SB2944 EngrossedLRB099 16156 EGJ 40482 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5changing Section 35A-15 as follows:
 
6    (215 ILCS 5/35A-15)
7    Sec. 35A-15. Company action level event.
8    (a) A company action level event means any of the following
9events:
10        (1) The filing of an RBC Report by an insurer that
11    indicates that:
12            (A) the insurer's total adjusted capital is
13        greater than or equal to its regulatory action level
14        RBC, but less than its company action level RBC;
15            (B) the insurer, if a life, health, or life and
16        health insurer or a fraternal benefit society, has
17        total adjusted capital that is greater than or equal to
18        its company action level RBC, but less than the product
19        of its authorized control level RBC and 3.0 and has a
20        negative trend; or
21            (C) the insurer, if a property and casualty
22        insurer, has total adjusted capital that is greater
23        than or equal to its company action level RBC, but less

 

 

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1        than the product of its authorized control level RBC
2        and 3.0 and triggers the trend test determined in
3        accordance with the trend test calculation included in
4        the property and casualty RBC Instructions.
5            (D) the insurer, if a health organization, has
6        total adjusted capital that is greater than or equal to
7        its company action level RBC but less than the product
8        of its authorized control level RBC and 3.0 and
9        triggers the trend test determined in accordance with
10        the trend test calculation included in the Health RBC
11        Instructions.
12        (2) The notification by the Director to the insurer of
13    an Adjusted RBC Report that indicates an event described in
14    paragraph (1), provided the insurer does not challenge the
15    Adjusted RBC Report under Section 35A-35.
16        (3) The notification by the Director to the insurer
17    that the Director has, after a hearing, rejected the
18    insurer's challenge under Section 35A-35 to an Adjusted RBC
19    Report that indicates the event described in paragraph (1).
20    (b) In the event of a company action level event, the
21insurer shall prepare and submit to the Director an RBC Plan
22that does all of the following:
23        (1) Identifies the conditions that contribute to the
24    company action level event.
25        (2) Contains proposed corrective actions that the
26    insurer intends to take and that are expected to result in

 

 

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1    the elimination of the company action level event. A health
2    organization is not prohibited from proposing recognition
3    of a parental guarantee or a letter of credit to eliminate
4    the company action level event; however the Director shall,
5    at his discretion, determine whether or the extent to which
6    the proposed parental guarantee or letter of credit is an
7    acceptable part of a satisfactory RBC Plan or Revised RBC
8    Plan.
9        (3) Provides projections of the insurer's financial
10    results in the current year and at least the 4 succeeding
11    years, both in the absence of proposed corrective actions
12    and giving effect to the proposed corrective actions,
13    including projections of statutory operating income, net
14    income, capital, and surplus. The projections for both new
15    and renewal business may include separate projections for
16    each major line of business and separately identify each
17    significant income, expense, and benefit component.
18        (4) Identifies the key assumptions affecting the
19    insurer's projections and the sensitivity of the
20    projections to the assumptions.
21        (5) Identifies the quality of, and problems associated
22    with, the insurer's business including, but not limited to,
23    its assets, anticipated business growth and associated
24    surplus strain, extraordinary exposure to risk, mix of
25    business, and use of reinsurance, if any, in each case.
26    (c) The insurer shall submit the RBC Plan to the Director

 

 

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1within 45 days after the company action level event occurs or
2within 45 days after the Director notifies the insurer that the
3Director has, after a hearing, rejected its challenge under
4Section 35A-35 to an Adjusted RBC Report.
5    (d) Within 60 days after an insurer submits an RBC Plan to
6the Director, the Director shall notify the insurer whether the
7RBC Plan shall be implemented or is, in the judgment of the
8Director, unsatisfactory. If the Director determines the RBC
9Plan is unsatisfactory, the notification to the insurer shall
10set forth the reasons for the determination and may set forth
11proposed revisions that will render the RBC Plan satisfactory
12in the judgment of the Director. Upon notification from the
13Director, the insurer shall prepare a Revised RBC Plan, which
14may incorporate by reference any revisions proposed by the
15Director. The insurer shall submit the Revised RBC Plan to the
16Director within 45 days after the Director notifies the insurer
17that the RBC Plan is unsatisfactory or within 45 days after the
18Director notifies the insurer that the Director has, after a
19hearing, rejected its challenge under Section 35A-35 to the
20determination that the RBC Plan is unsatisfactory.
21    (e) In the event the Director notifies an insurer that its
22RBC Plan or Revised RBC Plan is unsatisfactory, the Director
23may, at the Director's discretion and subject to the insurer's
24right to a hearing under Section 35A-35, specify in the
25notification that the notification constitutes a regulatory
26action level event.

 

 

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1    (f) Every domestic insurer that files an RBC Plan or
2Revised RBC Plan with the Director shall file a copy of the RBC
3Plan or Revised RBC Plan with the chief insurance regulatory
4official in any state in which the insurer is authorized to do
5business if that state has a law substantially similar to the
6confidentiality provisions in subsection (a) of Section 35A-50
7and if that official requests in writing a copy of the plan.
8The insurer shall file a copy of the RBC Plan or Revised RBC
9Plan in that state no later than the later of 15 days after
10receiving the written request for the copy or the date on which
11the RBC Plan or Revised RBC Plan is filed under subsection (c)
12or (d) of this Section.
13(Source: P.A. 97-955, eff. 8-14-12; 98-157, eff. 8-2-13.)
 
14    Section 99. Effective date. This Act takes effect upon
15becoming law.