Bill Text: IA SF2131 | 2019-2020 | 88th General Assembly | Enrolled

---

Bill Title: A bill for an act relating to credit allowed to domestic ceding insurers for reinsurance ceded to reinsurers, and including applicability provisions. (Formerly SSB 3048.) Effective date: 07/01/2020. Applicability date: 07/01/2020.

Spectrum: Committee Bill

Status: (Passed) 2020-03-12 - Signed by Governor. S.J. 615. [SF2131 Detail]

Download: Iowa-2019-SF2131-Enrolled.html

---

Senate File 2131 - Enrolled
Senate File 2131
AN ACT
RELATING TO CREDIT ALLOWED TO DOMESTIC CEDING INSURERS FOR
REINSURANCE CEDED TO REINSURERS, AND INCLUDING APPLICABILITY
PROVISIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
Section 1. NEW SECTION . 521B.101A Definitions.
For purposes of this chapter, unless the context otherwise
requires:
1. “Commissioner” means the commissioner of insurance.
2. “NAIC” means the national association of insurance
commissioners.
Sec. 2. Section 521B.102, unnumbered paragraph 1, Code
2020, is amended to read as follows:
Credit for reinsurance shall be allowed a domestic ceding
insurer as either an asset or a reduction from liability on
account of reinsurance ceded only when the reinsurer meets

Senate File 2131, p. 2
the requirements of subsection 1 , 2 , 3 , 4 , 5 , 5A, or 6 . The
commissioner may adopt rules pursuant to section 521B.105
specifying additional requirements related to the valuation of
assets or reserve credits, the amount and forms of security
supporting reinsurance arrangements described in section
521B.105 , and the circumstances pursuant to which credit shall
be reduced or eliminated. Credit shall be allowed under
subsection 1 , 2 , or 3 only respecting cessions of those kinds
or classes of business which the assuming insurer is licensed
or otherwise permitted to write or assume in the assuming
insurer’s state of domicile or, in the case of a United States
branch of an alien assuming insurer, in the state through
which the alien assuming insurer is entered and licensed to
transact insurance or reinsurance. Credit shall be allowed
under subsection 3 or 4 only if the applicable requirements of
subsection 7 have been satisfied.
Sec. 3. Section 521B.102, subsection 2, paragraph e, Code
2020, is amended to read as follows:
e. Demonstrate to the satisfaction of the commissioner that
the assuming insurer has adequate financial capacity to meet
the assuming insurer’s reinsurance obligations and is otherwise
qualified to assume reinsurance from domestic insurers. An
assuming insurer is deemed to meet this requirement as of the
time of the assuming insurer’s application if the assuming
insurer maintains a surplus as regards policyholders in an
amount of not less than twenty million dollars and the assuming
insurer’s accreditation has not been denied by the commissioner
within ninety calendar days after submission of the assuming
insurer’s application.
Sec. 4. Section 521B.102, subsection 3, paragraph a,
unnumbered paragraph 1, Code 2020, is amended to read as
follows:
Credit shall be allowed when the reinsurance is ceded to
an assuming insurer that is domiciled in, or in the case of a
United States branch of an alien assuming insurer , is entered
through, a state that employs standards regarding credit for
reinsurance that are substantially similar to those applicable
under this chapter and the assuming insurer or United States

