2020 -- H 7769 | |
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LC004535 | |
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STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2020 | |
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A N A C T | |
RELATING TO INSURANCE -- RISK-BASED CAPITAL (RBC) FOR INSURERS ACT | |
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Introduced By: Representatives Jacquard, and Johnston | |
Date Introduced: February 26, 2020 | |
Referred To: House Corporations | |
(Dept. of Business Regulation) | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Section 27-4.6-3 of the General Laws in Chapter 27-4.6 entitled "Risk-Based |
2 | Capital (RBC) for Insurers Act" is hereby amended to read as follows: |
3 | 27-4.6-3. Company action level event. |
4 | (a) "Company action level event" means any of the following events: |
5 | (1) The filing of an RBC report by an insurer that indicates that: |
6 | (i) The insurer's total adjusted capital is greater than or equal to its regulatory action level |
7 | RBC but less than its company action level RBC; |
8 | (ii) If a life and/or health insurer, the insurer has total adjusted capital that is greater than |
9 | or equal to its company action level RBC but less than the product of its authorized control level |
10 | RBC and 2.5 3.0 and has a negative trend; or |
11 | (iii) If a property and casualty insurer, the insurer has total adjusted capital which is greater |
12 | than or equal to its company action level RBC but less than the product of its authorized control |
13 | level RBC and 3.0 and triggers the trend test determined in accordance with the trend test |
14 | calculation included in the property and casualty RBC instructions. |
15 | (2) The notification by the commissioner to the insurer of an adjusted RBC report that |
16 | indicates an event in subdivision (a)(1), provided the insurer does not challenge the adjusted RBC |
17 | report under § 27-4.6-7; or |
18 | (3) If, pursuant to § 27-4.6-7, an insurer challenges an adjusted RBC report that indicates |
19 | the event in subdivision (a)(1), the notification by the commissioner to the insurer that the |
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1 | commissioner has, after a hearing, rejected the insurer's challenge. |
2 | (b) In the event of a company action level event, the insurer shall prepare and submit to the |
3 | commissioner an RBC plan which shall: |
4 | (1) Identify the conditions that contribute to the company action level event; |
5 | (2) Contain proposals of corrective actions that the insurer intends to take and would be |
6 | expected to result in the elimination of the company action level event; |
7 | (3) Provide projections of the insurer's financial results in the current year and at least the |
8 | four (4) succeeding years, both in the absence of proposed corrective actions and giving effect to |
9 | the proposed corrective actions, including projections of statutory operating income, net income, |
10 | capital and/or surplus. (The projections for both new and renewal business might include separate |
11 | projections for each major line of business and separately identify each significant income, expense |
12 | and benefit component); |
13 | (4) Identify the key assumptions impacting the insurer's projections and the sensitivity of |
14 | the projections to the assumptions; and |
15 | (5) Identify the quality of, and problems associated with, the insurer's business, including, |
16 | but not limited to, its assets, anticipated business growth and associated surplus strain, |
17 | extraordinary exposure to risk, mix of business and use of reinsurance, if any, in each case. |
18 | (c) The RBC plan shall be submitted: |
19 | (1) Within forty-five (45) days of the company action level event; or |
20 | (2) If the insurer challenges an adjusted RBC report pursuant to § 27-4.6-7, within forty- |
21 | five (45) days after notification to the insurer that the commissioner has, after a hearing, rejected |
22 | the insurer's challenge. |
23 | (d) Within sixty (60) days after the submission by an insurer of an RBC plan to the |
24 | commissioner, the commissioner shall notify the insurer whether the RBC plan shall be |
25 | implemented or is, in the judgment of the commissioner, unsatisfactory. If the commissioner |
26 | determines that the RBC plan is unsatisfactory, the notification to the insurer shall set forth the |
27 | reasons for the determination, and may set forth proposed revisions which will render the RBC plan |
28 | satisfactory in the judgment of the commissioner. Upon notification from the commissioner, the |
29 | insurer shall prepare a revised RBC plan, which may incorporate by reference any revisions |
30 | proposed by the commissioner, and shall submit the revised RBC plan to the commissioner: |
31 | (1) Within forty-five (45) days after the notification from the commissioner; or |
32 | (2) If the insurer challenges the notification from the commissioner under § 27-4.6-7, |
33 | within forty-five (45) days after a notification to the insurer that the commissioner has, after a |
34 | hearing, rejected the insurer's challenge. |
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1 | (e) In the event of a notification by the commissioner to an insurer that the insurer's RBC |
2 | plan or revised RBC plan is unsatisfactory, the commissioner may at the commissioner's discretion, |
3 | subject to the insurer's right to a hearing under § 27-4.6-7, specify in the notification that the |
4 | notification constitutes a regulatory action level event. |
5 | (f) Every domestic insurer that files an RBC plan or revised RBC plan with the |
6 | commissioner shall file a copy of the RBC plan or revised RBC plan with the insurance |
7 | commissioner in any state in which the insurer is authorized to do business if: |
8 | (1) That state has an RBC provision substantially similar to § 27-4.6-8(a); and |
9 | (2) The insurance commissioner of that state has notified the insurer of its request for the |
10 | filing in writing, in which case the insurer shall file a copy of the RBC plan or revised RBC plan |
11 | in that state no later than the later of: |
12 | (i) Fifteen (15) days after the receipt of notice to file a copy of its RBC plan or revised |
13 | RBC plan with the state; or |
14 | (ii) The date on which the RBC plan or revised RBC plan is filed under subsections (c) and |
15 | (d) of this section. |
16 | SECTION 2. This act shall take effect upon passage. |
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EXPLANATION | |
BY THE LEGISLATIVE COUNCIL | |
OF | |
A N A C T | |
RELATING TO INSURANCE -- RISK-BASED CAPITAL (RBC) FOR INSURERS ACT | |
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1 | This act would update the Life Risk Based Capital statutes to the current National |
2 | Association of Insurance Commissioners standard. |
3 | This act would take effect upon passage. |
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LC004535 | |
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