Virginia’s Bureau of Insurance issued guidelines for implementation of the Commonwealth’s credit for reinsurance law. The Bureau’s December 13, 2012 Administrative Letter 2012-11 (the “Letter”) lists the basic criteria the Bureau will rely on in making determinations as to whether a domestic ceding insurer can take credit for reinsurance, based on the reinsurer qualifying as: (1) a licensed Virginia insurer in good standing, (2) an accredited Virginia reinsurer with at least $20 million surplus, (3) a reinsurer licensed in a state with similar credit laws and at least $20 million surplus, (4) a single assuming insurer with a trust account and at least $20 million surplus, (5) a participant in an association of unincorporated underwriters and at least $100 million surplus, (6) a participant in an association of incorporated underwriters with aggregate surplus of $10 billion and a joint trusteed surplus of at least $100 million; or (7) a reinsurer certified in Virginia with a surplus of $250 million, domiciled and licensed in a qualified jurisdiction, and with acceptable ratings from two or more ratings agencies.
The Letter also delineates ceding insurer responsibilities in ensuring the validity of credit reported on their statements, and provides information pertaining to filing requirements and forms.
This post written by John Pitblado.