A. Credit for reinsurance shall be allowed a domestic ceding insurer as either an asset or deduction from liability when the assuming insurer satisfies the requirements of Subsection B, C, D, or E of this Section. If the requirements of Subsection D are satisfied, the requirements of Subsection F of this Section shall also be satisfied.
B. Credit shall be allowed when the reinsurance is ceded to an assuming insurer which is authorized in this state. An authorized insurer is one which holds a certificate of authority to transact insurance or reinsurance.
C. Credit shall also be allowed when the reinsurance is ceded to an assuming insurer which is accredited as a reinsurer in this state. An accredited reinsurer shall be approved by the Department of Insurance after filing an application for accreditation, and:
(1) Filing with the Department of Insurance evidence of its submission to the jurisdiction of this state, and as may be set forth by the department in regulations.
(2) Submission of the reinsurer to the authority of the Department of Insurance to examine books and records of the reinsurer.
(3) Demonstration by the reinsurer that the reinsurer is licensed or authorized to transact insurance or reinsurance in, or in the case of a United States branch of an alien assuming insurer, is entered through, at least one state which employs standards regarding credit for reinsurance equal to or exceeding those applicable under this Subpart.
(4) Annual filing with the Department of Insurance a true copy of its annual statement filed with the insurance department of its state of domicile and a copy of its most recent audited financial statement.
D.(1)(a) Credit shall also be allowed under Paragraph (2) of this Subsection when the reinsurance is ceded to an assuming insurer which maintains a trust fund in a qualified United States financial institution, as defined in R.S. 22:653(B), for the payment of the valid claims of its United States policyholders and ceding insurers, their assigns, and successors in interest. The assuming insurer shall report and submit annually to the commissioner information substantially the same as that required to be reported on the National Association of Insurance Commissioners (NAIC) annual statement form by authorized insurers to enable the commissioner to determine the sufficiency of the trust fund.
(b) Any credit for reinsurance shall not be granted under Paragraph (2) of this Subsection unless the form of the trust and amendments to the trust have been approved by the Department of Insurance. The trust instrument shall provide that contested claims shall be valid and enforceable upon the final order of any court of competent jurisdiction in the United States. The trust shall vest legal title to its assets in the trustees of the trust for its United States ceding insurers, their assigns, and successors in interest. The trust shall be subject to examination as determined by the department. The trust described herein shall remain in existence for as long as the assuming insurer shall have obligations due under the reinsurance agreements subject to the trust.
(c) Not later than the twenty-eighth day of each February, the trustees of the trust established under Paragraph (2) of this Subsection shall provide a written report to the department setting forth the balance of the trust and listing the investments of the trust of the preceding calendar year, and shall certify the date of termination of the trust, if so planned, or shall certify that the trust shall not expire prior to the succeeding December thirty-first.
(2)(a) In the case of a single assuming insurer, the trust shall consist of a trusteed account in an amount not less than the assuming insurer's liabilities attributable to business written in the United States and, in addition, the assuming insurer shall maintain a trusteed surplus of not less than twenty million dollars.
(b) In the case of a group of insurers that include individual unincorporated underwriters, the trust shall consist of a trusteed account representing the group's liabilities attributable to business written in the United States and, in addition, the group shall maintain a trusteed surplus of which one hundred million dollars shall be held jointly for the benefit of United States ceding insurers of any member of the group. The group shall make available to the commissioner an annual certification of the solvency of each underwriter by its domiciliary regulator and its independent public accountants.
(c) In the case of a group of incorporated insurers under common administration, the group shall:
(i) Submit to this state's authority to examine its books and records and bear the expense of the examination.
(ii) Maintain aggregate policyholders' surplus of ten billion dollars.
(iii) Maintain a trust consisting of a trusteed account in an amount not less than the group's several liabilities attributable to business ceded by United States ceding insurers to any member of the group.
(iv) In addition, maintain a joint trusteed surplus of which one hundred million dollars shall be held jointly for the benefit of the United States ceding insurers of any member of the group as additional security for these liabilities.
(v) Within ninety days after its financial statements are due to be filed with the group's domiciliary regulator make available to the commissioner an annual certification of the member's solvency by the member's domiciliary regulator and financial statements of each underwriter member of the group audited by independent public accountants.
