20-1098.20. Security for branch business and branch operations
227 words·~1 min read·
/az/title-20/20-1098-20·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
A. In the case of a branch captive insurer, as security for the payment of liabilities attributable to the branch operations, the director shall require that either a trust fund that is funded by assets acceptable to the director or an irrevocable letter of credit be established and maintained in the United States for the benefit of United States policyholders and United States ceding insurers under insurance policies issued or reinsurance contracts issued or assumed by the branch captive insurer through its branch operations.
B. The amount of each security shall be at least the amount prescribed in section 20-1098.03 and the reserves on such insurance policies or such reinsurance contracts, including reserves for losses, allocated loss adjustment expenses, incurred but not reported losses and unearned premiums with regard to business written through the branch operations. Notwithstanding this section the director may permit a branch captive insurer that is required to post security for loss reserves on branch business by its reinsurer to reduce the monies in the trust account or the amount payable under the irrevocable letter of credit required by this section by the same amount if the security remains posted with the reinsurer.
C. If the form of security selected is a letter of credit, the letter of credit must be established by, or issued or confirmed by, a qualified United States financial institution.