IC 27-6-10-1 "Accredited reinsurer" defined
Sec. 1. As used in this chapter, "accredited reinsurer" means an
insurer that:
(1) files with the commissioner evidence of the insurer's
submission to Indiana jurisdiction;
(2) submits to Indiana authority to examine the insurer's books
and records;
(3) is:
(A) licensed to transact insurance or reinsurance in at least
one (1) state; or
(B) in the case of a United States branch of an alien
company (as defined in IC 27-1-2-3), entered through and
licensed to transact insurance or reinsurance in at least one
(1) state; and
(4) files annually with the commissioner a copy of the insurer's
annual statement filed with the insurance department of the
insurer's state of domicile and a copy of the insurer's most
recent audited financial statement, and:
(A) maintains a surplus as regards policyholders in an
amount not less than twenty million dollars ($20,000,000)
and whose accreditation has not been denied by the
commissioner within ninety (90) days of submission; or
(B) maintains a surplus as regards policyholders in an
amount less than twenty million dollars ($20,000,000) and
whose accreditation has been approved by the commissioner. As added by P.L.116-1994, SEC.54.
IC 27-6-10-2 "Ceding insurer" defined
Sec. 2. As used in this chapter, "ceding insurer" has the meaning
set forth in IC 27-6-1.1-1. As added by P.L.116-1994, SEC.54.
IC 27-6-10-3 "Commissioner" defined
Sec. 3. As used in this chapter, "commissioner" refers to the
insurance commissioner appointed under IC 27-1-1-2. As added by P.L.116-1994, SEC.54.
IC 27-6-10-4 "Department" defined
Sec. 4. As used in this chapter, "department" refers to the
department of insurance created under IC 27-1-1-1. As added by P.L.116-1994, SEC.54.
IC 27-6-10-5 "Qualified United States financial institution" as used in
IC 27-6-10-14(c)
Sec. 5. As used in section 14(c) of this chapter, "qualified United
States financial institution" means an institution that:
(1) is organized, or in the case of a United States office of a
foreign banking organization, licensed under the laws of the
United States or any state thereof;
(2) is regulated, supervised, and examined by United States
federal or state authorities having regulatory authority over
banks and trust companies; and
(3) has been determined by the commissioner or the Securities
Valuation Office of the National Association of Insurance
Commissioners to meet the standards of financial condition and
standing as are considered necessary and appropriate to regulate
the quality of financial institutions whose letters of credit will
be acceptable to the commissioner. As added by P.L.116-1994, SEC.54.
IC 27-6-10-6 "Qualified United States financial institution" as used in
IC 27-6-10-11(a) and IC 27-6-10-14(b)
Sec. 6. As used in sections 11(a) and 14(b) of this chapter,
"qualified United States financial institution" means an institution
that:
(1) is organized, or in the case of a United States branch or
agency office of a foreign banking organization, licensed under
the laws of the United States or any state thereof and has been
granted authority to operate with fiduciary powers; and
(2) is regulated, supervised, and examined by federal or state
authorities having regulatory authority over banks and trust
companies. As added by P.L.116-1994, SEC.54.
IC 27-6-10-7 Asset or deduction from liability; requirements
Sec. 7. Credit for reinsurance shall be allowed to any domestic
ceding insurer as either an asset or a deduction from liability on
account of reinsurance ceded only when:
(1) the reinsurer meets the requirements of:
(A) section 8 of this chapter;
(B) section 9 of this chapter;
(C) sections 10 and 12 of this chapter;
(D) sections 11 and 12 of this chapter; or
(E) section 13 of this chapter; and
(2) the reinsurance contract provides in substance that, in the
event of the insolvency of the ceding insurer, the reinsurance is
payable under a contract reinsured by the assuming insurer on
the basis of reported claims allowed in the liquidation
proceedings, subject to court approval, without diminution
because of the insolvency of the ceding insurer. Payments under
this subdivision must be made directly to the ceding insurer or
to the ceding insurer's domiciliary liquidator except as provided
in IC 27-9-3-30.1. The reinsurance agreement may provide that
the domiciliary liquidator of an insolvent ceding insurer shall
give written notice to an assuming insurer of the pendency of a
claim against the ceding insurer on the contract reinsured within
a reasonable time after the claim is filed in the liquidation
proceeding. During the pendency of the claim, any assuming
insurer may investigate the claim and interpose in the
proceeding where the claim is to be adjudicated, at the
assuming insurer's expense, any defenses that the assuming
insurer considers available to the ceding insurer or the
liquidator. If two (2) or more assuming insurers are involved in
the same claim and a majority in interest elect to interpose a
defense to the claim, the expense must be apportioned under the
terms of the reinsurance agreement as though the expense had
been incurred by the ceding insurer. As added by P.L.116-1994, SEC.54. Amended by P.L.233-1999,
SEC.7.
IC 27-6-10-8 Assuming insurer licensed to transact insurance or reinsurance
Sec. 8. As provided in section 7 of this chapter, credit for
reinsurance shall be allowed a domestic ceding insurer when the
reinsurance is ceded to an assuming insurer that is licensed to
transact insurance or reinsurance in Indiana. As added by P.L.116-1994, SEC.54.
