Editorial Note on Subchapter A of Chapter II
Editorial Note: Nomenclature changes to subchapter A appear at 78 FR 60697, Oct. 2, 2013.

§ 223.12 Recognition as reinsurer. ( a ) *Use of recognized reinsurers.* Companies holding a certificate of authority may: (1) Receive credit for reinsurance ceded to a reinsurer recognized pursuant to this section, as described in § 223.9(c); and (2) Protect liability in excess of their underwriting limit on risks not running to the United States by reinsuring excess liability with a reinsurer recognized pursuant to this section. ( b ) *Application.* Every company applying for recognition by Treasury as one of the categories of reinsurers in paragraphs (c) through (j) of this section, or annual renewal of such recognition, shall submit an application to Treasury, c/o Surety Bonds Program, to the location, and in the manner, specified online at *https://www.fiscal.treasury.gov/surety-bonds/ .* The applicant company must submit the documentation and must meet the requirements as outlined in this section and in supplemental guidance published by Treasury on its website. ( c ) *Treasury recognition.* Recognition by Treasury will be effective for a term that expires on the last day of the following October. A list of reinsuring companies so recognized by Treasury will be published online at *https://www.fiscal.treasury.gov/surety-bonds/ .* ( d ) *Notice to Treasury.* Each company recognized pursuant to this section shall immediately notify Treasury if a U.S. state takes action to suspend or revoke the company's license or its status or eligibility as an Accredited Reinsurer, Certified Reinsurer, or Reciprocal Jurisdiction Reinsurer, or if the company notifies a U.S. state that a supervisory authority in its domiciliary jurisdiction takes regulatory action against it for serious noncompliance with applicable law (as determined by the supervisory authority in its domiciliary jurisdiction). ( e ) *Eligibility.* A company is not eligible for recognition under this section if it only insures or reinsures risks of its parent, affiliated, or controlled unaffiliated business, or is deemed by Treasury to be primarily engaged in self-insurance. ( f ) *Guidance.* Treasury may issue supplemental guidance regarding the timing, form, content, and its analysis of the submissions required pursuant to this section. Such guidance will be posted on its website. ( g ) *Noncompliance.* Noncompliance with the requirements of this section may result in a company's application for recognition, or for renewal of its recognition, being denied. ( h ) *Admitted reinsurers* —(1) *Application for recognition by U.S. company.* Any company organized under the laws of the United States or of any state thereof, wishing to apply for recognition as an admitted reinsurer of surety companies doing business with the United States, shall submit an application to Treasury, c/o Surety Bonds Program, to the location, and in the manner, specified online at *https://www.fiscal.treasury.gov/surety-bonds/ .* The company shall file the following data with Treasury and shall transmit therewith the fee in accordance with the provisions of § 223.22: ( i ) Payment of the application fee in accordance with the provisions of § 223.22; ( ii ) A written request for recognition as an admitted reinsurer, signed by an officer of the company. This request must indicate: ( A ) The reason for applying for recognition; ( B ) Whether the company has ever previously applied for recognition as an admitted reinsurer, whether Treasury approved the application, and the applicable dates; and ( C ) If Treasury previously approved the company for recognition as an admitted reinsurer, the reason for termination of its recognition and the applicable date; ( iii ) A certified copy of its charter or articles of incorporation with all amendments as of the date of application showing the legal name of the company and that it is authorized to write reinsurance; ( iv ) A listing of the names of the company's current officers and directors as of the date of application, including a biographical affidavit of each officer and director per instructions online at *https://www.fiscal.treasury.gov/surety-bonds/ ;* ( v ) A certified copy of a license from any one state in which it has been authorized to do business showing its authority to write reinsurance and/or other lines of insurance; ( vi ) A copy of the latest available report of its examination by its domiciliary State Insurance Department including a copy of company responses to any significant findings or recommendations; ( vii ) Annual statements of its financial condition, as of the close of the last two full years preceding the date of application, on the annual statement form of the NAIC with all Schedules and Exhibits completed, including copies of the NAIC File Upload, showing that it has paid-up capital of at least $250,000 in cash or its equivalent, in the case of a stock insurance company, or has net assets of not less than $500,000 over and above all liabilities, in the case of a mutual insurance company. The Annual Financial Statement's Jurat Page (only) is to be signed (facsimile signatures are acceptable) by the company President, Secretary, and a Notary Public who shall also affix a notary seal; ( viii ) IRIS ratio results, and an explanation for any ratios outside the normal ranges as established by the NAIC for the last two years preceding the date of application; ( ix ) A memorandum setting forth the company's method of operation, including lines of business written, the company's underwriting and claims philosophy, and significant changes in the company's operations or corporate structure that impact its financial statements; ( x ) A completed Treasury Schedule F (Form No. TFS 6314), as referenced in § 223.9(c) for two years preceding the date of application; ( xi ) A Statement of Actuarial Opinion as of the close of the last two years preceding the date of application provided by a qualified actuary, as defined by the NAIC, on the adequacy of all loss reserves with the scope and format of the statement also conforming to the requirements of the NAIC; and ( xii ) Such other evidence as Treasury may request to establish that the company is solvent and able to meet the continuing obligation to carry out its contracts. Treasury will publish supplemental guidance annually regarding evidence it may require, submission methods, and format of the data listed in paragraphs (h)(1)(i) through (xi) of this section. (2) *Application by a U.S. branch.