Oregon Administrative Rules › Chapter 836 - DEPARTMENT OF CONSUMER AND BUSINESS SERVICES, INSURANCE REGULATION › Division 12 - CREDIT FOR REINSURANCE › Section 836-012-0046 - Credit for Reinsurance - Certified Reinsurers

Current through Register Vol. 63, No. 7, July 1, 2024
(1) Pursuant to ORS
			 731.511,
			 the director shall allow credit for reinsurance ceded by a domestic insurer to
			 an assuming insurer that has been certified as a reinsurer in this state at all
			 times for which statutory financial statement credit for reinsurance is claimed
			 under this rule. The credit allowed shall be based upon the security held by or
			 on behalf of the ceding insurer in accordance with a rating assigned to the
			 certified reinsurer by the director. The security shall be in a form consistent
			 with ORS
			 731.510 and
			 731.511 and OAR 836-012-0070, 836-012-0080, or 836-012-0090. The amount of security
			 required in order for full credit to be allowed shall correspond with the
			 following requirements:
(a) Ratings Security
			 Required
Secure - 1 0%
Secure - 2 10%
Secure - 3 20%
Secure - 4 50%
Secure - 5 75%
Vulnerable - 6 100%
(b) Affiliated reinsurance transactions shall
			 receive the same opportunity for reduced security requirements as all other
			 reinsurance transactions.
(c) The
			 director shall require the certified reinsurer to post 100 percent, for the
			 benefit of the ceding insurer or its estate, security upon the entry of an
			 order of rehabilitation, liquidation or conservation against the ceding
			 insurer.
(d) In order to facilitate
			 the prompt payment of claims, a certified reinsurer shall not be required to
			 post security for catastrophe recoverables for a period of one year from the
			 date of the first instance of a liability reserve entry by the ceding company
			 as a result of a loss from a catastrophic occurrence as recognized by the
			 director. The one year deferral period is contingent upon the certified
			 reinsurer continuing to pay claims in a timely manner. Reinsurance recoverables
			 for only the following lines of business as reported on the NAIC annual
			 financial statement related specifically to the catastrophic occurrence will be
			 included in the deferral:
(A) Line 1:
			 Fire
(B) Line 2: Allied
			 Lines
(C) Line 3: Farmowners
			 multiple peril
(D) Line 4:
			 Homeowners multiple peril
(E) Line
			 5: Commercial multiple peril
(F)
			 Line 9: Inland Marine
(G) Line 12:
			 Earthquake
(H) Line 21: Auto
			 physical damage
(e)
			 Credit for reinsurance under this rule shall apply only to reinsurance
			 contracts entered into or renewed on or after the effective date of the
			 certification of the assuming insurer. Any reinsurance contract entered into
			 prior to the effective date of the certification of the assuming insurer that
			 is subsequently amended after the effective date of the certification of the
			 assuming insurer, or a new reinsurance contract, covering any risk for which
			 collateral was provided previously, shall only be subject to this rule with
			 respect to losses incurred and reserves reported from and after the effective
			 date of the amendment or new contract.
(f) Nothing in this rule shall prohibit the
			 parties to a reinsurance agreement from agreeing to provisions establishing
			 security requirements that exceed the minimum security requirements established
			 for certified reinsurers under this rule.