CHAPTER 36. RISK BASED CAPITAL REQUIREMENTS
IC 27-1-36
Chapter 36. Risk Based Capital Requirements
IC 27-1-36-1
Exemption from applicability of chapter
Sec. 1. The commissioner may exempt from the application of thischapter:
(1) A domestic property and casualty insurer that:
(A) writes direct business only in Indiana;
(B) receives annual premiums from direct business writtenof not more than two million dollars ($2,000,000); and
(C) assumes no reinsurance in excess of five percent (5%) ofdirect business written.
(2) A health maintenance organization that:
(A) operates only in Indiana; and
(B) receives annual subscriber premiums (as defined inIC 27-13-1-33) of not more than two million dollars($2,000,000).
(3) A limited service health maintenance organization that:
(A) operates only in Indiana;
(B) receives annual subscriber premiums (as defined inIC 27-13-1-33) of not more than two million dollars($2,000,000); and
(C) covers not more than two thousand (2,000) enrollees.
As added by P.L.186-1996, SEC.1. Amended by P.L.51-2002, SEC.1.
IC 27-1-36-2
"Adjusted RBC report" defined
Sec. 2. As used in this chapter, "adjusted RBC report" means anRBC report that has been adjusted by the commissioner undersection 28 of this chapter.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-3
"Authorized control level event" defined
Sec. 3. As used in this chapter, "authorized control level event"has the meaning set forth in section 39 of this chapter.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-4
"Authorized control level RBC" defined
Sec. 4. As used in this chapter, the "authorized control level RBC"means, with respect to an insurer, the number determined under therisk-based capital formula in accordance with the RBC instructions.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-5
"Company action level event" defined
Sec. 5. As used in this chapter, "company action level event" hasthe meaning set forth in section 29 of this chapter.As added by P.L.186-1996, SEC.1.
IC 27-1-36-6
"Company action level RBC" defined
Sec. 6. As used in this chapter, "company action level RBC"means, with respect to an insurer, the product of two (2) multipliedby the insurer's authorized control level RBC.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-7
"Corrective order" defined
Sec. 7. As used in this chapter, "corrective order" means an orderissued by the commissioner that specifies the corrective actions thatthe commissioner determines are required.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-8
"Domestic insurer" defined
Sec. 8. As used in this chapter, "domestic insurer" means any:
(1) insurance company;
(2) health maintenance organization; or
(3) limited service health maintenance organization;
that is domiciled in Indiana.
As added by P.L.186-1996, SEC.1. Amended by P.L.51-2002, SEC.2.
IC 27-1-36-9
"Foreign insurer" defined
Sec. 9. As used in this chapter, "foreign insurer" means thefollowing:
(1) An insurer that is:
(A) licensed to do business in Indiana under IC 27-1-17; but
(B) not a domestic insurer.
(2) A health maintenance organization that:
(A) is organized under the laws of a state other than Indiana,a territory or another insular possession of the United States,or the District of Columbia; and
(B) has obtained a certificate of authority under IC 27-13-2.
(3) A limited service health maintenance organization that:
(A) is organized under the laws of a state other than Indiana,a territory or another insular possession of the United States,or the District of Columbia; and
(B) has obtained a certificate of authority under IC 27-13-34.
As added by P.L.186-1996, SEC.1. Amended by P.L.51-2002, SEC.3.
IC 27-1-36-9.4
"Health maintenance organization" defined
Sec. 9.4. As used in this chapter, "health maintenanceorganization" has the meaning set forth in IC 27-13-1-19.
As added by P.L.51-2002, SEC.4.
IC 27-1-36-9.6
"Insurer" defined
Sec. 9.6. As used in this chapter, "insurer" includes:
(1) a health maintenance organization; and
(2) a limited service health maintenance organization.
As added by P.L.51-2002, SEC.5.
IC 27-1-36-9.8
"Limited service health maintenance organization" defined
Sec. 9.8. As used in this chapter, "limited service healthmaintenance organization" has the meaning set forth inIC 27-13-34-4.
As added by P.L.51-2002, SEC.6.