IC 27-6-10-9 Assuming insurer is accredited reinsurer; revocation of
accreditation
Sec. 9. As provided in section 7 of this chapter, credit for
reinsurance shall be allowed a domestic ceding insurer when the
reinsurance is ceded to an assuming insurer that is an accredited
reinsurer in Indiana. No credit shall be allowed a domestic ceding
insurer if the assuming insurer's accreditation has been revoked by
the commissioner after notice and hearing. As added by P.L.116-1994, SEC.54.
IC 27-6-10-10 Assuming insurers domiciled and licensed in another state
Sec. 10. As provided in section 7 of this chapter, credit shall be
allowed a domestic ceding insurer when the reinsurance is ceded to
an assuming insurer:
(1) that:
(A) is domiciled and licensed in; or
(B) in the case of a United States branch of an alien
company (as defined in IC 27-1-2-3), is entered through;
a state that employs standards regarding credit for reinsurance
substantially similar to those applicable under this chapter;
(2) that:
(A) maintains a surplus as regards policyholders in an
amount not less than twenty million dollars ($20,000,000);
and
(B) submits to the authority of Indiana to examine the
insurer's books and records;
provided, however, that the requirement of clause (A) does not
apply to reinsurance ceded and assumed pursuant to pooling
arrangements among insurers in the same holding company
system; and
(3) that complies with section 12 of this chapter. As added by P.L.116-1994, SEC.54.
IC 27-6-10-11 Assuming insurer maintaining a trust fund in a qualified United
States financial institution; report on sufficiency of fund; form and
content of trust
Sec. 11. (a) As provided in section 7 of this chapter, credit for
reinsurance shall be allowed a domestic ceding insurer when the
reinsurance is ceded to an assuming insurer that maintains a trust
fund in a qualified United States financial institution (as defined in
section 6 of this chapter) for the payment of the valid claims of its
United States policyholders and ceding insurers, their assigns, and
successors in interest, and the assuming insurer complies with
section 12 of this chapter. In order for the commissioner to determine
the sufficiency of the trust fund, the assuming insurer shall report
annually to the commissioner substantially the same information as
that required to be reported by licensed insurers on the National
Association of Insurance Commissioners' annual statement form. A
trust maintained under this section shall comply with the provisions
of this section.
(b) A trust shall comply with the following:
(1) In the case of a trust of a single assuming insurer:
(A) the trust shall consist of a trusteed account representing
the assuming insurer's liabilities attributable to business
written in the United States; and
(B) the assuming insurer shall maintain a trusteed surplus of
not less than twenty million dollars ($20,000,000).
(2) In the case of a trust of a group including incorporated and
individual unincorporated underwriters that are an assuming
insurer:
(A) the trust shall consist of a trusteed account representing
the liabilities of the group attributable to business written in
the United States;
(B) the group shall maintain a trusteed surplus of which one
hundred million dollars ($100,000,000) shall be held jointly
for the benefit of United States ceding insurers of any
member of the group; and
(C) the incorporated members of the group shall not be
engaged in any business other than underwriting as a
member of the group and shall be subject to the same level
of solvency regulation and control by the group's domiciliary
regulator as are the unincorporated members.
The group shall make available to the commissioner an annual
certification of the solvency of each underwriter by the
domiciliary regulator of the group and its independent public
accountants.
(3) In the case of a trust of a group of incorporated insurers
under common administration that are an assuming insurer:
(A) the group:
(i) shall report annually to the commissioner as required
under subsection (a);
(ii) must have continuously transacted an insurance
business outside the United States for at least three (3)
years immediately before making application for
accreditation;
(iii) shall submit to Indiana's authority to examine the
books and records of the group and bear the expense of the
examination;
(iv) shall have an aggregate policyholders' surplus of ten
billion dollars ($10,000,000,000); and
(v) shall maintain a joint trusteed surplus of which one
hundred million dollars ($100,000,000) shall be held
jointly for the benefit of United States ceding insurers of
any member of the group as additional security for any
such liabilities;
(B) each member of the group shall make available to the
commissioner an annual certification of the member's
solvency by the member's domiciliary regulator and its
independent public accountant; and
(C) the trust shall be in an amount equal to the several
liabilities of the group attributable to business ceded by
United States ceding insurers to any member of the group
pursuant to reinsurance contracts issued in the name of such
group.
(c) A trust shall be in a form approved by the commissioner.
(d) The trust instrument of a trust shall provide that contested
claims are valid and enforceable upon the final order of any court
with jurisdiction in the United States.
(e) A trust shall vest legal title to the trust's assets in the trustees
of the trust for the trust's United States policyholders and ceding
insurers, their assigns, and successors in interest.
(f) A trust and the assuming insurer shall be subject to
examination as determined by the commissioner.
(g) A trust shall remain in effect for as long as the assuming
insurer shall have outstanding obligations due under the reinsurance
agreements subject to the trust.
(h) Not later than February 28 of each year the trustees of a trust
permitted under this section shall report in writing to the
commissioner the following information:
(1) The balance of the trust.
(2) A listing of the trust's investments at the preceding year end.
