§ 27-4.7-3 - RBC reports. - Rhode Island Statutes

SECTION 27-4.7-3

   § 27-4.7-3  RBC reports. – (a) A domestic health organization shall, on or prior to each March 1 (the"filing date"), prepare and submit to the commissioner a report of its RBClevels as of the end of the calendar year just ended, in a form and containingany information that is required by the RBC instructions. In addition, adomestic health organization shall file its RBC report:

   (1) With the NAIC in accordance with the RBC instructions; and

   (2) With the insurance commissioner in any state in which thehealth organization is authorized to do business, if the insurance commissionerhas notified the health organization of its request in writing, in which casethe health organization shall file its RBC report not later than the later of:

   (i) Fifteen (15) days from the receipt of notice to file itsRBC report with that state; or

   (ii) The filing date.

   (b) A health organization's RBC shall be determined inaccordance with the formula set forth in the RBC instructions. The formulashall take the following into account (and may adjust for the covariancebetween) determined in each case by applying the factors in the manner setforth in the RBC instructions:

   (1) Asset risk;

   (2) Credit risk;

   (3) Underwriting risk; and

   (4) All other business risks and any other relevant risksthat are set forth in the RBC instructions.

   (c) An excess of capital (i.e., net worth) over the amountproduced by the risk-based capital requirements contained in this chapter andthe formulas, schedules, and instructions referenced in this chapter isdesirable in the business of health insurance. Health organizations should seekto maintain capital above the RBC levels required by this chapter. Additionalcapital is used and useful in the insurance business and helps to secure ahealth organization against various risks inherent in, or affecting, thebusiness of insurance and not accounted for, or only partially measured by, therisk-based capital requirements contained in this chapter.

   (d) If a domestic health organization files an RBC reportthat in the judgment of the commissioner is inaccurate, then the commissionershall adjust the RBC report to correct the inaccuracy and shall notify thehealth organization of the adjustment. The notice shall contain a statement ofthe reason for the adjustment. An RBC report adjusted in this manner isreferred to as an "adjusted RBC report."