Wyoming Administrative Code › Agency 044 - Insurance Dept › Sub-Agency 0002 - General Agency, Board or Commission Rules › Chapter 50 - CREDIT FOR REINSURANCE REGULATION › Section 50-7 - Credit for Reinsurance - Reinsurers Maintaining Trust Funds

Current through July 13, 2024
(a) Pursuant to
				W.S.
				26-5-112(a)(v) the
				commissioner shall allow credit for reinsurance ceded by a domestic insurer to
				an assuming insurer which, as of any date on which statutory financial
				statement credit for reinsurance is claimed, and thereafter for so long as
				credit for reinsurance is claimed, maintains a trust fund in an amount
				prescribed below in a qualified U.S. financial institution as defined in
				W.S.
				26-5-114(b), for the payment
				of the valid claims of its U.S. domiciled ceding insurers, their assigns and
				successors in interest. The assuming insurer shall report annually to the
				commissioner substantially the same information as that required to be reported
				on the National Association of Insurance Commissioners ("NAIC") annual
				statement form by licensed insurers to enable the commissioner to determine the
				sufficiency of the trust fund.
(b)
				The following requirements apply to the following categories of assuming
				insurer:
(i) The trust fund for a single
				assuming insurer shall consist of funds in trust in an amount not less than the
				assuming insurer's liabilities attributable to reinsurance ceded by U.S.
				domiciled insurers, and in addition, the assuming insurer shall maintain a
				trusteed surplus of not less than $20,000,000, except as provided in paragraph
				(ii) of this subsection.
(ii) At
				any time after the assuming insurer has permanently discontinued underwriting
				new business secured by the trust for at least three full years, the
				commissioner with principal regulatory oversight of the trust may authorize a
				reduction in the required trusteed surplus, but only after a finding, based on
				an assessment of the risk, that the new required surplus level is adequate for
				the protection of U.S. ceding insurers, policyholders and claimants in light of
				reasonably foreseeable adverse loss development. The risk assessment may
				involve an actuarial review, including an independent analysis of reserves and
				cash flows, and shall consider all material risk factors, including when
				applicable the lines of business involved, the stability of the incurred loss
				estimates and the effect of the surplus requirements on the assuming insurer's
				liquidity or solvency. The minimum required trusteed surplus may not be reduced
				to an amount less than thirty percent (30%) of the assuming insurer's
				liabilities attributable to reinsurance ceded by U.S. ceding insurers covered
				by the trust.
(iii) The trust fund
				for a group including incorporated and individual unincorporated underwriters
				shall consist of:
(A) For reinsurance ceded
				under reinsurance agreements with an inception, amendment or renewal date on or
				after January 1, 1993, funds in trust in an amount not less than the respective
				underwriters' several liabilities attributable to business ceded by U.S.
				domiciled ceding insurers to any underwriter of the group;
(B) For reinsurance ceded under reinsurance
				agreements with an inception date on or before December 31, 1992, and not
				amended or renewed after that date, notwithstanding the other provisions of
				this regulation, funds in trust in an amount not less than the respective
				underwriters' several insurance and reinsurance liabilities attributable to
				business written in the United States; and
(C) In addition to these trusts, the group
				shall maintain a trusteed surplus of which $100,000,000 shall be held jointly
				for the benefit of the United States domiciled ceding insurers of any member of
				the group for all the years of account.
(iv) The incorporated members of the group
				shall not be engaged in any business other than underwriting as a member of the
				group and shall be subject to the same level of regulation and solvency control
				by the group's domiciliary regulator as are the unincorporated members. The
				group shall, within ninety (90) days after its financial statements are due to
				be filed with the group's domiciliary regulator, provide to the commissioner:
(A) An annual certification by the group's
				domiciliary regulator of the solvency of each underwriter member of the group;
				or
(B) If a certification is
				unavailable, a financial statement prepared by independent public accountants
				of each underwriter member of the group.
(v) The trust fund for a group of
				incorporated insurers under common administration whose members possess
				aggregate policyholders surplus of $10,000,000,000 (calculated and reported in
				substantially the same manner as prescribed by the annual statement
				instructions and
Accounting Practices and Procedures Manual
of
				the NAIC) and which has continuously transacted an insurance business outside
				the United States for at least three (3) years immediately prior to making
				application for accreditation shall:
(A)
				Consist of funds in trust in an amount not less than the assuming insurers'
				several liabilities attributable to business ceded by U.S. domiciled ceding
				insurers to any members of the group pursuant to reinsurance contracts issued
				in the name of such group;
(B)
				Maintain a joint trusteed surplus of which $100,000,000 shall be held jointly
				for the benefit of U.S. domiciled ceding insurers of any member of the group;
				and
(C) File a properly executed
				Form AR-1 as evidence of the submission to this state's authority to examine
				the books and records of any of its members and shall certify that any member
				examined will bear the expense of any such examination.
(vi) Within ninety (90) days after the
				statements are due to be filed with the group's domiciliary regulator, the
				group shall file with the commissioner an annual certification of each
				underwriter member's solvency by the member's domiciliary regulators, and
				financial statements, prepared by independent public accountants, of each
				underwriter member of the group.