§431:3-403 - Company action level event.

§431:3-403 Company action level event. (a) "Company action level event" means any of the following events:

(1) The filing of a risk-based capital report by aninsurer which indicates that:

(A) The insurer's total adjusted capital isgreater than or equal to its regulatory action level risk-based capital butless than its company action level risk-based capital; or

(B) If a life or accident and health orsickness insurer, the insurer has total adjusted capital which is greater thanor equal to its company action level risk-based capital but less than theproduct of its authorized control level risk-based capital and 2.5, and has anegative trend;

(2) The notification by the commissioner to theinsurer of an adjusted risk-based capital report that indicates the occurrenceof the event in paragraph (1), if the insurer does not challenge the adjustedrisk-based capital report under section 431:3-407; or

(3) If, pursuant to section 431:3-407, the insurerchallenges an adjusted risk-based capital report that indicates the occurrenceof the event in paragraph (1), the notification by the commissioner to theinsurer that the commissioner has, after a hearing, rejected the insurer'schallenge.

(b) In the event of a company action levelevent, the insurer shall prepare and submit to the commissioner a risk-basedcapital plan which shall:

(1) Identify the conditions in the insurer whichcontribute to the company action level event;

(2) Contain proposals of corrective actions which theinsurer intends to take and would be expected to result in the elimination ofthe company action level event;

(3) Provide projections of the insurer's financialresults in the current year and at least the four 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 surplus. The projections for both new and renewalbusiness may include separate projections for each major line of business andseparately identify each significant income, expense, and benefit component;

(4) Identify the key assumptions having an impact onthe insurer's projections and the sensitivity of the projections to theassumptions; and

(5) Identify the quality of, and problems associatedwith, the insurer'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 in each case, if any.

(1) Within forty-five days of the company actionlevel event; or

(2) If the insurer challenges an adjusted risk-basedcapital report pursuant to section 431:3-407, within forty-five days afternotification to the insurer that the commissioner has, after a hearing,rejected the insurer's challenge.

(d) Within sixty days after the submission byan insurer of a risk-based capital plan to the commissioner, the commissionershall notify the insurer whether the risk-based capital plan shall beimplemented or is, in the judgment of the commissioner, unsatisfactory. If thecommissioner determines the risk-based capital plan is unsatisfactory, thenotification to the insurer shall set forth the reasons for the determination,and may set forth proposed revisions which will render the risk-based capitalplan satisfactory, in the judgment of the commissioner. Upon notification fromthe commissioner, the insurer shall prepare a revised risk-based capital plan,which may incorporate by reference any revisions proposed by the commissioner,and shall submit the revised risk-based capital plan to the commissioner:

(1) Within forty-five days after the notificationfrom the commissioner; or

(2) If the insurer challenges the notification fromthe commissioner under section 431:3-407, within forty-five 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 thecommissioner to an insurer that the insurer's risk-based capital plan orrevised risk-based capital plan is unsatisfactory, the commissioner, at thecommissioner's discretion, subject to the insurer's right to a hearing undersection 431:3-407, may specify in the notification that the notificationconstitutes a regulatory action level event.

(f) Every domestic insurer that files arisk-based capital plan or revised risk-based capital plan with thecommissioner shall file a copy of the risk-based capital plan or revisedrisk-based capital plan with the insurance commissioner in any state in whichthe insurer is authorized to do business if:

(1) That state has a risk-based capital provisionsubstantially similar to section 431:3-408(a); and

(2) The insurance commissioner of that state hasnotified the insurer of its request for the filing in writing, in which casethe insurer shall file a copy of the risk-based capital plan or revisedrisk-based capital plan in that state no later than the later of:

(A) Fifteen days after the receipt of noticeto file a copy of its risk-based capital plan or revised risk-based capitalplan with that state; or

(B) The date on which the risk-based capitalplan or revised risk-based capital plan is filed under subsections (c) and (d).[L 1994, c 190, pt of §1; am L 1995, c 61, §2 as superseded by c 232, §4; am L1997, c 75, §5; am L 1999, c 128, §2; am L 2003, c 212, §27]