Oregon Administrative Rules › Chapter 836 - DEPARTMENT OF CONSUMER AND BUSINESS SERVICES, INSURANCE REGULATION › Division 12 - CREDIT FOR REINSURANCE › Section 836-012-0260 - Requirements Applicable to Covered Policies to Obtain Credit for Reinsurance; Opportunity for Remediation

Current through Register Vol. 63, No. 7, July 1, 2024
(1)
			 Subject to the exemptions described in OAR 836-012-0240  and the provisions of
			 OAR 836-012-0260 (2), credit for reinsurance shall be allowed with respect to
			 ceded liabilities pertaining to Covered Policies pursuant to OAR 836-012-0031  if, and only if, in addition to all other requirements imposed by law or
			 regulation, the following requirements are met on a treaty-by treaty basis:
(a) The ceding insurer's statutory policy
			 reserves with respect to the Covered Policies are established in full and in
			 accordance with the applicable requirements of ORS
			 733.302 and related regulations
			 and actuarial guidelines, and credit claimed for any reinsurance treaty subject
			 to this rule does not exceed the proportionate share of those reserves ceded
			 under the contract; and
(b) The
			 ceding insurer determines the Required Level of Primary Security with respect
			 to each reinsurance treaty subject to this rule and provides support for its
			 calculation as determined to be acceptable to the director; and
(c) Funds consisting of Primary Security, in
			 an amount at least equal to the Required Level of Primary Security, are held by
			 or on behalf of the ceding insurer, as security under the reinsurance treaty
			 within the meaning of OAR 836-012-0060, on a funds withheld, trust, or modified
			 coinsurance basis; and
(d) Funds
			 consisting of Other Security, in an amount at least equal to any portion of the
			 statutory reserves as to which Primary Security is not held pursuant to OAR
			 836-012-0260 (1)(c), are held by or on behalf of the ceding insurer as security
			 under the reinsurance treaty within the meaning of OAR 836-012-0060;
			 and
(e) Any trust used to satisfy
			 the requirements of OAR 836-012-0260  shall comply with all of the conditions
			 and qualifications of OAR 836-012-0070, except that:
(A) Funds consisting of Primary Security or
			 Other Security held in trust shall for the purposes identified in OAR
			 836-012-0250 (2), be valued according to the valuation rules set forth in OAR
			 836-012-0250 (2)  as applicable; and
(B) There are no affiliate investment
			 limitations with respect to any security held in such trust if such security is
			 not needed to satisfy the requirements of OAR 836-012-0260 (1)(c);
			 and
(C) The reinsurance treaty must
			 prohibit withdrawals or substitutions of trust assets that would leave the fair
			 market value of the Primary Security within the trust (when aggregated with
			 Primary Security outside the trust that is held by or on behalf of the ceding
			 insurer in the manner required by OAR 836-012-0260 (1)(c)) below 102 percent of
			 the level required by OAR 836-012-0260 (1)(c)  at the time of the withdrawal or
			 substitution; and
(D) The
			 determination of reserve credit under OAR 836-012-0070 (4)(c)  shall be
			 determined according to the valuation rules set forth in OAR 836-012-0250 (2),
			 as applicable; and
(f)
			 The reinsurance treaty has been approved by the director.