(3) A certification of the date of termination of the trust, if
applicable, or a certification that the trust shall not expire
before December 31.
(i) Credit may only be permitted under this section if an assuming
insurer also complies with section 12 of this chapter. As added by P.L.116-1994, SEC.54.
IC 27-6-10-12 Assuming insurers not licensed or accredited in Indiana;
disallowance of credits; exception
Sec. 12. If an assuming insurer is not licensed or accredited to
transact insurance or reinsurance in Indiana, the credit permitted by
sections 10 and 11 of this chapter shall not be allowed unless the
assuming insurer agrees in the reinsurance agreements to the
following:
(1) That in the event of the failure of the assuming insurer to
perform the assuming insurer's obligations under the terms of
the reinsurance agreement, the assuming insurer, at the request
of the ceding insurer, shall:
(A) submit to the jurisdiction of any court with jurisdiction
in any state of the United States;
(B) comply with all requirements necessary to give the court
described in clause (A) jurisdiction; and
(C) abide by the final decision of the court or of any
appellate court in the event of an appeal; and
(2) To designate the commissioner or an attorney licensed in,
and having offices in, Indiana as its true and lawful attorney
upon whom may be served any lawful process in any action,
suit, or proceeding instituted by or on behalf of the ceding
company.
This section is not intended to conflict with or override the obligation
of the parties to a reinsurance agreement to arbitrate their disputes,
if such an obligation is created in the agreement. As added by P.L.116-1994, SEC.54.
IC 27-6-10-13 Assuming insurer failing to meet requirements of IC 27-6-10-8
through IC 27-6-10-11; insurance of risks jurisdiction
Sec. 13. Credit shall be allowed to a domestic ceding insurer when
the reinsurance is ceded to an assuming insurer not meeting the
requirements of sections 8, 9, 10, or 11 but only with respect to the
insurance of risks located in jurisdictions where such reinsurance is
required by applicable law or regulation of that jurisdiction. As added by P.L.116-1994, SEC.54.
IC 27-6-10-14 Reduction from liability for reinsurance ceded to assuming insurer
not meeting statutory requirements; amount; security
Sec. 14. (a) A reduction from liability for the reinsurance ceded
by a domestic insurer to an assuming insurer not meeting the
requirements of section 8, 9, 10, 11, 12, or 13 of this chapter shall be
allowed in an amount not exceeding the liabilities carried by the
ceding insurer.
(b) The reduction permitted under subsection (a) shall be in the
amount of funds held by or on behalf of the ceding insurer under a
reinsurance contract with the assuming insurer as security for the
payment of obligations thereunder. The security must be held in the
United States subject to withdrawal solely by, and under the
exclusive control of, the ceding insurer. A reduction under this
section is permitted in the amounts held by or on behalf of the ceding
insurer in a trust for the ceding insurer held in a qualified United
States financial institution (as defined in section 6 of this chapter).
(c) The security described under subsection (b) may be in the
following forms:
(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 (as
defined in section 5 of this chapter) not later than December 31
in 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 that meet 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
the earlier of their expiration, extension, renewal, modification,
or amendment.
(4) Any other form of security acceptable to the commissioner. As added by P.L.116-1994, SEC.54. Amended by P.L.2-1995,
SEC.105.
IC 27-6-10-15 Implementation of chapter
Sec. 15. The commissioner may adopt rules under IC 4-22-2 to
implement this chapter. As added by P.L.116-1994, SEC.54.
IC 27-6-10-1 "Accredited reinsurer" defined
Sec. 1. As used in this chapter, "accredited reinsurer" means an
insurer that:
(1) files with the commissioner evidence of the insurer's
submission to Indiana jurisdiction;
(2) submits to Indiana authority to examine the insurer's books
and records;
(3) is:
(A) licensed to transact insurance or reinsurance in at least
one (1) state; or
(B) in the case of a United States branch of an alien
company (as defined in IC 27-1-2-3), entered through and
licensed to transact insurance or reinsurance in at least one
(1) state; and
(4) files annually with the commissioner a copy of the insurer's
annual statement filed with the insurance department of the
insurer's state of domicile and a copy of the insurer's most
recent audited financial statement, and:
(A) maintains a surplus as regards policyholders in an
amount not less than twenty million dollars ($20,000,000)
and whose accreditation has not been denied by the
commissioner within ninety (90) days of submission; or
(B) maintains a surplus as regards policyholders in an
amount less than twenty million dollars ($20,000,000) and
whose accreditation has been approved by the commissioner. As added by P.L.116-1994, SEC.54.
IC 27-6-10-2 "Ceding insurer" defined
Sec. 2. As used in this chapter, "ceding insurer" has the meaning
set forth in IC 27-6-1.1-1. As added by P.L.116-1994, SEC.54.
IC 27-6-10-3 "Commissioner" defined
Sec. 3. As used in this chapter, "commissioner" refers to the
insurance commissioner appointed under IC 27-1-1-2. As added by P.L.116-1994, SEC.54.
IC 27-6-10-4 "Department" defined
Sec. 4. As used in this chapter, "department" refers to the
department of insurance created under IC 27-1-1-1. As added by P.L.116-1994, SEC.54.
