§ 35A-20 — Regulatory action level event

Illinois § 35A-20

• Jurisdiction: Illinois
• Topic: REGULATION
• Ch. 215: INSURANCE
• Act 215 ILCS 5/: Illinois Insurance Code.
• Art.: Article IIA - Risk-Based Capital

Text

(a) A regulatory action level event means any of the following events: (1) The filing of an RBC Report by the insurer that indicates that the insurer's total adjusted capital is greater than or equal to its authorized control level RBC, but less than its regulatory action level RBC. (2) The notification by the Director to an insurer of an Adjusted RBC Report that indicates the event described in paragraph (1), provided the insurer does not challenge the Adjusted RBC Report under Section 35A-35. (3) The notification by the Director to the insurer that the Director has, after a hearing, rejected the insurer's challenge under Section 35A-35 to an Adjusted RBC Report that indicates the event described in paragraph (1). (4) The failure of the insurer to file an RBC Report by the filing date, unless the insurer has provided an explanation for the failure that is satisfactory to the Director and has cured the failure within 10 days after the filing date. (5) The failure of the insurer to submit an RBC Plan to the Director within the time period set forth in subsection (c) of Section 35A-15. (6) The notification by the Director to the insurer that the insurer's RBC Plan or revised RBC Plan is, in the judgment of the Director, unsatisfactory and that the notification constitutes a regulatory action level event with respect to the insurer, provided the insurer does not challenge the determination under Section 35A-35. (7) The notification by the Director to the insurer that the Director has, after a hearing, rejected the insurer's challenge under Section 35A-35 to the determination made by the Director under paragraph (6). (8) The notification by the Director to the insurer that the insurer has failed to adhere to its RBC Plan or Revised RBC Plan, but only if that failure has a substantial adverse effect on the ability of the insurer to eliminate the company action level event in accordance with its RBC Plan or Revised RBC Plan and the Director has so stated in the notification, provided the insurer does not challenge the determination under Section 35A-35. (9) The notification by the Director to the insurer that the Director has, after a hearing, rejected the insurer's challenge under Section 35A-35 to the determination made by the Director under paragraph (8). (b) In the event of a regulatory action level event, the Director shall do all of the following: (1) Require the insurer to prepare and submit an RBC Plan or, if applicable, a Revised RBC Plan to the Director within 45 days after the regulatory action level event occurs or within 45 days after the Director notifies the insurer that the Director has, after a hearing, rejected its challenge under Section 35A-35 to either an Adjusted RBC Report or a Revised RBC Plan. However, if the insurer previously prepared and submitted an RBC Plan or a Revised RBC Plan in accordance with any provision of this Article, the Director may determine that the previously prepared RBC Plan or Revised RBC Plan satisfies the requirement of this subsection (b)(1). (2) Perform any examination or analysis of the assets, liabilities, and operations of the insurer, including a review of its RBC Plan or Revised RBC Plan, that the Director deems necessary. (3) After the examination or analysis, issue a Corrective Order specifying the corrective actions the Director determines are required. (c) In determining corrective actions, the Director may take into account any factors the Director deems relevant based upon the examination or analysis of the assets, liabilities, and operations of the insurer including, but not limited to, the results of any sensitivity tests undertaken under the RBC Instructions. The regulatory action level event shall be deemed sufficient grounds for the Director to issue a Corrective Order in accordance with Article XII 1/2. The Director shall have rights, powers, and duties with respect to the insurer that are set forth in Article XII 1/2 and the insurer shall be entitled to the protections afforded insurers under Article XII 1/2. (d) The Director may retain actuaries, investment experts, and other consultants necessary to review an insurer's RBC Plan or Revised RBC Plan, examine or analyze the assets, liabilities, and operations of the insurer, and formulate the Corrective Order with respect to the insurer. The fees, costs, and expenses related to the actuaries, investment experts, and other consultants shall be reasonable and customary for the nature of the services provided and shall be borne by the affected insurer or the party designated by the Director.

Legislative History

(Source: P.A. 90-794, eff. 8-14-98; 91-549, eff. 8-14-99.)