Risk-Based Capital Act

The act governs the capital that insurance companies must maintain in relation to the risks they carry, requiring insurers to file risk-based capital reports with the state insurance regulator. It sets out a graduated series of triggers — company action, regulatory action, authorized control, and mandatory control level events — under which progressively stronger supervisory responses become available as an insurer's capital falls further below the required level, escalating from a corrective plan prepared by the company to the regulator assuming control. It also reaches insurers domiciled elsewhere but doing business in the state, allows a company to contest a determination through a challenge hearing, provides immunity for actions taken under it, and keeps the reports confidential, barring their use in ratemaking or in public announcements about an insurer's capital position.

Editorial summary generated from the text of this act. It is not part of the statute — read the sections below for the operative language.