SB 150 — CREDIT FOR REINSURANCE ACT

submit to the superintendent's authority to e e 17 examine its books and records;

e e n d 18 C.

be licensed to transact insurance or reinsurance = = l ] 19 in at least one state, or in the case of a United States branch a l r i 20 of an alien assuming insurer, be entered through and licensed t e a t to transact insurance or reinsurance in at least one state;

m m 21 e d r e 22 D.

file annually with the superintendent a copy of c e r c 23 its annual statement filed with the insurance department of its e a n b 24 state of domicile and a copy of its most recent audited u [ financial statement;

and .221571.5SA - 8 - E.

demonstrate to the satisfaction of the superintendent that it has adequate financial capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers, provided that an assuming insurer is deemed to meet this requirement as of SB 150 Page 8 the time of its application if it maintains a surplus as regards policyholders in an amount not less than twenty million dollars ($20,000,000) and its accreditation has not been denied by the superintendent within ninety days after submission of its application.

[NEW MATERIAL ] TRUST REQUIREMENTS.-- A.

The trust fund for a single assuming insurer shall consist of funds in trust in an amount not less than the assuming insurer's liabilities attributable to reinsurance ceded by United States ceding insurers, and, in addition, the assuming insurer shall maintain a trusteed surplus of not less e e 17 than twenty million dollars ($20,000,000), except as provided e e n d 18 in Subsection B of this section.

= = l ] 19 B.

At any time after the assuming insurer has a l r i 20 permanently discontinued underwriting new business secured by t e a t the trust for at least three full years, the government agency m m 21 e d r e 22 with principal regulatory oversight of the trust may authorize c e r c 23 a reduction in the required trusteed surplus, but only after a e a n b 24 finding, based on an assessment of the risk, that the new u [ required surplus level is adequate for the protection of United .221571.5SA - 9 - States ceding insurers, policyholders and claimants in light of reasonably foreseeable adverse loss development.

The risk assessment may involve an actuarial review, including an independent analysis of reserves and SB 150 Page 9 cash flows, and shall consider all material risk factors, including, when applicable, the lines of business involved, the stability of the incurred loss estimates and the effect of the surplus requirements on the assuming insurer's liquidity or solvency.

(1) for reinsurance ceded pursuant to reinsurance agreements with an inception, amendment or renewal e e 17 date on or after January 1, 1993, the trust shall consist of a e e n d 18 trusteed account in an amount not less than the respective = = l ] 19 underwriters' several liabilities attributable to business a l r i 20 ceded by United-States-domiciled ceding insurers to any t e a t underwriter of the group;

m m 21 e d r e 22 (2) for reinsurance ceded pursuant to c e r c 23 reinsurance agreements with an inception date on or before e a n b 24 December 31, 1992, and not amended or renewed after that date, u [ notwithstanding the other provisions of the Credit for .221571.5SA - 10 - Reinsurance Act, the trust shall consist of a trusteed account in an amount not less than the respective underwriters' several insurance and reinsurance liabilities SB 150 Page 10 attributable to business written in the United States;

and (5) within ninety days after its financial e e 17 statements are due to be filed with the group's domiciliary e e n d 18 regulator, the group shall provide to the superintendent an = = l ] 19 annual certification by the group's domiciliary regulator of a l r i 20 the solvency of each underwriter member;

or if a certification t e a t is unavailable, financial statements, prepared by independent m m 21 e d r e 22 public accountants, of each underwriter member of the group.

c e r c 23 D.

In the case of a group of incorporated e a n b 24 underwriters under common administration, the group shall:

u [ (1) have continuously transacted an insurance .221571.5SA - 11 - business outside the United States for at least three years immediately prior to making application for SB 150 Page 11 accreditation;

and (5) within ninety days after its financial statements are due to be filed with the group's domiciliary e e 17 regulator, make available to the superintendent an annual e e n d 18 certification of each underwriter member's solvency by the = = l ] 19 member's domiciliary regulator and financial statements of each a l r i 20 underwriter member of the group prepared by its independent t e a t public accountant.

m m 21 e d r e 22 SECTION 7.

[NEW MATERIAL ] CERTIFIED REINSURERS--REINSURERS--QUALIFICATIONS.-- c e r c 23 QUALIFICATIONS.-- e a n b 24 A.

