Or. Admin. Code § 410-141-5055

Current through Register Vol. 63, No. 12, December 1, 2024

Section 410-141-5055 - FINANCIAL SOLVENCY REGULATION: Requirements for Obtaining Credit for Reinsurance

(1) The Authority shall not allow financial statement credit for reinsurance to a cedent CCO as either an asset or a reduction from liability on account of reinsurance ceded unless the reinsurance meets the requirements of subsection (2) or (3) of this section.

(2) Credit shall be allowed when the reinsurance is ceded to an authorized assuming CCO or an authorized health insurer that has been approved and accepted by the Authority to act as a reinsurer of the cedent CCO in accordance with OAR 410-141-5050. The Authority shall not allow credit to a cedent CCO if the approval or acceptance of the reinsurer has been revoked by the Authority after notice and opportunity for hearing.

(3) The Authority shall allow a reduction from liability for reinsurance ceded by a CCO to an assuming reinsurer not meeting the requirements of subsection (2) in an amount not exceeding the liabilities carried by the cedent CCO. The reduction shall be in the amount of funds held by or on behalf of the cedent CCO, including funds held in trust for the exclusive benefit of the cedent CCO, under a reinsurance contract with such reinsurer as security for the payment of obligations under the reinsurance contract. The security must be held in the United States subject to withdrawal solely by and under the exclusive control of the cedent CCO insurer or, in the case of a trust, held in a Qualified United States Financial Institution. The security may be in the form of any of the following:

(a) Cash.

(b) Securities listed by the SVO.

(c) Clean, irrevocable, unconditional and "evergreen" letters of credit issued or confirmed by a Qualified United States Financial Institution effective no later than December 31 of the year for which filing is being made, and in the possession of, or in trust for, the cedent CCO on or before the filing date of its annual statement. Letters of credit meeting 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 their expiration, extension, renewal, modification or amendment, whichever first occurs.

(d) Any other form of security acceptable to the Authority.

(4) An allowed asset or a reduction from liability for reinsurance ceded to an unauthorized reinsurer pursuant to subsection (3) of this section shall be allowed only when the applicable requirements of OAR 410-141-5050 to OAR 410-141-5070 are satisfied.

Or. Admin. Code § 410-141-5055

DMAP 58-2019, adopt filed 12/18/2019, effective 1/1/2020

Statutory/Other Authority: ORS 414.615, 414.625, 414.635, 414.651 & ORS 413.042

Statutes/Other Implemented: ORS 414.610 - 414.685