<section article="gin" article_name="Insurance" number="32-101" title_number="32" title_name="Risk Management and Own Risk and Solvency Assessment Act" subtitle_number="1"> <level label="a"> <text>In this title the following words have the meanings indicated.</text> </level> <level label="b"> <text>“Carrier” means:</text> <level label="1"> <text>an insurer;</text> </level> <level label="2"> <text>a nonprofit health service plan;</text> </level> <level label="3"> <text>a health maintenance organization; or</text> </level> <level label="4"> <text>a dental plan organization.</text> </level> </level> <level label="c"> <text>“Insurance group” means, for the purpose of conducting an ORSA, those carriers and affiliates that are included within an insurance holding company system as defined in § 7–101 of this article.</text> </level> <level label="d"> <text>“NAIC” means the National Association of Insurance Commissioners.</text> </level> <level label="e"> <text>“Own Risk and Solvency Assessment” or “ORSA” means a confidential internal assessment, appropriate to the nature, scale, and complexity of a carrier or insurance group, that the carrier or insurance group conducts, of the material and relevant risks associated with the carrier’s or insurance group’s current business plan and the sufficiency of capital resources to support those risks.</text> </level> <level label="f"> <text>“ORSA Guidance Manual” means the current version of the Own Risk and Solvency Assessment Guidance Manual developed and adopted by the National Association of Insurance Commissioners.</text> </level> <level label="g"> <text>“ORSA–related information” means any document, material, or other information related to an ORSA, an ORSA Summary Report, or a risk management framework of a carrier or insurance group.</text> </level> <level label="h"> <text>“ORSA Summary Report” means a confidential high–level summary of the ORSA of a carrier or insurance group.</text> </level> <level label="i"> <text>“Supervisory college” has the meaning stated in § 2–209.1 of this article.</text> </level> </section> <section article="gin" article_name="Insurance" number="32-102" title_number="32" title_name="Risk Management and Own Risk and Solvency Assessment Act" subtitle_number="1"> <level label="a"> <text>The purposes of this title are to:</text> <level label="1"> <text>require a carrier or insurance group to maintain a risk management framework and complete an ORSA;</text> </level> <level label="2"> <text>set the requirements for filing an ORSA Summary Report with the Commissioner; and</text> </level> <level label="3"> <text>provide for the confidential treatment of the ORSA, the ORSA Summary Report, and other ORSA–related information.</text> </level> </level> <level label="b"> <text>This title applies to all carriers domiciled in the State that are not exempt under § 32–106 of this title.</text> </level> </section> <section article="gin" article_name="Insurance" number="32-103" title_number="32" title_name="Risk Management and Own Risk and Solvency Assessment Act" subtitle_number="1"> <level label="a"> <text>Each carrier subject to this title shall maintain a risk management framework for identifying, assessing, monitoring, managing, and reporting its material and relevant risks.</text> </level> <level label="b"> <text>A carrier may satisfy this requirement if the insurance group of which the carrier is a member maintains a risk management framework that applies to the operations of the carrier.</text> </level> </section> <section article="gin" article_name="Insurance" number="32-104" title_number="32" title_name="Risk Management and Own Risk and Solvency Assessment Act" subtitle_number="1"> <level label="a"> <text>Subject to § 32–106 of this title, a carrier, or the insurance group of which the carrier is a member, shall regularly conduct an ORSA consistent with the process outlined in the ORSA Guidance Manual.</text> </level> <level label="b"> <text>The ORSA shall be conducted:</text> <level label="1"> <text>regularly, but not less than once each year; and</text> </level> <level label="2"> <text>at any time when there is a significant change to the risk profile of the carrier or the insurance group of which the carrier is a member.</text> </level> </level> </section> <section article="gin" article_name="Insurance" number="32-105" title_number="32" title_name="Risk Management and Own Risk and Solvency Assessment Act" subtitle_number="1"> <level label="a"> <text>On request of the Commissioner, but not more than once each year, a carrier shall submit to the Commissioner an ORSA Summary Report or a combination of reports that together contain the information described in the ORSA Guidance Manual, applicable to the carrier or the insurance group of which the carrier is a member.</text> </level> <level label="b"> <text>Notwithstanding any request from the Commissioner, if the carrier is a member of an insurance group, the carrier shall submit the report required by this section if the Commissioner is the lead state commissioner of the insurance group as determined by the procedures in the Financial Analysis Handbook adopted by the NAIC.</text> </level> <level label="c"> <text>The carrier shall:</text> <level label="1"> <text>determine the most appropriate date of the filing based on the carrier’s internal strategic planning processes; and</text> </level> <level label="2"> <text>notify the Commissioner of the anticipated date of the filing.