Florida Administrative Code › 69 - DEPARTMENT OF FINANCIAL SERVICES › 69O - OIR - Insurance Regulation › Chapter 69O-141 - ADMINISTRATIVE SUPERVISION AND WITHDRAWAL FROM THE STATE › Section 69O-141.002 - Standards Regarding Administrative Supervision

Current through Reg. 50, No. 138; July 16, 2024
(1) The Office's determination as to whether
				the provisions of part VI, chapter 624, F.S., regarding administrative
				supervision are appropriate for an insurer shall be based on the standards set
				out in sections 624.80 and
				624.81, F.S.
(2) Criteria which shall be considered in
				determining whether an insurer is in unsound condition as provided in section
				624.80(2),
				F.S., or is engaging in methods or practices which render the continuance of
				business hazardous to the public or insureds include the following:
(a) Adverse findings reported in financial
				condition and market conduct examination reports;
(b) The National Association of Insurance
				Commissioners Insurance Regulatory Information System and its related
				reports;
(c) The ratios of
				commission expense, general insurance expense, policy benefits and reserve
				increases as to annual written premium and net investment income which could
				lead to an impairment of capital and surplus;
(d) That the insurer's asset portfolio when
				viewed in light of current economic conditions is not of sufficient value,
				liquidity, or diversity to assure the company's ability to meet its outstanding
				obligations as they mature;
(e) The
				ability of an assuming reinsurer to perform and whether the insurer's
				reinsurance program provides sufficient protection for the company's remaining
				surplus after taking into account the insurer's cash flow and the classes of
				business written as well as the financial condition of the assuming
				reinsurer;
(f) That the insurer's
				operating loss in the last twelve month period or any shorter period of time,
				including but not limited to net capital gain or loss, change in non-admitted
				assets, and cash dividends paid to shareholders, is greater than 50% of such
				insurer's remaining surplus as regards policyholders in excess of the minimum
				required;
(g) Whether any parent,
				holding company, affiliate, subsidiary, or reinsurer is insolvent, threatened
				with insolvency, or delinquent in payment of its monetary or other
				obligations;
(h) Contingent
				liabilities, pledges or guaranties which either individually or collectively
				involve a total amount which in the Office's opinion may affect the solvency of
				the insurer;
(i) Whether any
				"controlling person" of an insurer is delinquent in the transmitting to, or
				payment of, net premiums to such insurer;
(j) The age and collectibility of
				receivables;
(k) Whether the
				management of an insurer, including officers, directors, or any other person
				who directly or indirectly controls the operation of such insurer, fails to
				possess and demonstrate the competence, fitness and reputation deemed necessary
				to serve the insurer in such position;
(l) Whether management of an insurer has
				failed to respond to inquiries relative to the condition of the insurer or has
				furnished false or misleading information concerning an inquiry;
(m) Whether management of an insurer either
				has filed any false or misleading sworn financial statement, or has released
				any false or misleading financial statement to lending institutions or to the
				general public, or has made a false or misleading entry, or has omitted an
				entry of material amount in the books of the insurer;
(n) Whether an insurer has grown so rapidly
				and to such an extent that it lacks adequate financial and administrative
				capacity to meet its obligations in a timely manner;
(o) Whether an insurer has experienced or
				will experience in the foreseeable future cash flow and/or liquidity
				problems;
(p) Whether an insurer
				has violated any applicable statutes or rules, or has been subjected to any
				final agency action relating to violation of such statutes or rules;
(q) Whether an insurer has incurred
				substantial new debt, has had to rely on frequent or substantial capital
				infusions, has a highly leveraged balance sheet, or relies increasingly on
				outside consulting sources (e.g. TPA's, MGA's, or management
				companies);
(r) Whether the Office
				has received a noticeable increase of consumer complaints for non-payment of
				claims or unusual delays in claim payments;
(s) Whether the Office believes future
				problems with insurer solvency will occur because of known or developing
				current events or situations (e.g. declining occupancy rates, inadequate
				reserves or change in reserve practices, or increase in debt service, or
				adverse changes in financial markets);
(t) Whether an insurer has voluntarily
				allowed the suspension or revocation of its certificate of authority in any
				state;
(u) Whether transactions
				with an insurer's affiliates, parent company, holding company, subsidiaries,
				officers, directors, shareholders, owners, management company, employees,
				agents, creditors, or any other person or entity have affected the insurer's
				solvency or liquidity in a manner which places the insurer's insureds at risk
				of loss of contracted benefits or security; or
(v) Whether a deadlock or dispute that
				threatens the solvency or viability of an insurer exists between the officers,
				directors, managing owners, managers, or other persons who control the
				operations of an insurer.