"Material nonrenewal, cancellation, or revision of a ceded reinsurance agreement" defined; reportable material revisions

Sec. 6. (a) As used in this chapter, "material nonrenewal, cancellation, or revision of a ceded reinsurance agreement" has the following meanings: (1) When used in connection with property and casualty business, including accident and sickness insurance business written by a property and casualty insurer, the term means a nonrenewal, cancellation, or revision that affects: (A) more than fifty percent (50%) of the insurer's total ceded written premium; or (B) more than fifty percent (50%) of the insurer's total ceded indemnity and loss adjustment reserves. (2) When used in connection with life insurance or accident and sickness insurance business, the term means a nonrenewal, cancellation, or revision that affects more than fifty percent (50%) of the total reserve credit taken for business ceded on an annualized basis, as indicated in the insurer's most recent annual statement. (b) The following events constitute a material revision of a ceded reinsurance agreement for property and casualty insurance, life insurance, or accident and sickness insurance business meeting the requirements of subsection (a) and must be reported: (1) An authorized reinsurer representing more than ten percent (10%) of a total cession is replaced by one (1) or more unauthorized reinsurers. (2) Previously established collateral requirements have been reduced or waived as respects one (1) or more unauthorized reinsurers representing collectively more than ten percent (10%) of a total cession. (c) A nonrenewal, cancellation, or revision of a ceded reinsurance agreement is not material and a filing is not required under subsection (a) or (b) for the following: (1) In connection with property and casualty business, including accident and sickness insurance business written by a property and casualty insurer, the insurer's total ceded written premium represents, on an annualized basis, less than ten percent (10%) of the insurer's total written premiums for direct and assumed business. (2) In connection with life insurance or accident and sickness insurance business, the total reserve credit taken for business ceded represents, on an annualized basis, less than ten percent (10%) of the statutory reserve requirement before any cession.