§ 27-14.2-3. Director's authority.
(a) For the purposes of making a determination of an insurer's financial condition under
this chapter, the director may:
(1) Disregard any credit or amount receivable resulting from transactions with a reinsurer
that is insolvent, impaired, or otherwise subject to a delinquency proceeding;
(2) Make appropriate adjustments, including disallowances to asset values attributable
to investments in or transactions with parents, subsidiaries, or affiliates consistent
with the NAIC Accounting Practices and Procedures Manual, state laws and regulations;
(3) Refuse to recognize the stated value of accounts receivable if the ability to collect
receivables is highly speculative in view of the age of the account or the financial
condition of the debtor;
(4) Increase the insurer's liability in an amount equal to any contingent liability, pledge,
or guarantee not otherwise included if there is a substantial risk that the insurer
will be called upon to meet the obligation undertaken within the next twelve-month
(12) period.
(b) If the director determines that the continued operation of the insurer licensed to
transact business in this state may be hazardous to its policyholders, creditors,
or the general public, then the director may, upon the director's determination, issue
an order requiring the insurer to:
(1) Reduce the total amount of present and potential liability for policy benefits by
reinsurance;
(2) Reduce, suspend, or limit the volume of business being accepted or renewed;
(3) Reduce general insurance and commission expenses by specified methods;
(4) Increase the insurer's capital and surplus;
(5) Suspend or limit the declaration and payment of a dividend by an insurer to its stockholders
or to its policyholders;
(6) File reports in a form acceptable to the director concerning the market value of an
insurer's assets;
(7) Limit or withdraw from certain investments or discontinue certain investment practices
to the extent the director deems necessary;
(8) Document the adequacy of premium rates in relation to the risks insured;
(9) File, in addition to regular annual statements, interim financial reports on the form
adopted by the National Association of Insurance Commissioners or in a format as promulgated
by the director;
(10) Correct corporate governance practice deficiencies, and adopt and utilize governance
practices acceptable to the director;
(11) Provide a business plan to the director in order to continue to transact business
in the state; or
(12) Notwithstanding any other provision of law limiting the frequency or amount of premium
rate adjustments, adjust rates for any non-life insurance product written by the insurer
that the director considers necessary to improve the financial condition of the insurer.
(c) If the insurer is a foreign insurer, the director's order under subsection (b) of
this section may be limited to the extent provided by statute.
(d) Any insurer subject to an order under subsection (b) of this section may request a
hearing to review that order. The notice of hearing shall be served upon the insurer
pursuant to the Administrative Procedures Act, chapter 35 of title 42. The notice of hearing shall state the time and place of the hearing, and the conduct,
condition, or ground upon which the director based the order. Unless mutually agreed
between the director and the insurer, the hearing shall occur not less than ten (10)
days nor more than thirty (30) days after notice is served and shall be either in
Providence County or in some other place of convenience to the parties to be designated
by the director. The director shall hold all hearings under this subsection privately,
unless the insurer requests a public hearing, in which case the hearing shall be public.