Louisiana Revised Statutes 22:634 – Company-action level event
Terms Used In Louisiana Revised Statutes 22:634
- Adjusted risk-based capital report: means a risk-based capital report which has been adjusted by the commissioner in accordance with La. See Louisiana Revised Statutes 22:631
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Authorized-control level risk-based capital: means the number determined under the risk-based capital formula in accordance with the risk-based capital instructions. See Louisiana Revised Statutes 22:631
- Commissioner: means the commissioner of insurance. See Louisiana Revised Statutes 22:631
- Health organization: means a health maintenance organization licensed under Subpart I of Part I of this Chapter, a limited health service organization which bears risk, dental or vision plan which bears risk, hospital, medical and dental indemnity or service corporation which bears risk, provider-sponsored organization which bears risk, or other risk-bearing managed care organization licensed under this Title. See Louisiana Revised Statutes 22:631
- Risk-based capital instructions: means the risk-based capital report including risk-based capital instructions adopted by the National Association of Insurance Commissioners, as these 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 Louisiana Revised Statutes 22:631
- Risk-based capital plan: means a comprehensive financial plan containing the elements specified in La. See Louisiana Revised Statutes 22:631
- Risk-based capital report: means the report required in La. See Louisiana Revised Statutes 22:631
- Total adjusted capital: means the sum of the following:
(a) A health organization's statutory capital and surplus as determined in accordance with the statutory accounting applicable to the annual financial statements required to be filed under La. See Louisiana Revised Statutes 22:631
A. A “company-action level event” means any of the following:
(1) The filing of a risk-based capital report by a health organization that indicates that the health organization’s total adjusted capital is greater than or equal to its regulatory action level risk-based capital but less than its company-action level risk-based capital. If a health organization has total adjusted capital which is greater than or equal to its company-action level risk-based capital but less than the product of its authorized-control level risk-based capital and three, and triggers the trend test determined in accordance with the trend test calculation included in the health risk-based capital instructions.
(2) Notification by the commissioner to the health organization of an adjusted risk-based capital report that indicates an event in Paragraph (1) of this Subsection, provided the health organization does not challenge the adjusted risk-based capital report under La. Rev. Stat. 22:638.
(3) If pursuant to La. Rev. Stat. 22:638, a health organization challenges an adjusted risk-based capital report that indicates the event in Paragraph (1) of this Subsection, the notification by the commissioner to the health organization that the commissioner has rejected the health organization’s challenge.
B. In the event of a company-action level event, the health organization shall prepare and submit to the commissioner a risk-based capital plan that shall do the following:
(1) Identify the conditions that contribute to the company-action level event.
(2) Contain proposals of corrective actions that the health organization intends to take and that would be expected to result in the elimination of the company-action level event.
(3) Provide projections of the health organization’s financial results in the current year and at least the two succeeding years, both in the absence of proposed corrective actions and giving effect to the proposed corrective actions, including projections of statutory balance sheets, operating income, net income, capital and surplus, and risk-based capital levels. The projections for both new and renewal business might include separate projections for each major line of business and separately identify each significant income, expense, and benefit component.
(4) Identify the key assumptions impacting the health organization’s projections and the sensitivity of the projections to the assumptions.
(5) Identify the quality of and problems associated with the health organization’s business, including but not limited to its assets, anticipated business growth and associated surplus strain, extraordinary exposure to risk, mix of business, and use of reinsurance, if any, in each case.
C. The risk-based capital plan shall be submitted either:
(1) Within forty-five days of the company-action level event.
(2) If the health organization challenges an adjusted risk-based capital report pursuant to La. Rev. Stat. 22:638, within forty-five days after notification to the health organization that the commissioner has rejected the health organization’s challenge.
D. Within sixty days after the submission by a health organization of a risk-based capital plan to the commissioner, the commissioner shall notify the health organization whether the risk-based capital plan shall be implemented or is, in the judgment of the commissioner, unsatisfactory. If the commissioner determines the risk-based capital plan is unsatisfactory, the notification to the health organization shall set forth the reasons for the determination and may set forth proposed revisions which will render the risk-based capital plan satisfactory, in the judgment of the commissioner. Upon notification from the commissioner, the health organization shall prepare a revised risk-based capital plan, which may incorporate by reference any revisions proposed by the commissioner, and shall submit the revised risk-based capital plan to the commissioner either:
(1) Within forty-five days after the notification from the commissioner.
(2) If the health organization challenges the notification from the commissioner pursuant to La. Rev. Stat. 22:638, within forty-five days after a notification to the health organization that the commissioner has rejected the health organization’s challenge.
E. In the event of a notification by the commissioner to a health organization that the health organization’s risk-based capital plan or revised risk-based capital plan is unsatisfactory, the commissioner may at the commissioner’s discretion, subject to the health organization’s right to a hearing under La. Rev. Stat. 22:638, specify in the notification that the notification constitutes a regulatory action level event.
Acts 2003, No. 1106, §1, eff. Dec. 31, 2003; Redesignated from La. Rev. Stat. 22:2036.4 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2009, No. 317, §1; Acts 2009, No. 503, §1; Acts 2014, No. 220, §1.
NOTE: Former La. Rev. Stat. 22:634 redesignated as La. Rev. Stat. 22:873 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009.