                                 CODE OF VIRGINIA

MANDATORY CONTROL LEVEL EVENT (§ 38.2-5506)

A. &#8220;Mandatory Control Level Event&#8221; means any of the following
events:

   1. The filing of an RBC Report which indicates that the licensee&#8217;s Total
   Adjusted Capital is less than its Mandatory Control Level RBC;

   2. The notification by the Commission to the licensee of an Adjusted RBC
   Report that indicates the event in subdivision A 1, provided the licensee does
   not challenge the Adjusted RBC Report under &#xA7; 38.2-5507; or

   3. If, pursuant to &#xA7; 38.2-5507, the licensee challenges an Adjusted RBC
   Report that indicates the event in subdivision A 1, notification by the
   Commission to the licensee that the Commission has, after a hearing, rejected
   the licensee&#8217;s challenge.

B. In the event of a Mandatory Control Level Event:

   1. With respect to a life and health insurer, the Commission shall take
   actions as are necessary to place the insurer under regulatory control
   pursuant to the provisions of Chapter 15 (&#xA7; 38.2-1500 et seq.). In that
   event, the Mandatory Control Level Event shall be deemed an indication of a
   hazardous financial condition which serves as sufficient grounds for the
   Commission to commence delinquency proceedings, and the receiver appointed in
   conjunction with such proceedings, shall have the rights, powers and duties
   with respect to the insurer as are set forth in Chapter 15 or any order of
   liquidation, rehabilitation or conservation entered thereunder. If the
   Commission takes actions pursuant to an Adjusted RBC Report, the insurer shall
   be entitled to such protections as are afforded to insurers under the
   appropriate provisions of this title pertaining to summary proceedings.
   Notwithstanding any of the foregoing, the Commission may forego action for up
   to ninety days after the Mandatory Control Level Event if the Commission finds
   there is a reasonable expectation that the Mandatory Control Level Event may
   be eliminated within the ninety-day period.

   2. With respect to a property and casualty insurer, the Commission shall take
   actions as are necessary to place the insurer under regulatory control
   pursuant to the provisions of Chapter 15, 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 to run-off under the supervision of the
   Commission. In either event, the Mandatory Control Level Event shall be deemed
   an indication of a hazardous financial condition which serves as sufficient
   grounds for the Commission to commence delinquency proceedings, and the
   receiver appointed in conjunction with such proceedings, shall have the
   rights, powers and duties with respect to the insurer as are set forth in
   Chapter 15 or any order of liquidation, rehabilitation, or conservation
   entered thereunder. If the Commission takes actions pursuant to an Adjusted
   RBC Report, the insurer shall be entitled to such protections as are afforded
   to insurers under the appropriate provisions of this title pertaining to
   summary proceedings. Notwithstanding any of the foregoing, the Commission may
   forego action for up to ninety days after the Mandatory Control Level Event if
   the Commission finds there is a reasonable expectation that the Mandatory
   Control Level Event may be eliminated within the ninety-day period.

   3. With respect to a health organization, the Commission shall take actions as
   are necessary to place the health organization under regulatory control
   pursuant to and in accordance with applicable provisions in Chapter 15 (&#xA7;
   38.2-1500 et seq.) and &#xA7; 38.2-4214.1, or &#xA7; 38.2-4509.1 of this
   title. In that event, the Mandatory Control Level Event shall be deemed an
   indication of a hazardous financial condition which serves as sufficient
   grounds for the Commission to commence delinquency proceedings, and the
   receiver appointed in conjunction with such proceedings shall have the rights,
   powers and duties with respect to the licensee as are set forth in Chapter 15,
   or any order of liquidation, rehabilitation or conservation entered
   thereunder. If the Commission takes actions pursuant to an adjusted RBC
   Report, the health organization shall be entitled to such protections as are
   afforded to the licensee under the appropriate provisions of this title
   pertaining to summary proceedings. Notwithstanding any of the foregoing, the
   Commission may forego action for up to ninety days after the Mandatory Control
   Level Event if the Commission finds there is a reasonable expectation that the
   Mandatory Control Level Event may be eliminated within the ninety-day period.

HISTORY: 1995, c. 789; 2000, c. 47; 2018, c. 706.