</text> </level> </level> <level label="d"> <text>The carrier’s or insurance group’s chief risk officer or other executive with responsibility for the oversight of the carrier’s enterprise risk management process shall sign the report and attest to the best of that individual’s belief and knowledge that:</text> <level label="1"> <text>the carrier applies the enterprise risk management process described in the ORSA Summary Report; and</text> </level> <level label="2"> <text>a copy of the report has been provided to the carrier’s board of directors or the appropriate committee of the board.</text> </level> </level> <level label="e"> <text>A carrier may comply with subsection (a) of this section by providing the most recent and substantially similar report that the carrier or another member of an insurance group of which the carrier is a member provided to the commissioner of another state or to a supervisor or regulator of a foreign jurisdiction if that report provides information that is comparable to the information described in the ORSA Guidance Manual.</text> </level> <level label="f"> <text>Any report that is provided under subsection (e) of this section in a language other than English must be accompanied by a translation of that report into English.</text> </level> </section> <section article="gin" article_name="Insurance" number="32-106" title_number="32" title_name="Risk Management and Own Risk and Solvency Assessment Act" subtitle_number="1"> <level label="a"> <text>A carrier is exempt from the requirements of this title if:</text> <level label="1"> <text>the carrier has annual direct written and unaffiliated assumed premium less than $500,000,000, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program; and</text> </level> <level label="2"> <text>the insurance group of which the carrier is a member has annual direct written and unaffiliated assumed premium less than $1,000,000,000, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program.</text> </level> </level> <level label="b"> <level label="1"> <text>If a carrier qualifies for exemption under subsection (a)(1) of this section, but the insurance group of which the carrier is a member does not qualify for exemption under subsection (a)(2) of this section, then the ORSA Summary Report that is required under § 32–105 of this title shall include every carrier within the insurance group.</text> </level> <level label="2"> <text>The ORSA Summary Report requirement under paragraph (1) of this subsection may be satisfied by submitting more than one ORSA Summary Report for any combination of carriers if the combination of reports includes every carrier within the insurance group.</text> </level> </level> <level label="c"> <text>If a carrier does not qualify for exemption under subsection (a)(1) of this section, but the insurance group of which it is a member qualifies for exemption under subsection (a)(2) of this section, then the only ORSA Summary Report required under § 32–105 of this title is the report that applies to that carrier.</text> </level> <level label="d"> <level label="1"> <text>A carrier that does not qualify for exemption under subsection (a) of this section may apply to the Commissioner for a waiver from the requirements of this title based on unique circumstances.</text> </level> <level label="2"> <text>If the carrier applying for a waiver is part of an insurance group with carriers domiciled in more than one state, the Commissioner shall contact the lead state commissioner and other domiciliary commissioners in considering whether to grant the carrier’s request for a waiver.</text> </level> <level label="3"> <text>In deciding whether to grant the carrier’s request for a waiver, the Commissioner may consider:</text> <level label="i"> <text>the type and volume of business written;</text> </level> <level label="ii"> <text>ownership and organizational structure; and</text> </level> <level label="iii"> <text>any other factor the Commissioner considers relevant to the carrier or insurance group of which the carrier is a member.</text> </level> </level> </level> <level label="e"> <text>Notwithstanding the exemptions provided for in this section, the Commissioner may require that a carrier:</text> <level label="1"> <text>maintain a risk management framework, conduct an ORSA, and file an ORSA Summary Report based on unique circumstances, including the type and volume of business written, ownership and organizational structure, federal agency requests, and international supervisor requests; or</text> </level> <level label="2"> <text>maintain a risk management framework, conduct an ORSA, and file an ORSA Summary Report if the carrier:</text> <level label="i"> <text>has risk–based capital at a company action level event as set forth in § 4–305 of this article;</text> </level> <level label="ii"> <text>meets one or more of the standards of a carrier deemed to be in financially hazardous condition as described in § 9–102 of this article; or</text> </level> <level label="iii"> <text>otherwise exhibits qualities of a troubled carrier as determined by the Commissioner.</text> </level> </level> </level> <level label="f"> <text>If a carrier that qualifies for an exemption under subsection (a) of this section subsequently no longer qualifies for that exemption due to changes in premium as reflected in the carrier’s most recent annual statement or in the most recent annual statements of the carriers within the insurance group of which the carrier is a member, the carrier shall have 1 year following the year the threshold is exceeded to comply with this title.