New York Codes, Rules and Regulations › Title 11 - INSURANCE › Chapter IV - Financial Condition Of Insurer and Reports to Superintendent › Subchapter D - Reinsurance › Part 128 - Commutation Of Reinsurance Agreements › Section 128.5 - Procedures

Current through Register Vol. 46, No. 28, July 10, 2024
(a) Any plan which
				  contains the commutation of reinsurance agreements shall be submitted to the
				  superintendent by the impaired or insolvent insurer within a period designated
				  by the superintendent, which shall not be more than 90 days from the
				  determination of the insurer's impairment or insolvency.
(b) If the superintendent has no objection to
				  any of the plan's terms and conditions and determines that the impaired or
				  insolvent insurer's surplus to policyholders will be restored to the minimum
				  required as determined in accordance with section
				  128.3(b) 
				  of this Part, the proposed plan shall be approved and the insurer shall offer
				  the commutation proposals to its ceding insurers. No commutation agreement
				  shall become effective and no consideration for any commutation agreement shall
				  be paid by the impaired or insolvent insurer until the superintendent
				  determines that, as a result of the commutation proposals agreed to and
				  executed by the ceding insurers, along with the effect of any other components
				  of the plan, the impaired or insolvent insurer's surplus to policyholders is
				  restored to the minimum required.
(c) Within 10 days after the superintendent
				  approves the plan, the impaired or insolvent insurer shall deliver the proposed
				  commutation agreements to each ceding insurer. The terms of any commutation
				  agreement shall not be subject to negotiation between the impaired or insolvent
				  insurer and the ceding insurer.
(d)
				  The impaired or insolvent insurer shall submit to the superintendent, within a
				  designated period as determined by the superintendent, copies of the executed
				  commutation agreements from those ceding insurers agreeing to the proposed
				  terms, copies of rejections of the commutation agreements by those ceding
				  insurers not agreeing to the proposed terms and copies of any other
				  correspondence pertaining to all such offers made to the ceding insurers. This
				  submission shall include a balance sheet that reflects the effect of the
				  executed agreements, together with any other components of the plan, upon the
				  insurer's impairment or insolvency as determined by the superintendent. The
				  insurer shall also submit copies of executed agreements with any
				  retrocessionaires which either modify, commute or assign any retrocession
				  agreement.
(e) If the
				  superintendent determines that, as a result of the executed commutation
				  agreements submitted by the impaired or insolvent insurer, together with any
				  other components of the plan, the insurer's surplus to policyholders is
				  restored to the minimum required as determined in accordance with section
				  128.3(b) 
				  of this Part, the executed commutation agreements shall become
				  effective.
(f) If the
				  superintendent determines that, as a result of the executed commutation
				  agreements submitted by the impaired or insolvent insurer, together with any
				  other components of the plan, the insurer's surplus to policyholders is not
				  restored to the minimum required as determined in accordance with section
				  128.3(b) 
				  of this Part, the superintendent may proceed against the insurer in accordance
				  with the stipulation executed pursuant to section
				  128.4(a)(3) 
				  of this Part.