Mississippi Administrative Code › Title 19 - Department of Insurance › Part 1 - General › Chapter 39 - (2009-2) Define Standards and Commissioner's Authority for Companies Deemed to be in Hazardous Financial Condition › Rule 19-1-39.03 - Standards

Current through June 25, 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. Adverse 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 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;
D. 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;
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
				guaranties 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 an insurer is delinquent in the transmitting to, or
				payment of, net premiums to the insurer;
J. The age and collect ability 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 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; 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;
N. 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;
O. Whether the insurer has experienced or
				will experience in the foreseeable future cash flow or liquidity
				problems;
P. 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;
Q. Whether management persistently engages in
				material under reserving that results in adverse development;
R. 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; and,
S. Any other finding
				determined by the Commissioner to be hazardous to the insurer's policyholders,
				creditors or general public.
Miss. Code Ann. §
										83-5-17,
				  et al. (Rev. 2011)