Credit shall be allowed when the reinsurance is u [ ceded to an assuming insurer that has been certified by the .221571.5SA - 12 - superintendent as a reinsurer in the state and complies with this section and secures its obligations in accordance with SB 150 Page 12 the requirements of Sections 7 through 9 of the Credit for Reinsurance Act.

(4) agree to submit to the jurisdiction of e e 17 this state, appoint the superintendent as its agent for service e e n d 18 of process in the state and agree to provide security for one = = l ] 19 hundred percent of the assuming insurer's liabilities a l r i 20 attributable to reinsurance ceded by United States ceding t e a t insurers if it resists enforcement of a final United States m m 21 e d r e 22 judgment;

c e r c 23 (5) agree to meet applicable information e a n b 24 filing requirements as determined by the superintendent, both u [ with respect to an initial application for certification and on .221571.5SA - 13 - an ongoing basis;

and (6) satisfy any other requirements for SB 150 Page 13 certification deemed relevant by the superintendent.

(2) the incorporated members of the association shall not be engaged in any business other than e e 17 underwriting as a member of the association and shall be e e n d 18 subject to the same level of regulation and solvency control by = = l ] 19 the association's domiciliary regulator as are the a l r i 20 unincorporated members;

and t e a t (3) within ninety days after its financial m m 21 e d r e 22 statements are due to be filed with the association's c e r c 23 domiciliary regulator, the association shall provide to the e a n b 24 superintendent an annual certification by the association's u [ domiciliary regulator of the solvency of each underwriter .221571.5SA - 14 - member or, if a certification is unavailable, financial SB 150 Page 14 statements prepared by independent public accountants, of each underwriter member of the association.

[NEW MATERIAL ] QUALIFIED JURISDICTIONS.-- A.

To determine whether the domiciliary jurisdiction of a non-United-States-assuming insurer is eligible to be recognized as a qualified jurisdiction, the superintendent shall evaluate the appropriateness and effectiveness of the reinsurance supervisory system of the jurisdiction, both initially and on an ongoing basis, and consider the rights, benefits and the extent of reciprocal e e 17 recognition afforded by the non-United-States jurisdiction to e e n d 18 reinsurers licensed and domiciled in the United States.

A = = l ] 19 qualified jurisdiction shall agree to share information and a l r i 20 cooperate with the superintendent with respect to all certified t e a t reinsurers domiciled within that jurisdiction.

A jurisdiction m m 21 e d r e 22 shall not be recognized as a qualified jurisdiction if the c e r c 23 superintendent has determined that the jurisdiction does not e a n b 24 adequately and promptly enforce final United States judgments u [ and arbitration awards.

Additional factors may be considered .221571.5SA - 15 - in the discretion of the SB 150 Page 15 superintendent.

[NEW MATERIAL ] CERTIFIED REINSURERS--RATINGS--REINSURERS--RATINGS--REQUIRED REQUIRED SECURITY.-- e e 17 A.

If a certified reinsurer's domiciliary e e n d 18 jurisdiction ceases to be a qualified jurisdiction, the = = l ] 19 superintendent may suspend the certified reinsurer's a l r i 20 certification indefinitely, in lieu of revocation.

t e a t B.

The superintendent shall assign a rating to each m m 21 e d r e 22 certified reinsurer, giving due consideration to the financial c e r c 23 strength ratings that have been assigned by rating agencies e a n b 24 deemed acceptable to the superintendent pursuant to rule.

The u [ superintendent shall publish a list of all certifiedSB reinsurers150 .221571.5SAPage - 16 -certified reinsurers and their ratings.

If a certified reinsurer maintains a trust to fully secure its obligations subject to Paragraph (3) of e e 17 Subsection D and Subsection E of Section 3 and Sections 4 and 6 e e n d 18 of the Credit for Reinsurance Act and chooses to secure its = = l ] 19 obligations incurred as a certified reinsurer in the form of a a l r i 20 multi-beneficiary trust, the certified reinsurer shall maintain t e a t separate trust accounts for its obligations incurred pursuant m m 21 e d r e 22 to reinsurance agreements issued or renewed as a certified c e r c 23 reinsurer with reduced security as permitted by this section or e a n b 24 comparable laws of other United States jurisdictions and for u [ its obligations subject to Paragraph SB 150 Page 17 (3) of Subsection D and .221571.5SA - 17 - Subsection E of Section 3 and Sections 4 and 6 of the Credit for Reinsurance Act.

