Section 27-5B-1 Purpose. The purpose of this chapter is to protect the interest of insureds, claimants, ceding insurers, assuming insurers, and the public generally. The Legislature declares its intent is to ensure adequate regulation of insurers and reinsurers and adequate protection for those to whom they owe obligations. In furtherance of that state interest, the […]
Section 27-5B-10 Reinsurer not licensed, accredited or certified – Additional reinsurance agreement requirements. (a) If the assuming insurer is not licensed, accredited or certified to transact insurance or reinsurance in this state, the credit permitted by Sections 27-5B-6 and 27-5B-7 shall not be allowed unless the assuming insurer agrees in the reinsurance agreements: (1) That […]
Section 27-5B-11 Reinsurer not licensed, accredited, or certified – Additional trust agreement requirements. If the assuming insurer does not meet the requirements of Section 27-5B-4, 27-5B-5, 27-5B-6, or 27-5B-8.1, the credit permitted by Section 27-5B-7 or 27-5B-8 shall not be allowed unless the assuming insurer agrees in the trust agreements to the following conditions: (1) […]
Section 27-5B-12 Accredited or certified reinsurer ceasing to meet requirements. (a) If an accredited or certified reinsurer ceases to meet the requirements for accreditation or certification, the commissioner may suspend or revoke the reinsurer’s accreditation or certification. (b) The commissioner must give the reinsurer notice and opportunity for hearing. The suspension or revocation may not […]
Section 27-5B-13 Concentration risk. (a) A ceding insurer shall take steps to manage its reinsurance recoverables proportionate to its own book of business. A domestic ceding insurer shall notify the commissioner within 30 days after reinsurance recoverables from any single assuming insurer, or group of affiliated assuming insurers, exceeds 50 percent of the domestic ceding […]
Section 27-5B-14 Asset or reduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of Sections 27-5B-3 through 27-5B-13. (a) An asset or a reduction from liability for the reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of Section 27-5B-3, 27-5B-4, […]
Section 27-5B-15 Qualified U.S. financial institutions. (a) For purposes of subdivision (3) of Section 27-5B-14, a qualified U.S. financial institution means an institution that meets all of the following: (1) Is organized or, in the case of a U.S. office of a foreign banking organization, licensed, under the laws of the United States or any […]
Section 27-5B-16 Insolvency clause. Except as provided in Section 27-5B-17, no credit shall be allowed, as an admitted asset or deduction from liability, to any ceding insurer for reinsurance placed with a reinsurer qualified under this chapter, unless the reinsurance contract provides, in substance, that in the event of the insolvency of the ceding insurer, […]
Section 27-5B-17 Guaranty association election. Notwithstanding Section 27-5B-16, in the event that a life and health insurance guaranty association has made the election to succeed to the rights and obligations of the insolvent insurer under the contract of reinsurance, the reinsurer’s liability to pay covered reinsured claims shall continue under the contract of reinsurance subject […]
Section 27-5B-18 Notice by domiciliary liquidator. The reinsurance agreement may provide that the domiciliary liquidator of an insolvent ceding insurer shall give written notice to the assuming insurer of the pendency of a claim against the ceding insurer on the contract within a reasonable time after the claim is filed in the liquidation proceeding. During […]
Section 27-5B-19 Rulemaking authority. (a) The commissioner may adopt rules implementing this chapter. (b) In addition to the authority of the commissioner pursuant to subsection (a), the commissioner may adopt rules applicable to reinsurance arrangements as provided in this subsection. (1) A rule adopted pursuant to this subsection may apply only to reinsurance relating to […]
Section 27-5B-2 Reinsurance permitted. (a) An insurer authorized under this title may accept reinsurance only of such risks and retain risk thereon within such limits as it is otherwise authorized to insure. (b) An insurer authorized under this title may reinsure all, or any part, of any particular risk with any solvent insurer. (Act 2013-209, […]
Section 27-5B-20 Reinsurance agreements affected. The amendments of this chapter and the additions to this chapter by Act 2021-235 shall apply to all cessions after January 1, 2022, under reinsurance agreements that have an inception, anniversary, or renewal date on or after July 1, 2022. (Act 2021-235, §2.)
Section 27-5B-3 Credit allowed a domestic ceding insurer. (a) Credit for reinsurance shall be allowed a domestic ceding insurer as either an asset or a reduction from liability on account of reinsurance ceded only when the reinsurer meets the requirements of Section 27-5B-4, 27-5B-5, 27-5B-6, 27-5B-7, 27-5B-8, 27-5B-8.1, or 27-5B-9. (b) The commissioner may adopt […]
Section 27-5B-4 Licensed reinsurer. Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is licensed to transact insurance or reinsurance in this state. (Act 2013-209, p. 463, §1.)
Section 27-5B-5 Accredited reinsurer. Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is accredited by the commissioner as a reinsurer in this state. In order to be eligible for accreditation, a reinsurer must do all of the following: (1) File with the commissioner evidence of its submission to this […]
Section 27-5B-6 Reinsurer domiciled in state with substantially similar law. (a) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is domiciled in, or in the case of a U.S. branch of an alien assuming insurer is entered through, a state that employs standards regarding credit for reinsurance substantially similar […]
Section 27-5B-7 Reinsurer maintaining a trust fund. (a) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that maintains a trust fund in a qualified U.S. financial institution, as defined in subsection (b) of Section 27-5B-15, for the payment of the valid claims of its U.S. ceding insurers, their assigns and […]
Section 27-5B-8 Certified reinsurer. (a) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is certified by the commissioner as a reinsurer in this state and secures its obligations in accordance with the requirements of this section. In order to be eligible for certification, the assuming insurer shall meet all […]
Section 27-5B-8.1 Reinsurer domiciled in a reciprocal jurisdiction. (a) Credit shall be allowed when the reinsurance is ceded to an assuming insurer meeting each of the following conditions: (1) The assuming insurer shall have its head office or be domiciled in, as applicable, and be licensed in a reciprocal jurisdiction. A reciprocal jurisdiction is a […]
