Nevada Administrative Code › Chapter 681A - Kinds of Insurance; Reinsurance › CERTIFIED REINSURERS › Section 681A.460 - Assignment of ratings by Commissioner; factors for making determination; adjustment of required security; periodic reporting requirements for certified reinsurers; reevaluation of rating; application of upgraded or downgraded rating to reinsurance contracts

Current through June 11, 2024
1. Except as
			 otherwise provided in NAC 681A.500, the Commissioner will assign a rating to
			 each certified reinsurer pursuant to NRS 681A.1554. When determining the rating
			 for a certified reinsurer, the Commissioner will evaluate the certified
			 reinsurer as a separate entity from any group in which it may be a member, but
			 the Commissioner may give consideration to the group in which a certified
			 reinsurer is a member if the Commissioner determines such consideration would
			 be appropriate. The Commissioner may evaluate an association that includes
			 incorporated and individual unincorporated underwriters that has been approved
			 to do business as a certified reinsurer on the basis of its group
			 rating.
2. The Commissioner will
			 determine the maximum rating that he or she may assign to a certified reinsurer
			 on the basis of the financial strength ratings assigned to the certified
			 reinsurer by two or more rating agencies determined to be acceptable by the
			 Commissioner. The Commissioner will use the lowest financial strength rating
			 received by the certified reinsurer to establish a maximum rating for the
			 certified reinsurer in accordance with the following table:
Maximum rating
A.M. Best Company, Inc.
S&P Global Ratings
Moody's Investors Service, Inc.
Fitch Ratings
Secure - 1
A++
AAA
Aaa
AAA
Secure - 2
A+
AA+, AA, AA-
Aa1, Aa2, Aa3
AA+, AA, AA-
Secure - 3
A
A+, A
A1, A2
A+, A
Secure - 4
A-
A-
A3
A-
Secure - 5
B++, B+
BBB+, BBB, BBB-
Baa1, Baa2, Baa3
BBB+, BBB, BBB-
Vulnerable - 6
B, B-, C++, C+, C, C-, D, E, F
BB+, BB, BB-, B+, B, B-, CCC, CC, D, R, SD
Ba1, Ba2, Ba3, B1, B2, B3, Caa, Ca, C
BB+, BB, BB-, B+, B, B-, CCC, CC, C
3.
			 When determining whether to assign the maximum rating pursuant to subsection 2
			 or a lower rating to a certified reinsurer, the Commissioner may consider
			 factors which include, without limitation:
(a)
			 The business practices of the certified reinsurer in dealing with its ceding
			 insurers, including, without limitation, its record of compliance with the
			 terms and obligations of reinsurance contracts.
(b) For a certified reinsurer domiciled in
			 the United States, a review of the most recent annual financial statement,
			 Schedule F for property or casualty insurers or Schedule S for life and health
			 insurers, as appropriate, filed by the insurer.
(c) For a certified reinsurer not domiciled
			 in the United States, an annual review of Form CR-F for property or casualty
			 insurers or Form CR-S for life and health insurers, as appropriate, filed by
			 the insurer.
(d) The reputation of
			 the certified reinsurer for prompt payment of claims under reinsurance
			 contracts based on an analysis of the reporting of overdue reinsurance
			 recoverables by ceding insurers on Schedule F, including, without limitation,
			 the proportion of obligations that are more than 90 days past due or are in
			 dispute, with specific attention given to obligations payable to companies that
			 are in administrative supervision or receivership.
(e) Any regulatory action against the
			 certified reinsurer.
(f) For a
			 certified reinsurer domiciled in the United States, financial statements
			 audited on the basis of generally accepted accounting principles, regulatory
			 filings and actuarial opinions.
(g)
			 For a certified insurer domiciled outside of the United States, the immediately
			 preceding 3 years' financial statements audited on the basis of generally
			 accepted accounting principles in the United States or basis statements audited
			 on the basis of international financial reporting standards which include an
			 audited footnote reconciling equity and net income on the basis of generally
			 accepted accounting principles in the United States or, with the permission of
			 the Commissioner, which are certified by an officer of the certified reinsurer
			 to be reconciled with generally accepted accounting principles in the United
			 States, regulatory filings and actuarial opinions as filed with the appropriate
			 supervisor in the jurisdiction.
(h)
			 The report of an independent auditor on the financial statements described in
			 paragraph (f) or (g), as applicable, of the certified reinsurer.
(i) The liquidation priority of obligations
			 to a ceding insurer in the domiciliary jurisdiction of the certified reinsurer
			 during an insolvency proceeding.
(j) The participation of the certified
			 reinsurer in any solvent scheme of arrangement or similar procedure which
			 involved ceding insurers domiciled in the United States. A certified reinsurer
			 shall provide notice to the Commissioner before the certified reinsurer
			 proposes to participate in a solvent scheme of arrangement or similar
			 procedure.
(k) Any other
			 information that the Commissioner determines is relevant.