2023 Laws of Puerto Rico › TITLE TWENTY-SIX - Insurance (§§ 101 — 10377) › Subtitle 1 - Insurance Generally (§§ 101 — 4513) › Chapter 45 - Risk Based Capital (§§ 4501 — 4513) › § 4505 - Regulatory action level event

(1) Regulatory action level event.— Means, in respect of all insurers, any of the following events:
(a) Submission of the insurer of a risk based capital report indicating that the adjusted capital of the insurer is greater than or equal to its authorized control level, but lesser than its regulatory action level.
(b) Notice by the Commissioner to the insurer regarding a revised risk based capital report that reflects the event described in clause (a) of this subsection, provided the insurer does not object the revised report under § 4508 of this title.
(c) Notice to the insurer by the Commissioner of his/her determination against the objection to the revised report that reflects the event described in clause (a) of this subsection, lodged by the insurer under § 4508 of this title.
(d) Failure of the insurer to submit a risk based capital report by or before the date of submission provided for in § 4503 of this title, except when the insurer has provided just cause for such failure, and the report has been indeed submitted within ten (10) days following the aforementioned date of submission.
(e) Failure of the insurer to submit before the Commissioner a risk based capital plan within the term provided in § 4504(3) of this title.
(f) Notice to the insurer by the Commissioner of the fact that the risk based capital plan or the revised plan is not satisfactory, in the judgment of the Commissioner, provided said determination has not been objected by the insurer under § 4508 of this title.
(g) Notice to the insurer by the Commissioner of his/her determination against the objection lodged by the insurer as stated in clause (f) of this subsection, and under § 4508 of this title.
(h) Notice to the insurer by the Commissioner of the fact that the latter has failed to comply with its risk based capital plan or its revised plan, but only if such noncompliance has significant and adverse effects on the ability of the insurer to eliminate the insurer action level event pursuant to the aforementioned plan, and the Commissioner has so provided in the notice. This event shall be contingent upon the non-objection of the insurer under § 4508 of this title, the determination of the Commissioner.
(i) Notice to the insurer by the Commissioner of his/her determination against the objection lodged by the insurer as stated in clause (h) of this subsection above and under § 4508 of this title.
(2) In case of a regulatory action level event, the Commissioner may:
(a) Require that the insurer prepare and submit a risk based capital plan or, if applicable, a revised plan;
(b) conduct pursuant to § 214 of this title, any investigation, as well as any examination or analysis as the Commissioner may deem pertinent, in terms of the assets, liabilities and operations of the insurer, including a revision of its risk based capital plan or its revised plan, as the case may be, and/or
(c) issue to the insurer a corrective order whereby the Commissioner specifies the corrective actions that the Commissioner deems pertinent and which the insurer must implement.
(3) In determining corrective actions, the Commissioner may take into consideration those factors he/she deems pertinent to the business of the insurer based on the investigation and/or examination or analysis conducted by the Commissioner on the assets, liabilities and operations of the insurer, including but not limited to the results of the tests, if any, undergone by the insurer pursuant to the risk based capital instructions. The risk based capital plan or the revised plan shall be submitted:
(a) Within the term of forty-five (45) days as of the date on which the regulatory action level event takes place;
(b) within the term of forty-five (45) days as of the date of notice to the insurer by the Commissioner of his/her determination against the objection lodged regarding the revised risk based capital report submitted by the insurer under § 4508 of this title, or
(c) within the term of forty-five (45) days as of the date of notice to the insurer by the Commissioner of his/her determination against the objection lodged concerning the revised plan submitted by the insurer under § 4508 of this title.
History —Ins. Code, added as § 45.050 on Mar. 18, 2008, No. 32, § 1, eff. 1 year after Mar. 18, 2008.