CHAPTER 404-F RISK-BASED CAPITAL (RBC) FOR INSURERS
Section 404-F:3
404-F:3 Company Action Level Event. –
I. "Company action level event" means any of the following events:
(a) The filing of an RBC report by an insurer which indicates that:
(1) 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;
(2) If a life and/or health insurer, 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
(3) If a property and casualty insurer or health organization, 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 RBC instructions;
(b) The notification by the commissioner to the insurer of an adjusted RBC report that indicates an event in subparagraph (a), provided the insurer does not challenge the adjusted RBC report under RSA 404-F:7; or
(c) If, pursuant to RSA 404-F:7, an insurer challenges an adjusted RBC report that indicates the event in subparagraph (a), the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.
II. In the event of a company action level event, the insurer shall prepare and submit to the commissioner 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 4 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/or 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.
III. The RBC plan shall be submitted:
(a) Within 45 days of the company action level event; or
(b) If the insurer challenges an adjusted RBC report pursuant to RSA 404-F:7, within 45 days after notification to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.
IV. Within 60 days after the submission by an insurer of an RBC plan to the commissioner, the commissioner shall notify the insurer 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 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 commissioner. Upon notification from the commissioner, the insurer 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:
(a) Within 45 days after the notification from the commissioner; or
(b) If the insurer challenges the notification from the commissioner under RSA 404-F:7, within 45 days after a notification to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.
V. In the event of a notification by the commissioner to an insurer that the insurer's RBC plan or revised RBC plan is unsatisfactory, the commissioner may at the commissioner's discretion, subject to the insurer's right to a hearing under RSA 404-F:7, specify in the notification that the notification constitutes a regulatory action level event.
VI. Every domestic insurer 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 insurer is authorized to do business if:
(a) Such state has an RBC provision substantially similar to RSA 404-F:8, I; and
(b) The insurance commissioner 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:
(1) Fifteen days after the receipt of notice to file a copy of its RBC plan or revised RBC plan with the state; or
(2) The date on which the RBC plan or revised RBC plan is filed under RSA 404-F:3, III and IV.