Illinois Administrative Code
Title 50 - INSURANCE
Part 205 - MUNICIPAL BOND INSURANCE
Section 205.70 - Reinsurance
Universal Citation: 50 IL Admin Code ยง 205.70
Current through Register Vol. 48, No. 12, March 22, 2024
a) An insurer qualified to write municipal bond insurance may, by contract, reinsure any such insurance it transacts, provided that credit in accounting and financial statements for reinsurance ceded shall be allowed only if the reinsurer is either:
1) An insurer, authorized in Illinois
to write the kinds of business defined in Class 2(g) and 2(h) of Section 4 of
the Illinois Insurance Code (Ill. Rev. Stat. 1985, ch. 73, par. 616), which has
policyholders' surplus of not less than twenty-five million dollars
($25,000,000), or
2) An insurer
that meets the surplus requirements of subsection
205.70(a)(1)
hereof, but is not licensed in Illinois; however, such credit shall be allowed
only to the extent and under the conditions specified in Section 173.1(2) of
the Illinois Insurance Code (Ill Rev. Stat. 1985, ch. 73, par.
785.1(2)
). The security requirements of such sections shall also cover any contingency
reserve established by such reinsurer.
b) The contingency reserve required by subsection 205.40(b) shall not be reduced by reason of any risk ceded unless the risk is ceded to a reinsurer described in subsection (a)(1) or (2) hereof and provided such reinsurer establishes the reserves required in subsections 205.40(b) and 205.60 with respect to the ceded portion of the risk.
c)
1) A municipal bond insurer may not reinsure
such insurance with affiliated companies unless the limitations of Section
205.50
are measured against the consolidated policyholders' surplus of such affiliated
insurers.
2) Subsection
205.70(a)
hereof does not diminish the applicability of Section 173.1 of the Illinois
Insurance Code (Ill Rev. Stat. 1985, ch. 73, par. 785.1).
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