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Office of the Lieutenant Governor Division of Banking, Insurance and Financial Regulation #5049 Kongens Gade, Charlotte Amalie, St. Thomas, USVT 00802-6487 @ (340) 774-2991 @ Fax (340) 774-9458 1131 King Street, Suite 101, Christiansted, St. Croix, USVI 00820 @ (340) 773-6449 @ Fax (340) 719-3801 hitps://Ity.gov.vt BULLETIN 2026-02 TO: Insurance Companies Doing Business in the U.S. Virgin Islands FROM: Tregenza A. Roach, Esq., Lieutenant Governor and Commissioner of Insurance RE: Information Regarding Compliance with Amendments to the Virgin Islands Insurance Holding Company System Regulatory Act On January 23, 2026, the Honorable Governor Albert Bryan Jr. signed into law Act No. 9073 (“Act”), which amended the Virgin Islands Insurance Holding Company System Regulatory Act, codified in Chapter 14 of Title 22 of the Virgin Islands Code. The Act adds provisions relating to group capital calculations, liquidity stress tests, and receivership. A copy of Act No. 9073 is attached. With respect to group capital calculations, the Act requires that the ultimate controlling person of every insurer subject to registration concurrently file, as part of the registration, an annual group capital calculation as directed by the lead state commissioner, unless the insurance holding company system qualifies for an exemption from this filing requirement. The requirements of the Act became effective upon signature by Governor Bryan, and the first annual group capital calculation filing is due in 2026. The Division of Banking, Insurance and Financial Regulation (“Division”) is in the process of adopting amended rules and regulations to implement the Act. In the interim, this Bulletin is issued to provide insurers conducting business in this Territory with guidance regarding the implementation of the Act and the corresponding rules and regulations. The Division is also adopting amended rules and regulations to clarify provisions relating to dividends and other distributions, including extraordinary dividends and any other extraordinary distributions, to ensure consistency with the Virgin Islands Insurance Holding Company System Regulatory Act. Accordingly, this Bulletin also provides guidance to insurers regarding these amendments. Bulletin No. 2026- 02 Section 325-6. Enterprise Risk Report The ultimate controlling person of an insurer required to file an enterprise risk report pursuant to Section 325(I)(1) of the Act shall furnish the required information on Form F, hereby made a part of these regulations. Section 325-7. Group Capital Calculation (a) Where an insurance holding company system has previously filed the annual group capital calculation at least once, the lead state commissioner has the discretion to exempt the ultimate controlling person from filing the annual group capital calculation if the lead state commissioner makes a determination based upon that filing that the insurance holding company system meets all of the following criteria: (1) Has annual direct written and unaffiliated assumed premium (including international direct and assumed premium), but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federa! Flood Program, of less than $1,000,000,000; (2) Has no insurers within its holding company structure that are domiciled outside of the United States or one of its territories; (3) Has no banking, depository or other financial entity that is subject to an identified regulatory capital framework within its holding company structure; (4) The holding company system attests that there are no material changes in the transactions between insurers and non-insurers in the group that have occurred since the last filing of the annual group capital; and (5) The non-insurers within the holding company system do not pose a material financial risk to the insurer’s ability to honor policyholder obligations. (b) Where an insurance holding company system has previously filed the annual group capital calculation at least once, the lead state commissioner has the discretion to accept in lieu of the group capital calculation a limited group capital filing if: (1) The insurance holding company system has annual direct written and unaffiliated assumed premium (including international direct and assumed premium), but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of less than $1,000,000,000; and all of the following additional criteria are met: (A) Has no insurers within its holding company structure that are domiciled outside of the United States or one of its territories; Bulletin No. 2026- 02 (B) Does not include a banking, depository or other financial entity that is subject to an identified regulatory capital framework; and (C) The holding company system attests that there are no material changes in transactions between insurers and non-insurers in the group that have occurred since the last filing of the report to the lead state commissioner and the non-insurers within the holding company system do not pose a material financial risk to the insurers ability to honor policyholder obligations. (c) For an insurance holding company that has previously met an exemption with respect to the group capital calculation pursuant Section 325-7(a) or 325-7(b) of this Bulletin, the lead state commissioner may require at any time the ultimate controlling person to file an annual group capital calculation, completed in accordance with the NAIC Group Capital Calculation Instructions, if any of the following criteria are met: (1) Any insurer within the insurance holding company system is in a Risk- Based Capital action level event as set forth in Sections 473 through 476 of Title 22 of the Virgin Islands Code or a similar standard for a non- U.S. insurer; or (2) Any insurer within the insurance holding company system meets one or more of the standards of an insurer deemed to be in hazardous financial condition as defined in Sections 519 and 520 of Title 22 of the Virgin Islands Code; or (3) Any insurer within the insurance holding company system otherwise exhibits qualities of a troubled insurer as determined by the lead state commissioner based on unique circumstances including, but not limited to, the type and volume of business written, ownership and organizational structure, federal agency requests, and international supervisor requests. (d) A