Oklahoma § 36-5123 - Asset or reduction from liability for ceded reinsurance Security

§ 36-5123. Asset or reduction from liability for ceded reinsurance Security

An asset or a reduction from liability for the reinsurance ceded

by a domestic insurer to an assuming insurer not meeting the

requirements of Section 5122 of this title shall be allowed in an

amount not exceeding the liabilities carried by the ceding insurer;

provided, further, that the Commissioner may adopt by regulation

pursuant to subsection B of Section 5124 of this title, specific

additional requirements relating to or setting forth: the valuation

of assets or reserve credits, the amount and forms of security

supporting reinsurance arrangements described in subsection B of

Section 5124 of this title and the circumstances pursuant to which

credit will be reduced or eliminated. The reduction shall be in the

amount of funds held by or on behalf of the ceding insurer including

funds held in trust for the ceding insurer, under a reinsurance

contract with the assuming insurer as security for the payment of

obligations thereunder, if the security is held in the United States

subject to withdrawal solely by, and under the exclusive control of,

the ceding insurer; or, in the case of a trust, held in a qualified

Oklahoma Statutes - Title 36. Insurance

United States financial institution, as defined in subsection B of

Section 5123.1 of this title. This security may be in the form of:

1. Cash;

2. Securities listed by the Securities Valuation Office of the

National Association of Insurance Commissioners including those

deemed exempt from filing as defined by the Purposes and Procedures

Manual of the Securities Valuation Office and qualifying as admitted

assets;

3.

a.

Clean, irrevocable, unconditional letters of credit,

issued or confirmed by a qualified United States

financial institution, as defined in subsection A of

Section 5123.1 of this title, effective no later than

December 31 of the year for which the filing is being

made, and in the possession of, or in trust for, the

ceding insurer on or before the filing date of its

annual statement.

b.

Letters of credit meeting applicable standards of

issuer acceptability as of the dates of their issuance

or confirmation shall, notwithstanding the issuing or

confirming institution's subsequent failure to meet

applicable standards of issuer acceptability, continue

to be acceptable as security until their expiration,

extension, renewal, modification or amendment,

whichever first occurs; or

4. Any other form of security acceptable to the Insurance

Commissioner.

Added by Laws 1992, c. 178, § 37, eff. Sept. 1, 1992. Amended by

Laws 1995, c. 52, § 1, emerg. eff. April 10, 1995; Laws 2000, c.

169, § 3, eff. Nov. 1, 2000; Laws 2002, c. 307, § 33, eff. Nov. 1,

2002; Laws 2016, c. 298, § 2, eff. Nov. 1, 2016; Laws 2022, c. 154,

§ 6, eff. Nov. 1, 2022.