Bill Text: IA HSB544 | 2019-2020 | 88th General Assembly | Introduced
Bill Title: A bill for an act relating to credit allowed to domestic ceding insurers for reinsurance ceded to reinsurers, and including applicability provisions.
Spectrum: Committee Bill
Status: (N/A - Dead) 2020-02-05 - Committee report, recommending passage. H.J. 201. [HSB544 Detail]
Download: Iowa-2019-HSB544-Introduced.html
House
Study
Bill
544
-
Introduced
SENATE/HOUSE
FILE
_____
BY
(PROPOSED
DEPARTMENT
OF
COMMERCE/INSURANCE
DIVISION
BILL)
A
BILL
FOR
An
Act
relating
to
credit
allowed
to
domestic
ceding
insurers
1
for
reinsurance
ceded
to
reinsurers,
and
including
2
applicability
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
TLSB
5352XD
(6)
88
ko/rn
S.F.
_____
H.F.
_____
Section
1.
NEW
SECTION
.
521B.101A
Definitions.
1
For
purposes
of
this
chapter,
unless
the
context
otherwise
2
requires:
3
1.
“Commissioner”
means
the
commissioner
of
insurance.
4
2.
“NAIC”
means
the
national
association
of
insurance
5
commissioners.
6
Sec.
2.
Section
521B.102,
unnumbered
paragraph
1,
Code
7
2020,
is
amended
to
read
as
follows:
8
Credit
for
reinsurance
shall
be
allowed
a
domestic
ceding
9
insurer
as
either
an
asset
or
a
reduction
from
liability
on
10
account
of
reinsurance
ceded
only
when
the
reinsurer
meets
11
the
requirements
of
subsection
1
,
2
,
3
,
4
,
5
,
5A,
or
6
.
The
12
commissioner
may
adopt
rules
pursuant
to
section
521B.105
13
specifying
additional
requirements
related
to
the
valuation
of
14
assets
or
reserve
credits,
the
amount
and
forms
of
security
15
supporting
reinsurance
arrangements
described
in
section
16
521B.105
,
and
the
circumstances
pursuant
to
which
credit
shall
17
be
reduced
or
eliminated.
Credit
shall
be
allowed
under
18
subsection
1
,
2
,
or
3
only
respecting
cessions
of
those
kinds
19
or
classes
of
business
which
the
assuming
insurer
is
licensed
20
or
otherwise
permitted
to
write
or
assume
in
the
assuming
21
insurer’s
state
of
domicile
or,
in
the
case
of
a
United
States
22
branch
of
an
alien
assuming
insurer,
in
the
state
through
23
which
the
alien
assuming
insurer
is
entered
and
licensed
to
24
transact
insurance
or
reinsurance.
Credit
shall
be
allowed
25
under
subsection
3
or
4
only
if
the
applicable
requirements
of
26
subsection
7
have
been
satisfied.
27
Sec.
3.
Section
521B.102,
subsection
2,
paragraph
e,
Code
28
2020,
is
amended
to
read
as
follows:
29
e.
Demonstrate
to
the
satisfaction
of
the
commissioner
that
30
the
assuming
insurer
has
adequate
financial
capacity
to
meet
31
the
assuming
insurer’s
reinsurance
obligations
and
is
otherwise
32
qualified
to
assume
reinsurance
from
domestic
insurers.
An
33
assuming
insurer
is
deemed
to
meet
this
requirement
as
of
the
34
time
of
the
assuming
insurer’s
application
if
the
assuming
35
-1-
LSB
5352XD
(6)
88
ko/rn
1/
20
S.F.
_____
H.F.
_____
insurer
maintains
a
surplus
as
regards
policyholders
in
an
1
amount
of
not
less
than
twenty
million
dollars
and
the
assuming
2
insurer’s
accreditation
has
not
been
denied
by
the
commissioner
3
within
ninety
calendar
days
after
submission
of
the
assuming
4
insurer’s
application.
5
Sec.
4.
Section
521B.102,
subsection
3,
paragraph
a,
6
unnumbered
paragraph
1,
Code
2020,
is
amended
to
read
as
7
follows:
8
Credit
shall
be
allowed
when
the
reinsurance
is
ceded
to
9
an
assuming
insurer
that
is
domiciled
in,
or
in
the
case
of
a
10
United
States
branch
of
an
alien
assuming
insurer
,
is
entered
11
through,
a
state
that
employs
standards
regarding
credit
for
12
reinsurance
that
are
substantially
similar
to
those
applicable
13
under
this
chapter
and
the
assuming
insurer
or
United
States
14
branch
of
an
alien
assuming
insurer
does
all
of
the
following:
15
Sec.
5.
Section
521B.102,
subsection
4,
paragraph
a,
Code
16
2020,
is
amended
to
read
as
follows:
17
a.
Credit
shall
be
allowed
when
the
reinsurance
is
ceded
18
to
an
assuming
insurer
that
maintains
a
trust
fund
in
a
19
qualified
United
States
financial
institution,
as
defined
20
in
section
521B.104,
subsection
2
,
for
payment
of
the
valid
21
claims
of
the
assuming
insurer’s
United
States
ceding
insurers,
22
their
assigns,
and
successors
in
interest.
To
enable
the
23
commissioner
to
determine
the
sufficiency
of
the
trust
fund,
24
the
assuming
insurer
shall
report
annually
to
the
commissioner
25
information
substantially
the
same
as
that
required
to
be
26
reported
by
licensed
insurers
on
the
national
association
of
27
insurance
commissioners’
NAIC
annual
statement
form
by
licensed
28
insurers
.
The
assuming
insurer
shall
submit
to
examination
of
29
the
assuming
insurer’s
books
and
records
by
the
commissioner
30
and
bear
the
expense
of
examination.
31
Sec.
6.
Section
521B.102,
subsection
4,
paragraph
b,
32
subparagraph
(2),
Code
2020,
is
amended
to
read
as
follows:
33
(2)
The
form
of
the
trust
and
any
trust
amendments
are
34
filed
with
the
commissioner
of
every
state
in
which
the
ceding
35
-2-
LSB
5352XD
(6)
88
ko/rn
2/
20
S.F.
_____
H.F.
_____
insurer’s
insurer
beneficiaries
of
the
trust
are
domiciled.
1
The
trust
instrument
shall
provide
that
contested
claims
are
2
valid
and
enforceable
upon
the
final
order
of
any
court
of
3
competent
jurisdiction
in
the
United
States.
