Ins 51.01(16)(a)
(a) The filing of a risk based capital report by an insurer which indicates that the insurer's total adjusted capital is greater than or equal to its authorized control level risk based capital but less than its regulatory action level risk based capital.
Ins 51.01(16)(b)
(b) The notification by the commissioner to an insurer of an adjusted risk based capital report that indicates the event in par.
(a), if the insurer does not challenge the adjusted risk based capital report under s.
Ins 51.50.
Ins 51.01(16)(c)
(c) If, pursuant to s.
Ins 51.50, the insurer challenges an adjusted risk based capital report that indicates the event in par.
(a), the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.
Ins 51.01(16)(d)
(d) The failure of the insurer to file a risk based capital report by the March 1, unless the insurer has provided an explanation for such failure which is satisfactory to the commissioner and has cured the failure within ten days after March 1.
Ins 51.01(16)(e)
(e) The failure of the insurer to submit a risk based capital plan to the commissioner within the time period set forth in s.
Ins 51.15 (2).
Ins 51.01(16)(f)
(f) Notification by the commissioner to the insurer of all of the following:
Ins 51.01(16)(f)1.
1. The risk based capital plan or revised risk based capital plan submitted by the insurer is, in the judgment of the commissioner, unsatisfactory.
Ins 51.01(16)(f)2.
2. Such notification constitutes a regulatory action level event with respect to the insurer, provided the insurer has not challenged the determination under s.
Ins 51.50.
Ins 51.01(16)(g)
(g) If, under s.
Ins 51.50, the insurer challenges a determination by the commissioner under par.
(f), the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected such challenge.
Ins 51.01(16)(h)
(h) Notification by the commissioner to the insurer that the insurer has failed to adhere to its risk based capital plan or revised risk based capital plan, but only if such failure has a substantial adverse effect on the ability of the insurer to eliminate the company action level event in accordance with its risk based capital plan or revised risk based capital plan and the commissioner has so stated in the notification, provided the insurer has not challenged the determination under s.
Ins 51.50.
Ins 51.01(16)(i)
(i) If, under s.
Ins 51.50, the insurer challenges a determination by the commissioner under par.
(h), the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the challenge.
Ins 51.01(17)
(17) “Regulatory action level risk based capital" means, with respect to any insurer, the product of 1.5 and its authorized control level risk based capital.
Ins 51.01(18)
(18) “Revised risk based capital plan" means a risk based capital plan prepared by an insurer with or without the commissioner's recommendation after the original plan is rejected by the commissioner.
Ins 51.01(19)
(19) “Risk based capital instructions" means the risk based capital report including risk based capital instructions adopted by the NAIC, as of September 1, 1996, and, if approved in writing by the commissioner, the risk based capital report and instructions as amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC.
Ins 51.01(20)
(20) “Risk based capital level" means an insurer's company action level risk based capital, regulatory action level risk based capital, authorized control level risk based capital, or mandatory control level risk based capital.
Ins 51.01(21)
(21) “Risk based capital plan” means a comprehensive financial plan containing the elements specified in s.
Ins 51.15 (1).
Ins 51.01(23)
(23) “Total adjusted capital" means the sum of all of the following:
Ins 51.01(23)(b)
(b) Such other items, if any, as the risk based capital instructions may provide.
Ins 51.01 History
History: Cr.
Register, December, 1996, No. 492, eff. 1-1-97; cr. (8m), r. (9) (a) 1., 2., renum. (9) (a) 3. to 8. to be (9) (a) 1. to 6., am. (10),
Register, May, 1999, No. 521, eff. 6-1-99;
CR 10-077: am. (4) (a) 2., (10), and (14); cr. (4) (a) 3. and 4., r. (9) (a) 3., renum. (9) (a) 4., 5., and 6. to be (9) (a) 3., 4., and 5.
Register December 2010 No. 660, eff. 1-1-11;
CR 13-059: am. (4) (a) 2.
Register June 2014 No. 702, eff. 7-1-14; correction in (9) (a) 2. made under s.
13.92 (4) (b) 7, Stats.,
Register June 2014 No. 702;
CR 22-071: am. (21) Register June 2023 No. 810, eff. 7-1-23. Ins 51.05
Ins 51.05
Risk based capital reports. Ins 51.05(1)(1)
Every domestic insurer shall, on or prior to each March 1, prepare and submit a report of its risk based capital levels as of the end of the calendar year just ended, in a form and containing such information as is required by the risk based capital instructions. For the purpose of this section filing of a risk based capital report with the NAIC constitutes filing with the commissioner. A domestic insurer shall file its risk based capital report with all of the following:
Ins 51.05(1)(a)
(a) The NAIC in accordance with the risk based capital instructions.
Ins 51.05(1)(b)
(b) 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 risk based capital report not later than the later of:
Ins 51.05(1)(b)1.
