NY Ins L § 6507 (2021)
2021 New York Laws ISC - Insurance Article 65 - Mortgage Guaranty Insurance Companies 6507 - Reinsurance.

§ 6507. Reinsurance. (a) A mortgage insurer may, by contract, reinsure any insurance it transacts and receive credit for such reinsurance as an asset  or  as  a  reduction  from liabilities, including its contingency reserve liability, in its financial statements where such reinsurance is placed with another mortgage insurer licensed under this article.  (b) Notwithstanding any provision of law  to  the  contrary,  mortgage guaranty  insurance  may,  by  contract, be reinsured, provided that any reinsurance arrangements entered into  by  a  mortgage  insurer  and  an assuming  insurer  comply  with  the  provisions  of  this  article. The unearned premium reserve required by section one thousand three  hundred five  of this chapter, the contingency reserve required by paragraph two of subsection (a) of section six  thousand  five  hundred  two  of  this article  and  loss reserve required by paragraph three of subsection (a) of section six thousand five  hundred  two  of  this  article  shall  be established  and  maintained  by the mortgage insurer or by the assuming insurer so that the aggregate  reserves  shall  not  be  less  than  the reserves required by such subsection.  (c)  Where  a  mortgage insurer cedes any insurance to an insurer that insures or reinsures other lines of insurance in  addition  to  mortgage guaranty  insurance,  the  amount of insurance so ceded shall not exceed thirty-five percent of  the  total  exposure  insured  by  the  mortgage insurer after deducting insurance ceded to any other mortgage insurer.  (d) Where a mortgage insurer cedes any insurance to a mortgage insurer not  licensed under this article or an insurer that insures or reinsures other lines of insurance in addition to mortgage guaranty insurance,  in order for the mortgage insurer to receive credit for such reinsurance as an  asset  or as a reduction from liabilities, including its contingency reserve liability, in its financial statements,  such  assuming  insurer must maintain a surplus to policyholders of at least thirty-five million dollars and the following must occur;  (1)  the  insurer must establish and maintain in a segregated trust an amount equal to the greater of either the contingency  reserve  required by  paragraph two of subsection (a) of section six thousand five hundred two of this article, or four percent of the outstanding total  liability under  the  aggregate  insurance  policies  assumed  from  the  mortgage insurer;  (2) the insurer must establish and maintain in a segregated trust,  or provide  a letter of credit in a form approved by the superintendent, an amount equal to the unearned premium and loss reserves;  (3) any such aggregated trust shall be funded by assets  permitted  by article  fourteen  of  this  chapter  for  the  loss reserve required by paragraph three of subsection (a) of section six thousand  five  hundred two  of  this  article  and for the unearned premium reserve required by section one thousand three hundred five of this chapter,  and  shall  be funded  by  either  the types of assets specified in paragraphs one, two and three of subsection (b) of section one thousand four hundred two and paragraphs one, two and twelve of subsection (a) of section one thousand four hundred four of this chapter or by tax  and  loss  bonds  purchased pursuant to § 832(e) of the Internal Revenue Code for the greater of the amount  of  reserves  required  by  paragraph  two  of subsection (a) of section six thousand five hundred two of this article or  paragraph  one of  subsection  (b)  of  section  six  thousand five hundred two of this article;  (4) the reinsurance agreement must be submitted to the commissioner or superintendent of insurance  of  the  mortgage  insurer's  domicile  for approval; and  (5) the reinsurance agreement must provide that:  (A)   it   is   not  valid  until  approved  by  the  commissioner  or superintendent of insurance of the mortgage insurer's domicile;  (B)  any  amendments to the reinsurance agreement must be submitted to the  commissioner  or  superintendent  of  insurance  of  the   mortgage insurer's domicile for approval prior to becoming effective;  (C) the ceding mortgage insurer has a right to terminate the ceding of additional  insurance  under  the reinsurance agreement if so ordered by the superintendent;  (D) the superintendent has the right  to  request  from  the  assuming reinsurer information concerning its financial condition;  (E)  the  assuming  reinsurer  shall  notify the superintendent of any material change in its financial condition; and  (F) such agreements and any amendments thereto shall  be  provided  to the  superintendent,  who  shall  have  the  right  to disapprove of any agreement. Such agreements and any amendments thereto  shall  be  deemed approved  by  the  superintendent  unless disapproved within thirty days from the date provided to  the  superintendent.  If  the  superintendent disapproves  of  any  reinsurance  agreement  or  amendments thereto the mortgage insurer shall not receive credit for  such  reinsurance  as  an asset or as a reduction from liabilities in its financial statement.  (e) Nothing contained herein shall be deemed to permit an insurer that insures  or  reinsures  other lines of insurance in addition to mortgage guaranty insurance to write directly mortgage guaranty insurance.  (f) Any reinsurance agreement that was valid under this chapter at the time entered into shall not be invalidated by this section.