IC 27-1-36-10
"Life and health insurer" defined
Sec. 10. As used in this chapter, "life and health insurer" means:
(1) an insurer that makes one (1) or more of the types ofinsurance described in Class 1 of IC 27-1-5-1; or
(2) a property and casualty insurer that writes only accident andhealth insurance.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-11
"Mandatory control level event" defined
Sec. 11. As used in this chapter, "mandatory control level event"has the meaning set forth in section 41 of this chapter.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-12
"Mandatory control level RBC" defined
Sec. 12. As used in this chapter, "mandatory control level RBC"means, with respect to an insurer, the product of seven-tenths (.7)multiplied by the insurer's authorized control level RBC.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-13
"NAIC" defined
Sec. 13. As used in this chapter, "NAIC" refers to the NationalAssociation of Insurance Commissioners.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-14
"Negative trend" defined
Sec. 14. As used in this chapter, "negative trend" means, withrespect to a life and health insurer, a negative trend over a period oftime, as determined in accordance with the trend test calculationincluded in the RBC instructions.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-15
"Property and casualty insurer" defined
Sec. 15. As used in this chapter, "property and casualty insurer"means an insurer that is authorized to make one (1) or more of thetypes of insurance described in Class 2 and Class 3 of IC 27-1-5-1.The term does not include the following:
(1) A monoline mortgage guaranty insurer.
(2) A financial guaranty insurer.
(3) A title insurer.
(4) A health maintenance organization.
(5) A limited service health maintenance organization.
As added by P.L.186-1996, SEC.1. Amended by P.L.51-2002, SEC.7.
IC 27-1-36-16
"RBC" defined
Sec. 16. As used in this chapter, "RBC" refers to risk basedcapital.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-17
"RBC instructions" defined
Sec. 17. As used in this chapter, "RBC instructions" means theRBC report including risk based capital instructions adopted by theNAIC, as amended by the NAIC.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-18
"RBC level" defined
Sec. 18. As used in this chapter, "RBC level" means an insurer's:
(1) company action level RBC;
(2) regulatory action level RBC;
(3) authorized control level RBC; or
(4) mandatory control level RBC.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-19
"RBC plan" defined
Sec. 19. As used in this chapter, "RBC plan" means acomprehensive financial plan containing the elements specified insection 30 of this chapter.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-20
"RBC report" defined
Sec. 20. As used in this chapter, "RBC report" means the reportrequired by section 25 of this chapter.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-21
"Regulatory action level event" defined Sec. 21. As used in this chapter, "regulatory action level event"has the meaning set forth in section 35 of this chapter.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-22
"Regulatory action level RBC" defined
Sec. 22. As used in this chapter, "regulatory action level RBC"means, with respect to an insurer, the product of one and five-tenths(1.5) multiplied by the insurer's authorized control level RBC.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-23
"Revised RBC plan" defined
Sec. 23. As used in this chapter, "revised RBC plan" means therevised RBC plan that an insurer must prepare, with or without thecommissioner's recommendation, if the commissioner rejects theinsurer's previous RBC plan.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-24
"Total adjusted capital" defined
Sec. 24. As used in this chapter, "total adjusted capital" means thesum of:
(1) an insurer's statutory capital and surplus determined inaccordance with the statutory accounting applicable to theannual financial statements required to be filed underIC 27-1-3.5; and
(2) other items, if any, that the RBC instructions may provide.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-25
RBC report; requirements; filing
Sec. 25. (a) A domestic insurer shall prepare a report of the RBClevels of the insurer as of the last day of the calendar year mostrecently ended. The report must:
(1) be in the form; and
(2) contain the information;
required by the RBC instructions.
(b) On or before March 1 of each year, a domestic insurer shallfile the RBC report described in subsection (a) with:
(1) the commissioner;
(2) the NAIC, in accordance with the RBC instructions; and
(3) the insurance commissioner in any state other than Indianain which the insurer is authorized to do business, if theinsurance commissioner has notified the insurer in writing ofthe commissioner's request for the insurer's RBC report.
An insurer is not required to pay a fee when filing an RBC reportunder this subsection.
