(a) Every domestic insurer shall, on or prior to each March 15 (the “filing date”), prepare and submit to the commissioner a report of its RBC Levels as of the end of the calendar year just ended, in a form and containing such information as is required by the RBC Instructions. In addition, every domestic insurer shall file its RBC Report:

(1) With the NAIC in accordance with the RBC Instructions.

Terms Used In California Insurance Code 739.2

  • Adjusted RBC Report: means a Risk-Based Capital (RBC) report that has been adjusted by the commissioner in accordance with subdivision (b) or (c) of Section 739. See California Insurance Code 739
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Commissioner: means the Insurance Commissioner of this State. See California Insurance Code 20
  • Domestic: means organized under the laws of this State, whether or not admitted. See California Insurance Code 26
  • Domestic insurer: means any life or health insurer or property and casualty insurer organized in this state. See California Insurance Code 739
  • 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 any admitted insurer issuing insurance subject to Part 2 (commencing with Section 10110) of Division 2, or a licensed property and casualty insurer writing only disability insurance. See California Insurance Code 739
  • NAIC: means the National Association of Insurance Commissioners. See California Insurance Code 739
  • Property and casualty insurer: means any admitted insurer writing insurance as described in Section 102, 103, 105, 107, 108, 109, 110, 111, 112, 113, 114, 115, 116, 118, 119. See California Insurance Code 739
  • RBC Instructions: means the RBC Report, including risk-based capital instructions adopted by the NAIC, and as the RBC Instructions may be amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC. See California Insurance Code 739
  • RBC Report: means the report required in Section 739. See California Insurance Code 739
  • State: means the State of California, unless applied to the different parts of the United States. See California Insurance Code 28

(2) With the insurance commissioner in any state in which the insurer is authorized to do business, if the insurance commissioner has notified the insurer of its request in writing, in which case the insurer shall file its RBC Report not later than the later of:

(A) Fifteen days from the receipt of notice to file its RBC Report with that state.

(B) The filing date.

(b) A life or health insurer‘s RBC shall be determined in accordance with the formula set forth in the RBC Instructions. The formula shall take into account, and may adjust for the covariance between, the following:

(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 such other relevant risks as are set forth in the RBC Instructions.

In each case, these shall be determined by applying the factors in the manner set forth in the RBC Instructions.

(c) A property and casualty insurer‘s RBC shall be determined in accordance with the formula set forth in the RBC Instructions. The formula shall take into account and may adjust for the covariance between the following:

(1) Asset risk.

(2) Credit risk.

(3) Underwriting risk.

(4) All other business risks and any other relevant risks as are set forth in the RBC Instructions.

(d) An excess of capital over the amount produced by the risk-based capital requirements contained in this article and the formulas, schedules, and instructions referenced in this article is desirable in the business of insurance. Accordingly, insurers shall seek to maintain capital above the RBC levels required by this article. Additional capital is used and useful in the insurance business and helps to secure an insurer against various risks inherent in, or affecting, the business of insurance and not accounted for or only partially measured by the risk-based capital requirements contained in this article.

(e) If a domestic insurer files an RBC Report that in the judgment of the commissioner is inaccurate, then the commissioner shall adjust the RBC Report to correct the inaccuracy and shall notify the insurer of the adjustment. The notice shall contain a statement of the reason for the adjustment. An RBC Report as so adjusted is referred to as an Adjusted RBC Report.

(Added by Stats. 1996, Ch. 708, Sec. 1. Effective January 1, 1997.)

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