AN ACT Relating to the
capital and surplus requirements of insurance companies; amending RCW
48.05.340; and adding new sections to chapter 48.05 RCW.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF
WASHINGTON:
NEW SECTION. Sec.
1. As used in sections 1
through 13 of this act, these terms have the following meanings:
(1) "RBC"
means risk-based capital.
(2) "NAIC"
means the national association of insurance commissioners.
(3) "Domestic
insurer" means any insurance company domiciled in this state.
(4) "Foreign or
alien insurer" means any insurance company that is licensed to do business
in this state under this chapter but is not domiciled in this state.
(5) "Life and
disability insurer" means any insurance company authorized to write only
life insurance, disability insurance, or both, as defined in chapter 48.11 RCW.
(6) "Property and
casualty insurer" means any insurance company authorized to write only
property insurance, marine and transportation insurance, general casualty
insurance, vehicle insurance, or any combination thereof, including disability
insurance, as defined in chapter 48.11 RCW.
(7) "Corrective
order" means an order issued by the commissioner specifying corrective
actions that the commissioner has determined are required.
(8) "Negative
trend" means, with respect to a life insurer, a disability insurer, or a
life and disability insurer, the negative trend over a period of time, as
determined in accordance with the trend test calculation included in the RBC
instructions.
(9) "Adjusted RBC
report" means an RBC report that has been adjusted by the commissioner in
accordance with section 2(5) of this act.
(10) "RBC
instructions" means the RBC report including risk-based capital instructions
adopted by the NAIC.
(11) "RBC
level" means an insurer's company action level RBC, regulatory action
level RBC, authorized control level RBC, or mandatory control level RBC where:
(a) "Company
action level RBC" means, with respect to any insurer, the product of 2.0
and its authorized control level RBC;
(b) "Regulatory
action level RBC" means the product 1.5 and its authorized control level
RBC;
(c) "Authorized
control level RBC" means the number determined under the risk-based
capital formula in accordance with the RBC instructions; and
(d) "Mandatory
control level RBC" means the product of .70 and the authorized control
level RBC.
(12) "RBC
plan" means a comprehensive financial plan containing the elements
specified in section 3(2) of this act. If the commissioner rejects the RBC
plan, and it is revised by the insurer, with or without the commissioner's
recommendation, the plan shall be called the "revised RBC plan."
(13) "RBC
report" means the report required in section 2 of this act.
(14) "Total
adjusted capital" means the sum of:
(a) An insurer's
statutory capital and surplus as determined in accordance with statutory
accounting applicable to the annual financial statements required to be filed
under RCW 48.05.250; and
(b) Other items, if any,
as the RBC instructions may provide.
NEW SECTION. Sec.
2. (1) Every domestic
insurer shall, on or prior to the filing date, which is hereby established as
March 1, prepare and submit to the commissioner a report of its RBC levels as
of the end of the calendar year just ended, in a form and containing that
information 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
commissioner in any state in which the insurer is authorized to do business, if
the insurance commissioner 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 days from
the receipt of notice to file its RBC report with that state; or
(ii) The filing date.
(2) A life and
disability 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:
(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 other relevant risks as are set forth in the RBC instructions;
determined in each case by applying the factors in the manner 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 into account and may
adjust for the covariance between:
(a) Asset risk;
(b) Credit risk;
(c) Underwriting risk;
and
(d) All other business
risks and other relevant risks as are set forth in the RBC instructions;
determined in each case by applying the factors in the manner set forth in the
RBC instructions.
(4) An excess of
capital over the amount produced by the RBC requirements and the formulas,
schedules, and instructions under sections 1 through 13 of this act is
desirable in the business of insurance. Accordingly, insurers should seek to
maintain capital above the RBC levels required. 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 RBC requirements.
(5) If a domestic
insurer files an RBC report that in the judgment of the commissioner is
inaccurate, then the commissioner 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.
NEW SECTION. Sec.
