New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter IV - Financial Condition Of Insurer and Reports to Superintendent
Subchapter D - Reinsurance
Part 127 - Reinsurance Transactions By Authorized Life Insurers And Certain Other Authorized Insurers
Section 127.0 - Preamble
Current through Register Vol. 46, No. 12, March 20, 2024
(a) The Insurance Department recognizes that authorized insurers routinely enter into reinsurance agreements that yield legitimate relief to ceding insurers from strain to surplus.
(b) However, it is improper for an authorized 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, while not transferring all the significant risks inherent in the insurance policies 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.
(c) It is the department's position that, except as provided in section 127.3 of this Part, if an authorized ceding insurer takes reserve credit by reducing liabilities or establishing assets for reinsurance ceded under the type of reinsurance agreements referred to in subdivision (b) of this section and described in section 127.2 of this Part, that ceding insurer would:
