Nevada Administrative Code
Chapter 681A - Kinds of Insurance; Reinsurance
CERTIFIED REINSURERS
Section 681A.440 - Financial statement credit for ceded insurance or reinsurance obligation: Authorization to claim; requirements concerning security; circumstances under which reinsurer may defer posting security

Universal Citation: NV Admin Code 681A.440

Current through September 16, 2024

1. The Commissioner will allow a ceding insurer to claim a financial statement credit for an insurance or reinsurance obligation ceded by the ceding insurer to an assuming insurer that has been a certified reinsurer in this State at all times for which the credit is claimed.

2. Except as otherwise provided in subsections 4 and 5 and subsection 4 of NAC 681A.460, to qualify for a credit, the security held by or on behalf of the ceding insurer must:

(a) Be in a form consistent with the provisions of NRS 681A.155 to 681A.1557, inclusive, 681A.180 and 681A.240 and NAC 681A.250 to 681A.380, inclusive; and

(b) Be in not less than an amount based on the rating assigned to the certified reinsurer by the Commissioner pursuant to NRS 681A.1554 and NAC 681A.460 as follows:
(1) For a certified reinsurer rated Secure - 1, 0 percent of the insurance or reinsurance obligation accepted by the certified reinsurer.

(2) For a certified reinsurer rated Secure - 2, 10 percent of the insurance or reinsurance obligation accepted by the certified reinsurer.

(3) For a certified reinsurer rated Secure - 3, 20 percent of the insurance or reinsurance obligation accepted by the certified reinsurer.

(4) For a certified reinsurer rated Secure - 4, 50 percent of the insurance or reinsurance obligation accepted by the certified reinsurer.

(5) For a certified reinsurer rated Secure - 5, 75 percent of the insurance or reinsurance obligation accepted by the certified reinsurer.

(6) For a certified reinsurer rated Vulnerable - 6, 100 percent of the insurance or reinsurance obligation accepted by the certified reinsurer.

3. An insurance or reinsurance obligation transferred from a ceding insurer to a certified reinsurer that is affiliated with the ceding insurer is subject to the requirements relating to security described in subsection 2.

4. Upon the entry of an order of rehabilitation, liquidation or conservation against the ceding insurer, a certified reinsurer shall post security for 100 percent of the insurance or reinsurance obligation accepted by the certified reinsurer for the benefit of the ceding insurer or its estate.

5. A certified reinsurer may defer posting security for an amount recoverable due to catastrophe for a period of 1 year after the date of the first instance of a liability reserve entry by the ceding insurer as a result of a loss from a catastrophic occurrence as recognized by the Commissioner. A certified reinsurer may defer posting security pursuant to this subsection only:

(a) If the certified reinsurer continues to pay claims in a timely manner during the deferral period; and

(b) For the following lines of business, as reported on the annual financial statement filed by the ceding insurer with the Commissioner and related specifically to the catastrophic occurrence:
(1) Line 1: Fire.

(2) Line 2: Allied lines.

(3) Line 3: Farm owners multiple peril.

(4) Line 4: Homeowners multiple peril.

(5) Line 5: Commercial multiple peril.

(6) Line 9: Inland marine.

(7) Line 12: Earthquake.

(8) Line 21: Auto physical damage.

6. The Commissioner will allow a ceding insurer to claim a financial statement credit for reinsurance ceded by the ceding insurer to a certified reinsurer only for a reinsurance contract entered into:

(a) On or after the effective date of the certification of the certified reinsurer; or

(b) Before the effective date of the certification of the certified reinsurer which is subsequently amended after the effective date of the certification of the certified reinsurer, or for which a new reinsurance contract is entered into covering any risk for which collateral was provided previously, only for losses incurred and reserves reported on or after the effective date of the amendment or new contract.

7. Nothing in this section shall be construed to prohibit the parties to a reinsurance contract from agreeing to provisions that establish security requirements which exceed the requirements established in paragraph (b) of subsection 2.

Added to NAC by Comm'r of Insurance by R079-16A, eff. 11/2/2016

NRS 679B.130, 681A.130, 681A.1555

Disclaimer: These regulations may not be the most recent version. Nevada 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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