Compilation of Rules and Regulations of the State of Georgia › Department 120 - OFFICE OF COMMISSIONER OF INSURANCE, SAFETY FIRE COMMISSIONER AND INDUSTRIAL LOAN COMMISSIONER › Chapter 120-2 - RULES OF COMMISSIONER OF INSURANCE › Subject 120-2-78 - CREDIT FOR REINSURANCE › Rule 120-2-78-.08 - Credit for Reinsurance-Certified Reinsurers

Current through Rules and Regulations filed through June 27, 2024
(1) Pursuant to O.C.G.A. §
									33-7-14(a)(5),
				the commissioner 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 commissioner. The security shall be in a form
				consistent with the provisions of O.C.G.A. §§
									33-7-14(a)(5) and
				33-7-14(b) and
				Sections 11, 12 or 13 of this Regulation. The amount of security required in
				order for full credit to be allowed shall correspond with the following
				requirements:
(a)
Ratings
Security Required
Secure - 1
0%
Secure - 2
10%
Secure - 3
20%
Secure - 4
50%
Secure - 5
75%
Vulnerable - 6
100%
(b)
				Affiliated reinsurance transactions shall receive the same opportunity for
				reduced security requirements as all other reinsurance transactions.
(c) The commissioner shall require the
				certified reinsurer to post one hundred percent (100%), for the benefit of the
				ceding insurer or its estate, security upon the entry of an order of
				rehabilitation, liquidation or conservation against the ceding
				insurer.
(d) 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
				commissioner. The one year deferral period is contingent upon the certified
				reinsurer continuing to pay claims in compliance with its contractual terms and
				obligations as set forth in the reinsurance agreement under which the claims
				are ceded. Reinsurance recoverables for only the following lines of business as
				reported on the NAIC annual financial statement related specifically to the
				catastrophic occurrence will be included in the deferral:
1. Line 1: Fire
2. Line 2: Allied Lines
3. Line 3: Farmowners multiple
				peril
4. Line 4: Homeowners
				multiple peril
5. Line 5:
				Commercial multiple peril
6. Line
				9: Inland Marine
7. Line 12:
				Earthquake
8. Line 21: Auto
				physical damage
(e)
				Credit for reinsurance under this section shall apply only to reinsurance
				contracts entered into or renewed on or after the effective date of the
				certification of the assuming insurer.
(f) 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.