West Virginia Code of State Rules › Agency 114 - Insurance Commission › Title 114 - LEGISLATIVE RULE INSURANCE COMMISSIONER › Series 114-40 - Credit For Reinsurance › Section 114-40-6 - Certified Reinsurers

Current through Register Vol. XLI, No. 28, July 12, 2024
6.1. Pursuant to W.
				Va. Code §
									33-4-15a(b)(2)(E),
				the commissioner 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 section. 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 commissioner. The security shall be in a form consistent
				with the provisions of W. Va. Code §§
									33-4-15a(b)(2)(E)
				and
				33-4-15a(c),
				and section 10, 11, or 12 of this rule. The amount of security required in order for
				full credit to be allowed shall correspond with the following requirements:
6.1.a.
Ratings
Security Required
Secure . 1
0%
Secure - 2
10%
Secure . 3
20%
Secure - 4
50%
Secure - 5
75%
Vulnerable . 6
100%
6.1.b.
				Affiliated reinsurance transactions shall receive the same opportunity for reduced
				security requirements as all other reinsurance transactions.
6.1.c. The commissioner shall require the
				certified reinsurer to post, for the benefit of the ceding insurer or its estate,
				one hundred percent (100%) security upon the entry of an order of rehabilitation,
				liquidation or conservation against the ceding insurer.
6.1.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 commissioner. 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 National Association of Insurance Commissioners annual
				financial statement related specifically to the catastrophic occurrence will be
				included in the deferral:
6.1.d.1. Line 1:
				Fire;
6.1.d.2. Line 2: Allied
				Lines;
6.1.d.3. Line 3: Farmowners
				multiple peril;
6.1.d.4. Line 4:
				Homeowners multiple peril;
6.1.d.5. Line
				5: Commercial multiple peril;
6.1.d.6.
				Line 9: Inland Marine;
6.1.d.7. Line 12:
				Earthquake; and
6.1.d.8. Line 21: Auto
				physical damage.
6.1.e. Credit
				for reinsurance under this section 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 section with respect to losses incurred and reserves reported
				from and after the effective date of the amendment or new contract.
6.1.f. Nothing in this section 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 section.