Senate File 2131, p. 3
branch of an alien assuming insurer does all of the following:
Sec. 5. Section 521B.102, subsection 4, paragraph a, Code
2020, is amended to read as follows:
a. Credit shall be allowed when the reinsurance is ceded
to an assuming insurer that maintains a trust fund in a
qualified United States financial institution, as defined
in section 521B.104, subsection 2 , for payment of the valid
claims of the assuming insurer’s United States ceding insurers,
their assigns, and successors in interest. To enable the
commissioner to determine the sufficiency of the trust fund,
the assuming insurer shall report annually to the commissioner
information substantially the same as that required to be
reported by licensed insurers on the national association of
insurance commissioners’ NAIC annual statement form by licensed
insurers . The assuming insurer shall submit to examination of
the assuming insurer’s books and records by the commissioner
and bear the expense of examination.
Sec. 6. Section 521B.102, subsection 4, paragraph b,
subparagraph (2), Code 2020, is amended to read as follows:
(2) The form of the trust and any trust amendments are
filed with the commissioner of every state in which the ceding
insurer’s insurer beneficiaries of the trust are domiciled.
The trust instrument shall provide that contested claims are
valid and enforceable upon the final order of any court of
competent jurisdiction in the United States. The trust shall
vest legal title to the trust’s assets in its trustees for
the benefit of the assuming insurer’s United States ceding
insurers, their assigns, and successors in interest. The trust
and the assuming insurer shall be subject to examination as
determined by the commissioner.
Sec. 7. Section 521B.102, subsection 4, paragraph c,
subparagraph (3), subparagraph division (e), Code 2020, is
amended to read as follows:
(e) Within ninety calendar days after its financial
statements are due to be filed with the group’s domiciliary
regulator, the group shall provide to the commissioner an
annual certification by the group’s domiciliary regulator of
the solvency of each underwriter member, or if a certification
is unavailable, financial statements, prepared by independent

Senate File 2131, p. 4
public accountants, of each underwriter member of the group.
Sec. 8. Section 521B.102, subsection 4, paragraph c,
subparagraph (4), subparagraph division (e), Code 2020, is
amended to read as follows:
(e) Within ninety calendar days after the group’s financial
statements are due to be filed with the group’s domiciliary
regulator, make available to the commissioner an annual
certification of each underwriter member’s solvency by the
member’s domiciliary regulator and financial statements of
each underwriter member of the group prepared by the group’s
independent public accountant.
Sec. 9. Section 521B.102, subsection 5, paragraph a,
subparagraph (4), Code 2020, is amended to read as follows:
(4) The assuming insurer shall agree to submit to the
jurisdiction of this state, to appoint the commissioner as the
assuming insurer’s agent for service of process in this state,
and agree to provide security for one hundred percent of the
assuming insurer’s liabilities attributable to reinsurance
ceded by United States ceding insurers, if the assuming insurer
resists enforcement of a final United States judgment.
Sec. 10. Section 521B.102, subsection 5, paragraph b,
subparagraph (3), Code 2020, is amended to read as follows:
(3) Within ninety calendar days after the association’s
financial statements are due to be filed with the association’s
domiciliary regulator, the association shall provide to the
commissioner an annual certification by the association’s
domiciliary regulator , of the solvency of each underwriter
member, or if a certification is unavailable, financial
statements, prepared by an independent public accountant, of
each underwriter member of the association.
Sec. 11. Section 521B.102, subsection 5, paragraph c,
subparagraphs (1), (2), and (3), Code 2020, are amended to read
as follows:
(1) In order to determine whether the domiciliary
jurisdiction of a non-United States assuming insurer is
eligible to be recognized as a qualified jurisdiction,
the commissioner shall evaluate the appropriateness and
effectiveness of the reinsurance supervisory system of the
jurisdiction, both initially and on an ongoing basis, and

Senate File 2131, p. 5
consider the rights, benefits, and the extent of reciprocal
recognition afforded by the non-United States jurisdiction
to reinsurers licensed and domiciled in the United States.
In order to be recognized as a qualified jurisdiction, a
jurisdiction must agree to share information and to cooperate
with the commissioner with respect to all certified reinsurers
domiciled within that jurisdiction. A jurisdiction shall not
be recognized as a qualified jurisdiction if the commissioner
has determined that the jurisdiction does not adequately and
promptly enforce final United States judgments and arbitration
awards. Additional factors may be considered in the discretion
of the commissioner.
(2) A list of qualified jurisdictions shall be published
through the national association of insurance commissioners’
NAIC committee process. The commissioner shall consider
this list in determining qualified jurisdictions. If the
commissioner recognizes a jurisdiction as qualified that does
not appear on the NAIC list of qualified jurisdictions, the
commissioner shall provide thoroughly documented justification
for the recognition in accordance with criteria to be developed
by rule as specified in rules adopted by the commissioner .
(3) United States jurisdictions that meet the requirements
for accreditation under the national association of insurance
commissioners’ NAIC financial standards and accreditation
program shall be recognized as qualified jurisdictions.
Sec. 12. Section 521B.102, subsection 5, paragraph e,
subparagraph (5), subparagraph division (b), Code 2020, is
amended to read as follows:
(b) If the commissioner continues to assign a higher rating
to a certified reinsurer as permitted by other provisions of
this subsection section , this requirement does not apply to a
certified reinsurer in inactive status or to a reinsurer whose
certification has been suspended.
Sec. 13. Section 521B.102, subsection 5, paragraph f, Code
2020, is amended to read as follows:
f. If an assuming insurer applying for certification as a
reinsurer in this state has been certified as a reinsurer in
another jurisdiction accredited by the national association
of insurance commissioners NAIC , the commissioner has the

