(a) Annually on or before March 1, each domestic insurer shall prepare and submit to the Insurance Commissioner a report of its RBC levels as of the end of the previous calendar year in a form and containing the information as needed by the RBC instructions. In addition, each domestic insurer shall file its RBC report:

(1) With the NAIC according to the RBC instructions; and

(2) With the insurance commissioner in a state in which the insurer may do business, if the insurance commissioner has notified the insurer of its request in writing, in which case the insurer shall file its RBC report by the later of:

(A) Fifteen (15) days from the receipt of notice to file its RBC report with that state; or

(B) The filing date.

(b) A life or accident and health insurer's or a fraternal benefit society's RBC is determined according to the formula stated in the RBC instructions. The formula shall take into account and may adjust for the covariance among the following factors determined in each case by applying the factors as stated in the RBC instructions:

(1) The risk for the insurer's assets;

(2) The risk of adverse insurance experience for the insurer's liabilities and obligations;

(3) The interest rate risk for the insurer's business; and

(4) Other business and relevant risks as determined in each case by applying RBC instructions.

(c) A property and casualty insurer's RBC is determined according to the formula stated in the RBC instructions. The formula may adjust for the covariance among the following factors determined according to the formula stated in the RBC instructions:

(1) Asset risk;

(2) Credit risk;

(3) Underwriting risk; and

(4) Other business and relevant risks as stated in the RBC instructions.

(d) An excess of capital over the amount produced by the risk-based capital requirements contained in this subchapter and the formulas, schedules, and instructions referenced in this subchapter are desirable in the business of insurance. Insurers should seek to maintain capital above the RBC levels needed by this subchapter. Additional capital is used and useful in the insurance business and helps to secure an insurer against various risks inherent in or affecting the business of insurance and not accounted for or only partially measured by the risk-based capital requirements contained in this subchapter.

(e) If a domestic insurer files an RBC report that in the judgment of the commissioner is inaccurate, the commissioner shall adjust the RBC report to correct the inaccuracy and notify the insurer of the adjustment. The notice shall contain a statement of the reason for the adjustment. An RBC report as so adjusted is referred to as an "adjusted RBC report".