TITLE 27

Insurance

CHAPTER 27-4.7

Risk-Based Capital (RBC) For Health Organizations Act

SECTION 27-4.7-4



   § 27-4.7-4  Company action level event.

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(a) "Company action level event" means any of the following events:



   (1) The filing of an RBC report by a health organization that

indicates that the health organization's total adjusted capital is greater than

or equal to its regulatory action level RBC but less than its company action

level RBC;



   (i) If a health organization has total adjusted capital which

is greater than or equal to its company action level RBC but less than the

product of its authorized control level RBC and 3.0 and triggers the trend test

determined in accordance with the trend test calculation included in the health

RBC instructions;



   (2) Notification by the commissioner to the health

organization of an adjusted RBC report that indicates an event in subdivision

(a)(1) of this section, provided the health organization does not challenge the

adjusted RBC report under § 27-4.7-8; or



   (3) If, pursuant to § 27-4.7-8, a health organization

challenges an adjusted RBC report that indicates the event in subdivision

(a)(1) of this section, the notification by the commissioner to the health

organization that the commissioner has, after a hearing, rejected the health

organization's challenge.



   (b) In the event of a company action level event, the health

organization shall prepare and submit to the commissioner an RBC plan that

shall:



   (1) Identify the conditions that contribute to the company

action level event;



   (2) Contain proposals of corrective actions that the health

organization intends to take and that would be expected to result in the

elimination of the company action level event;



   (3) Provide projections of the health organization's

financial results in the current year and at least the two (2) succeeding

years, both in the absence of proposed corrective actions and giving effect to

the proposed corrective actions, including projections of statutory balance

sheets, operating income, net income, capital and surplus, and RBC levels. The

projections for both new and renewal business might 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 health

organization's projections and the sensitivity of the projections to the

assumptions; and



   (5) Identify the quality of, and problems associated with,

the health organization's business, including, but not limited to, its assets,

anticipated business growth and associated surplus strain, extraordinary

exposure to risk, mix of business, and use of reinsurance, if any, in each case.



   (c) The RBC plan shall be submitted:



   (1) Within forty-five (45) days of the company action level

event; or



   (2) If the health organization challenges an adjusted RBC

report pursuant to § 27-4.7-8 within forty-five (45) days after

notification to the health organization that the commissioner has, after a

hearing, rejected the health organization's challenge.



   (d) Within sixty (60) days after the submission by a health

organization of an RBC plan to the commissioner, the commissioner shall notify

the health organization whether the RBC plan shall be implemented or is, in the

judgment of the commissioner, unsatisfactory. If the commissioner determines

the RBC plan is unsatisfactory, the notification to the health organization

shall set forth the reasons for the determination, and may set forth proposed

revisions which will render the RBC plan satisfactory in the judgment of the

commissioner. Upon notification from the commissioner, the health organization

shall prepare a revised RBC plan, which may incorporate by reference any

revisions proposed by the commissioner, and shall submit the revised RBC plan

to the commissioner:



   (1) Within forty-five (45) days after the notification from

the commissioner; or



   (2) If the health organization challenges the notification

from the commissioner under § 27-4.7-8, within forty-five (45) days after

a notification to the health organization that the commissioner has, after a

hearing, rejected the health organization's challenge.



   (e) In the event of a notification by the commissioner to a

health organization that the health organization's RBC plan or revised RBC plan

is unsatisfactory, the commissioner may, at the commissioner's discretion,

subject to the health organization's right to a hearing under § 27-4.7-8,

specify in the notification that the notification constitutes a regulatory

action level event.



   (f) Every domestic health organization that files an RBC plan

or revised RBC plan with the commissioner shall file a copy of the RBC plan or

revised RBC plan with the insurance commissioner in any state in which the

health organization is authorized to do business if:



   (1) The state has an RBC provision substantially similar to

§ 27-4.7-9(a); and



   (2) The insurance commissioner of that state has notified the

health organization of its request for the filing in writing, in which case the

health organization shall file a copy of the RBC plan or revised RBC plan in

that state no later than the later of:



   (i) Fifteen (15) days after the receipt of notice to file a

copy of its RBC plan or revised RBC plan with the state; or



   (ii) The date on which the RBC plan or revised RBC plan is

filed under subsections (c) and (d) of this section.



History of Section.

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

229, § 11; P.L. 2010, ch. 49, § 2; P.L. 2010, ch. 65, §

2.)