§432:2-304  Reinsurance.  (a)  Adomestic society may, by a reinsurance agreement, cede any individual risk orrisks in whole or in part to an insurer (other than another fraternal benefitsociety) having the power to make such reinsurance and authorized to dobusiness in this State, or if not so authorized, one which is approved by thecommissioner.  No such society may reinsure substantially all of its insurancein force without the written permission of the commissioner.  It may takecredit for the reserves on such ceded risks to the extent reinsured, but nocredit shall be allowed as an admitted asset or as a deduction from liability,to a ceding society for reinsurance made, ceded, renewed, or otherwise becomingeffective after July 1, 1988, unless the reinsurance is payable by the assuminginsurer on the basis of the liability of the ceding society under the contractor contracts reinsured without diminution because of the insolvency of theceding society.

(b)  Notwithstanding the limitation in subsection(a), a society may reinsure the risks of another society in a consolidation ormerger approved by the commissioner under section 432:2-305. [L 1987, c 347, ptof §2]

 

Revision Note

 

  "July 1, 1988" substituted for "the effectivedate of this article".