To aid in the detection and prevention of insurer impairments:

(1) The board of directors shall, upon majority vote, notify the director or his designee of any information indicating a member insurer may be unable or potentially unable to fulfill its contractual obligations.

(2) The board of directors may, upon majority vote, request that the director or his designee order an examination of a member insurer which the board in good faith believes may be unable or potentially unable to fulfill its contractual obligations. The examination may be conducted as a National Association of Insurance Commissioners examination or may be conducted by the director or his designee. The cost of the examination must be paid by the association and the examination report must be treated as are other examination reports. In no event may the examination report be released to the board of directors of the association prior to its release to the public, but this does not excuse the director or his designee from his obligation to comply with item (3) of this section. The director or his designee shall notify the board of directors when the examination is completed. The request for an examination must be kept on file by the department, but it is not open to public inspection prior to the release of the examination report to the public. It must be released at that time only if the examination discloses that the examined insurer is unable or potentially unable to meet its contractual obligations.

(3) The director or his designee shall report to the board of directors when he has reasonable cause to believe that a member or licensed insurer may be unable or potentially unable to fulfill its contractual obligations.

(4) The board of directors may, upon majority vote, make reports and recommendations to the director, his designee, and the department upon any matter germane to the solvency, liquidation, rehabilitation, or conservation of a member insurer. These reports and recommendations are not open to public inspection.

(5) The board of directors may, upon majority vote, make recommendations to the director, his designee, and the department for the detection and prevention of insurer impairments.

(6) The board of directors shall, at the conclusion of an insurer impairment in which the association carried out its duties under this chapter or exercised any of its powers under this chapter, prepare a report on the history and causes of the impairment, based on the information available to the association, and submit the report to the department.

HISTORY: Former 1976 Code Section 38-29-110 [1962 Code Section 37-1409; 1971 (57) 351; 1986 Act No. 426, Section 7] recodified as Section 38-21-100 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-110 [1962 Code Section 37-572; 1972 (57) 2776] recodified as Section 38-29-110 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 631.