North Dakota Code 26.1-10.1-03 – Nonrenewals, cancellations, or revisions of ceded reinsurance agreements
1. Materiality and scope.
Terms Used In North Dakota Code 26.1-10.1-03
- 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.
- following: when used by way of reference to a chapter or other part of a statute means the next preceding or next following chapter or other part. See North Dakota Code 1-01-49
- Property: includes property, real and personal. See North Dakota Code 1-01-49
- written: include "typewriting" and "typewritten" and "printing" and "printed" except in the case of signatures and when the words are used by way of contrast to typewriting and printing. See North Dakota Code 1-01-37
- year: means twelve consecutive months. See North Dakota Code 1-01-33
a. Nonrenewals, cancellations, or revisions of ceded reinsurance agreements or new ceded reinsurance agreements need not be reported under section 26.1-10.1-01 if the nonrenewals, cancellations, or revisions of ceded reinsurance agreements or new ceded reinsurance agreements are not material. For purposes of this chapter, a material nonrenewal, cancellation, or revision of a ceded reinsurance agreement or a material new ceded reinsurance agreement is one that affects:
(1) As respects property and casualty business, including accident and health business written by a property and casualty insurer:
(a) More than fifty percent of the insurer’s total ceded written premium; or
(b) More than fifty percent of the insurer’s total ceded indemnity and loss adjustment reserves.
(2) As respects life, annuity, and accident and health business, more than fifty percent of the total reserve credit taken for business ceded, on an annualized basis, as indicated in the insurer’s most recent annual statement. (3) As respects either property and casualty or life, annuity, and accident and health business, either of the following events constitutes a material revision that must be reported:
(a) An authorized reinsurer representing more than ten percent of a total cession is replaced by one or more unauthorized reinsurers; or
(b) Previously established collateral requirements have been reduced or waived as respects one or more unauthorized reinsurers representing collectively more than ten percent of a total cession. b. However, filing is not required if:
(1) As respects property and casualty business, including accident and health business written by a property and casualty insurer, the insurer’s total ceded written premium represents, on an annualized basis, less than ten percent of its total written premium for direct and assumed business; or
(2) As respects life, annuity, and accident and health business, 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.
2. Information to be reported.
a. The following information is required to be disclosed in any report of a material nonrenewal, cancellation, or revision of ceded reinsurance agreements or material new ceded reinsurance agreements:
(1) Effective date of the nonrenewal, cancellation, revision, or new agreement; (2) The description of the transaction with an identification of the initiator of the transaction; (3) Purpose of, or reason for, the transaction; and
(4) If applicable, the identity of the replacement reinsurers.
b. Insurers are required to report all material nonrenewals, cancellations, or revisions of ceded reinsurance agreements or material new ceded reinsurance agreements on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers that utilizes a pooling arrangement or one hundred percent reinsurance agreement that affects the solvency and integrity of the insurer’s reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than one million dollars total direct plus assumed written premiums during a calendar year which are not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than five percent of the insurer’s capital and surplus.