The
trust
shall
4
vest
legal
title
to
the
trust’s
assets
in
its
trustees
for
5
the
benefit
of
the
assuming
insurer’s
United
States
ceding
6
insurers,
their
assigns,
and
successors
in
interest.
The
trust
7
and
the
assuming
insurer
shall
be
subject
to
examination
as
8
determined
by
the
commissioner.
9
Sec.
7.
Section
521B.102,
subsection
4,
paragraph
c,
10
subparagraph
(3),
subparagraph
division
(e),
Code
2020,
is
11
amended
to
read
as
follows:
12
(e)
Within
ninety
calendar
days
after
its
financial
13
statements
are
due
to
be
filed
with
the
group’s
domiciliary
14
regulator,
the
group
shall
provide
to
the
commissioner
an
15
annual
certification
by
the
group’s
domiciliary
regulator
of
16
the
solvency
of
each
underwriter
member,
or
if
a
certification
17
is
unavailable,
financial
statements,
prepared
by
independent
18
public
accountants,
of
each
underwriter
member
of
the
group.
19
Sec.
8.
Section
521B.102,
subsection
4,
paragraph
c,
20
subparagraph
(4),
subparagraph
division
(e),
Code
2020,
is
21
amended
to
read
as
follows:
22
(e)
Within
ninety
calendar
days
after
the
group’s
financial
23
statements
are
due
to
be
filed
with
the
group’s
domiciliary
24
regulator,
make
available
to
the
commissioner
an
annual
25
certification
of
each
underwriter
member’s
solvency
by
the
26
member’s
domiciliary
regulator
and
financial
statements
of
27
each
underwriter
member
of
the
group
prepared
by
the
group’s
28
independent
public
accountant.
29
Sec.
9.
Section
521B.102,
subsection
5,
paragraph
a,
30
subparagraph
(4),
Code
2020,
is
amended
to
read
as
follows:
31
(4)
The
assuming
insurer
shall
agree
to
submit
to
the
32
jurisdiction
of
this
state,
to
appoint
the
commissioner
as
the
33
assuming
insurer’s
agent
for
service
of
process
in
this
state,
34
and
agree
to
provide
security
for
one
hundred
percent
of
the
35
-3-
LSB
5352XD
(6)
88
ko/rn
3/
20
S.F.
_____
H.F.
_____
assuming
insurer’s
liabilities
attributable
to
reinsurance
1
ceded
by
United
States
ceding
insurers,
if
the
assuming
insurer
2
resists
enforcement
of
a
final
United
States
judgment.
3
Sec.
10.
Section
521B.102,
subsection
5,
paragraph
b,
4
subparagraph
(3),
Code
2020,
is
amended
to
read
as
follows:
5
(3)
Within
ninety
calendar
days
after
the
association’s
6
financial
statements
are
due
to
be
filed
with
the
association’s
7
domiciliary
regulator,
the
association
shall
provide
to
the
8
commissioner
an
annual
certification
by
the
association’s
9
domiciliary
regulator
,
of
the
solvency
of
each
underwriter
10
member,
or
if
a
certification
is
unavailable,
financial
11
statements,
prepared
by
an
independent
public
accountant,
of
12
each
underwriter
member
of
the
association.
13
Sec.
11.
Section
521B.102,
subsection
5,
paragraph
c,
14
subparagraphs
(1),
(2),
and
(3),
Code
2020,
are
amended
to
read
15
as
follows:
16
(1)
In
order
to
determine
whether
the
domiciliary
17
jurisdiction
of
a
non-United
States
assuming
insurer
is
18
eligible
to
be
recognized
as
a
qualified
jurisdiction,
19
the
commissioner
shall
evaluate
the
appropriateness
and
20
effectiveness
of
the
reinsurance
supervisory
system
of
the
21
jurisdiction,
both
initially
and
on
an
ongoing
basis,
and
22
consider
the
rights,
benefits,
and
the
extent
of
reciprocal
23
recognition
afforded
by
the
non-United
States
jurisdiction
24
to
reinsurers
licensed
and
domiciled
in
the
United
States.
25
In
order
to
be
recognized
as
a
qualified
jurisdiction,
a
26
jurisdiction
must
agree
to
share
information
and
to
cooperate
27
with
the
commissioner
with
respect
to
all
certified
reinsurers
28
domiciled
within
that
jurisdiction.
A
jurisdiction
shall
not
29
be
recognized
as
a
qualified
jurisdiction
if
the
commissioner
30
has
determined
that
the
jurisdiction
does
not
adequately
and
31
promptly
enforce
final
United
States
judgments
and
arbitration
32
awards.
Additional
factors
may
be
considered
in
the
discretion
33
of
the
commissioner.
34
(2)
A
list
of
qualified
jurisdictions
shall
be
published
35
-4-
LSB
5352XD
(6)
88
ko/rn
4/
20
S.F.
_____
H.F.
_____
through
the
national
association
of
insurance
commissioners’
1
NAIC
committee
process.
The
commissioner
shall
consider
2
this
list
in
determining
qualified
jurisdictions.
If
the
3
commissioner
recognizes
a
jurisdiction
as
qualified
that
does
4
not
appear
on
the
NAIC
list
of
qualified
jurisdictions,
the
5
commissioner
shall
provide
thoroughly
documented
justification
6
for
the
recognition
in
accordance
with
criteria
to
be
developed
7
by
rule
as
specified
in
rules
adopted
by
the
commissioner
.
8
(3)
United
States
jurisdictions
that
meet
the
requirements
9
for
accreditation
under
the
national
association
of
insurance
10
commissioners’
NAIC
financial
standards
and
accreditation
11
program
shall
be
recognized
as
qualified
jurisdictions.
12
Sec.
12.
Section
521B.102,
subsection
5,
paragraph
e,
13
subparagraph
(5),
subparagraph
division
(b),
Code
2020,
is
14
amended
to
read
as
follows:
15
(b)
If
the
commissioner
continues
to
assign
a
higher
rating
16
to
a
certified
reinsurer
as
permitted
by
other
provisions
of
17
this
subsection
section
,
this
requirement
does
not
apply
to
a
18
certified
reinsurer
in
inactive
status
or
to
a
reinsurer
whose
19
certification
has
been
suspended.
20
Sec.
13.
Section
521B.102,
subsection
5,
paragraph
f,
Code
21
2020,
is
amended
to
read
as
follows:
22
f.
