South Carolina’s Department of Insurance is reminding carriers that it may soon give extra scrutiny to liquidity and capital as well as investments in subsidiaries’ securities, thanks to a law approved by state legislators this year.
“If the Director determines that the continued operation of an insurer may be hazardous to its policyholders, its creditors, or the general public, the Director may issue an order requiring the insurer to limit or withdraw from certain investments or transactions or discontinue certain practices as to investments or transactions to the extent the Director considers necessary,” reads a June 27 bulletin from DOI Director Michael Wise.
The law enacts Senate Bill 220, which was passed by lawmakers and signed by the governor in May. It is in keeping with National Association of Insurance Commissioners accreditation requirements for regulators.
The new rules apply to all insurer financial statements due on Aug. 15, the DOI explained.
The changes to the Insurance Holding Company Regulatory Act “enhance the Department’s ability to assess the enterprise risk to insurers within a holding company system.” The law implements a group capital calculation and a liquidity stress test for macroprudential supervision.
The calculation should provide additional data to help regulators assess group risks and capital and will include information on the potential risks from outside the carrier, the bulletin noted.
The bulletin can be seen . Senate Bill 220 is
Questions about the changes can be emailed to financialanalysis@doi.sc.gov.
Topics Carriers South Carolina
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