(a) “Authorized Control Level Event” means any of the following events:
Terms Used In Tennessee Code 56-46-205
Authorized Control Level RBC: means the number determined under the risk-based capital formula in accordance with the RBC Instructions. See Tennessee Code 56-46-201
Corrective order: means an order issued by the commissioner specifying corrective actions which the commissioner has determined are required. See Tennessee Code 56-46-201
Health organization: means a health maintenance organization, limited health service organization, dental or vision plan, hospital, medical and dental indemnity or service corporation, or other managed care organization licensed pursuant to chapters 27, 28, 30, 31, 32 and 51 of this title. See Tennessee Code 56-46-201
Total adjusted capital: means the sum of:(A) A health organization's statutory capital and surplus, also known as net worth, as determined in accordance with the statutory accounting applicable to the annual financial statements required to be filed under §. See Tennessee Code 56-46-201
(1) The filing of an RBC report by the health organization that indicates that the health organization’s total adjusted capital is greater than or equal to its Mandatory Control Level RBC but less than its Authorized Control Level RBC;(2) The notification by the commissioner to the health organization of an adjusted RBC report that indicates the event in subdivision (a)(1); provided, that the health organization does not challenge the adjusted RBC report under § 56-46-207;(3) If, pursuant to § 56-46-207, the health organization challenges an adjusted RBC report that indicates the event in subdivision (a)(1), notification by the commissioner to the health organization that the commissioner has, after a hearing, rejected the health organization’s challenge;(4) The failure of the health organization to respond, in a manner satisfactory to the commissioner, to a corrective order; provided, that the health organization has not challenged the corrective order under § 56-46-207; or(5) If the health organization has challenged a corrective order under § 56-46-207 and the commissioner has, after a hearing, rejected the challenge or modified the corrective order, the failure of the health organization to respond, in a manner satisfactory to the commissioner, to the corrective order subsequent to rejection or modification by the commissioner.(b) If an Authorized Control Level Event occurs with respect to a health organization, the commissioner shall:
(1) Take such actions as are required under § 56-46-204 regarding a health organization with respect to which a Regulatory Action Level Event has occurred; or(2) If the commissioner deems it to be in the best interests of the policyholders and creditors of the health organization and of the public, take such actions as are necessary to cause the health organization to be placed under regulatory control under chapter 9 of this title. In the event the commissioner takes such actions, the Authorized Control Level Event shall be deemed sufficient grounds for the commissioner to take action under chapter 9 of this title, and the commissioner shall have the rights, powers and duties with respect to the health organization as are set forth in chapter 9 of this title. In the event the commissioner takes actions under this subsection (b) pursuant to an adjusted RBC report, the health organization shall be entitled to such protections as are afforded to health organizations under chapter 9, part 2 of this title pertaining to summary proceedings.