3. (1) "Company action
level event" means any of the following events:
(a) The filing of an
RBC report by an insurer indicating that:
(i) The insurer's total
adjusted capital is greater than or equal to its regulatory action level RBC,
but less than its company action level RBC; or
(ii) If a life and
disability insurer, the insurer has total adjusted capital that is greater than
or equal to its company action level RBC, but less than the product of its
authorized control level RBC and 2.5 and has a negative trend;
(b) The notification by
the commissioner to the insurer of an adjusted RBC report that indicates an
event in (a) of this subsection, provided the insurer does not challenge the
adjusted RBC report under section 7 of this act; or
(c) If, under section 7
of this act, an insurer challenges an adjusted RBC report that indicates an
event in (a) of this subsection, the notification by the commissioner to the
insurer that the commissioner has, after a hearing, rejected the insurer's
challenge.
(2) In the event of a
company action level event, the insurer shall prepare and submit to the
commissioner an RBC plan that:
(a) Identifies the conditions
that contribute to the company action level event;
(b) Contains proposals
of corrective actions that the insurer intends to take and would be expected to
result in the elimination of the company action level event;
(c) Provides
projections of the insurer's financial results in the current year and at least
the four succeeding years, both in the absence of proposed corrective actions
and giving effect to the proposed corrective actions, including projections of
statutory operating income, net income, capital, and surplus. The projections
for both new and renewal business might include separate projections for each
major line of business and separately identify each significant income,
expense, and benefit component;
(d) Identifies the key
assumptions impacting the insurer's projections and the sensitivity of the
projections to the assumptions; and
(e) Identifies the
quality of, and problems associated with, the insurer's business, including but
not limited to its assets, anticipated business growth and associated surplus
strain, extraordinary exposure to risk, mix of business, and use of
reinsurance, if any, in each case.
(3) The RBC plan shall
be submitted:
(a) Within forty-five
days of the company action level event; or
(b) If the insurer challenges
an adjusted RBC report under section 7 of this act, within forty-five days
after notification to the insurer that the commissioner has, after a hearing,
rejected the insurer's challenge.
(4) Within sixty days
after the submission by an insurer of an RBC plan to the commissioner, the
commissioner shall notify the insurer whether the RBC plan may be implemented
or is, in the judgment of the commissioner, unsatisfactory. If the
commissioner determines the RBC plan is unsatisfactory, the notification to the
insurer shall set forth the reasons for the determination, and may set forth
proposed revisions that will render the RBC plan satisfactory. Upon
notification from the commissioner, the insurer shall prepare a revised RBC
plan, that may incorporate by reference any revisions proposed by the
commissioner, and shall submit the revised RBC plan to the commissioner:
(a) Within forty-five
days after the notification from the commissioner; or
(b) If the insurer
challenges the notification from the commissioner under section 7 of this act,
within forty-five days after a notification to the insurer that the
commissioner has, after a hearing, rejected the insurer's challenge.
(5) In the event of a
notification by the commissioner to an insurer that the insurer's RBC plan or
revised RBC plan is unsatisfactory, the commissioner may, subject to the
insurer's rights to a hearing under section 7 of this act, specify in the
notification that the notification constitutes a regulatory action level event.
(6) Every domestic
insurer that files an RBC plan or revised RBC plan with the commissioner shall
file a copy of the RBC plan or revised RBC plan with the insurance commissioner
in any state in which the insurer is authorized to do business if:
(a) The state has an RBC
provision substantially similar to section 8(1) of this act; and
(b) The insurance
commissioner of that state has notified the insurer of its request for the
filing in writing, in which case the insurer shall file a copy of the RBC plan
or revised RBC plan in that state no later than the later of:
(i) Fifteen days after
the receipt of notice to file a copy of its RBC plan or revised plan with the
state; or
(ii) The date on which
the RBC plan or revised RBC plan is filed under subsections (3) and (4) of this
section.
NEW SECTION. Sec.