IC 27-6-10-5 "Qualified United States financial institution" as used in
IC 27-6-10-14(c)
Sec. 5. As used in section 14(c) of this chapter, "qualified United
States financial institution" means an institution that:
(1) is organized, or in the case of a United States office of a
foreign banking organization, licensed under the laws of the
United States or any state thereof;
(2) is regulated, supervised, and examined by United States
federal or state authorities having regulatory authority over
banks and trust companies; and
(3) has been determined by the commissioner or the Securities
Valuation Office of the National Association of Insurance
Commissioners to meet the standards of financial condition and
standing as are considered necessary and appropriate to regulate
the quality of financial institutions whose letters of credit will
be acceptable to the commissioner. As added by P.L.116-1994, SEC.54.
IC 27-6-10-6 "Qualified United States financial institution" as used in
IC 27-6-10-11(a) and IC 27-6-10-14(b)
Sec. 6. As used in sections 11(a) and 14(b) of this chapter,
"qualified United States financial institution" means an institution
that:
(1) is organized, or in the case of a United States branch or
agency office of a foreign banking organization, licensed under
the laws of the United States or any state thereof and has been
granted authority to operate with fiduciary powers; and
(2) is regulated, supervised, and examined by federal or state
authorities having regulatory authority over banks and trust
companies. As added by P.L.116-1994, SEC.54.
IC 27-6-10-7 Asset or deduction from liability; requirements
Sec. 7. Credit for reinsurance shall be allowed to any domestic
ceding insurer as either an asset or a deduction from liability on
account of reinsurance ceded only when:
(1) the reinsurer meets the requirements of:
(A) section 8 of this chapter;
(B) section 9 of this chapter;
(C) sections 10 and 12 of this chapter;
(D) sections 11 and 12 of this chapter; or
(E) section 13 of this chapter; and
(2) the reinsurance contract provides in substance that, in the
event of the insolvency of the ceding insurer, the reinsurance is
payable under a contract reinsured by the assuming insurer on
the basis of reported claims allowed in the liquidation
proceedings, subject to court approval, without diminution
because of the insolvency of the ceding insurer. Payments under
this subdivision must be made directly to the ceding insurer or
to the ceding insurer's domiciliary liquidator except as provided
in IC 27-9-3-30.1. The reinsurance agreement may provide that
the domiciliary liquidator of an insolvent ceding insurer shall
give written notice to an assuming insurer of the pendency of a
claim against the ceding insurer on the contract reinsured within
a reasonable time after the claim is filed in the liquidation
proceeding. During the pendency of the claim, any assuming
insurer may investigate the claim and interpose in the
proceeding where the claim is to be adjudicated, at the
assuming insurer's expense, any defenses that the assuming
insurer considers available to the ceding insurer or the
liquidator. If two (2) or more assuming insurers are involved in
the same claim and a majority in interest elect to interpose a
defense to the claim, the expense must be apportioned under the
terms of the reinsurance agreement as though the expense had
been incurred by the ceding insurer. As added by P.L.116-1994, SEC.54. Amended by P.L.233-1999,
SEC.7.
IC 27-6-10-8 Assuming insurer licensed to transact insurance or reinsurance
Sec. 8. As provided in section 7 of this chapter, credit for
reinsurance shall be allowed a domestic ceding insurer when the
reinsurance is ceded to an assuming insurer that is licensed to
transact insurance or reinsurance in Indiana. As added by P.L.116-1994, SEC.54.
IC 27-6-10-9 Assuming insurer is accredited reinsurer; revocation of
accreditation
Sec. 9. As provided in section 7 of this chapter, credit for
reinsurance shall be allowed a domestic ceding insurer when the
reinsurance is ceded to an assuming insurer that is an accredited
reinsurer in Indiana. No credit shall be allowed a domestic ceding
insurer if the assuming insurer's accreditation has been revoked by
the commissioner after notice and hearing. As added by P.L.116-1994, SEC.54.
IC 27-6-10-10 Assuming insurers domiciled and licensed in another state
Sec. 10. As provided in section 7 of this chapter, credit shall be
allowed a domestic ceding insurer when the reinsurance is ceded to
an assuming insurer:
(1) that:
(A) is domiciled and licensed in; or
(B) in the case of a United States branch of an alien
company (as defined in IC 27-1-2-3), is entered through;
a state that employs standards regarding credit for reinsurance
substantially similar to those applicable under this chapter;
(2) that:
(A) maintains a surplus as regards policyholders in an
amount not less than twenty million dollars ($20,000,000);
and
(B) submits to the authority of Indiana to examine the
insurer's books and records;
provided, however, that the requirement of clause (A) does not
apply to reinsurance ceded and assumed pursuant to pooling
arrangements among insurers in the same holding company
system; and
(3) that complies with section 12 of this chapter. As added by P.L.116-1994, SEC.54.
