Florida Administrative Code
69 - DEPARTMENT OF FINANCIAL SERVICES
69O - OIR - Insurance Regulation
Chapter 69O-144 - REINSURANCE
Section 69O-144.011 - Credit for Reinsurance from Reinsurers Domiciled in Reciprocal Jurisdictions
Universal Citation: FL Admin Code R 69O-144.011
Current through Reg. 50, No. 187; September 24, 2024
(1) Pursuant to Section 624.610(4), F.S., the Office shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that is licensed to write reinsurance by, and has its head office or is domiciled in, a reciprocal jurisdiction, and which meets the other requirements of the statute and this rule.
(2) As used in this chapter, a "reciprocal jurisdiction" is a jurisdiction, as designated by the Office pursuant to subsection (4) of this rule, that is one of the following:
(a) A non-United States jurisdiction that is
subject to an in-force covered agreement with the United States, each within
its legal authority; or, in the case of a covered agreement between the United
States and the European Union, a jurisdiction that is a member state of the
European Union. As used in this rule, the term "covered agreement" has the same
definition as that within Section 624.610(4)(a)1., F.S.
(b) A United States jurisdiction that meets
the requirements for accreditation under the Financial Regulation Standards and
Accreditation Program of the National Association of Insurance
Commissioners.
(c) A qualified
jurisdiction, as defined in subsection
69O-144.007(9),
F.A.C., which meets the additional requirements present in Section
624.610(4)(a)3., F.S.
(3) Credit shall be allowed when the reinsurance is ceded from an insurer domiciled in this state to an assuming insurer meeting each of the conditions set forth below.
(a) The assuming insurer must be
licensed to transact reinsurance by, and have its head office or be domiciled
in, a reciprocal jurisdiction.
(b)
The assuming insurer must have and maintain on an ongoing basis minimum capital
and surplus, or its equivalent, calculated on at least an annual basis as of
the preceding December 31 or at the annual date otherwise statutorily reported
to the reciprocal jurisdiction, and confirmed as set forth in paragraph (3)(g)
according to the methodology of its domiciliary jurisdiction, in the following
amounts:
1. No less than $250 million;
or
2. If the assuming insurer is an
association, including incorporated and individual unincorporated underwriters:
a. Minimum capital and surplus equivalents
(net of liabilities) or own funds of the equivalent of at least $250 million;
and
b. A central fund containing a
balance of the equivalent of at least $250
million.
(c)
The assuming insurer must have and maintain on an ongoing basis a minimum
solvency or capital ratio, as applicable, as follows:
1. If the assuming insurer has its head
office or is domiciled in a reciprocal jurisdiction as defined in Section
624.610(4)(a)1., F.S., the ratio specified in the applicable covered
agreement;
2. If the assuming
insurer is domiciled in a reciprocal jurisdiction as defined in Section
624.610(4)(a)2., F.S., a risk-based capital (RBC) ratio of three hundred
percent (300%) of the authorized control level, calculated in accordance with
the formula developed by the NAIC; or
3. If the assuming insurer is domiciled in a
reciprocal jurisdiction as defined in Section 624.610(4)(a)3., F.S., after
consultation with the reciprocal jurisdiction and considering any
recommendations published through the NAIC Committee Process, such solvency or
capital ratio as the Office determines to be an effective measure of
solvency.
(d) The
assuming insurer must agree to and provide adequate assurance, in the form of a
properly executed Form OIR-C1-517, "Certificate of Reinsurer Domiciled in
Reciprocal Jurisdiction," which may be obtained from
https://www.floir.com/iportal, of
its agreement to the following:
1. The
assuming insurer must agree to provide prompt written notice and explanation to
the Office if it falls below the minimum requirements set forth in paragraph
(3)(b) or (3)(c) of this subsection, or if any regulatory action is taken
against it for serious noncompliance with applicable law.
2. The assuming insurer must consent in
writing to the jurisdiction of the courts of this state and to the appointment
of the Chief Financial Officer, pursuant to Section
48.151, F.S., as its agent for
service of process in this state.
a. The
Office may also require that such consent be provided and included in each
reinsurance agreement under the Office's jurisdiction.
b. Nothing in this provision shall limit or
in any way alter the capacity of parties to a reinsurance agreement to agree to
alternative dispute resolution mechanisms, except to the extent such agreements
are unenforceable under applicable insolvency or delinquency
laws.
