Nevada Administrative Code › Chapter 680A - Authorization of Insurers and General Requirements › DETERMINATION OF HAZARDOUS FINANCIAL CONDITION › Section 680A.220 - Commissioner to determine if continued operation of insurer is hazardous; considerations for determination

Current through June 11, 2024
1. The Commissioner
			 will consider the following to determine whether the continued operation of an
			 insurer transacting the business of insurance in this State is hazardous to the
			 general public or the policyholders or creditors of the insurer:
(a) Adverse findings concerning the insurer's
			 financial condition or market conduct as reported or summarized in examination
			 reports, audit reports and actuarial opinions, reports, summaries or memoranda
			 which the Commissioner determines to be material.
(b) Financial solvency analysis tools and
			 information and reports concerning the insurer from the Insurance Regulatory
			 Information System of the National Association of Insurance
			 Commissioners.
(c) Whether the
			 insurer has made adequate provision in accordance with accepted actuarial
			 standards of practice for the anticipated cash flows required by policies,
			 contractual obligations and related expenses of the insurer. In making that
			 determination, the Commissioner will consider the assets held by the insurer
			 with respect to reserves and related actuarial items, including, without
			 limitation, the investment earnings on such assets and the financial
			 consideration anticipated to be received and retained under such policies and
			 contracts.
(d) If the insurer has
			 reinsurance, the ability of the 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, the
			 classes of insurance written by the insurer and the financial condition of the
			 assuming reinsurer.
(e) Whether the
			 insurer's operating loss in the most previous 12-month period, or such shorter
			 period as the Commissioner deems appropriate, is greater than 50 percent of the
			 insurer's surplus which is in excess of the statutory minimum surplus required
			 for that insurer pursuant to
			 NRS
			 680A.120.
(f) Whether the insurer's operating loss,
			 excluding net capital gain, in the most previous 12-month period, or such
			 shorter period as the Commissioner deems appropriate, is greater than 20
			 percent of the insurer's surplus which is in excess of the statutory minimum
			 surplus required for that insurer pursuant to
			 NRS
			 680A.120.
(g) Whether any entity within the system of
			 the insurance holding company, reinsurer or obligor of the insurer is
			 insolvent, threatened with insolvency or delinquent in payment of its monetary
			 or other obligations and, in the opinion of the Commissioner, such insolvency
			 or delinquency may affect the solvency of the insurer.
(h) Whether the contingent liabilities,
			 pledges or guaranties of the insurer, 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 person who directly or indirectly controls the insurer is
			 delinquent in the transmission to, or payment of, a net premium to the
			 insurer.
(j) The age and
			 collectibility of the accounts receivable of the insurer.
(k) Whether any person involved in the
			 management of the insurer fails to possess and demonstrate the competence,
			 fitness and reputation deemed necessary by the Commissioner to serve the
			 insurer in such a position.
(l)
			 Whether the management of the insurer has failed to respond to any inquiry
			 concerning the condition of the insurer, or has provided false or misleading
			 information in response to such an inquiry.
(m) Whether the insurer has failed to meet
			 financial and holding company filing requirements, unless the insurer is
			 excused from such filing requirements for a reason deemed sufficient by the
			 Commissioner.
(n) Whether the
			 management of the insurer has:
(1) Filed a
			 false or misleading sworn financial statement with the Division or the
			 insurance regulatory authority of any other state;
(2) Released a false or misleading statement
			 to a lending institution or the general public; or
(3) Made a false or misleading entry, or has
			 omitted an entry of a material amount, in the books of the insurer.
(o) 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.
(p) Whether the insurer has experienced, or
			 will likely experience in the foreseeable future, problems with its cash flow
			 or liquidity.
(q) Whether the
			 insurer has established reserves that do not comply with the minimum standards
			 prescribed by specific statute or regulation, statutory accounting practices,
			 sound actuarial principles and actuarial standards of practice.
(r) Whether the insurer persistently
			 maintains inadequate reserves that results in an adverse effect on the general
			 public or on the policyholders or creditors of the insurer.
(s) 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 ability of the insurer to meet its outstanding obligations as the
			 obligations mature.
(t) Any other
			 finding determined by the Commissioner to be hazardous to the general public or
			 to the policyholders or creditors of the insurer.