Section R590-114-2 - Purpose and Scope(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.Utah Admin. Code R590-114-2
Amended by Utah State Bulletin Number 2021-22, effective 11/8/2021