Section Ins 13.09 - Reinsurance(1) PURPOSE. This rule implements and interprets s. 612.33, Stats., for the purpose of setting rules or guidelines for permitted and prohibited reinsurance and required reinsurance.(2) SCOPE. This rule shall apply to all town mutual insurers subject to ch. 612, Stats.(3) DEFINITIONS. For the purpose of this section only:(a) ``Maximum attachment point" means the amount of losses, expressed as a percentage of net premiums written, which constitutes the limit of the town mutual's retention under the aggregate excess of loss reinsurance required by sub. (4).(b) ``Net premiums written" means gross premiums written less premiums ceded for reinsurance inuring to the benefit of an aggregate excess of loss reinsurance contract. Reinsurance premiums ceded for aggregate excess of loss reinsurance, reinsurance premiums paid or recovered related to coverage for other years, and dividends paid to policyholders shall not be considered in determining net premiums written.(4) REQUIRED REINSURANCE. (a)Aggregate excess of loss reinsurance. Every town mutual shall obtain and continuously maintain unlimited aggregate excess of loss reinsurance for all risks covered by property and nonproperty insurance that is not otherwise ceded under another reinsurance contract. The aggregate excess of loss reinsurance shall provide a maximum attachment point expressed as a percentage of net premiums written, which is based on the relationship of the town mutual's prior year-end surplus to prior year-end gross premiums written, as set forth in the following schedule: 1. Ratio that results from the division of prior year-end surplus by prior year-end gross premiums written | Maximum attachment point expressed as a percentage of net premiums written during the calendar year of coverage |
300% or higher | 150% |
101% to 299% | 100% |
100% or less | 75% |
2. For purposes of this section 13.09, all calculations shall be based on the final annual statement filed with the commissioner.3. The aggregate excess of loss reinsurance contract shall warrant by specific reference that it complies with this section.4. Any town mutual that fails to comply, or has reason to believe that it is in imminent risk of failure to comply, with this section after its effective date shall notify the commissioner within 5 days of such failure or awareness.(b)Reinsurance of nonproperty insurance. Any town mutual which provides nonproperty insurance coverage shall obtain reinsurance as required by s. 612.33(2) (b), Stats.Wis. Admin. Code Office of the Commissioner of Insurance Ins 13.09
Cr. Register, December, 1974, No. 228, eff. 1-1-75; r. and recr., Register, June, 2001, No. 546, eff. 1-1-02.