521D.4 - REPORT OF NONRENEWAL, CANCELLATION, REVISION OF CEDED REINSURANCE AGREEMENTS -- INFORMATION REQUIRED -- SCOPE.
521D.4 REPORT OF NONRENEWAL, CANCELLATION, REVISION OF CEDED REINSURANCE AGREEMENTS -- INFORMATION REQUIRED -- SCOPE. 1. A nonrenewal, cancellation, or revision of a ceded reinsurance agreement need not be reported pursuant to section 521D.2 if the nonrenewal, cancellation, or revision is not material. For purposes of this chapter, a material nonrenewal, cancellation, or revision of a ceded reinsurance agreement is one that does the following: a. For property and casualty business including accident and health business when written as such, affects more than fifty percent of an insurer's ceded written premium on an annualized basis as indicated in the insurer's most recently filed statutory statement. b. For life, annuity, and accident and health business, affects more than fifty percent of the total reserve credit taken for business ceded on an annualized basis as indicated in the insurer's most recently filed statutory statement. 2. Notwithstanding subsection 1, a filing is not required if the insurer's ceded written premium represents, on an annualized basis, less than ten percent of direct plus assumed written premium, or the total reserve credit taken for business ceded represents, on an annualized basis, less than ten percent of the statutory reserve requirement prior to any cession. 3. A report required to be filed pursuant to this chapter is to be filed regardless of who has initiated the nonrenewal, cancellation, or revision of the ceded reinsurance agreement whenever one or more of the following conditions exist: a. The entire cession has been canceled, nonrenewed, or revised and ceded indemnity and loss adjustment expense reserves, after any nonrenewal, cancellation, or revision, represent less than fifty percent of the comparable reserves that would have been ceded had the nonrenewal, cancellation, or revision not occurred. b. An authorized or accredited reinsurer has been replaced on an existing cession by an unauthorized reinsurer. c. Collateral requirements previously established for unauthorized reinsurers have been reduced. Subject to the materiality criteria, for purposes of paragraphs "b" and "c", a report shall be filed if the result of the revision affects more than ten percent of the cession. 4. A report of a material nonrenewal, cancellation, or revision of a ceded reinsurance agreement required to be filed shall include all of the following: a. The effective date of the nonrenewal, cancellation, or revision. b. The description of the transaction including the identification of the initiator of the transaction. c. The purpose of, or reason for, the transaction. d. The identity of the replacement reinsurers, if applicable. 5. Insurers are required to report all material nonrenewals, cancellations, or revisions of ceded reinsurance agreements on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers which utilizes an intercompany pooling agreement or arrangement or a one hundred percent reinsurance agreement under which the ceding company has ceded substantially one hundred percent of its direct and assumed business to a pool. An insurer is deemed to have ceded substantially one hundred percent of its direct and assumed business to a pool if the insurer has less than one million dollars of total direct plus assumed written premiums during a calendar year that are not subject to the pooling agreement or arrangement and the net income of the business not subject to the pooling agreement or arrangement represents less than five percent of the insurer's capital and surplus. If a group of insurers reports on a consolidated basis, the report shall identify the individual insurers that are members of the group.
Section History: Recent Form 94 Acts, ch 1176, §19