Oklahoma Administrative Code › Title 365 - Insurance Department › Chapter 25 - Other Licensees › Subchapter 7 - Companies › Part 7 - COMPANIES IN HAZARDOUS FINANCIAL CONDITION › Section 365:25-7-42 - Standards for determining hazardous financial condition

Current
				  through Vol. 41, No. 20, July 1, 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, 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) 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;
(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 cash flow and the classes of business written as well as the
				  financial condition of the assuming reinsurer;
(5) Whether the insurer's operating loss for
				  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;
(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 (20%) 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 obligations, and which in the opinion of the commissioner 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 the 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 cash flow and/or liquidity
				  problems.
(17) 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;
(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 general public.
Added at 9 Ok Reg
					 2533, eff 6-26-92; Amended at 25 Ok Reg 1660, eff 7-14-08; Amended at 26 Ok Reg
					 1654, eff 7-14-09