(c) If an insurer is required under subsection (b)(3) to file its RBCreport with the insurance commissioner of a state other than Indiana,
the insurer shall file the RBC report with the insurance commissionerof that state not later than:
(1) fifteen (15) days after the insurer receives the notice; or
(2) March 1 of the calendar year in which the insurer receivesthe notice;
whichever occurs later.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-26
Life and health insurer's RBC; formula
Sec. 26. A life and health insurer's RBC must be determined inaccordance with the formula set forth in the RBC instructions. Theformula must take into account (and may adjust for the covariancebetween):
(1) the risk with respect to the insurer's assets;
(2) the risk of adverse insurance experience with respect to theinsurer's liabilities and obligations;
(3) the interest rate risk with respect to the insurer's business;and
(4) all other business risks and such other relevant risks as areset forth in the RBC instructions;
determined by applying the factors in the manner set forth in theRBC instructions.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-26.1
Health maintenance organization's and limited service healthmaintenance organization's RBC; formula
Sec. 26.1. A health maintenance organization's RBC and a limitedservice health maintenance organization's RBC must be determinedin accordance with the formula set forth in the RBC instructions fora health maintenance organization and a limited service healthmaintenance organization. The formula must take into account (andmay adjust for the covariance between):
(1) affiliation investment risk;
(2) asset risk;
(3) credit risk;
(4) underwriting risk; and
(5) all other business risks and such other relevant risks as areset forth in the RBC instructions;
determined by applying the factors in the manner set forth in theRBC instructions.
As added by P.L.51-2002, SEC.8.
IC 27-1-36-27
Property and casualty insurer's RBC; formula
Sec. 27. A property and casualty insurer's RBC must bedetermined in accordance with the formula set forth in the RBCinstructions. The formula must take into account (and may adjust forthe covariance between): (1) asset risk;
(2) credit risk;
(3) underwriting risk; and
(4) all other business risks and such other relevant risks as areset forth in the RBC instructions;
determined by applying the factors in the manner set forth in theRBC instructions.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-28
Inaccuracy of RBC report filed by domestic insurer
Sec. 28. (a) If the commissioner determines an RBC report filedby a domestic insurer is inaccurate, the commissioner shall:
(1) adjust the RBC report to correct the inaccuracy; and
(2) notify the insurer of the adjustment.
(b) A notice provided by the commissioner under subsection (a)must contain a statement of the reason for the adjustment.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-29
"Company action level event" defined
Sec. 29. As used in this chapter, "company action level event"means any of the following events:
(1) The filing of an RBC report by an insurer that indicates that:
(A) the insurer's total adjusted capital is:
(i) greater than or equal to its regulatory action level RBC;but
(ii) less than its company action level RBC; or
(B) if a life and health insurer, the insurer:
(i) has total adjusted capital that is greater than or equal toits company action level RBC but less than the product oftwo and five-tenths (2.5) multiplied by its authorizedcontrol level RBC; and
(ii) has a negative trend.
(2) The notification by the commissioner to the insurer of anadjusted RBC report that indicates that:
(A) the insurer's total adjusted capital is:
(i) greater than or equal to its regulatory action level RBC;but
(ii) less than its company action level RBC; or
(B) if a life and health insurer, the insurer:
(i) has total adjusted capital that is greater than or equal toits company action level RBC but less than the product oftwo and five-tenths (2.5) multiplied by its authorizedcontrol level RBC; and
(ii) has a negative trend;
unless the insurer challenges the adjusted RBC report undersection 44 of this chapter.
(3) The notification by the commissioner to the insurer that thecommissioner has, after a hearing under section 44 of this
chapter, rejected the insurer's challenge to an adjusted RBCreport described in subdivision (2).
As added by P.L.186-1996, SEC.1.
IC 27-1-36-30
Preparation and submission of RBC plan after company actionlevel event
Sec. 30. If a company action level event occurs, the insurer shallprepare and submit to the commissioner an RBC plan that does allthe following:
(1) Addresses the following:
(A) The conditions that contribute to the insurer's RBC level.
(B) The key assumptions affecting the insurer's projectionsand the sensitivity of the projections to the assumptions.
(C) The quality of, and problems associated with, theinsurer's business, including the following:
(i) Assets.
(ii) Anticipated business growth and associated surplusstrain.
(iii) Extraordinary exposure to risk.
(iv) Mix of business and use of reinsurance, if any, in eachcase.
(2) Contains proposals for corrective actions that the insurerintends to take and that would be expected to result in theelimination of the RBC level.