Senate File 2131, p. 6
discretion to defer to that jurisdiction’s certification, and
has the discretion to defer to the rating assigned by that
jurisdiction, and the assuming insurer shall be considered to
be a certified reinsurer in this state.
Sec. 14. Section 521B.102, Code 2020, is amended by adding
the following new subsection:
NEW SUBSECTION . 5A. a. Credit shall be allowed when the
reinsurance is ceded to an assuming insurer that meets all of
the following conditions:
(1) The assuming insurer must have its head office located
in or be domiciled in, as applicable, and be licensed in, a
reciprocal jurisdiction. For purposes of this subsection, a
“reciprocal jurisdiction” is a jurisdiction that meets at least
one of the following requirements:
(a) A non-United States jurisdiction that is subject to an
in-force covered agreement with the United States, each within
its legal authority, or, in the case of a covered agreement
between the United States and the European Union, is a member
state of the European Union. For purposes of this subsection,
a “covered agreement” is an agreement entered into pursuant to
Tit. V, §502(a)(3), 31 U.S.C. §§313-314, of the Dodd-Frank Wall
Street Reform and Consumer Protection Act, Pub. L. No. 111-203,
that is currently in effect or in a period of provisional
application and that addresses the elimination, under specified
conditions, of collateral requirements as a condition for
entering into any reinsurance agreement with a ceding insurer
domiciled in this state or for allowing the ceding insurer to
recognize credit for reinsurance.
(b) A United States jurisdiction that meets the
requirements for accreditation under the NAIC financial
regulation standards and accreditation program.
(c) A qualified jurisdiction, as determined by the
commissioner pursuant to subsection 5, paragraph “c” , which is
not otherwise described in this paragraph or paragraph “b” ,
and that meets certain additional requirements consistent with
the terms and conditions of an in-force covered agreement as
specified in rules adopted by the commissioner.
(2) The assuming insurer must have and maintain, on an
ongoing basis, minimum capital and surplus, or its equivalent,

Senate File 2131, p. 7
calculated according to the methodology of the assuming
insurer’s domiciliary jurisdiction, in an amount specified in
rules adopted by the commissioner. If the assuming insurer
is an association, including incorporated and individual
unincorporated underwriters, the assuming insurer must have
and maintain, on an ongoing basis, minimum capital and surplus
equivalents, net of liabilities, calculated according to the
methodology applicable in the assuming insurer’s domiciliary
jurisdiction, and a central fund containing a balance in an
amount as specified in rules adopted by the commissioner.
(3) The assuming insurer must have and maintain, on
an ongoing basis, a minimum solvency or capital ratio, as
applicable, as specified in rules adopted by the commissioner.
If the assuming insurer is an association, including
incorporated and individual unincorporated underwriters,
the assuming insurer must have and maintain, on an ongoing
basis, a minimum solvency or capital ratio in the reciprocal
jurisdiction where the assuming insurer has its head office or
is domiciled, as applicable, and where the assuming insurer is
also licensed.
(4) The assuming insurer must agree and shall provide
to the commissioner, in the form and manner specified by the
commissioner, adequate assurance of all of the following:
(a) Prompt written notice and explanation if the assuming
insurer falls below the minimum requirements set forth in
subparagraph (2) or (3) of this paragraph, or if any regulatory
action is taken against the assuming insurer for serious
noncompliance with any applicable law.
(b) Written consent that the assuming insurer shall submit
to the jurisdiction of the courts of this state and to the
appointment of the commissioner as agent for service of
process. The commissioner may also require that consent for
service of process be included in each reinsurance agreement
entered into by the assuming insurer. This subparagraph
division shall not limit or alter the capacity of the parties
to a reinsurance agreement to agree to alternative dispute
resolution, except to the extent such alternative dispute
resolution is unenforceable under applicable insolvency or
delinquency laws.

