(A) Every domestic licensee must, on or before each March first filing date, prepare and submit to the director an RBC Report of its RBC Levels as of the end of the preceding calendar year. That RBC Report must be filed in a form and must contain such information required by the RBC Instructions. In addition, every domestic licensee must file its RBC Report:
(1) with the NAIC in accordance with the RBC Instructions; and
(2) with the chief insurance regulatory officer in a state in which the licensee is authorized to transact business, if that chief insurance regulatory officer has notified the licensee in writing. The licensee must file its RBC Report with that chief insurance regulatory officer no later than fifteen days from its receipt of notice to file or the March first filing date.
(B)(1) A life and health insurer's RBC must be determined in accordance with the formula detailed in the RBC Instructions. The formula must be determined in each case by applying the factors in the manner detailed in the RBC Instructions and must take into account, and may adjust for the covariance between:
(a) risk with respect to assets;
(b) risk of adverse insurance experience with respect to liabilities and obligations;
(c) interest rate risk with respect to the insurer's business; and
(d) all other business risks and other relevant risks in the RBC Instructions.
(2) Each risk must be determined in each case by applying the factors in the manner set forth in the RBC Instructions.
(C)(1) A property and casualty insurer's RBC must be determined by applying the factors in the manner detailed in the RBC Instructions and must be determined in accordance with the formula detailed in the RBC Instructions. The formula must take into account, and may adjust for the covariance between:
(a) asset risk;
(b) credit risk;
(c) underwriting risk; and
(d) all other business risks and other relevant risks in the RBC Instructions.
(2) Each risk must be determined in each case by applying the factors in the manner set forth in the RBC Instructions.
(D)(1) A health organization's RBC must be determined by applying the factors in the manner detailed in the RBC Instructions and must be determined in accordance with the formula detailed in the RBC Instructions. The formula must be taken into account, and may adjust for the covariance between:
(a) asset risk;
(b) credit risk;
(c) underwriting risk; and
(d) all other business risks and other relevant risks in the RBC Instructions.
(2) Each risk must be determined in each case by applying the factors in the manner set forth in the RBC Instructions.
(E) An excess of capital over the amount produced by the RBC requirements, formulas, schedules, and instructions contained in this article is desirable. Licensees should seek to maintain capital above the required RBC levels. Additional capital is used and is useful in securing a licensee against various risks inherent in or affecting the business of insurance and not accounted for, or which only may be partially measured, by the RBC requirements contained in this article.
(F) If a domestic licensee files an RBC Report which, in the judgment of the director, is inaccurate, then the director must adjust the RBC Report to correct the inaccuracy and must notify the domestic licensee in writing of the adjustment. The notice must include the reasons for the adjustment.
HISTORY: 1996 Act No. 254, Section 2; 2014 Act No. 164 (S.908), Section 2, eff January 1, 2015.
Effect of Amendment
2014 Act No. 164, Section 2, substituted "licensee" for "insurer" throughout; rewrote subsection (C); added subsection (D); redesignated the remaining subsections accordingly; and made other nonsubstantive changes.
Structure South Carolina Code of Laws
Chapter 9 - Capital, Surplus, Reserves, And Other Financial Matters
Section 38-9-10. Capital and surplus required of stock insurers; delinquency.
Section 38-9-20. Surplus required of mutual insurers; delinquency.
Section 38-9-40. Director to notify insurers of amounts required; annual schedule.
Section 38-9-50. Restrictions on kinds of insurance that insurers may write.
Section 38-9-60. No limitation on certain license provisions.
Section 38-9-70. Insurers may make deposits to do business in other states.
Section 38-9-90. Securities or bonds must be held as security for claims.
Section 38-9-100. Deposit of securities not necessary when made with other states.
Section 38-9-110. Voluntary deposits for compliance with laws of other states.
Section 38-9-120. Exchange of deposited securities.
Section 38-9-130. Interest on deposited securities.
Section 38-9-140. Principal of deposited securities.
Section 38-9-150. Return of deposited securities.
Section 38-9-160. Enforcement of trust created by deposit.
Section 38-9-170. Unearned premium reserve.
Section 38-9-180. Standard Valuation Law.
Section 38-9-190. Loss and claim reserves.
Section 38-9-200. Reinsurance credits; liability reductions.
Section 38-9-210. Reduction from liability for reinsurance; security.
Section 38-9-220. "Qualified United States financial institution" defined.
Section 38-9-230. Confidentiality.
Section 38-9-310. Definitions.
Section 38-9-320. Preparation and submission of RBC (risk based capital) Report; form and content.
Section 38-9-340. Regulatory Action Level Event defined; duties of director; corrective action.
Section 38-9-370. Confidential hearing; notification; time of hearing.
Section 38-9-380. Confidentiality of reports, plans, and orders.
Section 38-9-400. Limitations on use of RBC (risk based capital) Instructions, Reports, and Plans.
Section 38-9-410. Other powers or duties of director or designee.
Section 38-9-420. Regulatory power of director.
Section 38-9-430. Exemptions from application of article.
Section 38-9-440. Applicability of RBC (risk based capital) requirements to foreign insurers.
Section 38-9-450. Limitation of liability.
Section 38-9-460. Notification by director which may result in regulatory action.