California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 3 - Annual Statements › Premiums in Course of Collection › Section 2303.18 - Denial of Statement Credit and Non-Admission of Assets

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Credit on financial statements for
					 reinsurance ceded by a domestic insurer shall be denied if the applicable
					 requirements of Sections
					 2303.3 through
					 2303.13 of this article have not
					 been met, by non-admission of recoverables on paid losses, disallowance of
					 recoverables on unpaid losses, or a requirement to use deposit accounting for
					 the cession.
(b) Reinsurance
					 recoverables that are due more than 90 days from a reinsurer to a domestic
					 insurer on paid losses or paid loss adjustment expenses may, in the
					 Commissioner's discretion, be required to be reported as non-admitted assets. A
					 domestic insurer may follow the NAIC Accounting Guidance when reporting
					 reinsurance recoverables due more than 90 days on its financial statements,
					 unless the Commissioner expressly requires the financial statements to reflect
					 the subject recoverables as non-admitted assets.
(c) Upon a determination that credit for
					 reinsurance ceded shall not be permitted or an asset is deemed non-admitted,
					 the Department shall issue a finding in the form of a written explanation to
					 the ceding insurer setting forth the reasons for the determination. The
					 determination may be appealed to the Chief of the Financial Surveillance Branch
					 or to the successor position after a reorganization of the Department, in a
					 manner consistent with making a request for a permitted accounting
					 practice.
(d) Denial of credits on
					 financial statements for reinsurance ceded pursuant to subdivisions (a) and (b)
					 of this section shall not be construed to be the only adjustments for
					 reinsurance contemplated under the California Insurance Code. To the extent
					 that the NAIC Accounting Guidance prescribes additional reductions in credits
					 for reinsurance or additional liability provisions for reinsurance, the NAIC
					 Accounting Guidance shall be followed.
1. New
						section filed 10-24-2006; operative 11-23-2006 (Register 2006, No.
						43).
2. Change without regulatory effect renumbering former section
						2303.18 to section
						2303.17 and renumbering former
						section 2303.19 to new section
						2303.18, including amendment of
						subsection (a), repealer of subsection (e) and amendment of NOTE, filed
						3-25-2015 pursuant to section
						100, title 1, California Code of
						Regulations (Register 2015, No. 13).
Note: Authority cited: Sections
						  720,
						  736,
						  922.8,
						  922.85,
						  923 and
						  12921,
						  Insurance Code; CalFarm Insurance Company v. Deukmejian, 48 Cal. 3d 805 (1989);
						  and 20th Century Insurance Company v. Garamendi, 8 Cal. 4th 216 (1994).
						  Reference: Sections
						  700,
						  717,
						  730,
						  733,
						  900,
						  922.2,
						  922.3,
						  922.4,
						  922.41,
						  922.5,
						  922.6,
						  923,
						  1011,
						  1215.5(f)
						  and
						  12921,
						  Insurance Code.