Senate File 2131, p. 8
(c) Written agreement that the assuming insurer shall pay
all final judgments, wherever enforcement is sought, obtained
against the assuming insurer by a ceding insurer, or the ceding
insurer’s legal successor, that have been declared enforceable
in the jurisdiction in which the final judgment is obtained.
(d) Each reinsurance agreement must include a provision
requiring the assuming insurer to provide security in an
amount equal to one hundred percent of the assuming insurer’s
liabilities attributable to reinsurance ceded pursuant to
that reinsurance agreement if the assuming insurer resists
enforcement of a final judgment that is enforceable under the
law of the jurisdiction in which the final judgment is obtained
or under an enforceable arbitration award, whether obtained by
the ceding insurer or by the ceding insurer’s legal successor
on behalf of the ceding insurer’s resolution estate.
(e) Written confirmation that the assuming insurer is not
presently participating in any solvent scheme of arrangement
which involves this state’s ceding insurers, and written
agreement that the assuming insurer shall notify the ceding
insurer and the commissioner and shall provide security in an
amount equal to one hundred percent of the assuming insurer’s
liabilities to the ceding insurer, should the assuming insurer
enter into such a solvent scheme of arrangement. Such security
shall be in a form consistent with the provisions of subsection
5, and section 521B.103.
(5) The assuming insurer or the assuming insurer’s legal
successor shall provide to the commissioner, on behalf of
itself and any legal predecessors, any documentation required
pursuant to rules adopted by the commissioner.
(6) Pursuant to rules adopted by the commissioner, the
assuming insurer shall maintain prompt payment of claims under
all reinsurance agreements.
(7) The assuming insurer’s supervisory authority shall
annually confirm to the commissioner that as of the preceding
December 31, or as of the annual date otherwise statutorily
reported to the reciprocal jurisdiction, the assuming insurer
complies with the requirements set forth in subparagraphs (2)
and (3) of this paragraph.
(8) An assuming insurer shall not be precluded from

Senate File 2131, p. 9
voluntarily providing any information to the commissioner.
b. The commissioner shall timely create and publish a list
of reciprocal jurisdictions.
(1) The commissioner’s list shall include any reciprocal
jurisdiction as defined under paragraph “a” , subparagraph
(1), subparagraph divisions (a) and (b), and the commissioner
shall consider any other reciprocal jurisdiction included on
the list of reciprocal jurisdictions published through the
NAIC committee process. Pursuant to criteria established
by rules adopted by the commissioner, the commissioner may
approve a jurisdiction that does not appear on the NAIC list of
reciprocal jurisdictions.
(2) The commissioner may remove a jurisdiction from the
list of reciprocal jurisdictions upon a determination that the
jurisdiction no longer meets the requirements of a reciprocal
jurisdiction, pursuant to a process established by rules
adopted by the commissioner, except that the commissioner shall
not remove a reciprocal jurisdiction as defined under paragraph
“a” , subparagraph (1), subparagraph divisions (a) and (b).
Upon removal of a reciprocal jurisdiction from the list of
reciprocal jurisdictions, credit for reinsurance ceded to an
assuming insurer which has its home office in or is domiciled
in that reciprocal jurisdiction shall be allowed if otherwise
allowed pursuant to this chapter.
c. The commissioner shall timely create and publish a
list of assuming insurers that have satisfied the conditions
in this subsection and to which cessions shall be granted
credit pursuant to this subsection. The commissioner may
add an assuming insurer to the list if a NAIC accredited
jurisdiction has added the assuming insurer to the NAIC
accredited jurisdiction’s list of assuming insurers or if,
upon initial eligibility, the assuming insurer submits the
information required under paragraph “a” , subparagraph (4), to
the commissioner and complies with any additional requirements
pursuant to rules adopted by the commissioner, except to the
extent that any of those rules conflict with an applicable
covered agreement.
d. If the commissioner determines that an assuming insurer
no longer meets one or more of the requirements under this

