Kentucky 2020 Regular Session Status: Enacted

HB 417 — AN ACT relating to credit for reinsurance.

Last action — signed by Governor (Acts ch. 50)

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  1. ✓
    Introduced
  2. ✓
    In Committee
  3. ✓
    Passed House
  4. ✓
    Passed Senate
  5. ✓
    To Executive
  6. 6
    Enacted

This bill has been enacted into law. Introduced February 12, 2020. Enacted.

Prognosis

Likely to advance 68% · moderate confidence

Where this bill stands today.

Odds of enactment

High

How often bills like it became law.

  • Enacted

    Current position in the legislative process.

  • Cleared a recorded vote

    Passed 2 recorded votes so far.

Prognosis reads this bill's own signals — stage, sponsorship breadth, committee status, recorded votes and cross-state momentum. Odds come from a model trained on which bills have become law.

Bill Text

What changed in the latest version

56 added · 56 removed

56 line(s) added, 56 removed.

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UNOFFICIAL COPY 20 RS BR 1437 AN ACT relating to credit for reinsurance.
UNOFFICIAL COPY 20 RS HB 417/GA AN ACT relating to credit for reinsurance.
Page 1 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 1.
Page 1 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA 1.
(2) (a) Credit for reinsurance shall be allowed a ceding insurer as either an asset or a deduction from liability on account of reinsurance ceded only when the Page 2 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 reinsurer meets the requirements of:
(2) (a) Credit for reinsurance shall be allowed a ceding insurer as either an asset or a deduction from liability on account of reinsurance ceded only when the Page 2 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA reinsurer meets the requirements of:
Is licensed to transact insurance or reinsurance in at least one (1) Page 3 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 state, or in the case of a United States branch of an alien assuming insurer, is entered through and licensed to transact insurance or reinsurance in at least one (1) state;
Is licensed to transact insurance or reinsurance in at least one (1) Page 3 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA state, or in the case of a United States branch of an alien assuming insurer, is entered through and licensed to transact insurance or reinsurance in at least one (1) state;
Page 4 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 1.
Page 4 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA 1.
of this subparagraph, but only after a finding, based on an assessment of the risk, that the new required surplus level is adequate for the Page 5 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 protection of United States ceding insurers, policyholders, and claimants in light of a reasonably foreseeable adverse loss development.
of this subparagraph, but only after a finding, based on an assessment of the risk, that the new required surplus level is adequate for the Page 5 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA protection of United States ceding insurers, policyholders, and claimants in light of a reasonably foreseeable adverse loss development.
The group shall make available to the commissioner an annual certification of the solvency of each underwriter by the group's Page 6 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 domiciliary insurance regulatory official and its independent public accountants.
The group shall make available to the commissioner an annual certification of the solvency of each underwriter by the group's Page 6 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA domiciliary insurance regulatory official and its independent public accountants.
The trust shall vest legal title to its assets in the trustees of the trust for its United States policyholders and Page 7 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 ceding insurers, their assigns, and successors in interest.
The trust shall vest legal title to its assets in the trustees of the trust for its United States policyholders and Page 7 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA ceding insurers, their assigns, and successors in interest.
Agree to submit to the jurisdiction of this state, appoint the Page 8 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 commissioner as its agent for service of process in this state, and agree to provide security for one hundred percent (100%) of the assuming insurer's liabilities attributable to reinsurance ceded by United States ceding insurers if the assuming insurer resists enforcement of a final United States judgment;
Agree to submit to the jurisdiction of this state, appoint the Page 8 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA commissioner as its agent for service of process in this state, and agree to provide security for one hundred percent (100%) of the assuming insurer's liabilities attributable to reinsurance ceded by United States ceding insurers if the assuming insurer resists enforcement of a final United States judgment;
The association provides the commissioner an annual certification by the association's domiciliary regulator of the solvency of each Page 9 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 underwriter member within ninety (90) days after its financial statements are due to be filed with the association's domiciliary regulator, or if a certification is unavailable, financial statements, prepared by independent public accountants, of each underwriter member of the association.
The association provides the commissioner an annual certification by the association's domiciliary regulator of the solvency of each Page 9 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA underwriter member within ninety (90) days after its financial statements are due to be filed with the association's domiciliary regulator, or if a certification is unavailable, financial statements, prepared by independent public accountants, of each underwriter member of the association.
The commissioner shall consider the list of qualified jurisdictions Page 10 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 published through the NAIC's committee process when determining qualified jurisdictions.
The commissioner shall consider the list of qualified jurisdictions Page 10 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA published through the NAIC's committee process when determining qualified jurisdictions.
In order 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 subsection (4) of this section, or in a multibeneficiary trust in accordance with paragraph (d) of this subsection, except as otherwise provided in this Page 11 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 paragraph.
In order 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 subsection (4) of this section, or in a multibeneficiary trust in accordance with paragraph (d) of this subsection, except as otherwise provided in this Page 11 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA paragraph.
With respect to obligations incurred by a certified reinsurer pursuant to this paragraph, if the security is insufficient, the commissioner shall reduce the allowable credit by an amount proportionate to the deficiency, and the commissioner may impose Page 12 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 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.
