(a) “Company Action Level Event” means any of the following events:

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Terms Used In Tennessee Code 56-46-203

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Authorized Control Level RBC: means the number determined under the risk-based capital formula in accordance with the RBC Instructions. See Tennessee Code 56-46-201
  • Commissioner: means the commissioner of commerce and insurance. See Tennessee Code 56-1-102
  • Domestic health organization: means a health organization domiciled in this state. See Tennessee Code 56-46-201
  • Health organization: means a health maintenance organization, limited health service organization, dental or vision plan, hospital, medical and dental indemnity or service corporation, or other managed care organization licensed pursuant to chapters 27, 28, 30, 31, 32 and 51 of this title. See Tennessee Code 56-46-201
  • RBC instructions: means the RBC report including risk-based capital instructions adopted by the NAIC, as these RBC instructions may be amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC. See Tennessee Code 56-46-201
  • RBC plan: means a comprehensive financial plan containing the elements specified in §. See Tennessee Code 56-46-201
  • RBC report: means the report required in §. See Tennessee Code 56-46-201
  • Regulatory Action Level RBC: means the product of 1. See Tennessee Code 56-46-201
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • Total adjusted capital: means the sum of:
    (A) A health organization's statutory capital and surplus, also known as net worth, as determined in accordance with the statutory accounting applicable to the annual financial statements required to be filed under §. See Tennessee Code 56-46-201
  • Year: means a calendar year, unless otherwise expressed. See Tennessee Code 1-3-105
(1) The filing of an RBC report by a health organization that indicates that:

(A) 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
(B) If a health organization 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 Health RBC instructions;
(2) Notification by the commissioner to the health organization of an adjusted RBC report that indicates an event in subdivision (a)(1); provided, that the health organization does not challenge the adjusted RBC report under § 56-46-207; or
(3) If, pursuant to § 56-46-207, a health organization challenges an adjusted RBC report that indicates the event in subdivision (a)(1), the notification by the commissioner to the health organization that the commissioner has, after a hearing, rejected the health organization’s challenge.
(b) If a Company Action Level Event occurs, the health organization shall 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 (2) 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 forty-five (45) days of the Company Action Level Event; or
(2) If the health organization challenges an adjusted RBC report pursuant to § 56-46-207, within forty-five (45) days after notification to the health organization that the commissioner has, after a hearing, rejected the health organization’s challenge.
(d) Within sixty (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 forty-five (45) days after the notification from the commissioner; or
(2) If the health organization challenges the notification from the commissioner under § 56-46-207, within forty-five (45) days after a notification to the health organization that the commissioner has, after a hearing, rejected the health organization’s challenge.
(e) If the commissioner notifies a health organization that its RBC plan or revised RBC plan is unsatisfactory, the commissioner may at the commissioner’s discretion, subject to the health organization’s right to a hearing under § 56-46-207, 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 an RBC provision substantially similar to § 56-46-208(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 by the later of:

(A) Fifteen (15) days after the receipt of notice to file a copy of its RBC plan or revised RBC plan with the state; or
(B) The date on which the RBC plan or revised RBC plan is filed under subsections (c) and (d).
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