1. Fifteen days from the receipt of notice to file its risk based capital report with that state.
Ins 51.05(1g)
(1g) The risk based capital of health maintenance organization insurers and of insurers writing only limited service health organization business shall be determined in accordance with the formula set forth in the risk based capital instructions. The formula shall take into account, and may adjust for the covariance between each of the following:
Ins 51.05(1g)(d)
(d) All other business risks and such other relevant risks as are set forth in the risk based capital instructions.
Ins 51.05(1r)
(1r) The risks identified under sub.
(1g) shall be provided for as determined in each case by applying the factors in the manner set forth in the risk based capital instructions.
Ins 51.05(2)
(2) A life or health insurer's risk based capital shall be determined in accordance with the formula set forth in the risk based capital instructions. The formula shall take into account, and may adjust for the covariance between each of the following:
Ins 51.05(2)(b)
(b) The risk of adverse insurance experience with respect to the insurer's liabilities and obligations.
Ins 51.05(2)(c)
(c) The interest rate risk with respect to the insurer's business.
Ins 51.05(2)(d)
(d) All other business risks and such other relevant risks as are set forth in the risk based capital instructions.
Ins 51.05(3)
(3) The risks identified under sub.
(2) shall be provided for as determined in each case by applying the factors in the manner set forth in the risk based capital instructions.
Ins 51.05(4)
(4) A property and casualty insurer's risk based capital shall be determined in accordance with the formula set forth in the risk based capital instructions. The formula shall take into account, and may adjust for the covariance between each of the following:
Ins 51.05(4)(d)
(d) All other business risks and such other relevant risks as are set forth in the risk based capital instructions.
Ins 51.05(5)
(5) The risks identified under sub.
(4) shall be provided for as determined in each case by applying the factors in the manner set forth in the risk based capital instructions.
Ins 51.05 Note
Note: An excess of capital over the amount produced by the risk based capital requirements in this subchapter and the formulas, schedules and instructions referenced in this subchapter is desirable in the business of insurance. Accordingly, insurers should seek to maintain capital above the risk based capital levels required by this subchapter. 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 risk-based capital requirements contained in this chapter.
Ins 51.05(6)
(6) If a domestic insurer files a risk based capital report which in the judgment of the commissioner is inaccurate, then the commissioner shall adjust the risk based capital 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.
Ins 51.05 History
History: Cr.
Register, December, 1996, No. 492, eff. 1-1-97;
cr. (1g) and (1r),
Register, May, 1999, No. 521, eff. 6-1-99.
Ins 51.15(1)(1)
If a company action level event occurs, the insurer shall prepare and submit to the commissioner a risk based capital plan which shall include all of the following:
Ins 51.15(1)(a)
(a) Identification of the conditions which contribute to the company action level event.
Ins 51.15(1)(b)
(b) Proposals of corrective actions which the insurer intends to take and would be expected to result in the elimination of the company action level event.
Ins 51.15(1)(c)
(c) 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 or surplus or both. The projections for both new and renewal business shall include separate projections for each major line of business and separately identify each significant income, expense and benefit component, if appropriate.
Ins 51.15(1)(d)
(d) Identification of the key assumptions impacting the insurer's projections and the sensitivity of the projections to the assumptions.
Ins 51.15(1)(e)
(e) Discussion of 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.
Ins 51.15(1)(f)
(f) Such other information as is requested by the commissioner.
Ins 51.15(2)
(2) The risk based capital plan required under this section shall be submitted:
Ins 51.15(2)(b)
(b) If the insurer challenges an adjusted risk based capital report under s.
Ins 51.50, within 45 days after notification to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.
Ins 51.15(3)
(3) Within 60 days after the submission by an insurer of a risk based capital plan to the commissioner, the commissioner shall notify the insurer whether the risk based capital plan shall be implemented or is, in the judgment of the commissioner, unsatisfactory. If the commissioner determines the risk based capital plan is unsatisfactory, the notification to the insurer shall set forth the reasons for the determination, and may set forth proposed revisions which will render the risk based capital plan satisfactory, in the judgment of the commissioner. Upon notification from the commissioner, the insurer shall prepare a revised risk based capital plan, which may incorporate by reference any revisions proposed by the commissioner, and shall submit the revised risk based capital plan to the commissioner:
Ins 51.15(3)(a)
(a) Within 45 days after the notification from the commissioner; or
Ins 51.15(3)(b)
(b) If the insurer challenges the notification from the commissioner under s.
Ins 51.50, within 45 days after a notification to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.
Ins 51.15(4)
(4) If the commissioner notifies an insurer that the insurer's risk based capital plan or revised risk based capital plan is unsatisfactory, the commissioner may at the commissioner's discretion, subject to the insurer's right to a hearing under s.
