N.J. Admin. Code § 11:2-39.5

Current through Register Vol. 56, No. 24, December 18, 2024

Section 11:2-39.5 - Regulatory action level event

(a) "Regulatory action level event" means, with respect to any insurer, any of the following events:

1. The filing of an RBC Report by an insurer which indicates that the insurer's total adjusted capital is greater than or equal to its Authorized Control Level RBC but less than its Regulatory Action Level RBC;

2. The notification by the Commissioner to an insurer of an Adjusted RBC Report that indicates the event in (a)1 above, provided the insurer does not challenge the Adjusted RBC Report under N.J.A.C. 11:2-39.9;

3. If the insurer, under N.J.A.C. 11:2-39.9, challenges an Adjusted RBC Report that indicates the event in (a)1 above, the notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected the insurer's challenge;

4. The failure of the insurer to file an RBC Report by the filing date, unless the insurer has provided an explanation for such failure which is satisfactory to the Commissioner and has cured the failure within 10 days after the filing date;

5. The failure of the insurer to comply with the filing deadlines set forth at N.J.A.C. 11:2-39.4(b) and (c);

6. Notification by the Commissioner to the insurer that:

i. An RBC Plan or Revised RBC Plan submitted by the insurer is, in the judgment of the Commissioner, unsatisfactory; and

ii. Such notification constitutes a regulatory action level event with respect to the insurer, provided the insurer has not challenged the determination under N.J.A.C. 11:2-39.9;

7. If the insurer, under N.J.A.C. 11:2-39.9, challenges a determination by the Commissioner pursuant to (a)6 above, the notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected such challenge;

8. Notification by the Commissioner to the insurer that the insurer has failed to adhere to its RBC Plan or Revised RBC Plan, but only if such failure has a substantial adverse effect on the ability of the insurer to eliminate the company action level event in accordance with its RBC Plan or Revised RBC Plan and the Commissioner has so stated in the notification, provided the insurer has not challenged the determination under N.J.A.C. 11:2-39.9; or

9. If the insurer, under N.J.A.C. 11:2-39.9, challenges a determination by the Commissioner pursuant to (a)8 above, the notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected the challenge.

(b) In the event of a regulatory action level event, the Commissioner shall for a domestic insurer, and may for a foreign insurer pursuant to N.J.A.C. 11:2-39.1 2:

1. Require the insurer to prepare and, within 45 days, submit an RBC Plan or, if applicable, a Revised RBC Plan;

2. Perform such examination or analysis as the Commissioner deems necessary of the assets, liabilities and operations of the insurer including a review of its RBC Plan or Revised RBC Plan; and

3. Subsequent to the examination or analysis, issue a corrective order specifying such corrective actions as the Commissioner shall determine are required.

(c) In determining corrective actions, the Commissioner may take into account such factors as are deemed relevant with respect to the insurer based upon the Commissioner's examination or analysis of the assets, liabilities and operations of the insurer including, but not limited to, the results of any sensitivity tests undertaken pursuant to the RBC Instructions.

(d) The Commissioner may retain actuaries and investment experts and other consultants as may be necessary in the judgment of the Commissioner to review the insurer's RBC Plan or Revised RBC Plan, examine and analyze the assets, liabilities and operations of the insurer and formulate the corrective order with respect to the insurer. The fees, costs and expenses relating to consultants shall be borne by the affected insurer or such other affiliated or controlling party as directed by the Commissioner.

N.J. Admin. Code § 11:2-39.5

Amended by R.1993 d.561, effective 11/15/1993.
See: 25 N.J.R. 4309(a), 25 N.J.R. 5208(a).
Amended by R.1996 d.3, effective 1/2/1996.
See: 27 N.J.R. 3278(b), 28 N.J.R. 152(b).
Amended by R.1997 d.186, effective 5/5/1997.
See: 29 N.J.R. 404(a), 29 N.J.R. 2175(b).
In (a)8, substituted "company action level" for "regulatory action level"; and in (a)9, deleted exception to notification where failure of insurers to adhere to plan has no adverse effect on its ability to eliminate the Regulatory action level event.