If
an
assuming
insurer
applying
for
certification
as
a
23
reinsurer
in
this
state
has
been
certified
as
a
reinsurer
in
24
another
jurisdiction
accredited
by
the
national
association
25
of
insurance
commissioners
NAIC
,
the
commissioner
has
the
26
discretion
to
defer
to
that
jurisdiction’s
certification,
and
27
has
the
discretion
to
defer
to
the
rating
assigned
by
that
28
jurisdiction,
and
the
assuming
insurer
shall
be
considered
to
29
be
a
certified
reinsurer
in
this
state.
30
Sec.
14.
Section
521B.102,
Code
2020,
is
amended
by
adding
31
the
following
new
subsection:
32
NEW
SUBSECTION
.
5A.
a.
Credit
shall
be
allowed
when
the
33
reinsurance
is
ceded
to
an
assuming
insurer
that
meets
all
of
34
the
following
conditions:
35
-5-
LSB
5352XD
(6)
88
ko/rn
5/
20
S.F.
_____
H.F.
_____
(1)
The
assuming
insurer
must
have
its
head
office
located
1
in
or
be
domiciled
in,
as
applicable,
and
be
licensed
in,
a
2
reciprocal
jurisdiction.
For
purposes
of
this
subsection,
a
3
“reciprocal
jurisdiction”
is
a
jurisdiction
that
meets
at
least
4
one
of
the
following
requirements:
5
(a)
A
non-United
States
jurisdiction
that
is
subject
to
an
6
in-force
covered
agreement
with
the
United
States,
each
within
7
its
legal
authority,
or,
in
the
case
of
a
covered
agreement
8
between
the
United
States
and
the
European
Union,
is
a
member
9
state
of
the
European
Union.
For
purposes
of
this
subsection,
10
a
“covered
agreement”
is
an
agreement
entered
into
pursuant
to
11
Tit.
V,
§502(a)(3),
31
U.S.C.
§§313-314,
of
the
Dodd-Frank
Wall
12
Street
Reform
and
Consumer
Protection
Act,
Pub.
L.
No.
111-203,
13
that
is
currently
in
effect
or
in
a
period
of
provisional
14
application
and
that
addresses
the
elimination,
under
specified
15
conditions,
of
collateral
requirements
as
a
condition
for
16
entering
into
any
reinsurance
agreement
with
a
ceding
insurer
17
domiciled
in
this
state
or
for
allowing
the
ceding
insurer
to
18
recognize
credit
for
reinsurance.
19
(b)
A
United
States
jurisdiction
that
meets
the
20
requirements
for
accreditation
under
the
NAIC
financial
21
regulation
standards
and
accreditation
program.
22
(c)
A
qualified
jurisdiction,
as
determined
by
the
23
commissioner
pursuant
to
subsection
5,
paragraph
“c”
,
which
is
24
not
otherwise
described
in
this
paragraph
or
paragraph
“b”
,
25
and
that
meets
certain
additional
requirements
consistent
with
26
the
terms
and
conditions
of
an
in-force
covered
agreement
as
27
specified
in
rules
adopted
by
the
commissioner.
28
(2)
The
assuming
insurer
must
have
and
maintain,
on
an
29
ongoing
basis,
minimum
capital
and
surplus,
or
its
equivalent,
30
calculated
according
to
the
methodology
of
the
assuming
31
insurer’s
domiciliary
jurisdiction,
in
an
amount
specified
in
32
rules
adopted
by
the
commissioner.
If
the
assuming
insurer
33
is
an
association,
including
incorporated
and
individual
34
unincorporated
underwriters,
the
assuming
insurer
must
have
35
-6-
LSB
5352XD
(6)
88
ko/rn
6/
20
S.F.
_____
H.F.
_____
and
maintain,
on
an
ongoing
basis,
minimum
capital
and
surplus
1
equivalents,
net
of
liabilities,
calculated
according
to
the
2
methodology
applicable
in
the
assuming
insurer’s
domiciliary
3
jurisdiction,
and
a
central
fund
containing
a
balance
in
an
4
amount
as
specified
in
rules
adopted
by
the
commissioner.
5
(3)
The
assuming
insurer
must
have
and
maintain,
on
6
an
ongoing
basis,
a
minimum
solvency
or
capital
ratio,
as
7
applicable,
as
specified
in
rules
adopted
by
the
commissioner.
8
If
the
assuming
insurer
is
an
association,
including
9
incorporated
and
individual
unincorporated
underwriters,
10
the
assuming
insurer
must
have
and
maintain,
on
an
ongoing
11
basis,
a
minimum
solvency
or
capital
ratio
in
the
reciprocal
12
jurisdiction
where
the
assuming
insurer
has
its
head
office
or
13
is
domiciled,
as
applicable,
and
where
the
assuming
insurer
is
14
also
licensed.
15
(4)
The
assuming
insurer
must
agree
and
shall
provide
16
to
the
commissioner,
in
the
form
and
manner
specified
by
the
17
commissioner,
adequate
assurance
of
all
of
the
following:
18
(a)
Prompt
written
notice
and
explanation
if
the
assuming
19
insurer
falls
below
the
minimum
requirements
set
forth
in
20
subparagraph
(2)
or
(3)
of
this
paragraph,
or
if
any
regulatory
21
action
is
taken
against
the
assuming
insurer
for
serious
22
noncompliance
with
any
applicable
law.
23
(b)
Written
consent
that
the
assuming
insurer
shall
submit
24
to
the
jurisdiction
of
the
courts
of
this
state
and
to
the
25
appointment
of
the
commissioner
as
agent
for
service
of
26
process.
The
commissioner
may
also
require
that
consent
for
27
service
of
process
be
included
in
each
reinsurance
agreement
28
entered
into
by
the
assuming
insurer.
This
subparagraph
29
division
shall
not
limit
or
alter
the
capacity
of
the
parties
30
to
a
reinsurance
agreement
to
agree
to
alternative
dispute
31
resolution,
except
to
the
extent
such
alternative
dispute
32
resolution
is
unenforceable
under
applicable
insolvency
or
33
delinquency
laws.
34
(c)
Written
agreement
that
the
assuming
insurer
shall
pay
35
-7-
LSB
5352XD
(6)
88
ko/rn
7/
20
S.F.
_____
H.F.
_____
all
final
judgments,
wherever
enforcement
is
sought,
obtained
1
against
the
assuming
insurer
by
a
ceding
insurer,
or
the
ceding
2
insurer’s
legal
successor,
that
have
been
declared
enforceable
3
in
the
jurisdiction
in
which
the
final
judgment
is
obtained.