With respect to obligations incurred by a certified reinsurer pursuant to this paragraph, if the security is insufficient, the commissioner shall reduce the allowable credit by an amount proportionate to the deficiency, and the commissioner may impose Page 12 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA 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.
The assuming insurer has its head office in, or is domiciled in, as Page 13 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 applicable, and is licensed in, a reciprocal jurisdiction;
The assuming insurer has its head office in, or is domiciled in, as Page 13 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA applicable, and is licensed in, a reciprocal jurisdiction;
To submit the assuming insurer's consent, in writing, to the Page 14 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 jurisdiction of the courts of this state and to the appointment of the commissioner as an agent for service of process.
To submit the assuming insurer's consent, in writing, to the Page 14 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA jurisdiction of the courts of this state and to the appointment of the commissioner as an agent for service of process.
To notify the ceding insurer and the commissioner, and to Page 15 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 provide security in the amount of one hundred percent (100%) of the assuming insurer's liabilities to the ceding insurer, should the assuming insurer enter into a solvent scheme of arrangement referenced in subpart i.
To notify the ceding insurer and the commissioner, and to Page 15 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA provide security in the amount of one hundred percent (100%) of the assuming insurer's liabilities to the ceding insurer, should the assuming insurer enter into a solvent scheme of arrangement referenced in subpart i.
The commissioner shall consider, and may approve, any other Page 16 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 reciprocal jurisdiction:
The commissioner shall consider, and may approve, any other Page 16 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA reciprocal jurisdiction:
of this section and complies with any additional requirements that the Page 17 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 commissioner may impose by administrative regulation, except to the extent that there is a conflict with an applicable covered agreement.
of this section and complies with any additional requirements that the Page 17 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA commissioner may impose by administrative regulation, except to the extent that there is a conflict with an applicable covered agreement.
Page 18 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 5.
Page 18 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA 5.
(h) Credit shall be allowed when the reinsurance is ceded to an assuming insurer not meeting the requirements of paragraph (a), (b), (c), (d), [or ](e), or (f) of Page 19 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 this subsection, but only with respect to the insurance of risks located in jurisdictions where such reinsurance is required by applicable law or regulation of that jurisdiction or reinsurance ceded to a residual market mechanism reinsurance association, or the members thereof, created pursuant to law or which has been voluntarily created as such by its members with the approval of the commissioner.
(h) Credit shall be allowed when the reinsurance is ceded to an assuming insurer not meeting the requirements of paragraph (a), (b), (c), (d), [or ](e), or (f) of Page 19 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA this subsection, but only with respect to the insurance of risks located in jurisdictions where such reinsurance is required by applicable law or regulation of that jurisdiction or reinsurance ceded to a residual market mechanism reinsurance association, or the members thereof, created pursuant to law or which has been voluntarily created as such by its members with the approval of the commissioner.
(j)[(h)] If the assuming insurer does not satisfy the requirements of paragraph (a), (b), [or ](c), or (f) of this subsection, the credit permitted by paragraph (d) or (e) of this subsection shall not be allowed unless the assuming insurer Page 20 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 agrees in the trust agreements to the following conditions:
(j)[(h)] If the assuming insurer does not satisfy the requirements of paragraph (a), (b), [or ](c), or (f) of this subsection, the credit permitted by paragraph (d) or (e) of this subsection shall not be allowed unless the assuming insurer Page 20 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA agrees in the trust agreements to the following conditions:
Page 21 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 3.
Page 21 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA 3.
Reinsurance recoverables from any single assuming insurer, Page 22 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 or group of affiliated assuming insurers, exceeds fifty percent (50%) of the domestic ceding insurer's last reported surplus to policyholders;
Reinsurance recoverables from any single assuming insurer, Page 22 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA or group of affiliated assuming insurers, exceeds fifty percent (50%) of the domestic ceding insurer's last reported surplus to policyholders;
Upon notice by the ceding insurer to the commissioner that the certified reinsurer has failed to pay claims owed under a reinsurance agreement in Page 23 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 a timely manner, the commissioner shall notify the certified reinsurer that it is no longer permitted to defer the posting of security for catastrophic recoverables.
Upon notice by the ceding insurer to the commissioner that the certified reinsurer has failed to pay claims owed under a reinsurance agreement in Page 23 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA a timely manner, the commissioner shall notify the certified reinsurer that it is no longer permitted to defer the posting of security for catastrophic recoverables.
Page 24 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 (a) Cash;
Page 24 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA (a) Cash;
Where the contract or other written agreement specifically provides Page 25 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 another payee of such reinsurance in the event of the insolvency of the ceding insurer;
Where the contract or other written agreement specifically provides Page 25 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA another payee of such reinsurance in the event of the insolvency of the ceding insurer;
Page 26 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 a.
Page 26 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA a.
Page 27 of 28 BR143700.100 - 1437 - XXXX Jacketed UNOFFICIAL COPY 20 RS BR 1437 b.
Page 27 of 28 HB041710.100 - 1437 - XXXX GA UNOFFICIAL COPY 20 RS HB 417/GA b.
Page 28 of 28 BR143700.100 - 1437 - XXXX Jacketed
Page 28 of 28 HB041710.100 - 1437 - XXXX GA
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Action History

