§ 23-69-138 — Impairment of capital or assets

(a) (1) (A) If a stock or mutual insurer becomes impaired or insolvent, the Insurance Commissioner may: (i) Determine the amount of the deficiency; and (ii) Serve notice upon the insurer to make good the deficiency within thirty (30) days after service of the notice. (B) After a hearing, the commissioner may suspend the insurer from soliciting or writing any new coverages in this state until the deficiency is made good. (2) For the purposes of this section, "insolvent" or "impairment" means the same as defined in the Uniform Insurers Liquidation Act, §§ 23-68-101 , 23-68-102(2) -(13), 23-68-104 , 23-68-105 , 23-68-113 , and 23-68-115 - 23-68-120 . (b) The deficiency may be made good: (1) In cash; (2) In assets eligible under § 23-63-801 et seq., which refers to investments, for the investment of the insurer's funds; (3) If a stock insurer, by: (A) Reduction of the stock insurer's capital to an amount not below the minimum required for the kinds of insurance thereafter to be transacted; or (B) Amendment of its certificate of authority to cover only such kinds of insurance thereafter for which the stock insurer has sufficient capital; or (4) If a mutual insurer, by amendment of its certificate of authority to cover only the kinds of insurance thereafter for which the mutual insurer has sufficient surplus. (c) (1) If the deficiency is not made good and proof filed with the commissioner within the thirty-day period: (A) The insurer shall be deemed insolvent; and (B) The commissioner shall institute delinquency proceedings against the insurer under the Uniform Insurers Liquidation Act, §§ 23-68-101 , 23-68-102(2) -(13), 23-68-104 , 23-68-105 , 23-68-113 , and 23-68-115 - 23-68-120 . (2) (A) However, the commissioner, upon application and submission of good cause, may extend the period that the deficiency may be made good and proof filed, but for no more than an additional thirty (30) days if the deficiency exists because of: (i) Increased loss reserves required by the commissioner; or (ii) Disallowance by the commissioner of certain assets or reduction of the value at which carried in the insurer's accounts. (B) However, acquisitions or changes of control of an impaired or insolvent domestic insurer that is or has applied to become an affiliate or subsidiary of a depository institution under federal law shall comply with the periods stated to restore capital or surplus. (d) This section applies in addition to or in conjunction with the insurance laws of this state, including without limitation the Risk-Based Capital Act, § 23-63-1301 et seq., and § 23-63-1501 et seq.

Legislative History

Acts 1959, No. 148, § 493; 1977, No. 373, §§ 1, 2; A.S.A. 1947, § 66-4241; Acts 2001, No. 1604, § 58; 2003, No. 540, § 1; 2011, No. 760, § 10.