The minimum trusteed surplus requirements provided in Paragraph (3) of Subsection D and Subsection E of Section 3 and Sections 4 and 6 of the Credit for Reinsurance Act are not applicable with respect to a multi-beneficiary trust maintained by a certified reinsurer for the purpose of securing obligations incurred pursuant to this section, except that such trust shall maintain a minimum trusteed surplus of e e 17 ten million dollars ($10,000,000).

e e n d 18 G.

With respect to obligations incurred by a = = l ] 19 certified reinsurer pursuant to this section, if the security a l r i 20 is insufficient, the superintendent shall reduce the allowable t e a t credit by an amount proportionate to the deficiency, and the m m 21 e d r e 22 superintendent may impose further reductions in allowable c e r c 23 credit upon finding that there is a material risk that the e a n b 24 certified reinsurer's obligations will SB 150 Page 18 not be paid in full when u [ due.

.221571.5SA - 18 - H.

If an applicant for certification has been certified as a reinsurer in an accredited jurisdiction, the superintendent may defer to that jurisdiction's certification and may defer to the rating assigned by that jurisdiction, and e e 17 such assuming insurer shall be considered to be a certified e e n d 18 reinsurer in this state.

= = l ] 19 K.

A certified reinsurer that ceases to assume new a l r i 20 business in this state may request to maintain its t e a t certification in inactive status in order to continue to m m 21 e d r e 22 qualify for a reduction in security for its in-force business.

c e r c 23 An inactive certified reinsurer shall continue to comply with e a n b 24 all applicable requirements of this section, and theSB u150 [Page 19 the superintendent shall assign a rating that takes into account, .221571.5SA - 19 - if relevant, the reasons why the reinsurer is not assuming new business.

[NEW MATERIAL ] RECIPROCAL JURISDICTION REINSURERS.-- A.

provided that if the assuming insurer is an e e 17 association, including incorporated and individual e e n d 18 unincorporated underwriters, it shall have and maintain, on an = = l ] 19 ongoing basis, minimum capital and surplus equivalents, net of a l r i 20 liabilities, calculated according to the methodology applicable t e a t in its domiciliary jurisdiction, and a central fund containing m m 21 e d r e 22 a balance in amounts to be set forth in rules promulgated c e r c 23 pursuant to Section 17 of the Credit for Reinsurance Act;

e a n b 24 (3) the assuming insurer shall have and uSB [150 Page 20 maintain, on an ongoing basis, a minimum solvency or capital .221571.5SA - 20 - ratio, as applicable, which will be set forth in rules promulgated pursuant to Section 17 of the Credit for Reinsurance Act;

e e 17 (b) the assuming insurer shall consent e e n d 18 in writing to the jurisdiction of the courts of this state and = = l ] 19 to the appointment of the superintendent as agent for service a l r i 20 of process;

provided that the superintendent may require that t e a t consent for service of process be provided to the m m 21 e d r e 22 superintendent and included in each reinsurance SB 150 Page 21 agreement;

and c e r c 23 further provided that nothing in this subparagraph shall limit e a n b 24 or in any way alter the capacity of parties to a reinsurance u [ agreement to agree to alternative dispute resolution .221571.5SA - 21 - mechanisms, except to the extent such agreements are unenforceable pursuant to applicable insolvency or delinquency laws;

(d) each reinsurance agreement shall include a provision requiring the assuming insurer to provide security in an amount equal to one hundred percent of the assuming insurer's liabilities attributable to reinsurance ceded pursuant to that agreement if the assuming insurer resists enforcement of a final judgment that is enforceable pursuant to the law of the jurisdiction in which it was obtained or a properly enforceable arbitration award, whether e e 17 obtained by the ceding insurer or by its legal successor on e e n d 18 behalf of its resolution estate;

and = = l ] 19 (e) the assuming insurer shall confirm a l r i 20 that it is not currently participating in any solvent scheme of t e a t arrangement that involves this state's ceding insurers and m m 21 e d r e 22 shall agree to notify the ceding insurer and the superintendentSB c150 ePage r22 csuperintendent 23 and to provide security in an amount equal to one hundred e a n b 24 percent of the assuming insurer's liabilities to the ceding u [ insurer, should the assuming insurer enter into such a solvent .221571.5SA - 22 - scheme of arrangement;

and (7) the assuming insurer's supervisory authority shall confirm to the superintendent on an annual basis, as of the preceding December 31 or at the annual date otherwise statutorily reported to the reciprocal jurisdiction, that the assuming insurer complies with the requirements set e e 17 forth in Paragraphs (2) and (3) of this subsection.

e e n d 18 B.

