Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) Credit on financial statements shall be
allowed for reinsurance ceded to an assuming insurer that is an accredited reinsurer
in California as of the date on which statutory financial statement credit for
reinsurance is claimed, unless (1) the assuming insurer is the subject of a
regulatory order or regulatory oversight on the grounds of hazardous financial
condition by any state in which it is licensed, (2) the cession of a domestic
insurer is not in compliance with the applicable provisions of Sections
2303.11 through
2303.13 of this article, or (3) the
assuming insurer was not licensed or otherwise permitted to write or assume the
lines or classes of business in its state of domicile.
(b) A reinsurer seeking accreditation shall file
an application with the Commissioner that must include:
1. An executed Certificate of Assuming Insurer
Form AR-1, published in Section
2303.22(a) of this
article, wherein the reinsurer:
A. Submits to the
authority of the Commissioner to examine its books and records, and agrees to bear
the expense of such examination or examinations; and
B. Affirms it has attached to such Certificate a
current list of its ceding insurers domiciled in California, and undertakes to
submit to the Commissioner additions to or deletions from such list at least once
per calendar quarter.
2. An
executed Designation of Agent for Service of Process and Consent to Jurisdiction
Form AR-2, published in Section
2303.22(b) of this
article;
3. A certified copy of a
certificate of authority or other acceptable evidence of a license to transact
insurance or reinsurance in at least one state;
4. A statement, verified by an officer of the
reinsurer, disclosing whether the reinsurer, or any affiliated person with an
interest of 10% or more in the reinsurer, is currently known to be the subject of
any order or proceeding initiated by a regulator in any jurisdiction regarding (1)
conservation, liquidation or receivership, (2) revocation or suspension of a license
or accreditation, or (3) restricting or precluding the transaction of insurance
based upon a hazardous financial condition. Where the regulatory action is
confidential, disclosure to the Commissioner is required only if permitted by the
regulator issuing the order or initiating the oversight. The statement shall affirm
that no actions, proceedings or orders subject to disclosure by this paragraph are
outstanding, except as disclosed in the statement. The reinsurer shall attach to the
statement copies of orders and other documents initiating proceedings for matters
disclosed in the statement. The statement shall be in a form acceptable to the
Commissioner.
5. A copy of the
reinsurer's:
A. Annual financial statements for
the past 3 years and all quarterly financial statements filed since the most recent
annual statement, if any. The annual statements, including any amendments and NAIC
required attachments, shall be signed and verified by the reinsurer's principal
executive officer or manager residing within the United States;
B. Most recent examination report, with an "as of"
date of not more than 5 years prior to its submission;
C. Most recent independent audit report and report
of internal controls, with an "as of" date of not more than 15 months prior to its
submission;
D. Most recent 8-K, 10-K and
10-Q forms, if any, filed with the SEC by the applicant or any controlling
person;
E. Certificate of good standing
from its state of domicile, or from the state of an alien insurer's port of
entry;
F. Most recent holding company
registration statement and any supplements thereto filed with its state of
domicile;
G. Most recent RBC report;
and
H. News releases issued by or on
behalf of the reinsurer within the year prior to submission.
6. Additional information or documentation as
requested by the Commissioner.
(c) To retain eligibility as an accredited
reinsurer, the reinsurer shall:
1. File its
quarterly and annual financial statements and its RBC report at the same time those
documents are filed with its state of domicile;
2. File an updated list of domestic insurer
cedants quarterly;
3. File copies of
news releases as they are issued by or on behalf of the reinsurer; by prior
arrangement with the Department, such filings may be made electronically;
and
4. File, on or before August 15 of
each year, the documents required by subdivision (b) of this section, except that it
is not necessary to file duplicates of financial documents and press releases
already submitted.
(d) The
costs and expenses incurred by the Department to review a reinsurer's application
for accreditation and subsequent filings shall be charged to and collected from the
reinsurer. The application for accreditation and required filings shall be submitted
in the manner set forth in Section
2303.21(c) of this
article.
(e) An accredited reinsurer,
authorized under Code Section 922.4(b) for the specific purpose of permitting
statement credit for a cession by a licensed insurer without the security required
by Code Section 922.5, is not a licensed insurer and may not solicit or transact
insurance business in this state either directly or through an agent or reinsurance
intermediary acting on its behalf.
1. New section
filed 10-24-2006; operative 11-23-2006 (Register 2006, No. 43).
2. Change
without regulatory effect amending subsections (a) and (b)5.A. and amending NOTE
filed 3-25-2015 pursuant to section
100, title 1, California Code of
Regulations (Register 2015, No. 13).
3. Amendment of subsections (b)1.,
(b)2. and (d) filed 11-27-2017; operative 1-1-2018 (Register 2017, No.
48).
Note: Authority cited: Sections
922.8,
922.85 and
923, 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
922.2,
922.3,
922.4,
922.42,
922.43,
922.6 and
923, Insurance
Code.
