Washington Administrative Code › Title 284 - Insurance Commissioner, Office of the › Chapter 284-16 - Insurers › FINANCIALLY HAZARDOUS CONDITION › Section 284-16-310 - Standards

Current through Register Vol. 24-14, July 15, 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 its policyholders, creditors, or the
				  general public. The commissioner may consider:
(1) Adverse findings reported in financial
				condition reports, market conduct examination reports, audit reports, or
				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 in
				the last twelve month period or any shorter period of time, including but not
				limited to 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 in the opinion of the commissioner may affect
				the solvency of the insurer.
(8)
				Contingencies, 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 or 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
				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 or 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 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, or 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 factor
				determined by the commissioner to be hazardous to the insurer's policyholders,
				creditors or general public.
Statutory Authority:
					 RCW
					 48.02.060,
					 48.31.435,
					 48.44.050, and
					 48.46.200. 09-24-053 (Matter No. R
					 2009-06), §
											284-16-310, filed 11/24/09,
					 effective 12/25/09. Statutory Authority:
					 RCW
					 48.02.060. 92-19-039 (Order R 92-9), §
											284-16-310, filed 9/9/92,
					 effective 10/10/92.