Current through Register Vol. 56, No. 24, December 18, 2024
(a) "Company action
level event" means any of the following events:
1. The filing of an RBC Report by an insurer
which indicates that:
i. 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;
ii. If a life/health 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 has a negative trend; or
iii.
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;
2. The notification by the Commissioner to
the insurer of an Adjusted RBC Report that indicates the event in (a)1 above,
provided the insurer does not challenge the Adjusted RBC Report under
N.J.A.C. 11:2-39.9; or
3. If the insurer, under
N.J.A.C. 11:2-39.9, challenges an Adjusted
RBC Report that indicates the event in (a)1 above, the notification by the
Commissioner to the insurer that the Commissioner has, after a hearing,
rejected the insurer's challenge.
(b) In the event of a company action level
event, a domestic insurer shall within 45 days prepare and submit to the
Commissioner an RBC Plan which shall:
1.
Identify the conditions which contribute to the company action level
event;
2. Set forth corrective
actions which the insurer intends to take that are reasonably expected to
result in the elimination of the company action level event;
3. 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/or surplus. (The projections of both new and
renewal business shall include separate projections for each major line of
business and separately identify each significant income, expense and benefit
component);
4. Identify the key
assumptions impacting the insurer's projections and the sensitivity of the
projections to the assumptions; and
5. 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 in each
case, if any.
(c) Within
60 days after the submission by a domestic insurer of an RBC Plan or a Revised
RBC Plan to the Commissioner, the Commissioner shall notify the insurer whether
such Plan shall be implemented or is, in the judgment of the Commissioner,
unsatisfactory. If the Commissioner determines that the 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 Plan
satisfactory, in the judgment of the Commissioner. The Commissioner may, at his
or her discretion, subject to the insurer's right to a hearing under
N.J.A.C. 11:2-39.9, specify in the
notification that the notification constitutes a regulatory action level event.
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:
1. Within 45 days after the notification from
the Commissioner; or
2. If the
insurer challenges the notification from the Commissioner under
N.J.A.C. 11:2-39.9, within 45 days after a
notification to the insurer that the Commissioner has, after a hearing,
rejected the insurer's challenge.
(d) 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:
1. Such state has a confidentiality provision
substantially similar to
N.J.A.C. 11:2-39.1 0(a); and
2. 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:
i. Fifteen
days after the receipt of notice to file a copy of its RBC Plan or Revised RBC
Plan with the state; or
ii. The
date on which the RBC Plan or Revised RBC Plan is filed under (b) or (c)
above.
