(1) The purpose of this rule is to determine, in accordance with Subsection 31A-17-404(10)(c)(ii), the form of letter of credit security to protect a ceding insurer in a reinsurance transaction if:
- (a) the requirement in Subsection 31A-17-404(3) or the alternative security factors in Subsection 31A-17-404(6) are not present; and
- (b) the ceding insurer retains the reinsurer's funds in the form of a letter of credit.
- (2) Security for a reinsurance transaction is maintained because the ceding insurer's reinsurance credit may be allowed as an asset or a deduction from liabilities.
- (3) The allowance or disallowance of credit in a reinsurance transaction may be used to determine if the transaction complies with other financial requirements of Title 31A, Insurance Code.
- (4) This rule applies to any person transacting insurance under Title 31A, Insurance Code.
KEY: insurance
Date of Last Change: November 8, 2021
Notice of Continuation: January 5, 2022
Authorizing, and Implemented or Interpreted Law: 31A-17-404