Oregon Revised Statutes Chapter 731 § 731.509 — Legislative intent; criteria for allowing credit for reinsurance; rules

Legislative intent; criteria for allowing credit for reinsurance; rules. (1) The purpose of ORS 731.509, 731.510, 731.511, 731.512 and 731.516 is to protect the interests of insureds, claimants, ceding insurers, assuming insurers and the public generally. The Legislative Assembly declares that the intent of the Legislative Assembly is to ensure adequate regulation of insurers and reinsurers and adequate protection for those to whom insurers and reinsurers owe obligations. In furtherance of that state interest, the Legislative Assembly mandates that upon the insolvency of an alien insurer or reinsurer that provides security to fund the alien insurer’s or reinsurer’s United States obligations in accordance with ORS 731.509, 731.510, 731.511, 731.512 and 731.516, the assets representing the security must be maintained in the United States and claims must be filed with and valued by the state insurance commissioner with regulatory oversight, and the assets must be distributed in accordance with the insurance laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic United States insurers. The Legislative Assembly declares that the laws contained in ORS 731.509, 731.510, 731.511, 731.512 and 731.516 are fundamental to the business of insurance in accordance with 15 U.S.C. 1011 and 1012. (2) The Director of the Department of Consumer and Business Services may not allow credit for reinsurance to a domestic ceding insurer as either an asset or a reduction from liability on account of reinsurance ceded unless credit is allowed as provided under ORS 731.508 and unless the reinsurer meets the requirements of: (a) Subsection (4) of this section; (b) Subsection (5) of this section and ORS 731.511 (1); (c) Subsection (6) of this section; (d) Subsections (7) and (8) of this section; (e) ORS 731.511; (f)(A) Subsection (9) of this section; and (B) Additional requirements that the director specifies by rule, which may include: (i) The valuation of assets or reserve credits; (ii) The amount and forms of security that support reinsurance arrangements; and (iii) The circumstances under which the director will reduce or eliminate credit; or (g) Subsection (10) of this section. (3) The director shall allow credit under subsection (4), (5) or (6) of this section or under ORS 731.511 only with respect to cessions of the kinds or classes of business that the assuming insurer is licensed or otherwise permitted to write or assume in the state in which the assuming insurer is domiciled or, if the assuming insurer is an alien insurer, the state in which the assuming insurer is entered and is licensed or authorized to transact insurance or reinsurance. The director may allow credit under subsection (6) or (7) of this section only if the assuming insurer satisfies applicable requirements under subsection (11) of this section. (4) The director shall allow credit if the reinsurance is ceded to an authorized assuming insurer that accepts reinsurance of risks and retains the risk of the reinsurance within such limits as the assuming insurer is otherwise authorized to insure in this state, as provided in ORS 731.508. (5) The director shall allow credit if the reinsurance is ceded to an assuming insurer that is accredited as a reinsurer in this state as provided in ORS 731.511. The director may not allow credit to a domestic ceding insurer if the director has revoked accreditation of the assuming insurer after notice and opportunity for hearing. (6) The director shall allow credit if the reinsurance is ceded to a foreign assuming insurer or a United States branch of an alien assuming insurer meeting all of the following requirements: (a) The foreign assuming insurer must be domiciled in a state employing standards regarding credit for reinsurance that equal or exceed the standards applicable under this section. The United States branch of an alien assuming insurer must be entered through a state employing such standards. (b) The foreign assuming insurer or United States branch of an alien assuming insurer must maintain a combined capital and surplus in an amount not less than $20,000,000. The requirement of this paragraph does not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same holding company system. (c) The foreign assuming insurer or United States branch of an alien assuming insurer must submit to the authority of the director to examine the foreign assuming insurer’s or the alien assuming insurer’s books and records. (7) The director shall allow credit if the reinsurance is ceded to an assuming insurer that maintains a trust fund meeting the requirements of this subsection and subsection (8) of this section and that also complies with other requirements of this subsection and subsection (8) of this section. The trust fund must be maintained in a qualified United States financial i