E. Any credit for reinsurance shall also be allowed when the reinsurance is ceded to an assuming insurer not meeting the requirements of Subsection B, C, or D of this Section, only as to the insurance of risks located in jurisdictions where the reinsurance is required by applicable law of that jurisdiction.
F. If the assuming insurer is not authorized or accredited to transact insurance or reinsurance in this state, credit permitted by Subsection D shall not be allowed unless:
(1) The assuming insurer provides the following in all reinsurance agreements:
(a) That in the event of the failure of the assuming insurer to perform its obligations under the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding insurer, shall submit to the jurisdiction of any court of competent jurisdiction in any state of the United States, comply with all requirements necessary to give such court jurisdiction, and abide by the final decision of the district court or appellate court.
(b) To designate the commissioner as its true and lawful attorney, who may be served any lawful service of process in any action, suit, or proceeding instituted by or on behalf of the ceding insurer.
(c) The provisions of Subparagraphs (a) and (b) of this Paragraph shall not be construed 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 reinsurance agreement.
(2) The assuming insurer files with the department a list identifying its officers and directors, or similar principals, along with biographical information for each and provides an annual update of this information.
(3) The assuming insurer agrees to allow the department to examine its books and records and to waive any protection it has under any secrecy laws of its domiciliary jurisdiction of the reinsurer, except that any examination shall only take place upon showing of good cause by the department for concern about the financial soundness or solvency of the subject entity.
G. The ceding insurer may take credit for the reserves on such ceded risks to the extent reinsured, except that:
(1) No credit shall be taken for such reserves unless the insurer accepting the reinsurance meets the requirements set forth in this Section as valid assuming insurers.
(2) No credit shall be allowed to any ceding insurer for reinsurance, as an admitted asset or as a deduction from liability, unless the reinsurance shall be payable, in the event of insolvency of the ceding insurer, to its liquidator or receiver on the basis of the claim or claims allowed against the insolvent ceding insurer by any court of competent jurisdiction or any justice or judge thereof, or by any receiver or liquidator having authority to determine and allow such claims, except either where the reinsurance contract with the consent of the direct insured or insureds specifically provides another payee of such reinsurance in the event of the insolvency of the ceding insurer, or when the assuming insurer with the consent of the direct insured or insureds has assumed such policy obligations of the ceding insurer as direct obligations of the assuming insurer to the payees under such policies and in substitution for the obligations of the ceding insurer to such payees.
(3) No credit for reinsurance shall be permitted unless the assuming insurer has been doing business in its country of domicile for at least three years, or is an affiliate of an insurer or reinsurer which has been doing business in its country of domicile for at least three years, unless the department, for good cause shown, waives this three-year operating requirement by rule or regulation.
A. Credit for reinsurance shall be allowed a domestic ceding insurer as either an asset or deduction from liability when the assuming insurer satisfies the requirements of Subsection B, C, D, or E of this Section. If the requirements of Subsection D are satisfied, the requirements of Subsection F of this Section shall also be satisfied.
B. Credit shall be allowed when the reinsurance is ceded to an assuming insurer which is authorized in this state. An authorized insurer is one which holds a certificate of authority to transact insurance or reinsurance.
C. Credit shall also be allowed when the reinsurance is ceded to an assuming insurer which is accredited as a reinsurer in this state. An accredited reinsurer shall be approved by the Department of Insurance after filing an application for accreditation, and:
(1) Filing with the Department of Insurance evidence of its submission to the jurisdiction of this state, and as may be set forth by the department in regulations.
(2) Submission of the reinsurer to the authority of the Department of Insurance to examine books and records of the reinsurer.
(3) Demonstration by the reinsurer that the reinsurer is licensed or authorized to transact insurance or reinsurance in, or in the case of a United States branch of an alien assuming insurer, is entered through, at least one state which employs standards regarding credit for reinsurance equal to or exceeding those applicable under this Subpart.
(4) Annual filing with the Department of Insurance a true copy of its annual statement filed with the insurance department of its state of domicile and a copy of its most recent audited financial statement.
