ORS Chapter 731 — Administration and General

ORS 731.520. Conditions that insurers assuming ceded reinsurance must meet for allowance of credit; list of reciprocal jurisdictions; list of qualifying assuming insurers; rules. (1) Credit must be allowed if reinsurance is ceded to an assuming insurer that meets each of the conditions set forth below: (a) The assuming insurer must be licensed in a reciprocal jurisdiction and have the assuming insurers home office in, or be domiciled in, as applicable, the reciprocal jurisdiction. For purposes of this paragraph, a reciprocal jurisdiction is a jurisdiction that meets one of the following: (A) A jurisdiction outside the United States that is subject to an in-force covered agreement with the United States, each within the jurisdictions legal authority or, in the case of a covered agreement between the United States and the European Union, is a member state of the European Union. For purposes of this subparagraph, a covered agreement is an agreement entered into under the Dodd-Frank Wall Street Reform and Consumer Protection Act, 31 U.S.C. 313 and 314, that is currently in effect or in a period of provisional application and that addresses the elimination, under specified conditions, of collateral requirements as a condition for entering into any reinsurance agreement with a ceding insurer domiciled in this state or for allowing the ceding insurer to recognize credit for reinsurance. (B) A United States jurisdiction that meets the requirements for accreditation under the National Association of Insurance Commissioners Financial Regulation Standards and Accreditation Program. (C) A qualified jurisdiction, as the Director of the Department of Consumer and Business Services determines in accordance with ORS 731.511 (5), that is not otherwise described in subparagraph (A) or (B) of this paragraph and that meets other requirements the director specifies by rule that are consistent with the terms and conditions of in-force covered agreements. (b) The assuming insurer must have and maintain, on an ongoing basis, minimum capital and surplus, or an equivalent, calculated according to the methodology of the assuming insurers domiciliary jurisdiction, in an amount set forth in rule. If the assuming insurer is an association, including incorporated and individual unincorporated underwriters, the assuming insurer must have and maintain, on an ongoing basis, minimum capital and surplus equivalents, net of liabilities, calculated according to the methodology applicable in the assuming insurers domiciliary jurisdiction, and a central fund containing a balance in amounts set forth in rule. (c) The assuming insurer must have and maintain, on an ongoing basis, a minimum solvency or capital ratio, as applicable, that is set forth in rule. If the assuming insurer is an association, including incorporated and individual unincorporated underwriters, the assuming insurer must have and maintain, on an ongoing basis, a minimum solvency or capital ratio in the reciprocal jurisdiction where the assuming insurer is licensed and has the assuming insurers head office or is domiciled. (d) The assuming insurer must agree and provide adequate assurance to the director, in a form the director specifies by rule, as follows: (A) The assuming insurer must provide prompt written notice and explanation to the director if the assuming insurer falls below the minimum requirements set forth in paragraph (b) or (c) of this subsection or if any regulatory action is taken against the assuming insurer for serious noncompliance with applicable law. (B) The assuming insurer must consent in writing to the jurisdiction of the courts of this state and to the appointment of the director as agent for service of process. The director may require that consent for service of process be provided to the director and included in each reinsurance agreement. This subparagraph does not limit or in any way alter the capacity of parties to a reinsurance agreement to agree to alternative dispute resolution mechanisms, except to the extent that such agreements are unenforceable under applicable insolvency or delinquency laws. (C) Wherever enforcement is sought, the assuming insurer must consent in writing to pay all final judgments that a ceding insurer or the ceding insurers successor obtains in a jurisdiction that has declared the final judgment enforceable. (D) Each reinsurance agreement must include a provision requiring the assuming insurer to provide security in an amount equal to 100 percent of the assuming insurers liabilities attributable to reinsurance ceded under the reinsurance agreement if the assuming insurer resists enforcement of a final judgment that is enforceable under the law of the jurisdiction in which the final judgment was obtained or of a properly enforceable arbitration award, whether the ceding insurer or the ceding insurers legal successor obtains the final judgment or arbitration award on behalf of the ceding insurer or the ceding insurers resolution estate. (E) The assuming insurer must confirm that the assuming insurer is not presently participating in any solvent scheme of arrangement that involves this states ceding insurers and, if the assuming insurer does enter into a solvent scheme of arrangement, must agree to notify the ceding insurer and the director and provide security in an amount equal to 100 percent of the assuming insurers liabilities to the ceding insurer. The security must be in a form that the director specifies by rule consistent with the provisions of ORS 731.510 and