Credit for Reinsurance Model Law

By National Association of Insurance Commissioners · 2019 · CP341-107-25

The NAIC's Credit for Reinsurance Model Law (Model #785), as published in NAIC Model Laws, Regulations, Guidelines and Other Resources, Summer 2019. Its purpose is to protect the interest of insureds, claimants, ceding insurers, assuming insurers and the public generally, and it sets out when a domestic ceding insurer is allowed credit for reinsurance ceded as an asset or a reduction from liability.

On the syllabus

Exam CP-341 — Outcomes 3c; the whole model law.

1 Purpose

2 Credit Allowed a Domestic Ceding Insurer

A. Credit is allowed when the reinsurance is ceded to an assuming insurer that is licensed to transact insurance or reinsurance in the state.
B. Credit is allowed when the assuming insurer is accredited by the commissioner as a reinsurer in the state.
C. Credit is allowed when the assuming insurer is domiciled in, or entered through, a state that employs standards regarding credit for reinsurance substantially similar to those of the statute.
D. Credit is allowed when the assuming insurer maintains a trust fund in a qualified U.S. financial institution for the payment of the valid claims of its U.S. ceding insurers.
E. Credit is allowed when the assuming insurer has been certified by the commissioner as a reinsurer in the state and secures its obligations as the subsection requires.
F. Credit is allowed when the assuming insurer meets the conditions set out, including being domiciled and licensed in a Reciprocal Jurisdiction.
G. Credit is allowed when the assuming insurer does not meet subsections A to F, but only as to the insurance of risks located in jurisdictions where the reinsurance is required by applicable law or regulation of that jurisdiction.
H. Provisions that apply if the assuming insurer is not licensed, accredited or certified to transact insurance or reinsurance in the state.

3 Asset or Reduction from Liability for Reinsurance Ceded by a Domestic Insurer to an Assuming Insurer not Meeting the Requirements of Section 2

4 Qualified U.S. Financial Institutions

5 Rules and Regulations

6 Reinsurance Agreements Affected

Sources

Credit for Reinsurance Model Law (NAIC Model #785, Summer 2019 text) — the document: title page, table of contents, section titles and the text of Section 2; the SOA's copy of the study note is not published, so the identification of "CP341-107-25: NAIC Model Laws: Credit for Reinsurance Model Law" with this text is by title, and the NAIC's file is dated 2019 in its footer but was posted in April 2024
CP 341 Syllabus, Mar 2027/Jul 2027 (SOA) — the citation as study note CP341-107-25 and the learning outcome it is assigned to