41-5403. COMPANY ACTION LEVEL EVENT. (1) "Company action level event" means any of the following events:
(a) 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; or
(ii) If a life and/or health insurer that completes the life annual statement for the reporting year or fraternal benefit society, 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 or casualty insurer, health organization or health insurer that completes the health annual statement for the reporting year, 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 or health RBC instructions;
(b) The notification by the director to the insurer of an adjusted RBC report that indicates an event in paragraph (a) of this subsection, provided the insurer does not challenge the adjusted RBC report under section 41-5407, Idaho Code; or
(c) If, pursuant to section 41-5407, Idaho Code, an insurer challenges an adjusted RBC report that indicates the event in paragraph (a) of this subsection, the notification by the director to the insurer that the director has, after a hearing, rejected the insurer’s challenge.
(2) In the event of a company action level event, the insurer shall prepare and submit to the director 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 insurer intends to take and would be expected to result in the elimination of the company action level event;
(c) Provide projections of the insurer’s financial results in the current year and at least the four (4) succeeding years, and for managed care organizations and health organizations for at least the two (2) 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 surplus. 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 insurer’s projections and the sensitivity of the projections to the assumptions; and
(e) 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, if any, in each case.
(3) The RBC plan shall be submitted:
(a) Within forty-five (45) days of the company action level event; or
(b) If the insurer challenges an adjusted RBC report pursuant to section 41-5407, Idaho Code, within forty-five (45) days after notification to the insurer that the director has, after a hearing, rejected the insurer’s challenge.
(4) Within sixty (60) days after the submission by an insurer of an RBC plan to the director, the director shall notify the insurer whether the RBC plan shall be implemented or is, in the judgment of the director, unsatisfactory. If the director determines the RBC 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 RBC plan satisfactory, in the judgment of the director. Upon notification from the director, the insurer shall prepare a revised RBC plan, which may incorporate by reference any revisions proposed by the director, and shall submit the revised RBC plan to the director:
(a) Within forty-five (45) days after the notification from the director; or
(b) If the insurer challenges the notification from the director under section 41-5407, Idaho Code, within forty-five (45) days after a notification to the insurer that the director has, after a hearing, rejected the insurer’s challenge.
(5) In the event of a notification by the director to an insurer that the insurer’s RBC plan or revised RBC plan is unsatisfactory, the director may, at the director’s discretion, subject to the insurer’s right to a hearing under section 41-5407, Idaho Code, specify in the notification that the notification constitutes a regulatory action level event.
(6) Every domestic insurer that files an RBC plan or revised RBC plan with the director shall file a copy of the RBC plan or revised RBC plan with the insurance director in any state in which the insurer is authorized to do business if:
(a) Such state has an RBC provision substantially similar to section 41-5408(1), Idaho Code; and
(b) The insurance director 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 (15) 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 subsections (3) and (4) of this section.
History:
[41-5403, added 1996, ch. 96, sec. 1, p. 285; am. 2007, ch. 277, sec. 1, p. 807; am. 2014, ch. 319, sec. 3, p. 787.]