non-U.S. jurisdiction is considered to “recognize and accept” the group capital calculation if it satisfies the following criteria: (1) With respect to Section 325(1)(2)(D) of the Act: (A) The non-U.S. jurisdiction recognizes the U.S. state regulatory approach to group supervision and group capital, by providing confirmation by a competent regulatory authority, in such jurisdiction, that insurers and insurance groups whose lead state is accredited by the NAIC under the NAIC Accreditation Program shall be subject only to worldwide prudential insurance group supervision including worldwide group governance, solvency and capital, and reporting, as applicable, by the lead state and will not be subject to group supervision, including worldwide group governance, solvency and capital, and reporting, at the level Bulletin No. 2026- 02 (e) of the worldwide parent undertaking of the insurance or reinsurance group by the non-U.S. jurisdiction; or (B) Where no U.S. insurance groups operate in the non-U.S. jurisdiction, that non-U.S. jurisdiction indicates formally in writing to the lead state with a copy to the International Association of Insurance Supervisors that the group capital calculation is an acceptable international capital standard. This will serve as the documentation otherwise required in Section 325-7(d)(1)(A) of this Bulletin. (2) The non-U.S. jurisdiction provides confirmation by a competent regulatory authority in such jurisdiction that information regarding insurers and their parent, subsidiary, or affiliated entities, if applicable, shall be provided to the lead state commissioner in accordance with a memorandum of understanding or similar document between the commissioner and such jurisdiction, including but not limited to the International Association of Insurance Supervisors Multilateral Memorandum of Understanding or other multilateral memoranda of understanding coordinated by the NAIC. The commissioner shall determine, in consultation with the NAIC Committee Process, if the requirements of the information sharing agreements are in force. A list of non-U.S. jurisdictions that “recognize and accept” the group capital calculation will be published through the NAIC Committee Process: (1) A list of jurisdictions that “recognize and accept” the group capital calculation pursuant to Section 325(1)(2)(D) of the Act, is published through the NAIC Committee Process to assist the lead state commissioner in determining which insurers shall file an annual group capital calculation. The list will clarify those situations in which a jurisdiction is exempted from filing under Section 325(1)(2)(D). To assist with a determination under Section 325(1)(2)(E) of the Act, the list will also identify whether a jurisdiction that is exempted under either Sections 325(1)(2)(C) and 325(1)(2)(D) of the Act requires a group capital filing for any U.S. based insurance group’s operations in that non-U.S. jurisdiction. (2) For a non-U.S. jurisdiction where no U.S. insurance groups operate, the confirmation provided to meet the requirement of Section 325- 7(d)(1)(B) of this Bulletin will serve as support for recommendation to be published as a jurisdiction that “recognizes and accepts” the group capital calculation through the NAIC Committee Process. (3) If the lead state commissioner makes a determination pursuant to Section 325(1)(2)(D) of the Act that differs from the NAIC List, the lead state commissioner shall provide thoroughly documented justification to the NAIC and other states. (4) Upon determination by the lead state commissioner that a non-U.S. jurisdiction no longer meets one or more of the requirements to Bulletin No. 2026- 02 “recognize and accept” the group capital calculation, the lead state commissioner may provide a recommendation to the NAIC that the non- U.S. jurisdiction be removed from the list of jurisdictions that “recognize and accepts” the group capital calculation. Section 326-1. Transactions Subject to Prior Notice - Notice Filing (a) An insurer required to give notice of a proposed transaction pursuant to Section 326 of Title 22 of the Virgin Islands Code shall furnish the required information on Form D, hereby made a part of these regulations. (b) Agreements for cost sharing services and management services shall at a minimum and as applicable: (1) (2) (3) (4) (5) (6) (7) (8) Identify the person providing services and the nature of such services; Set forth the methods to allocate costs; Require timely settlement, not less frequently than on a quarterly basis, and compliance with the requirements in the Accounting Practices and Procedures Manual: Prohibit advancement of funds by the insurer to the affiliate except to pay for services defined in the agreement; State that the insurer will maintain oversight for functions provided to the insurer by the affiliate and that the insurer will monitor services annually for quality assurance; Define records and data of the insurer to include all records and data developed or maintained under or related to the agreement that are otherwise the property of the insurer, in whatever form maintained, including, but not limited to, claims and claim files, policyholder lists, application files, litigation files, premium records, rate books, underwriting manuals, personnel records, financial records or similar records within the possession, custody or control of the affiliate; Specify that all records and data of the insurer are and remain the property of the insurer, and: (A) Are subject to control of the insurer; (B) Are identifiable; and (C) Are segregated from all other persons’ records and data or are readily capable of segregation at no additional cost to the insurer; State that all funds and invested assets of the insurer are the exclusive Bulletin No. 2026- 02 property of the insurer, held for the benefit of the insurer and are subject to the control of the insurer; (9) Include standards for termination of the agreement with and without cause; (10) Include provisions for indemnification of the insurer in the event of gross negligence or willful misconduct on the part of the affiliate providing the services and for any actions by the affiliate that violate provisions of the agreement required in Subsections 326-1(b)(11) through 326-1(b)(15) of this Bulletin; (11) Specify that if the insurer is placed in any supervision, seizure, conservatorship, receivership