Compilation of Rules and Regulations of the State of Georgia
Department 120 - OFFICE OF COMMISSIONER OF INSURANCE, SAFETY FIRE COMMISSIONER AND INDUSTRIAL LOAN COMMISSIONER
Chapter 120-2 - RULES OF COMMISSIONER OF INSURANCE
Subject 120-2-61 - LIFE AND HEALTH REINSURANCE AGREEMENTS
Rule 120-2-61-.02 - Preamble
Current through Rules and Regulations filed through September 23, 2024
(1) The Georgia Insurance Department recognizes that licensed insurers routinely enter into reinsurance agreements that yield legitimate relief to the ceding insurer from strain to surplus.
(2) However, it is improper for a licensed insurer, in the capacity of ceding insurer, to enter into reinsurance agreements for the principal purpose of producing significant surplus aid for the ceding insurer, typically on a temporary basis, while not transferring all of the significant risks inherent in the business being reinsured. In substance or effect, the expected potential liability to the ceding insurer remains basically unchanged by the reinsurance transaction, notwithstanding certain risk elements in the reinsurance agreement, such as catastrophic mortality or extraordinary survival. The terms of such agreements referred to herein and described in Section 120-2-61-.04(1) (excluding the provisions found in 120-2-61-.04(1)(g)1. and 120-2-61-.04(1)(g)2.) violate:
O.C.G.A. Secs. 33-2-9, 33-7-14.
