Iowa Administrative Code › Agency 191 - Insurance Division › Regulated Industries › Chapter 110 - Standards and Commissioner's Authority for Companies Deemed to Be in Hazardous Financial Condition › Rule 191-110.4 - Standards

Current through Register Vol. 47, No. 3, July 24, 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 Iowa
				  might be deemed to be hazardous to its policyholders, creditors, or the general
				  public. The commissioner may consider:
Adverse findings reported in financial condition and market
				  conduct examination reports, audit reports, and actuarial opinions, reports, or
				  summaries.
The National Association of Insurance Commissioners'
				  Insurance Regulatory Information System and its other financial analysis
				  solvency tools and reports.
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.
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
Whether the insurer's operating loss in the last 12-month
				  period or any shorter period of time, including but not limited to net capital
				  gain or loss, change in nonadmitted 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.
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.
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 which,
				  in the opinion of the commissioner, may affect the solvency of the
				  insurer
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
Whether any "controlling person" of an insurer is delinquent
				  in the transmitting or payment of net premiums to the insurer
The age and collectability of receivables.
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.
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.
Whether the insurer has failed to meet financial and holding
				  company filing requirements in the absence of a reason satisfactory to the
				  commissioner.
Whether management of an insurer either has filed any false
				  or misleading sworn financial statement, or has released a 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
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
Whether the insurer has experienced, or will experience in
				  the foreseeable future, cash flow or liquidity problems.
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.
Whether management persistently engages in material
				  underreserving that results in adverse development.
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 ensure the
				  insurer's ability to meet its outstanding obligations as they mature.
Whether the insurer's underwriting expenses are in excess of
				  70 percent of net premiums for three years, excluding companies that write more
				  than 75 percent of gross premium in surety. Companies licensed under Iowa Code
				  chapters 508 and 512B are excluded from this subrule.
Any other finding determined by the commissioner to be
				  hazardous to the insurer's policyholders, creditors, or the general
				  public.