A. On or before the later of March 1 or its annual statement filing due date, each domestic insurer shall annually prepare and submit to the director a report of the insurer’s RBC levels as of the end of the previous calendar year.  The RBC report shall be in a form and shall contain that information that is required by the RBC instructions.  Each domestic insurer shall file its RBC report with both:

Terms Used In Arizona Laws 20-488.01

  • Adjusted RBC report: means a report that has been adjusted by the director in accordance with section 20-488. See Arizona Laws 20-488
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Domestic insurer: means a life or health insurer, or both, a property or casualty insurer, or both, or a health organization that is authorized to transact insurance business in this state and that is organized in this state. See Arizona Laws 20-488
  • Health organization: means a hospital service corporation, medical service corporation, dental service corporation or optometric service corporation or a hospital, medical, dental and optometric service corporation that has a certificate of authority pursuant to chapter 4, article 3 of this title, a prepaid dental plan organization that has a certificate of authority pursuant to chapter 4, article 7 of this title or a health care services organization that has a certificate of authority pursuant to chapter 4, article 9 of this title. See Arizona Laws 20-488
  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • Life or health insurer: means an insurer authorized to transact life insurance, annuities or accident and health insurance in this state, a fraternal benefit society or an authorized property or casualty insurer writing only accident and health insurance, but does not include a health organization. See Arizona Laws 20-488
  • Property: includes both real and personal property. See Arizona Laws 1-215
  • Property or casualty insurer: means an insurer licensed to transact insurance as described in section 20-256 or 20-252, respectively, but does not include monoline mortgage guaranty insurers, financial guaranty insurers and title insurers. See Arizona Laws 20-488
  • RBC: means risk-based capital. See Arizona Laws 20-488
  • RBC instructions: means the RBC report, including risk-based capital instructions adopted by the national association of insurance commissioners. See Arizona Laws 20-488
  • RBC report: means the report required under section 20-488. See Arizona Laws 20-488

1. The national association of insurance commissioners in accordance with the RBC instructions.

2. The insurance director in any state in which the insurer is authorized to transact insurance business on the written request of the insurance director.  The insurer shall file its RBC report not later than fifteen days after receiving notice to file its RBC report with that state or the filing date specified in this subsection, whichever is later.

B. A life or health insurer‘s RBC shall be determined according to the formula set forth in the RBC instructions.  The formula shall take into account and may adjust for the covariance between the following risks that are determined in each case by applying the factors in the manner set forth in the RBC instructions:

1. The risk with respect to the insurer’s assets.

2. The risk of adverse insurance experience with respect to the insurer’s liabilities and obligations.

3. The interest rate risk with respect to the insurer’s business.

4. All other business risks and any other relevant risks that are set forth in the RBC instructions.

C. A property or casualty insurer‘s RBC shall be determined according to the formula set forth in the RBC instructions. The formula shall take into account and may adjust for the covariance between the following risks that are determined in each case by applying the factors in the manner set forth in the RBC instructions:

1. Asset risk.

2. Credit risk.

3. Underwriting risk.

4. All other business risks and any other relevant risks that are set forth in the RBC instructions.

D. A health organization‘s RBC shall be determined according to the formula set forth in the RBC instructions.  The formula shall take into account and may adjust for the covariance between the following risks that are determined in each case by applying the factors in the manner set forth in the RBC instructions:

1. Asset risk.

2. Credit risk.

3. Underwriting risk.

4. All other business risks and any other relevant risks that are set forth in the RBC instructions.

E. If the director determines that an RBC report filed by a domestic insurer is inaccurate, the director shall adjust the RBC report to correct the inaccuracy and shall notify the insurer of the adjustment.  The notice shall state the reason for the adjustment.  An RBC report that has been adjusted shall be referred to as an adjusted RBC report.

F. Insurers shall maintain capital above the RBC levels required by this article.