(3) Provides projections of the insurer's financial results in thecurrent year and at least the four (4) consecutive succeedingyears, both in the absence of proposed corrective actions andgiving effect to the proposed corrective actions, includingprojections of the following:
(A) Statutory operating income.
(B) Net income.
(C) Capital.
(D) Surplus. (The projections for both new and renewalbusiness may include separate projections for each majorline of business and separately identify each significantincome, expense, and benefit component.)
As added by P.L.186-1996, SEC.1.
IC 27-1-36-31
Timing for submission of RBC plan after company action levelevent
Sec. 31. An insurer must submit to the commissioner an RBC planrequired under section 30 of this chapter:
(1) not more than forty-five (45) days after the company actionlevel event; or
(2) not more than forty-five (45) days after notification to theinsurer that the commissioner has, after a hearing under section44 of this chapter, rejected the insurer's challenge.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-32
RBC plan; notice by commissioner; revised RBC plan
Sec. 32. (a) Not more than sixty (60) days after an insurer submitsan RBC plan under section 31 of this chapter, the commissioner shallnotify the insurer of whether the RBC plan:
(1) must be implemented; or
(2) is unsatisfactory.
(b) If the commissioner determines that an RBC plan isunsatisfactory, the notification to the insurer:
(1) must state the reasons for the determination; and
(2) may include revisions proposed by the commissioner thatwill render the RBC plan satisfactory.
(c) Upon receiving a notification from the commissioner undersubsection (b), the insurer shall prepare a revised RBC plan. Therevised RBC plan may incorporate by reference any revisionsproposed by the commissioner. The insurer shall submit the revisedRBC plan to the commissioner:
(1) not more than forty-five (45) days after the insurer receivesthe notification under subsection (a)(2); or
(2) not more than forty-five (45) days after the insurer receivesthe notification from the commissioner that the commissionerhas, after a hearing under section 44 of this chapter, rejected theinsurer's challenge.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-33
Notification by commissioner as regulatory action level event
Sec. 33. If the commissioner notifies an insurer that the insurer'sRBC plan or revised RBC plan is unsatisfactory, the commissionermay, subject to the insurer's right to a hearing under section 44 ofthis chapter, specify in the notification that the notificationconstitutes a regulatory action level event.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-34
Filing RBC plan with commissioner of state other than Indiana
Sec. 34. (a) A domestic insurer that files an RBC plan or a revisedRBC plan with the commissioner shall file a copy of the RBC planor revised RBC plan with the insurance commissioner in each stateother than Indiana in which the insurer is authorized to do business,if:
(1) the state has an RBC provision substantially similar tosection 45 of this chapter; and
(2) the insurance commissioner of that state has notified theinsurer in writing of its request for the filing.
(b) If an insurer is required under subsection (a) to file its RBCplan or revised RBC plan with the insurance commissioner of a stateother than Indiana, the insurer shall file the RBC plan or revisedRBC plan not later than:
(1) fifteen (15) days after the insurer receives notice under
subsection (a)(2); or
(2) the date on which the RBC plan or revised RBC plan is filedunder sections 31 and 32 of this chapter;
whichever occurs later.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-35
"Regulatory action level event" defined
Sec. 35. As used in this chapter, "regulatory action level event"means any of the following events:
(1) The filing of an RBC report by the insurer that indicates thatthe insurer's total adjusted capital is:
(A) greater than or equal to its authorized control level RBC;but
(B) less than its regulatory action level RBC.
(2) The notification by the commissioner to an insurer of anadjusted RBC report that indicates that the insurer's totaladjusted capital is:
(A) greater than or equal to its authorized control level RBC;but
(B) less than its regulatory action level RBC;
unless the insurer challenges the adjusted RBC report undersection 44 of this chapter.
(3) The notification by the commissioner to the insurer that thecommissioner has, after a hearing under section 44 of thischapter, rejected the insurer's challenge to an adjusted RBCreport.
(4) The failure of the insurer to file an RBC report by the filingdate, unless the insurer:
(A) has provided an explanation for the failure that issatisfactory to the commissioner; and
(B) has cured the failure not more than ten (10) days afterthe March 1 filing date.
(5) The failure of the insurer to submit an RBC plan to thecommissioner within the period prescribed in section 31 of thischapter.
