38.2-5504 - Regulatory Action Level Event.
§ 38.2-5504. Regulatory Action Level Event.
A. "Regulatory Action Level Event" means, with respect to any licensee, anyof the following events:
1. The filing of an RBC Report by the licensee which indicates that thelicensee's Total Adjusted Capital is greater than or equal to its AuthorizedControl Level RBC but less than its Regulatory Action Level RBC;
2. The notification by the Commission to a licensee of an Adjusted RBC Reportthat indicates the event in subdivision A 1, provided the licensee does notchallenge the Adjusted RBC Report under § 38.2-5507;
3. If, pursuant to § 38.2-5507, the licensee challenges an Adjusted RBCReport that indicates the event in subdivision A 1, the notification by theCommission to the licensee that the Commission has, after a hearing, rejectedthe licensee's challenge;
4. The failure of the licensee to file an RBC Report by the filing date,unless the licensee has provided an explanation for such failure which issatisfactory to the Commission and has cured the failure within ten daysafter the filing date;
5. The failure of the licensee to submit an RBC Plan to the Commission withinthe time period set forth in subsection C of § 38.2-5503;
6. Notification by the Commission to the licensee that:
a. The RBC Plan or Revised RBC Plan submitted by the licensee is, in thejudgment of the Commission, unsatisfactory; and
b. Such notification constitutes a Regulatory Action Level Event with respectto the licensee, provided the licensee has not challenged the determinationunder § 38.2-5507;
7. If, pursuant to § 38.2-5507, the licensee challenges a determination bythe Commission under subdivision A 6, the notification by the Commission tothe licensee that the Commission has, after a hearing, rejected suchchallenge;
8. Notification by the Commission to the licensee that the licensee hasfailed to adhere to its RBC Plan or Revised RBC Plan, but only if suchfailure has a substantial adverse effect on the ability of the licensee toeliminate the Company Action Level Event in accordance with its RBC Plan orRevised RBC Plan and the Commission has so stated in the notification,provided the licensee has not challenged the determination under § 38.2-5507;or
9. If, pursuant to § 38.2-5507, the licensee challenges a determination bythe Commission under subdivision A 8, the notification by the Commission tothe licensee that the Commission has, after a hearing, rejected the challenge.
B. In the event of a Regulatory Action Level Event, the Commission shall:
1. Require the licensee to prepare and submit an RBC Plan or, if applicable,a Revised RBC Plan;
2. Perform such examination or analysis as the Commission deems necessary ofthe assets, liabilities and operations of the licensee including a review ofits RBC Plan or Revised RBC Plan; and
3. Subsequent to the examination or analysis, issue a corrective orderspecifying such corrective actions as the Commission shall determine arerequired. In determining corrective actions, the Commission may take intoaccount such factors as are deemed relevant with respect to the licenseebased upon the Commission's examination or analysis of the assets,liabilities and operations of the licensee, including, but not limited to,the results of any sensitivity tests undertaken pursuant to the RBCInstructions.
C. The RBC Plan or Revised RBC Plan shall be submitted:
1. Within forty-five days after the occurrence of the Regulatory Action LevelEvent;
2. If the licensee challenges an Adjusted RBC Report pursuant to § 38.2-5507and the challenge is not frivolous in the judgment of the Commission, withinforty-five days after the notification to the licensee that the Commissionhas, after a hearing, rejected the licensee's challenge; or
3. If the licensee challenges a Revised RBC Plan under § 38.2-5507 and thechallenge is not frivolous in the judgment of the Commission, withinforty-five days after notification to the licensee that the Commission has,after a hearing, rejected the licensee's challenge.
D. The Commission may retain actuaries and investment experts and otherconsultants as may be necessary in the judgment of the Commission to reviewthe licensee's RBC Plan or Revised RBC Plan, examine or analyze the assets,liabilities and operations, including contractual relationships, of thelicensee and formulate the corrective order with respect to the licensee. Thefees, costs and expenses relating to consultants shall be borne by theaffected licensee or such other party as directed by the Commission.
(1995, c. 789; 2000, c. 47.)