Alaska Administrative Code › Title 3 - Commerce, Community, and Economic Development › Part 2 - Division of Insurance › Chapter 21 - Insurer - Financial › Article 6 - Reinsurance › 3 AAC 21.694 - Credit for reinsurance-certified reinsurance

Current through May 31, 2024
(a) Pursuant to
				  AS
				  21.12.020(a)(5), the
				  director shall allow credit for reinsurance ceded by a domestic insurer to an
				  assuming insurer that has been certified as a reinsurer in this state at all
				  times for which statutory financial statement credit for reinsurance is claimed
				  under this section. The credit allowed shall be based upon the security held by
				  or on behalf of the ceding insurer in accordance with a rating assigned to the
				  certified reinsurer by the director. The security shall be in a form consistent
				  with the provisions of
				  AS
				  21.12.020(a)(5) and
				  AS
				  21.12.020(c) and 3 AAC
				  21.663,
				  3 AAC 21.664,
				  and
				  3 AAC 21.685.
(b) The amount of security required in order
				  for full credit to be allowed must correspond with the following requirement
(1)
Ratings
Security Required
Secure -1
0%
Secure - 2
10%
Secure - 3
20%
Secure - 4
50%
Secure - 5
75%
Vulnerable - 6
100%
(2) affiliated reinsurance transactions shall
				  receive the same opportunity for reduced security requirements as all other
				  reinsurance transactions;
(3) the
				  director shall require the certified reinsurer to post 100 percent security,
				  for the benefit of the ceding insurer or its estate, upon the entry of an order
				  of rehabilitation, liquidation or conservation against the ceding insurer;
(4) in order to facilitate the
				  prompt payment of claims, a certified reinsurer shall not be required to post
				  security for catastrophe recoverables for a period of one year from the date of
				  the first instance of a liability reserve entry by the ceding company as a
				  result of a loss from a catastrophic occurrence as recognized by the director;
				  the one year deferral period is contingent upon the certified reinsurer
				  continuing to pay claims in a timely manner; Reinsurance recoverables for only
				  the following lines of business as reported on the National Association of
				  Insurance Commissioners annual financial statement related specifically to the
				  catastrophic occurrence will be included in the deferral:
(A) Line 1: Fire
(B) Line 2: Allied Lines
(C) Line 3: Farm owners multiple peril
(D) Line 4: Homeowners multiple
				  peril
(E) Line 5: Commercial
				  multiple peril
(F) Line 9: Inland
				  Marine
(G) Line 12:
				  Earthquake
(H) Line 21: Auto
				  physical damage;
(5)
				  credit for reinsurance under this section applies only to reinsurance contracts
				  entered into or renewed on or after the effective date of the certification of
				  the assuming insurer; any reinsurance contract entered into prior to the
				  effective date of the A. certification of the assuming insurer that is
				  subsequently amended after the effective date of the certification of the
				  assuming insurer, or a new reinsurance contract, covering any risk for which
				  collateral was provided previously, shall only be subject to this section with
				  respect to losses incurred and reserves reported from and after the effective
				  date of the amendment or new contract; and
(6) nothing in this section shall prohibit
				  the parties to a reinsurance agreement from agreeing to provisions establishing
				  security requirements that exceed the minimum security requirements established
				  for certified reinsurers under this section.