United States

New York Circular Letter No. 11 (2010) Re: Deferred Premium Asset & Unearned Premium Reserve

The purpose of this Circular Letter is two-fold: 1) to clarify the method by which an insurer must establish a deferred premium asset ("DPA") or unearned premium reserve ("UPR"), and 2) to remind any ceding life insurer that takes reinsurance credit against its mean reserves or mid-terminal reserves that it must reduce any associated DPA proportionally by the amount reinsured, and that it must not reduce any associated UPR in excess of the amount reinsured, nor take into account the premium mode by which it remits premiums to its reinsurer nor any DPA or UPR established by the reinsurer.
read full story

New York Releases Proposed Changes to Credit for Reinsurance Regulation

Please download the attached pdf for details of the proposed changes.
Credit for Reinsurance Regulation


Canada

Reinsurance Security Agreements (August 2010)

OSFI is issuing Draft Guidance for Reinsurance Security Agreements that sets out OSFI’s minimum standards with respect to reinsurance security agreements and the requirement to secure an accompanying legal opinion. The Guidance also outlines OSFI’s expectations regarding the operation by companies of the reinsurance security agreement process. Accompanying the Draft Guidance is a letter that summarizes OSFI’s rationale for moving away from standard form reinsurance trust agreements and outlines OSFI’s new approach to reinsurance security agreements.
read full story
Reinsurance Trust Agreements

Sound Reinsurance Practices and Procedures (August 2010)

Draft Guideline B-3 sets out OSFI’s expectations with respect to sound reinsurance risk management practices and procedures. It applies to all federally regulated insurers, including life insurers and property and casualty insurers, domestic insurance companies and foreign insurance companies in respect of their insurance business in Canada, registered reinsurers, and societies, for reinsurance cessions, retrocessions, and, where applicable, for assumption reinsurance transactions.
read full story