Ohio § 3901.63

§ 3901.63.

(A) If section 3901.62 of the Revised Code does not apply to the reinsurance ceded to an assuming insurer by a domestic ceding

insurer that is authorized to do any insurance business in this state, the ceding

insurer may take credit for the reinsurance ceded as a reduction of liability in an

amount not exceeding the liabilities carried by the ceding insurer, if the ceding

insurer complies with section 3901.64 of the Revised Code , and if funds are held directly by the ceding insurer or in trust on behalf of the

ceding insurer, in accordance with this section, as security for the payment of obligations

under the reinsurance contract with the assuming insurer. (B)(1) If the funds are held directly by the ceding insurer under division (A) of this section,

the funds shall be held in the United States and shall be under the exclusive control

of, and subject to withdrawal solely by, the ceding insurer.  If the funds are held in trust on behalf of the ceding insurer under division (A)

of this section, the funds shall be held in the United States in a qualified United

States financial institution. (2) For the purposes of division (B)(1) of this section, a “United States financial institution”

is qualified if both of the following apply: (a) The institution is organized under or, in the case of a United States branch or agency

office of a foreign banking organization, is chartered under the laws of the United

States or any state thereof and has been granted authority to operate with fiduciary

powers. (b) The institution is regulated, supervised, and examined by federal or state officials

that have regulatory authority over banks and trust companies. (C) The funds held directly by the ceding insurer or in trust on behalf of the ceding

insurer shall be in any of the following forms: (1) Cash; (2) Securities that are listed by the securities valuation office of the national association

of insurance commissioners, including those considered exempt from filing as defined

by the purposes and procedures manual of the securities valuation office, and that

qualify as admitted assets; (3) Irrevocable, unconditional, and automatically renewable letters of credit that are

issued or confirmed by a qualified United States financial institution.  For purposes of division (C)(3) of this section, a United States financial institution

is qualified if all of the following apply: (a) It is organized under or, in the case of a United States branch or agency office

of a foreign banking organization, is chartered under the laws of the United States

or any state thereof. (b) It is regulated, supervised, and examined by federal or state officials that have

regulatory authority over banks and trust companies. (c) The superintendent of insurance or the securities valuation office of the national

association of insurance commissioners has determined that it meets such standards

of financial condition and standing as are considered necessary and appropriate for

purposes of ensuring that its letters of credit will be of a quality that is acceptable

to the superintendent. (4) Any other form of security the superintendent determines to be acceptable. (D) Notwithstanding any subsequent failure of an issuing or confirming financial institution

to meet the standards of issuer acceptability set forth in division (C)(3) of this

section, a letter of credit issued or confirmed by a financial institution that meets

those standards on the date of the issuance or confirmation shall continue to be acceptable

as security until its expiration, extension, renewal, modification, or amendment,

whichever occurs first.