§ 22:635 — Regulatory-action level event

Louisiana § 22:635

• Jurisdiction: Louisiana
• Title 22: Insurance

Text

§635. Regulatory-action level event
A. "Regulatory-action level event" means any of the following events:
(1) The filing of a risk-based capital report by the health organization that indicates
that the health organization's total adjusted capital is greater than or equal to its authorized
control level risk-based capital but less than its regulatory-action level risk-based capital.
(2) Notification by the commissioner to a health organization of an adjusted risk-based capital report that indicates the event in Paragraph (1) of this Subsection, provided the
health organization does not challenge the adjusted risk-based capital report under R.S.
22:638.
(3) If, pursuant to R.S. 22:638, the health organization challenges an adjusted risk-based capital report that indicates the event in Paragraph (1) of this Subsection, the
notification by the commissioner to the health organization that the commissioner has
rejected the health organization's challenge.
(4) The failure of the health organization to file a risk-based capital report by the
filing date, unless the health organization has provided an explanation for the failure that is
satisfactory to the commissioner and has cured the failure within ten days after the filing
date.
(5) The failure of the health organization to submit a risk-based capital plan to the
commissioner within the time period set forth in R.S. 22:634(C).
(6) Notification by the commissioner to the health organization that both of the
following apply:
(a) The risk-based capital plan or revised risk-based capital plan submitted by the
health organization is, in the judgment of the commissioner, unsatisfactory.
(b) Notification constitutes a regulatory-action level event with respect to the health
organization, provided the health organization has not challenged the determination pursuant
to R.S. 22:638.
(7) If, pursuant to R.S. 22:638, the health organization challenges a determination
by the commissioner pursuant to Paragraph (6) of this Subsection, the notification by the
commissioner to the health organization that the commissioner has rejected the challenge.
(8) Notification by the commissioner to the health organization that the health
organization has failed to adhere to its risk-based capital plan or revised risk-based capital
plan, but only if the failure has a substantial adverse effect on the ability of the health
organization to eliminate the company-action level event in accordance with its risk-based
capital plan or revised risk-based capital plan and the commissioner has so stated in the
notification, provided the health organization has not challenged the determination under
R.S. 22:638.
(9) If, pursuant to R.S. 22:638, the health organization challenges a determination
by the commissioner under Paragraph (8) of this Subsection, the notification by the
commissioner to the health organization that the commissioner has rejected the challenge.
B. In the event of a regulatory-action level event, the commissioner shall do the
following:
(1) Require the health organization to prepare and submit a risk-based capital plan
or, if applicable, a revised risk-based capital plan.
(2) Perform such examination or analysis as the commissioner deems necessary of
the assets, liabilities, and operations of the health organization including a review of its risk-based capital plan or revised risk-based capital plan.
(3) Subsequent to the examination or analysis, issue an order specifying such
corrective actions as the commissioner shall determine are required.
C. In determining corrective actions, the commissioner may take into account factors
the commissioner deems relevant with respect to the health organization based upon the
commissioner's examination or analysis of the assets, liabilities, and operations of the health
organization, including but not 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 either:
(1) Within forty-five days after the occurrence of the regulatory-action level event.
(2) If the health organization challenges an adjusted risk-based capital report
pursuant to R.S. 22:638 and the challenge is not frivolous in the judgment of the
commissioner, within forty-five days after the notification to the health organization that the
commissioner has rejected the health organization's challenge.
(3) If the health organization challenges a revised risk-based capital plan pursuant
to R.S. 22:638 and the challenge is not frivolous in the judgment of the commissioner, within
forty-five days after the notification to the health organization that the commissioner has,
after a hearing, rejected the health organization's challenge.
D. The commissioner may retain actuaries, investment experts, and other consultants
as may be necessary in the judgment of the commissioner to review the health organization's
risk-based capital plan or revised risk-based capital plan, examine or analyze the assets,
liabilities, and operations, including contractual relationships of the health organization, and
formulate the corrective order with respect to the health organization. The fees, costs, and
expenses relating to such consultants shall be borne by the affected health organization or
such other party as directed by the commissioner.
NOTE: Former R.S. 22:635 redesignated as R.S. 22:1261 by Acts 2008, No.
415, §1, eff. Jan. 1, 2009.

Legislative History

Acts 2003, No. 1106, §1, eff. Dec. 31, 2003; Redesignated from R.S. 22:2036.5 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2009, No. 317, §1; Acts 2009, No. 503, §1.