§36-310A.3. Material nonrenewals, cancellations or revisions of
531 words·~2 min read·
/ok/title-36-insurance/36-310a-3·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
ceded reinsurance agreements defined - Information to be disclosed in report.
A. 1. No nonrenewals, cancellations or revisions of ceded reinsurance agreements need be reported pursuant to Section 1 of this act if the nonrenewals, cancellations or revisions are not material. For purposes of this act, a material nonrenewal, cancellation or revision is one that affects:
a. as respects property and casualty business, including
accident and health business written by a property and
casualty insurer:
(1)more than fifty percent (50%) of the insurer's
total ceded written premium, or
(2)more than fifty percent (50%) of the insurer's
total ceded indemnity and loss adjustment
reserves,
b. as respects life, annuity, and accident and health
business: more than fifty percent (50%) of the total
reserve credit taken for business ceded, on an
annualized basis, as indicated in the insurer's most
recent annual statement, and
c. as respects either property and casualty or life,
annuity, and accident and health business, either of
the following events shall constitute a material
revision which must be reported:
(1)an authorized reinsurer representing more than
ten percent (10%) of a total cession is replaced
by one or more unauthorized reinsurers, or
(2)previously established collateral requirements
have been reduced or waived as respects one or
more unauthorized reinsurers representing
collectively more than ten percent (10%) of a
total cession.
2. However, no filing shall be required if:
a. as respects property and casualty business, including
accident and health business written by a property and
casualty insurer: the insurer's total ceded written
premium represents, on an annualized basis, less than
ten percent (10%) of its total written premium for
direct and assumed business, or
b. as respects life, annuity, and accident and health
business: the total reserve credit taken for business
ceded represents, on an annualized basis, less than
ten percent (10%) of the statutory reserve requirement
prior to any cession.
B. 1. The following information is required to be disclosed in any report of a material nonrenewal, cancellation or revision of ceded reinsurance agreements:
a. effective date of the nonrenewal, cancellation or
revision,
b. the description of the transaction with an
identification of the initiator thereof,
c. purpose of, or reason for, the transaction, and
d. if applicable, the identity of the replacement
reinsurers.
2. Insurers are required to report all material nonrenewals, cancellations or revisions of ceded reinsurance agreements on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers which utilizes a pooling arrangement or one hundred percent (100%) reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if:
a. the insurer has less than One Million Dollars
($1,000,000.00) total direct plus assumed written
premiums during a calendar year that are not subject
to a pooling arrangement, and
b. the net income of the business not subject to the
pooling arrangement represents less than five percent
(5%) of the insurer's capital and surplus. Added by Laws 1997, c. 273, § 3, eff. July 1, 1997.