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The Vermont Statutes Online
Title
08
:
Banking and Insurance
Chapter
159
:
RISK BASED CAPITAL FOR INSURERS
§
8303. Company action level event
(a)
"Company action level event" means any of the following events:
(1) The filing
of a risk based capital report by an insurer which indicates that:
(A) the
insurer's total adjusted capital is greater than or equal to its regulatory
action level risk based capital but less than its company action level risk
based capital;
(B) if a life or
health insurer or a fraternal benefit society, the insurer or society has total
adjusted capital which is greater than or equal to its company action level
risk based capital but less than the product of its authorized control level
risk based capital and 3.0 and has a negative trend; or
(C) if a
property and casualty insurer, the insurer has total adjusted capital which is
greater than or equal to its company action level risk based capital but less
than the product of its authorized control level risk based capital and 3.0 and
triggers the trend test determined in accordance with the trend test
calculation included in the property and casualty risk based capital
instructions.
(2) The
notification by the Commissioner to the insurer of an adjusted risk based
capital report that indicates an event in subdivision (1) of this subsection,
provided the insurer does not challenge the adjusted risk based capital report
under section 8307 of this title.
(3) If, under
section 8307 of this title, an insurer challenges an adjusted risk based
capital report that indicates the event in subdivision (1) of this subsection,
the notification by the Commissioner to the insurer that the Commissioner has,
after a hearing, rejected the insurer's challenge.
(b) An insurer
shall prepare and submit to the Commissioner a risk based capital plan within
45 days of filing a risk based capital report or within 45 days of a final
adjusted risk based capital report showing a company action level event. The
risk based capital plan shall be a comprehensive financial plan and shall:
(1) identify the
conditions in the insurer which contribute to the company action level event;
(2) contain
proposals of corrective actions which the insurer intends to take that would
result in the elimination of the company action level event;
(3) provide
projections of the insurer's financial results in the current year and at least
the four succeeding years, both in the absence of proposed corrective actions
and giving effect to the proposed corrective actions, including projections of
statutory operating income, net income, capital, and surplus. The projections
for both new and renewal business should include separate projections for each
major line of business and separately identify each significant income,
expense, and benefit component;
(4) identify the
key assumptions impacting the insurer's projections and the sensitivity of the
projections to the assumptions; and
(5) identify the
quality of, and problems associated with, the insurer's business, including its
assets, anticipated business growth and associated surplus strain,
extraordinary exposure to risk, mix of business, and use of reinsurance.
(c) The
Commissioner shall notify the insurer whether the proposed risk based capital
plan is approved within 60 days of its submission. If the Commissioner
disapproves the plan, the notice shall set forth the reasons for the
disapproval and may notify the insurer of revisions which will render the risk
based capital plan satisfactory to the Commissioner. Upon notice that a
proposed plan is disapproved, the insurer shall prepare and submit a revised
risk based capital plan within 45 days of the Commissioner's notice of
disapproval or, if the Commissioner's notice of disapproval is appealed under
section 8307 of this title, within 45 days of a Commissioner's determination
adverse to the insurer.
(d) In the event
of a notification by the Commissioner to an insurer that the insurer's risk
based capital plan or revised risk based capital plan is unsatisfactory, the
Commissioner may at the Commissioner's discretion, subject to the insurer's
right to a hearing under section 8307 of this title, specify in the
notification that the notification constitutes a regulatory action level event.
(e) Each
domestic insurer required to file a risk based capital plan or revised risk
based capital plan under this section shall file a copy of the plan with the
insurance commissioner in any state in which the insurer is authorized to do
business if:
(1) such state
has a provision that is substantially similar to section 8308 of this title;
and
(2) the
insurance commissioner of that state has notified the insurer of its request
for the filing in writing. Plans required to be filed under this subdivision
shall be filed no later than the later of:
(A) 15 days
after notice to file a copy of its risk based capital plan or revised risk
based capital plan with the state; or
(B) the date on
which the risk based capital plan or revised risk based capital plan is
required to be filed under section 8304 of this title. (Added 1993, No. 235
(Adj. Sess.), § 8, eff. June 21, 1994; amended 2009, No. 137 (Adj. Sess.), §
15; 2013, No. 29, § 38, eff. May 13, 2013.)