§ 58-10-65. Nonrenewals, cancellations, or revisions of ceded reinsurance agreements.
§58‑10‑65. Nonrenewals, cancellations, or revisions of cededreinsurance agreements.
(a) Insurers do nothave to report nonrenewals, cancellations, or revisions of ceded reinsuranceagreements under G.S. 58‑10‑55 if they are not material. For thepurposes of this Part, a nonrenewal, cancellation, or revision of a cededreinsurance agreement is considered material and must be reported if:
(1) It is for propertyand casualty business, including accident and health business written by aproperty and casualty insurer and affects:
a. More than fiftypercent (50%) of the insurer's total ceded written premium; or
b. More than fiftypercent (50%) of the insurer's total ceded indemnity and loss adjustmentreserves.
(2) It is for life,annuity, and accident and health business and affects more than fifty percent(50%) of the total reserve credit taken for business ceded, on an annualizedbasis, as indicated in the insurer's most recent annual statement.
(3) It is for eitherproperty and casualty, or life, annuity, and accident and health business, and:
a. An authorizedreinsurer representing more than ten percent (10%) of a total cession isreplaced by one or more unauthorized reinsurers; or
b. Previouslyestablished collateral requirements have been reduced or waived with respect toone or more unauthorized reinsurer's representing collectively more than tenpercent (10%) of a total cession.
(b) No filing isrequired if:
(1) For property andcasualty business, including accident and health business written by a propertyand casualty insurer, the insurer's total ceded written premium represents, onan annualized basis, less than ten percent (10%) of its total written premiumfor direct and assumed business.
(2) For life, annuity,and accident and health business, the total reserve credit taken for businessceded represents, on an annualized basis, less than ten percent (10%) of thestatutory reserve requirement before any cession.
(c) The followinginformation shall be disclosed in any report under this section:
(1) Effective date ofthe nonrenewal, cancellation, or revision.
(2) Description of thetransaction, with an identification of the initiator of the transaction.
(3) Purpose of, orreason for, the transaction.
(4) If applicable,identity of the replacement reinsurers.
(d) Every insurer shallreport all material nonrenewals, cancellations, or revisions of cededreinsurance agreements on a nonconsolidated basis unless the insurer is part ofa consolidated group of insurers that uses a pooling arrangement or one hundredpercent (100%) reinsurance agreement that affects the solvency and integrity ofthe insurer's reserves and the insurer ceded substantially all of its directand assumed business to the pool. An insurer cedes substantially all of itsdirect and assumed business to a pool if the insurer has less than one milliondollars ($1,000,000) total direct plus assumed written premiums during acalendar year that are not subject to the pooling arrangement and the netincome of the business not subject to the pooling arrangement represents lessthan five percent (5%) of the insurer's capital and surplus. (1995,c. 318, s. 1.)