§ 38-9-320 — Preparation and submission of RBC (risk based capital) Report; form and content.

South Carolina § 38-9-320

• Jurisdiction: South Carolina
• Title 38: INSURANCE
• Ch. 9: CAPITAL, SURPLUS, RESERVES, AND OTHER FINANCIAL MATTERS

Text

(A) Every domestic licensee must, on or before each March first filing date, prepare and submit to the director an RBC Report of its RBC Levels as of the end of the preceding calendar year. That RBC Report must be filed in a form and must contain such information required by the RBC Instructions. In addition, every domestic licensee must file its RBC Report: (1) with the NAIC in accordance with the RBC Instructions; and (2) with the chief insurance regulatory officer in a state in which the licensee is authorized to transact business, if that chief insurance regulatory officer has notified the licensee in writing. The licensee must file its RBC Report with that chief insurance regulatory officer no later than fifteen days from its receipt of notice to file or the March first filing date. (B)(1) A life and health insurer's RBC must be determined in accordance with the formula detailed in the RBC Instructions. The formula must be determined in each case by applying the factors in the manner detailed in the RBC Instructions and must take into account, and may adjust for the covariance between: (a) risk with respect to assets; (b) risk of adverse insurance experience with respect to liabilities and obligations; (c) interest rate risk with respect to the insurer's business; and (d) all other business risks and other relevant risks in the RBC Instructions. (2) Each risk must be determined in each case by applying the factors in the manner set forth in the RBC Instructions. (C)(1) A property and casualty insurer's RBC must be determined by applying the factors in the manner detailed in the RBC Instructions and must be determined in accordance with the formula detailed in the RBC Instructions. The formula must take into account, and may adjust for the covariance between: (a) asset risk; (b) credit risk; (c) underwriting risk; and (d) all other business risks and other relevant risks in the RBC Instructions. (2) Each risk must be determined in each case by applying the factors in the manner set forth in the RBC Instructions. (D)(1) A health organization's RBC must be determined by applying the factors in the manner detailed in the RBC Instructions and must be determined in accordance with the formula detailed in the RBC Instructions. The formula must be taken into account, and may adjust for the covariance between: (a) asset risk; (b) credit risk; (c) underwriting risk; and (d) all other business risks and other relevant risks in the RBC Instructions. (2) Each risk must be determined in each case by applying the factors in the manner set forth in the RBC Instructions. (E) An excess of capital over the amount produced by the RBC requirements, formulas, schedules, and instructions contained in this article is desirable. Licensees should seek to maintain capital above the required RBC levels. Additional capital is used and is useful in securing a licensee against various risks inherent in or affecting the business of insurance and not accounted for, or which only may be partially measured, by the RBC requirements contained in this article. (F) If a domestic licensee files an RBC Report which, in the judgment of the director, is inaccurate, then the director must adjust the RBC Report to correct the inaccuracy and must notify the domestic licensee in writing of the adjustment. The notice must include the reasons for the adjustment.

Legislative History

HISTORY: 1996 Act No. 254, SECTION 2; 2014 Act No. 164 (S.908), SECTION 2, eff January 1, 2015. Effect of Amendment 2014 Act No. 164, SECTION 2, substituted "licensee" for "insurer" throughout; rewrote subsection (C); added subsection (D); redesignated the remaining subsections accordingly; and made other nonsubstantive changes.