Code of Maine Rules
02 - DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION
031 - BUREAU OF INSURANCE
Chapter 740 - CREDIT FOR REINSURANCE
Section 031-740-14 - Reinsurance contracts - mandatory provisions
Current through 2024-38, September 18, 2024
Except for reinsurance required by law, the Superintendent may not grant credit for reinsurance unless the reinsurance agreement contains the provisions specified in this section. In determining whether to grant full credit under Title 24-A M.R.S.A. §731-B(1)(D) for reinsurance required by law, the Superintendent shall consider whether the reinsurance program provides protections comparable to those specified in this section, if applicable to the nature of the reinsurance program.
A. An insolvency clause meeting the requirements of Title 24-A M.R.S.A. §731-B(5), providing that in the event of the insolvency of the ceding insurer, the reinsurance is payable under a contract or contracts reinsured by the assuming insurer on the basis of reported claims allowed by the court, without diminution because of the insolvency of the ceding insurer. The payments must be made directly to the ceding insurer or to the ceding insurer's domiciliary receiver unless the contract or other written agreement specifically provides another payee in the event of the insolvency of the ceding insurer or unless the assuming insurer, with the consent of the direct insured or insureds, has assumed the policy obligations of the ceding insurer as direct obligations of the assuming insurer to the payees under the reinsured policies and in substitution for the obligations of the ceding insurer to those payees.
B. A provision, meeting the requirements of Title 24-A M.R.S.A. §731-B(2)(A), requiring the assuming insurer, at the request of the ceding insurer, to submit to the jurisdiction of any court of competent jurisdiction in any state of the United States, or to an alternative dispute resolution panel if provided in the agreement, to comply with all requirements necessary to give the court or panel jurisdiction, and to abide by the final decision after appeal rights have been exhausted.
C. A provision, meeting the requirements of Title 24-A M.R.S.A. §731-B(2)(B), designating the Superintendent or an attorney as the assuming insurer's attorney upon whom may be served any lawful process in any action, suit, or proceeding instituted by or on behalf of the ceding company.
D. An intermediary clause, if payments may be made through intermediaries, under which the intermediary's credit risk is borne by the assuming insurer.