Ins 51.50, specify in the notification that the notification constitutes a regulatory action level event.
Ins 51.15(5)
(5) Every domestic insurer that files a risk based capital plan or revised risk based capital plan with the commissioner shall file a copy of the risk based capital plan or revised risk based capital plan with the insurance commissioner in any state in which the insurer is authorized to do business if:
Ins 51.15(5)(b)
(b) The insurance commissioner of that state has notified the insurer of its request for the filing in writing.
Ins 51.15(6)
(6) If an insurer is required to file a risk based capital plan or revised risk based capital plan under sub.
(5) in a state it shall file a copy of the risk based capital plan or revised risk based capital plan in that state no later than the later of the following:
Ins 51.15(6)(a)
(a) Fifteen days after the receipt of notice to file a copy of its risk based capital plan or revised risk based capital plan with the state.
Ins 51.15 History
History: Cr.
Register, December, 1996, No. 492, eff. 1-1-97.
Ins 51.20
Ins 51.20
Regulatory action level event. Ins 51.20(1)(1)
If a regulatory action level event occurs with respect to an insurer the commissioner shall:
Ins 51.20(1)(a)
(a) Require the insurer to prepare and submit a risk based capital plan or, if applicable, a revised risk based capital plan;
Ins 51.20(1)(b)
(b) Perform such examination or analysis as the commissioner deems necessary of the assets, liabilities and operations of the insurer including a review of its risk based capital plan or revised risk based capital plan; and
Ins 51.20(1)(c)
(c) Subsequent to the examination or analysis, issue an order specifying such corrective actions as the commissioner shall determine are required.
Ins 51.20(2)
(2) In determining corrective actions, the commissioner may take into account such factors as are 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 pursuant to the risk based capital instructions. The insurer shall submit a risk based capital plan or revised risk based capital plan:
Ins 51.20(2)(a)
(a) Within 45 days after the occurrence of the regulatory action level event;
Ins 51.20(2)(b)
(b) If the insurer challenges an adjusted risk based capital report under s.
Ins 50.50 and the challenge is not frivolous in the judgment of the commissioner, within 45 days after the notification to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge; or
Ins 51.20(2)(c)
(c) If the insurer challenges a revised risk based capital plan pursuant to s.
Ins 51.50 and the challenge is not frivolous in the judgment of the commissioner, within 45 days after the notification to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.
Ins 51.20(3)
(3) 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 risk based capital plan or revised risk based capital plan, examine or analyze the assets, liabilities and operations of the insurer and formulate a corrective order with respect to the insurer. The fees, costs and expenses relating to consultants shall be borne by the affected insurer or such other party as directed by the commissioner.
Ins 51.20 History
History: Cr.
Register, December, 1996, No. 492, eff. 1-1-97.
Ins 51.30
Ins 51.30
Authorized control level event. If an authorized control level event occurs with respect to an insurer, the commissioner shall:
Ins 51.30(1)
(1) Take such actions as are required under s.
Ins 51.20 regarding an insurer with respect to which a regulatory action level event has occurred; or
Ins 51.30(2)
(2) If the commissioner deems it to be in the best interests of the policyholders and creditors of the insurer and of the public, take such actions as are necessary to cause the insurer to be placed under regulatory control under ch.
645, Stats. If the commissioner takes such actions, the authorized control level event shall be deemed sufficient grounds for the commissioner to take action under ch.
645, Stats., and the commissioner shall have the rights, powers and duties with respect to the insurer as are set forth in ch.
645, Stats.
Ins 51.30 History
History: Cr.
Register, December, 1996, No. 492, eff. 1-1-97.
Ins 51.40
Ins 51.40
Mandatory control level. If there is a mandatory control level event:
Ins 51.40(1)
(1) With respect to a life or health insurer, the commissioner shall take such actions as are necessary to place the insurer under regulatory control under ch.
645, Stats. The mandatory control level event shall be deemed sufficient grounds for the commissioner to take action under ch.
645, Stats., and the commissioner shall have the rights, powers and duties with respect to the insurer as are set forth in ch.
645, Stats. Notwithstanding any of the foregoing, 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 90 day period.
Ins 51.40(2)
(2) With respect to a property and casualty insurer, the commissioner shall take such actions as are necessary to place the insurer under regulatory control under ch.
645, Stats., or, in the case of an insurer which is writing no business and which 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 shall be deemed sufficient grounds for the commissioner to take action under ch.
645, Stats., and the commissioner shall have the rights, powers and duties with respect to the insurer as are set forth in ch.
645, Stats. Notwithstanding any of the foregoing, the commissioner may forego action for up to 90 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 90 day period.
Ins 51.40 History
History: Cr.
Register, December, 1996, No. 492, eff. 1-1-97.