Nothing in this section precludes an assuming = = l ] 19 insurer from providing the superintendent with information on a a l r i 20 voluntary basis.

tSB e150 aPage t23 SECTION 11.

[NEW MATERIAL ] RECIPROCAL JURISDICTIONS.-- m m 21 e d r e 22 A.

The superintendent shall timely create and c e r c 23 publish a list of reciprocal jurisdictions.

A list of e a n b 24 reciprocal jurisdictions shall be published through the u [ national association of insurance commissioners committee .221571.5SA - 23 - process.

The superintendent may remove a jurisdiction from the list of reciprocal jurisdictions upon a determination that the jurisdiction no longer meets the requirements of a reciprocal jurisdiction, in accordance with a process set forth in rules adopted by the superintendent, except that the superintendent shall not remove from the list a reciprocal jurisdiction as defined in Paragraphs (1) and (2) of e e 17 Subsection F of Section 2 of the Credit for Reinsurance Act.

e e n d 18 Upon removal of a reciprocal jurisdiction from the list, credit = = l ] 19 for reinsurance ceded to an assuming SB 150 Page 24 insurer that has its home a l r i 20 office or is domiciled in that jurisdiction shall be allowed, t e a t if otherwise allowed pursuant to the Credit for Reinsurance m m 21 e d r e 22 Act.

c e r c 23 SECTION 12.

[NEW MATERIAL ] RECIPROCAL JURISDICTION e a n b 24 ASSUMING INSURERS.-- u [ A.

The superintendent shall timely create and .221571.5SA - 24 - publish a list of reciprocal jurisdiction assuming insurers that have satisfied the conditions set forth in this section and to which cessions shall be granted credit.

If the superintendent determines that an assuming insurer no longer meets one or more of the requirements pursuant to this section, the superintendent may e e 17 revoke or suspend the eligibility of the assuming insurer for e e n d 18 recognition pursuant to this section in accordance with = = l ] 19 procedures set forth in rule.

aSB l150 rPage i25 20 C.

While an assuming insurer's eligibility is t e a t suspended, no reinsurance agreement issued, amended or renewed m m 21 e d r e 22 after the effective date of the suspension qualifies for credit c e r c 23 except to the extent that the assuming insurer's obligations e a n b 24 pursuant to the contract are secured in accordance with Section u [ 16 of the Credit for Reinsurance Act.

.221571.5SA - 25 - D.

Nothing in this section shall limit or in any e e 17 way alter the capacity of parties to a reinsurance agreement to e e n d 18 agree on requirements for security or other terms in that =SB =150 lPage ]26 19 reinsurance agreement, except as expressly prohibited by the a l r i 20 Credit for Reinsurance Act or other applicable law or rule.

t e a t SECTION 13.

[NEW MATERIAL ] AGREEMENTS OF RECIPROCAL m m 21 e d r e 22 JURISDICTION REINSURERS.-- c e r c 23 A.

With respect to reciprocal jurisdiction e a n b 24 reinsurers, credit may be taken pursuant to this section only u [ for reinsurance agreements entered into, amended or renewed on .221571.5SA - 26 - or after the effective date of the Credit for Reinsurance Act and only with respect to losses incurred and reserves reported on or after the later of:

Nothing in this section shall authorize an assuming insurer to withdraw or reduce the security provided pursuant to any reinsurance agreement except as permitted by e e 17 the terms of the agreement.

e e n d 18 D.

Nothing in this section shall limit, or in any =SB =150 lPage ]27 19 way alter, the capacity of parties to any reinsurance agreement a l r i 20 to renegotiate the agreement.

t e a t E.

Credit shall be allowed when the reinsurance is m m 21 e d r e 22 ceded to an assuming insurer not meeting the requirements of c e r c 23 Sections 3 through 12 and Subsections A through D of Section 13 e a n b 24 of the Credit for Reinsurance Act, but only as to the insurance u [ of risks located in jurisdictions where the reinsurance is .221571.5SA - 27 - required by applicable law or regulation of that jurisdiction.

and will abide by the final decision of the court or of any appellate court in the e e 17 event of an appeal;

and eSB e150 nPage d28 18 (2) to designate the superintendent or a = = l ] 19 designated attorney as its true and lawful attorney upon whom a l r i 20 may be served any lawful process in any action, suit or t e a t proceeding instituted by or on behalf of the ceding insurer;

m m 21 e d r e 22 provided that this subsection is not intended to conflict with c e r c 23 or override the obligation of the parties to a reinsurance e a n b 24 agreement to arbitrate their disputes, if this obligation is u [ created in the agreement.

