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2012 SESSION

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HB 1139 Reinsurance credits; conforms State's law to Credit for Reinsurance Model Law of NAIC.

Introduced by: R. Lee Ware, Jr. | all patrons    ...    notes | add to my profiles

SUMMARY AS PASSED HOUSE: (all summaries)

Reinsurance credits.  Conforms Virginia's law regarding credits to insurers for reinsurance ceded to approved assuming insurers to the provisions of the Credit for Reinsurance Model Law of the National Association of Insurance Commissioners (NAIC). Conformity to the Model complies with provisions of the federal Nonadmitted and Reinsurance Reform Act (NRRA), which permits states to proceed with reinsurance collateral reforms on an individual basis if they are accredited under the NAIC’s Financial Regulation Standards and Accreditation Program. Provisions establish (i) how an accredited reinsurer may demonstrate to the State Corporation Commission that it has adequate financial capacity to meet its reinsurance obligations, (ii) the requirements for a reduction in the required trusteed surplus, (iii) the requirements for credit for reinsurance to be allowed when the reinsurance is ceded to a certified reinsurer, (iv) eligibility requirements for becoming a certified reinsurer, (v) the Commission's authority to suspend or revoke a reinsurer's accreditation or certification, (vi) requirements for ceding insurers to manage their concentration risk and to diversify their reinsurance program, (vii) criteria for securities that an assuming insurer may hold in trust as security for the payment of the ceding insurer's obligations, and (viii) trusteed surplus requirements for multiple beneficiary trust accounts. Existing provisions regarding credits for cessions under reinsurance agreements are repealed.


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