Under Company Action Level, which actions are required by the DOI and the insurer?

• A. DOI: None; Insurer: submit action plan to commissioner of domiciliary state explaining how it will obtain needed capital or reduce its risks
• B. DOI: right to take corrective action; Insurer: submit action plan to commissioner of domiciliary state explaining how it will obtain needed capital or reduce its risks
• C. DOI: appointment of a receiver; Insurer: cease operations
• D. DOI: impose penalties; Insurer: increase premiums

Answer: (A)

Under Company Action Level, the regulator expects the insurer to take written responsibility for addressing undercapitalization or elevated risk by presenting an action plan. The plan is submitted to the commissioner and outlines how the company will obtain the needed capital or reduce its risks so it can return to a sound financial condition. At this stage, the regulator’s role is to review and monitor the plan and ensure it’s being carried out; direct remedies like appointing a receiver or imposing penalties are reserved for more severe levels of regulatory action. Increasing premiums is not a mandated remedy at this level, since premium decisions are primarily business choices rather than regulatory actions.