§ 27-4.6-3 - Company action level event. - Rhode Island Statutes

SECTION 27-4.6-3

   § 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 indicatesthat:

   (i) The insurer's total adjusted capital is greater than orequal to its regulatory action level RBC but less than its company action levelRBC; or

   (ii) If a life and/or health insurer, the insurer has totaladjusted capital that is greater than or equal to its company action level RBCbut less than the product of its authorized control level RBC and 2.5 and has anegative trend;

   (2) The notification by the commissioner to the insurer of anadjusted RBC report that indicates an event in subdivision (a)(1), provided theinsurer does not challenge the adjusted RBC report under § 27-4.6-7; or

   (3) If, pursuant to § 27-4.6-7, an insurer challenges anadjusted RBC report that indicates the event in subdivision (a)(1), thenotification 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 insurershall prepare and submit to the commissioner an RBC plan which shall:

   (1) Identify the conditions that contribute to the companyaction level event;

   (2) Contain proposals of corrective actions that the insurerintends to take and would be expected to result in the elimination of thecompany action level event;

   (3) Provide projections of the insurer's financial results inthe current year and at least the four (4) succeeding years, both in theabsence of proposed corrective actions and giving effect to the proposedcorrective actions, including projections of statutory operating income, netincome, capital and/or surplus. (The projections for both new and renewalbusiness might include separate projections for each major line of business andseparately identify each significant income, expense and benefit component);

   (4) Identify the key assumptions impacting the insurer'sprojections 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, anticipatedbusiness 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 levelevent; or

   (2) If the insurer challenges an adjusted RBC report pursuantto § 27-4.6-7, within forty-five (45) days after notification to theinsurer that the commissioner has, after a hearing, rejected the insurer'schallenge.

   (d) Within sixty (60) days after the submission by an insurerof an RBC plan to the commissioner, the commissioner shall notify the insurerwhether the RBC plan shall be implemented or is, in the judgment of thecommissioner, unsatisfactory. If the commissioner determines that the RBC planis unsatisfactory, the notification to the insurer shall set forth the reasonsfor the determination, and may set forth proposed revisions which will renderthe RBC plan satisfactory in the judgment of the commissioner. Uponnotification from the commissioner, the insurer shall prepare a revised RBCplan, which may incorporate by reference any revisions proposed by thecommissioner, and shall submit the revised RBC plan to the commissioner:

   (1) Within forty-five (45) days after the notification fromthe commissioner; or

   (2) If the insurer challenges the notification from thecommissioner under § 27-4.6-7, within forty-five (45) days after anotification 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 aninsurer that the insurer's RBC plan or revised RBC plan is unsatisfactory, thecommissioner may at the commissioner's discretion, subject to the insurer'sright to a hearing under § 27-4.6-7, specify in the notification that thenotification constitutes a regulatory action level event.

   (f) Every domestic insurer that files an RBC plan or revisedRBC plan with the commissioner shall file a copy of the RBC plan or revised RBCplan with the insurance commissioner in any state in which the insurer isauthorized to do business if:

   (1) That state has an RBC provision substantially similar to§ 27-4.6-8(a); and

   (2) The insurance commissioner of that state has notified theinsurer of its request for the filing in writing, in which case the insurershall file a copy of the RBC plan or revised RBC plan in that state no laterthan the later of:

   (i) Fifteen (15) days after the receipt of notice to file acopy of its RBC plan or revised RBC plan with the state; or

   (ii) The date on which the RBC plan or revised RBC plan isfiled under subsections (c) and (d) of this section.