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The Vermont Statutes Online
Title
08
:
Banking and Insurance
Chapter
159
:
RISK BASED CAPITAL FOR INSURERS
§
8301. Definitions
As used in this
chapter:
(1)
"Adjusted risk based capital report" means a risk based capital
report which has been adjusted by the Commissioner in accordance with
subsection 8302(e) of this title.
(2)
"Commissioner" means the Commissioner of Financial Regulation.
(3)
"Corrective order" means an order issued by the Commissioner
specifying corrective actions which the Commissioner has determined are
required under this chapter.
(4)
"Domestic insurer" means any insurance company organized in this
State under subchapter 1 of chapter 101 of this title, any fraternal benefit
society organized in this State under chapter 121 of this title, any health
maintenance organization organized in this State under chapter 139 of this
title, and any entity organized in this State under chapter 123 or 125 of this
title.
(5)
"Fraternal benefit society" means any insurance company licensed
under chapter 121 of this title.
(6)
"Foreign insurer" means any entity licensed to transact business in
this State that is required to file a risk based capital statement in the state
where the entity is domiciled.
(7) "Life
or health insurer" means any insurance company who insures lives or health
as defined in subdivisions 3301(a)(1) and (2) of this title, any health
maintenance organization organized in this State under chapter 139 of this
title, any entity organized in this State under chapter 123 or 125 of this
title, or a licensed property and casualty insurer writing only accident and
health insurance.
(8) "NAIC"
means the National Association of Insurance Commissioners.
(9)
"Negative trend" means, with respect to a life or health insurer or
fraternal benefit society, negative trend over a period of time as determined
in accordance with the trend test calculation included in the life or fraternal
risk based capital instructions.
(10)
"Property and casualty insurer" means any insurance company who
insures property or casualty as defined in subdivisions 3301(a)(3) and (7) of
this title, but shall not include monoline mortgage guaranty insurers,
financial guaranty insurers, and title insurers.
(11) "Risk
based capital instructions" means the risk based capital report form and
the related instructions adopted by the NAIC and approved by the Commissioner.
(12) "Risk based
capital level" means one of the following four levels: company action
level risk based capital, regulatory action level risk based capital,
authorized control level risk based capital, or mandatory control level risk
based capital.
(A)
"Company action level risk based capital" means, with respect to any
insurer, the product of 2.0 and its authorized control level risk based
capital.
(B)
"Regulatory action level risk based capital" means the product of 1.5
and its authorized control level risk based capital.
(C)
"Authorized control level risk based capital" means the number
determined under the risk based capital formula in accordance with the risk
based capital instructions.
(D)
"Mandatory control level risk based capital" means the product of
0.70 and its authorized control level risk based capital.
(13) "Risk
based capital plan" means a comprehensive financial plan containing the
elements specified in subsection 8303(b) of this title. If the Commissioner
rejects the risk based capital plan and it is revised by the insurer, with or
without the Commissioner's recommendation, the plan shall be called the
"revised risk based capital plan."
(14) "Risk
based capital report" means the report required in section 8302 of this
title.
(15) "Total
adjusted capital" means the sum of:
(A) the
insurer's statutory capital and surplus reported in the insurer's annual
statement under section 3561 of this title; and
(B) such other
items, if any, as the risk based capital instructions may provide. (Added 1993,
No. 235 (Adj. Sess.), § 8, eff. June 21, 1994; amended 1995, No. 180 (Adj.
Sess.), § 38(a); 2009, No. 137 (Adj. Sess.), § 14; 2011, No. 78 (Adj. Sess.), §
2, eff. April 2, 2012; 2013, No. 29, § 36, eff. May 13, 2013.)