</text> </level> </section> <section article="gin" article_name="Insurance" number="32-107" title_number="32" title_name="Risk Management and Own Risk and Solvency Assessment Act" subtitle_number="1"> <level label="a"> <text>The ORSA Summary Report shall be prepared consistent with the ORSA Guidance Manual.</text> </level> <level label="b"> <text>Documentation and supporting information for the ORSA Summary Report shall be maintained and made available on examination or request of the Commissioner.</text> </level> <level label="c"> <level label="1"> <text>The Commissioner shall review the ORSA Summary Report.</text> </level> <level label="2"> <text>The Commissioner shall make any requests for additional information using procedures similar to those currently used in the analysis and examination of multi–state or global carriers and insurance groups.</text> </level> </level> <level label="d"> <text>The ORSA Summary Report shall include a short summary of material changes and updates to the ORSA Summary Report since the prior year.</text> </level> <level label="e"> <text>The Commissioner may retain, at the carrier’s expense, third–party consultants, including attorneys, actuaries, accountants, and other experts not otherwise a part of the Administration’s staff as may be reasonably necessary to assist the Administration in reviewing the carrier’s risk management framework, ORSA, ORSA Summary Report, or compliance with this title.</text> </level> </section> <section article="gin" article_name="Insurance" number="32-108" title_number="32" title_name="Risk Management and Own Risk and Solvency Assessment Act" subtitle_number="1"> <level label="a"> <level label="1"> <text>ORSA–related information, including the ORSA Summary Report, in the possession or control of the Commissioner that is obtained by, created by, or disclosed to the Commissioner or any other person under this title:</text> <level label="i"> <text>is confidential and privileged;</text> </level> <level label="ii"> <text>is not subject to Title 4 of the General Provisions Article;</text> </level> <level label="iii"> <text>is not subject to subpoena; and</text> </level> <level label="iv"> <text>is not subject to discovery or admissible as evidence in any civil action.</text> </level> </level> <level label="2"> <text>Except as provided in subsections (b) and (d) of this section, the Commissioner may not otherwise make ORSA–related information public without prior written consent of the carrier to which it pertains.</text> </level> </level> <level label="b"> <text>The Commissioner may use ORSA–related information in the furtherance of any regulatory or legal action brought as part of the duties of the Commissioner.</text> </level> <level label="c"> <text>The Commissioner, and any person who receives ORSA–related information, through examination or otherwise, while acting under the authority of the Commissioner or with whom ORSA–related information is shared under this title, may not be allowed or required to testify in any private civil action concerning any ORSA–related information that is subject to subsection (a) of this section.</text> </level> <level label="d"> <text>In order to assist in the performance of the Commissioner’s regulatory duties, the Commissioner:</text> <level label="1"> <text>may, on request, share ORSA–related information, including confidential and privileged ORSA–related information that is subject to subsection (a) of this section, with:</text> <level label="i"> <text>other state, federal, and international financial regulatory agencies, including members of any supervisory college;</text> </level> <level label="ii"> <text>the NAIC; and</text> </level> <level label="iii"> <text>any third–party consultants the Commissioner designates.</text> </level> </level> <level label="2"> <text>The Commissioner may share ORSA–related information under paragraph (1) of this subsection if the recipient:</text> <level label="i"> <text>agrees in writing to maintain the confidentiality and privileged status of the ORSA–related information; and</text> </level> <level label="ii"> <text>verifies in writing that it has the legal authority to maintain the confidentiality of the ORSA–related information.</text> </level> </level> </level> <level label="e"> <level label="1"> <text>The Commissioner may receive ORSA–related information from:</text> <level label="i"> <text>other state, federal, and international financial regulatory agencies, including members of any supervisory college; and</text> </level> <level label="ii"> <text>the NAIC.</text> </level> </level> <level label="2"> <text>The Commissioner shall maintain as confidential and privileged any ORSA–related information received under paragraph (1) of this subsection that the Commissioner receives with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the ORSA–related information.</text> </level> </level> <level label="f"> <level label="1"> <text>The Commissioner shall enter into a written agreement with the NAIC or a third–party consultant governing the sharing and use of information provided under this title, consistent with this section.