North Dakota Administrative Code › Title 45 - Insurance, Commissioner of › Article 45-03 - Regulation of Insurance Companies › Chapter 45-03-13 - Regulation of and Standards for Companies Deemed to be in Hazardous Financial Condition › Section 45-03-13-01 - Standards

Current through Supplement No. 393, July, 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 the policyholders, creditors, or the
				  general public. The commissioner may consider:
1. Adverse findings reported in financial
				condition and market conduct examination reports, audit reports, 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. Whether the insurer has made adequate
				provision according to presently accepted actuarial standards of practice for
				the anticipated cashflows 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 the reserves and related actuarial items, including the
				investment earnings on the assets, and considerations anticipated to be
				received and retained under the policies and contracts.
4. 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 cashflow and the classes of business written as well as the financial
				condition of the assuming reinsurer.
5. The insurer's operating loss in the last
				twelve-month period or any shorter period of time, including, net capital gain
				or loss, change in nonadmitted assets, and cash dividends paid to shareholders,
				is greater than fifty percent of such insurer's remaining surplus as regards
				policyholders in excess of the minimum required.
6. 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 of the insurer's remaining
				surplus as regards policyholders in excess of the minimum required.
7. 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
				obligation and which may affect the solvency of the insurer.
8. 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.
9. Whether any
				"controlling person" of an insurer is delinquent in the transmitting to, or
				payment of, net premiums to such insurer.
10. The age and collectibility of
				receivables.
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.
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.
13. Whether the insurer has failed to meet
				financial and holding company filing requirements in the absence of a reason
				satisfactory to the commissioner.
14. 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.
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.
16. Whether the insurer has experienced or
				will experience in the foreseeable future cashflow or liquidity problems, or
				both.
17. Whether management has
				established reserves that do not comply with minimum standards established by
				state insurance laws, rules, statutory accounting standards, sound actuarial
				principles, and standards of practice.
18. Whether management persistently engages
				in material under reserving that results in adverse development.
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.
20. Any other finding
				determined by the commissioner to be hazardous to the insurer's policyholders,
				creditors, or the general public.
General Authority: NDCC 28-32
Law Implemented: NDCC 26.1-01-03.1, 26.1-05-04, 26.1-05-32,
					 26.1-06.1-01 (3)(a), 26.1-06.1-11