Current through Register Vol. 60, No. 12, December 1, 2021
Authority shall not allow financial statement credit for reinsurance to a
cedent CCO as either an asset or a reduction from liability on account of
reinsurance ceded unless the reinsurance meets the requirements of subsection
(2) or (3) of this section.
Credit shall be allowed when the reinsurance is ceded to an authorized assuming
CCO or an authorized health insurer that has been approved and accepted by the
Authority to act as a reinsurer of the cedent CCO in accordance with OAR
410-141-5050. The Authority shall not allow credit to a cedent CCO if the
approval or acceptance of the reinsurer has been revoked by the Authority after
notice and opportunity for hearing.
The Authority shall allow a reduction
from liability for reinsurance ceded by a CCO to an assuming reinsurer not
meeting the requirements of subsection (2) in an amount not exceeding the
liabilities carried by the cedent CCO. The reduction shall be in the amount of
funds held by or on behalf of the cedent CCO, including funds held in trust for
the exclusive benefit of the cedent CCO, under a reinsurance contract with such
reinsurer as security for the payment of obligations under the reinsurance
contract. The security must be held in the United States subject to withdrawal
solely by and under the exclusive control of the cedent CCO insurer or, in the
case of a trust, held in a Qualified United States Financial Institution. The
security may be in the form of any of the following:
(b) Securities listed by the SVO.
(c) Clean, irrevocable, unconditional and
"evergreen" letters of credit issued or confirmed by a Qualified United States
Financial Institution effective no later than December 31 of the year for which
filing is being made, and in the possession of, or in trust for, the cedent CCO
on or before the filing date of its annual statement. Letters of credit meeting
applicable standards of issuer acceptability as of the dates of their issuance
or confirmation shall, notwithstanding the issuing or confirming institution's
subsequent failure to meet applicable standards of issuer acceptability,
continue to be acceptable as security until their expiration, extension,
renewal, modification or amendment, whichever first occurs.
(d) Any other form of security acceptable to
allowed asset or a reduction from liability for reinsurance ceded to an
unauthorized reinsurer pursuant to subsection (3) of this section shall be
allowed only when the applicable requirements of OAR 410-141-5050 to OAR
410-141-5070 are satisfied.