Senate File 2131, p. 10
subsection, the commissioner may revoke or suspend the
eligibility of the assuming insurer for recognition under this
subsection in accordance with procedures established by rules
adopted by the commissioner.
(1) While an assuming insurer’s eligibility is suspended,
any reinsurance agreement issued, amended, or renewed after the
effective date of the suspension does not qualify for credit
except to the extent that the assuming insurer’s obligations
under the reinsurance agreement are secured in accordance with
section 521B.103.
(2) If an assuming insurer’s eligibility is revoked, credit
for reinsurance shall not be granted after the effective date
of the revocation with respect to any reinsurance agreements
entered into by the assuming insurer, including reinsurance
agreements entered into prior to the date of revocation, except
to the extent that the assuming insurer’s obligations under
the reinsurance agreement are secured in a form acceptable to
the commissioner and consistent with the provisions of section
521B.103.
e. If subject to a legal process of rehabilitation,
liquidation, or conservation, as applicable, the ceding
insurer or the ceding insurer’s representative may seek, and if
determined appropriate by the court in which such legal process
is pending, may obtain an order requiring that the assuming
insurer post security for all outstanding ceded liabilities.
f. This subsection shall not limit or alter the capacity of
the parties to a reinsurance agreement to agree on requirements
for security or other terms in the reinsurance agreement,
except as expressly prohibited by this chapter or any other
applicable law or regulation.
g. (1) Credit may be taken under this subsection only for
reinsurance agreements entered into, amended, or renewed on or
after July 1, 2020, and only with respect to losses incurred
and reserves reported on or after the later of the date on
which the assuming insurer has met all eligibility requirements
pursuant to this subsection, and the effective date of the new
reinsurance agreement, amendment, or renewal.
(2) This paragraph shall not alter or impair a ceding
insurer’s right to take credit for reinsurance, to the extent

Senate File 2131, p. 11
that credit is not available under this subsection, as long as
the reinsurance qualifies for credit under any other applicable
provision of this chapter.
h. This subsection shall not authorize an assuming
insurer to withdraw or reduce the security provided under any
reinsurance agreement except as permitted by the terms of the
reinsurance agreement.
i. This subsection shall not limit or alter the capacity
of parties to any reinsurance agreement to renegotiate the
reinsurance agreement.
Sec. 15. Section 521B.102, subsections 6 and 7, Code 2020,
are amended to read as follows:
6. Credit shall be allowed when reinsurance is ceded to
an assuming insurer that does not meet the requirements of
subsection 1 , 2 , 3 , 4 , or 5 , or 5A, but only as to the insurance
of risks located in jurisdictions where the reinsurance is
required by applicable law or regulation of that jurisdiction.
7. a. If the assuming insurer is not licensed, accredited,
or certified to transact insurance or reinsurance in this
state, the credit permitted by subsections 3 and 4 shall not be
allowed unless the assuming insurer agrees in the reinsurance
agreements agreement to do all of the following:
(1) In the event of the failure of the assuming insurer
to perform its obligations under the terms of the reinsurance
agreement, the assuming insurer, at the request of the ceding
insurer, will shall submit to the jurisdiction of any court of
competent jurisdiction in any state of the United States, will
shall comply with all requirements necessary to give the court
jurisdiction, and will shall abide by the final decision of the
court or of any appellate court in the event of any appeal,
concerning such failure.
(2) The assuming insurer will shall designate the
commissioner or a designated attorney as its true and lawful
attorney to receive lawful process in any action, suit, or
proceeding instituted by or on behalf of the ceding insurer.
b. This subsection is not intended to conflict with or
override the obligation of the parties to a reinsurance
agreement to arbitrate their disputes a dispute if the
obligation for the parties to arbitrate disputes is created in