  1. signed by Governor (Acts ch. 50)

  2. delivered to Governor

  3. enrolled, signed by President of the Senate

  4. enrolled, signed by Speaker of the House

  5. received in House

  6. 3rd reading, passed 31-0

  7. posted for passage in the Consent Orders of the Day for Thursday, March 19, 2020

  8. 2nd reading, to Rules

  9. reported favorably, 1st reading, to Consent Calendar

  10. to Banking & Insurance (S)

  11. received in Senate

  12. 3rd reading, passed 93-0

  13. posted for passage in the Regular Orders of the Day for Friday, February 28, 2020

  14. 2nd reading, to Rules

  15. reported favorably, 1st reading, to Calendar

  16. posted in committee

  17. to Banking & Insurance (H)

  18. introduced in House

Sponsorship breakdown

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0 sponsors · 0 co-sponsors · 138 not signed on

Sponsors (0)

None.

Co-sponsors (0)

None.

Not signed on (138)

138 members have not signed on to this bill.

Show all 138 →

"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Votes

PASS HB 417

Passed 31 Yea · 0 Nay · 7 Other
Party YeaNayPresentNot Voting
Unaffiliated 17006
Republican 14000
Democrat 0001
Total 31007
% of votes cast 82%0%0%18%
How each member voted (38)
Member Party Vote
Alvarado — Yea
Turner — Yea
Buford — Yea
Hornback — Yea
Robinson — Yea
Humphries — Yea
Schickel — Yea
Carroll D — Yea
Schroder — Yea
Westerfield — Yea
Castlen — Yea
McGarvey — Yea
Meredith — Yea
Thayer — Yea
Harris — Yea
Nemes — Yea
Thomas — Yea
Embry — Not Voting
Kerr — Not Voting
Parrett — Not Voting
Clark — Not Voting
Harper Angel — Not Voting
Miller J — Not Voting
Gerald A. Neal Democrat Not Voting
Brandon Smith Republican Yea
Christian McDaniel Republican Yea
David P. Givens Republican Yea
Jared Carpenter Republican Yea
Jimmy Higdon Republican Yea
Julie Raque Adams Republican Yea
Max Wise Republican Yea
Mike Wilson Republican Yea
Phillip Wheeler Republican Yea
Rick Girdler Republican Yea
Robby Mills Republican Yea
Robert Stivers Republican Yea
Robin L. Webb Republican Yea
Stephen West Republican Yea

