§ 681A.1555 — Certified reinsurer: Required security

Nevada § 681A.1555

• Jurisdiction: Nevada
• Title 57: INSURANCE
• Ch. 681A: Kinds

Text

1. For a domestic ceding insurer to qualify for full financial statement credit for reinsurance ceded to a certified reinsurer, the certified reinsurer shall maintain security in a form acceptable to the Commissioner and consistent with the provisions of NRS 681A.240 or, in a multi-beneficiary trust, pursuant to NRS 681A.180 and 681A.190 , except as otherwise provided in NRS 681A.155 to 681A.1557 , inclusive.
2. If a certified reinsurer maintains a trust to fully secure its obligations subject to NRS 681A.180 and 681A.190 , and chooses to secure its obligations incurred as a certified reinsurer in the form of a multi-beneficiary trust, the certified reinsurer shall maintain separate trust accounts for its obligations incurred under reinsurance agreements issued or renewed as a certified reinsurer with reduced security as permitted by this section or comparable laws of other jurisdictions in the United States and for its obligations subject to NRS 681A.180 and 681A.190 . It is a condition of the grant of certification pursuant to NRS 681A.155 to 681A.1557 , inclusive, that the certified reinsurer shall have bound itself, by the language of the trust and agreement with the commissioner of insurance of the state with principal regulatory authority over each trust account, to fund, upon termination of any such trust account, out of the remaining surplus of such trust any deficiency of any other such trust account.
3. The minimum trusteed surplus requirements provided in NRS 681A.180 and 681A.190 are not applicable with respect to a multi-beneficiary trust maintained by a certified reinsurer for the purpose of securing obligations incurred pursuant to NRS 681A.155 to 681A.1557 , inclusive, except that the trust shall maintain a minimum trusteed surplus of $10,000,000.
4. With respect to obligations incurred by a certified reinsurer pursuant to NRS 681A.155 to 681A.1557 , inclusive, if the security is insufficient, the Commissioner shall reduce the allowable credit by an amount proportionate to the deficiency and may impose further reductions in allowable credit upon finding that there is a material risk that the certified reinsurer’s obligations will not be paid in full when due.
5. For the purposes of NRS 681A.155 to 681A.1557 , inclusive, a certified reinsurer whose certification has been terminated for any reason shall be treated as a certified reinsurer required to secure 100 percent of its obligations.
6. If the Commissioner continues to assign a higher rating as permitted by other provisions of NRS 681A.150 to 681A.190 , inclusive, this requirement does not apply to a certified reinsurer in inactive status or to a reinsurer whose certification has been suspended.
7. A certified reinsurer shall secure obligations assumed from ceding insurers in the United States under this section at a level consistent with the rating of the certified reinsurer, as specified in regulations adopted by the Commissioner.
8. As used in this section, “terminated” means the revocation, suspension, voluntary surrender or inactive status of a reinsurer’s certification.

Legislative History

(Added to NRS by 2015, 3383 )