2005 Idaho Code - 41-604 — DISALLOWANCE OF "WASH" TRANSACTIONS

                                  TITLE  41
                                  INSURANCE
                                  CHAPTER 6
                            ASSETS AND LIABILITIES
    41-604.  DISALLOWANCE OF "WASH" TRANSACTIONS. (1) The director shall
disallow as an asset or as a credit against liabilities any reinsurance found
by him after a hearing thereon to have been arranged for the purpose
principally of deception as to the ceding insurer's financial condition as of
the date of any financial statement of the insurer. Without limiting the
general purport of the foregoing provision, reinsurance of any substantial
part of the insurer's outstanding risks contracted for in fact within four (4)
months prior to the date of any such financial statement and canceled in fact
within four (4) months after the date of such statement, or reinsurance under
which the reinsurer bears no substantial insurance risk or substantial risk of
net loss to itself, shall prima facie be deemed to have been arranged for the
purpose principally of deception within the intent of this provision.
    (2)  The director shall disallow as an asset any deposit, funds or other
assets of the insurer found by him after a hearing thereon:
    (a)  Not to be in good faith the property of the insurer, and
    (b)  Not freely subject to withdrawal or liquidation by the insurer at any
time for the payment or discharge of claims or other obligations arising under
its policies, and
    (c)  To be resulting from arrangements made principally for the purpose of
deception as to the insurer's financial condition as of the date of any
financial statement of the insurer.
    (3)  No such disallowance of assets or credits shall be valid unless made
by the director after a hearing of which notice was given the insurer within
six (6) months after the date the financial statement of the insurer as to
which such deception is claimed was filed with the director.
    (4)  The director may suspend or revoke the certificate of authority of
any insurer which has knowingly been a party to any such deception or attempt
thereat.