D.(1)(a) Credit shall also be allowed under Paragraph (2) of this Subsection when the reinsurance is ceded to an assuming insurer which maintains a trust fund in a qualified United States financial institution, as defined in R.S. 22:653(B), for the payment of the valid claims of its United States policyholders and ceding insurers, their assigns, and successors in interest. The assuming insurer shall report and submit annually to the commissioner information substantially the same as that required to be reported on the National Association of Insurance Commissioners (NAIC) annual statement form by authorized insurers to enable the commissioner to determine the sufficiency of the trust fund.
(b) Any credit for reinsurance shall not be granted under Paragraph (2) of this Subsection unless the form of the trust and amendments to the trust have been approved by the Department of Insurance. The trust instrument shall provide that contested claims shall be valid and enforceable upon the final order of any court of competent jurisdiction in the United States. The trust shall vest legal title to its assets in the trustees of the trust for its United States ceding insurers, their assigns, and successors in interest. The trust shall be subject to examination as determined by the department. The trust described herein shall remain in existence for as long as the assuming insurer shall have obligations due under the reinsurance agreements subject to the trust.
(c) Not later than the twenty-eighth day of each February, the trustees of the trust established under Paragraph (2) of this Subsection shall provide a written report to the department setting forth the balance of the trust and listing the investments of the trust of the preceding calendar year, and shall certify the date of termination of the trust, if so planned, or shall certify that the trust shall not expire prior to the succeeding December thirty-first.
(2)(a) In the case of a single assuming insurer, the trust shall consist of a trusteed account in an amount not less than the assuming insurer's liabilities attributable to business written in the United States and, in addition, the assuming insurer shall maintain a trusteed surplus of not less than twenty million dollars.
(b) In the case of a group of insurers that include individual unincorporated underwriters, the trust shall consist of a trusteed account representing the group's liabilities attributable to business written in the United States and, in addition, the group shall maintain a trusteed surplus of which one hundred million dollars shall be held jointly for the benefit of United States ceding insurers of any member of the group. The group shall make available to the commissioner an annual certification of the solvency of each underwriter by its domiciliary regulator and its independent public accountants.
(c) In the case of a group of incorporated insurers under common administration, the group shall:
(i) Submit to this state's authority to examine its books and records and bear the expense of the examination.
(ii) Maintain aggregate policyholders' surplus of ten billion dollars.
(iii) Maintain a trust consisting of a trusteed account in an amount not less than the group's several liabilities attributable to business ceded by United States ceding insurers to any member of the group.
(iv) In addition, maintain a joint trusteed surplus of which one hundred million dollars shall be held jointly for the benefit of the United States ceding insurers of any member of the group as additional security for these liabilities.
(v) Within ninety days after its financial statements are due to be filed with the group's domiciliary regulator make available to the commissioner an annual certification of the member's solvency by the member's domiciliary regulator and financial statements of each underwriter member of the group audited by independent public accountants.
E. Any credit for reinsurance shall also be allowed when the reinsurance is ceded to an assuming insurer not meeting the requirements of Subsection B, C, or D of this Section, only as to the insurance of risks located in jurisdictions where the reinsurance is required by applicable law of that jurisdiction.
F. If the assuming insurer is not authorized or accredited to transact insurance or reinsurance in this state, credit permitted by Subsection D shall not be allowed unless:
(1) The assuming insurer provides the following in all reinsurance agreements:
(a) That in the event of the failure of the assuming insurer to perform its obligations under the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding insurer, shall submit to the jurisdiction of any court of competent jurisdiction in any state of the United States, comply with all requirements necessary to give such court jurisdiction, and abide by the final decision of the district court or appellate court.
(b) To designate the commissioner as its true and lawful attorney, who may be served any lawful service of process in any action, suit, or proceeding instituted by or on behalf of the ceding insurer.
(c) The provisions of Subparagraphs (a) and (b) of this Paragraph shall not be construed 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 reinsurance agreement.
(2) The assuming insurer files with the department a list identifying its officers and directors, or similar principals, along with biographical information for each and provides an annual update of this information.
(3) The assuming insurer agrees to allow the department to examine its books and records and to waive any protection it has under any secrecy laws of its domiciliary jurisdiction of the reinsurer, except that any examination shall only take place upon showing of good cause by the department for concern about the financial soundness or solvency of the subject entity.
