(1)
Regulatory Action Level Event. Means, with respect to
any Health Organization, any of the following events:
(a) The filing of an RBC Report by the Health
Organization which indicates that the Health Organization's total adjusted
capital is greater than or equal to its Authorized Control Level RBC but less
than its Regulatory Action Level RBC;
(b) The notification by the Commissioner to a
Health Organization of an Adjusted RBC Report that indicates the event in 211
CMR 25.04(1)(a), provided the Health Organization does not challenge the
Adjusted RBC Report under
211 CMR 25.07;
(c) If, pursuant to
211 CMR 25.07, the
Health Organization challenges an Adjusted RBC Report that indicates the event
in 211 CMR 25.04(1)(a), the notification by the Commissioner to the Health
Organization that the Commissioner has, after a hearing, rejected the Health
Organization's challenge;
(d) The
failure of the Health Organization to file an RBC Report by the filing date,
unless the Health Organization has provided an explanation for such failure
which is satisfactory to the Commissioner and has cured the failure within ten
days after the Filing Date;
(e) The
failure of the Health Organization to submit an RBC Plan to the Commissioner
within the time period set forth in
211 CMR
25.03(3);
(f) Notification by the Commissioner to the
Health Organization that:
1. The RBC Plan or
Revised RBC Plan submitted by the Health Organization is, in the judgment of
the Commissioner, unsatisfactory; and
2. Such notification constitutes a Regulatory
Action Level Event with respect to the Health Organization, provided the Health
Organization has not challenged the determination under
211 CMR 25.07;
(g) If, pursuant to
211 CMR 25.07, the
Health Organization challenges a determination by the Commissioner under 211
CMR 25.04(1)(f), the notification by the Commissioner to the Health
Organization that the Commissioner has, after a hearing, rejected such
challenge;
(h) Notification by the
Commissioner to the Health Organization that the Health Organization has failed
to adhere to its RBC Plan or Revised RBC Plan, but only if such failure has a
substantial adverse effect on the ability of the Health Organization to
eliminate the Company Action Level Event in accordance with its RBC Plan or
Revised RBC Plan and the Commissioner has so stated in the notification,
provided the Health Organization has not challenged the determination under
211 CMR 25.07;
or
(i) If, pursuant to
211 CMR 25.07, the
Health Organization challenges a determination by the Commissioner under 211
CMR 25.04(1)(h), the notification by the Commissioner to the Health
Organization that the Commissioner has, after a hearing, rejected the
challenge.
(2) In the
event of a Regulatory Action Level Event the Commissioner shall:
(a) Require the Health Organization to
prepare and submit an RBC Plan or, if applicable, a Revised RBC Plan;
(b) Perform such examination or analysis as
the Commissioner deems necessary of the assets, liabilities and operations of
the Health Organization including a review of its RBC Plan or Revised RBC Plan;
and
(c) Subsequent to the
examination or analysis, issue an order specifying such corrective actions as
the Commissioner shall determine are required (a "Corrective Order").
(3) In determining corrective
actions, the Commissioner may take into account such factors as the
Commissioner deems relevant with respect to the Health Organization based upon
the Commissioner's examination or analysis of the assets, liabilities and
operations of the Health Organization, including, but not limited to, the
results of any sensitivity tests undertaken pursuant to the RBC Instructions.
The RBC Plan or Revised RBC Plan shall be submitted:
(a) Within 45 days after the occurrence of
the Regulatory Action Level Event;
(b) If the Health Organization challenges an
Adjusted RBC Report pursuant to
211 CMR 25.07 and the
challenge is not frivolous in the judgment of the Commissioner within 45 days
after the notification to the Health Organization that the Commissioner has,
after a hearing, rejected the Health Organization's challenge; or
(c) If the Health Organization challenges a
Revised RBC Plan pursuant to
211 CMR 25.07 and the
challenge is not frivolous in the judgment of the Commissioner, within 45 days
after the notification to the Health Organization that the Commissioner has,
after a hearing, rejected the Health Organization's challenge.
(4) The Commissioner may retain
actuaries and investment experts and other consultants as may be necessary in
the judgment of the Commissioner to review the Health Organization's RBC Plan
or Revised RBC Plan, examine or analyze the assets, liabilities and operations
(including contractual relationships) of the Health Organization and formulate
the Corrective Order with respect to the Health Organization. The fees, costs
and expenses relating to consultants shall be borne by the affected Health
Organization or such other party as directed by the Commissioner.
