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§ 2303.4. Credit for Reinsurance Ceded to Accredited Reinsurer.

10 CA ADC § 2303.4Barclays Official California Code of Regulations

Barclays California Code of Regulations
Title 10. Investment
Chapter 5. Insurance Commissioner (Refs & Annos)
Subchapter 3. Insurers
Article 3. Annual Statements
Premiums in Course of Collection
10 CCR § 2303.4
§ 2303.4. Credit for Reinsurance Ceded to Accredited Reinsurer.
Currentness
(a) Credit on financial statements shall be allowed for reinsurance ceded to an assuming insurer that is an accredited reinsurer in California as of the date on which statutory financial statement credit for reinsurance is claimed, unless (1) the assuming insurer is the subject of a regulatory order or regulatory oversight on the grounds of hazardous financial condition by any state in which it is licensed, (2) the cession of a domestic insurer is not in compliance with the applicable provisions of Sections 2303.11 through 2303.13 of this article, or (3) the assuming insurer was not licensed or otherwise permitted to write or assume the lines or classes of business in its state of domicile.
(b) A reinsurer seeking accreditation shall file an application with the Commissioner that must include:
1. An executed Certificate of Assuming Insurer Form AR-1, published in Section 2303.22(a) of this article, wherein the reinsurer:
A. Submits to the authority of the Commissioner to examine its books and records, and agrees to bear the expense of such examination or examinations; and
B. Affirms it has attached to such Certificate a current list of its ceding insurers domiciled in California, and undertakes to submit to the Commissioner additions to or deletions from such list at least once per calendar quarter.
2. An executed Designation of Agent for Service of Process and Consent to Jurisdiction Form AR-2, published in Section 2303.22(b) of this article;
3. A certified copy of a certificate of authority or other acceptable evidence of a license to transact insurance or reinsurance in at least one state;
4. A statement, verified by an officer of the reinsurer, disclosing whether the reinsurer, or any affiliated person with an interest of 10% or more in the reinsurer, is currently known to be the subject of any order or proceeding initiated by a regulator in any jurisdiction regarding (1) conservation, liquidation or receivership, (2) revocation or suspension of a license or accreditation, or (3) restricting or precluding the transaction of insurance based upon a hazardous financial condition. Where the regulatory action is confidential, disclosure to the Commissioner is required only if permitted by the regulator issuing the order or initiating the oversight. The statement shall affirm that no actions, proceedings or orders subject to disclosure by this paragraph are outstanding, except as disclosed in the statement. The reinsurer shall attach to the statement copies of orders and other documents initiating proceedings for matters disclosed in the statement. The statement shall be in a form acceptable to the Commissioner.
5. A copy of the reinsurer's:
A. Annual financial statements for the past 3 years and all quarterly financial statements filed since the most recent annual statement, if any. The annual statements, including any amendments and NAIC required attachments, shall be signed and verified by the reinsurer's principal executive officer or manager residing within the United States;
B. Most recent examination report, with an “as of” date of not more than 5 years prior to its submission;
C. Most recent independent audit report and report of internal controls, with an “as of” date of not more than 15 months prior to its submission;
D. Most recent 8-K, 10-K and 10-Q forms, if any, filed with the SEC by the applicant or any controlling person;
E. Certificate of good standing from its state of domicile, or from the state of an alien insurer's port of entry;
F. Most recent holding company registration statement and any supplements thereto filed with its state of domicile;
G. Most recent RBC report; and
H. News releases issued by or on behalf of the reinsurer within the year prior to submission.
6. Additional information or documentation as requested by the Commissioner.
(c) To retain eligibility as an accredited reinsurer, the reinsurer shall:
1. File its quarterly and annual financial statements and its RBC report at the same time those documents are filed with its state of domicile;
2. File an updated list of domestic insurer cedants quarterly;
3. File copies of news releases as they are issued by or on behalf of the reinsurer; by prior arrangement with the Department, such filings may be made electronically; and
4. File, on or before August 15 of each year, the documents required by subdivision (b) of this section, except that it is not necessary to file duplicates of financial documents and press releases already submitted.
(d) The costs and expenses incurred by the Department to review a reinsurer's application for accreditation and subsequent filings shall be charged to and collected from the reinsurer. The application for accreditation and required filings shall be submitted in the manner set forth in Section 2303.21(c) of this article.
(e) An accredited reinsurer, authorized under Code Section 922.4(b) for the specific purpose of permitting statement credit for a cession by a licensed insurer without the security required by Code Section 922.5, is not a licensed insurer and may not solicit or transact insurance business in this state either directly or through an agent or reinsurance intermediary acting on its behalf.

Credits

Note: Authority cited: Sections 922.8, 922.85 and 923, Insurance Code; CalFarm Insurance Company v. Deukmejian, 48 Cal. 3d 805 (1989); and 20th Century Insurance Company v. Garamendi, 8 Cal. 4th 216 (1994). Reference: Sections 922.2, 922.3, 922.4, 922.42, 922.43, 922.6 and 923, Insurance Code.
History
1. New section filed 10-24-2006; operative 11-23-2006 (Register 2006, No. 43).
2. Change without regulatory effect amending subsections (a) and (b)5.A. and amending Note filed 3-25-2015 pursuant to section 100, title 1, California Code of Regulations (Register 2015, No. 13).
3. Amendment of subsections (b)1., (b)2. and (d) filed 11-27-2017; operative 1-1-2018 (Register 2017, No. 48).
This database is current through 5/24/24 Register 2024, No. 21.
Cal. Admin. Code tit. 10, § 2303.4, 10 CA ADC § 2303.4
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