Current through Register Vol. 48, No. 12, March 22, 2024
a) For
purposes of making a determination of an insurer's financial condition under
this Part, the Director may:
1) Disregard any
credit or amount receivable resulting from transactions with a reinsurer that
is insolvent, impaired or otherwise subject to a delinquency
proceeding;
2) Make adjustments,
including disallowances, to asset values attributable to investments in or
transactions with parents, subsidiaries or affiliates, in keeping with current
professional practices consistent with NAIC accounting practices and
procedures;
3) Refuse to recognize
the stated value of accounts receivable if the ability to collect the
receivables is highly speculative in view of the age of the account or the
financial condition of the debtor;
4) Increase the insurer's liability in an
amount equal to any contingent liability, pledge, or guarantee not otherwise
included if there is a substantial risk that the insurer will be called upon to
meet the obligation undertaken within the next 12 month period;
5) Increase the company's reserves for
losses, loss adjustment expenses, or unearned premium or any other liability to
reflect adjustments recommended by the Department's financial examiners or
actuaries or by the person preparing the statement of actuarial opinion as
required by Section 136 of the Code and in keeping with the current
professional practice stated in the NAIC Annual Statement Instructions for
Property and Casualty Insurers;
6)
Make any other appropriate adjustment to the company's assets and liabilities
necessary to reflect the insurer's financial condition.
b) If the Director determines that the
continued operation of the insurer licensed to transact business in this State
may be hazardous to its policyholders, creditors or the general public, the
Director may, upon a determination, issue an order requiring the insurer to
take any of the actions listed in this subsection (b). If the insurer is a
foreign insurer, the Director's order may be limited to the extent provided by
statute. The order may require the insurer to:
1) reduce the total amount of present and
potential liability for policy benefits by reinsurance;
2) reduce, suspend or limit the volume of
business being accepted or renewed;
3) reduce general insurance and commission
expenses by specified methods;
4)
increase the insurer's capital and surplus;
5) suspend or limit the declaration and
payment of a dividend by an insurer to its stockholders or to its
policyholders;
6) file reports, in
a format acceptable to the Director, concerning the market value of an
insurer's assets;
7) limit or
withdraw from certain investments or discontinue certain investment practices
to the extent the Director deems necessary;
8) document the adequacy of premium rates in
relation to the risks insured;
9)
file, in addition to regular annual statements, interim financial reports on
the form adopted by NAIC or in a format promulgated by the Director;
10) correct corporate governance practice
deficiencies and adopt and utilize governance practices acceptable to the
Director;
11) provide a business
plan to the Director in order to continue to transact business in this
State;
12) notwithstanding any
other provision of law limiting the frequency or amount of premium rate
adjustments, adjust rates for any non-life insurance product written by the
insurer that the Director considers necessary to improve the financial
condition of the insurer;
13)
disapprove the payment of any ordinary dividend or other distribution to
shareholders;
14) take any other
action the Director deems to be remedial.
c) An insurer subject to an order under
subsection (b) may request a hearing to review that order. The notice of
hearing shall be served upon the insurer pursuant to Section 186.1(5) and (6)
of the Code.