4
(d)
Each
reinsurance
agreement
must
include
a
provision
5
requiring
the
assuming
insurer
to
provide
security
in
an
6
amount
equal
to
one
hundred
percent
of
the
assuming
insurer’s
7
liabilities
attributable
to
reinsurance
ceded
pursuant
to
8
that
reinsurance
agreement
if
the
assuming
insurer
resists
9
enforcement
of
a
final
judgment
that
is
enforceable
under
the
10
law
of
the
jurisdiction
in
which
the
final
judgment
is
obtained
11
or
under
an
enforceable
arbitration
award,
whether
obtained
by
12
the
ceding
insurer
or
by
the
ceding
insurer’s
legal
successor
13
on
behalf
of
the
ceding
insurer’s
resolution
estate.
14
(e)
Written
confirmation
that
the
assuming
insurer
is
not
15
presently
participating
in
any
solvent
scheme
of
arrangement
16
which
involves
this
state’s
ceding
insurers,
and
written
17
agreement
that
the
assuming
insurer
shall
notify
the
ceding
18
insurer
and
the
commissioner
and
shall
provide
security
in
an
19
amount
equal
to
one
hundred
percent
of
the
assuming
insurer’s
20
liabilities
to
the
ceding
insurer,
should
the
assuming
insurer
21
enter
into
such
a
solvent
scheme
of
arrangement.
Such
security
22
shall
be
in
a
form
consistent
with
the
provisions
of
subsection
23
5,
and
section
521B.103.
24
(5)
The
assuming
insurer
or
the
assuming
insurer’s
legal
25
successor
shall
provide
to
the
commissioner,
on
behalf
of
26
itself
and
any
legal
predecessors,
any
documentation
required
27
pursuant
to
rules
adopted
by
the
commissioner.
28
(6)
Pursuant
to
rules
adopted
by
the
commissioner,
the
29
assuming
insurer
shall
maintain
prompt
payment
of
claims
under
30
all
reinsurance
agreements.
31
(7)
The
assuming
insurer’s
supervisory
authority
shall
32
annually
confirm
to
the
commissioner
that
as
of
the
preceding
33
December
31,
or
as
of
the
annual
date
otherwise
statutorily
34
reported
to
the
reciprocal
jurisdiction,
the
assuming
insurer
35
-8-
LSB
5352XD
(6)
88
ko/rn
8/
20
S.F.
_____
H.F.
_____
complies
with
the
requirements
set
forth
in
subparagraphs
(2)
1
and
(3)
of
this
paragraph.
2
(8)
An
assuming
insurer
shall
not
be
precluded
from
3
voluntarily
providing
any
information
to
the
commissioner.
4
b.
The
commissioner
shall
timely
create
and
publish
a
list
5
of
reciprocal
jurisdictions.
6
(1)
The
commissioner’s
list
shall
include
any
reciprocal
7
jurisdiction
as
defined
under
paragraph
“a”
,
subparagraph
8
(1),
subparagraph
divisions
(a)
and
(b),
and
the
commissioner
9
shall
consider
any
other
reciprocal
jurisdiction
included
on
10
the
list
of
reciprocal
jurisdictions
published
through
the
11
NAIC
committee
process.
Pursuant
to
criteria
established
12
by
rules
adopted
by
the
commissioner,
the
commissioner
may
13
approve
a
jurisdiction
that
does
not
appear
on
the
NAIC
list
of
14
reciprocal
jurisdictions.
15
(2)
The
commissioner
may
remove
a
jurisdiction
from
the
16
list
of
reciprocal
jurisdictions
upon
a
determination
that
the
17
jurisdiction
no
longer
meets
the
requirements
of
a
reciprocal
18
jurisdiction,
pursuant
to
a
process
established
by
rules
19
adopted
by
the
commissioner,
except
that
the
commissioner
shall
20
not
remove
a
reciprocal
jurisdiction
as
defined
under
paragraph
21
“a”
,
subparagraph
(1),
subparagraph
divisions
(a)
and
(b).
22
Upon
removal
of
a
reciprocal
jurisdiction
from
the
list
of
23
reciprocal
jurisdictions,
credit
for
reinsurance
ceded
to
an
24
assuming
insurer
which
has
its
home
office
in
or
is
domiciled
25
in
that
reciprocal
jurisdiction
shall
be
allowed
if
otherwise
26
allowed
pursuant
to
this
chapter.
27
c.
The
commissioner
shall
timely
create
and
publish
a
28
list
of
assuming
insurers
that
have
satisfied
the
conditions
29
in
this
subsection
and
to
which
cessions
shall
be
granted
30
credit
pursuant
to
this
subsection.
The
commissioner
may
31
add
an
assuming
insurer
to
the
list
if
a
NAIC
accredited
32
jurisdiction
has
added
the
assuming
insurer
to
the
NAIC
33
accredited
jurisdiction’s
list
of
assuming
insurers
or
if,
34
upon
initial
eligibility,
the
assuming
insurer
submits
the
35
-9-
LSB
5352XD
(6)
88
ko/rn
9/
20
S.F.
_____
H.F.
_____
information
required
under
paragraph
“a”
,
subparagraph
(4),
to
1
the
commissioner
and
complies
with
any
additional
requirements
2
pursuant
to
rules
adopted
by
the
commissioner,
except
to
the
3
extent
that
any
of
those
rules
conflict
with
an
applicable
4
covered
agreement.
5
d.
If
the
commissioner
determines
that
an
assuming
insurer
6
no
longer
meets
one
or
more
of
the
requirements
under
this
7
subsection,
the
commissioner
may
revoke
or
suspend
the
8
eligibility
of
the
assuming
insurer
for
recognition
under
this
9
subsection
in
accordance
with
procedures
established
by
rules
10
adopted
by
the
commissioner.
11
(1)
While
an
assuming
insurer’s
eligibility
is
suspended,
12
any
reinsurance
agreement
issued,
amended,
or
renewed
after
the
13
effective
date
of
the
suspension
does
not
qualify
for
credit
14
except
to
the
extent
that
the
assuming
insurer’s
obligations
15
under
the
reinsurance
agreement
are
secured
in
accordance
with
16
section
521B.103.
17
(2)
If
an
assuming
insurer’s
eligibility
is
revoked,
credit
18
for
reinsurance
shall
not
be
granted
after
the
effective
date
19
of
the
revocation
with
respect
to
any
reinsurance
agreements
20
entered
into
by
the
assuming
insurer,
including
reinsurance
21
agreements
entered
into
prior
to
the
date
of
revocation,
except
22
to
the
extent
that
the
assuming
insurer’s
obligations
under
23
the
reinsurance
agreement
are
secured
in
a
form
acceptable
to
24
the
commissioner
and
consistent
with
the
provisions
of
section
25
521B.103.