.221571.5SA - 28 - G.

(1) notwithstanding any other provision in the trust instrument, if the trust fund is inadequate because it contains an amount less than the amount required by Section 6 of the Credit for Reinsurance Act, or if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation or similar proceedings pursuant to the laws of its state or country of domicile, the trustee shall comply with an order of the government agency with regulatory e e 17 oversight over the trust or SB 150 Page 29 with an order of a court of e e n d 18 competent jurisdiction directing the trustee to transfer to the = = l ] 19 government agency with regulatory oversight all of the assets a l r i 20 of the trust fund;

t e a t (2) the assets shall be distributed by and m m 21 e d r e 22 claims shall be filed with and valued by the government agency c e r c 23 with regulatory oversight in accordance with the laws of the e a n b 24 state in which the trust is domiciled that are applicable to u [ the liquidation of domestic insurance companies;

.221571.5SA - 29 - (3) if the government agency with regulatory oversight determines that the assets of the trust fund or any part of the fund are not necessary to satisfy the claims of the United States ceding insurers of the grantor of the trust, the assets or part of the assets shall be returned by the government agency with regulatory oversight to the trustee for distribution in accordance with the trust agreement;

[NEW MATERIAL ] REVOCATION OF ACCREDITATION OR CERTIFICATION.-- A.

If an accredited or certified reinsurer ceases to meet the requirements for accreditation or certification, the superintendent may suspend or revoke the reinsurer's SB 150 Page 30 accreditation or certification.

e e 17 B.

The superintendent shall give the reinsurer e e n d 18 notice and opportunity for hearing.

The suspension or = = l ] 19 revocation shall not take effect until after the a l r i 20 superintendent's order on hearing unless:

t e a t (1) the reinsurer waives its right to hearing;

m m 21 e d r e 22 (2) the superintendent's order is based on c e r c 23 regulatory action by the reinsurer's domiciliary jurisdiction e a n b 24 or the voluntary surrender or termination of the reinsurer's u [ eligibility to transact insurance or reinsurance business in .221571.5SA - 30 - its domiciliary jurisdiction or in the primary certifying state of the reinsurer pursuant to Subsection J of Section 9 of the Credit for Reinsurance Act;

If a reinsurer's accreditation or certification is revoked, no credit for reinsurance shall be granted after the SB 150 Page 31 effective date of the revocation, except to the extent that the reinsurer's obligations pursuant to the contract are secured in e e 17 accordance with Subsections C through I of Section 9 or Section e e n d 18 16 of the Credit for Reinsurance Act.

= = l ] 19 SECTION 15.

[NEW MATERIAL ] CONCENTRATION OF RISK.-- a l r i 20 A.

A ceding insurer shall take steps to manage its t e a t reinsurance recoverables proportionate to its own book of m m 21 e d r e 22 business.

A domestic ceding insurer shall notify the c e r c 23 superintendent within thirty days after reinsurance e a n b 24 recoverables from any single assuming insurer, or group of u [ affiliated assuming insurers, exceeds fifty percent of the .221571.5SA - 31 - domestic ceding insurer's last reported surplus to policyholders, or after it is determined that reinsurance recoverables from any single assuming insurer, or group of affiliated assuming insurers, is likely to exceed this limit.

A domestic ceding insurer shall notify the superintendent within thirty days after ceding to any single assuming insurer, or group of affiliated assuming insurers, more than twenty percent of the ceding insurer's gross written premium in the prior calendar year, or after it has determined that the reinsurance ceded to any single assuming insurer, or group of affiliated assuming insurers, SB 150 Page 32 is likely to exceed this limit.

The notification shall demonstrate that the exposure is safely managed by the domestic e e 17 ceding insurer.

e e n d 18 SECTION 16.

[NEW MATERIAL ] REDUCTION IN LIABILITY.-- = = l ] 19 A.