4. (1) "Regulatory
action level event" means, with respect to any insurer, any of the
following events:
(a) The filing of an
RBC report by the insurer indicating 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;
(b) The notification by
the commissioner to an insurer of an adjusted RBC report that indicates the
event in (a) of this subsection, provided the insurer does not challenge the
adjusted RBC report under section 7 of this act;
(c) If, under section 7
of this act, the insurer challenges an adjusted RBC report that indicates the
event in (a) of this subsection, the notification by the commissioner to the
insurer that the commissioner has, after a hearing, rejected the insurer's
challenge;
(d) The failure of the
insurer to file an RBC report by the filing date, unless the insurer has
provided an explanation for such failure that is satisfactory to the
commissioner and has cured the failure within ten days after the filing date;
(e) The failure of the
insurer to submit an RBC plan to the commissioner within the time period set
forth in section 3(3) of this act;
(f) Notification by the
commissioner to the insurer that:
(i) The RBC plan or
revised RBC plan submitted by the insurer is, in the judgment of the
commissioner, unsatisfactory; and
(ii) The notification
constitutes a regulatory action level event with respect to the insurer,
provided the insurer has not challenged the determination under section 7 of
this act;
(g) If, under section 7
of this act, the insurer challenges a determination by the commissioner under
(f) of this subsection, the notification by the commissioner to the insurer
that the commissioner has, after a hearing, rejected the challenge;
(h) 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 the 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 section 7 of this act; or
(i) If, under section 7
of this act, the insurer challenges a determination by the commissioner under
(h) of this subsection, the notification by the commissioner to the insurer
that the commissioner has, after a hearing, rejected the challenge.
(2) In the event of a
regulatory action level event the commissioner shall:
(a) Require the insurer
to prepare and submit an RBC plan or, if applicable, a revised RBC plan;
(b) Perform the
examination or analysis 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
(c) Subsequent to the
examination or analysis, issue an order specifying those corrective actions the
commissioner determines are required.
(3) In determining
corrective actions, the commissioner may take into account those factors 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
under the RBC instructions. The RBC plan or revised RBC plan shall be
submitted:
(a) Within forty-five
days after the occurrence of the regulatory action level event;
(b) If the insurer
challenges an adjusted RBC report under section 7 of this act, and the
challenge is not frivolous in the judgment of the commissioner, within forty-five
days after the notification to the insurer that the commissioner has, after a
hearing, rejected the insurer's challenge; or
(c) If the insurer
challenges a revised RBC plan under section 7 of this act, and the challenge is
not frivolous in the judgment of the commissioner, within forty-five days after
the notification to the insurer that the commissioner has, after a hearing,
rejected the insurer's challenge.
(4) 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 or 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 other party as directed by the commissioner.
NEW SECTION. Sec.
5. (1) "Authorized
control level event" means any of the following events:
(a) The filing of an
RBC report by the insurer indicating that the insurer's total adjusted capital
is greater than or equal to its mandatory control level RBC but less than its
authorized control level RBC;
(b) The notification by
the commissioner to the insurer of an adjusted RBC report that indicates the
event in (a) of this subsection, provided the insurer does not challenge the
adjusted RBC report under section 7 of this act;
(c) If, under section 7
of this act, the insurer challenges an adjusted RBC report that indicates the
event in (a) of this subsection, notification by the commissioner to the
insurer that the commissioner has, after a hearing, rejected the insurer's
challenge;
(d) The failure of the
insurer to respond, in a manner satisfactory to the commissioner, to a
corrective order, provided the insurer has not challenged the corrective order
under section 7 of this act; or
(e) If the insurer has
challenged a corrective order under section 7 of this act and the commissioner
has, after a hearing, rejected the challenge or modified the corrective order,
the failure of the insurer to respond, in a manner satisfactory to the
commissioner, to the corrective order subsequent to rejection or modification
by the commissioner.
(2) In the event of an authorized
control level event with respect to an insurer, the commissioner shall:
(a) Take those actions
required under section 4 of this act regarding an insurer with respect to which
a regulatory action level event has occurred; or
(b) If the commissioner
deems it to be in the best interests of the policyholders and creditors of the
insurer and of the public, take those actions necessary to cause the insurer to
be placed under regulatory control under chapter 48.31 RCW. In the event the
commissioner takes these actions, the authorized control level event is
sufficient grounds for the commissioner to take action under chapter 48.31 RCW,
and the commissioner has the rights, powers, and duties with respect to the
insurer as are set forth in chapter 48.31 RCW. In the event the commissioner
takes actions under this subsection pursuant to an adjusted RBC report, the
insurer is entitled to those protections afforded to insurers under RCW
48.31.121 pertaining to summary proceedings.
