40-3012. Duties of commissioner and board for the detection and prevention of insurer impairments; reports and recommendations of board to commissioner.
40-3012
40-3012. Duties of commissioner and board for the detection andprevention of insurer impairments; reports and recommendations of board to commissioner.To aid in the detection and prevention of insurer impairments:(a) It shall be the duty of the commissioner to:
(1) Notify the commissioners of all other states, territories ofthe United States and the District of Columbia when the commissioner takesany of the following actions against a member insurer:
(A) Revocation of license;
(B) suspension of license; or
(C) makes any formal order that such company restricts its premiumwriting, obtain additional contributions to surplus, withdraw from thestate, reinsure all or any part of its business, or increase capital,surplus or any other account for the security of policyholders or creditors.
Such notice shall be mailed to all commissioners within 30 daysfollowing the action taken or the date on which such action occurs;
(2) report to the board of directors when the commissioner hastaken any of the actions set forth in paragraph (1) of this subsection orhas received a report from any other commissioner indicating that any suchaction has been taken in another state. Such report to the board ofdirectors shall contain all significant details of the action taken or thereport received from another commissioner;
(3) report to the board of directors when the commissioner hasreasonable cause to believe from any examination, whether completed or inprocess, of any member company that such company may be an impaired orinsolvent insurer. Such report and information shall be kept confidentialby the board of directors until such time as made public by thecommissioner or other lawful authority;
(4) furnish to the board of directors the national association ofinsurance commissioners' insurance regulatory information system ratios andlistings of companies not included in the ratios developed by the nationalassociation of insurance commissioners, and the board may use theinformation contained therein in carrying out its duties andresponsibilities under this section. Such report and the informationcontained therein shall be kept confidential by the board of directorsuntil such time as made public by the commissioner or other lawful authority.
(b) The commissioner may seek the advice and recommendations of theboard of directors concerning any matter affecting the commissioner'sduties and responsibilities regarding the financial condition of memberinsurers and companies seeking admission to transact insurance business in this state.
(c) Theboard of directors, upon majority vote, may make reports andrecommendations to the commissioner upon any matter germane to thesolvency, liquidation, rehabilitation or conservation of any memberinsurer or germane to the solvency of any company seeking to do anyinsurance business in this state. Such reports and recommendations shallnot be considered publicdocuments.
(d) It shall be the duty of the board of directors, upon majorityvote, to notify the commissioner of any information indicating any memberinsurer may be an impaired or insolvent insurer.
(e) The board of directors, upon majority vote, may request that thecommissioner order an examination of any member insurer which the board ingood faith believes may be an impaired or insolvent insurer.The examination may be conducted as a national association ofinsurance commissioners' examination or may be conducted by such persons asthe commissioner designates. The cost of such examination shall be paid bythe association and the examination report shall be treated as are otherexamination reports. In no event shall such examination report be releasedto the board of directors prior to its release to the public, but thisshall not preclude the commissioner from complying with subsection (a).
The commissioner shall notify the board of directors when theexamination is completed. The request for an examination shall be kept onfile by the commissioner but it shall not be open to public inspection priorto the release of the examination report to the public.
(f) The board of directors, upon majority vote,may make recommendationsto the commissioner for the detection and prevention of insurer insolvencies.
(g) The board of directors, at the conclusion of any insurer insolvencyin which the associationwas obligated to pay covered claims, shall prepare a report to thecommissioner containing such information as it may have in its possessionbearing on the history and causes of such insolvency. The board shallcooperate with the board of directors of guaranty associations in otherstates in preparing a report on the history and causes of insolvency of aparticular insurer and may adopt, by reference, any report prepared by suchother associations.
History: L. 1972, ch. 190, § 12;L. 1986, ch. 180, § 10; July 1.