Md. Code Regs. 31.05.08.25

Current through Register Vol. 51, No. 22, November 1, 2024

Section 31.05.08.25 - Change in Certification Rating or Suspension or Revocation of Certification

A. Change in Certification Rating.

(1) In the case of a downgrade of a financial strength rating by a rating agency, or other change in circumstance, the Commissioner shall upon written notice to the certified reinsurer assign a new certification rating to the certified reinsurer in accordance with the requirements of Regulation .24 of this chapter.If the Commissioner downgrades the certified reinsurer's certification rating, the certified reinsurer shall meet the security requirements applicable to its new certification rating for all business it has assumed as a certified reinsurer.

(2) If the Commissioner upgrades a certified reinsurer's certification rating, the certified reinsurer may meet the security requirements applicable to its new rating on a prospective basis, but the Commissioner shall require the certified reinsurer to post security under the previously applicable security requirements as to all contracts in force on or before the effective date of the upgraded rating.

B. Authority to Suspend or Revoke. The Commissioner may upon written notice and opportunity for a hearing pursuant to Insurance Article, § 2-210, Annotated Code of Maryland, suspend or revoke a certified reinsurer's certification at any time if:

(1) The certified reinsurer fails to meet its obligations or security requirements under this chapter;

(2) Other financial or operating results of the certified reinsurer, or documented significant delays in payment by the certified reinsurer, lead the Commissioner to reconsider the certified reinsurer's ability or willingness to meet its contractual obligations; or

(3) The certified reinsurer ceases to meet other requirements for certification.

C. Suspension or Revocation of the Certification of a Certified Reinsurer.

(1) While a reinsurer's certification is suspended, a reinsurance contract issued or renewed after the effective date of the suspension does not qualify for credit except to the extent the reinsurer's obligations under the contract are secured in accordance with Insurance Article, § 5-914, Annotated Code of Maryland.

(2) If a reinsurer's certification is revoked, credit for reinsurance may not be granted after the effective date of the revocation except to the extent that the reinsurer's obligations under the contract are secured in accordance with Insurance Article, § 5-911, Annotated Code of Maryland, or Insurance Article, § 5-914, Annotated Code of Maryland.

D. Notwithstanding the change of a certified reinsurer's certification rating or suspension or revocation of its certification, a domestic insurer that has ceded reinsurance to that certified reinsurer may not be denied credit for reinsurance for a period of 3 months for all reinsurance ceded to that certified reinsurer, unless the Commissioner finds that the reinsurance is found to be at high risk of uncollectibility.

Md. Code Regs. 31.05.08.25