Idaho Administrative Code
Title IDAPA 18 - Insurance, Department of
Rule 18.07.06 - RULES GOVERNING LIFE AND HEALTH REINSURANCE AGREEMENTS
Section 18.07.06.001 - TITLE, PURPOSE AND SCOPE

Universal Citation: ID Admin Code 18.07.06.001

Current through August 31, 2023

01. Title. IDAPA 18.07.06, "Rules Governing Life and Health Reinsurance Agreements." (3-31-22)

02. Purpose. To set forth standards for Reinsurance Agreements involving life insurance, annuities, or accident and sickness insurance (disability) in order that the financial statements of the life and health and property and casualty insurers writing health business and utilizing such agreements properly reflect the financial condition of the ceding and assuming insurer. (3-31-22)

a. The Department recognizes that licensed insurers routinely enter into reinsurance agreements that yield legitimate relief to the ceding insurer from strain to surplus. (3-31-22)

b. 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 011 violate Idaho Code Sections 41-1306, 41-515, 41-308(3), 41-327 and 41-3309: (3-31-22)

03. Applicability. This rule applies to all domestic life and accident and health insurers and to all other licensed life and accident and health insurers that are not subject to a substantially similar rule in their domiciliary state. This rule also similarly applies to licensed property and casualty insurers with respect to their accident and health business. This rule does not apply to assumption reinsurance or yearly renewable term reinsurance. (3-31-22)

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