1. A. The fund shall maintain excess insurance or reinsurance in the amount approved by the commissioner, based on an actuarially sound catastrophe model that limits the fund’s exposure on any one loss occurrence to 20 percent of its members distribution payable/surplus or an amount authorized by the commissioner.

   1. 1. The fund shall submit a feasibility study prepared by a qualified actuary which analyzes the impact the specific retention on the fund.
   2. 2. No fund shall secure a retention which in the commissioner's opinion is not actuarially sound.
   3. 3. The commissioner shall deny the use of a retention if he finds that the higher retention will have a significant adverse effect on the financial condition of the fund.
2. B. The excess insurance or reinsurance coverage shall provide for one or more reinstatements.
3. C. All excess insurance or reinsurance agreements shall be approved by the department prior to execution.

Authority Note

AUTHORITY NOTE: Promulgated in accordance with R.S. 22:11, 12:1851 et seq., and the Administrative Procedure Act, R.S. 49:950 et seq.

Historical Note

HISTORICAL NOTE: Promulgated by the Department of Insurance, Office of the Commissioner, LR 51:74 (January 2025).