Senate File 2131, p. 12
the reinsurance agreement.
Sec. 16. Section 521B.102, subsection 8, unnumbered
paragraph 1, Code 2020, is amended to read as follows:
If the assuming insurer does not meet the requirements
of subsection 1 , 2 , or 3 , or 5A, the credit permitted by
subsection 4 or 5 shall not be allowed unless the assuming
insurer agrees in a trust agreement to satisfy the following
conditions:
Sec. 17. Section 521B.102, subsection 9, unnumbered
paragraph 1, Code 2020, is amended to read as follows:
If an accredited or certified reinsurer ceases to meet
the requirements of for accreditation or certification
pursuant to this section for accreditation or certification ,
the commissioner may suspend or revoke the reinsurer’s
accreditation or certification.
Sec. 18. Section 521B.102, subsection 9, paragraph b, Code
2020, is amended to read as follows:
b. While a reinsurer’s accreditation or certification is
suspended, a reinsurance contract issued or renewed after the
effective date of the suspension does not qualify for credit
except to the extent that the reinsurer’s obligations under the
reinsurance contract are secured in accordance with section
521B.103 . If a reinsurer’s accreditation or certification is
revoked, credit for reinsurance shall not be granted after the
effective date of the revocation except to the extent that the
reinsurer’s obligations under the reinsurance contract are
secured in accordance with subsection 5 , paragraph “e” , or
section 521B.103 .
Sec. 19. Section 521B.102, subsection 10, paragraphs a and
b, Code 2020, are amended to read as follows:
a. A domestic ceding insurer shall take steps to manage
its reinsurance recoverables proportionate to its own book
of business. A domestic ceding insurer shall notify the
commissioner within thirty calendar days after reinsurance
recoverables from any single assuming insurer, or group
of affiliated assuming insurers, exceeds fifty percent
of the domestic ceding insurer’s last reported surplus to
policyholders, or after it is determined the domestic ceding
insurer has determined that reinsurance recoverables from

Senate File 2131, p. 13
any single assuming insurer, or group of affiliated assuming
insurers, is likely to exceed this limit. The notification
shall demonstrate that the exposure is safely managed by the
domestic ceding insurer.
b. A domestic ceding insurer shall take steps to diversify
its reinsurance program. A domestic ceding insurer shall
notify the commissioner within thirty calendar days after
ceding to any single assuming insurer, or group of affiliated
assuming insurers, more than twenty percent of the domestic
ceding insurer’s gross written premium in the prior calendar
year, or after the domestic ceding insurer has determined that
the reinsurance ceded to any single assuming insurer, or group
of affiliated assuming insurers, is likely to exceed this
limit. The notification shall demonstrate that the exposure is
safely managed by the domestic ceding insurer.
Sec. 20. Section 521B.103, Code 2020, is amended to read as
follows:
521B.103 Limited credit allowed other domestic ceding
insurers.
1. An asset or a reduction from liability for reinsurance
ceded by a domestic insurer to an assuming insurer not meeting
the requirements of section 521B.102 , shall be allowed in an
amount not exceeding the liabilities carried by the ceding
insurer. The commissioner may adopt rules pursuant to section
521B.105 specifying requirements related to the valuation of
assets or reserve credits, the amount and forms of security
supporting reinsurance arrangements described in section
521B.105 , and the circumstances pursuant to which credit shall
be reduced or eliminated. The reduction shall be in the
amount of funds held by or on behalf of the ceding insurer,
including funds held in trust for the ceding insurer, under a
reinsurance contract with the assuming insurer as security for
the payment of obligations under the reinsurance contract, if
the security is held in the United States subject to withdrawal
solely by, and under the exclusive control of, the ceding
insurer, or in the case of a trust, held in a qualified United
States financial institution as defined in section 521B.104,
subsection 2 .
2. The security may be in the form of any of the following:

