Pursuant to Section 3 of the act, D.C. Code section 353302, the Commissioner shall allow a reduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of section 2 of the act, D.C. Code section 35-3301 in an amount not exceeding the liabilities carried by the ceding insurer. Such reduction shall be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the exclusive benefit of the ceding insurer, under a reinsurance contract with such assuming insurer as security for the payment of obligations thereunder. Such security must be 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 4(b) of the act, D.C. Code section 35 -3303(b). This security may be in the form of any of the following:
An admitted asset or a reduction from liability for reinsurance ceded to an unauthorized assuming insurer pursuant to Section 2806.1(a), (b) and (c) shall be allowed only when the requirements of Sections 2807, 2808, or 2809 of this title are met.
D.C. Mun. Regs. tit. 26, r. 26-A2807