(a) Any insurance company authorized to do business in this state may, with respect to subjects of insurance resident, located or to be performed in this state, reinsure all or substantially all of its insurance business in force, or all or substantially all of a major class thereof, with another insurer by agreement of bulk reinsurance after compliance with this section. Each such agreement shall be filed with the Insurance Commissioner and shall become effective upon the expiration of twenty days after the date of filing unless disapproved by the commissioner.

(b) The Insurance Commissioner shall disapprove such an agreement within twenty days after filing if it is found:

(1) That the agreement is unfair and inequitable to any insurer or to any policyholder involved;

(2) That the reinsurance, if effectuated, would reduce the provision of service to policyholders of any insurer involved;

(3) That the agreement does not embody adequate provisions by which the reinsuring insurer becomes liable to the original insureds for any loss or damage occurring under the policies reinsured in accordance with the original terms of such policies or does not require the reinsuring insurer to furnish each such insured with a certificate evidencing such assumption of liability;

(4) That the assuming reinsurer is not authorized to transact such insurance in this state;

(5) That the assuming reinsurer will not appoint the commissioner or his successors as its irrevocable attorney for service of process, so long as any policy so reinsured or claim thereunder remains in force or outstanding;

(6) That such reinsurance would materially tend to lessen competition in the insurance business in this state or elsewhere as to the kinds of insurance involved or would materially tend to create a monopoly as to such business; or

(7) That the proposed bulk reinsurance is not free of other reasonable objections.

(c) If the Insurance Commissioner disapproves the agreement, he shall notify in writing each insurer involved specifying his reasons for doing so.

(P.A. 91-41.)