26
e.
If
subject
to
a
legal
process
of
rehabilitation,
27
liquidation,
or
conservation,
as
applicable,
the
ceding
28
insurer
or
the
ceding
insurer’s
representative
may
seek,
and
if
29
determined
appropriate
by
the
court
in
which
such
legal
process
30
is
pending,
may
obtain
an
order
requiring
that
the
assuming
31
insurer
post
security
for
all
outstanding
ceded
liabilities.
32
f.
This
subsection
shall
not
limit
or
alter
the
capacity
of
33
the
parties
to
a
reinsurance
agreement
to
agree
on
requirements
34
for
security
or
other
terms
in
the
reinsurance
agreement,
35
-10-
LSB
5352XD
(6)
88
ko/rn
10/
20
S.F.
_____
H.F.
_____
except
as
expressly
prohibited
by
this
chapter
or
any
other
1
applicable
law
or
regulation.
2
g.
(1)
Credit
may
be
taken
under
this
subsection
only
for
3
reinsurance
agreements
entered
into,
amended,
or
renewed
on
or
4
after
July
1,
2020,
and
only
with
respect
to
losses
incurred
5
and
reserves
reported
on
or
after
the
later
of
the
date
on
6
which
the
assuming
insurer
has
met
all
eligibility
requirements
7
pursuant
to
this
subsection,
and
the
effective
date
of
the
new
8
reinsurance
agreement,
amendment,
or
renewal.
9
(2)
This
paragraph
shall
not
alter
or
impair
a
ceding
10
insurer’s
right
to
take
credit
for
reinsurance,
to
the
extent
11
that
credit
is
not
available
under
this
subsection,
as
long
as
12
the
reinsurance
qualifies
for
credit
under
any
other
applicable
13
provision
of
this
chapter.
14
h.
This
subsection
shall
not
authorize
an
assuming
15
insurer
to
withdraw
or
reduce
the
security
provided
under
any
16
reinsurance
agreement
except
as
permitted
by
the
terms
of
the
17
reinsurance
agreement.
18
i.
This
subsection
shall
not
limit
or
alter
the
capacity
19
of
parties
to
any
reinsurance
agreement
to
renegotiate
the
20
reinsurance
agreement.
21
Sec.
15.
Section
521B.102,
subsections
6
and
7,
Code
2020,
22
are
amended
to
read
as
follows:
23
6.
Credit
shall
be
allowed
when
reinsurance
is
ceded
to
24
an
assuming
insurer
that
does
not
meet
the
requirements
of
25
subsection
1
,
2
,
3
,
4
,
or
5
,
or
5A,
but
only
as
to
the
insurance
26
of
risks
located
in
jurisdictions
where
the
reinsurance
is
27
required
by
applicable
law
or
regulation
of
that
jurisdiction.
28
7.
a.
If
the
assuming
insurer
is
not
licensed,
accredited,
29
or
certified
to
transact
insurance
or
reinsurance
in
this
30
state,
the
credit
permitted
by
subsections
3
and
4
shall
not
be
31
allowed
unless
the
assuming
insurer
agrees
in
the
reinsurance
32
agreements
agreement
to
do
all
of
the
following:
33
(1)
In
the
event
of
the
failure
of
the
assuming
insurer
34
to
perform
its
obligations
under
the
terms
of
the
reinsurance
35
-11-
LSB
5352XD
(6)
88
ko/rn
11/
20
S.F.
_____
H.F.
_____
agreement,
the
assuming
insurer,
at
the
request
of
the
ceding
1
insurer,
will
shall
submit
to
the
jurisdiction
of
any
court
of
2
competent
jurisdiction
in
any
state
of
the
United
States,
will
3
shall
comply
with
all
requirements
necessary
to
give
the
court
4
jurisdiction,
and
will
shall
abide
by
the
final
decision
of
the
5
court
or
of
any
appellate
court
in
the
event
of
any
appeal,
6
concerning
such
failure.
7
(2)
The
assuming
insurer
will
shall
designate
the
8
commissioner
or
a
designated
attorney
as
its
true
and
lawful
9
attorney
to
receive
lawful
process
in
any
action,
suit,
or
10
proceeding
instituted
by
or
on
behalf
of
the
ceding
insurer.
11
b.
This
subsection
is
not
intended
to
conflict
with
or
12
override
the
obligation
of
the
parties
to
a
reinsurance
13
agreement
to
arbitrate
their
disputes
a
dispute
if
the
14
obligation
for
the
parties
to
arbitrate
disputes
is
created
in
15
the
reinsurance
agreement.
16
Sec.
16.
Section
521B.102,
subsection
8,
unnumbered
17
paragraph
1,
Code
2020,
is
amended
to
read
as
follows:
18
If
the
assuming
insurer
does
not
meet
the
requirements
19
of
subsection
1
,
2
,
or
3
,
or
5A,
the
credit
permitted
by
20
subsection
4
or
5
shall
not
be
allowed
unless
the
assuming
21
insurer
agrees
in
a
trust
agreement
to
satisfy
the
following
22
conditions:
23
Sec.
17.
Section
521B.102,
subsection
9,
unnumbered
24
paragraph
1,
Code
2020,
is
amended
to
read
as
follows:
25
If
an
accredited
or
certified
reinsurer
ceases
to
meet
26
the
requirements
of
for
accreditation
or
certification
27
pursuant
to
this
section
for
accreditation
or
certification
,
28
the
commissioner
may
suspend
or
revoke
the
reinsurer’s
29
accreditation
or
certification.
30
Sec.
18.
Section
521B.102,
subsection
9,
paragraph
b,
Code
31
2020,
is
amended
to
read
as
follows:
32
b.
While
a
reinsurer’s
accreditation
or
certification
is
33
suspended,
a
reinsurance
contract
issued
or
renewed
after
the
34
effective
date
of
the
suspension
does
not
qualify
for
credit
35
-12-
LSB
5352XD
(6)
88
ko/rn
12/
20
S.F.
_____
H.F.
_____
except
to
the
extent
that
the
reinsurer’s
obligations
under
the
1
reinsurance
contract
are
secured
in
accordance
with
section
2
521B.103
.
If
a
reinsurer’s
accreditation
or
certification
is
3
revoked,
credit
for
reinsurance
shall
not
be
granted
after
the
4
effective
date
of
the
revocation
except
to
the
extent
that
the
5
reinsurer’s
obligations
under
the
reinsurance
contract
are
6
secured
in
accordance
with
subsection
5
,
paragraph
“e”
,
or
7
section
521B.103
.
