38.2-5502 - RBC Reports.
§ 38.2-5502. RBC Reports.
A. Every domestic licensee shall, on or prior to each March 1, the "filingdate," prepare and submit to the Commission a report of its RBC Levels as ofthe end of the calendar year just ended, in a form and containing suchinformation as is required by the RBC Instructions. In addition, everydomestic licensee shall file its RBC Report:
1. With the NAIC in accordance with the RBC Instructions; and
2. With the insurance commissioner in any state in which the licensee isauthorized to do business, if the insurance commissioner has notified thelicensee of its request in writing, in which case, the licensee shall fileits RBC Report not later than the later of:
a. Fifteen days from the receipt of notice to file its RBC Report with thatstate; or
b. The filing date.
B. A life and health insurer's RBC shall be determined in accordance with theformula set forth in the RBC Instructions. The formula shall take intoaccount, and may adjust for the covariance between, the following risks:
1. The risk with respect to the insurer's assets;
2. The risk of adverse insurance experience with respect to the insurer'sliabilities and obligations;
3. The interest rate risk with respect to the insurer's business; and
4. All other business risks and such other relevant risks as are set forth inthe RBC Instructions.
Each risk shall be determined in each case by applying the factors in themanner set forth in the RBC Instructions.
C. A property and casualty insurer's RBC shall be determined in accordancewith the formula set forth in the RBC Instructions. The formula shall takeinto account, and may adjust for the covariance between, the following risks:
1. Asset risk;
2. Credit risk;
3. Underwriting risk; and
4. All other business risks and such other relevant risks as are set forth inthe RBC Instructions.
Each risk shall be determined in each case by applying the factors in themanner set forth in the RBC Instructions.
D. A health organization's RBC shall be determined in accordance with theformula set forth in the RBC Instructions. The formula shall take intoaccount, and may adjust for the covariance between, the following risks:
1. Asset risk;
2. Credit risk;
3. Underwriting risk; and
4. All other business risks and such other relevant risks as are set forth inthe RBC Instructions.
Each risk shall be determined in each case by applying the factors in themanner set forth in the RBC Instructions.
E. An excess of capital over the amount produced by the risk-based capitalrequirements contained in this Act and the formulas, schedules andinstructions referred to in this Act is desirable in the business ofinsurance. Accordingly, licensees should seek to maintain capital above theRBC levels required by this Act. Additional capital is used and useful in theinsurance business and helps to secure a licensee against various risksinherent in, or affecting, the business of insurance and not accounted for oronly partially measured by the risk-based capital requirements contained inthis Act.
F. If a domestic licensee files an RBC Report which in the judgment of theCommission is inaccurate, then the Commission shall adjust the RBC Report tocorrect the inaccuracy and shall notify the licensee of the adjustment. Thenotice shall contain a statement of the reason for the adjustment. An RBCReport as so adjusted is referred to as an "Adjusted RBC Report."
(1995, c. 789; 2000, c. 47.)