Alaska Administrative Code › Title 3 - Commerce, Community, and Economic Development › Part 2 - Division of Insurance › Chapter 21 - Insurer - Financial › Article 4 - Definition of Standards and Director's Authority for Companies Deemed to be in an Impaired Financial Condition › 3 AAC 21.510 - Standards

Current through May 31, 2024
(a) To determine whether an insurer is
				  impaired or in imminent danger of becoming impaired, the director may consider
				  one or more of the following:
(1) findings in
				  financial condition and market conduct examination reports prepared by the
				  division or another licensing jurisdiction, audit reports, and actuarial
				  opinions, reports, or summaries;
(2) National Association of Insurance
				  Commissioners' Insurance Regulatory Information System reports or other
				  financial analysis reports;
(3)
				  whether the insurer has made adequate provision, according to accepted
				  actuarial standards of practice, for the anticipated cash flows required by the
				  contractual obligations and related expenses of the insurer, when considered in
				  light of the assets held by the insurer for reserves and related actuarial
				  items including the investment earnings on those assets and the considerations
				  anticipated to be received and retained under the contracts;
(4) the financial condition and ability of an
				  assuming reinsurer to perform and, after taking into account the insurer's cash
				  flow and the classes of business written, whether the insurer's reinsurance
				  program provides sufficient protection for the insurer's remaining
				  surplus;
(5) whether the insurer's
				  operating results in the last 12 months or a shorter period of time, including
				  any net capital gain or loss, a change in nonadmitted assets, and cash
				  dividends paid to shareholders, would reduce by more than 50 percent the
				  insurer's remaining policyholder surplus held in excess of the minimum
				  policyholder surplus required under AS 21;
(6) whether the insurer's operating loss in
				  the last 12 months or a shorter period of time, excluding net capital gains, is
				  greater than 20 percent of the insurer's remaining policyholder surplus held in
				  excess of the minimum policyholder surplus required under AS 21;
(7) 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 a monetary obligation,
				  any of which in the opinion of the director may affect the solvency of the
				  insurer;
(8) contingent
				  liabilities, pledges, or guaranties that, individually or collectively, involve
				  a total amount that the director determines may affect the solvency of the
				  insurer;
(9) whether a controlling
				  person of an insurer is delinquent in the transmission or payment of net
				  premiums to the insurer;
(10) the
				  age and collectability of receivables;
(11) whether the management of an insurer or
				  any other person who directly or indirectly controls the operation of the
				  insurer fails to possess and demonstrate the competence, fitness, and
				  reputation considered necessary to serve the insurer in the position
				  held;
(12) whether the management
				  of an insurer fails to respond to an inquiry of the director relative to the
				  condition of the insurer or gives the director false or misleading information
				  concerning an inquiry;
(13) whether
				  the insurer has failed to meet financial and holding company filing
				  requirements in the absence of a reason satisfactory to the director;
(14) whether the management of an insurer
				  files a false or misleading financial statement, releases a false or misleading
				  financial statement to a lending institution or the public, makes a false or
				  misleading entry, or omits an entry in the books of the insurer in a material
				  amount or an amount that would place the insurer in a condition that might
				  constitute impairment as defined in
				  AS
				  21.97.900;
(15) 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;
(16) whether the insurer has experienced, or
				  will experience in the next 60 months, negative cash flow or liquidity
				  problems;
(17) 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;
(18) whether management persistently engages
				  in material under reserving that results in adverse development;
(19) 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;
(20) any other condition
				  that might constitute impairment as defined in
				  AS
				  21.97.900.