8
Sec.
19.
Section
521B.102,
subsection
10,
paragraphs
a
and
9
b,
Code
2020,
are
amended
to
read
as
follows:
10
a.
A
domestic
ceding
insurer
shall
take
steps
to
manage
11
its
reinsurance
recoverables
proportionate
to
its
own
book
12
of
business.
A
domestic
ceding
insurer
shall
notify
the
13
commissioner
within
thirty
calendar
days
after
reinsurance
14
recoverables
from
any
single
assuming
insurer,
or
group
15
of
affiliated
assuming
insurers,
exceeds
fifty
percent
16
of
the
domestic
ceding
insurer’s
last
reported
surplus
to
17
policyholders,
or
after
it
is
determined
the
domestic
ceding
18
insurer
has
determined
that
reinsurance
recoverables
from
19
any
single
assuming
insurer,
or
group
of
affiliated
assuming
20
insurers,
is
likely
to
exceed
this
limit.
The
notification
21
shall
demonstrate
that
the
exposure
is
safely
managed
by
the
22
domestic
ceding
insurer.
23
b.
A
domestic
ceding
insurer
shall
take
steps
to
diversify
24
its
reinsurance
program.
A
domestic
ceding
insurer
shall
25
notify
the
commissioner
within
thirty
calendar
days
after
26
ceding
to
any
single
assuming
insurer,
or
group
of
affiliated
27
assuming
insurers,
more
than
twenty
percent
of
the
domestic
28
ceding
insurer’s
gross
written
premium
in
the
prior
calendar
29
year,
or
after
the
domestic
ceding
insurer
has
determined
that
30
the
reinsurance
ceded
to
any
single
assuming
insurer,
or
group
31
of
affiliated
assuming
insurers,
is
likely
to
exceed
this
32
limit.
The
notification
shall
demonstrate
that
the
exposure
is
33
safely
managed
by
the
domestic
ceding
insurer.
34
Sec.
20.
Section
521B.103,
Code
2020,
is
amended
to
read
as
35
-13-
LSB
5352XD
(6)
88
ko/rn
13/
20
S.F.
_____
H.F.
_____
follows:
1
521B.103
Limited
credit
allowed
other
domestic
ceding
2
insurers.
3
1.
An
asset
or
a
reduction
from
liability
for
reinsurance
4
ceded
by
a
domestic
insurer
to
an
assuming
insurer
not
meeting
5
the
requirements
of
section
521B.102
,
shall
be
allowed
in
an
6
amount
not
exceeding
the
liabilities
carried
by
the
ceding
7
insurer.
The
commissioner
may
adopt
rules
pursuant
to
section
8
521B.105
specifying
requirements
related
to
the
valuation
of
9
assets
or
reserve
credits,
the
amount
and
forms
of
security
10
supporting
reinsurance
arrangements
described
in
section
11
521B.105
,
and
the
circumstances
pursuant
to
which
credit
shall
12
be
reduced
or
eliminated.
The
reduction
shall
be
in
the
13
amount
of
funds
held
by
or
on
behalf
of
the
ceding
insurer,
14
including
funds
held
in
trust
for
the
ceding
insurer,
under
a
15
reinsurance
contract
with
the
assuming
insurer
as
security
for
16
the
payment
of
obligations
under
the
reinsurance
contract,
if
17
the
security
is
held
in
the
United
States
subject
to
withdrawal
18
solely
by,
and
under
the
exclusive
control
of,
the
ceding
19
insurer,
or
in
the
case
of
a
trust,
held
in
a
qualified
United
20
States
financial
institution
as
defined
in
section
521B.104,
21
subsection
2
.
22
2.
The
security
may
be
in
the
form
of
any
of
the
following:
23
a.
Cash.
24
b.
A
security
listed
by
the
securities
valuation
office
25
of
the
national
association
of
insurance
commissioners
NAIC
,
26
including
those
securities
deemed
exempt
from
filing
as
27
defined
by
the
purposes
and
procedures
manual
of
the
securities
28
valuation
office
and
those
securities
qualifying
as
admitted
29
assets.
30
c.
(1)
Clean,
irrevocable,
unconditional
letters
of
credit,
31
issued
or
confirmed
by
a
qualified
United
States
financial
32
institution,
as
defined
in
section
521B.104,
subsection
1
,
33
effective
no
later
than
December
31
of
the
year
for
which
the
34
filing
is
being
made,
and
in
the
possession
of,
or
in
trust
35
-14-
LSB
5352XD
(6)
88
ko/rn
14/
20
S.F.
_____
H.F.
_____
for,
the
ceding
insurer
on
or
before
the
filing
date
of
the
1
ceding
insurer’s
annual
statement.
2
(2)
A
letter
of
credit
meeting
applicable
standards
3
of
issuer
acceptability
as
of
the
date
of
the
issuance
or
4
confirmation
of
the
letter
of
credit’s
issuance
or
confirmation
5
credit
shall,
notwithstanding
the
issuing
or
confirming
6
institution’s
subsequent
failure
to
meet
applicable
standards
7
of
issuer
acceptability,
continue
to
be
acceptable
as
security
8
until
the
expiration,
extension,
renewal,
modification,
or
9
amendment
of
the
letter
of
credit,
whichever
occurs
first.
10
d.
Any
other
form
of
security
acceptable
to
the
11
commissioner.
12
Sec.
21.
Section
521B.104,
subsection
1,
paragraph
c,
Code
13
2020,
is
amended
to
read
as
follows:
14
c.
Has
been
determined
by
either
the
commissioner
or
the
15
securities
valuation
office
of
the
national
association
of
16
insurance
commissioners
NAIC
to
meet
the
standards
of
financial
17
condition
and
standing
as
are
considered
necessary
and
18
appropriate
to
regulate
the
quality
of
financial
institutions
19
whose
letters
of
credit
will
be
acceptable
to
the
commissioner.
20
Sec.
22.
Section
521B.105,
subsection
1,
Code
2020,
is
21
amended
to
read
as
follows:
22
1.
The
commissioner
may
adopt
rules
,
pursuant
to
chapter
23
17A
,
as
necessary
or
convenient
to
administer
this
chapter
.
24
Sec.
23.
