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 a health
organization that indicates that:
i. 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;
or
ii. If a health organization has
total adjusted capital that 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;
2. Notification by the Commissioner to the
health organization of an adjusted RBC report that indicates an event in (a)1
above, provided the health organization does not challenge the adjusted RBC
report under
N.J.A.C.
11:2-39A.9; or
3. If the health organization, under
N.J.A.C.
11:2-39A.9 challenges an adjusted RBC Report
that indicates the event in (a)1 above, the notification by the Commissioner to
the health organization that the Commissioner has, after a hearing, rejected
the health organization's challenge.
(b) In the event of a company action level
event, the health organization shall within 45 days prepare and submit to the
Commissioner an RBC plan that shall:
1.
Identify the conditions that contribute to the company action level
event;
2. Contain proposals of
corrective actions that the health organization intends to take and that would
be expected to result in the elimination of the company action level
event;
3. 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;
4. Identify the key assumptions impacting the
health organization's projections and the sensitivity of the projections to the
assumptions; and
5. 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.
(c) The RBC plan shall be submitted:
1. Within 45 days of the company action level
event; or
2. If the health
organization challenges an adjusted RBC report pursuant to
N.J.A.C.
11:2-39A.9, within 45 days after notification
to the health organization that the Commissioner has, after a hearing, rejected
the health organization's challenge.
(d) 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:
1.
Within 45 days after the notification from the Commissioner; or
2. If the health organization challenges the
notification from the Commissioner under
N.J.A.C.
11:2-39A.9, within 45 days after a
notification to the health organization that the Commissioner has, after a
hearing, rejected the health organization's challenge.
(e) 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 his or her
discretion, and subject to the health organization's right to a hearing under
N.J.A.C.
11:2-39A.9, specify in the notification that
the notification constitutes a regulatory action level event.
(f) 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:
1. The state has a confidentiality provision
substantially similar to
N.J.A.C.
11:2-39A.10(a);
and
2. 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:
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 (c) and (d) above.