IC 27-6-10-11 Assuming insurer maintaining a trust fund in a qualified United
States financial institution; report on sufficiency of fund; form and
content of trust
Sec. 11. (a) As provided in section 7 of this chapter, credit for
reinsurance shall be allowed a domestic ceding insurer when the
reinsurance is ceded to an assuming insurer that maintains a trust
fund in a qualified United States financial institution (as defined in
section 6 of this chapter) for the payment of the valid claims of its
United States policyholders and ceding insurers, their assigns, and
successors in interest, and the assuming insurer complies with
section 12 of this chapter. In order for the commissioner to determine
the sufficiency of the trust fund, the assuming insurer shall report
annually to the commissioner substantially the same information as
that required to be reported by licensed insurers on the National
Association of Insurance Commissioners' annual statement form. A
trust maintained under this section shall comply with the provisions
of this section.
(b) A trust shall comply with the following:
(1) In the case of a trust of a single assuming insurer:
(A) the trust shall consist of a trusteed account representing
the assuming insurer's liabilities attributable to business
written in the United States; and
(B) the assuming insurer shall maintain a trusteed surplus of
not less than twenty million dollars ($20,000,000).
(2) In the case of a trust of a group including incorporated and
individual unincorporated underwriters that are an assuming
insurer:
(A) the trust shall consist of a trusteed account representing
the liabilities of the group attributable to business written in
the United States;
(B) the group shall maintain a trusteed surplus of which one
hundred million dollars ($100,000,000) shall be held jointly
for the benefit of United States ceding insurers of any
member of the group; and
(C) the incorporated members of the group shall not be
engaged in any business other than underwriting as a
member of the group and shall be subject to the same level
of solvency regulation and control by the group's domiciliary
regulator as are the unincorporated members.
The group shall make available to the commissioner an annual
certification of the solvency of each underwriter by the
domiciliary regulator of the group and its independent public
accountants.
(3) In the case of a trust of a group of incorporated insurers
under common administration that are an assuming insurer:
(A) the group:
(i) shall report annually to the commissioner as required
under subsection (a);
(ii) must have continuously transacted an insurance
business outside the United States for at least three (3)
years immediately before making application for
accreditation;
(iii) shall submit to Indiana's authority to examine the
books and records of the group and bear the expense of the
examination;
(iv) shall have an aggregate policyholders' surplus of ten
billion dollars ($10,000,000,000); and
(v) shall maintain a joint trusteed surplus of which one
hundred million dollars ($100,000,000) shall be held
jointly for the benefit of United States ceding insurers of
any member of the group as additional security for any
such liabilities;
(B) each member of the group shall make available to the
commissioner an annual certification of the member's
solvency by the member's domiciliary regulator and its
independent public accountant; and
(C) the trust shall be in an amount equal to the several
liabilities of the group attributable to business ceded by
United States ceding insurers to any member of the group
pursuant to reinsurance contracts issued in the name of such
group.
(c) A trust shall be in a form approved by the commissioner.
(d) The trust instrument of a trust shall provide that contested
claims are valid and enforceable upon the final order of any court
with jurisdiction in the United States.
(e) A trust shall vest legal title to the trust's assets in the trustees
of the trust for the trust's United States policyholders and ceding
insurers, their assigns, and successors in interest.
(f) A trust and the assuming insurer shall be subject to
examination as determined by the commissioner.
(g) A trust shall remain in effect for as long as the assuming
insurer shall have outstanding obligations due under the reinsurance
agreements subject to the trust.
(h) Not later than February 28 of each year the trustees of a trust
permitted under this section shall report in writing to the
commissioner the following information:
(1) The balance of the trust.
(2) A listing of the trust's investments at the preceding year end.
(3) A certification of the date of termination of the trust, if
applicable, or a certification that the trust shall not expire
before December 31.
(i) Credit may only be permitted under this section if an assuming
insurer also complies with section 12 of this chapter. As added by P.L.116-1994, SEC.54.
IC 27-6-10-12 Assuming insurers not licensed or accredited in Indiana;
disallowance of credits; exception
Sec. 12. If an assuming insurer is not licensed or accredited to
transact insurance or reinsurance in Indiana, the credit permitted by
sections 10 and 11 of this chapter shall not be allowed unless the
assuming insurer agrees in the reinsurance agreements to the
following:
(1) That in the event of the failure of the assuming insurer to
perform the assuming insurer's obligations under the terms of
the reinsurance agreement, the assuming insurer, at the request
of the ceding insurer, shall:
(A) submit to the jurisdiction of any court with jurisdiction
in any state of the United States;
(B) comply with all requirements necessary to give the court
described in clause (A) jurisdiction; and
(C) abide by the final decision of the court or of any
appellate court in the event of an appeal; and
(2) To designate the commissioner or an attorney licensed in,
and having offices in, Indiana as its true and lawful attorney
upon whom may be served any lawful process in any action,
suit, or proceeding instituted by or on behalf of the ceding
company.
This section is not intended to conflict with or override the obligation
of the parties to a reinsurance agreement to arbitrate their disputes,
if such an obligation is created in the agreement. As added by P.L.116-1994, SEC.54.
