a "trusteed surplus
statement"), on a form prescribed by him, showing at last year-end:

(A) all its general state deposits, meaning assets within the United
States deposited with officers of any state in trust for the security of
all its policyholders, or policyholders and creditors, within the United
States;

(B) all its special state deposits, meaning assets within the United
States deposited with officers of any state in trust for the security of
its policyholders, or policyholders and creditors, in a particular
state;

(C) all its trusteed assets, meaning assets within the United States
held by a trustee or trustees for the security of all its policyholders,
or policyholders and creditors, within the United States;

(D) if a life insurance company, the amount of its policy loans to
policyholders within the United States, not exceeding the amount of the
legal reserve required on each such policy;

(E) all its reserves and other liabilities arising out of policies or
obligations issued, assumed or incurred in the United States; and

(F) such further information as may be necessary to apply the
provisions of this section.

(2) In determining the net amount of the insurer's liabilities in the
United States, a deduction may be made: (i) for reinsurance on losses
with authorized insurers, less unpaid reinsurance premiums, with a
schedule showing by companies the amount deducted, and (ii) for unearned
premiums on agents' balances or uncollected premiums not more than
ninety days past due. Any liability on an asset not considered in such
statement may be applied against such asset.

(3) No credit shall be allowed in such statement for any special state
deposit held for the exclusive benefit of policyholders, or
policyholders and creditors, of any particular state except as an offset
against the liabilities of such alien insurer in such state.

(4) The accrued interest at date of statement on assets deposited with
states and trustees shall be allowed in such statement, where such
interest is collected by the states or trustees.

(b) (1) Such trusteed surplus statement shall be signed and verified
by the United States manager, attorney-in-fact, or a duly empowered
assistant United States manager, of the alien insurer. The items of
securities and other property held under trust deeds shall be certified
to by the United States trustee or trustees. The superintendent may at
any time require a further statement of the same kind and of such date
as he may determine.

(2) Every report on examination of the United States branch of an
alien insurer shall include a trusteed surplus statement as of the date
of examination in addition to the general statement of the financial
condition of such United States branch.

(c) (1) The aggregate value of the insurer's general state deposits
and trusteed assets less the aggregate net amount of all of its
liabilities and reserves in the United States as determined in
accordance with this section shall be known as its "trusteed surplus" in
the United States. Whenever it appears to the superintendent from any
such statement or any report that an alien insurer's trusteed surplus is
reduced below the greater of the minimum capital required of, or the
minimum surplus to policyholders required to be maintained by, a
domestic insurer licensed to transact the same kinds of insurance, he
shall determine the amount of such impairment and order the insurer,
through its United States manager or attorney, to eliminate such
impairment within such period as he designates, not more than ninety
days from service of the order. He may also by order revoke or suspend
such insurer's license or prohibit it from issuing new policies in the
United States while such impairment exists.

(2) If at the expiration of such designated period such insurer has
not satisfied the superintendent that such impairment has been
eliminated, the superintendent may proceed against such insurer pursuant
to the provisions of article seventy-four of this chapter as an insurer
whose condition is such that its further transaction of business in the
United States will be hazardous to its policyholders, its creditors or
the public in the United States.