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 a
Health Organization which indicates that the Health Organization's total
adjusted capital is greater than or equal to its Regulatory Action Level RBC
but less than its Company Action Level RBC.
If a Health Organization has a 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 Health
RBC Instructions;
(b) The
notification by the Commissioner to the Health Organization of an Adjusted RBC
Report that indicates an event in 211 CMR 25.03(1)(a), provided the Health
Organization does not challenge the Adjusted RBC Report under
211 CMR 25.07;
or
(c) If, pursuant to
211 CMR 25.07, a Health
Organization challenges an Adjusted RBC Report that indicates the event in 211
CMR 25.03(1)(a), the notification by the Commissioner to the Health
Organization that the Commissioner has, after a hearing, rejected the Health
Organization's challenge.
(2) In the event of a Company Action Level
Event, the Health Organization 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 Health Organization intends to take and would be expected to result
in the elimination of the Company Action Level Event;
(c) Provide projections of the Health
Organization's financial results in the current year and at least the two
succeeding years, both in the absence of proposed corrective actions and giving
effect to the proposed corrective actions, including projections of statutory
balance sheets, operating income, net income, capital and surplus, and RBC
Levels. 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 Health Organization's projections and the sensitivity of the projections to
the assumptions; and
(e) Identify
the quality of, and problems associated with, the Health Organization'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 Health
Organization challenges an Adjusted RBC Report pursuant to
211 CMR 25.07, within 45
days after notification to the Health Organization that the Commissioner has,
after a hearing, rejected the Health Organization's challenge.
(4) Within 60 days after the
submission by a Health Organization of an RBC Plan to the Commissioner, the
Commissioner shall notify the Health Organization 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
Health Organization 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
Health Organization 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 Health Organization challenges the
notification from the Commissioner under
211 CMR 25.07, within 45
days after a notification to the Health Organization that the Commissioner has,
after a hearing, rejected the Health Organization's challenge.
(5) In the event of a notification
by the Commissioner to a Health Organization that the Health Organization's RBC
Plan or Revised RBC Plan is unsatisfactory, the Commissioner may at the
Commissioner's discretion, subject to the Health Organization's right to a
hearing under
211 CMR 25.07, specify
in the notification that the notification constitutes a Regulatory Action Level
Event.
(6) Every Domestic Health
Organization 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 Health Organization is authorized to do
business if:
(a) Such state has an RBC
provision substantially similar to
211
CMR 25.08(1); and
(b) The insurance commissioner of that state
has notified the Health Organization of its request for the filing in writing,
in which case the Health Organization 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 25.03(3) and (4).
