Current through Register 1531, September 27, 2024
(1)
Company Action Level Event. Means any of the following
events:
(a) The filing of an RBC Report by an
insurer which indicates that:
1. The
insurer's total adjusted capital is greater than or equal to its Regulatory
Action Level RBC but less than its Company Action Level RBC; or
2. If a life and/or health insurer or a
Fraternal Benefit Society, the insurer or society has total adjusted capital
which is greater than or equal to its Company Action Level RBC but less than
the product of its Authorized Control Level RBC and 3.0 and has a negative
trend.
3. If a property and
casualty insurer, the insurer has total adjusted capital which is greater than
or equal to its Company Action Level RBC but less than the product of its
Authorized Control Level RBC and 3.0 and triggers the trend test determined in
accordance with the trend test calculation included in the Property and
Casualty RBC instructions.
(b) The notification by the Commissioner to
the insurer of an Adjusted RBC Report that indicates an event in 211 CMR
20.03(1)(a), provided the insurer does not challenge the Adjusted RBC Report
under
211 CMR 20.07;
or
(c) If, pursuant to
211 CMR 20.07, an
insurer challenges an Adjusted RBC Report that indicates the event in 211 CMR
20.03(1)(a), the notification by the Commissioner to the insurer that the
Commissioner has, after a hearing, rejected the insurer's challenge.
(2) In the event of a Company
Action Level Event, the insurer shall prepare and submit to the Commissioner an
RBC Plan which shall:
(a) Identify the
conditions which contribute to the Company Action Level Event;
(b) Contain proposals of corrective actions
which the insurer intends to take and would be expected to result in the
elimination of the Company Action Level Event;
(c) Provide projections of the insurer's
financial results in the current year and at least the four succeeding years,
both in the absence of proposed corrective actions and giving effect to the
proposed corrective actions, including projections of statutory operating
income, net income, capital and surplus. (The projections for both new and
renewal business might include separate projections for each major line of
business and separately identify each significant income, expense and benefit
component);
(d) Identify the key
assumptions impacting the insurer's projections and the sensitivity of the
projections to the assumptions; and
(e) Identify the quality of, and problems
associated with, the insurer's business, including but not limited to its
assets, anticipated business growth and associated surplus strain,
extraordinary exposure to risk, mix of business and use of reinsurance, if any,
in each case.
(3) The
RBC Plan shall be submitted:
(a) Within 45
days of the Company Action Level Event; or
(b) If the insurer challenges an Adjusted RBC
Report pursuant to
211 CMR 20.07, within 45
days after notification to the insurer that the Commissioner has, after a
hearing, rejected the insurer's challenge.
(4) Within 60 days after the submission by an
insurer of an RBC Plan to the Commissioner, the Commissioner shall notify the
insurer whether the RBC Plan shall be implemented or is, in the judgment of the
Commissioner, unsatisfactory. If the Commissioner determines the RBC Plan is
unsatisfactory, the notification to the insurer shall set forth the reasons for
the determination, and may set forth proposed revisions which will render the
RBC Plan satisfactory, in the judgment of the Commissioner. Upon notification
from the Commissioner, the insurer shall prepare a Revised RBC Plan, which may
incorporate by reference any revisions proposed by the Commissioner, and shall
submit the Revised RBC Plan to the Commissioner:
(a) Within 45 days after the notification
from the Commissioner; or
(b) If
the insurer challenges the notification from the Commissioner under
211 CMR 20.07, within 45
days after a notification to the insurer that the Commissioner has, after a
hearing, rejected the insurer's challenge.
(5) In the event of a notification by the
Commissioner to an insurer that the insurer's RBC Plan or Revised RBC Plan is
unsatisfactory, the Commissioner may at the Commissioner's discretion, subject
to the insurer's right to a hearing under
211 CMR 20.07, specify
in the notification that the notification constitutes a Regulatory Action Level
Event.
(6) Every domestic insurer
that files an RBC Plan or Revised RBC Plan with the Commissioner shall file a
copy of the RBC Plan or Revised RBC Plan with the insurance Commissioner in any
state in which the insurer is authorized to do business if:
(a) Such state has an RBC provision
substantially similar to
211
CMR 20.08(1); and
(b) The insurance Commissioner of that state
has notified the insurer of its request for the filing in writing, in which
case the insurer shall file a copy of the RBC Plan or Revised RBC Plan in that
state no later than the later of:
1. 15 days
after the receipt of notice to file a copy of its RBC Plan or Revised RBC Plan
with the state; or
2. The date on
which the RBC Plan or Revised RBC Plan is filed under 211 CMR 20.03(3) and
(4).
