2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:3-403 Company action level event.

§431:3-403 Company action level event.
(a) "Company action level event" means any of the following events:
(1) The filing of a risk-based capital report by an insurer which indicates that:
(A) The insurer's total adjusted capital is greater than or equal to its regulatory action level risk-based capital but less than its company action level risk-based capital;
(B) If a life or accident and health or sickness insurer, the insurer has total adjusted capital greater than or equal to its company action level risk-based capital but less than the product of its authorized control level risk-based capital and three, and has a negative trend;
(C) If a property and casualty insurer, the insurer has a total adjusted capital greater than or equal to its company action level risk-based capital but less than the product of its authorized control level risk-based capital and three, and triggers the trend test determined in accordance with the trend test calculation included in the property and casualty risk-based capital instructions; or
(D) If a benefit society or health maintenance organization, the benefit society or health maintenance organization has a total adjusted capital greater than or equal to its company action level risk-based capital but less than the product of its authorized control level risk-based capital and three, and triggers the trend test determined in accordance with the trend test calculation included in the health risk-based capital instructions;
(2) The notification by the commissioner to the insurer of an adjusted risk-based capital report that indicates the occurrence of the event in paragraph (1), if the insurer does not challenge the adjusted risk-based capital report under section 431:3-407; or
(3) If, pursuant to section 431:3-407, the insurer challenges an adjusted risk-based capital report that indicates the occurrence of the event in paragraph (1), the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.
(b) In the event of a company action level event, the insurer shall prepare and submit to the commissioner a risk-based capital plan which shall:
(1) Identify the conditions in the insurer which contribute to the company action level event;
(2) Contain proposals of corrective actions which the insurer intends to take and would be expected to result in the elimination of the company action level event;
(3) Provide projections of the insurer's financial results in the current year and at least the four succeeding years, both in the absence of proposed corrective actions and giving effect to the proposed corrective actions, including projections of statutory operating income, net income, capital, and surplus. The projections for both new and renewal business may include separate projections for each major line of business and separately identify each significant income, expense, and benefit component;
(4) Identify the key assumptions having an impact on the insurer's projections and the sensitivity of the projections to the assumptions; and
(5) Identify the quality of, and problems associated with, the insurer's business, including but not limited to its assets, anticipated business growth and associated surplus strain, extraordinary exposure to risk, mix of business, and use of reinsurance in each case, if any.
(c) The risk-based capital plan shall be submitted:
(1) Within forty-five days of the company action level event; or
(2) If the insurer challenges an adjusted risk-based capital report pursuant to section 431:3-407, within forty-five days after notification to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.
(d) Within sixty days after the submission by an insurer of a risk-based capital plan to the commissioner, the commissioner shall notify the insurer whether the risk-based capital plan shall be implemented or is, in the judgment of the commissioner, unsatisfactory. If the commissioner determines the risk-based capital plan is unsatisfactory, the notification to the insurer shall set forth the reasons for the determination, and may set forth proposed revisions which will render the risk-based capital plan satisfactory, in the judgment of the commissioner. Upon notification from the commissioner, the insurer shall prepare a revised risk-based capital plan, which may incorporate by reference any revisions proposed by the commissioner, and shall submit the revised risk-based capital plan to the commissioner:
(1) Within forty-five days after the notification from the commissioner; or
(2) If the insurer challenges the notification from the commissioner under section 431:3-407, within forty-five days after a notification to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.
(e) In the event of a notification by the commissioner to an insurer that the insurer's risk-based capital plan or revised risk-based capital plan is unsatisfactory, the commissioner, at the commissioner's discretion, subject to the insurer's right to a hearing under section 431:3-407, may specify in the notification that the notification constitutes a regulatory action level event.
(f) Every domestic insurer that files a risk-based capital plan or revised risk-based capital plan with the commissioner shall file a copy of the risk-based capital plan or revised risk-based capital plan with the insurance commissioner in any state in which the insurer is authorized to do business if:
(1) That state has a risk-based capital provision substantially similar to section 431:3-408(a); and
(2) The insurance commissioner of that state has notified the insurer of its request for the filing in writing, in which case the insurer shall file a copy of the risk-based capital plan or revised risk-based capital plan in that state no later than the later of:
(A) Fifteen days after the receipt of notice to file a copy of its risk-based capital plan or revised risk-based capital plan with that state; or
(B) The date on which the risk-based capital plan or revised risk-based capital plan is filed under subsections (c) and (d). [L 1994, c 190, pt of §1; am L 1995, c 61, §2 as superseded by c 232, §4; am L 1997, c 75, §5; am L 1999, c 128, §2; am L 2003, c 212, §27; am L 2011, c 80, §3; am L 2013, c 190, §1]