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§27-4.7-3  Rbc Reports. –

Published: 2015

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CHAPTER 27-4.7

Risk-Based Capital (RBC) For Health Organizations Act

SECTION 27-4.7-3

   § 27-4.7-3  RBC reports. –

(a) A domestic health organization shall, on or prior to each March 1 (the

"filing date"), prepare and submit to the commissioner a report of its RBC

levels as of the end of the calendar year just ended, in a form and containing

any information that is required by the RBC instructions. In addition, a

domestic health organization shall file its RBC report:

   (1) With the NAIC in accordance with the RBC instructions; and

   (2) With the insurance commissioner in any state in which the

health organization is authorized to do business, if the insurance commissioner

has notified the health organization of its request in writing, in which case

the health organization shall file its RBC report not later than the later of:

   (i) Fifteen (15) days from the receipt of notice to file its

RBC report with that state; or

   (ii) The filing date.

   (b) A health organization's RBC shall be determined in

accordance with the formula set forth in the RBC instructions. The formula

shall take the following into account (and may adjust for the covariance

between) determined in each case by applying the factors in the manner set

forth in the RBC instructions:

   (1) Asset risk;

   (2) Credit risk;

   (3) Underwriting risk; and

   (4) All other business risks and any other relevant risks

that are set forth in the RBC instructions.

   (c) An excess of capital (i.e., net worth) over the amount

produced by the risk-based capital requirements contained in this chapter and

the formulas, schedules, and instructions referenced in this chapter is

desirable in the business of health insurance. Health organizations should seek

to maintain capital above the RBC levels required by this chapter. Additional

capital is used and useful in the insurance business and helps to secure a

health organization against various risks inherent in, or affecting, the

business of insurance and not accounted for, or only partially measured by, the

risk-based capital requirements contained in this chapter.

   (d) If a domestic health organization files an RBC report

that in the judgment of the commissioner is inaccurate, then the commissioner

shall adjust the RBC report to correct the inaccuracy and shall notify the

health organization of the adjustment. The notice shall contain a statement of

the reason for the adjustment. An RBC report adjusted in this manner is

referred to as an "adjusted RBC report."

History of Section.

(P.L. 2000, ch. 178, § 1; P.L. 2000, ch. 200, § 11; P.L. 2000, ch.

229, § 11.)