IC 27-6-10-13 Assuming insurer failing to meet requirements of IC 27-6-10-8
through IC 27-6-10-11; insurance of risks jurisdiction
Sec. 13. Credit shall be allowed to a domestic ceding insurer when
the reinsurance is ceded to an assuming insurer not meeting the
requirements of sections 8, 9, 10, or 11 but only with respect to the
insurance of risks located in jurisdictions where such reinsurance is
required by applicable law or regulation of that jurisdiction. As added by P.L.116-1994, SEC.54.
IC 27-6-10-14 Reduction from liability for reinsurance ceded to assuming insurer
not meeting statutory requirements; amount; security
Sec. 14. (a) A reduction from liability for the reinsurance ceded
by a domestic insurer to an assuming insurer not meeting the
requirements of section 8, 9, 10, 11, 12, or 13 of this chapter shall be
allowed in an amount not exceeding the liabilities carried by the
ceding insurer.
(b) The reduction permitted under subsection (a) shall be in the
amount of funds held by or on behalf of the ceding insurer under a
reinsurance contract with the assuming insurer as security for the
payment of obligations thereunder. The security must be held in the
United States subject to withdrawal solely by, and under the
exclusive control of, the ceding insurer. A reduction under this
section is permitted in the amounts held by or on behalf of the ceding
insurer in a trust for the ceding insurer held in a qualified United
States financial institution (as defined in section 6 of this chapter).
(c) The security described under subsection (b) may be in the
following forms:
(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 (as
defined in section 5 of this chapter) not later than December 31
in 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 that meet 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
the earlier of their expiration, extension, renewal, modification,
or amendment.
(4) Any other form of security acceptable to the commissioner. As added by P.L.116-1994, SEC.54. Amended by P.L.2-1995,
SEC.105.
IC 27-6-10-15 Implementation of chapter
Sec. 15. The commissioner may adopt rules under IC 4-22-2 to
implement this chapter. As added by P.L.116-1994, SEC.54.
IC 27-6-10-1 "Accredited reinsurer" defined
Sec. 1. As used in this chapter, "accredited reinsurer" means an
insurer that:
(1) files with the commissioner evidence of the insurer's
submission to Indiana jurisdiction;
(2) submits to Indiana authority to examine the insurer's books
and records;
(3) is:
(A) licensed to transact insurance or reinsurance in at least
one (1) state; or
(B) in the case of a United States branch of an alien
company (as defined in IC 27-1-2-3), entered through and
licensed to transact insurance or reinsurance in at least one
(1) state; and
(4) files annually with the commissioner a copy of the insurer's
annual statement filed with the insurance department of the
insurer's state of domicile and a copy of the insurer's most
recent audited financial statement, and:
(A) maintains a surplus as regards policyholders in an
amount not less than twenty million dollars ($20,000,000)
and whose accreditation has not been denied by the
commissioner within ninety (90) days of submission; or
(B) maintains a surplus as regards policyholders in an
amount less than twenty million dollars ($20,000,000) and
whose accreditation has been approved by the commissioner. As added by P.L.116-1994, SEC.54.
IC 27-6-10-2 "Ceding insurer" defined
Sec. 2. As used in this chapter, "ceding insurer" has the meaning
set forth in IC 27-6-1.1-1. As added by P.L.116-1994, SEC.54.
IC 27-6-10-3 "Commissioner" defined
Sec. 3. As used in this chapter, "commissioner" refers to the
insurance commissioner appointed under IC 27-1-1-2. As added by P.L.116-1994, SEC.54.
IC 27-6-10-4 "Department" defined
Sec. 4. As used in this chapter, "department" refers to the
department of insurance created under IC 27-1-1-1. As added by P.L.116-1994, SEC.54.
IC 27-6-10-5 "Qualified United States financial institution" as used in
IC 27-6-10-14(c)
Sec. 5. As used in section 14(c) of this chapter, "qualified United
States financial institution" means an institution that:
(1) is organized, or in the case of a United States office of a
foreign banking organization, licensed under the laws of the
United States or any state thereof;
(2) is regulated, supervised, and examined by United States
federal or state authorities having regulatory authority over
banks and trust companies; and
(3) has been determined by the commissioner or the Securities
Valuation Office of the National Association of Insurance
Commissioners to meet the standards of financial condition and
standing as are considered necessary and appropriate to regulate
the quality of financial institutions whose letters of credit will
be acceptable to the commissioner. As added by P.L.116-1994, SEC.54.
IC 27-6-10-6 "Qualified United States financial institution" as used in
IC 27-6-10-11(a) and IC 27-6-10-14(b)
Sec. 6. As used in sections 11(a) and 14(b) of this chapter,
"qualified United States financial institution" means an institution
that:
(1) is organized, or in the case of a United States branch or
agency office of a foreign banking organization, licensed under
the laws of the United States or any state thereof and has been
granted authority to operate with fiduciary powers; and
(2) is regulated, supervised, and examined by federal or state
authorities having regulatory authority over banks and trust
companies. As added by P.L.116-1994, SEC.54.
