Code of the District of Columbia

§ 31–2102. Corrective actions.

(a) If the Mayor determines that the continued operation of the insurer licensed to transact business in the District of Columbia may be hazardous to its policyholders, creditors, or the general public, the Mayor may, upon his or her determination, issue an order requiring the insurer to:

(1) Reduce the total amount of present and potential liability for policy benefits by reinsurance;

(2) Reduce, suspend, or limit the volume of business being accepted or renewed;

(3) Reduce general insurance and commission expenses by specified methods;

(4) Increase the insurer’s capital and surplus;

(5) Suspend or limit the declaration and payment of dividend by an insurer to its stockholders or to its policyholders;

(6) File reports in a form acceptable to the Mayor concerning the market value of an insurer’s assets;

(7) Limit or withdraw from certain investments or discontinue certain investment practices to the extent the Mayor deems necessary;

(8) Document the adequacy of premium rates in relation to the risks insured;

(9) File, in addition to regular annual statements, interim financial reports on the form adopted by the National Association of Insurance Commissioners or on a form promulgated by the Mayor;

(10) Correct corporate governance practice deficiencies and adopt and utilize governance practices acceptable to the Mayor;

(11) Provide a business plan to the Mayor in order to continue to transact business in the District; or

(12) Notwithstanding any other provision of law limiting the frequency or amount of premium rate adjustments, adjust rates for any non-life insurance product written by the insurer that the Mayor considers necessary to improve the financial condition of the insurer.

(a-1) For the purposes of making a determination of an insurer’s financial condition under this section, the Mayor may:

(1) Disregard any credit or amount receivable resulting from transactions with a reinsurer that is insolvent, impaired, or otherwise subject to a delinquency proceeding;

(2) Make appropriate adjustments including disallowance to asset values attributable to investments in or transactions with parents, subsidiaries, or affiliates consistent with the National Association of Insurance Commissioners Accounting Policies and Procedures Manual and District laws and regulations;

(3) Refuse to recognize the stated value of accounts receivable if the ability to collect receivables is highly speculative in view of the age of the account or the financial condition of the debtor; and

(4) Increase the insurer’s liability in an amount equal to any contingent liability, pledge, or guarantee not otherwise included if there is a substantial risk that the insurer will be called upon to meet the obligation undertaken within the next 12-month period.

(b) If the insurer is a foreign insurer, the Mayor’s order under subsection (a) of this section may be limited to the extent provided by statute.

(c) Any insurer subject to an order under subsection (a) of this section may request a hearing to review that order. The notice of hearing shall be served upon the insurer pursuant to § 2-509. The notice of hearing shall state the time and place of hearing, and the conduct, condition, or ground upon which the Mayor based the order. Unless mutually agreed between the Mayor and the insurer, the hearing shall occur not less than 10 days nor more than 30 days after notice is served and shall be held in the District of Columbia. The Mayor shall hold all hearings under this section privately, unless the insurer requests a public hearing, in which case the hearing shall be public.

(d) The procedures and remedies set forth in this chapter do not in any way supercede or limit the authority of the Commissioner of Insurance and Securities [Commissioner of the Department of Insurance, Securities, and Banking] to take over a company or to revoke or suspend its certificate of authority pursuant to Chapter 11 of this title, Chapter 25 of this title, or Chapter 43 of this title.


(Oct. 21, 1993, D.C. Law 10-43, § 3, 40 DCR 6023; Apr. 26, 1994, D.C. Law 10-103, § 7(a), 41 DCR 1005; May 21, 1997, D.C. Law 11-268, § 10(ee), 44 DCR 1730; Mar. 11, 2015, D.C. Law 20-235, § 4(b), 62 DCR 461.)

Prior Codifications

1981 Ed., § 35-3502.

Effect of Amendments

The 2015 amendment by D.C. Law 20-235 substituted “its policyholders, creditors” for “the policyholders” in the introductory language of (a); added (a)(10) through (a)(12) and made related changes; and added (a-1).

Temporary Legislation

For temporary (225 day) amendment of section, see § 7(a) of Insurance Omnibus Temporary Amendment Act of 1993 (D.C. Law 10-76, March 17, 1994, law notification 41 DCR 1626).