TITLE 27
Insurance
CHAPTER 27-4.6
Risk-Based Capital (RBC) for Insurers Act
SECTION 27-4.6-3
§ 27-4.6-3 Company action level event.
(a) "Company action level event" means any of the following events:
(1) The filing of an RBC report by an insurer that indicates
that:
(i) The insurer's total adjusted capital is greater than or
equal to its regulatory action level RBC but less than its company action level
RBC;
(ii) If a life and/or health insurer, the insurer has total
adjusted capital that is greater than or equal to its company action level RBC
but less than the product of its authorized control level RBC and 2.5 and has a
negative trend; or
(iii) If a property and casualty insurer, the insurer 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 property and casualty RBC instructions.
(2) The notification by the commissioner to the insurer of an
adjusted RBC report that indicates an event in subdivision (a)(1), provided the
insurer does not challenge the adjusted RBC report under § 27-4.6-7; or
(3) If, pursuant to § 27-4.6-7, an insurer challenges an
adjusted RBC report that indicates the event in subdivision (a)(1), the
notification by the commissioner to the insurer that the commissioner has,
after a hearing, rejected the insurer's challenge.
(b) In the event of a company action level event, the insurer
shall prepare and submit to the commissioner an RBC plan which shall:
(1) Identify the conditions that contribute to the company
action level event;
(2) Contain proposals of corrective actions that the insurer
intends to take and would be expected to 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 (4) 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/or surplus. (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 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, 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 insurer challenges an adjusted RBC report pursuant
to § 27-4.6-7, within forty-five (45) days after notification to the
insurer that the commissioner has, after a hearing, rejected the insurer's
challenge.
(d) Within sixty (60) days after the submission by an insurer
of an RBC plan to the commissioner, the commissioner shall notify the insurer
whether the RBC plan shall be implemented or is, in the judgment of the
commissioner, unsatisfactory. If the commissioner determines that the RBC plan
is unsatisfactory, the notification to the insurer 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 insurer 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 insurer challenges the notification from the
commissioner under § 27-4.6-7, within forty-five (45) days after a
notification to the insurer that the commissioner has, after a hearing,
rejected the insurer's challenge.
(e) In the event of a notification by the commissioner to an
insurer that the insurer's RBC plan or revised RBC plan is unsatisfactory, the
commissioner may at the commissioner's discretion, subject to the insurer's
right to a hearing under § 27-4.6-7, specify in the notification that the
notification constitutes a regulatory action level event.
(f) Every domestic insurer 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 insurer is
authorized to do business if:
(1) That state has an RBC provision substantially similar to
§ 27-4.6-8(a); and
(2) The insurance commissioner of that state has notified the
insurer of its request for the filing in writing, in which case the insurer
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. 1996, ch. 187, § 2; P.L. 2010, ch. 49, § 1; P.L. 2010, ch. 65,
§ 1.)