[§431:4A-102]  Reduction from liability for
reinsurance ceded by a domestic insurer to an assuming insurer.  A
reduction from liability for the reinsurance ceded by a domestic insurer to an
assuming insurer not meeting the requirements of section 431:4A-101 shall be
allowed in an amount not exceeding the liabilities carried by the ceding
insurer.  The reduction shall be in the amount of funds held by or on behalf of
the ceding insurer, including funds held in trust for the ceding insurer, under
a reinsurance contract with the assuming insurer as security for the payment of
obligations thereunder, if that security is held in the United States subject
to withdrawal solely by, and under the exclusive control of, the ceding
insurer; or, in the case of a trust, held in a qualified United States
financial institution.  This security may be in the form of:



(1)  Cash;



(2)  Securities listed by the securities valuation
office of the National Association of Insurance Commissioners and qualifying as
admitted assets;



(3)  Clean, irrevocable, unconditional letters of
credit, issued or confirmed by a qualified United States financial institution,
no later than December 31st in respect of the year for which filing is being
made, and in the possession of the ceding company on or before the filing date
of its annual statement.  Letters of credit issued by issuing (or confirming)
institutions 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; or



(4)  Any other form of security acceptable to the
commissioner. [L 1992, c 176, pt of §5]