§ 27-14.2-3 - Director's orders. - Rhode Island Statutes

SECTION 27-14.2-3

   § 27-14.2-3  Director's orders. – (a) For the purposes of making a determination of an insurer's financialcondition under this chapter, the director may:

   (1) Disregard any credit or amount receivable resulting fromtransactions with a reinsurer which is insolvent, impaired, or otherwisesubject to a delinquency proceeding;

   (2) Make appropriate adjustments to asset values attributableto investments in or transactions with parents, subsidiaries, or affiliates;

   (3) Refuse to recognize the stated value of accountsreceivable if the ability to collect receivables is highly speculative in viewof the age of the account or the financial condition of the debtor; or

   (4) Increase the insurer's liability in an amount equal toany contingent liability, pledge, or guarantee not included if there is asubstantial risk that the insurer will be called upon to meet the obligationundertaken within the next twelve (12) month period.

   (b) If the director determines that the continued operationof the insurer licensed to transact business in this state may be hazardous tothe policyholders or the general public, then the director may, upon his or herdetermination, issue an order requiring the insurer to:

   (1) Reduce the total amount of present and potentialliability for policy benefits by reinsurance;

   (2) Reduce, suspend, or limit the volume of business beingaccepted or renewed;

   (3) Reduce general insurance and commission expenses byspecified methods;

   (4) Increase the insurer's capital and surplus;

   (5) Suspend or limit the declaration and payment of adividend by an insurer to its stockholders or to its policyholders;

   (6) File reports in a form acceptable to the directorconcerning the market value of an insurer's assets;

   (7) Limit or withdraw from certain investments or discontinuecertain investment practices to the extent the commissioner deems necessary;

   (8) Document the adequacy of premium rates in relation to therisks insured; or

   (9) File, in addition to regular annual statements, interimfinancial reports on the form adopted by the national association of insurancecommissioners or on a format as promulgated by the commissioner.

   (c) If the insurer is a foreign insurer, the director's orderunder subsection (b) of this section may be limited to the extent provided bystatute.

   (d) Any insurer subject to an order under subsection (b) ofthis section may request a hearing to review that order. The notice of hearingshall be served upon the insurer pursuant to the Administrative Procedures Act,chapter 35 of title 42. The notice of hearing shall state the time and place ofthe hearing, and the conduct, condition, or ground upon which the directorbased the order. Unless mutually agreed between the director and the insurer,the hearing shall occur not less than ten (10) days nor more than thirty (30)days after notice is served and shall be either in Providence County or in someother place of convenience to the parties to be designated by the director. Thedirector shall hold all hearings under this subsection privately, unless theinsurer requests a public hearing, in which case the hearing shall be public.