Florida Office of Insurance Regulation Seeks to Expand Credit for Reinsurance From Eligible Reinsurers to Apply to Life Insurance

The Florida Office of Insurance Regulation (“OIR”) is seeking to amend Rule 69O-144.007, F.A.C, entitled “Credit for Reinsurance From Eligible Reinsurers” to apply to life insurance.  The Rule currently applies only to property and casualty insurance.

Rule 69O-144.007 was initially adopted to implement provisions of Section 624.610(3)(e), F.S., which gives the Florida Insurance Commissioner authority to allow credit for reinsurance that does not meet criteria established in Sections 624.610(3)(a)-(d), if the assuming insurer holds surplus in excess of $250 million and has a secure financial strength rating from at least two nationally recognized statistical rating organizations deemed acceptable by the Commissioner.

The Notice of Development of Rulemaking issued by the OIR is reprinted below.

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Notice of Development of Rulemaking

DEPARTMENT OF FINANCIAL SERVICES
OIR – Insurance Regulation

RULE NO.: RULE TITLE:
69O-144.007: Credit for Reinsurance From Eligible Reinsurers
PURPOSE AND EFFECT: Amends Rule 69O-144.007, F.A.C.
SUBJECT AREA TO BE ADDRESSED: Sections 624.610(3)(a)-(d), Florida Statutes, establishes the circumstances under which an insurer may normally receive credit, as either an asset or reduction from liability, for ceding liability to an assuming reinsurer. Section 624.610(3)(e), Florida Statutes, gives the Commissioner authority to allow credit for reinsurance that does not meet the criteria established in Sections 624.610(3)(a)-(d), Florida Statutes, if the assuming insurer holds surplus in excess of $250 million and has a secure financial strength rating from at least two nationally recognized statistical rating organizations deemed acceptable by the Commissioner. Rule 69O-144.007, Florida Administrative Code, was adopted by the Office to implement the provisions of Section 624.610(3)(e), Florida Statutes. The Rule currently applies only to property and casualty insurance and it does not permit the Commissioner to allow credit for life insurers that obtain reinsurance from reinsurers that do not meet the criteria contained in Sections 624.610(3)(a)-(d), Florida Statutes. The Office of Insurance Regulation is seeking to amend Rule 69O-144.007, Florida Administrative Code, to apply to life insurance as well as property and casualty insurance.
RULEMAKING AUTHORITY: 624.308, 624.610(14) FS.
LAW IMPLEMENTED: 624.307(1), 624.610 FS.

IF REQUESTED IN WRITING AND NOT DEEMED UNNECESSARY BY THE AGENCY HEAD, A RULE DEVELOPMENT WORKSHOP WILL BE NOTICED IN THE NEXT AVAILABLE FLORIDA ADMINISTRATIVE WEEKLY.
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE DEVELOPMENT AND A COPY OF THE PRELIMINARY DRAFT, IF AVAILABLE, IS: Kerry Krantz, Office of Insurance Regulation, E-mail Kerry.Krantz@floir.com

THE PRELIMINARY TEXT OF THE PROPOSED RULE DEVELOPMENT IS AVAILABLE AT NO CHARGE FROM THE CONTACT PERSON LISTED ABOVE.

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