(6) Notification by the commissioner to the insurer undersection 33 of this chapter, unless the insurer challenges thenotification under section 44 of this chapter.
(7) The notification by the commissioner to the insurer that thecommissioner has, after a hearing under section 44 of thischapter, rejected the challenge to a determination by thecommissioner under section 33 of this chapter.
(8) Notification by the commissioner to the insurer that theinsurer has failed to adhere to its RBC plan or revised RBCplan, but only if:
(A) the failure has a substantial adverse effect on the abilityof the insurer to eliminate the company action level event inaccordance with its RBC plan or revised RBC plan; and
(B) the commissioner has so stated in the notification; unless the insurer challenges the determination under section 44of this chapter.
(9) The notification by the commissioner to the insurer that thecommissioner has, after a hearing under section 44 of thischapter, rejected the insurer's challenge to the determinationmade under subdivision (8).
As added by P.L.186-1996, SEC.1.
IC 27-1-36-36
Action by commissioner after regulatory action level event
Sec. 36. If a regulatory action level event occurs, thecommissioner shall:
(1) require the insurer to prepare an RBC plan or, if applicable,a revised RBC plan;
(2) perform such examination or analysis as the commissionerconsiders necessary of the assets, liabilities, and operations ofthe insurer, including a review of the insurer's RBC plan orrevised RBC plan; and
(3) after the examination or analysis, issue a corrective orderspecifying the corrective actions that the commissionerdetermines are required, taking into account relevant factorswith respect to the insurer, based upon the commissioner'sexamination or analysis of the assets, liabilities, and operationsof the insurer, including the results of any sensitivity testsundertaken under the RBC instructions.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-37
Timing for submission of RBC plan or revised RBC plan afterregulatory action level event
Sec. 37. The RBC plan or revised RBC plan must be submitted:
(1) not more than forty-five (45) days after the regulatory actionlevel event;
(2) not later than forty-five (45) days after the notification to theinsurer that the commissioner has, after a hearing under section44 of this chapter, rejected the insurer's challenge to an adjustedRBC report; or
(3) not more than forty-five (45) days after the notification tothe insurer that the commissioner has, after a hearing undersection 44 of this chapter, rejected the insurer's challenge to anadjusted RBC plan.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-38
Consultants to commissioner
Sec. 38. (a) The commissioner may retain actuaries, investmentexperts, and other consultants that the commissioner determines tobe necessary to:
(1) review the insurer's RBC plan or revised RBC plan;
(2) examine or analyze the assets, liabilities, and operations of
the insurer; and
(3) formulate the corrective order with respect to the insurer.
(b) The reasonable costs and expenses relating to consultants shallbe paid by the affected insurer or another party, as directed by thecommissioner.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-39
"Authorized control level event" defined
Sec. 39. As used in this chapter, "authorized control level event"means any of the following events:
(1) The filing of an RBC report by an insurer that indicates thatthe insurer's total adjusted capital is:
(A) greater than or equal to its mandatory control level RBC;but
(B) less than its authorized control level RBC.
(2) The notification by the commissioner to the insurer of anadjusted RBC report that indicates that the insurer's totaladjusted capital is:
(A) greater than or equal to its mandatory control level RBC;but
(B) less than its authorized control level RBC;
unless the insurer challenges the adjusted RBC report undersection 44 of this chapter.
(3) Notification by the commissioner to the insurer that thecommissioner has, after a hearing under section 44 of thischapter, rejected the insurer's challenge to an adjusted RBCreport.
(4) The failure of the insurer to respond, in a mannersatisfactory to the commissioner, to a corrective order, unlessthe insurer has challenged the corrective order under section 44of this chapter.
(5) The failure of the insurer to respond, in a mannersatisfactory to the commissioner, to a corrective order if, aftera challenge and a hearing under section 44 of this chapter, thecommissioner has:
(A) rejected the challenge; or
(B) modified the corrective order.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-40
Action by commissioner after authorized control level event
Sec. 40. (a) If an authorized control level event occurs withrespect to an insurer, the commissioner shall:
(1) take the actions required under section 36 of this chapterregarding an insurer; or
(2) if the commissioner considers it to be in the best interests of:
(A) the policyholders and creditors of the insurer; and
(B) the public;
take any action necessary to cause the insurer to be placed
under regulatory control under IC 27-9.
