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Delaware General AssemblyDelaware RegulationsMonthly Register of RegulationsNovember 2016

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18 DE Admin. Code 304
Proposed amended Regulation 304 relating to Standards and Commissioner's Authority for Companies Deemed to be in Hazardous Financial Condition [Formerly Regulation 70] was published in the Delaware Register of Regulations on September 1, 2016. The comment period remained open until October 3, 2016. There was no public hearing on proposed amended Regulation 304. Public notice of the proposed amended Regulation 304 was published in the Register of Regulations in conformity with Delaware law.
1. 18 Del.C. §§311, 519, 520, 5901 and 5905 require a regulation to set forth rules and procedural requirements which the Commissioner deems necessary to carry out the provisions of the Code.
Based on the provisions of 18 Del.C. §§311, 519, 520, 5901 and 5905; and 29 Del.C. Ch. 101, and the record in this docket, I hereby adopt proposed amended Regulation 304 as may more fully and at large appear in the version attached hereto to be effective 10 days after being published as final.
The text of proposed amended Regulation 304 last appeared in the Register of Regulations Vol. 20, Issue 3, pages 146-149.
IT IS SO ORDERED this 1st day of November, 2016.
304 Define Standards and Commissioner’s Authority for Companies Deemed to be in Hazardous Financial Condition
This Regulation is adopted and promulgated by 18 Del.C. §§519, 520, 5901 and 5905 and 29 Del.C. Ch. 101.
3.1.1 findings of adverse financial condition or adverse market conduct examination reports adverse findings reported in financial condition and market conduct examination reports, audit reports, and actuarial opinions, reports or summaries;
3.1.3 the ratios of commission expense, general insurance expense, policy benefits and reserve increases as to annual premium and net investment income which could lead to an impairment of capital and surplus 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 expenses 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;
3.1.4 the insurer's asset portfolio when viewed in light of current economic conditions is not of sufficient value, liquidity, or diversity to assure the company's ability to meet its outstanding obligations as they mature;
3.1.5 the ability of an assuming reinsurer to perform and whether the insurer's reinsurance program provides sufficient protection for the company's 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;
3.1.65 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 50% of such insurer's remaining surplus as regards policyholders in excess of the minimum required;
3.1.7 whether any affiliate, subsidiary or reinsurer is insolvent, threatened with insolvency, or delinquent in payment of its monetary or other obligation 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;
3.1.11 whether the management of an insurer, including officers, directors, or any other person who directly or indirectly controls the operation of such the insurer, fails to possess and demonstrate the competence, fitness and reputation deemed necessary to serve the insurer in such position;
3.1.134 whether 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 material amount in the books of the insurer;
3.1.145 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; or
3.1.156 whether the company has experienced or will experience in the foreseeable future cash flow and/or liability problems.;
4.1.2 make appropriate adjustments including disallowance to asset values attributable to investments in or transactions with parents, subsidiaries, or affiliates consistent with the NAIC Accounting Practices And Procedures Manual, state laws and regulations;
4.2 If the Commissioner determines that the continued operation of the insurer licensed to transact business in this state may be hazardous to the policyholders, creditors or the general public, then the Commissioner may, upon his a determination, issue an order requiring the insurer to:
4.3 If the insurer is a foreign insurer, the Commissioner's order may be limited to the extent provided by statute.
Any order or decision of the cCommissioner shall be subject to review in accordance with the Administrative Procedures Act at the instance of nay party to the proceedings whose interests are substantially affected.
This Regulation shall become effective thirty (30) days after the commissioner's signature 10 days after being published as final.
Last Updated: December 31 1969 19:00:00.
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