Code of Massachusetts Regulations › 211 CMR - DIVISION OF INSURANCE › Title 211 CMR 67.00 - Workers' Compensation Self-insurance Groups › Section 67.21 - Reinsurance and Excess Insurance Contract Provisions

Current through Register 1525, July 5, 2024
(1) Specific excess coverage limit for each
			 group shall be at least $5,000,000 per occurrence (per claim for disease).
			 Groups composed of businesses with a high risk of multiple injury from a single
			 occurrence may be required to maintain higher limits.
(2)
Retention
. The
			 retention allowed for a group's specific excess policy shall be actuarially
			 sound and shall be not more than 30% of the net premium of the group up to a
			 maximum of $500,000. The maximum retention may be revisited after groups have
			 been in operation for three years.
(3) Aggregate excess insurance shall attach
			 at 105% of standard premium, and groups may choose their aggregate limit from
			 the following two options:
Option A
: An amount not less than 50%
				of the group's in-force premium of which the first $1,000,000 of this aggregate
				reinsurance coverage must be total reimbursement reinsurance and the remainder
				may be total reimbursement reinsurance or financial reinsurance.
Option B
: An amount of not less than
				ten times the specific retention, all of which shall be total reimbursement
				insurance. Groups with in-force premium in excess of $15,000,000, shall obtain
				additional reinsurance, which may be financial reinsurance, in the amount of
				50% of the in-force premium in excess of $15,000,000.
The aggregate excess insurance or reinsurance requirements may
				be revisited after groups have been in operation for three years.
(4) No more than one group shall
			 be covered by any contract or policy of excess insurance or reinsurance and the
			 named insured shall be the group or its statutory successor in
			 interest.
(5) Except as otherwise
			 provided in 211 CMR 67.21, reinsurers and excess insurers shall be subject to
			 the Commissioner's approval, and shall meet all of the following criteria:
(a) They shall be licensed, admitted or
			 otherwise authorized to transact insurance or reinsurance business in the
			 Commonwealth; and,
(b) They shall
			 be classed, according to the following table, in either the top two categories
			 by one of the rating agencies, or receive at least the minimum acceptable
			 rating from two of the rating agencies shown below:
Top Two Categories
Minimum Acceptable Rating
A. M. Best & Company
A++,
A+
A-
Duff & Phelps
AAA,
AA+
AA
Moody's Investors Services
AAA,
AA1
AA2
Standard & Poor Corporation
AAA,
AA
A
The requirements of 211 CMR 67.21(5)(b) may be waived annually,
				in whole or in part, by the Commissioner as applicable to a group with a
				minimum rating of "A" from any rating agency named in 211 CMR 67.21(5)(b) upon
				a determination by the Division that the reinsurer or excess insurer is
				financially strong and that the condition of the reinsurance/excess insurance
				market is such that compliance would place undue financial hardship on a
				particular group.
(c) The
			 Underwriters at Lloyd's of London are specifically approved for reinsurance,
			 provided their policies comply with 211 CMR 67.21(7).