An LPS may reinsure, pursuant to a reinsurance contract,
only the risks of a ceding insurer.
Unless otherwise approved in advance by the commissioner, an
LPS may not assume or retain exposure to reinsurance losses for its own account
that are not funded by one or more of the following:
a. Proceeds from a securitization.
b. Premium and other amounts payable by the
ceding insurer to the LPS pursuant to the reinsurance contract.
c. Letters of credit.
d. Guaranties of a parent.
e. Any return on investment of the items in
paragraph
"a " or
"b " of this subrule.
An LPS may cede risks assumed through a reinsurance contract
to one or more reinsurers through the purchase of reinsurance, subject to the
prior approval of the commissioner.
An LPS may enter into contracts and conduct other commercial
activities related or incidental to and necessary to fulfill the purposes of a
reinsurance contract, an insurance securitization, and this chapter, provided
such contracts and activities are included in the LPS's plan of operation or
are otherwise approved in advance by the commissioner Such contracts and
activities may include but are not limited to: entering into reinsurance
contracts; issuing LPS securities; complying with the terms of these contracts
or securities; entering into trust, guaranteed investment contract, swap, or
other derivative, tax, administration, services reimbursement, or fiscal agent
transactions; complying with trust indenture, reinsurance, or retrocession; or
entering into other agreements necessary or incidental to effect a reinsurance
contract or an insurance securitization in compliance with this chapter and the
LPS's plan of operation.
Unless otherwise approved in advance by the commissioner, a
reinsurance contract shall not contain any provision for payment by the LPS in
discharge of its obligations under the reinsurance contract to any person other
than the ceding insurer or any receiver of the ceding insurer.
