§431:3-402  Risk-based capital reports. (a)  Every domestic insurer, on or before each March 1 (the "filingdate"), shall prepare and submit to the commissioner a report of itsrisk-based capital levels as of the end of the calendar year just ended, in aform and containing any information that is required by the risk-based capitalinstructions.  In addition, every domestic insurer shall file its risk-basedcapital report:

(1)  With the National Association of InsuranceCommissioners in accordance with the risk-based capital instructions; and

(2)  With the insurance commissioner in any state inwhich the insurer is authorized to do business, if the commissioner hasnotified the insurer of its request in writing, in which case the insurer shallfile its risk-based capital report not later than the later of:

(A)  Fifteen days from the receipt of notice tofile its risk-based capital report with that state; or

(B)  The filing date.

(b)  A life or accident and health or sicknessinsurer's risk-based capital shall be determined in accordance with the formulaset forth in the risk-based capital instructions.  The formula shall take intoaccount and may adjust for the covariance among the following, which shall bedetermined in each case by applying the factors in the manner set forth in therisk-based capital instructions:

(1)  The risk with respect to the insurer's assets;

(2)  The risk of adverse insurance experience withrespect to the insurer's liabilities and obligations;

(3)  The interest rate risk with respect to theinsurer's business; and

(4)  All other business risks and any other relevantrisks that are set forth in the risk-based capital instructions.

(c)  A property and casualty insurer'srisk-based capital shall be determined in accordance with the formula set forthin the risk-based capital instructions.  The formula shall take into accountand may adjust for the covariance among the following, which shall bedetermined in each case by applying the factors in the manner set forth in therisk-based capital instructions:

(1)  Asset risk;

(2)  Credit risk;

(3)  Underwriting risk; and

(4)  All other business risks and such other relevantrisks as are set forth in the risk-based capital instructions.

(d)  An excess of capital over the amountproduced by the risk-based capital requirements contained in this part and theformulas, schedules, and instructions referenced in this part is desirable inthe business of insurance.  Accordingly, insurers shall seek to maintaincapital above the risk-based capital levels required by this part.  Additionalcapital is used and useful in the business of insurance and helps to secure aninsurer against various risks inherent in, or affecting, the business ofinsurance and not accounted for or only partially measured by the risk-basedcapital requirements contained in this part.

(e)  If a domestic insurer files a risk-basedcapital report which, in the judgment of the commissioner, is inaccurate, thenthe commissioner shall adjust the risk-based capital report to correct theinaccuracy and shall notify the insurer of the adjustment.  The notice shallcontain a statement of the reason for the adjustment.  A risk-based capitalreport as so adjusted is referred to as an adjusted risk-based capital report.[L 1994, c 190, pt of §1; am L 1995, c 61, §2 as superseded by c 232, §4; am L1997, c 75, §4; am L 1998, c 71, §2; am L 1999, c 128, §2; am L 2003, c 212,§26]