Unless otherwise ordered by the commissioner, an insurer may
take credit for a reduction in liability for reinsurance ceded to a reinsurer
even if the credit is not permitted under s.
Ins
52.02 in an amount not exceeding the lesser of the
liabilities carried by the ceding insurer or the amount of funds held by or on
behalf of the ceding insurer, but only if the funds are held in the United
States and are security for the payment of obligations under the reinsurance
contract and if the funds meet one of the following:
(1) Are included under a security arrangement
and are subject to withdrawal solely by, and are under the exclusive control
of, the ceding insurer, and the form of the funds and the security agreement
are approved by the commissioner or the equivalent official of the state of
domicile or entry of the ceding insurer.
(2) Are unencumbered, are securities listed
by the securities valuation office of the national association of insurance
commissioners and qualifying as admitted assets or cash, are withheld by the
ceding insurer, and are subject to withdrawal solely by, and are under the
exclusive control of, the ceding insurer;
(3) Are securities listed by the securities
valuation office of the national association of insurance commissioners,
including those deemed exempt from filing as defined by the purposes and
procedures manual of the securities valuation office, and qualifying as
admitted assets or cash, are held in a trust for the exclusive benefit of the
ceding insurer and the ceding insurer, reinsurer, reinsurance contract and
trust comply with s.
Ins
52.05; or
(4) Are available under a clean, irrevocable,
unconditional and evergreen letter of credit which is issued or confirmed by a
qualified United States institution and are subject to withdrawal solely by,
and are under the exclusive control of, the ceding insurer and the letter of
credit is in the possession of the ceding insurer and the ceding insurer,
reinsurer and letter of credit comply with s.
Ins 52.06. A
letter of credit meeting applicable standards of issuer acceptability as of the
date of issue or confirmation continues to meet those standards for the purpose
of this subsection if after issuance or confirmation the financial institution
fails to meet applicable standards of issuer acceptability. The letter of
credit continues to be acceptable as funds until its expiration, extension,
renewal, modification or amendment, whichever first occurs.
Notes
Wis. Admin. Code Office of the Commissioner of Insurance § Ins 52.04
Cr. Register, July, 1993,
No. 451, eff. 8-1-93.
Amended by, CR
17-004: am. (3)
Register
December 2017 No. 744, eff.
1/1/2018