Section
521B.105,
subsection
2,
paragraph
a,
25
unnumbered
paragraph
1,
Code
2020,
is
amended
to
read
as
26
follows:
27
A
rule
adopted
pursuant
to
this
subsection
is
applicable
28
only
to
reinsurance
arrangements
relating
to
any
of
the
29
following:
30
Sec.
24.
Section
521B.105,
subsection
2,
paragraph
a,
31
subparagraph
(5),
Code
2020,
is
amended
to
read
as
follows:
32
(5)
Other
life
and
health
insurance
and
annuity
products
as
33
to
which
the
national
association
of
insurance
commissioners
34
NAIC
adopts
model
regulatory
requirements
with
respect
to
35
-15-
LSB
5352XD
(6)
88
ko/rn
15/
20
S.F.
_____
H.F.
_____
credit
for
reinsurance.
1
Sec.
25.
Section
521B.105,
subsection
2,
paragraph
c,
Code
2
2020,
is
amended
to
read
as
follows:
3
c.
A
rule
adopted
pursuant
to
this
subsection
may
require
4
the
ceding
insurer,
in
calculating
the
amounts
or
forms
of
5
security
required
to
be
held
under
rules
adopted
under
this
6
subsection
,
to
use
the
valuation
manual
as
defined
in
section
7
508.36
,
including
all
amendments
adopted
by
the
national
8
association
of
insurance
commissioners
NAIC
and
in
effect
on
9
the
date
as
of
which
the
calculation
is
made,
to
the
extent
10
applicable.
11
Sec.
26.
Section
521B.105,
subsection
3,
Code
2020,
is
12
amended
to
read
as
follows:
13
3.
A
rule
adopted
pursuant
to
this
section
is
not
applicable
14
to
cessions
to
an
assuming
insurer
that
meets
either
any
of
the
15
following
requirements:
16
a.
Meets
the
conditions
set
forth
in
section
521B.102,
17
subsection
6.
18
a.
b.
Is
certified
in
Iowa.
19
b.
c.
Maintains
at
least
two
hundred
fifty
million
dollars
20
in
capital
and
surplus
when
determined
in
accordance
with
the
21
accounting
practices
and
procedures
manual
of
the
national
22
association
of
insurance
commissioners
NAIC
,
including
all
23
amendments
adopted
by
the
national
association
of
insurance
24
commissioners
NAIC
,
but
excluding
the
impact
of
any
permitted
25
or
prescribed
practices;
and
meets
either
of
the
following
26
requirements:
27
(1)
Is
licensed
in
at
least
twenty-six
states.
28
(2)
Is
licensed
in
at
least
ten
states,
and
is
licensed
or
29
accredited
in
a
total
of
at
least
thirty-five
states.
30
Sec.
27.
APPLICABILITY.
This
Act
applies
to
all
cessions
31
under
reinsurance
agreements
that
have
an
inception,
32
anniversary,
or
renewal
date
on
or
after
July
1,
2020.
33
EXPLANATION
34
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
35
-16-
LSB
5352XD
(6)
88
ko/rn
16/
20
S.F.
_____
H.F.
_____
the
explanation’s
substance
by
the
members
of
the
general
assembly.
1
This
bill
relates
to
credit
allowed
to
domestic
ceding
2
insurers
for
reinsurance
ceded
to
reinsurers.
3
The
bill
amends
Code
chapter
521B
(credit
for
reinsurance)
4
to
conform
more
closely
to
the
national
association
of
5
insurance
commissioners’
(NAIC)
credit
for
reinsurance
model
6
act.
7
The
bill
provides
that
credit
is
allowed
when
reinsurance
is
8
ceded
to
an
assuming
insurer
that
has
its
head
office
located
9
in,
or
is
domiciled
in,
and
is
licensed
in,
a
reciprocal
10
jurisdiction.
A
“reciprocal
jurisdiction”
is
defined
in
the
11
bill
as
a
jurisdiction
that
is
a
non-United
States
jurisdiction
12
that
is
subject
to
an
in-force
covered
agreement
with
the
13
United
States,
or
a
United
States
jurisdiction
that
meets
14
the
requirements
for
accreditation
under
the
NAIC
financial
15
regulation
standards
and
accreditation
program,
or
a
qualified
16
jurisdiction
as
determined
by
the
commissioner
that
meets
17
certain
additional
requirements
consistent
with
the
terms
and
18
conditions
of
an
in-force
covered
agreement.
19
“Covered
agreement”
is
defined
in
the
bill
as
an
agreement
20
entered
into
pursuant
to
Tit.
V,
§502(a)(3),
31
U.S.C.
21
§§313-314,
of
the
Dodd-Frank
Wall
Street
Reform
and
Consumer
22
Protection
Act,
that
is
currently
in
effect
or
in
a
period
of
23
provisional
application
and
that
addresses
the
elimination,
24
under
specified
conditions,
of
collateral
requirements
as
a
25
condition
for
entering
into
a
reinsurance
agreement
with
a
26
ceding
insurer
domiciled
in
this
state,
or
for
allowing
the
27
ceding
insurer
to
recognize
credit
for
reinsurance.
28
The
bill
requires
an
assuming
insurer
to
maintain
minimum
29
capital
and
surplus,
or
its
equivalent,
calculated
according
30
to
the
methodology
of
the
assuming
insurer’s
domiciliary
31
jurisdiction,
in
an
amount
specified
by
the
commissioner
32
of
insurance
(commissioner).
If
an
assuming
insurer
is
33
an
association,
including
incorporated
and
individual
34
unincorporated
underwriters,
the
assuming
insurer
must
35
-17-
LSB
5352XD
(6)
88
ko/rn
17/
20
S.F.
_____
H.F.
_____
maintain
minimum
capital
and
surplus
equivalents,
net
of
1
liabilities,
calculated
according
to
the
methodology
of
the
2
assuming
insurer’s
domiciliary
jurisdiction,
and
a
central
3
fund
containing
a
balance
in
an
amount
specified
by
the
4
commissioner.
The
bill
also
requires
an
assuming
insurer
to
5
maintain
a
minimum
solvency
or
capital
ratio
as
specified
by
6
the
commissioner.
If
the
assuming
insurer
is
an
association,
7
including
incorporated
and
individual
unincorporated
8
underwriters,
the
assuming
insurer
must
maintain
a
minimum
9
solvency
or
capital
ratio
in
the
reciprocal
jurisdiction
where
10
the
assuming
insurer
has
its
head
office
or
is
domiciled,
and
11
where
the
assuming
insurer
is
also
licensed.