3. The assuming
insurer must consent in writing to pay all final judgments, wherever
enforcement is sought, obtained by a ceding insurer, that have been declared
enforceable in the territory where the judgment was obtained.
4. The assuming insurer must agree to include
a provision in each reinsurance agreement requiring the assuming insurer to
provide security in an amount equal to one hundred percent (100%) of the
assuming insurer's liabilities attributable to reinsurance ceded pursuant to
that agreement if the assuming insurer resists enforcement of a final judgment
that is enforceable under the law of the jurisdiction in which it was obtained
or a properly enforceable arbitration award, whether obtained by the ceding
insurer or by its legal successor on behalf of its estate, if
applicable.
5. The assuming insurer
must confirm that it is not presently participating in any solvent scheme of
arrangement, which involves this state's ceding insurers, and agrees to notify
the ceding insurer and the Office and to provide one hundred percent (100%)
security to the ceding insurer consistent with the terms of the scheme, should
the assuming insurer enter into such a solvent scheme of arrangement. Such
security shall be in a form consistent with the provisions of Sections
624.610(3) and
(5), F.S., and Rule
69O-144.009, F.A.C. For purposes
of this rule, the term "solvent scheme of arrangement" means a foreign or alien
statutory or regulatory compromise procedure subject to requisite majority
creditor approval and judicial sanction in the assuming insurer's domiciliary
jurisdiction either to finally commute liabilities of duly noticed classed
members or creditors of a solvent debtor, or to reorganize or restructure the
debts and obligations of a solvent debtor on a final basis, and which may be
subject to judicial recognition and enforcement of the arrangement by a
governing authority outside the ceding insurer's domiciliary
jurisdiction.
6. The assuming
insurer must agree in writing to meet the applicable information filing
requirements as set forth in paragraphs (3)(e) and (3)(g) of this
subsection.
(e) The
assuming insurer must file an application for reciprocal jurisdiction reinsurer
status, in accordance with paragraph
69O-144.002(5)(a),
F.A.C., and the requirements of this rule. If an NAIC accredited jurisdiction
has determined that a reciprocal jurisdiction reinsurer has met the conditions
in that jurisdiction to become a reciprocal jurisdiction reinsurer, the Office
may accept documentation filed with that NAIC accredited jurisdiction or with
the NAIC to satisfy the reciprocal jurisdiction reinsurer's status in this
state.
(f) The assuming insurer
must maintain a practice of prompt payment of claims under reinsurance
agreements. The lack of prompt payment will be evidenced if any of the
following criteria is met:
1. More than
fifteen percent (15%) of the reinsurance recoverables from the assuming insurer
are overdue and in dispute as reported to the Office;
2. More than fifteen percent (15%) of the
assuming insurer's ceding insurers or reinsurers have overdue reinsurance
recoverable on paid losses of 90 days or more which are not in dispute and
which exceed for each ceding insurer $100,000, or as otherwise specified in a
covered agreement; or
3. The
aggregate amount of reinsurance recoverable on paid losses which are not in
dispute, but are overdue by 90 days or more, exceeds $50 million, or as
otherwise specified in a covered agreement.
(g) To maintain its reciprocal jurisdiction
reinsurer status in this state, the assuming insurer or its legal successor
must annually provide the information required by paragraph
69O-144.002(5)(b),
F.A.C. If an NAIC accredited jurisdiction has determined that a reciprocal
jurisdiction reinsurer has met the conditions in that jurisdiction to become a
reciprocal jurisdiction reinsurer, the Office may accept documentation filed
with that NAIC accredited jurisdiction or with the NAIC to satisfy the
reinsurer's status in this state.
(h) Nothing in this chapter precludes an
assuming insurer from providing the Office with information on a voluntary
basis.
(i) The provisions of this
chapter do not limit the authority of the Office to request additional
information pertaining to the reinsurance agreement, or any subsequent
reinsurance agreement entered into by the assuming insurer and Florida ceding
insurers, under Section
624.610(4)(e),
F.S.
(4) The Office shall publish and maintain a list of approved reciprocal jurisdictions on its website. The Office shall timely create and publish a list of Reciprocal Jurisdictions.
