2006 Utah Code - 31A-20-107 — Reinsurance.

     31A-20-107.   Reinsurance.
     (1) An authorized insurer writing nonassessable policies may assume as a reinsurer any risks it may write directly. Subject to Chapters 5 through 14, Chapter 17, and to any limitation imposed on a foreign insurer by the law of its domicile, the commissioner may also authorize an insurer to assume, as a reinsurer, designated classes of risks it is not authorized to write directly.
     (2) Subject to Section 31A-5-508, any authorized insurer may cede or retrocede to any insurer authorized to assume it under Subsection (1) any liability it has undertaken on risks lawfully written under its certificate of authority. It may also cede or retrocede reinsurance to any authorized agency of the federal government or of this state. Subject to Section 31A-17-404, the rules adopted by the commissioner under that section, and to Subsection (3), an authorized insurer may also cede or retrocede reinsurance to an unauthorized insurer.
     (3) No person may knowingly cede reinsurance or permit or assist it to be ceded to any reinsurer not in sound financial condition. If the reinsurer satisfies one or more of the security factors under Subsection 31A-17-404 (3), there is a rebuttable presumption that the reinsurer is in sound financial condition.
     (4) Any authorized reinsurer who knowingly assumes from an unauthorized insurer, risks that may lawfully be written only by an authorized insurer, shall immediately report the facts of the transaction to the commissioner. The assuming reinsurer is liable for all taxes and penalties applicable under Sections 31A-3-301, 31A-3-302, and 31A-3-303, but may take credit for their payment in its settlement of accounts with the unauthorized ceding insurer, unless the assuming reinsurer's agreement with the ceding insurer already took those taxes into account.
     (5) (a) Except as provided under Subsection (5)(b), any authorized reinsurer proposing to withdraw from writing a class of its business in Utah, except by nonrenewal of existing contracts at their expiration, shall give the commissioner 60 days' written notice of its intention. The authorized reinsurer may not withdraw until after those 60 days have lapsed.
     (b) This subsection does not apply if the withdrawing reinsurer writes an insignificant market share of that class of business in Utah. The commissioner shall define "insignificant market share" by rule.

Amended by Chapter 30, 1992 General Session