31A-20-107 - Reinsurance.
31A-20-107. Reinsurance.
(1) (a) An authorized insurer writing a nonassessable policy may assume as a reinsurer arisk it may write directly.
(b) Subject to Chapters 5 through 14, Chapter 17, and to any limitation imposed on aforeign insurer by the law of its domicile, the commissioner may also authorize an insurer toassume, as a reinsurer, one or more designated classes of risks it is not authorized to writedirectly.
(2) (a) Subject to Section 31A-5-508, an authorized insurer may cede or retrocede to:
(i) an insurer authorized to assume it under Subsection (1) a liability it has undertaken ona risk lawfully written under its certificate of authority; and
(ii) an authorized agency of the federal government or of this state.
(b) An authorized insurer may cede or retrocede reinsurance to an unauthorized insurersubject to:
(i) Sections 31A-17-404 and 31A-17-404.1;
(ii) a rule made by the commissioner under a section listed in Subsection (2)(b)(i); and
(iii) Subsection (3).
(3) A person may not knowingly cede reinsurance or permit or assist it to be ceded to areinsurer not in sound financial condition. If a reinsurer satisfies one or more of the securityfactors under Section 31A-17-404.1, there is a rebuttable presumption that the reinsurer is insound financial condition.
(4) (a) An authorized reinsurer who knowingly assumes from an unauthorized insurer, arisk that may lawfully be written only by an authorized insurer, shall immediately report the factsof the transaction to the commissioner.
(b) (i) Subject to Subsection (4)(b)(ii), an assuming reinsurer described in Subsection(4)(a):
(A) is liable for all taxes and penalties applicable under Sections 31A-3-301, 31A-3-302,and 31A-3-303; and
(B) may take credit for the payment of a tax or penalty lapse under Subsection (4)(b)(i) inits settlement of accounts with the unauthorized ceding insurer.
(ii) This Subsection (4)(b) does not apply if the assuming reinsurer's agreement with theceding insurer takes the taxes described in Subsection (4)(b)(i) into account.
(5) (a) Except as provided under Subsection (5)(b), an authorized reinsurer proposing towithdraw from writing a class of its business in Utah, except by nonrenewal of an existingcontract at its expiration, shall give the commissioner 60 days written notice of its intention. Theauthorized reinsurer may not withdraw until after those 60 days lapse.
(b) This Subsection (5) does not apply if the withdrawing reinsurer writes aninsignificant market share of that class of business in Utah. The commissioner shall define"insignificant market share" by rule.
Amended by Chapter 257, 2008 General Session