Alaska Administrative Code › Title 3 - Commerce, Community, and Economic Development › Part 2 - Division of Insurance › Chapter 21 - Insurer - Financial › Article 6 - Reinsurance › 3 AAC 21.660 - Authorized assuming insurer maintaining a trust fund

Current through May 31, 2024
(a) The director
				  shall allow credit for reinsurance ceded by a domestic insurer to an authorized
				  assuming insurer that maintains a trust fund on or before the as of date of the
				  ceding insurer's statutory financial statement. The director shall allow this
				  credit for as long as credit for reinsurance is claimed by the domestic insurer
				  and the trust fund is maintained in an amount and location as required under AS
				  21.12.020(a)(4). The assuming insurer shall report annually to the director
				  substantially the same information as that required to be reported on the
				  National Association of Insurance Commissioners annual statement form by
				  licensed insurers, to enable the director to determine the sufficiency of the
				  trust fund.
(b) The trust fund for
				  a single assuming insurer shall consist of funds in trust in an amount not less
				  than the assuming insurer's liabilities attributable to reinsurance ceded by
				  United States domiciled insurers. In addition, the assuming insurer shall
				  maintain a trusteed surplus of not less than $20,000,000, except as provided in
				  (c) of this section.
(c) At any
				  time after the assuming insurer has permanently discontinued underwriting new
				  business secured by the trust for at least three full years the insurance
				  regulatory official with principal regulatory oversight of the trust may
				  authorize a reduction in the required trusteed surplus, but only after a
				  finding, based on an assessment of the risk, that the new required surplus
				  level is adequate for the protection of United States ceding insurers,
				  policyholders, and claimants in light of reasonably foreseeable adverse loss
				  development. The risk assessment may involve an actuarial review, including an
				  independent analysis of reserves and cash flows, and shall consider all
				  material risk factors, including when applicable the lines of business
				  involved, the stability of the incurred loss estimates and the effect of the
				  surplus requirements on the assuming insurer's liquidity or solvency. The
				  minimum required trusteed surplus may not be reduced to an amount less than 30
				  percent of the assuming insurer's liabilities attributable to reinsurance ceded
				  by United States ceding insurers covered by the trust.
(d) The trust fund for a group including
				  incorporated and individual unincorporated underwriters shall consist of:
(1) for reinsurance ceded under reinsurance
				  agreements with an inception, amendment, or renewal date on or after January 1,
				  1993, funds in trust in an amount not less than the respective underwriters'
				  several liabilities attributable to business ceded by United States domiciled
				  ceding insurers to any underwriter of the group;
(2) for reinsurance ceded under reinsurance
				  agreements with an inception date on or before December 31, 1992, and not
				  amended or renewed after that date, notwithstanding the other provisions of
				  this regulation, funds in trust in an amount not less than the respective
				  underwriters' several insurance and reinsurance liabilities attributable to
				  business written in the United States; and
(3) in addition to these trusts, the group
				  shall maintain a trusteed surplus of which $100,000,000 shall be held jointly
				  for the benefit of the United States domiciled ceding insurers of any member of
				  the group for all the years of account.