(a) Every domestic insurer, on or before each March 1, the filing date, shall prepare and submit to the commissioner a report of its risk-based capital levels as of the end of the calendar year just ended, in a form and containing any information that is required by the risk-based capital instructions. In addition, every domestic insurer shall file its risk-based capital report:
Terms Used In Hawaii Revised Statutes 431:3-402
Adjusted risk-based capital report: means a risk-based capital report that has been adjusted by the commissioner in accordance with section 431:3-402(f). See Hawaii Revised Statutes 431:3-401
Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
Benefit society: means a mutual benefit society registered under section 432:1-301 or a fraternal benefit society organized under § 432:2-301. See Hawaii Revised Statutes 431:3-401
Domestic insurer: includes an insurer, a benefit society or a health maintenance organization. See Hawaii Revised Statutes 431:3-401
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 accident and health or sickness insurer: means any insurer that is within the definition of § 431:1-204 or 431:1-205 and is licensed under article 3, or a licensed property and casualty insurer writing only accident and health or sickness insurance. See Hawaii Revised Statutes 431:3-401
Property and casualty insurer: means any insurer that is within the definition of § 431:1-206, 431:1-207, 431:1-208, 431:1-209, 431:1-210, or 431:1-211 and is licensed under article 3, but shall not include monoline mortgage guaranty insurers, financial guaranty insurers, and title insurers. See Hawaii Revised Statutes 431:3-401
Risk-based capital instructions: means the risk-based capital report including risk-based capital instructions adopted by the National Association of Insurance Commissioners, as such risk-based capital instructions may be amended by the National Association of Insurance Commissioners from time to time in accordance with the procedures adopted by the National Association of Insurance Commissioners. See Hawaii Revised Statutes 431:3-401
(1) With the National Association of Insurance Commissioners in accordance with the risk-based capital instructions; and(2) With the insurance commissioner in any state in which the insurer is authorized to do business, if the commissioner has notified the insurer of its request in writing, in which case the insurer shall file its risk-based capital report not later than the later of:
(A) Fifteen days from the receipt of notice to file its risk-based capital report with that state; or(B) The filing date.(b) A life or accident and health or sickness insurer‘s risk-based capital shall be determined in accordance with the formula set forth in the risk-based capital instructions. The formula shall take into account and may adjust for the covariance among the following, which shall be determined in each case by applying the factors in the manner set forth in the risk-based capital 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; and(4) All other business risks and any other relevant risks that are set forth in the risk-based capital instructions.(c) A property and casualty insurer‘s risk-based capital shall be determined in accordance with the formula set forth in the risk-based capital instructions. The formula shall take into account and may adjust for the covariance among the following, which shall be determined in each case by applying the factors in the manner set forth in the risk-based capital instructions:
(1) Asset risk;(2) Credit risk;(3) Underwriting risk; and(4) All other business risks and any other relevant risks as set forth in the risk-based capital instructions.(d) A benefit society or health maintenance organization‘s risk-based capital shall be determined in accordance with the formula set forth in the risk-based capital instructions. The formula shall take into account and may adjust for the covariance among the following, which shall be determined in each case by applying the factors in the manner set forth in the risk-based capital instructions:
(1) Asset risk;(2) Credit risk;(3) Underwriting risk; and(4) All other business risks and any other relevant risks as set forth in the risk-based capital instructions.(e) An excess of capital, or net worth, over the amount produced by the risk-based capital requirements contained in this part and the formulas, schedules, and instructions referenced in this part is desirable in the business of insurance. Accordingly, insurers shall seek to maintain capital above the risk-based capital levels required by this part. Additional capital is used and useful in the business of insurance 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 part.(f) If a domestic insurer files a risk-based capital report which, in the judgment of the commissioner, is inaccurate, then the commissioner shall adjust the risk-based capital 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. A risk-based capital report adjusted pursuant to this subsection is referred to as an adjusted risk-based capital report.
