Sec. 1223. conditions of reinsurance

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## Sec. 1223 conditions of reinsurance **[**[12 U.S.C. 1749bbb–9](/us/usc/t12/s1749bbb–9)**]** ###

(a)Subject to the provisions of subsection (b), reinsurance shall not be offered by the Director in a State or be applicable to insurance policies written in that State by an insurer— ####

(1)in any State which has not, after the close of the second full regular session of the appropriate State legislative body following the date of the enactment of this title, adopted appropriate legislation, retroactive to the date of the enactment of this title, under which the State, its political subdivisions, or a governmental corporation or fund established pursuant to State law, will reimburse the Director for any reinsured losses in that State in any reinsurance contract year, in an amount up to 5 per centum of the aggregate property insurance premiums earned in that State during the calendar year immediately preceding the end of the reinsurance contract year on those lines of insurance reinsured by the Director in that State during the contract year, to the extent that reinsured losses paid by the Director for such year exceed the total of

(A)reinsurance premiums earned in that State during that reinsurance contract year plus

(B)the excess of

(i)the total premiums earned by the Director for reinsurance in that State during a preceding period measured from the end of the most recent reinsurance contract year with respect to which the Director was reimbursed for losses under this title over

(ii)any amounts paid by the Director for reinsured losses that were incurred during such period; ####

(2)after thirty days following notification to the insurer that the Director finds (after consultation with the State insurance authority) that there has not been adopted by the State, or the property insurance industry in that State, a suitable program or programs, in addition to plans under part A, to make essential property insurance available without regard to environmental hazards, and that such action is necessary to carry out the purposes of this title; except that this paragraph shall not become effective until two years after the date of the enactment of this title, or at such earlier date as the Director, after consultation with the State insurance authority, may determine; ####

(3)after thirty days following notification to the insurer that the Director, or the State insurance authority, finds that such insurer is not fully participating— #####

(A)in the plan in the State; #####

(B)where it exists, in a pool; and #####

(C)where it exists, in any other program found by the Director to aid in making essential property insurance more readily available in the State: *Provided,* That the Director shall not make any such finding with respect to any insurer unless

(i)prior to making such finding the Director has requested and considered the views of the State insurance authority as to whether such finding should be made, or

(ii)the Director has made such a request in writing to the State insurance authority and such authority has failed to respond thereto within a reasonable period of time after receiving such request; ####

(4)following a merger, acquisition, consolidation or reorganization involving one or more insurers having lines of property insurance in the State reinsured under this title and one or more insurers with or without such reinsurance, unless the surviving company— #####

(A)meets the criteria of eligibility for reinsurance, other than as provided under section 1222(d); and #####

(B)within ten days pays any reinsurance premiums due; or ####

(5)upon receipt from the insurer or pool that it desires to cancel its reinsurance agreement with the Director in the State. ###

(b)Notwithstanding the foregoing provisions of this section, reinsurance may be continued for the term of the policies written prior to the date of termination or nonrenewal of reinsurance under this section, for as long as the insurer pays reinsurance premiums annually in such amounts as are determined under section 1222, based on the annual premiums earned on such reinsured policies, and for the purpose of this subsection the renewal, extension, modification, or other change in a policy, for which any additional premium is charged, shall be deemed to be a policy written on the date such change was made.

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12 USC 1749bbb–9

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Sec. 1223

conditions of reinsurance

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