Louisiana Revised Statutes 22:635 – Regulatory-action level event
Terms Used In Louisiana Revised Statutes 22:635
- Adjusted risk-based capital report: means a risk-based capital report which has been adjusted by the commissioner in accordance with Louisiana Revised Statutes 22:631
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Commissioner: means the commissioner of insurance. See Louisiana Revised Statutes 22:631
- Corrective order: means an order issued by the commissioner specifying corrective actions which the commissioner has determined are required. See Louisiana Revised Statutes 22:631
- Health organization: means a health maintenance organization licensed under Subpart I of Part I of this Chapter, a limited health service organization which bears risk, dental or vision plan which bears risk, hospital, medical and dental indemnity or service corporation which bears risk, provider-sponsored organization which bears risk, or other risk-bearing managed care organization licensed under this Title. See Louisiana Revised Statutes 22:631
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Regulatory-action level risk-based capital: means the product of one and one half and the number determined under the risk-based capital formula in accordance with the risk-based capital instructions. See Louisiana Revised Statutes 22:631
- Risk-based capital instructions: means the risk-based capital report including risk-based capital instructions adopted by the National Association of Insurance Commissioners, as these risk-based capital instructions may be amended by the National Association of Insurance Commissioners from time to time in accordance with the procedures adopted by the National Association of Insurance Commissioners. See Louisiana Revised Statutes 22:631
- Risk-based capital plan: means a comprehensive financial plan containing the elements specified in Louisiana Revised Statutes 22:631
- Risk-based capital report: means the report required in Louisiana Revised Statutes 22:631
- Total adjusted capital: means the sum of the following:
(a) A health organization's statutory capital and surplus as determined in accordance with the statutory accounting applicable to the annual financial statements required to be filed under Louisiana Revised Statutes 22:631
A. “Regulatory-action level event” means any of the following events:
(1) The filing of a risk-based capital report by the health organization that indicates that the health organization’s total adjusted capital is greater than or equal to its authorized control level risk-based capital but less than its regulatory-action level risk-based capital.
(2) Notification by the commissioner to a health organization of an adjusted risk-based capital report that indicates the event in Paragraph (1) of this Subsection, provided the health organization does not challenge the adjusted risk-based capital report under La. Rev. Stat. 22:638.
(3) If, pursuant to La. Rev. Stat. 22:638, the health organization challenges an adjusted risk-based capital report that indicates the event in Paragraph (1) of this Subsection, the notification by the commissioner to the health organization that the commissioner has rejected the health organization’s challenge.
(4) The failure of the health organization to file a risk-based capital report by the filing date, unless the health organization has provided an explanation for the failure that is satisfactory to the commissioner and has cured the failure within ten days after the filing date.
(5) The failure of the health organization to submit a risk-based capital plan to the commissioner within the time period set forth in La. Rev. Stat. 22:634(C).
(6) Notification by the commissioner to the health organization that both of the following apply:
(a) The risk-based capital plan or revised risk-based capital plan submitted by the health organization is, in the judgment of the commissioner, unsatisfactory.
(b) Notification constitutes a regulatory-action level event with respect to the health organization, provided the health organization has not challenged the determination pursuant to La. Rev. Stat. 22:638.
(7) If, pursuant to La. Rev. Stat. 22:638, the health organization challenges a determination by the commissioner pursuant to Paragraph (6) of this Subsection, the notification by the commissioner to the health organization that the commissioner has rejected the challenge.
(8) Notification by the commissioner to the health organization that the health organization has failed to adhere to its risk-based capital plan or revised risk-based capital plan, but only if the failure has a substantial adverse effect on the ability of the health organization to eliminate the company-action level event in accordance with its risk-based capital plan or revised risk-based capital plan and the commissioner has so stated in the notification, provided the health organization has not challenged the determination under La. Rev. Stat. 22:638.
(9) If, pursuant to La. Rev. Stat. 22:638, the health organization challenges a determination by the commissioner under Paragraph (8) of this Subsection, the notification by the commissioner to the health organization that the commissioner has rejected the challenge.
B. In the event of a regulatory-action level event, the commissioner shall do the following:
(1) Require the health organization to prepare and submit a risk-based capital plan or, if applicable, a revised risk-based capital plan.
(2) Perform such examination or analysis as the commissioner deems necessary of the assets, liabilities, and operations of the health organization including a review of its risk-based capital plan or revised risk-based capital plan.
(3) Subsequent to the examination or analysis, issue an order specifying such corrective actions as the commissioner shall determine are required.
C. In determining corrective actions, the commissioner may take into account factors the commissioner deems relevant with respect to the health organization based upon the commissioner’s examination or analysis of the assets, liabilities, and operations of the health organization, including but not limited to the results of any sensitivity tests undertaken pursuant to the risk-based capital instructions. The risk-based capital plan or revised risk-based capital plan shall be submitted either:
(1) Within forty-five days after the occurrence of the regulatory-action level event.
(2) If the health organization challenges an adjusted risk-based capital report pursuant to La. Rev. Stat. 22:638 and the challenge is not frivolous in the judgment of the commissioner, within forty-five days after the notification to the health organization that the commissioner has rejected the health organization’s challenge.
(3) If the health organization challenges a revised risk-based capital plan pursuant to La. Rev. Stat. 22:638 and the challenge is not frivolous in the judgment of the commissioner, within forty-five days after the notification to the health organization that the commissioner has, after a hearing, rejected the health organization’s challenge.
D. The commissioner may retain actuaries, investment experts, and other consultants as may be necessary in the judgment of the commissioner to review the health organization’s risk-based capital plan or revised risk-based capital plan, examine or analyze the assets, liabilities, and operations, including contractual relationships of the health organization, and formulate the corrective order with respect to the health organization. The fees, costs, and expenses relating to such consultants shall be borne by the affected health organization or such other party as directed by the commissioner.
Acts 2003, No. 1106, §1, eff. Dec. 31, 2003; Redesignated from La. Rev. Stat. 22:2036.5 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2009, No. 317, §1; Acts 2009, No. 503, §1.
NOTE: Former La. Rev. Stat. 22:635 redesignated as La. Rev. Stat. 22:1261 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009.