Louisiana Revised Statutes 22:614 – Regulatory-action level event
Terms Used In Louisiana Revised Statutes 22:614
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Corrective order: means an order issued by the department specifying corrective actions which are required. See Louisiana Revised Statutes 22:611
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Regulatory-action level risk-based capital: means one hundred fifty percent of a company's authorized control level risk-based capital. See Louisiana Revised Statutes 22:611
- Risk-based capital instructions: means the risk-based capital report including risk-based capital instructions adopted by the NAIC, as such risk-based capital instructions may be amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC. See Louisiana Revised Statutes 22:611
- Risk-based capital plan: means a comprehensive financial plan containing the requirements of Louisiana Revised Statutes 22:611
- Risk-based capital report: means the report required pursuant to Louisiana Revised Statutes 22:611
- Total adjusted capital: means the sum of:
(a) An insurer's statutory capital and surplus. See Louisiana Revised Statutes 22:611
A. “Regulatory-action level event” shall mean any of the following events:
(1) The filing of a risk-based capital report by the insurer which indicates that the total adjusted capital of the insurer is greater than or equal to its authorized control level risk-based capital but less than its regulatory-action level risk-based capital.
(2) The notification by the department to an insurer of an adjusted risk-based capital report that indicates the event in Paragraph (1) of this Subsection, unless challenged by the insurer pursuant to La. Rev. Stat. 22:617.
(3) The notification by the department to the insurer that the department has rejected the dispute by the insurer after an administrative hearing pursuant to La. Rev. Stat. 22:617.
(4) The failure of the insurer to file a risk-based capital report by March first of each year, unless the insurer has provided an explanation for such failure which is satisfactory to the department and has remedied the failure to file within ten days after March first of each year.
(5) The failure of the insurer to submit a risk-based capital plan to the department required in La. Rev. Stat. 22:613(C).
(6) The notification by the department to the insurer that:
(a) The department has determined the risk-based capital plan is unsatisfactory.
(b) Such notification constitutes a regulatory-action level event with respect to the insurer, unless the insurer disputes the action pursuant to La. Rev. Stat. 22:617.
(7) If the insurer disputes a determination of the department under Paragraph (6) of this Subsection, the notification by the department to the insurer that the dispute has been rejected by the department.
(8) The notification by the department that the insurer has failed to adhere to its risk-based capital plan or revised risk-based capital plan. The notification will occur if the failure has a substantial adverse effect on the ability of the insurer to eliminate the company-action level event in accordance with its risk-based capital plan or revised risk-based capital plan. The department shall state the adverse effect of the notification, unless the insurer failed to dispute the determination pursuant to La. Rev. Stat. 22:617.
(9) If the insurer challenges a determination by the department, the notification by the department in Paragraph (8) of this Subsection to the insurer that the department has rejected the dispute after an administrative hearing.
B. In the event of a regulatory-action level event, the department shall:
(1) Require the insurer to prepare and submit a risk-based capital plan or, if applicable, a revised risk-based capital plan to the department.
(2) Perform an examination or analysis as the department deems necessary of the assets, liabilities, and operations of the insurer including a review of its risk-based capital plan or revised risk-based capital plan.
(3) Subsequent to the examination or analysis, issue a corrective order.
C. The determination by the department for corrective action, may take into account such factors as are deemed relevant with respect to the insurer based upon the examination or analysis by the department of the assets, liabilities, and operations of the insurer. The analysis shall not be 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:
(1) Within forty-five days after the occurrence of the regulatory-action level event.
(2) Within forty-five days after the notification to the insurer that the department has rejected the dispute by the insurer, unless the dispute is frivolous as determined by the department.
D. The department may retain actuaries, investment experts, and other consultants as may be necessary in the judgment of the department to review the risk-based capital plan or revised risk-based capital plan of the insurer, examine or analyze the assets, liabilities, and operations of the insurer and formulate the corrective order with respect to the insurer. The fees, reasonable costs, and expenses for the consultants shall be borne by the examined insurer or other party as directed by the department.
Acts 1995, No. 1203, §1, eff. June 29, 1995; Redesignated from La. Rev. Stat. 22:863 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2009, No. 317, §1.
NOTE: Former La. Rev. Stat. 22:614 redesignated as La. Rev. Stat. 22:853 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009.