Loss Ratio

Its required minimum paid-in capital is impaired or it cannot meet its obligations as they become due — Section 985 defines insolvency as the impairment of an insurer's required minimum paid-in capital or the insurer's inability to fulfill its obligations. When insolvency is found, the Commissioner may step in through conservation, liquidation, or other delinquency proceedings. Paying dividends, having a high loss ratio, or losing a lawsuit do not, by themselves, establish insolvency.

CA-specific example

Expand access to affordable health coverage, protect consumers, and reduce the growth of health care costs — The Affordable Care Act was enacted to expand access to affordable health insurance — through guaranteed issue, the health insurance exchanges, premium tax credits, and Medicaid expansion — while protecting consumers through rules such as essential health benefits, metal tiers, and medical loss ratio requirements, and restraining the growth of health care costs. It did not replace Medicare or abolish state regulation; instead it layered federal market reforms onto the state-regulated insurance system while states continued to operate their own exchanges.

National insurance concept