Section R590-173-11 - Reinsurance Ceded to an Unauthorized Reinsurer Not Meeting the Requirements ofs R590-173-4 Through R590-173-10(1) A reduction is allowed from liability for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of Section 31A-17-40.(2) A reduction from liability is: (a) an amount not exceeding the liabilities carried by the ceding insurer; and(b) 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 under the reinsurance contract which funds shall be:(i) held in the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer; or(ii) in the case of a trust, held in a qualified United States financial institution.(3) The security held under Subsection (2)(b) may be in the form of: (b) securities listed by the Securities Valuation Office of the NAIC, including those deemed exempt from filing as defined by the Purposes and Procedures Manual of the Securities Valuation Office, and qualifying as admitted assets;(c) clean, irrevocable, unconditional, and evergreen letters of credit that: (i) are issued or confirmed by a qualified United States financial institution;(ii) are effective no later than December 31 of the year the filing is made;(iii) are in the possession of, or in trust for, the ceding insurer on or before the filing date of its annual statement; and(iv) meet the issuer's standards of acceptability at the time of issuance until their expiration, extension, renewal, modification, or amendment, whichever occurs first; or(d) any other security acceptable to the commissioner.(2) An admitted asset or a reduction from liability for reinsurance ceded to an unauthorized assuming insurer pursuant to this section is allowed only when the requirements of the following are satisfied: (a) Section R590-173-15; and(b) the applicable provisions of: (ii) Section R590-173-13; or(iii) Section R590-173-14.Utah Admin. Code R590-173-11
Amended by Utah State Bulletin Number 2017-3, effective 1/10/2017Adopted by Utah State Bulletin Number 2022-12, effective 6/7/2022