Hawaii Administrative Rules
Title 16 - DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS
Chapter 170 - DISCLOSURE OF MATERIAL TRANSACTIONS
Section 16-170-3 - Nonrenewals, cancellations, or revisions of ceded reinsurance agreements
Universal Citation: HI Admin Rules 16-170-3
Current through February, 2024
(a) Materiality and scope.
(1) No nonrenewals, cancellations, or
revisions of ceded reinsurance agreements or new ceded reinsurance agreements
affecting in force life insurance business need be reported pursuant to section
16-170-1 if the nonrenewals, cancellations, or revisions of ceded reinsurance
agreements or new ceded reinsurance agreements affecting in force life
insurance business are not material. For purposes of this chapter, a material
nonrenewal, cancellation, or revision of a ceded reinsurance agreement or a
material new ceded reinsurance agreement affecting in force life insurance
business is one that affects:
(A) As respects
property and casualty business, including accident and health business written
by a property and casualty insurer:
(i) More
than fifty per cent of the insurer's total ceded written premium; or
(ii) More than fifty per cent of the
insurer's total ceded indemnity and loss adjustment reserves.
(B) As respects life, annuity, and
accident and health business, more than fifty per cent of the total reserve
credit taken for business ceded, on an annualized basis, as indicated in the
insurer's most recent annual statement.
(C) As respects either property and casualty
or life, annuity, and accident and health business, either of the following
events shall constitute a material revision which must be reported:
(i) An authorized reinsurer representing more
than ten per cent of a total cession is replaced by one or more unauthorized
reinsurers; or
(ii) Previously
established collateral requirements have been reduced or waived as respects one
or more unauthorized reinsurers representing collectively more than ten per
cent of a total cession.
(2) However, no filing shall be required if:
(A) As respects property and casualty
business, including accident and health business written by a property and
casualty insurer, the insurer's total ceded written premium represents, on an
annualized basis, less than ten per cent of its total written premium for
direct and assumed business, or
(B)
As respects life, annuity, and accident and health business, the total reserve
credit taken for business ceded represents, on an annualized basis, less than
ten per cent of the statutory reserve requirement prior to any
cession.
(b) Information to be reported.
(1) The following
information is required to be disclosed in any report of a material nonrenewal,
cancellation, or revision of ceded reinsurance agreements or material new ceded
reinsurance agreements affecting in force life insurance business:
(A) Effective date of the nonrenewal,
cancellation, or revision or new agreement;
(B) The description of the transaction with
an identification of the initiator thereof;
(C) Purpose of, or reason for, the
transaction; and
(D) If applicable,
the identity of the replacement reinsurers.
(2) Insurers are required to report all
material nonrenewals, cancellations, or revisions of ceded reinsurance
agreements or material new ceded reinsurance agreements affecting in force life
insurance business on a non-consolidated basis unless the insurer is part of a
consolidated group of insurers which utilizes a pooling arrangement or one
hundred per cent reinsurance agreement that affects the solvency and integrity
of the insurer's reserves and the insurer ceded substantially all of its direct
and assumed business to the pool. An insurer is deemed to have ceded
substantially all of its direct and assumed business to a pool if the insurer
has less than $1,000,000 total direct plus assumed written premiums during a
calendar year that are not subject to a pooling arrangement and the net income
of the business not subject to the pooling arrangement represents less than
five per cent of the insurer's capital and surplus.
Disclaimer: These regulations may not be the most recent version. Hawaii 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.
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