Reinsurance.

Existing law requires every insurer doing business in the state to make and file annual financial statements with the Insurance Commissioner, as specified. Existing law, for the purposes of those financial statements, allows a domestic insurer that cedes reinsurance to an assuming reinsurer to take a credit for the reinsurance as either an asset or a deduction from liability if the reinsurer meets specified requirements. If the reinsurer does not meet those requirements, existing law allows a credit for reinsurance to be taken either as an asset or a deduction from liability in an amount not exceeding the liabilities carried by the ceding insurer to the extent that the ceding insurer provides security in the form of funds or letters of credit, as specified. Existing law authorizes the commissioner to prescribe requirements consistent with those provisions, as specified. This bill would authorize the commissioner to adopt regulations applicable to reinsurance arrangements for certain life insurance policies, long-term care insurance policies, and annuities, as specified. The bill would authorize the commissioner, with regard to credit for reinsurance, to adopt by regulation, pursuant to specified provisions, specific additional requirements relating to or setting forth the valuation of assets or reserve credits, the amount and forms of security supporting reinsurance arrangements for certain life insurance policies, long-term care insurance policies, and annuities, and the circumstances pursuant to which a credit described above would be reduced or eliminated. The bill would require that any regulations adopted by the Department of Insurance in accordance with this act be based upon, and consistent with, the current version of the model regulations adopted by the National Association of Insurance Commissioners, as provided. This bill would declare that it is to take effect immediately as an urgency statute.