D.C. Mun. Regs. tit. 26, r. 26-A3773
If any provision of this section, or its application to any person or circumstance, is held invalid, such determination shall not affect other provisions or applications of this regulation which can be given effect without the invalid provision or application, and to that end the provisions of this regulation are separable.
A risk retention group shall not receive statement credit if all of its policies are ceded through one hundred percent (100%) reinsurance arrangements, or another lesser percentage as required, in the discretion of the Commissioner.
Credit for reinsurance will be permitted if the reinsurer complies with D.C. Official Code § 31-501et seq. A reinsurer that satisfies the requirements in D.C. Official Code § 31-501et seq. shall also comply with the reinsurance regulations in Chapter 28 of Title 26 A of the District of Columba Municipal Regulations.
Credit for reinsurance may be permitted if the reinsurer maintains an A- or higher A.M. Best rating, or other comparable rating from a nationally recognized rating organization, and the reinsurer maintains a minimum policyholder surplus in an amount acceptable to the Commissioner based upon a review of the reinsurer's most recent audited financial statements; and the reinsurer is licensed and domiciled in a jurisdiction acceptable to the Commissioner.
Credit for reinsurance may be permitted if the reinsurer satisfies all of the following requirements and any other requirements deemed necessary by the Commissioner:
The Commissioner shall either require a reinsurer not domiciled in the US to include language in the reinsurance agreement that states that in the event of the reinsurer's failure to perform its obligations under the terms of its reinsurance agreement, it shall submit to the jurisdiction of any court of competent jurisdiction in the US or shall require compliance with Subsection 3773.7.
For credit for reinsurance and solvency regulatory purposes, the Commissioner may require an approved funds-held agreement; letter of credit; trust or other acceptable collateral based on unearned premium, loss, and LAE reserves; or IBNR.
Upon application, the Commissioner may waive either of the reinsurance requirements in Subsection 3773.5(b) or 3773.5(f) in circumstances where the risk retention group licensed as a captive insurer or reinsurer can demonstrate to the satisfaction of the Commissioner that the reinsurer is sufficiently capitalized based upon an annual review of the reinsurer's most recent audited financial statements, the reinsurer is licensed and domiciled in a jurisdiction satisfactory to the Commissioner, and the proposed reinsurance agreement adequately protects the risk retention group licensed as a captive insurer and its policyholders. Any such waiver should be included in the plan of operation, or any subsequent revision or amendment of the plan, pursuant to Section 3902(d)(1) of the Federal Liability Risk Retention Act of 1986, and the plan must be submitted by the risk retention group licensed as a captive to the Commissioner of its state of domicile and each state in which the risk retention group licensed as a captive intends to do business or is currently registered. Any such waiver of a Section 3773.5 requirement constitutes a change in the risk retention group's plan of operation in each of those states.
Upon application, the Commissioner may waive the requirement in Section 3773.6 that a reinsurance arrangement must satisfy either Section 3773.6 or 3773.7 in circumstances where the risk retention group licensed as a captive insurer or reinsurer can demonstrate to the satisfaction of the Commissioner that the reinsurer is sufficiently capitalized based upon an annual review of the reinsurer's most recent audited financial statements, the reinsurer is licensed and domiciled in a jurisdiction satisfactory to the Commissioner, and the proposed reinsurance agreement adequately protects the risk retention group licensed as a captive insurer and its policyholders. Any such waiver should be disclosed in Note 1 of the risk retention group's annual statutory financial statement.
Each approved captive manager or risk retention group licensed as a captive insurer shall assess the reinsurance programs of the risk retention groups licensed as captives under their management, and within sixty (60) days of the effective date of this rulemaking, submit a written report to the Commissioner indicating whether such risk retention groups licensed as captives are in compliance with these guidelines. All risk retention groups licensed as captive insurers that fail to submit the report in a timely manner shall be examined, at the risk retention group's expense, to determine compliance with this rulemaking.
This section shall be effective after one hundred twenty (120) days from the effective date of these rules. Risk retention groups licensed as captive insurers who require additional time to comply with these guidelines shall be permitted to take credit for reinsurance for risks ceded to reinsurers not in compliance with these guidelines for a period not to exceed twelve (12) months from the effective date of these guidelines upon satisfactory demonstration to the Commissioner that such delay of implementation will not cause a hazardous financial condition or potential harm to its member policyholders.
The requirements of this section shall not apply to reinsurance agreements that were effective on or before January 1, 2011, and received prior approval pursuant to D.C. Official Code § 31-3931.08.
D.C. Mun. Regs. tit. 26, r. 26-A3773