§ 31A-5-703 — Nonrenewals, cancellations, or revisions of ceded reinsurance agreements.

Utah § 31A-5-703

• Jurisdiction: Utah
• Title 31A: Insurance Code
• Ch. 31A-5: Domestic Stock and Mutual Insurance Corporations
• Part 31A-5-7: Disclosure of Material Transactions

Text

(1) (1)(a) A nonrenewal, cancellation, or revision of ceded reinsurance agreements is not subject to the reporting requirements of Section 31A-5-701 if:
(1)(a)(i) the nonrenewal, cancellation, or revision is not material; or
(1)(a)(ii) with respect to a property and casualty business, the insurer's total ceded written premium, on an annualized basis, is less than 10% of its total written premium for direct and assumed business; or
(1)(a)(iii) with respect to a life, annuity, and accident and health business, the total reserve credit taken for business ceded, on an annualized basis, is less than 10% of the statutory reserve requirement prior to a cession.
(1)(b) For purposes of this part, a material nonrenewal, cancellation, or revision is one that affects:
(1)(b)(i) with respect to a property and casualty business:

(1)(b)(i)(A) more than 50% of the insurer's total ceded written premium; or
(1)(b)(i)(B) more than 50% of the insurer's total ceded indemnity and loss adjustment reserves;
(1)(b)(ii) with respect to a life, annuity, and accident and health business, more than 50% of the total reserve credit taken for business ceded, on an annualized basis, as indicated in the insurer's most recent annual statement; or
(1)(b)(iii) with respect to either property and casualty or life, annuity, or accident and health business:

(1)(b)(iii)(A) an authorized reinsurer representing more than 10% of a total cession is replaced by one or more unauthorized reinsurers; or
(1)(b)(iii)(B) previously established collateral requirements have been reduced or waived as respects one or more unauthorized reinsurers representing collectively more than 10% of a total cession.
(2) (2)(a) The following information is required to be disclosed in any report filed pursuant to Section 31A-5-701 of a material nonrenewal, cancellation, or revision of a ceded reinsurance agreement:
(2)(a)(i) the effective date of the nonrenewal, cancellation, or revision;
(2)(a)(ii) the description of the transaction with an identification of the initiator of the transaction;
(2)(a)(iii) the purpose of, or reason for the transaction; and
(2)(a)(iv) if applicable, the identity of the replacement reinsurers.
(2)(b) (2)(b)(i) Insurers are required to report all material nonrenewals, cancellations, or revisions of ceded reinsurance agreements on a nonconsolidated basis unless the insurer:

(2)(b)(i)(A) is part of a consolidated group of insurers that uses a pooling arrangement or 100% reinsurance agreement that affects the solvency and integrity of the insurer's reserves; and
(2)(b)(i)(B) ceded substantially all of its direct and assumed business to the pool.
(2)(b)(ii) An insurer is considered to have ceded substantially all of its direct and assumed business to a pool if:

(2)(b)(ii)(A) the insurer has less than $1,000,000 total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement; and
(2)(b)(ii)(B) the net income of the business not subject to the pooling arrangement represents less than 5% of the insurer's capital and surplus.

Legislative History

Amended by Chapter 116, 2001 General Session