12
The
bill
requires
an
assuming
insurer
to
provide
written
13
notice
and
an
explanation
to
the
commissioner
if
the
assuming
14
insurer
falls
below
the
minimum
requirements
for
surplus,
15
solvency,
or
capital,
or
if
any
regulatory
action
is
taken
16
against
the
assuming
insurer
for
noncompliance
with
applicable
17
laws.
18
An
assuming
insurer
must
also
provide
written
consent
to
19
the
commissioner
that
the
assuming
insurer
will
submit
to
the
20
jurisdiction
of
the
courts
of
this
state
and
to
the
appointment
21
of
the
commissioner
as
agent
for
service
of
process.
The
22
commissioner
may
also
require
that
consent
for
service
of
23
process
be
included
in
each
reinsurance
agreement
entered
into
24
by
the
assuming
insurer.
The
bill
provides
that
an
assuming
25
insurer
must
also
agree
that
the
assuming
insurer
will
pay
all
26
final
judgments
obtained
against
it
by
a
ceding
insurer,
or
27
the
ceding
insurer’s
legal
successor,
that
have
been
declared
28
enforceable
in
the
jurisdiction
in
which
the
final
judgment
29
is
obtained.
Each
reinsurance
agreement
must
also
include
a
30
provision
requiring
the
assuming
insurer
to
provide
security
31
in
an
amount
equal
to
100
percent
of
the
assuming
insurer’s
32
liabilities
attributable
to
reinsurance
ceded
pursuant
to
33
that
reinsurance
agreement
if
the
assuming
insurer
resists
34
enforcement
of
a
final
judgment.
35
-18-
LSB
5352XD
(6)
88
ko/rn
18/
20
S.F.
_____
H.F.
_____
An
assuming
insurer
is
required
by
the
bill
to
provide
the
1
commissioner
with
confirmation
that
the
assuming
insurer
is
not
2
presently
participating
in
any
solvent
scheme
of
arrangement
3
which
involves
Iowa’s
ceding
insurers,
and
written
agreement
4
that
the
assuming
insurer
will
notify
the
ceding
insurer
and
5
the
commissioner
and
will
provide
security
in
an
amount
equal
6
to
100
percent
of
the
assuming
insurer’s
liabilities
to
the
7
ceding
insurer,
should
the
assuming
insurer
enter
into
a
8
solvent
scheme
of
arrangement.
9
An
assuming
insurer
is
required
to
maintain
prompt
claim
10
payments
under
all
reinsurance
agreements.
The
assuming
11
insurer’s
supervisory
authority
must
annually
confirm
to
the
12
commissioner
that
the
assuming
insurer
complies
with
the
13
requirements
for
minimum
surplus,
solvency,
and
capital.
14
The
bill
requires
the
commissioner
to
create
and
publish
a
15
list
of
reciprocal
jurisdictions
which
must
be
determined
by
16
the
commissioner
as
detailed
in
the
bill.
The
commissioner
17
must
also
create
and
publish
a
list
of
assuming
insurers
that
18
have
satisfied
the
conditions
required
for
cessions
to
be
19
granted
credit.
The
commissioner
may
add
an
assuming
insurer
20
to
that
list
if
a
NAIC
accredited
jurisdiction
has
added
the
21
assuming
insurer
to
the
NAIC
accredited
jurisdiction’s
list
22
of
assuming
insurers,
or
if
the
assuming
insurer
submits
the
23
information
as
detailed
in
the
bill
to
the
commissioner,
and
24
complies
with
any
additional
requirements
pursuant
to
rules
25
adopted
by
the
commissioner.
26
The
bill
allows
the
commissioner
to
revoke
or
suspend
the
27
eligibility
of
an
assuming
insurer
for
inclusion
on
the
list
if
28
the
commissioner
determines
that
an
assuming
insurer
no
longer
29
meets
the
requirements
to
be
on
the
list.
If
an
assuming
30
insurer’s
eligibility
is
suspended,
any
reinsurance
agreements
31
issued,
amended,
or
renewed
after
the
effective
date
of
the
32
suspension
do
not
qualify
for
credit
except
to
the
extent
33
that
the
assuming
insurer’s
obligations
under
the
reinsurance
34
agreement
are
secured.
If
an
assuming
insurer’s
eligibility
35
-19-
LSB
5352XD
(6)
88
ko/rn
19/
20
S.F.
_____
H.F.
_____
is
revoked,
credit
for
reinsurance
shall
not
be
granted
after
1
the
effective
date
of
the
revocation
with
respect
to
any
2
reinsurance
agreements
entered
into
by
the
assuming
insurer,
3
including
reinsurance
agreements
entered
into
prior
to
the
date
4
of
revocation,
except
to
the
extent
that
the
assuming
insurer’s
5
obligations
under
the
reinsurance
agreement
are
secured
in
a
6
form
acceptable
to
the
commissioner.
7
If
a
ceding
insurer
is
subject
to
a
legal
process
of
8
rehabilitation,
liquidation,
or
conservation,
the
ceding
9
insurer
may
seek
an
order
requiring
that
the
assuming
insurer
10
post
security
for
all
outstanding
ceded
liabilities.
11
The
bill
does
not
limit
or
alter
the
capacity
of
the
parties
12
to
a
reinsurance
agreement
to
agree
on
requirements
for
13
security
or
other
terms
in
the
reinsurance
agreement,
except
14
as
expressly
prohibited
by
Code
chapter
521B,
or
any
other
15
applicable
law
or
regulation.
16
Credit
may
be
taken
under
the
provisions
of
the
bill
only
for
17
reinsurance
agreements
entered
into,
amended,
or
renewed
on
or
18
after
the
effective
date
of
the
bill,
and
only
with
respect
to
19
losses
incurred
and
reserves
reported
on
or
after
the
later
of
20
the
date
on
which
the
assuming
insurer
has
met
all
eligibility
21
requirements
under
the
bill,
and
the
effective
date
of
the
new
22
reinsurance
agreement,
amendment,
or
renewal.
23
The
bill
does
not
authorize
an
assuming
insurer
to
withdraw
24
or
reduce
the
security
provided
under
any
reinsurance
agreement
25
except
as
permitted
by
the
terms
of
the
reinsurance
agreement,
26
or
limit
or
alter
the
capacity
of
parties
to
any
reinsurance
27
agreement
to
renegotiate
the
reinsurance
agreement.
28
The
bill
applies
to
all
cessions
under
reinsurance
29
agreements
that
have
an
inception,
anniversary,
or
renewal
date
30
after
July
1,
2020.
31
-20-
LSB
5352XD
(6)
88
ko/rn
20/
20