(b) An authorized control level event is sufficient grounds for thecommissioner to:
(1) determine, under IC 27-9-2-1, that an insurer has committedor engaged in, or is about to commit or engage in, an act, apractice, or a transaction that would subject the insurer to adelinquency proceeding under IC 27-9-3-1 or IC 27-9-3-6; and
(2) serve upon the insurer, under IC 27-9-2-1, orders reasonablynecessary to correct, eliminate, or remedy the conduct,condition, or ground.
The commissioner has the rights, powers, and duties with respect tothe insurer that are set forth in IC 27-9.
(c) If the commissioner takes action under subsection (a)(2), theinsurer is entitled to the protections of IC 27-9-2 pertaining tosummary proceedings.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-41
"Mandatory control level event" defined
Sec. 41. As used in this chapter, "mandatory control level event"means any of the following events:
(1) The filing of an RBC report that indicates that the insurer'stotal adjusted capital is less than its mandatory control levelRBC.
(2) Notification by the commissioner to the insurer of anadjusted RBC report that indicates that the insurer's totaladjusted capital is less than its mandatory control level RBCunless the insurer challenges the adjusted RBC report undersection 44 of this chapter.
(3) Notification by the commissioner to the insurer that thecommissioner has, after a hearing under section 44 of thischapter, rejected the insurer's challenge to an adjusted RBCreport.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-42
Action by commissioner after mandatory control level event withrespect to life and health insurer
Sec. 42. (a) If a mandatory control level event occurs with respectto a life and health insurer, the commissioner shall take the actionsnecessary to place the insurer under regulatory control under IC 27-9.
(b) A mandatory control level event is sufficient grounds for thecommissioner to take action against a life and health insurer underIC 27-9, and the commissioner has the rights, powers, and dutieswith respect to the insurer that are set forth in IC 27-9.
(c) If the commissioner takes action against a life and healthinsurer under an adjusted RBC report, the insurer is entitled to theprotections of IC 27-9-2 pertaining to summary proceedings.
(d) The commissioner may forego action under subsections (a)through (c) for not more than ninety (90) days after the mandatory
control level event if the commissioner finds there is a reasonableexpectation that the mandatory control level event may be eliminatedwithin the ninety (90) day period.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-42.1
Action by commissioner after mandatory control level event withrespect to health maintenance organization or limited servicehealth maintenance organization
Sec. 42.1. (a) If a mandatory control level event occurs withrespect to a health maintenance organization or a limited servicehealth maintenance organization, the commissioner shall take theaction necessary to place the health maintenance organization orlimited service health maintenance organization under regulatorycontrol under IC 27-13.
(b) A mandatory control level event is sufficient grounds for thecommissioner to take action against a health maintenanceorganization or a limited service health maintenance organizationunder IC 27-13 and the commissioner has the rights, powers, andduties with respect to the health maintenance organization or limitedservice health maintenance organization that are set forth inIC 27-13.
(c) If the commissioner takes action against a health maintenanceorganization or a limited service health maintenance organizationunder an adjusted RBC report, the health maintenance organizationor limited service health maintenance organization is entitled to theprotections under IC 27-9-2 pertaining to summary proceedings.
(d) The commissioner may forego action under subsections (a)through (c) for not more than ninety (90) days after the mandatorycontrol level event if the commissioner finds that there is areasonable expectation that the mandatory control level event may beeliminated within the ninety (90) day period.
As added by P.L.51-2002, SEC.9.
IC 27-1-36-43
Action by commissioner after mandatory control level event withrespect to property and casualty insurer
Sec. 43. (a) If a mandatory control level event occurs with respectto a property and casualty insurer, the commissioner:
(1) shall take the actions necessary to place the insurer underregulatory control under IC 27-9; or
(2) in the case of an insurer that is not writing business and thatis running off its existing business, may allow the insurer tocontinue its run-off under the supervision of the commissioner.
(b) A mandatory control level event is sufficient grounds for thecommissioner to take action against a property and casualty insurerunder IC 27-9, and the commissioner has the rights, powers, andduties with respect to the insurer that are set forth in IC 27-9.
(c) If the commissioner takes action against a property andcasualty insurer under an adjusted RBC report, the insurer is entitled
to the protections of IC 27-9-2 pertaining to summary proceedings.
