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§27-4.6-3  Company action level event. –


Published: 2015

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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.)