Utah Admin. Code R590-265-5 - Commissioner's Authority

(1) To determine an insurer's financial condition under this rule, the commissioner may:

(a) disregard any credit or amount receivable resulting from a transaction 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 an investment in or transaction with a parent, subsidiary, or affiliate consistent with the NAIC Accounting Practices and Procedures Manual and state laws and rules;

(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; or

(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 with the next 12 -month period.

(2) If the commissioner determines that the continued operation of the insurer may be hazardous to its policyholders, creditors, or the general public, the commissioner may 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 dividend by an insurer to its stockholders or to its policy holders;

(f) file reports in a form acceptable to the commissioner concerning the market value of an insurer's assets;

(g) limit or withdraw from certain investments or discontinue certain investment practices to the extent the commissioner considers 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 NAIC or in a format adopted by the commissioner;

(j) correct corporate governance practice deficiencies, and adopt and utilize governance practices acceptable to the commissioner;

(k) provide a business plan to the commissioner to continue to transact business in the state; or

(l) 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.

(3) The commissioner's order against a foreign insurer may be limited to the extent provided by statute.

(4) An insurer subject to an order under Subsection (1) may request a hearing to review the order. The notice of hearing shall:

(a) be served upon the insurer pursuant to Section 31A-27-503;

(b) state the time and place of the hearing; and

(c) state the ground the commissioner relied upon in the order.

(5) Unless mutually agreed upon by the commissioner and the insurer, a hearing under Subsection (4) shall:

(a) occur not less than 10 days or more than 30 days after notice is served; and

(b) be conducted in Salt Lake County or in another location convenient to the parties designated by the commissioner.

Notes

Utah Admin. Code R590-265-5

Amended by Utah State Bulletin Number 2023-02, effective 1/10/2023