Utah Admin. Code R590-114-2 - Purpose and Scope
(1) The purpose of
this rule is to determine, in accordance with Subsection
31A-17-404(10)(c)(ii),
the form of letter of credit security to protect a ceding insurer in a
reinsurance transaction if:
(a) the
requirement in Subsection
31A-17-404(3)
or the alternative security factors in Subsection
31A-17-404(6)
are not present; and
(b) the ceding
insurer retains the reinsurer's funds in the form of a letter of
credit.
(2) Security for
a reinsurance transaction is maintained because the ceding insurer's
reinsurance credit may be allowed as an asset or a deduction from
liabilities.
(3) The allowance or
disallowance of credit in a reinsurance transaction may be used to determine if
the transaction complies with other financial requirements of Title 31A,
Insurance Code.
(4) This rule
applies to any person transacting insurance under Title 31A, Insurance
Code.
Notes
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