Comments on Florida Credit for Reinsurance Proposed Rules Due by February 10, 2015

Comments are currently being accepted by the Florida Office of Insurance Regulation (“OIR”) until February 10, 2015 on proposed Rules that would conform the State of Florida to the National Association of Insurance Commissioners’ (“NAICs'”) Credit for Reinsurance Model Law. 

To view the complete Rule texts and markups, click on the hyperlinks below:

69O-144.005  Credit for Reinsurance

69O-144.007  Credit for Reinsurance From Eligible Reinsurers

Adoption of the proposed Rules would serve to fulfill NAIC accreditation requirements, as well as provide consistency among regulatory jurisdictions as to the manner in which reinsurers are granted the status of “certified reinsurer” (currently termed “eligible reinsurer” in the Rule).  Importantly, the proposed Rules address the manner in which Florida domestic insurance companies can apply credit for reinsurance from these entities.

Among the material changes in the Proposed Rules are:

• A change of the status name from “eligible reinsurer” to “certified reinsurer”
• Clarification and expansion of the documentation required to be filed in order to obtain and maintain status as a “certified reinsurer;” the factors to be considered in the evaluation and rating of certified reinsurers; and the method by which a jurisdiction is determined to be “qualified”
• Clarification of the process and regulatory responsibilities when the financial condition of a certified reinsurer changes (i.e., there is a change in financial strength rating or revocation of the certification of a certified reinsurer)
• Clarification of disclosure requirements of the OIR when it receives an application from a reinsurer for this status
• Clarification of the circumstances under which the Florida Insurance Commissioner may suspend, revoke, or otherwise modify a certified reinsurer’s certificatiom
• Addition of reinsurance concentration disclosure requirements; ceding insurers must notify the OIR in the event that reinsurance recoverables or reinsurance ceded exceeds a certain amount
• Addition of language that would allow the trusteed surplus of Trusteed Reinsurers to drop below $20 million if the Trusteed reinsurer is no longer underwriting new business and demonstrated that surplus below $20 million was warranted

To submit comments on the proposed Rules electronically, click here.

Should you have any questions or comments, please contact Colodny Fass.

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