2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 159 - Risk-Based Capital for Insurers › § 8303. Company action level event

§ 8303. 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 that 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) in the case of a life or health insurer or a fraternal benefit society, the insurer or society has total adjusted capital that is 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 3.0 and has a negative trend;
(C) in the case of a property and casualty insurer, the insurer has total adjusted capital that is 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 3.0 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) in the case of a health maintenance organization, the insurer has total adjusted capital that is 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 3.0 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 an event in subdivision (1) of this subsection, provided the insurer does not challenge the adjusted risk-based capital report under section 8307 of this title.
(3) If, under section 8307 of this title, an insurer challenges an adjusted risk-based capital report that indicates the event in subdivision (1) of this subsection, the notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected the insurer’s challenge.
(b) An insurer shall prepare and submit to the Commissioner a risk-based capital plan within 45 days of filing a risk-based capital report or within 45 days of a final adjusted risk-based capital report showing a company action level event. The risk-based capital plan shall be a comprehensive financial plan and shall:
(1) Identify the conditions in the insurer that contribute to the company action level event.
(2) Contain proposals of corrective actions that the insurer intends to take that would 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 should include separate projections for each major line of business and separately identify each significant income, expense, and benefit component.
(4) Identify the key assumptions impacting the insurer’s projections and the sensitivity of the projections to the assumptions.
(5) Identify the quality of, and problems associated with, the insurer’s business, including its assets, anticipated business growth and associated surplus strain, extraordinary exposure to risk, mix of business, and use of reinsurance.
(c) The Commissioner shall notify the insurer whether the proposed risk-based capital plan is approved within 60 days of its submission. If the Commissioner disapproves the plan, the notice shall set forth the reasons for the disapproval and may notify the insurer of revisions that will render the risk-based capital plan satisfactory to the Commissioner. Upon notice that a proposed plan is disapproved, the insurer shall prepare and submit a revised risk-based capital plan within 45 days of the Commissioner’s notice of disapproval or, if the Commissioner’s notice of disapproval is appealed under section 8307 of this title, within 45 days of a Commissioner’s determination adverse to the insurer.
(d) 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 may at the Commissioner’s discretion, subject to the insurer’s right to a hearing under section 8307 of this title, specify in the notification that the notification constitutes a regulatory action level event.
(e) Each domestic insurer required to file a risk-based capital plan or revised risk-based capital plan under this section shall file a copy of the plan with the insurance commissioner in any state in which the insurer is authorized to do business if:
(1) such state has a provision that is substantially similar to section 8308 of this title; or
(2) the insurance commissioner of that state has notified the insurer of its request for the filing in writing. Plans required to be filed under this subdivision shall be filed not later than the later of:
(A) 15 days after notice to file a copy of its risk-based capital plan or revised risk-based capital plan with the state; or
(B) the date on which the risk-based capital plan or revised risk-based capital plan is required to be filed under section 8304 of this title. (Added 1993, No. 235 (Adj. Sess.), § 8, eff. June 21, 1994; amended 2009, No. 137 (Adj. Sess.), § 15; 2013, No. 29, § 38, eff. May 13, 2013; 2021, No. 25, § 13, eff. May 12, 2021.)