Section 012. Director's Authority

01. Determination of Financial Condition. For the purposes of making a determination of a n insurer’s financial condition under this rule, the Director may: (3-31-22) a. Disregard any credit or amount receivable resulting from transactions with a reinsurer which i s insolvent, impaired or otherwise subject to a delinquency proceeding; (3-31-22) b. Make appropriate adjustments, including disallowance, to asset values attributable to investments in or transactions with parents, subsidiaries, or affiliates, consistent with the NAIC Accounting Policies an d Procedures Manual, state laws, and regulations; (3-31-22) c. Refuse to recognize the stated value of accounts receivable if the ability to collect receivables i s highly speculative in view of the age of the account or the financial condition of the debtor; (3-31-22) d. Increase the insurer’s liability in an amount equal to any contingent liability, pledge, or guarante e not otherwise included if there is a substantial risk that the insurer will be called upon to meet the obligatio n undertaken within the next twelve (12) month period. (3-31-22) 02. Issuance of Order. If the Director determines that the continued operation of the insurer license d to transact business in this state may be hazardous to the policyholders or creditors or to the general public, then th e Director may, upon a determination, issue an order requiring the insurer to: (3-31-22) a. Reduce the total amount of present and potential liability for policy benefits by reinsurance; (3-31-22) b. Reduce, suspend or limit the volume of business being accepted or renewed; (3-31-22) c. Reduce general insurance and commission expenses by specified methods; (3-31-22) d. Increase the insurer’s capital and surplus; (3-31-22) e. Suspend or limit the declaration and payment of dividend by an insurer to its stockholders or to it s policyholders; (3-31-22) f. File reports in a form acceptable to the Director concerning the market value of an insurer’s assets; (3-31-22) g

d; (3-31-22) c. Reduce general insurance and commission expenses by specified methods; (3-31-22) d. Increase the insurer’s capital and surplus; (3-31-22) e. Suspend or limit the declaration and payment of dividend by an insurer to its stockholders or to it s policyholders; (3-31-22) f. File reports in a form acceptable to the Director concerning the market value of an insurer’s assets; (3-31-22) g. Limit or withdraw from certain investments or discontinue certain investment practices to th e extent the Director deems necessary; (3-31-22) h. Document the adequacy of premium rates in relation to the risks insured; (3-31-22) i. File, in addition to regular annual statements, interim financial reports on the form adopted by th e NAIC or in such format as promulgated by the Director; (3-31-22) j. Correct corporate governance practice deficiencies and adopt and utilize governance practice s acceptable to the Director; (3-31-22) k. Provide a business plan to the Director in order to continue to transact business in the state; or (3-31-22) l. Adjust rates for any non-life insurance product written by the insurer that the Director consider s necessary to improve the financial condition of the insurer. (3-31-22) 03. Hearing. Any insurer subject to an order under Subsection 012.02 may request a hearing to revie w that order pursuant to Title 41, Chapter 2, Idaho Code. (3-31-22) 013. -- 999. (RESERVED)