Senate File 2131, p. 14
a. Cash.
b. A security listed by the securities valuation office
of the national association of insurance commissioners NAIC ,
including those securities deemed exempt from filing as
defined by the purposes and procedures manual of the securities
valuation office and those securities qualifying as admitted
assets.
c. (1) Clean, irrevocable, unconditional letters of credit,
issued or confirmed by a qualified United States financial
institution, as defined in section 521B.104, subsection 1 ,
effective no later than December 31 of the year for which the
filing is being made, and in the possession of, or in trust
for, the ceding insurer on or before the filing date of the
ceding insurer’s annual statement.
(2) A letter of credit meeting applicable standards
of issuer acceptability as of the date of the issuance or
confirmation of the letter of credit’s issuance or confirmation
credit shall, notwithstanding the issuing or confirming
institution’s subsequent failure to meet applicable standards
of issuer acceptability, continue to be acceptable as security
until the expiration, extension, renewal, modification, or
amendment of the letter of credit, whichever occurs first.
d. Any other form of security acceptable to the
commissioner.
Sec. 21. Section 521B.104, subsection 1, paragraph c, Code
2020, is amended to read as follows:
c. Has been determined by either the commissioner or the
securities valuation office of the national association of
insurance commissioners NAIC to meet the standards of financial
condition and standing as are considered necessary and
appropriate to regulate the quality of financial institutions
whose letters of credit will be acceptable to the commissioner.
Sec. 22. Section 521B.105, subsection 1, Code 2020, is
amended to read as follows:
1. The commissioner may adopt rules , pursuant to chapter
17A , as necessary or convenient to administer this chapter .
Sec. 23. Section 521B.105, subsection 2, paragraph a,
unnumbered paragraph 1, Code 2020, is amended to read as
follows:

Senate File 2131, p. 15
A rule adopted pursuant to this subsection is applicable
only to reinsurance arrangements relating to any of the
following:
Sec. 24. Section 521B.105, subsection 2, paragraph a,
subparagraph (5), Code 2020, is amended to read as follows:
(5) Other life and health insurance and annuity products as
to which the national association of insurance commissioners
NAIC adopts model regulatory requirements with respect to
credit for reinsurance.
Sec. 25. Section 521B.105, subsection 2, paragraph c, Code
2020, is amended to read as follows:
c. A rule adopted pursuant to this subsection may require
the ceding insurer, in calculating the amounts or forms of
security required to be held under rules adopted under this
subsection , to use the valuation manual as defined in section
508.36 , including all amendments adopted by the national
association of insurance commissioners NAIC and in effect on
the date as of which the calculation is made, to the extent
applicable.
Sec. 26. Section 521B.105, subsection 3, Code 2020, is
amended to read as follows:
3. A rule adopted pursuant to this section is not applicable
to cessions to an assuming insurer that meets either any of the
following requirements:
a. Meets the conditions set forth in section 521B.102,
subsection 6.
a. b. Is certified in Iowa.
b. c. Maintains at least two hundred fifty million dollars
in capital and surplus when determined in accordance with the
accounting practices and procedures manual of the national
association of insurance commissioners NAIC , including all
amendments adopted by the national association of insurance
commissioners NAIC , but excluding the impact of any permitted
or prescribed practices; and meets either of the following
requirements:
(1) Is licensed in at least twenty-six states.
(2) Is licensed in at least ten states, and is licensed or
accredited in a total of at least thirty-five states.
Sec. 27. APPLICABILITY. This Act applies to all cessions

Senate File 2131, p. 16
under reinsurance agreements that have an inception,
anniversary, or renewal date on or after July 1, 2020.
______________________________ ______________________________
CHARLES SCHNEIDER PAT GRASSLEY
President of the Senate Speaker of the House
I hereby certify that this bill originated in the Senate and
is known as Senate File 2131, Eighty-eighth General Assembly.
______________________________
W. CHARLES SMITHSON
Secretary of the Senate
Approved _______________, 2020 ______________________________
KIM REYNOLDS
Governor