or delinquency proceeding set forth in Chapter 51 of Title 22 of the Virgin Islands Code: (A) _ All ofthe rights of the insurer under the agreement extend to the receiver or Commissioner to the extent permitted by the laws of the U.S. Virgin Islands; (B) All records and data of the insurer shall be identifiable and segregated from all other persons’ records and data or readily capable of segregation at no additional cost to the receiver or the Commissioner; (C) A complete set of records and data of the insurer will immediately be made available to the receiver or the Commissioner, shall be made available in a usable format and shall be turned over to the receiver or Commissioner immediately upon the receiver or the Commissioner's request, and the cost to transfer data to the receiver or the Commissioner shall be fair and reasonable; and, (D) Affiliates will make available all employees essential to the operations of the insurer and the services associated therewith for the immediate continued performance of the essential services ordered or directed by the receiver or Commissioner; (12) Specify that an affiliate has no automatic right to terminate the agreement if the insurer is placed in any supervision, seizure, conservatorship, receivership or delinquency proceeding set forth in Chapter 51 of Title 22 of the Virgin Islands Code; (13) Specify that an affiliate will provide the essential services for a minimum period of time after termination of the agreement, if the insurer is placed in any supervision, seizure, conservatorship, receivership or delinquency proceeding set forth in Chapter 51 of Title 22 of the Virgin Islands Code, as ordered or directed by the receiver or Commissioner. Performance of the essential services will continue to be provided without regard to pre-receivership unpaid fees, so long as the affiliate continues to receive timely payment for post-receivership Bulletin No. 2026- 02 services rendered, and unless released by the receiver, Commissioner or supervising court; (14) — Specify that an affiliate will continue to maintain any systems, programs or other infrastructure, notwithstanding any supervision, seizure, conservatorship, receivership or delinquency proceeding pursuant to Chapter 51 of Title 22 of the Virgin Islands Code, and will make them available to the receiver or Commissioner as ordered or directed by the receiver or Commissioner for so long as the affiliate continues to receive timely payment for post-receivership services rendered, and unless released by the receiver, Commissioner or supervising court; and (15) Specify that, in furtherance of the cooperation between the receiver and the affected guaranty associations and subject to the receiver's authority over the insurer, if the insurer is placed in any supervision, seizure, conservatorship, receivership or delinquency proceeding set forth in Chapter 51 of Title 22 of the Virgin Islands Code, and portions of the insurer’s policies or contracts are eligible for coverage by one or more guaranty associations, the affiliate’s commitments under Subsections 326-1(b)(11) through 326-1(b)(14) of this Bulletin will extend to such guaranty associations. Section 326-2. Extraordinary Dividends and Other Distributions (a) Requests for approval of extraordinary dividends or any other extraordinary distribution to shareholders shall include the following: (1) The amount of the proposed dividend; (2) The date established for payment of the dividend; (3) A statement as to whether the dividend is to be in cash or other property and, if in property, a description thereof, its cost, and its fair market value together with an explanation of the basis for valuation; (4) A copy of the calculations determining that the proposed dividend is extraordinary. The work paper shall include the following information: (A) The amounts, dates and form of payment of all dividends or distributions (including regular dividends but excluding distributions of the insurer’s own securities) paid within the period of twelve (12) consecutive months ending on the date fixed for payment of the proposed dividend for which approval is sought and commencing on the day after the same day of the same month in the last preceding year; (B) Surplus as regards policyholders (total capital and surplus) as of the 31st day of December next preceding; Bulletin No. 2026- 02 (C) If the insurer is a life insurer, the net gain from operations for the 12-month period ending the 3!* day of December next preceding; (D) Ifthe insurer is not a life insurer, the net income for the 12-month period ending the 31st day of December next preceding and the two preceding 12-month periods; and (E) If the insurer is not a life insurer, the dividends paid to stockholders excluding distributions of the insurer’s own securities in the preceding two (2) calendar years; (5) | A balance sheet and statement of income for the period intervening from the last annual statement filed with the Commissioner and the end of the month preceding the month in which the request for dividend approval is submitted; and (6) A brief statement as to the effect of the proposed dividend upon the insurer’s surplus and the reasonableness of surplus in relation to the insurer's outstanding liabilities and the adequacy of surplus relative to the insurer’s financial needs. (b) Subject to Section 326(b) of Title 22 of the Virgin Islands Code, each registered insurer shall notify the Commissioner, in writing, of an extraordinary dividend or any other extraordinary distribution to its shareholders within five (5) days following the declaration thereof and no less than thirty (30) days prior to payment. The notice must include the information required by Subsection 326-2(a) of this Bulletin. (c) Subject to Section 326(b) of Title 22, each registered insurer shall notify the Commissioner, in writing, of a dividend or other distribution to its shareholders within five (5) days following the declaration thereof and no less than ten (10) days prior to payment. The notice must include the information required by Subsection 326-2(a) of this Bulletin. Questions regarding this Bulletin may be directed to the Division by calling Suzette Richards, Esq., Legal , at (340) 773-6449, Dated this 2” By of Feb Mar 2026 at St. Thomas, U.S. Virgin Islands. LH: Kew A. Ry ch, Esq. ne Be Bat ae of Insurance