The Louisiana Department of Insurance has amended Regulation 43, which describes the standards by which the commissioner can use to determine whether an insurance company is in a hazardous financial condition. A company in such condition presents a danger to its policyholders, creditors, and the general public.

The amendment adds two standards to a list of many. The first is whether the insurer's operating loss in the last 12-month period or shorter period of time is greater than 50 percent of the insurer's remaining surplus. The second is whether the insurer has experienced or will experience cash flow or liquidity problems in the foreseeable future. 

Other standards that can be considered include:

• Adverse findings reported in financial condition and market conduction examination reports
• The NAIC regulatory information system and other financial analysis solvency tools
• The ability of the assuming reinsurer to perform
• Whether a reinsurer in the insurer's insurance holding company system is insolvent or in danger of insolvency
• Whether management consistently engages in under-reserving
• Whether an insurer has grown rapidly and doesn't have adequate financial and administrative capacity to meet its obligations
• Any other finding determined by the commissioner to be hazardous to policyholders, creditors, or the general public

The standards can be used solely or in combination with others for the commissioner to decide whether an insurer is in hazardous financial condition.