2023 Connecticut General Statutes › Title 38a - Insurance › Chapter 698 - Insurers › Section 38a-85a. - Certification as a reinsurer. Regulations.

(a)(1) To be eligible for certification by the commissioner as a reinsurer in this state for the purposes of section 38a-85, an assuming insurer shall:
(A) Be domiciled and licensed to transact insurance or reinsurance in a qualified jurisdiction, as set forth in subsection (c) of this section;
(B) Maintain minimum capital and minimum surplus requirements or their equivalent in an amount prescribed by the commissioner pursuant to regulations adopted in accordance with the provisions of chapter 54;
(C) Maintain financial strength ratings from two or more rating agencies that are deemed acceptable by the commissioner pursuant to regulations adopted in accordance with the provisions of chapter 54;
(D) Agree to submit to the jurisdiction of this state and appoint the commissioner as its agent for service of process in this state;
(E) Agree to provide security for one hundred per cent of such insurer's liabilities attributable to reinsurance ceded by domestic and foreign ceding insurers if the assuming insurer resists enforcement of a final judgment entered by a court in this or another state;
(F) Agree in the trust instrument, if the assuming insurer chooses to secure its obligations incurred under reinsurance agreements issued or renewed as a certified reinsurer in the form of a multibeneficiary trust, as set forth in subdivision (2) of subsection (e) of this section, that such assuming insurer shall, upon termination of any trust account of such trust, fund any deficiency of any other trust account of such trust out of the remaining surplus of the trust;
(G) Agree to meet applicable filing requirements as prescribed by the commissioner; and
(H) Comply with any other requirements deemed necessary for certification by the commissioner.
(2) If an applicant for certification has been certified as a reinsurer in a jurisdiction accredited by the National Association of Insurance Commissioners, the commissioner may certify such applicant as a certified reinsurer in this state and may accept the rating assigned to such certified reinsurer by such jurisdiction.
(b) In the case of an assuming insurer that is a group including incorporated and individual unincorporated underwriters, in addition to the requirements of subsection (a) of this section:
(1) Such group shall comply with the minimum capital and minimum surplus requirements under subsection (a) of this section through the capital and surplus equivalents, less current liabilities, of the group and its members. Such equivalents shall include a joint central fund in an amount determined by the commissioner to provide adequate financial protection for unsatisfied obligations of the group or any of its members;
(2) The incorporated members of the group shall not be engaged in any business other than underwriting as a member of the group and shall be subject to the same level of regulation and solvency control by the group's domiciliary insurance regulatory official as the unincorporated members; and
(3) Not later than ninety days after its financial statements are due to be filed with the group's domiciliary insurance regulatory official, the group shall provide to the commissioner an annual certification by the group's domiciliary insurance regulatory official of the solvency of each underwriter who is a member of the group or, if such certification is not provided by the group's domiciliary insurance regulatory official, financial statements prepared by independent public accountants of each such underwriter.
(c) The commissioner shall publish a list of qualified jurisdictions from which an assuming insurer, domiciled and licensed to transact insurance or reinsurance in such jurisdiction, shall be eligible for certification as a reinsurer in this state.
(1) In determining such list, the commissioner shall consider the list of qualified jurisdictions published by the National Association of Insurance Commissioners. Any state that meets the requirements for accreditation under the National Association of Insurance Commissioners' financial standards and accreditation program shall be recognized as a qualified jurisdiction.
(2) If the commissioner qualifies a jurisdiction that is not included in the National Association of Insurance Commissioners' list, the commissioner shall publish documented justification for such qualification. The commissioner shall adopt regulations, in accordance with the provisions of chapter 54, to establish criteria to justify a qualification.
(3) To determine if the domiciliary jurisdiction of an alien assuming insurer is eligible to be recognized as a qualified jurisdiction, the commissioner shall (A) evaluate initially and on an ongoing basis the appropriateness and effectiveness of such domiciliary jurisdiction's reinsurance regulatory system, and (B) consider (i) the rights, benefits and extent of reciprocity afforded by such domiciliary jurisdiction to domestic and foreign reinsurers, including whether such domiciliary jurisdiction has agreed to share information and cooperate with the commissioner with respect to all certified reinsurers domiciled in such jurisdiction, and (ii) any other factors deemed relevant by the commissioner. The commissioner shall not recognize a domiciliary jurisdiction of an alien assuming insurer as a qualified jurisdiction if the commissioner determines that such domiciliary jurisdiction does not adequately and promptly enforce final United States judgments or United States arbitration awards.
(d) After giving due consideration to the financial strength ratings assigned by rating agencies deemed acceptable to the commissioner, the commissioner shall assign a rating to each certified reinsurer and shall publish a list of certified reinsurers and their ratings. The commissioner shall adopt regulations, in accordance with chapter 54, to establish the acceptable rating agencies, the methodology of the commissioner's rating system and the levels of security required for each such rating.
(e) (1) A certified reinsurer shall secure obligations assumed from domestic and foreign ceding insurers at a level consistent with its rating, in accordance with regulations adopted pursuant to subsection (d) of this section.
(2) (A) If a certified reinsurer chooses to secure its obligations incurred under reinsurance agreements issued or renewed as a certified reinsurer in the form of a multibeneficiary trust, such reinsurer shall maintain separate trust accounts for (i) such obligations incurred, with reduced security as permitted under this subdivision or comparable laws of other states, and (ii) its obligations subject to subsection (e) of section 38a-85.
(B) The minimum trusteed surplus requirements set forth in subsection (e) of section 38a-85 shall not apply to a multibeneficiary trust established pursuant to this subdivision. Such multibeneficiary trust shall maintain a trusteed surplus of not less than ten million dollars.
(f) If a certified reinsurer ceases to assume new business in this state, such reinsurer may file a request with the commissioner to maintain its certification in inactive status to continue to qualify for a reduction in security for its in-force business. An inactive certified reinsurer shall continue to comply with all applicable requirements of this section. The commissioner shall assign a new rating to such inactive certified reinsurer that takes into account the reasons, if relevant, why the reinsurer is not assuming new business.
(P.A. 12-139, S. 2.)