New York Codes, Rules and Regulations › Title 11 - INSURANCE › Chapter IV - Financial Condition Of Insurer and Reports to Superintendent › Subchapter D - Reinsurance › Part 125 - Credit For Reinsurance › Section 125.4 - Credit for reinsurance involving risks other than life, annuity and accident and health from unauthorized insurers

Current through Register Vol. 46, No. 28, July 10, 2024
A ceding insurer may elect to take credit, as an asset or
					 as a deduction from loss and unearned premium reserves, for reinsurance
					 recoverable, involving risks other than life, annuity and accident and health,
					 from an assuming insurer not authorized in this State, provided:
(a) U.S. domiciled insurers and U.S. branches
				  of alien insurers. In the case of an assuming insurer, domiciled in the United
				  States, or an alien assuming insurer entered as a United States branch in
				  another state, such assuming insurer presents and maintains satisfactory
				  evidence that it meets the standards of solvency required of licensed insurers
				  of like character and otherwise complies substantially with related
				  requirements imposed on such licensed insurers.
(b) U.S. insurance exchanges. In the case of
				  an assuming underwriting member of an insurance exchange domiciled in any state
				  or jurisdiction in the United States except this State, such assuming insurer
				  (underwriting member) presents and maintains satisfactory evidence that it
				  meets the standards of solvency as computed on a statutory insurance accounting
				  basis required of authorized insurers of like character and otherwise complies
				  substantially with related requirements imposed on such underwriting member and
				  with such terms and conditions as prescribed by the superintendent.
(c)
(1)
				  Alien assuming insurers.
(i) In the case of
				  an alien assuming insurer, not otherwise entered as a United States branch in
				  another state, such assuming insurer meets the standards of solvency required
				  of licensed insurers of like character, such terms and conditions as prescribed
				  by the superintendent, and otherwise complies substantially with related
				  requirements, and such assuming insurer has deposited and continues to maintain
				  in one or more New York State banks and/or members of the Federal Reserve
				  System located in New York State, a trust fund or trust funds, constituting a
				  trusteed surplus, in cash, readily marketable securities, or letters of credit,
				  in an amount of not less than $20 million for the protection of the United
				  States insurers, and United States beneficiaries under reinsurance policies
				  (contracts) issued by such alien assuming insurers. Such trusteed amount shall
				  be in addition to any other trust fund required by this department, including,
				  but not limited to, a trusteed amount at least equal to the liabilities
				  attributable to United States insurers and United States beneficiaries under
				  reinsurance policies (contracts) issued by such alien assuming insurers. As
				  used in this subdivision, surplus means the balance remaining after subtracting
				  the liabilities, attributable to reinsurance policies (contracts) issued in the
				  name of such alien assuming insurer from the total assets deposited in the
				  trust fund or trust funds.
(ii)
(a) Notwithstanding subparagraph (i) of this
				  paragraph, the superintendent may approve a reduction in the trust to less than
				  $20 million if the assuming insurer has permanently discontinued underwriting
				  new business secured by the trust for at least three full years and finds,
				  based on an assessment of the risk, that the new required surplus level is
				  adequate for the protection of U.S. ceding insurers, policyholders and
				  claimants in light of reasonably foreseeable adverse loss
				  development.
(b) The risk
				  assessment may involve an actuarial review, including an independent analysis
				  of reserves and cash flows, and shall consider all material risk factors,
				  including when applicable the lines of business involved, the stability of the
				  incurred loss estimates and the effect of the surplus requirements on the
				  assuming insurer's liquidity or solvency.
(c) The minimum required trusteed surplus may
				  not be reduced to an amount less than 30 percent of the assuming insurer's
				  liabilities attributable to reinsurance ceded by U.S. ceding insurers. The
				  trusteed amount shall be in addition to any other trust fund required by the
				  superintendent, including a trusteed amount at least equal to the liabilities
				  attributable to United States insurers and United States beneficiaries under
				  reinsurance policies issued by such alien assuming insurers.
(d) As used in this paragraph, surplus means
				  the balance remaining after subtracting the liabilities, attributable to
				  reinsurance policies issued in the name of the alien assuming insurer from the
				  total assets deposited in the trust fund or trust funds.