Pine Belt Life Insurance Company
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MISSISSIPPI INSURANCE DEPARTMENT Report of Examination of PINE BELT LIFE INSURANCE COMPANY as of December 31, 2015 TABLE OF CONTENTS Examiner’s Affidavit ............................................................................................................................... 1 Salutation ................................................................................................................................................. 2 Scope of Examination .............................................................................................................................. 3 Comments and Recommendations of Previous Examination .................................................................. 3 History of the Company ........................................................................................................................... 4 Corporate Records ................................................................................................................................... 4 Holding Company Structure .................................................................................................................... 4 Organizational Chart .................................................................................................................. 5 Affiliated Companies .................................................................................................................. 5 Related Party Agreement ............................................................................................................ 7 Management and Control ......................................................................................................................... 8 Stockholders ............................................................................................................................... 8 Board of Directors ...................................................................................................................... 8 Committees ................................................................................................................................. 8 Officers ....................................................................................................................................... 8 Conflict of Interest ...................................................................................................................... 8 Fidelity Bond and Other Insurance .......................................................................................................... 9 Pensions, Stock Ownership and Insurance Plans ..................................................................................... 9 Territory and Plan of Operation ............................................................................................................... 9 Reinsurance .............................................................................................................................................. 9 Growth of Company ................................................................................................................................ 9 Accounts and Records ............................................................................................................................ 10 Statutory Deposits .................................................................................................................................. 10 Financial Statements .............................................................................................................................. 11 Introduction .............................................................................................................................. 11 Statement of Assets, Liabilities, Surplus and Other Funds…………………………………...12 Summary of Operations ............................................................................................................ 13 Reconciliation of Capital and Surplus ...................................................................................... 14 Subsequent Events……………………………………………………………………………………..15 Market Conduct Activities……………………………………………………………………………..15 Policyholder Service ................................................................................................................. 15 Underwriting and Rating ........................................................................................................... 15 Claims Handling ....................................................................................................................... 15 Producer Licensing ................................................................................................................... 15 Privacy………………………………………………………………………………… ……...15 Commitments and Contingent Liabilities .............................................................................................. 15 Comments and Recommendations ......................................................................................................... 16 Acknowledgment ................................................................................................................................... 17 MIKE CHANEY Commissioner of Insurance MISSISSIPPI INSURANCE DEPARTMENT State Fire Marshal 501 N. WEST STREET, SUITE 1001 MAILING ADDRESS WOOLFOLK BUILDING Post Office Box 79 MARK HAIRE JACKSON, MISSISSIPPI 39201 Jackson, MS 39205-0079 TELEPHONE: (601) 359-3569 Deputy Commissioner of www.mid.ms.gov Insurance FAX: (601) 576-2568 May 1, 2017 Honorable Mike Chaney Commissioner of Insurance Mississippi Insurance Department 1001 Woolfolk Building 501 North West Street Jackson, Mississippi 39201 Dear Commissioner Chaney: Pursuant to your instructions and authorization and in compliance with statutory provisions, an examination has been conducted, as of December 31, 2015, of the affairs and financial condition of: PINE BELT LIFE INSURANCE COMPANY 851 County Road 1519 P. O. Box 750 Bay Springs, Mississippi 39422 License # NAIC Group # NAIC # FEETS # MATS # 0700040 N/A 13158 13158-MS-2015-10 MS-MS099-7 This examination was commenced in accordance with Miss. Code Ann. § 83-5-201 et seq. and was performed in Bay Springs, Mississippi, at the statutory home office of the Company. The report of examination is herewith submitted. Pine Belt Life Insurance Company MID Examination as of December 31, 2015 Page 2 SCOPE OF EXAMINATION We have performed our single-state examination of Pine Belt Life Insurance Company (“Company” or “PBLIC”). The last examination covered the period of May 1, 2008 through December 31, 2010. This examination covers the period January 1, 2011 through December 31, 2015. We conducted our examination in accordance with the NAIC Financial Condition Examiners Handbook. The Handbook requires that we plan and perform the examination to evaluate the financial condition, assess corporate governance, identify current and prospective risks of the Company and evaluate system controls and procedures used to mitigate those risks. An examination also includes identifying and evaluating significant risks that could cause an insurer’s surplus to be materially misstated both currently and prospectively. All accounts and activities of the Company were considered in accordance with the risk-focused examination process. This may include assessing significant estimates made by management and evaluating management’s compliance with Statutory Accounting Principles. The examination does not attest to the fair presentation of the financial statements included herein. If, during the course of the examination an adjustment is identified, the impact of such adjustment will be documented separately following the Company’s financial statements. This examination report includes significant findings of fact and general information about the insurer and its financial condition. There may be other items identified during the examination that, due to their nature (e.g., subjective conclusions, proprietary information, etc.), are not included within the examination report but separately communicated to other regulators and/or the Company. COMMENTS AND RECOMMENDATIONS OF PREVIOUS EXAMINATION Previous Exam Comment and Recommendation #1: It was noted that the Company does not have a policy in place whereby disclosures are made to the Board of Directors of any material interest or affiliation on the part of any officer or director that was a conflict, or would likely be a conflict, with the official duties of such persons. It is recommended that the Company adopt a Conflict of Interest policy and require Board members to sign written statements annually regarding any current or potential conflicts. It was noted during the current exam period that the Company was unable to locate Board executed conflict of interest statements for the years 2013 and 2016. See Conflict of Interest section of this report for additional information. Pine Belt Life Insurance Company MID Examination as of December 31, 2015 Page 3 HISTORY OF THE COMPANY The Company was incorporated on March 27, 2008, under the laws of the State of Mississippi for the purpose of writing industrial life insurance policies. The Company commenced operations on May 1, 2008, with its principal office located in Bay Springs, Mississippi. The Company is a stock life insurance company. The Articles of Association authorized the Company to issue 100,000 shares of common stock, each reflecting a par value of $1.00 per share. As of December 31, 2015, all of the authorized common