</text> </level> <level label="2"> <text>The agreement required under paragraph (1) of this subsection shall:</text> <level label="i"> <text>specify procedures and protocols regarding the confidentiality and security of ORSA–related information shared with the NAIC or a third–party consultant under this title, including procedures and protocols for sharing by the NAIC with other state regulators from states in which the insurance group has domiciled carriers;</text> </level> <level label="ii"> <text>specify that the recipient agrees in writing to maintain the confidentiality and privileged status of the ORSA–related information and has verified in writing the legal authority to maintain the confidentiality;</text> </level> <level label="iii"> <text>specify that ownership of the ORSA–related information shared under this title remains with the Commissioner and that the use of the ORSA–related information by the NAIC or a third–party consultant is subject to the direction of the Commissioner;</text> </level> <level label="iv"> <text>prohibit the NAIC or a third–party consultant from storing the ORSA–related information shared under this title in a permanent database after the underlying analysis is completed;</text> </level> <level label="v"> <text>require prompt notice to be given to a carrier whose confidential ORSA–related information in the possession of the NAIC or a third–party consultant under this title is subject to a request or subpoena for disclosure or production;</text> </level> <level label="vi"> <text>require the NAIC or a third–party consultant to consent to intervention by a carrier in any judicial or administrative action in which the NAIC or a third–party consultant may be required to disclose confidential ORSA–related information about the carrier shared with the NAIC or a third–party consultant under this title; and</text> </level> <level label="vii"> <text>in the case of an agreement involving a third–party consultant, provide:</text> <level label="1"> <text>that the third–party consultant shall be under the direction and control of the Commissioner and act in a purely advisory capacity;</text> </level> <level label="2"> <text>that the third–party consultant is subject to the same confidentiality standards and requirements as the Commissioner;</text> </level> <level label="3"> <text>that the third–party consultant shall verify to the Commissioner, with notice to the carrier, that the third–party consultant:</text> </level> <level label="A"> <text>is free of any conflict of interest;</text> </level> <level label="B"> <text>has internal procedures in place to ensure that it remains free of any conflict of interest; and</text> </level> <level label="C"> <text>will comply with the confidentiality standards and requirements of this article;</text> </level> <level label="4"> <text>that, before using a carrier’s ORSA–related information in a manner inconsistent with the agreement with the Commissioner or sharing the carrier’s ORSA–related information with a person other than the Commissioner, the third–party consultant shall obtain written consent of the carrier; and</text> </level> <level label="5"> <text>for written notification to the carrier.</text> </level> </level> </level> </level> <level label="g"> <level label="1"> <text>The sharing of ORSA–related information and documents by the Commissioner under this title may not constitute a delegation of regulatory authority or rulemaking.</text> </level> <level label="2"> <text>The Commissioner is solely responsible for the administration, execution, and enforcement of this title.</text> </level> </level> <level label="h"> <text>A waiver of any applicable privilege or claim of confidentiality in ORSA–related information may not occur as a result of disclosure of the ORSA–related information to the Commissioner under this section or as a result of sharing the ORSA–related information as authorized under this title.</text> </level> <level label="i"> <text>ORSA–related information in the possession or control of the NAIC or a third–party consultant under this title:</text> <level label="1"> <text>is confidential and privileged;</text> </level> <level label="2"> <text>is not subject to Title 4 of the General Provisions Article;</text> </level> <level label="3"> <text>is not subject to subpoena; and</text> </level> <level label="4"> <text>is not subject to discovery or admissible in evidence in any civil action.</text> </level> </level> </section> <section article="gin" article_name="Insurance" number="32-109" title_number="32" title_name="Risk Management and Own Risk and Solvency Assessment Act" subtitle_number="1"> <level label="a"> <text>Subject to § 2–210 of this article, a carrier that, without just cause, fails to timely file an ORSA Summary Report as required by this title is subject to a penalty of $200 for each day the violation continues, up to a maximum of $25,000.</text> </level> <level label="b"> <text>The Commissioner may reduce the penalty under subsection (a) of this section if the carrier demonstrates to the Commissioner that the imposition of the penalty would constitute a financial hardship to the carrier.</text> </level> <level label="c"> <text>This section does not limit the authority of the Commissioner to take any other action authorized by this article.</text> </level> </section> <section article="gin" article_name="Insurance" number="32-110" title_number="32" title_name="Risk Management and Own Risk and Solvency Assessment Act" subtitle_number="1"> <text>The Commissioner may adopt regulations consistent with this title.</text> </section>