Utah Admin. Code R590-173-11 - Reinsurance Ceded to an Unauthorized Reinsurer Not Meeting the Requirements ofs R590-173-4 Through R590-173-10
(1) A
reduction is allowed from liability for reinsurance ceded by a domestic insurer
to an assuming insurer not meeting the requirements of Section
31A-17-40.
(2) A reduction from
liability is:
(a) an amount not exceeding the
liabilities carried by the ceding insurer; and
(b) the amount of funds held by or on behalf
of the ceding insurer, including funds held in trust for the exclusive benefit
of the ceding insurer, under a reinsurance contract with such assuming insurer
as security for the payment of obligations under the reinsurance contract which
funds shall be:
(i) held in the United States
subject to withdrawal solely by, and under the exclusive control of, the ceding
insurer; or
(ii) in the case of a
trust, held in a qualified United States financial institution.
(3) The security held
under Subsection (2)(b) may be in the form of:
(a) cash;
(b) securities listed by the Securities
Valuation Office of the NAIC, including those deemed exempt from filing as
defined by the Purposes and Procedures Manual of the Securities Valuation
Office, and qualifying as admitted assets;
(c) clean, irrevocable, unconditional, and
evergreen letters of credit that:
(i) are
issued or confirmed by a qualified United States financial
institution;
(ii) are effective no
later than December 31 of the year the filing is made;
(iii) are in the possession of, or in trust
for, the ceding insurer on or before the filing date of its annual statement;
and
(iv) meet the issuer's
standards of acceptability at the time of issuance until their expiration,
extension, renewal, modification, or amendment, whichever occurs first;
or
(d) any other
security acceptable to the commissioner.
(2)
An admitted asset or a reduction from liability for reinsurance ceded to an
unauthorized assuming insurer pursuant to this section is allowed only when the
requirements of the following are satisfied:
(a) Section R590-173-15; and
(b) the applicable provisions of:
(i) Section
R590-173-12;
(ii) Section
R590-173-13;
or
(iii) Section
R590-173-14.
Notes
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