* A U.S. branch of a non-U.S. company applying for recognition as an admitted reinsurer must file the following data with Treasury, and shall transmit therewith the fee in accordance with the provisions of § 223.22: ( i ) The submissions listed in paragraphs (h)(1)(i) through (xii) of this section, except that the financial statement of such branch shall show that it has net assets of not less than $250,000 over and above all liabilities; and ( ii ) Evidence satisfactory to Treasury to establish that it has on deposit in the United States not less than $250,000 available to its policyholders and creditors in the United States. (3) *Application for renewal of recognition as an admitted reinsurer.* Any company recognized pursuant to paragraph (h)(1) or (2) of this section wishing to apply for renewal of its recognition shall submit an application to Treasury, c/o Surety Bonds Program, to the location, and in the manner, specified online at *https://www.fiscal.treasury.gov/surety-bonds/ .* The company must file the following data with Treasury and shall transmit therewith the fee in accordance with the provisions of § 223.22: ( i ) Payment of the application fee in accordance with the provisions of § 223.22; ( ii ) A copy of the latest available report of its examination by its domiciliary State Insurance Department including a copy of company responses to any significant findings or recommendations; ( iii ) Annual statements of its financial condition, as of the close of the preceding year, on the annual statement form of the NAIC with all Schedules and Exhibits completed, including copies of the NAIC File Upload, showing that it has paid-up capital of at least $250,000 in cash or its equivalent, in the case of a stock insurance company, or has net assets of not less than $500,000 over and above all liabilities, in the case of a mutual insurance company. The Annual Financial Statement's Jurat Page (only) is to be signed (facsimile signatures are acceptable) by the company President, Secretary, and a Notary Public who shall also affix a notary seal; ( iv ) IRIS ratio results, and an explanation for any ratios outside the normal ranges as established by the NAIC as of the close of the preceding year; ( v ) A completed Treasury Schedule F (Form No. TFS 6314), as referenced in § 223.9(c) as of the close of the preceding year; ( vi ) A Statement of Actuarial Opinion as of the close of the preceding year provided by a qualified actuary, as defined by the NAIC, on the adequacy of all loss reserves with the scope and format of the statement also conforming to the requirements of the NAIC; ( vii ) A listing of the names of the company's current officers and directors as of the close of the preceding year, including a biographical affidavit of each new officer and director per instructions online at *https://www.fiscal.treasury.gov/surety-bonds/ ;* and ( viii ) Such other evidence as Treasury may request to establish that the company is solvent and able to meet the continuing obligation to carry out its contracts. Treasury will publish supplemental guidance annually regarding evidence it may require, submission methods, and format of the data listed in paragraphs (h)(3)(i) through (vii) of this section. ( i ) *Complementary reinsurers.* Any company may apply for recognition as a complementary reinsurer or annual renewal of such recognition provided the company is licensed to write reinsurance by and has its head office in (or is domiciled in) a non-U.S. jurisdiction that is subject to an in-force Covered Agreement entered into with the United States pursuant to 31 U.S.C. 313-314, which Covered Agreement addresses the elimination, under specified conditions, of collateral requirements as a condition for entering into any reinsurance agreement with a ceding insurer domiciled in a U.S. state or for allowing the ceding insurer to recognize credit for reinsurance. To obtain recognition as a complementary reinsurer, the company must submit to Treasury the fee in accordance with the provisions of § 223.22 and must: (1) Meet and maintain all capital and surplus, solvency, and market conduct requirements under the applicable Covered Agreement; (2) Be recognized by at least one U.S. state as a Reciprocal Jurisdiction Reinsurer, as defined by the state's credit for reinsurance law or regulation based on the NAIC's Credit for Reinsurance Model Law and Regulation, and submit proof of such recognition; and (3) Submit to Treasury: ( i ) For initial applications for recognition, all information provided by the company or by the supervisory authority of the company's domiciliary jurisdiction to any U.S. state regulator in the two most recently completed calendar years. ( ii ) For applications for renewal of recognition, all semi-annual and annual filing information provided by the company or by the supervisory authority of the company's domiciliary jurisdiction to any U.S. state regulator in the most recently completed calendar year. ( iii ) Payment of the application fee in accordance with the provisions of § 223.22. ( j ) *Alien reinsurers.* Any company may apply for recognition or annual renewal of such recognition as an alien reinsurer, provided it is licensed to write reinsurance by, and has its head office or domicile in, a non-U.S. jurisdiction that is recognized by a U.S. state as a Qualified Jurisdiction or as a Reciprocal Jurisdiction, provided that the Reciprocal Jurisdiction is not party to an in-force Covered Agreement as described in paragraph (i) of this section. Treasury may also consider, if it deems appropriate, the lists of Qualified and Reciprocal Jurisdictions most recently published through the relevant NAIC committee when determining a company's eligibility for recognition pursuant to this paragraph (j). To obtain such recognition, the company must submit to Treasury the fee in accordance with the provisions of § 223.22 and must: (1) Be recognized by at least one U.S. state as an “Accredited Reinsurer,” “Certified Reinsurer,” or a “Reciprocal Jurisdiction Reinsurer,” as defined by the state's credit for reinsurance law or regulation based on the NAIC's Credit for Reinsurance Model Law and Regulation, and submit proof of such recognition; (2) Meet and maintain all capital and surplus, market conduct, and other requirements for eligibility as an “Accredited Reinsurer,” “Certified Reinsurer,” or “Reciprocal Jurisdiction Reinsurer” in accordance with the law and regulation of all U.S. states granting it such recognition; and (3) Submit to Treasury: ( i ) For initial applications for recognition, all information provided to any U.S. state regulator in the two most recently completed calendar years. ( ii ) For applications for renewal of such recognition, all annual filing information provided to any U.S. state regulator in the most recently completed calendar year. ( iii ) Payment of the application fee in accordance with the provisions of § 223.22. [89 FR 48835, June 10, 2024]