Idaho Administrative Code › Title IDAPA 18 - Insurance, Department of › Rule 18.07.05 - DIRECTOR'S AUTHORITY FOR COMPANIES DEEMED TO BE IN HAZARDOUS FINANCIAL CONDITION › Section 18.07.05.011 - STANDARDS

Current through August 31, 2023
The following standards, either singly or in combination of two
				(2) or more, may be considered by the Director to determine whether the
				continued operation of any insurer transacting insurance business in this state
				might be deemed to be hazardous to its policyholders or creditors or to the
				general public. The Director may consider: (3-31-22)
01.
Examination Reports
. Adverse
			 findings reported in financial condition and market conduct examination
			 reports, audit reports, and actuarial opinions, reports or summaries.
			 (3-31-22)
02.
NAIC Insurance
			 Regulatory Information System
. The NAIC Regulatory Information System
			 and its other financial analysis solvency tools and reports.
			 (3-31-22)
03.
Adequate Cash
			 Provision
. Whether the insurer has made adequate provision, according to
			 presently accepted actuarial standards of practice, for the anticipated cash
			 flows needed by the contractual obligations and related expenses of the
			 insurer, when considered in light of the assets held by the insurer with
			 respect to such reserves and related actuarial items including, but not limited
			 to, the investment earnings on such assets, and the considerations anticipated
			 to be received and retained under such policies and contracts.
			 (3-31-22)
04.
Reinsurance
			 Program
. 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. (3-31-22)
05.
Operating Loss (50% of Surplus)
. Whether the insurer's operating loss in
			 the last twelve (12) 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 fifty percent (50%) of the
			 insurer's remaining surplus as regards policyholders in excess of the minimum
			 mandatory. (3-31-22)
06.
Operating Loss (20% of Surplus)
. Whether the insurer's operating
			 loss in the last twelve (12) month period or any shorter period of time,
			 excluding net capital gains, is greater than twenty percent (20%) of the
			 insurer's remaining surplus as regards policyholders in excess of the minimum
			 mandatory. (3-31-22)
07.
Insolvency of Affiliate, Subsidiary or Reinsurer
. Whether a
			 reinsurer, obligor, or any entity within the insurer's insurance holding
			 company system is insolvent, threatened with insolvency, or delinquent in
			 payment of its monetary or other obligations, and which in the opinion of the
			 Director may affect the solvency of the insurer. (3-31-22)
08.
Contingent Liabilities
.
			 Contingent liabilities, pledges or guaranties which either individually or
			 collectively involve a total amount which in the opinion of the Director may
			 affect the solvency of the insurer. (3-31-22)
09.
Controlling Person
. Whether
			 any "controlling person" of an insurer is delinquent in the transmitting to, or
			 payment of, net premiums to such insurer. (3-31-22)
10.
Receivables
. The age and
			 collectibility of receivables. (3-31-22)
11.
Competence of Management
.
			 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. (3-31-22)
12.
Failure to Respond to
			 Inquiries
. Whether management of an insurer has failed to respond to
			 inquiries relative to the condition of the insurer or has furnished false and
			 misleading information concerning an inquiry. (3-31-22)
13.
Failure to Meet Filing
			 Requirements
. Whether the insurer has failed to meet financial and
			 holding company filing requirements in the absence of a reason satisfactory to
			 the Director. (3-31-22)
14.
False or Misleading Financial Statements
. Whether management of an
			 insurer either has filed any false or misleading sworn financial statement, or
			 has released 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. (3-31-22)
15.
Extensive Growth
. Whether
			 the 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. (3-31-22)
16.
Cash
			 Flow
. Whether the company has experienced or will experience in the
			 foreseeable future cash flow and/or liquidity problems. (3-31-22)
17.
Reserves Compliance with Minimum
			 Standards
. Whether management has established reserves that do not
			 comply with minimum standards established by state insurance laws, regulations,
			 statutory accounting standards, sound actuarial principles and standards of
			 practice. (3-31-22)
18.
Material Under-Reserving
. Whether management persistently engages
			 in material underreserving that results in adverse development.
			 (3-31-22)
19.
Transactions
			 Among Affiliates
. Whether transactions among affiliates, subsidiaries or
			 controlling persons for which the insurer receives assets, capital gains or
			 both do not provide sufficient value, liquidity or diversity to assure the
			 insurer's ability to meet its outstanding obligations as they mature.
			 (3-31-22)
20.
Any Other
			 Finding
. Any other finding determined by the Director to be hazardous to
			 the insurer's policyholders or creditors or to the general public.
			 (3-31-22)