31A-28-112. Prevention of insolvencies.
(1) The purpose of this section is to aid in the detection and prevention of insurer
insolvencies or impairments.
(2) The commissioner shall:
(a) notify the commissioner of every state within 30 days following the action taken or the
date the action occurs, when the commissioner takes the following actions against a member
insurer:
(i) revokes its license;
(ii) suspends its license; or
(iii) makes a formal order that the member insurer:
(A) restrict its premium writing;
(B) obtain additional contributions to surplus;
(C) withdraw from the state;
(D) reinsure all or any part of its business; or
(E) increase capital, surplus, or any other account for the security of policy owners or
creditors;
(b) report to the board of directors when the commissioner has:
(i) taken any of the actions set forth in Subsection (2)(a); or
(ii) received a report from any other commissioner indicating that an action described in
Subsection (2)(a) has been taken in another state;
(c) include in the report to the board of directors required by Subsection (2)(b):
(i) all significant details of the action taken; or
(ii) the report received from another commissioner;
(d) promptly report to the board of directors when the commissioner has reasonable cause
to believe from an examination of any member insurer, whether completed or in process, that the
insurer may be an impaired or insolvent insurer; and
(e) furnish to the board of directors the National Association of Insurance Commissioners
Insurance Regulatory Information System ratios and listings of companies not included in the
ratios developed by the National Association of Insurance Commissioners.
(3) (a) The board of directors may use the information contained in the ratios and listings
described in Subsection (2)(e) in carrying out the board of directors' duties and responsibilities
under this section.
(b) The report and the information contained in the ratios and listings shall be kept
confidential by the board of directors until the commissioner or other lawful authority publishes
the information.
(4) The commissioner may seek the advice and recommendations of the board of
directors concerning any matter affecting the commissioner's duties and responsibilities regarding
the financial condition of member insurers and companies seeking admission to transact insurance
business in this state.
(5) (a) The board of directors may make reports and recommendations to the
commissioner upon any matter germane to:
(i) the solvency, liquidation, rehabilitation, or conservation of any member insurer; or
(ii) the solvency of any company seeking to do an insurance business in this state.
(b) The reports and recommendations of the board of directors described in Subsection
(5)(a) may not be considered public documents.
(6) The board of directors may, upon majority vote, notify the commissioner of any
information indicating a member insurer may be an impaired or insolvent insurer.
(7) The board of directors may make recommendations to the commissioner for the
detection and prevention of insurer insolvencies.
(8) (a) At the conclusion of any insurer insolvency in which the association was obligated
to pay covered claims, the board of directors shall prepare a report to the commissioner
containing the information the board of directors has in its possession bearing on the history and
causes of the insolvency.
(b) In preparing a report on the history and causes of insolvency of a particular insurer,
the board of directors may cooperate with:
(i) the board of directors of a guaranty association in another state; or
(ii) an organization described in Subsection 31A-28-108(16).
(c) The board of directors may adopt by reference any report prepared by:
(i) a guaranty association in another state; or
(ii) an organization described in Subsection 31A-28-108(16).
Amended by Chapter 161, 2001 General Session
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Last revised: Thursday, May 28, 2009