An asset or a reduction in liability for the a l r i 20 reinsurance ceded by a domestic insurer to an assuming insurer t e a t not meeting the requirements of Sections 3 through 15 of the m m 21 e d r e 22 Credit for Reinsurance Act shall be allowed in an amount not c e r c 23 exceeding the liabilities carried by the ceding insurer;

e a n b 24 provided that the superintendent may adopt by rule pursuant to u [ Section 17 of the Credit for Reinsurance Act specific .221571.5SA - 32 - additional requirements relating to or setting forth:

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, pursuant to a reinsurance contract with the assuming insurer as security for the payment of obligations thereunder, if the security is SB 150 Page 33 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 United States financial institution e e 17 as defined in Paragraph (2) of Subsection E of Section 2 of the e e n d 18 Credit for Reinsurance Act.

This security may be in the form = = l ] 19 of:

a l r i 20 (1) cash;

t e a t (2) securities listed by the securities m m 21 e d r e 22 valuation office of the national association of insurance c e r c 23 commissioners, including those deemed exempt from filing as e a n b 24 defined by the purposes and procedures manual of the securities u [ valuation office, and qualifying as admitted assets;

.221571.5SA - 33 - (3) clean, irrevocable, unconditional letters of credit issued or confirmed by a qualified United States financial institution 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;

(4) 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, SB 150 Page 34 renewal, modification or amendment, whichever first occurs;

[NEW MATERIAL ] PROMULGATION OF RULES.-- e e 17 A.

The superintendent shall adopt rules to e e n d 18 implement the provisions of the Credit for Reinsurance Act.

= = l ] 19 B.

The superintendent may adopt rules applicable to a l r i 20 reinsurance arrangements as set forth in Subsection C of this t e a t section.

m m 21 e d r e 22 C.

A rule adopted pursuant to Subsections B through c e r c 23 G of this section may apply only to reinsurance relating to:

e a n b 24 (1) life insurance policies with guaranteed u [ nonlevel gross premiums or guaranteed nonlevel benefits;

.221571.5SA - 34 - (2) universal life insurance policies with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period;

SB 150 Page 35 D.

or (2) policies issued prior to January 1, 2015, e e 17 if risk pertaining to such pre-2015 policies is ceded in e e n d 18 connection with the treaty, in whole or in part, on or after = = l ] 19 January 1, 2015.

a l r i 20 E.

A rule adopted pursuant to Subsections B through t e a t G of this section may require the ceding insurer, in m m 21 e d r e 22 calculating the amounts or forms of security required to be c e r c 23 held pursuant to rules promulgated pursuant to the Credit for e a n b 24 Reinsurance Act, to use the valuation manual adopted by the u [ national association of insurance commissioners pursuant to .221571.5SA - 35 - Paragraph (1) of Section 11B of the national association of insurance commissioners standard valuation law, including all amendments adopted by the national association of insurance commissioners and in effect on the date as of which the calculation is made, to the extent applicable.

(1) meets the conditions set forth in Sections 10 through 12 and Subsections A through D of SB 150 Page 36 Section 13 of the Credit for Reinsurance Act;

or (3) maintains at least two hundred fifty million dollars ($250,000,000) in capital and surplus when determined in accordance with the national association of insurance commissioners accounting practices and procedures e e 17 manual, including all amendments thereto adopted by the e e n d 18 national association of insurance commissioners, excluding the = = l ] 19 impact of any permitted or prescribed practices;

and a l r i 20 (4) is licensed in at least twenty-six states;

t e a t or m m 21 e d r e 22 (5) is licensed in at least ten states, and c e r c 23 licensed or accredited in at least thirty-five states.

e a n b 24 G.

The authority to adopt rules pursuant to u [ Subsections B through F of this section shall not limit the .221571.5SA - 36 - superintendent's general authority to adopt rules pursuant to Subsection A of this section.

[NEW MATERIAL ] INSOLVENCY.--Upon the insolvency of a non-United-States insurer or reinsurer that provides security to fund its obligations in the United States in accordance with the Credit for Reinsurance Act, the assets representing the security shall be maintained in the United States, and claims shall be filed with and valued by the state insurance commissioner with regulatory oversight, and the assets shall be distributed, in accordance with the insurance laws of the SB 150 Page 37 state in which the trust is domiciled that are applicable to the liquidation of domestic United States insurance companies.

EMERGENCY.--It is necessary for the public e e 17 peace, health and safety that this act take effect immediately.

eSB e150 nPage d38 1825 - 37 - = = l ] 19 a l r i 20 t e a t m m 21 e d r e 22 c e r c 23 e a n b 24 u [ .221571.5SA