IC 27-6-10-7 Asset or deduction from liability; requirements
Sec. 7. Credit for reinsurance shall be allowed to any domestic
ceding insurer as either an asset or a deduction from liability on
account of reinsurance ceded only when:
(1) the reinsurer meets the requirements of:
(A) section 8 of this chapter;
(B) section 9 of this chapter;
(C) sections 10 and 12 of this chapter;
(D) sections 11 and 12 of this chapter; or
(E) section 13 of this chapter; and
(2) the reinsurance contract provides in substance that, in the
event of the insolvency of the ceding insurer, the reinsurance is
payable under a contract reinsured by the assuming insurer on
the basis of reported claims allowed in the liquidation
proceedings, subject to court approval, without diminution
because of the insolvency of the ceding insurer. Payments under
this subdivision must be made directly to the ceding insurer or
to the ceding insurer's domiciliary liquidator except as provided
in IC 27-9-3-30.1. The reinsurance agreement may provide that
the domiciliary liquidator of an insolvent ceding insurer shall
give written notice to an assuming insurer of the pendency of a
claim against the ceding insurer on the contract reinsured within
a reasonable time after the claim is filed in the liquidation
proceeding. During the pendency of the claim, any assuming
insurer may investigate the claim and interpose in the
proceeding where the claim is to be adjudicated, at the
assuming insurer's expense, any defenses that the assuming
insurer considers available to the ceding insurer or the
liquidator. If two (2) or more assuming insurers are involved in
the same claim and a majority in interest elect to interpose a
defense to the claim, the expense must be apportioned under the
terms of the reinsurance agreement as though the expense had
been incurred by the ceding insurer. As added by P.L.116-1994, SEC.54. Amended by P.L.233-1999,
SEC.7.
IC 27-6-10-8 Assuming insurer licensed to transact insurance or reinsurance
Sec. 8. As provided in section 7 of this chapter, credit for
reinsurance shall be allowed a domestic ceding insurer when the
reinsurance is ceded to an assuming insurer that is licensed to
transact insurance or reinsurance in Indiana. As added by P.L.116-1994, SEC.54.
IC 27-6-10-9 Assuming insurer is accredited reinsurer; revocation of
accreditation
Sec. 9. As provided in section 7 of this chapter, credit for
reinsurance shall be allowed a domestic ceding insurer when the
reinsurance is ceded to an assuming insurer that is an accredited
reinsurer in Indiana. No credit shall be allowed a domestic ceding
insurer if the assuming insurer's accreditation has been revoked by
the commissioner after notice and hearing. As added by P.L.116-1994, SEC.54.
IC 27-6-10-10 Assuming insurers domiciled and licensed in another state
Sec. 10. As provided in section 7 of this chapter, credit shall be
allowed a domestic ceding insurer when the reinsurance is ceded to
an assuming insurer:
(1) that:
(A) is domiciled and licensed in; or
(B) in the case of a United States branch of an alien
company (as defined in IC 27-1-2-3), is entered through;
a state that employs standards regarding credit for reinsurance
substantially similar to those applicable under this chapter;
(2) that:
(A) maintains a surplus as regards policyholders in an
amount not less than twenty million dollars ($20,000,000);
and
(B) submits to the authority of Indiana to examine the
insurer's books and records;
provided, however, that the requirement of clause (A) does not
apply to reinsurance ceded and assumed pursuant to pooling
arrangements among insurers in the same holding company
system; and
(3) that complies with section 12 of this chapter. As added by P.L.116-1994, SEC.54.
IC 27-6-10-11 Assuming insurer maintaining a trust fund in a qualified United
States financial institution; report on sufficiency of fund; form and
content of trust
Sec. 11. (a) As provided in section 7 of this chapter, credit for
reinsurance shall be allowed a domestic ceding insurer when the
reinsurance is ceded to an assuming insurer that maintains a trust
fund in a qualified United States financial institution (as defined in
section 6 of this chapter) for the payment of the valid claims of its
United States policyholders and ceding insurers, their assigns, and
successors in interest, and the assuming insurer complies with
section 12 of this chapter. In order for the commissioner to determine
the sufficiency of the trust fund, the assuming insurer shall report
annually to the commissioner substantially the same information as
that required to be reported by licensed insurers on the National
Association of Insurance Commissioners' annual statement form. A
trust maintained under this section shall comply with the provisions
of this section.
(b) A trust shall comply with the following:
(1) In the case of a trust of a single assuming insurer:
(A) the trust shall consist of a trusteed account representing
the assuming insurer's liabilities attributable to business
written in the United States; and
(B) the assuming insurer shall maintain a trusteed surplus of
not less than twenty million dollars ($20,000,000).
(2) In the case of a trust of a group including incorporated and
individual unincorporated underwriters that are an assuming
insurer:
(A) the trust shall consist of a trusteed account representing
the liabilities of the group attributable to business written in
the United States;
(B) the group shall maintain a trusteed surplus of which one
hundred million dollars ($100,000,000) shall be held jointly
for the benefit of United States ceding insurers of any
member of the group; and
(C) the incorporated members of the group shall not be
engaged in any business other than underwriting as a
member of the group and shall be subject to the same level
of solvency regulation and control by the group's domiciliary
regulator as are the unincorporated members.
The group shall make available to the commissioner an annual
certification of the solvency of each underwriter by the
domiciliary regulator of the group and its independent public
accountants.