NEW SECTION. Sec.
6. (1) "Mandatory
control level event" means any of the following events:
(a) The filing of an
RBC report indicating that the insurer's total adjusted capital is less than
its mandatory control level RBC;
(b) Notification by the
commissioner to the insurer of an adjusted RBC report that indicates the event
in (a) of this subsection, provided the insurer does not challenge the adjusted
RBC report under section 7 of this act; or
(c) If, under section 7
of this act, the insurer challenges an adjusted RBC report that indicates the
event in (a) of this subsection, notification by the commissioner to the
insurer that the commissioner has, after a hearing, rejected the insurer's
challenge.
(2) In the event of a
mandatory control level event:
(a) With respect to a
life and disability insurer, the commissioner shall take those actions
necessary to place the insurer under regulatory control under chapter 48.31
RCW. In that event, the mandatory control level event is sufficient grounds
for the commissioner to take action under chapter 48.31 RCW, and the
commissioner has the rights, powers, and duties with respect to the insurer as
are set forth in chapter 48.31 RCW. If the commissioner takes actions pursuant
to an adjusted RBC report, the insurer is entitled to the protections of RCW
48.31.121 pertaining to summary proceedings. However, the commissioner may
forego action for up to ninety days after the mandatory control level event if
the commissioner finds there is a reasonable expectation that the mandatory
control level event may be eliminated within the ninety-day period.
(b) With respect to a
property and casualty insurer, the commissioner shall take those actions
necessary to place the insurer under regulatory control under chapter 48.31
RCW, or, in the case of an insurer that is writing no business and that is
running-off its existing business, may allow the insurer to continue its
run-off under the supervision of the commissioner. In either event,the
mandatory control level event is sufficient grounds for the commissioner to
take action under chapter 48.31 RCW and the commissioner has the rights,
powers, and duties with respect to the insurer as are set forth in chapter
48.31 RCW. If the commissioner takes actions pursuant to an adjusted RBC
report, the insurer is entitled to the protections of RCW 48.31.121 pertaining
to summary proceedings. However, the commissioner may forego action for up to
ninety days after the mandatory control level event if the commissioner finds
there is a reasonable expectation that the mandatory control level event may be
eliminated within the ninety-day period.
NEW SECTION. Sec.
7. (1) Upon notification to
an insurer by the commissioner of any of the following, the insurer shall have
the right to a hearing, in accordance with chapters 48.04 and 34.05 RCW, at
which the insurer may challenge any determination or action by the
commissioner:
(a) Of an adjusted RBC
report; or
(b)(i) That the
insurer's RBC plan or revised RBC plan is unsatisfactory; and
(ii) The notification
constitutes a regulatory action level event with respect to such insurer; or
(c) That the insurer
has failed to adhere to its RBC plan or revised RBC plan and that such failure
has a substantial adverse effect on the ability of the insurer to eliminate the
company action level event with respect to the insurer in accordance with its
RBC plan or revised RBC plan; or
(d) Of a corrective
order with respect to the insurer.
(2) The insurer shall
notify the commissioner of its request for a hearing within five days after the
notification by the commissioner under this section. Upon receipt of the
insurer's request for a hearing, the commissioner shall set a date for the
hearing. The date shall be no less than ten nor more than thirty days after
the date of the insurer's request.
NEW SECTION. Sec.
8. (1) All RBC reports, to
the extent the information is not required to be set forth in a publicly
available annual statement schedule, and RBC plans, including the results or
report of any examination or analysis of an insurer and any corrective order issued
by the commissioner, with respect to any domestic insurer or foreign insurer
that are filed with the commissioner constitute information that might be
damaging to the insurer if made available to its competitors, and therefore
shall be kept confidential by the commissioner. This information shall not be
made public or be subject to subpoena, other than by the commissioner and then
only for the purpose of enforcement actions taken by the commissioner.
