Compilation of Rules and Regulations of the State of Georgia › Department 120 - OFFICE OF COMMISSIONER OF INSURANCE, SAFETY FIRE COMMISSIONER AND INDUSTRIAL LOAN COMMISSIONER › Chapter 120-2 - RULES OF COMMISSIONER OF INSURANCE › Subject 120-2-54 - REGULATION TO DEFINE STANDARDS AND COMMISSIONER'S AUTHORITY FOR COMPANIES DEEMED TO BE IN HAZARDOUS FINANCIAL CONDITION › Rule 120-2-54-.03 - Standards

Current through Rules and Regulations filed through June 27, 2024
The following standards, either singly or a combination of
				  two or more, may be considered by the Commissioner to determine whether the
				  continued operation of any insurer transacting an insurance business in this
				  State might be deemed to be hazardous to its policyholders, creditors, or the
				  general public. The Commissioner may consider:
(a) Averse findings reported in financial
				condition and market conduct examination reports, audit reports, and actuarial
				opinions, reports or summaries;
(b)
				The National Association of Insurance Commissioners Insurance Regulatory
				Information System and its other financial analysis solvency tools and
				reports;
(c) Whether the insurer
				has made adequate provision, according to presently accepted actuarial
				standards of practice, for the anticipated cash flows required by the
				contractual obligations and related expense 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;
(d) The ability of an assuming reinsurer to
				perform and whether the insurers reinsurance program provides sufficient
				protection for the insurer'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;
(e) Whether 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 fifty percent (50%) of the
				insurer's remaining surplus as regards policyholders in excess of the minimum
				required;
(f) Whether the insurer's
				operating loss in the last twelve-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
				required;
(g) 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 Commissioner may affect
				the solvency of the insurer;
(h)
				Contingent liabilities, pledges or guarantees which either individually or
				collectively involve a total amount which in the opinion of the Commissioner
				may affect the solvency of the insurer;
(i) Whether any controlling person of any
				insurer is delinquent in the transmitting to, or payment of, net premiums to
				the insurer;
(j) The age and
				collectability of receivables;
(k)
				Whether the management of an insurer, including officers, directors, or any
				other person who directly or indirectly controls the operation of the insurer,
				fails to possess and demonstrate the competence, fitness, and reputation deemed
				necessary to serve the insurer in such position;
(l) Whether the 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;
(m) Whether the insurer has failed to meet
				financial and holding company filing requirements in the absence of a reason
				satisfactory to the Commissioner;
(n) Whether the 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 a material amount in the books of the insurer;
(o) 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;
(p) Whether the insurer has experienced or
				will experience in the foreseeable future cash flow or liquidity
				problems;
(q) 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;
(r) Whether management persistently engages
				in material under-reserving that results in adverse development;
(s) Whether transactions among affiliates,
				subsidiaries, or controlling persons for which the insurer receives assets or
				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;
(t) Any other
				finding determined by the Commissioner to be hazardous to the insurer's
				policyholders, creditors, or general public.
O.C.G.A. Secs.
				  33-2-9,
				  33-2-11,
				  33-2-12,
				  33-2-13,
				  33-2-14,
				  33-3-17,
				  33-3-18,
				  33-3-19,
				  33-13-6,
				  33-13-18.