Louisiana Administrative Code › Title 37 - INSURANCE › Part XIII - Regulations › Chapter 13 - Regulation 43-Companies in Hazardous Financial Condition › Section XIII-1305 - Standards

Current through Register Vol. 50, No. 6, June 20, 2024
A. 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 their policyholders, creditors, or the general public. The commissioner may
				consider:
1. adverse findings reported in
				financial condition and market conduct examination reports, audit reports, and
				actuarial opinions, reports or summaries;
2. the National Association of Insurance
				Commissioners insurance regulatory information system and its other financial
				analysis solvency tools and reports;
3. the ratios of commission expense, general
				insurance expense, policy benefits, and reserve increases as to annual premium
				and net investment income which could lead to an impairment of capital and
				surplus;
4. the ability of an
				assuming reinsurer to perform and whether the insurer's 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;
5. whether the insurer's operating loss in
				the last 13-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 percent of the insurer's
				remaining surplus as regards policyholders in excess of the minimum
				required;
6. whether the insurer's
				operating loss in the last 12-month period or any shorter period of time,
				excluding net capital gains, is greater than 20 percent of the insurer's
				remaining surplus as regards policyholders in excess of the minimum
				required;
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 its monetary
				or other obligations, and which in the opinion of the commissioner may affect
				the solvency of the insurer;
8.
				contingent liabilities, pledges or guaranties which either individually or
				collectively involve a total amount which in the opinion of the commissioner
				may affect the solvency of the insurer;
9. whether any "person" in "control" of an
				insurer is delinquent in the transmitting to, or payment of, net premiums to
				the insurer;
10. the age and
				collectibility of receivables;
11.
				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;
12. 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;
13. 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;
14. 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; or
15. 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;
16. whether management persistently engages
				in material under reserving that results in adverse development;
17. 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;
18. 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 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;
19.
				whether the insurer has failed to meet financial and holding company filing
				requirements in the absence of a reason satisfactory to the
				commissioner;
20. any other finding
				determined by the commissioner to be hazardous to the insurer's policyholders,
				creditors, or the general public.