2022 Nevada Revised Statutes
Chapter 681A - Kinds of Insurance; Limits on Risk; Reinsurance
NRS 681A.211 - Credit for reinsurance ceded by domestic insurer to assuming insurer: Requirements for allowance.

The Commissioner must allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that is licensed to write reinsurance and meets each of the conditions set forth below:

1. The assuming insurer must have its head office or be domiciled in, as applicable, and be licensed in a reciprocal jurisdiction.

2. The assuming insurer must have and maintain, on an ongoing basis, minimum capital and surplus, or its equivalent, calculated according to the methodology of its domiciliary jurisdiction on at least an annual basis as of the preceding December 31 or at the annual date otherwise statutorily reported to the reciprocal jurisdiction, and confirmed as set forth in NRS 681A.2125, in the following amounts:

(a) Not less than $250,000,000; or

(b) If the assuming insurer is an association, including, without limitation, incorporated and individual unincorporated underwriters, which has and maintains, on an ongoing basis, minimum capital and surplus equivalents, net of liabilities, in the reciprocal jurisdiction where the assuming insurer has its head office or is domiciled, as applicable, and is also licensed, which are calculated according to the methodology applicable in its domiciliary jurisdiction:

(1) Minimum capital and surplus equivalents, net of liabilities, or own funds which are equivalent, of at least $250,000,000; and

(2) A central fund with a balance of the equivalent of at least $250,000,000.

3. The assuming insurer must have and maintain on an ongoing basis a minimum solvency or capital ratio, as applicable, as follows:

(a) If the assuming insurer has its head office or is domiciled in a reciprocal jurisdiction which meets the requirements of subsection 1 of NRS 681A.062, the ratio specified in the applicable covered agreement;

(b) If the assuming insurer is domiciled in a reciprocal jurisdiction which meets the requirements of subsection 2 of NRS 681A.062, a risk-based capital ratio of 300 percent of the authorized control level, calculated in accordance with the formula developed by the NAIC; or

(c) If the assuming insurer is domiciled in a reciprocal jurisdiction which meets the requirements of subsection 3 of NRS 681A.062, after consultation with the reciprocal jurisdiction and considering any applicable recommendations published by the NAIC, such solvency or capital ratio as the Commissioner determines to be an effective measure of solvency.

4. The assuming insurer must agree to and provide adequate assurance to the Commissioner, in the form of a properly executed Certificate of Reinsurer Domiciled In Reciprocal Jurisdiction Form RJ-1, of each of the following requirements:

(a) The assuming insurer must agree to provide prompt written notice and explanation to the Commissioner if it falls below the minimum requirements set forth in subsection 2 or 3, or if any regulatory action is taken against it for serious noncompliance with applicable law.

(b) The assuming insurer must consent in writing to the jurisdiction of the courts of this State and to the appointment of the Commissioner as agent for service of process. The Commissioner may also require that such consent for service of process be provided to the Commissioner and included in each reinsurance agreement under the Commissioner’s jurisdiction. Nothing in this paragraph limits, or in any way alters, the capacity of parties to a reinsurance agreement to agree to alternative dispute resolution mechanisms, except to the extent such agreements are unenforceable under applicable insolvency or delinquency laws.

(c) The assuming insurer must consent in writing to pay all final judgments, wherever enforcement is sought, obtained by a ceding insurer or its legal successor, that have been declared enforceable in the jurisdiction where the judgment was obtained.

(d) Each reinsurance agreement must include a provision requiring the assuming insurer to provide security in an amount equal to 100 percent of the assuming insurer’s liabilities attributable to reinsurance ceded pursuant to that agreement if the assuming insurer resists enforcement of a final judgment that is enforceable under the law of the jurisdiction in which it was obtained or a properly enforceable arbitration award, whether obtained by the ceding insurer or by its legal successor on behalf of its resolution estate, if applicable.

(e) The assuming insurer must confirm that it is not presently participating in any solvent scheme of arrangement which involves this State’s ceding insurers, and agree to notify the ceding insurer and the Commissioner and to provide security in an amount equal to 100 percent of the assuming insurer’s liabilities to the ceding insurer consistent with the terms of the scheme, should the assuming insurer enter into such a solvent scheme of arrangement. The security must be in a form consistent with the provisions of NRS 681A.1551 to 681A.1557, inclusive, and NRS 681A.240, as specified by the Commissioner by regulation.

(f) The assuming insurer must agree in writing to meet the applicable information filing requirements as set forth in NRS 681A.2115.

(Added to NRS by 2021, 2949)