Code of Massachusetts Regulations
211 CMR - DIVISION OF INSURANCE
Title 211 CMR 129.00 - Life And Health Reinsurance Agreements
Section 129.01 - General

Universal Citation: 211 MA Code of Regs 211.129

Current through Register 1531, September 27, 2024

211 CMR 129.00 is promulgated pursuant to authority granted by M.G.L. c. 175, § 20. 211 CMR 129.00 shall apply to all domestic life and accident and health insurers and to all other licensed life and accident and health insurers which are not subject to a substantially similar regulation in their domiciliary state. 211 CMR 129.00 shall also similarly apply to licensed property and casualty insurers with respect to their accident and health business. 211 CMR 129.00 shall not apply to assumption reinsurance, yearly renewable term reinsurance or certain nonproportional reinsurance such as stop loss or catastrophe reinsurance. The Massachusetts Division of Insurance recognizes that licensed insurers routinely enter into reinsurance agreements that yield legitimate relief to the ceding insurer from strain to surplus. 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 211 CMR 129.02 violate:

(1) M.G.L. c. 175, § 25, relating to financial statements which do not properly reflect the financial condition of the ceding insurer;

(2) M.G.L. c. 175, § 20A, relating to reinsurance reserve credits, thus resulting in a ceding insurer improperly reducing liabilities or establishing assets for reinsurance ceded; and

(3) M.G.L. c. 175J, §§ 1, 2 and 3 relating to creating a situation that may be hazardous to policyholders and the people of this State.

Disclaimer: These regulations may not be the most recent version. Massachusetts 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.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.