§ 22:614 — Regulatory-action level event

Louisiana § 22:614

• Jurisdiction: Louisiana
• Title 22: Insurance

Text

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 R.S. 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 R.S. 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 R.S. 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 R.S. 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 R.S. 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.
NOTE: Former R.S. 22:614 redesignated as R.S. 22:853 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009.

Legislative History

Acts 1995, No. 1203, §1, eff. June 29, 1995; Redesignated from R.S. 22:863 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2009, No. 317, §1.