AmazonScience/document-haystack

1As a holding company with no significant business operations of its own, AIG Parent depends on dividends from our subsidiaries to 2meet our obligations. U.S. state insurance laws typically provide that dividends in excess of certain prescribed limits are considered to 3be extraordinary dividends and require prior approval or non-disapproval from the applicable insurance regulator. Outside the U.S., 4(re)insurers, subject to certain exceptions, are permitted to pay dividends subject to maintaining prescribed capital and solvency 5requirements and ensuring that dividends are made out of profits/retained earnings.6Further, as part of their regulatory oversight processes, insurance regulators conduct periodic examinations of our (re)insurance 7subsidiaries. Such examinations can cover a broad scope of the (re)insurance subsidiary’s operations, including the financial strength 8of the (re)insurance subsidiary; sales, marketing and claims handling practices; risk management; capital and liquidity management; 9and information technology operations (including emerging technology risks). 10Insurance and securities regulators and other law enforcement agencies and attorneys general also, from time to time, make 11inquiries, issue data calls and conduct examinations or investigations regarding compliance with insurance and other laws or for 12informational purposes that can be company-specific or part of a broader industry-wide effort.  13There can be no assurance that any noncompliance with such applicable laws, regulations or guidance would not have a material 14adverse effect on our business or results of operations.15REGULATORY REGIMES16United States17States18At the state-level, the National Association of Insurance Commissioners (NAIC) is a standard-setting and regulatory support 19organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. 20territories. The NAIC is not a regulator, but, with assistance from the NAIC, state insurance regulators establish standards and best 21practices, conduct peer reviews and coordinate regulatory oversight. Model laws and regulations promulgated by the NAIC only 22become effective in a state once formally adopted by such state and are subject to revision by each state. Examples of NAIC models 23adopted, in substantial part, by all states include:24• The Risk-Based Capital (RBC) for Insurers Model Act, which incorporates an RBC formula calculated in accordance with 25instructions updated annually by the NAIC that is designed to measure the adequacy of an insurer’s total adjusted capital, as 26calculated pursuant to the RBC formula, in relation to certain risks inherent in its business, and authorizes certain regulatory 27actions regarding insurers whose RBC levels fall below specific thresholds. The NAIC has adopted, or is considering, several 28changes impacting how RBC is calculated, including initiatives aimed at a comprehensive review of the RBC investment 29framework as well as a proposed modeling methodology to determine RBC for collateralized loan obligations and other structured 30securities to reduce reliance on the use of rating agency ratings. The RBC levels of each of our U.S. domiciled (re)insurance 31companies exceeded each of these specific thresholds as of December 31, 2023. In addition to RBC requirements, the insurance 32laws of our domiciliary states prescribe certain minimum capital and surplus requirements for insurance companies. If any of our 33(re)insurance entities fell below prescribed levels of statutory capital and surplus, it would be our intention to provide appropriate 34capital or other types of support to that entity. For additional information, see Part II, Item 7. MD&A – Liquidity and Capital 35Resources – Liquidity and Capital Resources of AIG Parent and Subsidiaries – Insurance Companies.36• The Insurance Holding Company System Regulatory Act and the Insurance Holding Company System Model Regulation (together, 37the Holding Company Models) include: provisions authorizing insurance commissioners to act as global group-wide supervisors for 38internationally active insurance groups and participate in international supervisory colleges; standards for transactions between a 39domestic (re)insurance company and its affiliates and regulatory approval requirements for certain of such transactions; 40requirements for obtaining regulatory approval for acquiring control of a domestic (re)insurance company; and the requirement that 41the ultimate controlling person of a U.S. insurer file an annual enterprise risk report with its lead state regulator identifying risks 42likely to have a material adverse effect upon the financial condition or liquidity of its licensed insurers or the insurance holding 43company system as a whole, among other requirements. The New York State Department of Financial Services (NYDFS) is AIG’s 44lead U.S.-state regulator, and leads AIG’s Supervisory College meetings, which consist of AIG’s key global regulatory bodies.45• The Risk Management and Own Risk and Solvency Assessment Model Act, which requires that insurers maintain a risk 46management framework, conduct an internal own risk and solvency assessment of the insurer’s material risks in normal and 47stressed environments, and submit annual Own Risk and Solvency Assessment (ORSA) summary reports to the insurance group’s 48lead U.S.-state regulator.49• The Corporate Governance Annual Disclosure Model Act (CGAD), which requires insurers to submit an annual filing regarding their 50corporate governance structure, policies and practices.51• And, specific to our life insurance subsidiaries, the NAIC's new Valuation Manual, which contains a principle-based reserving 52(PBR) approach to life insurance company reserves. PBR is designed to tailor the reserving process to more closely reflect the 53risks of specific products rather than the factor-based approach employed historically.54ITEM 1 | Business558 AIG | 2023 Form 10-K