Chapter 049
2010 -- S 2714 SUBSTITUTE A
Enacted 06/12/10
A N A C T
RELATING TO INSURANCE
Introduced By: Senators Lynch, Walaska, and Bates
Date Introduced: March 24, 2010
It is enacted by the
General Assembly as follows:
SECTION 1. Section 27-4.6-3 of the General Laws in Chapter
27-4.6 entitled "Risk-
Based Capital (RBC) for
Insurers Act" is hereby amended to read as follows:
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; or
(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 section 27-4.6-7; or
(3) If,
pursuant to section 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 section 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 section 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
section 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 section 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.
SECTION 2. Section 27-4.7-4 of the General Laws in Chapter
27-4.7 entitled "Risk-
Based Capital (RBC) For
Health Organizations Act" is hereby amended to read as follows:
27-4.7-4.
Company action level event. -- (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
section 27-4.7-8; or
(3) If, pursuant to
section 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 section 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
section 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 section
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 section 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.
SECTION 3. This act shall take effect upon passage.
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LC01946/SUB A
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