G. The ceding insurer may take credit for the reserves on such ceded risks to the extent reinsured, except that:
(1) No credit shall be taken for such reserves unless the insurer accepting the reinsurance meets the requirements set forth in this Section as valid assuming insurers.
(2) No credit shall be allowed to any ceding insurer for reinsurance, as an admitted asset or as a deduction from liability, unless the reinsurance shall be payable, in the event of insolvency of the ceding insurer, to its liquidator or receiver on the basis of the claim or claims allowed against the insolvent ceding insurer by any court of competent jurisdiction or any justice or judge thereof, or by any receiver or liquidator having authority to determine and allow such claims, except either where the reinsurance contract with the consent of the direct insured or insureds specifically provides another payee of such reinsurance in the event of the insolvency of the ceding insurer, or when the assuming insurer with the consent of the direct insured or insureds has assumed such policy obligations of the ceding insurer as direct obligations of the assuming insurer to the payees under such policies and in substitution for the obligations of the ceding insurer to such payees.
(3) No credit for reinsurance shall be permitted unless the assuming insurer has been doing business in its country of domicile for at least three years, or is an affiliate of an insurer or reinsurer which has been doing business in its country of domicile for at least three years, unless the department, for good cause shown, waives this three-year operating requirement by rule or regulation.
A. Credit for reinsurance shall be allowed a domestic ceding insurer as either an asset or deduction from liability when the assuming insurer satisfies the requirements of Subsection B, C, D, or E of this Section. If the requirements of Subsection D are satisfied, the requirements of Subsection F of this Section shall also be satisfied.
B. Credit shall be allowed when the reinsurance is ceded to an assuming insurer which is authorized in this state. An authorized insurer is one which holds a certificate of authority to transact insurance or reinsurance.
C. Credit shall also be allowed when the reinsurance is ceded to an assuming insurer which is accredited as a reinsurer in this state. An accredited reinsurer shall be approved by the Department of Insurance after filing an application for accreditation, and:
(1) Filing with the Department of Insurance evidence of its submission to the jurisdiction of this state, and as may be set forth by the department in regulations.
(2) Submission of the reinsurer to the authority of the Department of Insurance to examine books and records of the reinsurer.
(3) Demonstration by the reinsurer that the reinsurer is licensed or authorized to transact insurance or reinsurance in, or in the case of a United States branch of an alien assuming insurer, is entered through, at least one state which employs standards regarding credit for reinsurance equal to or exceeding those applicable under this Subpart.
(4) Annual filing with the Department of Insurance a true copy of its annual statement filed with the insurance department of its state of domicile and a copy of its most recent audited financial statement.
D.(1)(a) Credit shall also be allowed under Paragraph (2) of this Subsection when the reinsurance is ceded to an assuming insurer which maintains a trust fund in a qualified United States financial institution, as defined in R.S. 22:653(B), for the payment of the valid claims of its United States policyholders and ceding insurers, their assigns, and successors in interest. The assuming insurer shall report and submit annually to the commissioner information substantially the same as that required to be reported on the National Association of Insurance Commissioners (NAIC) annual statement form by authorized insurers to enable the commissioner to determine the sufficiency of the trust fund.
(b) Any credit for reinsurance shall not be granted under Paragraph (2) of this Subsection unless the form of the trust and amendments to the trust have been approved by the Department of Insurance. The trust instrument shall provide that contested claims shall be valid and enforceable upon the final order of any court of competent jurisdiction in the United States. The trust shall vest legal title to its assets in the trustees of the trust for its United States ceding insurers, their assigns, and successors in interest. The trust shall be subject to examination as determined by the department. The trust described herein shall remain in existence for as long as the assuming insurer shall have obligations due under the reinsurance agreements subject to the trust.
(c) Not later than the twenty-eighth day of each February, the trustees of the trust established under Paragraph (2) of this Subsection shall provide a written report to the department setting forth the balance of the trust and listing the investments of the trust of the preceding calendar year, and shall certify the date of termination of the trust, if so planned, or shall certify that the trust shall not expire prior to the succeeding December thirty-first.
