Code of Massachusetts Regulations › 211 CMR - DIVISION OF INSURANCE › Title 211 CMR 150.00 - Standards And Commissioner's Authority For Placing Companies Deemed To Be In Hazardous Financial Condition Under Administrative Supervision › Section 150.03 - Standards

Current through Register 1525, July 5, 2024
211 CMR 150.03(1) through (17), 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 or the general
				public. The Commissioner may consider:
(1) materially 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 to annual premium and
			 net investment income which could lead to an impairment of capital and
			 surplus;
(4) the insurer's asset
			 portfolio when viewed in light of current economic conditions is not of
			 sufficient value, liquidity, or diversity to assure the company's ability to
			 meet its outstanding obligations as they mature;
(5) 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;
(6) 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;
(7) 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 non-admitted assets, and cash
			 dividends paid to shareholders, is greater than 50% of the insurer's remaining
			 surplus as regards policyholders in excess of the minimum required;
(8) 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% of the insurer's remaining surplus as regards
			 policyholders in excess of the minimum required;
(9) 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 including but not limited to 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;
(10) contingent
			 liabilities, pledges or guaranties which either individually or collectively
			 involve a total amount which in the opinion of the Commissioner may materially
			 adversely affect the solvency of the insurer;
(11) whether any "controlling person" of an
			 insurer is delinquent in the transmitting to, or payment of, net premiums to
			 the insurer;
(12) whether the age
			 and collectability of receivables involve a total amount which the Commissioner
			 determines adversely affects the solvency of the insurer;
(13) 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;
(14) 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 including but not limited to whether the insurer has
			 failed to meet financial and holding company filing requirements in the absence
			 of a reason satisfactory to the Commissioner;
(15) whether management of an insurer either
			 has knowingly filed any false or misleading sworn financial statement, or
			 knowingly has released a false or misleading financial statement to lending
			 institutions or to the general public, or knowingly has made a false or
			 misleading entry, or knowingly has omitted an entry of material amount in the
			 books of the insurer;
(16) 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; and
(17) whether the
			 insurer has experienced or will experience in the foreseeable future cash flow
			 or liquidity problems including but not limited to 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 or whether management
			 persistently engages in material under reserving that results in adverse
			 development.