26-48-202. Risk-based capital reports.

(a) A domestic health organization shall, annually on or prior to 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 information as required by the RBC instructions. In addition, every domestic health organization shall file its RBC report:

(i) With the NAIC in accordance with the RBC instructions; and

(ii) With the insurance commissioner in any state in which the health organization is authorized to do business, if the insurance commissioner has notified the health organization of its request in writing, in which case the health organization shall file its RBC report not later than the later of:

(A) Fifteen (15) days from the receipt of notice to file its RBC report with that state; or

(B) March 1.

(b) A health organization's RBC shall be determined in accordance with the formula set forth in the RBC instructions and this article. The formula shall take the following into account, and may adjust for the covariance between the following which are determined in each case by applying the factors in the manner set forth in the RBC instructions:

(i) Asset risk;

(ii) Credit risk;

(iii) Underwriting risk; and

(iv) All other business risks and other relevant risks as are set forth in the RBC instructions.

(c) If a domestic health organization files an RBC report which in the judgment of the commissioner is inaccurate, the commissioner shall adjust the RBC report to correct the inaccuracy and shall notify the health organization of the adjustment. The notice shall contain a statement of the reasons for the adjustment. An RBC report as so adjusted is referred to as an "adjusted RBC report".

(d) An excess of capital over the amount produced by the risk-based capital requirements contained in this article and the formulas, schedules and instructions referenced in this article is desirable in the business of health insurance. Accordingly, health organizations should seek to maintain capital above the RBC levels required by this article. Additional capital is used and useful in the insurance business and helps to secure a health organization 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 article.