Nebraska Administrative Code › Topic - INSURANCE, DEPARTMENT OF › Title 210 - NEBRASKA DEPARTMENT OF INSURANCE › Chapter 55 - RULE TO DEFINE STANDARDS AND DIRECTOR'S AUTHORITY FOR COMPANIES DEEMED TO BE IN HAZARDOUS FINANCIAL CONDITION › Section 210-55-004 - Standards

Current through June 17, 2024
The following standards, either singly or a combination of
				  two or more, may be considered by the Director 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 Director may consider:
004.01 Adverse findings reported in financial
				condition and market conduct examination reports, audit reports, and actuarial
				opinions, reports or summaries;
004.02 The National Association of Insurance
				Commissioners Insurance Regulatory Information System and its other financial
				analysis solvency tools and reports;
004.03 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;
004.04 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;
004.05 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;
004.06 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;
004.07 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 Director may
				affect the solvency of the insurer;
004.08 Contingent liabilities, pledges or
				guarantees which either individually or collectively involve a total amount
				which in the opinion of the Director may affect the solvency of the
				insurer;
004.09 Whether any
				"controlling person" of an insurer is delinquent in the transmitting to, or
				payment of, net premiums to such insurer;
004.10 The age and collectability of
				receivables;
004.11 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;
004.12 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;
004.13 Whether the insurer has failed to meet
				financial and holding company filing requirements in the absence of a reason
				satisfactory to the Director;
004.14 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;
004.15 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;
004.16 Whether the insurer has experienced or
				will experience in the foreseeable future cash flow or liquidity
				problems;
004.17 Whether management
				has established reserves that do not comply with minimum standards established
				by state insurance laws, rules or regulations, statutory accounting standards,
				sound actuarial principles and standards of practice;
004.18 Whether management persistently
				engages in material under reserving that results in adverse
				development;
004.19 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; or
004.20 Any other finding determined by the
				Director to be hazardous to the insurer's policyholders, creditors or general
				public.