In lieu of reinsurance, the IC said the conservator, receiver or liquidator may also enter into assumption reinsurance
agreements (ARA) or similar contracts with reinsurers, provided that it is approved by the commission.
The total of net premiums subject to the fee includes "reinsurance premiums written, reduced by reinsurance ceded, and reduced by ceding commissions and [medical loss ratio (MLR)] rebates." The affected net premium total also includes premiums written for assumption reinsurance -- but not premiums written for indemnity reinsurance.
In an assumption reinsurance arrangement, a company takes over the entire risk from the "direct insurance writer," or original coverage issuer.
However, the net premiums written do include premiums written for assumption reinsurance and are reduced by assumption reinsurance premiums ceded (Regs.
It is worth highlighting that indemnity reinsurance is excluded but assumption reinsurance is included.
The rating withdrawal reflects the termination of the quota share insurance treaties and an assumption reinsurance
agreement with the insurer's parent ARI Mutual Insurance Company that was recently approved by the The New Jersey Department of Banking and Insurance.
An inquirer presented questions about surety insurance that had been transferred to a reinsurer under an assumption reinsurance
agreement, where the ceding insurer and reinsurer were both foreign insurers.
When the issue was raised that companies with these blocks of business could use assumption reinsurance
, Gorski explained that risk-based capital formulas are net of reinsurance, unlike reserving calculations.
insurers form a foreign captive to reinsure risks, the premiums will constitute RPII whether the arrangement is a conventional contract or an assumption reinsurance
contract pursuant to which the ceding company will no longer retain any rights or obligations.
1,2002, the company and its parent, Meridian Security Insurance Co., entered into an assumption reinsurance
agreement and ICO was to be dissolved.