(1)
For the purposes of making a determination of an insurer's financial condition
under
211 CMR 150.00, the
Commissioner may:
(a) disregard any credit or
amount receivable resulting from transactions with a reinsurer that is
insolvent, impaired or otherwise subject to a delinquency proceeding;
(b) make appropriate adjustments including
disallowance to asset values attributable to investments in or transactions
with parents, subsidiaries or affiliates consistent with the NAIC Accounting
Policies And Procedures Manual, state laws and regulations;
(c) refuse to recognize the stated value of
accounts receivable if the ability to collect receivables is highly speculative
in view of the age of the account or the financial condition of the debtor;
and
(d) increase the insurer's
liability in an amount equal to any contingent liability, pledge, or guarantee
not otherwise included if there is a substantial risk that the insurer will be
called upon to meet the obligation undertaken within the next 12 month
period.
(2) If the
Commissioner determines that the continued operation of the insurer licensed to
transact business in this state may be hazardous to its policyholders,
creditors or the general public, the Commissioner may, upon a determination,
issue an order requiring the insurer to:
(a)
reduce the total amount of present and potential liability for policy benefits
by reinsurance;
(b) reduce, suspend
or limit the volume of business being accepted or renewed;
(c) reduce general insurance and commission
expenses by specified methods;
(d)
increase the insurer's capital and surplus;
(e) suspend or limit the declaration and
payment of dividends by an insurer to its stockholders or to its
policyholders;
(f) file reports in
a form acceptable to the Commissioner concerning the market value of an
insurer's assets and provide a business plan to the Commissioner in order to
continue to transact business in the state;
(g) limit or withdraw from certain
investments or discontinue certain investment practices to the extent the
Commissioner deems necessary;
(h)
document the adequacy of premium rates in relation to the risks
insured;
(i) file, in addition to
regular annual statements, interim financial reports on the form adopted by the
National Association of Insurance Commissioners or in such format as
promulgated by the Commissioner;
(j) correct corporate governance practice
deficiencies, and adopt and utilize governance practices acceptable to the
Commissioner including but not limited to changing Board members and attending
Board meetings; and
(k)
notwithstanding any other provision of law limiting the frequency or amount of
premium rate adjustments, adjust rates for any non-life insurance product
written by the insurer that the Commissioner considers necessary to improve the
financial condition of the insurer.
If the insurer is a foreign insurer the Commissioner's order
may be limited to the extent provided by statute.
(3) An insurer subject to an order under 211
CMR
150.04(2) may request a hearing to review that order. The Commissioner
shall issue a notice of hearing which states the time and place of the hearing,
and the conduct, condition or grounds which are the basis of the order. Service
of the notice shall be by hand, U.S. Mail or electronic medium.
Unless mutually agreed between the Commissioner and the
insurer, the hearing shall occur not less than ten days nor more than 30 days
after notice is served. The Commissioner shall hold all hearings under 211 CMR
150.04 privately, unless the insurer requests a public hearing, in which case
the hearing shall be public. The Commissioner may open the proceedings or
hearings or make public the information relating to the supervision of any
insurer if the Commissioner deems that it is in the best interest of the public
or in the best interest of the insurer, its insureds, creditors or the general
public.
