§ 131E-288. Liquidity. - North Carolina Statutes

§ 131E‑288. Liquidity.

(a)        Each PSO shall have sufficient cash flow to meet itsobligations as they become due. In determining the ability of a PSO to meetthis requirement, the Division shall consider the following:

(1)        The timeliness of payment;

(2)        The extent to which the current ratio is maintained at one‑to‑oneor whether there is a change in the current ratio over a period of time; and

(3)        The availability of outside financial resources.

(b)        The following corresponding remedies apply:

(1)        If the PSO fails to pay obligations as they become due, theDivision shall require the PSO to initiate corrective action to pay all overdueobligations.

(2)        The Division may require the PSO to initiate correctiveaction if either of the following is evident: (i) the current ratio declinessignificantly; or (ii) there is a continued downward trend in the currentratio. The corrective action may include a change in the distribution ofassets, a reduction of liabilities, or alternative arrangements to secureadditional funding requirements to restore the current ratio to one‑to‑one.

(3)        If there is a change in the availability of the outsideresources, the Division shall require the PSO to obtain funding fromalternative financial resources.

(c)        Nothing in the foregoing liquidity requirements shall beinterpreted to require the PSO to maintain a current ratio of one‑to‑oneif the PSO can demonstrate to the Division that it is able to pay itsobligations as they become due and the current ratio maintained by the PSO hasneither declined significantly nor is on a continued downward trend. (1998‑227, s. 1.)