Or. Admin. R. 836-011-0460

Current through Register Vol. 63, No. 8, August 1, 2024

Section 836-011-0460 - Nonrenewals, Cancellations or Revisions of Ceded Reinsurance Agreements

(1) Materiality and scope:

(a) No nonrenewals, cancellations or revisions of ceded reinsurance agreements need be reported pursuant to OAR 836-011-0440 if the nonrenewals, cancellations or revisions are not material. For purposes of 836-011-0430 to 836-011-0460, a material nonrenewal, cancellation or revision is one that affects:

(A) As respects property and casualty business, including accident and health business written by a property and casualty insurer:

(i) More than fifty percent of the insurer's total ceded written premium; or

(ii) More than fifty percent of the insurer's total ceded indemnity and loss adjustment reserves.

(B) As respects life, annuity, and accident and health business: more than fifty percent of the total reserve credit taken for business ceded, on an annualized basis, as indicated in the insurer's most recent annual statement;

(C) As respects either property and casualty business or life, annuity, and accident and health business, either of the following events shall constitute a material revision that must be reported:

(i) An authorized reinsurer representing more than ten percent of a total cession is replaced by one or more unauthorized reinsurers; or

(ii) Previously established collateral requirements have been reduced or waived as respects one or more unauthorized reinsurers representing collectively more than ten percent of a total cession.

(b) However, no filing shall be required if:

(A) As respects property and casualty business, including accident and health business written by a property and casualty insurer: the insurer's total ceded written premium represents, on an annualized basis, less than ten percent of its total written premium for direct and assumed business; or

(B) As respects life, annuity, and accident and health business: the total reserve credit taken for business ceded represents, on an annualized basis, less than ten percent of the statutory reserve requirement prior to any cession.

(2) Information to be reported:

(a) The following information is required to be disclosed in any report of a material nonrenewal, cancellation or revision of a ceded reinsurance agreement:

(A) Effective date of the nonrenewal, cancellation or revision;

(B) The description of the transaction with an identification of the initiator thereof;

(C) Purpose of, or reason for, the transaction; and

(D) If applicable, the identity of the replacement reinsurers.

(b) Insurers are required to report all material nonrenewals, cancellations or revisions of ceded reinsurance agreements on a non-consolidated basis unless the insurer is part of a consolidated group of insurers that utilizes a pooling arrangement or 100 percent reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than $1,000,000 total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than five percent of the insurer's capital and surplus.

Or. Admin. R. 836-011-0460

ID 7-1995, f. & cert. ef. 11-15-95

Stat. Auth.: ORS 731.244 & ORS 731.574

Stats. Implemented: ORS 731.574 & ORS 733.210