MARYLAND ADOPTS CREDIT FOR REINSURANCE REGULATIONS
The Maryland Insurance Commissioner adopted regulations regarding Credit for Reinsurance effective August 18, 2014. The regulations will implement changes made to Title 5, Subtitle 9 of the Maryland Insurance Article, and are based upon recent amendments to model law and regulation developed by the National Association of Insurance Commissioners entitled “Credit for Reinsurance Model Law” (No. 785) and “Credit for Reinsurance Model Regulation” (No. 786), respectively. The regulations provide standards for a licensed ceding insurer to receive credit for reinsurance ceded to a certified reinsurer as a reduction of collateral requirements and include provisions that establish: 1) eligibility requirements to be considered for certification as a certified reinsurer; 2) eligibility requirements of a jurisdiction in which an assuming insurer may be domiciled to be considered a qualified jurisdiction; 3) eligibility requirements to be considered for approval as an accredited reinsurer; 4) a rating method to be used in the certification process; and, 5) a sliding scale with the level of required collateral varying from 0% to 100% of ceded liabilities based on the certified reinsurer’s rating.
This post written by Kelly A. Cruz-Brown.
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