(d) The commissioner may forego action for not more than ninety(90) days after the mandatory control level event if the commissionerfinds there is a reasonable expectation that the mandatory controllevel event may be eliminated within the ninety (90) day period.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-44
Confidential department hearing
Sec. 44. (a) The insurer has the right to a confidentialdepartmental hearing, on the record, upon the occurrence of any ofthe following:
(1) Notification to an insurer by the commissioner of anadjusted RBC report.
(2) Notification to an insurer by the commissioner under section32(b) of this chapter.
(3) Notification to an insurer by the commissioner that:
(A) the insurer has failed to adhere to its RBC plan orrevised RBC plan; and
(B) the insurer's failure has a substantial adverse effect onthe ability of the insurer to eliminate the company actionlevel event with respect to the insurer in accordance with itsRBC plan or revised RBC plan.
(4) Notification to an insurer by the commissioner of acorrective order with respect to the insurer.
(b) At a confidential hearing under this section, the insurer maychallenge any determination or action by the commissioner.
(c) An insurer must notify the commissioner of the insurer'srequest for a hearing under this section not more than five (5) daysafter the notification by the commissioner under subsection (a). Uponreceiving the insurer's request for a hearing, the commissioner shallset a date for the hearing. The date set by the commissioner must be:
(1) at least ten (10); and
(2) not more than thirty (30);
days after the date of the insurer's request.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-45
Confidential information
Sec. 45. (a) Because they contain information that might bedamaging to an insurer if made available to the insurer's competitors,the following are declared confidential for purposes of IC 5-14-3-4and are not subject to inspection and copying by the public underIC 5-14-3-3:
(1) An RBC report filed with the commissioner under thischapter, to the extent that the information in the report is notrequired to be provided in a publicly available annual statementschedule.
(2) An RBC plan filed with the commissioner under thischapter, including: (A) the results or report of any examination or analysis of aninsurer performed under the plan; and
(B) any corrective order issued by the commissioner underthe examination or analysis.
(b) The information described in subsection (a):
(1) must be kept confidential by the commissioner;
(2) shall not be made public; and
(3) is not subject to subpoena, other than by the commissionerand then only for the purpose of enforcement actions taken bythe commissioner under this chapter or another provision of thistitle.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-46
Comparison of insurer's total adjusted capital to RBC levels
Sec. 46. (a) The comparison of an insurer's total adjusted capitalto any of its RBC levels is a regulatory tool that may indicate theneed for possible corrective action with respect to the insurer and itis not intended as a means to rank insurers generally. Except asprovided in subsection (b), the action of an insurer, an insuranceproducer, a broker, or other person engaged in any manner in theinsurance business, in:
(1) making, publishing, disseminating, circulating, or placingbefore the public; or
(2) causing, directly or indirectly to be made, published,disseminated, circulated, or placed before the public, in anewspaper, magazine, or other publication, or in the form of anotice, circular, pamphlet, letter, or poster, or over any radio ortelevision station, or in any other way;
an advertisement, an announcement, or a statement containing anassertion, a representation, or a statement regarding the RBC level ofan insurer or any component derived in the calculation of the RBClevel of an insurer is misleading and is prohibited.
(b) If:
(1) a materially false statement with respect to the comparisonregarding an insurer's total adjusted capital to an RBC level ofthe insurer or an inappropriate comparison of any other amountto the insurer's RBC levels is published in any writtenpublication; and
(2) the insurer is able to demonstrate to the commissioner withsubstantial proof the:
(A) falsity; or
(B) inappropriateness;
of the statement;
the insurer may publish an announcement in a written publication ifthe sole purpose of the announcement is to rebut the materially falsestatement.
As added by P.L.186-1996, SEC.1. Amended by P.L.178-2003,SEC.31.
IC 27-1-36-47
Use of documents referred to in chapter
Sec. 47. (a) The:
(1) RBC instructions;
(2) RBC reports;
(3) adjusted RBC reports;
(4) RBC plans; and
(5) revised RBC plans;
referred to in this chapter are intended solely for use by thecommissioner in monitoring the solvency of insurers and the need forpossible corrective action with respect to insurers.
