                                 CODE OF VIRGINIA

COMPANY ACTION LEVEL EVENT (§ 38.2-5503)

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

   1. The filing of an RBC Report by a licensee which indicates that:
   				a. The licensee&#8217;s Total Adjusted Capital is greater than or equal to
   its Regulatory Action Level RBC but less than its Company Action Level RBC;
   				b. If a life and health insurer, the insurer has Total Adjusted Capital
   which is greater than or equal to its Company Action Level RBC but less than
   the product of its Authorized Control Level RBC and 3.0 and has a negative
   trend;
   				c. If a property and casualty insurer, the insurer has Total Adjusted
   Capital that is greater than or equal to its Company Action Level RBC but less
   than the product of its Authorized Control Level RBC and 3.0 and triggers the
   trend test determined in accordance with the Trend Test Calculation included
   in the Property and Casualty RBC instructions; or
   				d. If a health organization, the health organization has Total Adjusted
   Capital that is greater than or equal to its Company Action Level RBC but less
   than the product of its Authorized Control Level RBC and 3.0 and triggers the
   trend test determined in accordance with the Trend Test Calculation included
   in the Health RBC instructions;

   2. The notification by the Commission to the licensee of an Adjusted RBC
   Report that indicates the event in subdivision A 1 a, 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 a, the 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 Company Action Level Event, the licensee shall prepare and
submit to the Commission an RBC Plan which shall:

   1. Identify the conditions in the licensee which contribute to the Company
   Action Level Event;

   2. Contain proposals of corrective actions which the licensee intends to take
   and would be expected to result in the elimination of the Company Action Level
   Event;

   3. Provide projections of the licensee&#8217;s financial results in the
   current year and for at least the four succeeding years if the licensee is a
   life and health insurer or a property and casualty insurer, or at least two
   succeeding years if the licensee is a health organization, both in the absence
   of proposed corrective actions and giving effect to the proposed corrective
   actions, including projections of statutory balance sheets, operating income,
   net income, capital and surplus, and RBC levels. If appropriate, the
   projections for both new and renewal business shall include separate
   projections for each major line of business and separately identify each
   significant income, expense and benefit component;

   4. Identify the key assumptions impacting the licensee&#8217;s projections and
   the sensitivity of the projections to the assumptions; and

   5. Identify the quality of, and problems associated with, the licensee&#8217;s
   business, including but not limited to its assets, anticipated business growth
   and associated surplus strain, extraordinary exposure to risk, mix of business
   and use of reinsurance, if any, in each case.

C. The RBC Plan shall be submitted:

   1. Within forty-five days of the Company Action Level Event; or

   2. If the licensee challenges an Adjusted RBC Report pursuant to &#xA7;
   38.2-5507, within forty-five days after notification to the licensee that the
   Commission has, after a hearing, rejected the licensee&#8217;s challenge.

D. Within sixty days after the submission by a licensee of an RBC Plan to the
Commission, the Commission shall notify the licensee whether the RBC Plan shall
be implemented or is, in the judgment of the Commission, unsatisfactory. If the
Commission determines the RBC Plan is unsatisfactory, the notification to the
licensee shall set forth the reasons for the determination, and may set forth
proposed revisions which will render the RBC Plan satisfactory, in the judgment
of the Commission. Upon notification from the Commission, the licensee shall
prepare a Revised RBC Plan, which may incorporate by reference any revisions
proposed by the Commission, and shall submit the Revised RBC Plan to the
Commission:

   1. Within forty-five days after the notification from the Commission; or

   2. If the licensee challenges the notification from the Commission under
   &#xA7; 38.2-5507, within forty-five days after a notification to the licensee
   that the Commission has, after a hearing, rejected the licensee&#8217;s
   challenge.

E. In the event of a notification by the Commission to a licensee that the
licensee&#8217;s RBC Plan or Revised RBC Plan is unsatisfactory, the Commission
may at the Commission&#8217;s discretion, subject to the licensee&#8217;s right
to a hearing under &#xA7; 38.2-5507, specify in the notification that the
notification constitutes a Regulatory Action Level Event.

F. Every domestic licensee that files an RBC Plan or Revised RBC Plan with the
Commission shall file a copy of the RBC Plan or Revised RBC Plan with the
insurance commissioner in any state in which the licensee is authorized to do
business if:

   1. Such state has an RBC provision substantially similar to subsection A of
   &#xA7; 38.2-5508; and

   2. The insurance commissioner of that state has notified the licensee of its
   request for the filing in writing, in which case the licensee shall file a
   copy of the RBC Plan or Revised RBC Plan in that state no later than the later
   of:
   				a. Fifteen days after the receipt of notice to file a copy of its RBC Plan
   or Revised RBC Plan with the state; or
   				b. The date on which the RBC Plan or Revised RBC Plan is filed under
   subsection C of &#xA7; 38.2-5504.

HISTORY: 1995, c. 789; 2000, c. 47; 2007, c. 360; 2012, c. 156.