Oregon Administrative Rules › Chapter 410 - OREGON HEALTH AUTHORITY, HEALTH SYSTEMS DIVISION: MEDICAL ASSISTANCE PROGRAMS › Division 141 - OREGON HEALTH PLAN › Section 410-141-5050 - FINANCIAL SOLVENCY REGULATION: Requirements for Reinsurance

Current through Register Vol. 63, No. 7, July 1, 2024
(1) Except with the
			 prior written approval of the Authority, a CCO may not reinsure risks written
			 or insured by other CCOs or other insurers.
(2) A CCO may cede and reinsure risks, on an
			 indemnity reinsurance basis, to another CCO authorized to transact such
			 business in this state or with a health insurer authorized to reinsure such
			 risks provided that such other CCO or such other health insurer has been
			 approved or accepted by the Authority to act as a reinsurer of the CCO and the
			 reinsurance qualifies for financial statement credit to the cedent CCO under
			 this section. The Authority shall not approve or accept any such reinsurance by
			 the cedent CCO in an unauthorized CCO or unauthorized health insurer, or which
			 the Authority finds for good cause would otherwise be contrary to the interests
			 of the Members of the cedent CCO.
(3) Credit shall not be allowed, as an asset
			 or as a deduction from liability, to any cedent CCO for reinsurance unless the
			 reinsurance contract provides, in substance, that in the event of the
			 insolvency of the cedent CCO, the reinsurance shall be payable on the basis of
			 reported claims allowed by the court hearing the liquidation proceeding,
			 without diminution because of the insolvency of the cedent CCO. Such payments
			 shall be made directly to the cedent CCO or to its domiciliary liquidator
			 except when the reinsurer, with the consent of the Authority, has assumed the
			 policy obligations of the cedent CCO as direct obligations of the reinsurer and
			 in substitution for the obligations of the cedent CCO.
(4) For the purposes of subsection (3) of
			 this section, the reinsurance agreement may provide that the domiciliary
			 liquidator of the insolvent cedent CCO shall, within a reasonable time after
			 the claim is filed in the liquidation proceeding, give written notice to the
			 reinsurer of the pendency of a claim against the cedent CCO on the risk
			 reinsured. During the pendency of the claim, the reinsurer may investigate the
			 claim and interpose, at its own expense, in the proceeding in which the claim
			 is to be adjudicated any defenses that the reinsurer determines to be available
			 to the cedent CCO or its liquidator. The reinsurer's expense in doing so may be
			 filed as a claim against the insolvent cedent CCO to the extent of a
			 proportionate share of the benefit that may accrue to the cedent CCO solely as
			 a result of the defense undertaken by the reinsurer. When two or more
			 reinsurers are involved in the same claim and a majority in interest elect to
			 interpose one or more defenses to the claim, the expense shall be apportioned
			 in accordance with the terms of the reinsurance agreement as though the expense
			 had been incurred by the cedent CCO.
(5) The Authority may disallow financial
			 statement credit for reinsurance that would otherwise be allowed if the
			 Authority determines that allowing credit would be contrary to accurate
			 financial reporting or proper financial management or may be hazardous to
			 Members of the CCO or the public generally.
(6) A cedent CCO promptly shall inform the
			 Authority in writing of the cancellation of, or any other material change to,
			 any of its reinsurance agreements or arrangements.
Statutory/Other Authority: ORS
				  413.042,
				  414.615,
				  414.625,
				  414.635 & 414.651
Statutes/Other Implemented: ORS
				  414.610-414.685