(2) The comparison of
an insurer's total adjusted capital to any of its RBC levels is a regulatory
tool that may indicate the need for possible corrective action with respect to
the insurer, and is not a means to rank insurers generally. Therefore, except
as otherwise required under the provisions of sections 1 through 13 of this
act, the making, publishing, disseminating, circulating, or placing before the
public, or causing, directly or indirectly to be made, published, disseminated,
circulated, or placed before the public, in a newspaper, magazine, or other
publication, or in the form of a notice, circular, pamphlet, letter, or poster,
or over any radio or television station, or in any other way, an advertisement,
announcement, or statement containing an assertion, representation, or
statement with regard to the RBC levels of any insurer, or of any component
derived in the calculation, by any insurer, agent, broker, or other person
engaged in any manner in the insurance business would be misleading and is
therefore prohibited. However, if any materially false statement with respect
to the comparison regarding an insurer's total adjusted capital to its RBC
levels, or any of them, or an inappropriate comparison of any other amount to
the insurer's RBC levels is published in any written publication and the insurer
is able to demonstrate to the commissioner with substantial proof the falsity
of such statement, or the inappropriateness, as the case may be, then the
insurer may publish an announcement in a written publication if the sole
purpose of the announcement is to rebut the materially false statement.
(3) The RBC
instructions, RBC reports, adjusted RBC reports, RBC plans, and revised RBC
plans are solely for use by the commissioner in monitoring the solvency of
insurers and the need for possible corrective action with respect to insurers
and shall not be used by the commissioner for ratemaking nor considered or
introduced as evidence in any rate proceeding nor used by the commissioner to
calculate or derive any elements of an appropriate premium level or rate of
return for any line of insurance that an insurer or any affiliate is authorized
to write.
NEW SECTION. Sec.
9. (1) The provisions of
sections 1 through 13 of this act are supplemental to any other provisions of
the laws of this state, and shall not preclude or limit any other powers or
duties of the commissioner under those laws, including, but not limited to,
chapter 48.31 RCW.
(2) The commissioner
may exempt any domestic property and casualty insurer from sections 1 through
13 of this act, if the insurer:
(a) Writes direct
business only in this state;
(b) Writes direct
annual premiums of two million dollars or less; and
(c) Assumes no
reinsurance in excess of five percent of direct premiums written.
NEW SECTION. Sec.
10. (1) Any foreign or alien
insurer shall, upon the written request of the commissioner, submit to the
commissioner an RBC report as of the end of the calendar year just ended by the
later of:
(a) The date an RBC
report would be required to be filed by a domestic insurer under section 2 of
this act; or
(b) Fifteen days after
the request is received by the foreign or alien insurer. Any foreign or alien
insurer shall, at the written request of the commissioner, promptly submit to
the commissioner a copy of any RBC plan that is filed with the insurance
commissioner of any other state.
(2) In the event of a
company action level event, regulatory action level event, or authorized
control level event with respect to any foreign or alien insurer as determined
under the RBC statute applicable in the state of domicile of the insurer or, if
no RBC statute is in force in that state, under the provisions of sections 1
through 13 of this act, if the insurance commissioner of the state of domicile
of the foreign or alien insurer fails to require the foreign or alien insurer
to file an RBC plan in the manner specified under that state's RBC statute, the
commissioner may require the foreign or alien insurer to file an RBC plan. In
this event, the failure of the foreign or alien insurer to file an RBC plan is
grounds to order the insurer to cease and desist from writing new insurance
business in this state.
(3) In the event of a
mandatory control level event with respect to any foreign or alien insurer, if
no domiciliary receiver has been appointed with respect to the foreign or alien
insurer under the rehabilitation and liquidation statute applicable in the
state of domicile of the foreign or alien insurer, the commissioner may apply for
an order under RCW 48.31.080 or 48.31.090 to conserve the assets within this
state of foreign or alien insurers, and the occurrence of the mandatory control
level event is considered adequate grounds for the application.
NEW SECTION. Sec.
11. There is no liability on
the part of, and no cause of action may arise against, the commissioner or
insurance department or its employees or agents for any action taken by them in
the performance of their powers and duties under sections 1 through 13 of this
act.
NEW SECTION. Sec.
12. All notices by the
commissioner to an insurer that may result in regulatory action are effective
upon dispatch if transmitted by registered or certified mail, or in the case of
any other transmission are effective upon the insurer's receipt of the notice.