(a) A list of Reciprocal
Jurisdictions is published through the NAIC Committee Process. The Office's
list shall include any Reciprocal Jurisdiction as defined under paragraphs
(2)(a) and (2)(b) and shall consider any other Reciprocal Jurisdiction included
on the NAIC list. The Office may approve a jurisdiction that does not appear on
the NAIC list of Reciprocal Jurisdictions as provided by applicable law,
regulation, or in accordance with criteria published through the NAIC Committee
Process.
(b) The Office may remove
a jurisdiction from the list of Reciprocal Jurisdictions upon a determination
that the jurisdiction no longer meets one or more of the requirements of a
Reciprocal Jurisdiction, as provided by applicable law, regulation, or in
accordance with a process published through the NAIC Committee Process, except
that the Office shall not remove from the list a Reciprocal Jurisdiction as
defined under paragraphs (2)(a) and (2)(b). Upon removal of a Reciprocal
Jurisdiction from this list credit for reinsurance ceded to an assuming insurer
domiciled in that jurisdiction shall be allowed, if otherwise allowed pursuant
to this rule and Section
624.610(4),
F.S.
(5) The Office shall publish and maintain a list of reciprocal jurisdiction reinsurers on its website. The Office shall timely create and publish a list of assuming insurers that have satisfied the conditions set forth in this section and to which cessions shall be granted credit in accordance with this section.
(a) If an NAIC accredited jurisdiction has
determined that the conditions set forth in subsection (3) have been met, the
Office has the discretion to defer to that jurisdiction's determination, and
add such assuming insurer to the list of assuming insurers to which cessions
shall be granted credit in accordance with this subsection. The Office may
accept financial documentation filed with another NAIC accredited jurisdiction
or with the NAIC in satisfaction of the requirements of subsection
(3).
(b) When requesting that the
Office defer to another NAIC accredited jurisdiction's determination, an
assuming insurer must submit a properly executed Form OIR-C1-517, "Certificate
of Reinsurer Domiciled in Reciprocal Jurisdiction," incorporated by reference
in paragraph (3)(d),and additional information as the Office may require. A
state that has received such a request will notify other states through the
NAIC Committee Process and provide relevant information with respect to the
determination of eligibility.
(6) The determination of reciprocal jurisdiction reinsurer status shall be made by order issued by the Office.
(7) If the Office determines that an assuming insurer no longer meets one or more of the requirements under Section 624.610, F.S., or this chapter, the Office may revoke or suspend the status of the assuming insurer.
(a) While an assuming insurer's status is
suspended, no reinsurance agreement issued, amended or renewed after the
effective date of the suspension qualifies for credit except to the extent that
the assuming insurer's obligations under the contract are secured in accordance
with Section 624.610(5),
F.S.
(b) If an assuming insurer's
status is revoked, no credit for reinsurance may be granted after the effective
date of the revocation with respect to any reinsurance agreements entered into
by the assuming insurer, including reinsurance agreements entered into prior to
the date of revocation, except to the extent that the assuming insurer's
obligations under the contract are secured in a form acceptable to the Office
and consistent with the provisions of Section
624.610(4),
F.S.
(8) Before denying statement credit or imposing a requirement to post security with respect to subsection (7) of this rule or adopting any similar requirement that will have substantially the same regulatory impact as security, the Office shall:
(a) Communicate with the ceding insurer, the
assuming insurer, and the assuming insurer's supervisory authority that the
assuming insurer no longer satisfies one of the conditions listed in subsection
(3) of this rule;
(b) Provide the
assuming insurer with 30 days from the initial communication to submit a plan
to remedy the defect, and 90 days from the initial communication to remedy the
defect, except in exceptional circumstances in which a shorter period is
necessary for policyholder and other consumer protection;
(c) After the expiration of 90 days or less,
as set out in paragraph (8)(b), if the Office determines that no or
insufficient action was taken by the assuming insurer, the Office may impose
any of the requirements as set out in this subsection; and
(d) Provide a written explanation to the
assuming insurer of any of the requirements set out in this
subsection.
(9) If subject to a legal process of rehabilitation, liquidation or conservation, as applicable, the ceding insurer, or its representative, may seek and, if determined appropriate by the court in which the proceedings are pending, may obtain an order requiring that the assuming insurer post security for all outstanding liabilities.
Rulemaking Authority 624.308(1), 624.610(15) FS. Law Implemented 624.610(4), (15) FS.
New 9-13-22.
Disclaimer: These regulations may not be the most recent version. Florida may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
