N.J. Admin. Code § 11:2-40.6

Current through Register Vol. 56, No. 24, December 18, 2024

Section 11:2-40.6 - Additional standards

(a) The ceding insurer's actuary signing the financial statement actuarial opinion with respect to the valuation of reserves shall consider this subchapter and any applicable actuarial standards of practice when determining the proper credit in financial statements filed with the Department. The actuary shall maintain adequate documentation and be prepared upon request by the Department to describe the actuarial work performed for inclusion in the financial statements and to demonstrate that such work conforms to this subchapter.

(b) Compliance with N.J.A.C. 11:2-40.4 shall not abrogate the requirement that reserve credits shall be based upon actual liability assumed by a reinsurer to reimburse a ceding insurer for benefits that the ceding insurer is obligated to pay under its direct policies and that gave rise to a required statutory reserve amount. An agreement meeting the technical requirements of N.J.A.C. 11:2-40.4, but failing to comply with the objective of this rule, shall not provide a basis for the taking of reserve credits by a ceding insurer.

(c) The ceding insurer shall maintain data used to determine reinsurance credits at its place of business for review by the Department upon request. Such data and documentation shall demonstrate compliance by the ceding insurer with this subchapter, and shall include, but not be limited to:

1. A comparison of the renewal expense allowances with the ceding insurer's anticipated expenses; and

2. A comparison of the guaranteed reserve adjustment interest rates to the maximum allowable statutory valuation rates in accordance with N.J.S.A. 17B:19-8.

N.J. Admin. Code § 11:2-40.6

Amended by R.1993 d.562, effective 11/15/1993.
See: 25 New Jersey Register 4314(a), 25 New Jersey Register 5212(a).