Ga. Comp. R. & Regs. R. 120-2-54-.03 - Standards
The following standards, either singly or a combination of two or more, may be considered by the Commissioner to determine whether the continued operation of any insurer transacting an insurance business in this State might be deemed to be hazardous to its policyholders, creditors, or the general public. The Commissioner may consider:
(a) Averse findings reported in financial
condition and market conduct examination reports, audit reports, and actuarial
opinions, reports or summaries;
(b)
The National Association of Insurance Commissioners Insurance Regulatory
Information System and its other financial analysis solvency tools and
reports;
(c) Whether the insurer
has made adequate provision, according to presently accepted actuarial
standards of practice, for the anticipated cash flows required by the
contractual obligations and related expense of the insurer, when considered in
light of the assets held by the insurer with respect to such reserves and
related actuarial items including, but not limited to, the investment earnings
on such assets, and the considerations anticipated to be received and retained
under such policies and contracts;
(d) The ability of an assuming reinsurer to
perform and whether the insurers reinsurance program provides sufficient
protection for the insurer's remaining surplus after taking into account the
insurer's cash flow and the classes of business written as well as the
financial condition of the assuming reinsurer;
(e) Whether the insurer's operating loss in
the last twelve-month period or any shorter period of time, including but not
limited to net capital gain or loss, change in non-admitted assets, and cash
dividends paid to shareholders, is greater than fifty percent (50%) of the
insurer's remaining surplus as regards policyholders in excess of the minimum
required;
(f) Whether the insurer's
operating loss in the last twelve-month period or any shorter period of time,
excluding net capital gains, is greater than twenty percent (20%) of the
insurer's remaining surplus as regards policyholders in excess of the minimum
required;
(g) Whether a reinsurer,
obligor or any entity within the insurer's insurance holding company system, is
insolvent, threatened with insolvency or delinquent in payment of its monetary
or other obligations, and which in the opinion of the Commissioner may affect
the solvency of the insurer;
(h)
Contingent liabilities, pledges or guarantees which either individually or
collectively involve a total amount which in the opinion of the Commissioner
may affect the solvency of the insurer;
(i) Whether any controlling person of any
insurer is delinquent in the transmitting to, or payment of, net premiums to
the insurer;
(j) The age and
collectability of receivables;
(k)
Whether the management of an insurer, including officers, directors, or any
other person who directly or indirectly controls the operation of the insurer,
fails to possess and demonstrate the competence, fitness, and reputation deemed
necessary to serve the insurer in such position;
(l) Whether the management of an insurer has
failed to respond to inquiries relative to the condition of the insurer or has
furnished false and misleading information concerning an inquiry;
(m) Whether the insurer has failed to meet
financial and holding company filing requirements in the absence of a reason
satisfactory to the Commissioner;
(n) Whether the management of an insurer
either has filed any false or misleading sworn financial statement, or has
released false or misleading financial statement to lending institutions or to
the general public, or has made a false or misleading entry, or has omitted an
entry of a material amount in the books of the insurer;
(o) Whether the insurer has grown so rapidly
and to such an extent that it lacks adequate financial and administrative
capacity to meet its obligations in a timely manner;
(p) Whether the insurer has experienced or
will experience in the foreseeable future cash flow or liquidity
problems;
(q) Whether management
has established reserves that do not comply with minimum standards established
by State insurance laws, regulations, statutory accounting standards, sound
actuarial principles, and standards of practice;
(r) Whether management persistently engages
in material under-reserving that results in adverse development;
(s) Whether transactions among affiliates,
subsidiaries, or controlling persons for which the insurer receives assets or
capital gains, or both, do not provide sufficient value, liquidity, or
diversity to assure the insurer's ability to meet its outstanding obligations
as they mature;
(t) Any other
finding determined by the Commissioner to be hazardous to the insurer's
policyholders, creditors, or general public.
Notes
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