§ 521b-103

521B.103 Limited credit allowed other domestic ceding insurers. 1. An asset or a reduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of section 521B.102, shall be allowed in anamount not exceeding the liabilities carried by the ceding insurer. The commissioner mayadopt rules pursuant to section 521B.105 specifying requirements related to the valuationof assets or reserve credits, the amount and forms of security supporting reinsurancearrangements described in section 521B.105, and the circumstances pursuant to whichcredit shall be reduced or eliminated. The reduction shall be in the amount of funds heldby 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 ofobligations under the reinsurance contract, if the security is held in the United States subjectto withdrawal solely by, and under the exclusive control of, the ceding insurer, or in thecase of a trust, held in a qualified United States financial institution as defined in section521B.104, subsection 2. 2.

al solely by, and under the exclusive control of, the ceding insurer, or in thecase of a trust, held in a qualified United States financial institution as defined in section521B.104, subsection 2. 2. The security may be in the form of any of the following:a. Cash.b. A security listed by the securities valuation office of the NAIC, including those securities deemed exempt from filing as defined by the purposes and procedures manual ofthe securities valuation office and those securities qualifying as admitted assets. c. (1) Clean, irrevocable, unconditional letters of credit, issued or confirmed by a qualified United States financial institution, as defined in section 521B.104, subsection 1, effective nolater than December 31 of the year for which the filing is being made, and in the possessionof, or in trust for, the ceding insurer on or before the filing date of the ceding insurer’s annualstatement. (2) A letter of credit meeting applicable standards of issuer acceptability as of the date of the issuance or confirmation of the letter of credit shall, notwithstanding the issuingor confirming institution’s subsequent failure to meet applicable standards of issueracceptability,

the date of the issuance or confirmation of the letter of credit shall, notwithstanding the issuingor confirming institution’s subsequent failure to meet applicable standards of issueracceptability, continue to be acceptable as security until the expiration, extension, renewal,modification, or amendment of the letter of credit, whichever occurs first. d. Any other form of security acceptable to the commissioner.2013 Acts, ch 39, §3, 11; 2017 Acts, ch 7, §6; 2020 Acts, ch 1008, §20, 27Referred to in §521B.102, 521B.1042020 amendment applies to all cessions under reinsurance agreements that have an inception, anniversary, or renewal date on or after July 1, 2020; 2020 Acts, ch 1008, §27 Sat Dec 23 00:52:45 2023 Iowa Code 2024, Section 521B.103 (17, 0)