Sec. 5. (a) A domestic insurer must file any proposed agreement of assumption reinsurance with the commissioner for the commissioner’s approval. The agreement must be executed by each insurer in a manner consistent with its articles and bylaws and the applicable law.

     (b) The requirement for filing and approval provided in subsection (a) is not applicable to an agreement if:

Terms Used In Indiana Code 27-6-1.1-5

  • Accepting insurer: means the insurer that is a party to a reinsurance transaction and that reinsures insurance, annuity, and endowment risks or liabilities of another insurer. See Indiana Code 27-6-1.1-1
  • Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
  • Assumption reinsurance: means a transaction in which one (1) insurer assumes all or a portion of the insurance, annuity, and endowment risks or liabilities of another insurer and thereby becomes directly and primarily liable to the insured, beneficiary, or policyholder under the policies and contracts subject to the reinsurance transaction. See Indiana Code 27-6-1.1-1
  • Ceding insurer: means the insurer that is a party to a reinsurance transaction and whose insurance, annuity, and endowment risks or liabilities are reinsured. See Indiana Code 27-6-1.1-1
  • Contract: A legal written agreement that becomes binding when signed.
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • Precedent: A court decision in an earlier case with facts and law similar to a dispute currently before a court. Precedent will ordinarily govern the decision of a later similar case, unless a party can show that it was wrongly decided or that it differed in some significant way.
  • Property: includes personal and real property. See Indiana Code 1-1-4-5
(1) the ceding insurer is not a domestic insurer; and

(2) the reserves and liabilities assumed under the agreement are not greater than twenty percent (20%) of the corresponding outstanding reserves and liabilities of the domestic accepting insurer without regard to the agreement.

     (c) The commissioner shall approve a reinsurance agreement within sixty (60) days after it is filed as provided in subsection (a) if the commissioner determines that:

(1) the agreement was legally executed by both insurers;

(2) in case one (1) of the parties to the agreement is a foreign or alien insurer, the agreement received the sanction and approval of the law of the foreign or alien jurisdiction, if necessary; and

(3) the agreement deals equitably and fairly with the contract and property rights of insurance, annuity, and endowment policy or contract holders of both insurers.

     (d) The commissioner’s approval of any agreement of reinsurance that is required to be filed as provided in subsection (a) shall be a condition precedent to the validity of the agreement. On the commissioner’s approval, the agreement shall become effective as of the date of the agreement or as of such other date as may be specifically provided in the agreement.

     (e) Within the period of forty-five (45) days following the commissioner’s approval of an agreement of assumption reinsurance, or within the period of forty-five (45) days following the effective date of an agreement of assumption reinsurance for which the approval of the commissioner is not required, the accepting insurer shall mail a written notification to each reinsured insurance, annuity, and endowment policy or contract holder. The notification must:

(1) specify each policy or contract subject to reinsurance and the effective date of the reinsurance transaction;

(2) offer to provide a copy of the agreement of assumption of reinsurance upon the written request of the policy or contract holder;

(3) state that the accepting insurer assumes all of the rights and obligations of the ceding insurer with respect to the policies and contracts that are subject to the agreement of assumption reinsurance; and

(4) state that the rights and benefits of the policy or contract holder under the policy or contract that is subject to reinsurance, including the right to surrender the policy or contract subject to the terms of the policy or contract, are not affected by the reinsurance.

     (f) This section does not apply to an assumption reinsurance agreement to which a domestic ceding insurer is a party if the insurer is the subject of a proceeding under IC 27-9-3.

As added by P.L.260-1983, SEC.1. Amended by P.L.256-1985, SEC.1; P.L.248-1989, SEC.1.

  Previous section
Next section  
 Chapter 1.1 Contents