§ 27-4.7-4 - Company action level event. - Rhode Island Statutes

SECTION 27-4.7-4

   § 27-4.7-4  Company action level event.– (a) "Company action level event" means any of the following events:

   (1) The filing of an RBC report by a health organization thatindicates that the health organization's total adjusted capital is greater thanor equal to its regulatory action level RBC but less than its company actionlevel RBC;

   (2) Notification by the commissioner to the healthorganization of an adjusted RBC report that indicates an event in subdivision(a)(1) of this section, provided the health organization does not challenge theadjusted RBC report under § 27-4.7-8; or

   (3) If, pursuant to § 27-4.7-8, a health organizationchallenges an adjusted RBC report that indicates the event in subdivision(a)(1) of this section, the notification by the commissioner to the healthorganization that the commissioner has, after a hearing, rejected the healthorganization's challenge.

   (b) In the event of a company action level event, the healthorganization shall prepare and submit to the commissioner an RBC plan thatshall:

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

   (2) Contain proposals of corrective actions that the healthorganization intends to take and that would be expected to result in theelimination of the company action level event;

   (3) Provide projections of the health organization'sfinancial results in the current year and at least the two (2) succeedingyears, both in the absence of proposed corrective actions and giving effect tothe proposed corrective actions, including projections of statutory balancesheets, operating income, net income, capital and surplus, and RBC levels. Theprojections for both new and renewal business might include separateprojections for each major line of business and separately identify eachsignificant income, expense, and benefit component;

   (4) Identify the key assumptions impacting the healthorganization's projections and the sensitivity of the projections to theassumptions; and

   (5) Identify the quality of, and problems associated with,the health organization's business, including, but not limited to, its assets,anticipated business growth and associated surplus strain, extraordinaryexposure 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 health organization challenges an adjusted RBCreport pursuant to § 27-4.7-8 within forty-five (45) days afternotification to the health organization that the commissioner has, after ahearing, rejected the health organization's challenge.

   (d) Within sixty (60) days after the submission by a healthorganization of an RBC plan to the commissioner, the commissioner shall notifythe health organization whether the RBC plan shall be implemented or is, in thejudgment of the commissioner, unsatisfactory. If the commissioner determinesthe RBC plan is unsatisfactory, the notification to the health organizationshall set forth the reasons for the determination, and may set forth proposedrevisions which will render the RBC plan satisfactory in the judgment of thecommissioner. Upon notification from the commissioner, the health organizationshall prepare a revised RBC plan, which may incorporate by reference anyrevisions proposed by the commissioner, and shall submit the revised RBC planto the commissioner:

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

   (2) If the health organization challenges the notificationfrom the commissioner under § 27-4.7-8, within forty-five (45) days aftera notification to the health organization that the commissioner has, after ahearing, rejected the health organization's challenge.

   (e) In the event of a notification by the commissioner to ahealth organization that the health organization's RBC plan or revised RBC planis unsatisfactory, the commissioner may, at the commissioner's discretion,subject to the health organization's right to a hearing under § 27-4.7-8,specify in the notification that the notification constitutes a regulatoryaction level event.

   (f) Every domestic health organization that files an RBC planor revised RBC plan with the commissioner shall file a copy of the RBC plan orrevised RBC plan with the insurance commissioner in any state in which thehealth organization is authorized to do business if:

   (1) The state has an RBC provision substantially similar to§ 27-4.7-9(a); and

   (2) The insurance commissioner of that state has notified thehealth organization of its request for the filing in writing, in which case thehealth organization shall file a copy of the RBC plan or revised RBC plan inthat state no later than 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.