US Laws, Codes, Statutes & Cases

                                  TITLE  41
                                  INSURANCE
                                  CHAPTER 54
                  RISK-BASED CAPITAL (RBC) FOR INSURERS ACT
    41-5402.  RBC REPORTS. (1) Every domestic insurer shall, on or prior to
each March 1 (the "filing date"), prepare and submit to the director a report
of its RBC levels as of the end of the calendar year just ended, in a form and
containing such information as is required by the RBC instructions. In
addition, every domestic insurer shall file its RBC report:
    (a)  With the NAIC in accordance with the RBC instructions; and
    (b)  With the insurance director in any state in which the insurer is
    authorized to do business, if the insurance director has notified the
    insurer of its request in writing, in which case the insurer shall file
    its RBC report not later than the later of:
         (i)  Fifteen (15) days from the receipt of notice to file its RBC
         report with that state; or
         (ii) The filing date.
    (2)  A life and health insurer's RBC shall be determined in accordance
with the formula set forth in the RBC instructions. The formula shall take
into account, and may adjust for the covariance between, the following factors
determined in each case by applying the factors in the manner set forth in the
RBC instructions.
    (a)  The risk with respect to the insurer's assets;
    (b)  The risk of adverse insurance experience with respect to the
    insurer's liabilities and obligations;
    (c)  The interest rate risk with respect to the insurer's business; and
    (d)  All other business risks and such other relevant risks as are set
    forth in the RBC instructions.
    (3)  A property and casualty insurer's RBC shall be determined in
accordance with the formula set forth in the RBC instructions. The formula
shall take the following into account, and may adjust for the covariance
between, determined in each case by applying the factors in the manner set
forth in the RBC instructions.
    (a)  Asset risk;
    (b)  Credit risk;
    (c)  Underwriting risk; and
    (d)  All other business risks and such other relevant risks as are set
    forth in the RBC instructions.
    (4)  An excess of capital over the amount produced by the risk-based
capital requirements contained in this chapter and the formulas, schedules and
instructions referenced in this chapter is desirable in the business of
insurance. Accordingly, insurers should seek to maintain capital above the RBC
levels required by this chapter. Additional capital is used and useful in the
insurance business 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 chapter.
    (5)  If a domestic insurer files an RBC report which in the judgment of
the director is inaccurate, then the director shall adjust the RBC 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. An RBC
report as so adjusted is referred to as an "adjusted RBC report."