Official roll call →

Pass

Passed 93 Yea · 0 Nay · 6 Other
Party YeaNayPresentNot Voting
Republican 29000
Unaffiliated 57006
Democrat 7000
Total 93006
% of votes cast 94%0%0%6%
How each member voted (99)
Member Party Vote
Fischer — Yea
Schamore — Yea
Bechler — Yea
Flood — Yea
Huff T — Yea
Sheldon — Yea
Bentley — Yea
Frazier — Yea
Jenkins — Yea
Minter — Yea
Sims — Yea
Sorolis — Yea
Nemes — Yea
Booker — Yea
Koenig — Yea
Stewart — Yea
Glenn — Yea
Palumbo — Yea
Stone — Yea
Branham Clark — Yea
Goforth — Yea
Lee — Yea
Lewis D — Yea
Pratt — Yea
Brenda — Yea
Graham — Yea
Lewis S — Yea
Prunty — Yea
Thomas — Yea
Graviss — Yea
Rand — Yea
Brown G — Yea
Raymond — Yea
Burch — Yea
Harris — Yea
Massey — Yea
Webber — Yea
Cantrell — Yea
Westrom — Yea
Donohue — Yea
Hatton — Yea
McCoy — Yea
Rothenburger — Yea
Wheatley — Yea
Heath — Yea
Rowland — Yea
Wiederstein — Yea
DuPlessis — Yea
Meredith — Yea
Hinkle — Yea
Meyer — Yea
Santoro — Yea
Yates — Yea
Howard — Yea
Carney — Not Voting
Hoover — Not Voting
Meeks — Not Voting
Scott — Not Voting
Turner — Not Voting
COMMONWEALTH OF KENTUCKY SENATE — Not Voting
Huff R — Yea
Miller C — Yea
Miller J — Yea
Al Gentry Democrat Yea
Ashley Tackett Laferty Democrat Yea
Lisa Willner Democrat Yea
Mary Lou Marzian Democrat Yea
Nima Kulkarni Democrat Yea
Pamela Stevenson Democrat Yea
Tina Bojanowski Democrat Yea
Aaron Reed Republican Yea
Adam Bowling Republican Yea
Bobby McCool Republican Yea
Chris Freeland Republican Yea
Chris Fugate Republican Yea
Daniel Elliott Republican Yea
David Hale Republican Yea
David Meade Republican Yea
David W. Osborne Republican Yea
Greg Elkins Republican Yea
James Tipton Republican Yea
Jason Petrie Republican Yea
Jim Gooch Jr. Republican Yea
John Blanton Republican Yea
Ken Upchurch Republican Yea
Kim Banta Republican Yea
Kim King Republican Yea
Kimberly Poore Moser Republican Yea
Mark Hart Republican Yea
Matthew Koch Republican Yea
Myron Dossett Republican Yea
Nancy Tate Republican Yea
Randy Bridges Republican Yea
Samara Heavrin Republican Yea
Savannah Maddox Republican Yea
Steve Bratcher Republican Yea
Steve Riley Republican Yea
Steven Rudy Republican Yea
Suzanne Miles Republican Yea

Official roll call →

Subjects

finance
Cross-referencing the record. Reading this bill against every other bill in the corpus by meaning, not keywords. Only the first open is slow. It’s instant for you after this. Matching · Ranking · Engrossing

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This bill has been enacted into law. Introduced February 12, 2020. Enacted.
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