RS 22:634 Company action level event
§634. Company-action level event
A. A "company-action level event" means any of the following:
(1) The filing of a risk-based capital report by a health organization that indicates that the health organization's total adjusted capital is greater than or equal to its regulatory action level risk-based capital but less than its company-action level risk-based capital.
(2) Notification by the commissioner to the health organization of an adjusted risk-based capital report that indicates an event in Paragraph (1) of this Subsection, provided the health organization does not challenge the adjusted risk-based capital report under R.S. 22:638.
(3) If pursuant to R.S. 22:638, a health organization challenges an adjusted risk-based capital report that indicates the event in Paragraph (1) of this Subsection, the notification by the commissioner to the health organization that the commissioner has rejected the health organization's challenge.
B. In the event of a company-action level event, the health organization shall prepare and submit to the commissioner a risk-based capital plan that shall do the following:
(1) Identify the conditions that contribute to the company-action level event.
(2) Contain proposals of corrective actions that the health organization intends to take and that would be expected to result in the elimination of the company-action level event.
(3) Provide projections of the health organization's financial results in the current year and at least the two succeeding years, both in the absence of proposed corrective actions and giving effect to the proposed corrective actions, including projections of statutory balance sheets, operating income, net income, capital and surplus, and risk-based capital levels. The projections for both new and renewal business might include separate projections for each major line of business and separately identify each significant income, expense, and benefit component.
(4) Identify the key assumptions impacting the health organization's projections and the sensitivity of the projections to the assumptions.
(5) Identify the quality of and problems associated with the health organization's business, including but not limited to its assets, anticipated business growth and associated surplus strain, extraordinary exposure to risk, mix of business, and use of reinsurance, if any, in each case.
C. The risk-based capital plan shall be submitted either:
(1) Within forty-five days of the company-action level event.
(2) If the health organization challenges an adjusted risk-based capital report pursuant to R.S. 22:638, within forty-five days after notification to the health organization that the commissioner has rejected the health organization's challenge.
D. Within sixty days after the submission by a health organization of a risk-based capital plan to the commissioner, the commissioner shall notify the health organization whether the risk-based capital plan shall be implemented or is, in the judgment of the commissioner, unsatisfactory. If the commissioner determines the risk-based capital plan is unsatisfactory, the notification to the health organization shall set forth the reasons for the determination and may set forth proposed revisions which will render the risk-based capital plan satisfactory, in the judgment of the commissioner. Upon notification from the commissioner, the health organization shall prepare a revised risk-based capital plan, which may incorporate by reference any revisions proposed by the commissioner, and shall submit the revised risk-based capital plan to the commissioner either:
(1) Within forty-five days after the notification from the commissioner.
(2) If the health organization challenges the notification from the commissioner pursuant to R.S. 22:638, within forty-five days after a notification to the health organization that the commissioner has rejected the health organization's challenge.
E. In the event of a notification by the commissioner to a health organization that the health organization's risk-based capital plan or revised risk-based capital plan is unsatisfactory, the commissioner may at the commissioner's discretion, subject to the health organization's right to a hearing under R.S. 22:638, specify in the notification that the notification constitutes a regulatory action level event.
Acts 2003, No. 1106, §1, eff. Dec. 31, 2003; Redesignated from R.S. 22:2036.4 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2009, No. 317, §1; Acts 2009, No. 503, §1.
NOTE: Former R.S. 22:634 redesignated as R.S. 22:873 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009.