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                                                      PRINTER'S NO. 1937

THE GENERAL ASSEMBLY OF PENNSYLVANIA


SENATE BILL

No. 1268 Session of 2006


        INTRODUCED BY STACK, O'PAKE, LOGAN, RAFFERTY, WASHINGTON AND
           FONTANA, JUNE 22, 2006

        REFERRED TO BANKING AND INSURANCE, JUNE 22, 2006

                                     AN ACT

     1  Amending the act of May 17, 1921 (P.L.789, No.285), entitled, as
     2     amended, "An act relating to insurance; establishing an
     3     insurance department; and amending, revising, and
     4     consolidating the law relating to the licensing,
     5     qualification, regulation, examination, suspension, and
     6     dissolution of insurance companies, Lloyds associations,
     7     reciprocal and inter-insurance exchanges, and certain
     8     societies and orders, the examination and regulation of fire
     9     insurance rating bureaus, and the licensing and regulation of
    10     insurance agents and brokers; the service of legal process
    11     upon foreign insurance companies, associations or exchanges;
    12     providing penalties, and repealing existing laws," further
    13     defining "company action level event" for purposes of risk-
    14     based capital reporting requirements.

    15     The General Assembly of the Commonwealth of Pennsylvania
    16  hereby enacts as follows:
    17     Section 1.  The definition of "company action level event" in
    18  section 501-A of the act of May 17, 1921 (P.L.789, No.285),
    19  known as The Insurance Department Act of 1921, added June 25,
    20  1997 (P.L.349, No.40), is amended to read:
    21     Section 501-A.  Definitions.
    22     The following words and phrases when used in this article
    23  shall have, unless the context clearly indicates otherwise, the


     1  meanings given to them in this section:
     2     * * *
     3     "Company action level event" means one or more of the
     4  following events:
     5     (1)  The filing of an RBC report by an insurer that indicates
     6  that:
     7     (i)  the insurer's total adjusted capital is greater than or
     8  equal to its regulatory action level RBC but less than its
     9  company action level RBC; [or]
    10     (ii)  if a life or health insurer, the insurer has total
    11  adjusted capital that is greater than or equal to its company
    12  action level RBC but less than the product of its authorized
    13  control level RBC and 2.5 and has a negative trend[.]; or
    14     (iii)  if a property or casualty insurer, the insurer has
    15  total adjusted capital that is greater than or equal to its
    16  company action level RBC but less than the product of its
    17  authorized control level RBC and 3.0 and a trend test result
    18  that triggers regulatory attention, as determined in accordance
    19  with the Trend Test Calculation included in the RBC
    20  instructions.
    21     (2)  The notification by the Insurance Commissioner to the
    22  insurer of an adjusted RBC report that indicates an event in
    23  paragraph (1).
    24     * * *
    25     Section 2.  This act shall take effect in 60 days.




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