20-488.02 - Arizona Statutes

20-488.02. Company action level event A. If a company action level event occurs, the insurer shall prepare and submit to the director an RBC plan. The plan shall: 1. Identify the conditions in the insurer that contribute to the company action level event. 2. Propose corrective actions that the insurer intends to take and that are 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 succeeding years. The projections shall be based on both the absence of corrective actions and the proposed corrective actions, including projections of statutory operating income, net income, capital or surplus. The projections for both new and renewal business may include separate projections for each major line of business and may 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. 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 in each case, if any. B. The RBC plan shall be submitted within: 1. Forty-five days after the company action level event occurs. 2. If the insurer challenges an adjusted RBC report pursuant to section 20-488.06, forty-five days after the insurer is notified that the director, after a hearing, has rejected the insurer's challenge. C. Within sixty days after the insurer submits an RBC plan to the director, the director shall notify the insurer that the RBC plan will be implemented or, in the director's judgment, is unsatisfactory. If the director determines that the RBC plan is unsatisfactory, the notice to the insurer shall set forth the reasons for the director's determination and may set forth proposed revisions that would render the plan satisfactory in the judgment of the director. On receipt of notice from the director, the insurer shall prepare a revised RBC plan. The revised RBC plan may incorporate by reference any revisions proposed by the director. The insurer shall submit the revised RBC plan to the director within: 1. Forty-five days after receiving notice from the director. 2. If the insurer challenges the notice from the director pursuant to section 20-488.06, forty-five days after the insurer is notified that the director, after a hearing, has rejected the insurer's challenge. D. If the director notifies the insurer that the insurer's RBC plan or revised RBC plan is unsatisfactory, subject to the insurer's right to a hearing pursuant to section 20-488.06 the director may specify in the notice that the notice constitutes a regulatory action level event. E. Each domestic insurer that files an RBC plan or a revised RBC plan with the director shall file a copy of the plan with the insurance director in any state in which the insurer is authorized to transact business if both: 1. That state has an RBC provision substantially similar to section 20-488.07, subsection A. 2. The insurance director in that state notifies the insurer in writing of its request for the filing. After receiving notice of the request, the insurer shall file a copy of the RBC plan or revised RBC plan in that state no later than fifteen days after the receipt of the notice or the date on which the RBC plan or revised RBC plan is filed pursuant to subsection B or C of this section, whichever is later.