(b) The instructions, reports, and plans referred to in subsection(a) shall not be:
(1) used by the commissioner for ratemaking;
(2) considered or introduced as evidence in a rate proceeding;or
(3) used by the commissioner to calculate or derive anyelements of an appropriate premium level or rate of return forany line of insurance that an insurer or an affiliate is authorizedto write.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-48
Chapter supplements other Indiana law
Sec. 48. This chapter is supplemental to other provisions ofIndiana law and does not preclude or limit any other powers or dutiesof the commissioner under other provisions of Indiana law, includingIC 27-9.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-49
Submission of RBC report by foreign insurer
Sec. 49. (a) Upon the written request of the commissioner, aforeign insurer shall submit to the commissioner an RBC report as ofthe last day of the calendar year most recently ended. The foreigninsurer shall submit the report on or before:
(1) the date on which a domestic insurer would be required tofile an RBC report under this chapter; or
(2) fifteen (15) days after the foreign insurer receives therequest;
whichever occurs later.
(b) Upon the written request of the commissioner, a foreigninsurer shall promptly submit to the commissioner a copy of anyRBC plan that the foreign insurer has filed with the insurancecommissioner of any other state.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-50
Filing of RBC plan by foreign insurer
Sec. 50. (a) If: (1) an event that is:
(A) a company action level event;
(B) a regulatory action level event; or
(C) an authorized control level event;
occurs with respect to a foreign insurer as determined under theRBC statute applicable in the state of domicile of the insurer(or, if no RBC statute is in force in that state, under thischapter); and
(2) the insurance commissioner of the state of domicile of theforeign insurer fails to require the foreign insurer to file an RBCplan in the manner specified under that state's RBC statute (or,if no RBC statute is in force in that state, under sections 31through 35 of this chapter);
the commissioner may require the foreign insurer to file an RBC planwith the commissioner.
(b) In a situation described in subsection (a), the failure of theforeign insurer to file an RBC plan with the commissioner is groundsfor the commissioner to order the insurer to cease and desist fromwriting new insurance business in Indiana.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-51
Liquidation of property of foreign insurer
Sec. 51. If:
(1) a mandatory control level event occurs with respect to aforeign insurer; and
(2) no domiciliary receiver has been appointed with respect tothe foreign insurer under the rehabilitation and liquidationstatute applicable in the state of domicile of the foreign insurer;
the commissioner may apply to the Marion County circuit court withrespect to the liquidation of property of the foreign insurer that isfound in Indiana. The occurrence of the mandatory control levelevent is adequate grounds for the application.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-52
Effective notice
Sec. 52. (a) A notice by the commissioner to an insurer that mayresult in regulatory action under this chapter, if transmitted byregistered or certified mail, is effective when the notice is put in themail.
(b) A transmission by the commissioner to an insurer under thischapter other than a notice described in subsection (a) is effectiveupon the insurer's receipt of the transmission.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-53
Immunity from liability
Sec. 53. There is no liability on the part of, and no cause of actionshall arise against: (1) the commissioner;
(2) the department; or
(3) any employee or agent of the department;
for any action taken in the exercise of their powers and theperformance of duties under this chapter.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-54
Severability of chapter provisions
Sec. 54. The provisions of this chapter are severable in the mannerprovided in IC 1-1-1-8. If:
(1) any provision of this chapter; or
(2) the application of this chapter to any person orcircumstance;
is held invalid, that determination shall not affect the provisions orapplications of this chapter that can be given effect without theinvalid provision or application.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-55
Rules
Sec. 55. The commissioner, under IC 4-22-2, may adoptreasonable rules necessary for the implementation of this chapter.
As added by P.L.186-1996, SEC.1.
IC 27-1-36-56
Excess capital
Sec. 56. (a) An excess of capital over the amount produced by the:
(1) risk based capital requirements contained in this chapter;and
(2) formulas, schedules, and instructions referred to in thischapter;
is desirable in the business of insurance. Therefore, insurers shouldseek to maintain capital above the RBC levels required by thischapter.
(b) Additional capital is used and useful in the insurance businessand helps to secure an insurer against various risks that are:
(1) inherent in or affecting the business of insurance; and
(2) not accounted for or only partially measured by the riskbased capital requirements contained in this chapter.
As added by P.L.186-1996, SEC.1.