California Code of Regulations
Title 10 - Investment
Chapter 5 - Insurance Commissioner
Subchapter 3 - Insurers
Article 3 - Annual Statements
Premiums in Course of Collection
Section 2303.18 - Denial of Statement Credit and Non-Admission of Assets
Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) Credit on financial statements for reinsurance ceded by a domestic insurer shall be denied if the applicable requirements of Sections 2303.3 through 2303.13 of this article have not been met, by non-admission of recoverables on paid losses, disallowance of recoverables on unpaid losses, or a requirement to use deposit accounting for the cession.
(b) Reinsurance recoverables that are due more than 90 days from a reinsurer to a domestic insurer on paid losses or paid loss adjustment expenses may, in the Commissioner's discretion, be required to be reported as non-admitted assets. A domestic insurer may follow the NAIC Accounting Guidance when reporting reinsurance recoverables due more than 90 days on its financial statements, unless the Commissioner expressly requires the financial statements to reflect the subject recoverables as non-admitted assets.
(c) Upon a determination that credit for reinsurance ceded shall not be permitted or an asset is deemed non-admitted, the Department shall issue a finding in the form of a written explanation to the ceding insurer setting forth the reasons for the determination. The determination may be appealed to the Chief of the Financial Surveillance Branch or to the successor position after a reorganization of the Department, in a manner consistent with making a request for a permitted accounting practice.
(d) Denial of credits on financial statements for reinsurance ceded pursuant to subdivisions (a) and (b) of this section shall not be construed to be the only adjustments for reinsurance contemplated under the California Insurance Code. To the extent that the NAIC Accounting Guidance prescribes additional reductions in credits for reinsurance or additional liability provisions for reinsurance, the NAIC Accounting Guidance shall be followed.
1. New section
filed 10-24-2006; operative 11-23-2006 (Register 2006, No. 43).
2. Change
without regulatory effect renumbering former section 2303.18 to section
2303.17 and renumbering former section
2303.19 to new section 2303.18,
including amendment of subsection (a), repealer of subsection (e) and amendment of
NOTE, filed 3-25-2015 pursuant to section
100, title 1, California Code of
Regulations (Register 2015, No. 13).
Note: Authority cited: Sections 720, 736, 922.8, 922.85, 923 and 12921, Insurance Code; CalFarm Insurance Company v. Deukmejian, 48 Cal. 3d 805 (1989); and 20th Century Insurance Company v. Garamendi, 8 Cal. 4th 216 (1994). Reference: Sections 700, 717, 730, 733, 900, 922.2, 922.3, 922.4, 922.41, 922.5, 922.6, 923, 1011, 1215.5(f) and 12921, Insurance Code.
