Code of Vermont Rules › Agency 21 - DEPARTMENT OF FINANCIAL REGULATION › Sub-Agency 020 - INSURANCE DIVISION › Chapter 040 - REGULATION 97-2: RISK BASED CAPITAL (RBC) FOR PROPERTY AND CASUALTY INSURERS › Section 21 020 040 - REGULATION 97-2: RISK BASED CAPITAL (RBC) FOR PROPERTY AND CASUALTY INSURERS

Current through
				June, 2024
Section 1
				Purpose
The purposes of this regulation are to require and set forth
				  the rules for the calculation and filing of Risk Based Capital (RBC) reports
				  and establish related procedural requirements of RBC for certain property and
				  casualty insurers. The related procedural requirements of the regulation do not
				  apply to domestic risk retention groups. This treatment for domestic risk
				  retention groups is not intended to alter the commissioner's authority with
				  respect to domestic risk retention groups.
Section 2 Authority
This regulation is issued pursuant to the authority vested in
				  the Commissioner of Banking, Insurance, Securities and Health Care
				  Administration by Title 8 V.S.A. Sections 75,
				  3304,
				  3309,
				  3561,
				  3569
				  and Chapter 145.
Section 3
				Definitions
As used in this regulation, these terms shall have the
				  following meanings:
A. "Adjusted RBC
				Report" means an RBC report which has been adjusted by the commissioner in
				accordance with Section 4D.
B.
				"Commissioner" means the Commissioner of the Department of Banking, Insurance
				Securities and Health Care Administration.
C. "Corrective order" means an order issued
				by the commissioner specifying corrective actions which the commissioner has
				determined are required.
D.
				"Domestic insurer" means any property and casualty insurance company organized
				in this state under Subchapter 1 of Chapter 101 of 8 V.S.A., but shall not
				include life and/or health insurers, monoline mortgage guaranty insurers,
				financial guaranty insurers, and title insurers.
E. "Foreign insurer" means any insurance
				company which is licensed to do business in this State under
				8 V.S.A. §
											3361 and is not domiciled in this
				State.
F. "NAIC" means the National
				Association of Insurance Commissioners.
G. "RBC instructions" means the RBC Report
				including risk-based capital instructions adopted by the NAIC, as such RBC
				Instructions may be amended by the NAIC from time to time in accordance with
				the procedures adopted by the NAIC or as modified and approved by the
				commissioner.
H. "RBC Level" means
				an insurer's Company Action Level RBC, Regulatory Action Level RBC, Authorized
				Control Level RBC, or Mandatory Control Level RBC where:
(1) "Company Action Level RBC" means, with
				respect to any insurer, the product of 2.0 and its Authorized Control Level
				RBC;
(2) "Regulatory Action Level
				RBC" means the product of 1.5 and its Authorized Control Level RBC;
(3) "Authorized Control Level RBC" means the
				number determined under the risk-based capital formula in accordance with the
				RBC Instructions;
(4) "Mandatory
				Control Level RBC" means the product of .70 and the Authorized Control Level
				RBC.
I. "RBC Plan" means
				a comprehensive financial plan containing the elements specified in Sections 5B
				through 5F. If the commissioner rejects the RBC Plan, and it is revised by the
				insurer, with or without the commissioner's recommendation, the plan shall be
				called the "Revised RBC Plan."
J.
				"RBC Report" means the report required in Section
				4.
K. "Total adjusted capital" means the sum of:
(1) An insurer's statutory capital and
				surplus reported in the insurer's annual statement under
				8 V.S.A. §
												3561; and
(2) Such other items, if any, as the RBC
				instructions may provide.