(3) In the case of a trust of a group of incorporated insurers
under common administration that are an assuming insurer:
(A) the group:
(i) shall report annually to the commissioner as required
under subsection (a);
(ii) must have continuously transacted an insurance
business outside the United States for at least three (3)
years immediately before making application for
accreditation;
(iii) shall submit to Indiana's authority to examine the
books and records of the group and bear the expense of the
examination;
(iv) shall have an aggregate policyholders' surplus of ten
billion dollars ($10,000,000,000); and
(v) shall maintain a joint trusteed surplus of which one
hundred million dollars ($100,000,000) shall be held
jointly for the benefit of United States ceding insurers of
any member of the group as additional security for any
such liabilities;
(B) each member of the group shall make available to the
commissioner an annual certification of the member's
solvency by the member's domiciliary regulator and its
independent public accountant; and
(C) the trust shall be in an amount equal to the several
liabilities of the group attributable to business ceded by
United States ceding insurers to any member of the group
pursuant to reinsurance contracts issued in the name of such
group.
(c) A trust shall be in a form approved by the commissioner.
(d) The trust instrument of a trust shall provide that contested
claims are valid and enforceable upon the final order of any court
with jurisdiction in the United States.
(e) A trust shall vest legal title to the trust's assets in the trustees
of the trust for the trust's United States policyholders and ceding
insurers, their assigns, and successors in interest.
(f) A trust and the assuming insurer shall be subject to
examination as determined by the commissioner.
(g) A trust shall remain in effect for as long as the assuming
insurer shall have outstanding obligations due under the reinsurance
agreements subject to the trust.
(h) Not later than February 28 of each year the trustees of a trust
permitted under this section shall report in writing to the
commissioner the following information:
(1) The balance of the trust.
(2) A listing of the trust's investments at the preceding year end.
(3) A certification of the date of termination of the trust, if
applicable, or a certification that the trust shall not expire
before December 31.
(i) Credit may only be permitted under this section if an assuming
insurer also complies with section 12 of this chapter. As added by P.L.116-1994, SEC.54.
IC 27-6-10-12 Assuming insurers not licensed or accredited in Indiana;
disallowance of credits; exception
Sec. 12. If an assuming insurer is not licensed or accredited to
transact insurance or reinsurance in Indiana, the credit permitted by
sections 10 and 11 of this chapter shall not be allowed unless the
assuming insurer agrees in the reinsurance agreements to the
following:
(1) That in the event of the failure of the assuming insurer to
perform the assuming insurer's obligations under the terms of
the reinsurance agreement, the assuming insurer, at the request
of the ceding insurer, shall:
(A) submit to the jurisdiction of any court with jurisdiction
in any state of the United States;
(B) comply with all requirements necessary to give the court
described in clause (A) jurisdiction; and
(C) abide by the final decision of the court or of any
appellate court in the event of an appeal; and
(2) To designate the commissioner or an attorney licensed in,
and having offices in, Indiana as its true and lawful attorney
upon whom may be served any lawful process in any action,
suit, or proceeding instituted by or on behalf of the ceding
company.
This section is not intended to conflict with or override the obligation
of the parties to a reinsurance agreement to arbitrate their disputes,
if such an obligation is created in the agreement. As added by P.L.116-1994, SEC.54.
IC 27-6-10-13 Assuming insurer failing to meet requirements of IC 27-6-10-8
through IC 27-6-10-11; insurance of risks jurisdiction
Sec. 13. Credit shall be allowed to a domestic ceding insurer when
the reinsurance is ceded to an assuming insurer not meeting the
requirements of sections 8, 9, 10, or 11 but only with respect to the
insurance of risks located in jurisdictions where such reinsurance is
required by applicable law or regulation of that jurisdiction. As added by P.L.116-1994, SEC.54.
IC 27-6-10-14 Reduction from liability for reinsurance ceded to assuming insurer
not meeting statutory requirements; amount; security
Sec. 14. (a) A reduction from liability for the reinsurance ceded
by a domestic insurer to an assuming insurer not meeting the
requirements of section 8, 9, 10, 11, 12, or 13 of this chapter shall be
allowed in an amount not exceeding the liabilities carried by the
ceding insurer.
(b) The reduction permitted under subsection (a) shall be in the
amount of funds held by or on behalf of the ceding insurer under a
reinsurance contract with the assuming insurer as security for the
payment of obligations thereunder. The security must be held in the
United States subject to withdrawal solely by, and under the
exclusive control of, the ceding insurer. A reduction under this
section is permitted in the amounts held by or on behalf of the ceding
insurer in a trust for the ceding insurer held in a qualified United
States financial institution (as defined in section 6 of this chapter).
(c) The security described under subsection (b) may be in the
following forms:
(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 (as
defined in section 5 of this chapter) not later than December 31
in 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 that meet 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
the earlier of their expiration, extension, renewal, modification,
or amendment.
(4) Any other form of security acceptable to the commissioner. As added by P.L.116-1994, SEC.54. Amended by P.L.2-1995,
SEC.105.
IC 27-6-10-15 Implementation of chapter
Sec. 15. The commissioner may adopt rules under IC 4-22-2 to
implement this chapter. As added by P.L.116-1994, SEC.54.