NEW SECTION. Sec.
13. For RBC reports required
by property and casualty insurers for 1995, the following requirements apply in
lieu of sections 3 through 6 of this act:
(1) In the event of a
company action level event with respect to a domestic insurer, the commissioner
shall take no regulatory action.
(2) In the event of a
regulatory action level event under section 4(1) (a), (b), or (c) of this act
the commissioner shall take the actions required under section 3 of this act.
(3) In the event of a
regulatory action level event under section 4(1) (d), (e), (f), (g), (h), or
(i) of this act or an authorized control level event, the commissioner shall
take the actions required under section 4 of this act.
(4) In the event of a
mandatory control level event with respect to an insurer, the commissioner
shall take the actions required under section 5 of this act.
Sec. 14. RCW 48.05.340 and 1994 c
171 s 1 are each amended to read as follows:
(1) Subject to RCW
48.05.350 and 48.05.360 to qualify for authority to transact any one kind of
insurance as defined in chapter 48.11 RCW or combination of kinds of insurance
as shown below, a foreign or alien insurer, whether stock or mutual, or a
domestic insurer hereafter formed shall possess unimpaired paid-in capital
stock, if a stock insurer, or unimpaired surplus if a mutual insurer, and
additional funds in surplus, as follows, and shall thereafter maintain
unimpaired a combined total of: (a) The paid-in capital stock if a stock
insurer or surplus if a mutual insurer, plus (b) such additional funds in
surplus equal to the total of the following initial requirements:
Paid-in
capital
Kind or
kinds stock or Additional
of
insurance basic surplus surplus
Life ............................. $2,000,000 $2,000,000
Disability........................ 2,000,000 2,000,000
Life and disability .............. 2,400,000 2,400,000
Property.......................... 2,000,000 2,000,000
Marine &
transportation ............. 2,000,000........................ 2,000,000
General casualty...................... 2,400,000 2,400,000
Vehicle........................... 2,000,000 2,000,000
Surety............................ 2,000,000 2,000,000
Any two of
the following
kinds of
insurance:
Property,
marine &
transportation,
general
casualty,
vehicle,
surety, disability..................... 3,000,000 3,000,000
Multiple
lines (all insurances
except
life and title
insurance) ............................ 3,000,000 3,000,000
Title (in
accordance with the
provisions of chapter
48.29 RCW)
(2) Capital and
surplus requirements are based upon all the kinds of insurance transacted by
the insurer wherever it may operate or propose to operate, whether or not only
a portion of such kinds are to be transacted in this state.
(3) Until December 31,
1996, a foreign or alien insurer holding a certificate of authority to transact
insurance in this state immediately prior to June 9, 1994, may continue to be
authorized to transact the same kinds of insurance as long as it is otherwise
qualified for such authority. A domestic insurer holding a certificate of
authority to transact insurance in this state immediately prior to June 9,
1994, may continue to be authorized to transact the same kinds of insurance as
long as it is otherwise qualified for such an authority and thereafter
maintains unimpaired the amount of paid-in capital stock, if a stock insurer,
or basic surplus, if a mutual or reciprocal insurer, and special or additional
surplus as required of it under laws in force immediately prior to June 9, 1994.
(((4) The
commissioner may, by rule, require insurers to maintain additional capital and
surplus based upon the type, volume, and nature of insurance business
transacted consistent with the methods then adopted by the National Association
of Insurance Commissioners for determining the appropriate amount of additional
capital and surplus to be required. In the absence of an applicable rule, the
commissioner may, after a hearing or with the consent of the insurer, require
an insurer to have and maintain a larger amount of capital or surplus than
prescribed under this section or the rules under this section, based upon the
volume and kinds of insurance transacted by the insurer and on the principles
of risk-based capital as determined by the National Association of Insurance
Commissioners. This subsection applies only to insurers authorized to write
life insurance, disability insurance, or both.))
NEW SECTION. Sec.
15. If any provision of this
act or its application to any person or circumstance is held invalid, the
remainder of the act or the application of the provision to other persons or
circumstances is not affected.
NEW
SECTION. Sec. 16. Sections 1 through 13 of
this act are each added to chapter 48.05 RCW.