(2)(a) In the case of a single assuming insurer, the trust shall consist of a trusteed account in an amount not less than the assuming insurer's liabilities attributable to business written in the United States and, in addition, the assuming insurer shall maintain a trusteed surplus of not less than twenty million dollars.
(b) In the case of a group of insurers that include individual unincorporated underwriters, the trust shall consist of a trusteed account representing the group's liabilities attributable to business written in the United States and, in addition, the group shall maintain a trusteed surplus of which one hundred million dollars shall be held jointly for the benefit of United States ceding insurers of any member of the group. The group shall make available to the commissioner an annual certification of the solvency of each underwriter by its domiciliary regulator and its independent public accountants.
(c) In the case of a group of incorporated insurers under common administration, the group shall:
(i) Submit to this state's authority to examine its books and records and bear the expense of the examination.
(ii) Maintain aggregate policyholders' surplus of ten billion dollars.
(iii) Maintain a trust consisting of a trusteed account in an amount not less than the group's several liabilities attributable to business ceded by United States ceding insurers to any member of the group.
(iv) In addition, maintain a joint trusteed surplus of which one hundred million dollars shall be held jointly for the benefit of the United States ceding insurers of any member of the group as additional security for these liabilities.
(v) Within ninety days after its financial statements are due to be filed with the group's domiciliary regulator make available to the commissioner an annual certification of the member's solvency by the member's domiciliary regulator and financial statements of each underwriter member of the group audited by independent public accountants.
E. Any credit for reinsurance shall also be allowed when the reinsurance is ceded to an assuming insurer not meeting the requirements of Subsection B, C, or D of this Section, only as to the insurance of risks located in jurisdictions where the reinsurance is required by applicable law of that jurisdiction.
F. If the assuming insurer is not authorized or accredited to transact insurance or reinsurance in this state, credit permitted by Subsection D shall not be allowed unless:
(1) The assuming insurer provides the following in all reinsurance agreements:
(a) That in the event of the failure of the assuming insurer to perform its obligations under the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding insurer, shall submit to the jurisdiction of any court of competent jurisdiction in any state of the United States, comply with all requirements necessary to give such court jurisdiction, and abide by the final decision of the district court or appellate court.
(b) To designate the commissioner as its true and lawful attorney, who may be served any lawful service of process in any action, suit, or proceeding instituted by or on behalf of the ceding insurer.
(c) The provisions of Subparagraphs (a) and (b) of this Paragraph shall not be construed 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 reinsurance agreement.
(2) The assuming insurer files with the department a list identifying its officers and directors, or similar principals, along with biographical information for each and provides an annual update of this information.
(3) The assuming insurer agrees to allow the department to examine its books and records and to waive any protection it has under any secrecy laws of its domiciliary jurisdiction of the reinsurer, except that any examination shall only take place upon showing of good cause by the department for concern about the financial soundness or solvency of the subject entity.
G. The ceding insurer may take credit for the reserves on such ceded risks to the extent reinsured, except that:
(1) No credit shall be taken for such reserves unless the insurer accepting the reinsurance meets the requirements set forth in this Section as valid assuming insurers.
(2) No credit shall be allowed to any ceding insurer for reinsurance, as an admitted asset or as a deduction from liability, unless the reinsurance shall be payable, in the event of insolvency of the ceding insurer, to its liquidator or receiver on the basis of the claim or claims allowed against the insolvent ceding insurer by any court of competent jurisdiction or any justice or judge thereof, or by any receiver or liquidator having authority to determine and allow such claims, except either where the reinsurance contract with the consent of the direct insured or insureds specifically provides another payee of such reinsurance in the event of the insolvency of the ceding insurer, or when the assuming insurer with the consent of the direct insured or insureds has assumed such policy obligations of the ceding insurer as direct obligations of the assuming insurer to the payees under such policies and in substitution for the obligations of the ceding insurer to such payees.
(3) No credit for reinsurance shall be permitted unless the assuming insurer has been doing business in its country of domicile for at least three years, or is an affiliate of an insurer or reinsurer which has been doing business in its country of domicile for at least three years, unless the department, for good cause shown, waives this three-year operating requirement by rule or regulation.
