§ 58-12-25. Mandatory control level event. - North Carolina Statutes

§ 58‑12‑25. Mandatory control level event.

(a)        "Mandatorycontrol level event" means any of the following events:

(1)        The filing of a risk‑basedcapital report that indicates that the insurer's total adjusted capital is lessthan its mandatory control level risk‑based capital.

(2)        Notification by theCommissioner to the insurer of an adjusted risk‑based capital report thatindicates the event in subdivision (1) of this subsection if the insurer doesnot challenge the adjusted risk‑based capital report under G.S. 58‑12‑30.

(3)        If the insurerchallenges an adjusted risk‑based capital report that indicates the eventin subdivision (1) of this subsection under G.S. 58‑12‑30,notification by the Commissioner to the insurer that the Commissioner hasrejected the challenge.

(b)        In the event of amandatory control level event with respect to a life insurer or a healthorganization, the Commissioner shall take actions as are necessary to cause theinsurer to be placed under regulatory control under Article 30 of this Chapter.The mandatory control level event is sufficient grounds for the Commissioner totake action under Article 30 of this Chapter, and the Commissioner shall havethe rights, powers, and duties with respect to the insurer as are set forth inArticle 30 of this Chapter. If the Commissioner takes actions pursuant to anadjusted risk‑based capital report, the insurer shall be entitled to suchprotections as are afforded to insurers under the provisions of Article 30 ofthis Chapter pertaining to summary proceedings. Notwithstanding any of theforegoing, the Commissioner may forego action for up to 90 days after themandatory control level event if the Commissioner finds there is a reasonableexpectation that the mandatory control level event may be eliminated within the90‑day period.

(c)        In the event of amandatory control level event with respect to a property and casualty insurer,the Commissioner shall take actions as are necessary to cause the insurer to beplaced under regulatory control under Article 30 of this Chapter, or, in thecase of an insurer which is writing no business and which is running off itsexisting business, may allow the insurer to continue its runoff under thesupervision of the Commissioner. In either event, the mandatory control levelevent is sufficient grounds for the Commissioner to take action under Article30 of this Chapter, and the Commissioner shall have the rights, powers, andduties with respect to the insurer as are set forth in Article 30 of thisChapter. If the Commissioner takes actions under an adjusted risk‑basedcapital report, the insurer shall be entitled to such protections as areafforded to insurers under the provisions of Article 30 of this Chapterpertaining to summary proceedings. Notwithstanding any of the foregoing, theCommissioner may forego action for up to 90 days after the mandatory controllevel event if the Commissioner finds there is a reasonable expectation thatthe mandatory control level event may be eliminated within the 90‑dayperiod. (1993(Reg. Sess., 1994), c. 678, s. 1; 2001‑223, ss. 12.7, 12.8.)