Ins 52.02(4m)(b)1. 1. The association shall satisfy its minimum capital and surplus requirement through capital and surplus equivalents, net of liabilities, of the association and its members, which shall include a joint central fund that may be applied to any unsatisfied obligation of the association.

Ins 52.02(4m)(b)2. 2. The incorporated members of the association shall not be engaged in any business other than underwriting as a member of the association and shall be subject to the same level of regulation and solvency control by the association’s domiciliary regulator as are the unincorporated members.

Ins 52.02(4m)(b)3. 3. Within 90 days after its financial statements are due to be filed with the association’s domiciliary regulator, the association shall provide the commissioner an annual certification by the association’s domiciliary regulator of the solvency of each underwriter member or, if certification is unavailable, financial statements prepared by independent public accountants of each underwriter member of the association.

Ins 52.02(4m)(c) (c) The commissioner shall create and publish electronically a list of qualified jurisdictions under which an assuming insurer licensed and domiciled therein is eligible to be considered for certification by the commissioner. Qualified jurisdictions shall be determined using the following criteria:

Ins 52.02(4m)(c)1. 1. In order to determine whether the domiciliary jurisdiction of a non-U.S. insurer is eligible to be recognized as a qualified jurisdiction, the commissioner shall evaluate the appropriateness and effectiveness of the reinsurance supervisory system of the jurisdiction, both initially and on an ongoing basis, and consider the rights, benefits, and the extent of reciprocal recognition afforded by the non-U.S. jurisdiction to reinsurers licensed and domiciled in the United States. A qualified jurisdiction shall agree to share information and cooperate with the commissioner with respect to all certified reinsurers domiciled within that jurisdiction. A jurisdiction may not be recognized as a qualified jurisdiction if the commissioner has determined that the jurisdiction does not adequately and promptly enforce final U.S. judgments and arbitration awards.

Ins 52.02(4m)(c)2. 2. The commissioner shall consider the list of qualified jurisdictions published through the National Association of Insurance Commissioners in determining qualified jurisdictions. If the commissioner approves a jurisdiction as qualified that does not appear on the National Association of Insurance Commissioners list, the commissioner shall provide a justification for determining the jurisdiction is qualified. Factors to be considered in determining whether to recognize a qualified jurisdiction include:

Ins 52.02(4m)(c)2.a. a. The framework under which the assuming insurer is regulated.

Ins 52.02(4m)(c)2.b. b. The structure and authority of the domiciliary regulator with regard to solvency regulation requirements and financial surveillance.

Ins 52.02(4m)(c)2.c. c. The substance of financial and operating standards for assuming insurers in the domiciliary jurisdiction.

Ins 52.02(4m)(c)2.d. d. The form and substance of financial reports required to be filed or made publically available by reinsurers in the domiciliary jurisdiction and the accounting principles used.

Ins 52.02(4m)(c)2.e. e. The domiciliary regulator’s willingness to cooperate with U.S. regulators in general and the commissioner in particular.

Ins 52.02(4m)(c)2.f. f. The history of performance by assuming insurers in the domiciliary jurisdiction.

Ins 52.02(4m)(c)2.g. g. Any documented evidence of substantial problems with enforcement of final U.S. judgments in the domiciliary jurisdiction. A jurisdiction will not be considered to be a qualified jurisdiction if the commissioner has determined that it does not adequately and promptly enforce final U.S. judgments and arbitration awards.

Ins 52.02(4m)(c)2.h. h. Any relevant international standards or guidance with respect to mutual recognition of reinsurance supervision adopted by the International Association of Insurance Supervisors.

Ins 52.02(4m)(c)2.i. i. Any other matters deemed relevant by the commissioner.

Ins 52.02(4m)(c)3. 3. U.S. jurisdictions that meet the requirements for accreditation under the National Association of Insurance Commissioners financial standards and accreditation program shall be recognized as qualified jurisdictions.

Ins 52.02(4m)(d) (d) If an applicant has been certified as a reinsurer in a National Association of Insurance Commissioners accredited jurisdiction, the commissioner has the discretion to defer to that jurisdiction’s certification, and has the discretion to defer to the rating assigned by that jurisdiction if the assuming insurer submits Form CR-1 and such additional information as the commissioner requires. The commissioner’s recognition of another accredited jurisdiction’s certification is subject to the following conditions:

Ins 52.02 Note Note: Form CR-1 is published as Chapter Ins 52 Appendix B.

Ins 52.02(4m)(d)1. 1. Any change in the certified reinsurer’s status or rating in the other jurisdiction shall apply automatically in this State as of the date it takes effect in the other jurisdiction. The certified reinsurer shall notify the commissioner of any change in its status or rating within 10 days of receiving notice of the change.

Ins 52.02(4m)(d)2. 2. The commissioner may withdraw recognition of the other jurisdiction’s rating at any time and assign a new rating in accordance with this section.

Ins 52.02(4m)(d)3. 3. The commissioner may withdraw recognition of the other jurisdiction’s certification at any time, with written notice to the reinsurer. Unless the commissioner suspends or revokes the certified reinsurer’s certification in accordance with s. Ins 52.025, the certified reinsurer’s certification shall remain in good standing in this state for a period of three months, which may be extended if additional time is necessary to consider the assuming insurer’s application for certification in this state.

Ins 52.02(4m)(e) (e) A certified reinsurer that ceases to assume new business from ceding insurers domiciled in this state may request to maintain its certification in inactive status in order to continue to qualify for a reduction in security for its in-force business. An inactive certified reinsurer shall continue to comply with all applicable requirements of this subchapter, and the commissioner shall assign a rating that takes into account the reasons why the reinsurer is not assuming new business.

Ins 52.02(4m)(f) (f) In addition to the clauses required under this chapter, reinsurance contracts entered or renewed under this subsection shall include a proper funding clause, which requires the certified reinsurer to provide and maintain security in an amount sufficient to avoid the imposition of any financial statement penalty on the ceding insurer under this section for reinsurance ceded to the certified reinsurer.

Ins 52.02(4m)(g) (g) The commissioner shall comply with all reporting and notification requirements that may be established by the National Association of Insurance Commissioners with respect to certified reinsurers and qualified jurisdictions.

Ins 52.02(4m)(h) (h) Credit for reinsurance under this subsection shall apply only to reinsurance contracts entered into or renewed on or after the effective date of the certification of the assuming insurer.

Ins 52.02(4m)(i) (i) Nothing in this subsection shall prohibit the parties to a reinsurance agreement from agreeing to provisions establishing security requirements that exceed the minimum security requirements established for certified reinsurers in this subsection.

Ins 52.02(4m)(j) (j) The commissioner may retain at the certified reinsurer’s expense such experts as shall be necessary to assist in the review of an initial application for certification and on an ongoing basis. Any experts so retained shall be under the direction and control of the commissioner. The commissioner may retain such experts as may be necessary to evaluate the supervisory systems of jurisdictions under evaluation for eligibility to become a qualified jurisdiction and on an ongoing basis. The expense for such experts shall be paid by the reinsurers seeking certification from that jurisdiction.

Ins 52.02(4r) (4r) The reinsurance is ceded to an assuming insurer that has been recognized by the commissioner as a reinsurer in a reciprocal jurisdiction, in accordance with pars. (a) to (h).

Ins 52.02(4r)(a) (a) Credit shall be allowed when the reinsurance is ceded from an insurer domiciled in this state to an assuming insurer meeting each of the conditions set forth below.