Ratings | Security Required |
Secure - 1 | 0% |
Secure - 2 | 10% |
Secure - 3 | 20% |
Secure - 4 | 50% |
Secure - 5 | 75% |
Vulnerable - 6 | 100% |
* Standard & Poor's;
* Moody's Investors Service;
* Fitch Ratings;
* A.M. Best Company; or
* Any other nationally recognized statistical rating organization.
Ratings | Best | S&P | Moody's | Fitch |
Secure - 1 | A++ | AAA | Aaa | AAA |
Secure - 2 | A+ | AA+, AA, AA- | Aal, Aa2, Aa3 | AA+, AA, AA- |
Secure - 3 | A | A+, A | Al, A2 | A+, A |
Secure - 4 | A- | A- | A3 | A- |
Secure - 5 | B++, B+ | BBB+, BBB, BBB- | Baal, Baa2, Baa3 | BBB+, BBB, BBB- |
Vulnerable - 6 | B,B-, C++, C+, rC,C-, D, E, F | BB+, BB, BB-, B+, B, B-, CCC, CC, C, D, R | Bal,Ba2, Ba3,Bl, B2, B3, Caa, Ca, C | BB+, BB, BB-, B+, B, B-, CCC+, CC, CCC-, DD |
* Minimum capital and surplus equivalents (net of liabilities) or own funds of the equivalent of at least $250 million.
* A central fund containing a balance of the equivalent of at least $250 million.
* The commissioner may also require that such consent be provided and included in each reinsurance agreement under the commissioner's jurisdiction.
* Nothing in this provision shall limit or in any way alter the capacity of parties to a reinsurance agreement to agree to alternative dispute resolution mechanisms, except to the extent such agreements are unenforceable under applicable insolvency or delinquency laws.
"Beneficiary" means the entity for whose sole benefit the trust has been established and any successor of the beneficiary by operation of law. If a court of law appoints a successor in interest to the named beneficiary, then the named beneficiary includes and is limited to the court-appointed domiciliary receiver (including conservator, rehabilitator or liquidator).
"Grantor" means the entity that has established a trust for the sole benefit of the beneficiary. When established in conjunction with a reinsurance agreement, the grantor is the unlicensed, unaccredited assuming insurer.
"Obligations" means:
"Qualified United States financial institution" means an institution meeting the requirements of rule 191-32.4 (508), except as permitted otherwise by the commissioner.
* To reimburse the ceding insurer for the assuming insurer's share of premiums returned to the owners of policies reinsured under the reinsurance agreement because of cancellations of such policies;
* To reimburse the ceding insurer for the assuming insurer's share of surrenders and benefits or losses paid by the ceding insurer pursuant to the provisions of the policies reinsured under the reinsurance agreement;
* To fund an account with the ceding insurer in an amount at least equal to the deduction, for reinsurance ceded, from the ceding insurer liabilities for policies ceded under the agreement. The account shall include, but not be limited to, amounts for policy reserves, claims and losses incurred (including losses incurred but not reported), loss adjustment expenses and unearned premium reserves;
* To pay any other amounts the ceding insurer claims are due under the reinsurance agreement.
* The assuming insurer shall, at the time of withdrawal, replace the withdrawn assets with other qualified assets having a market value equal to the market value of the assets withdrawn so as to maintain at all times the deposit in the required amount, or
* After withdrawal and transfer, the market value of the trust account is not less than 102 percent of the required amount.
The ceding insurer shall not unreasonably or arbitrarily withhold its approval.
* The return of any amount withdrawn in excess of the actual amounts required to comply with 5.33(11) "J"(l)"5," first three bulleted paragraphs, or in the case of 5.33(11) "J"(l)"5," fourth bulleted paragraph, any amounts that are subsequently determined not to be due; and
* Interest payments, at a rate not in excess of the prime rate of interest, on the amounts held pursuant to 5.33(11) "J"(l)"5," third bulleted paragraph.
* Interest at a rate different from that provided in 5.33(11) "d"(2)"2";
* Court of arbitration costs;
* Attorney's fees;
* Any other reasonable expenses.
* To reimburse the ceding insurer for the assuming insurer's share of premiums returned to the owners of policies reinsured under the reinsurance agreement on account of cancellations of such policies;
* To reimburse the ceding insurer for the assuming insurer's share of surrenders and benefits or losses paid by the ceding insurer under the terms and provisions of the policies reinsured under the reinsurance agreement;
* To fund an account with the ceding insurer in an amount at least equal to the deduction, for reinsurance ceded, from the ceding insurer's liabilities for policies ceded under the agreement (such amount shall include, but not be limited to, amounts for policy reserves, claims and losses incurred and unearned premium reserves);
* To pay any other amounts the ceding insurer claims are due under the reinsurance agreement.
This rule is intended to implement Iowa Code chapter 521B.
1 Available from Insurance Division
Iowa Admin. Code r. 191-5.33