Louisiana DOI amends hazardous financial condition regulation

The Louisiana Department of Insurance amended Regulation 43, “Companies in Hazardous Financial Condition,” to update the standards the insurance commissioner uses for identifying insurers in such condition as to render the continuance of their business hazardous to their policyholders, creditors or the general public.

The amended regulation added the following standards:

• “Whether the insurer’s operating loss in the last 12 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 percent of the insurer’s remaining surplus as regards policyholders in excess of the minimum required.
• “Whether the insurer has experienced or will experience in the foreseeable future cash flow or liquidity problems.”

The changes were made in light of the model regulation adopted by the National Association of Insurance Commissioners.