A. A domestic insurer shall not reinsure with another insurer all or substantially all of its insurance business in force, or of a major class thereof, except under an agreement of bulk reinsurance and in compliance with this section. No such agreement shall become effective unless filed with the superintendent and approved by him in writing.

B. The superintendent shall approve such agreement within a reasonable time after filing if he finds that:

(1) the plan and agreement of bulk reinsurance are fair and equitable to each insurer and to the policyholders involved; and

(2) the reinsurance if effectuated would not materially reduce the protection or service to policyholders of the insurers; and

(3) the agreement embodies adequte [adequate] provisions by which the assuming reinsurer becomes liable to the original insureds for protection and benefits under policies reinsured in accordance with the terms of such policies; and

(4) the assuming reinsurer is authorized to transact such insurance in this state, or is qualified as for such authorization and will appoint the superintendent and his successors as its irrevocable attorney for service of process so long as any policy so reinsured or liability thereunder remains in force or outstanding; and

(5) the reinsurance would not materially tend to lessen competition in the insurance business in this state or elsewhere as to the kinds of insurance involved and would not materially tend to create any monopoly as to such business; and

(6) the proposed bulk reinsurance is free of other reasonable objections.

C. If the superintendent does not so approve he shall forthwith notify each insurer involved in writing specifying the reasons therefor.

D. If for reinsurance of all or substantially all of the business in force of a mutual insurer at a time when the insurer's surplus is not impaired, the plan and agreement for reinsurance must be approved by vote of not less than two-thirds of the mutual insurer's members who vote thereon in person or by proxy at a meeting of members called for the purpose pursuant to such reasonable notice by mail or publication as may be provided for in the plan. For a life insurer, the right to vote may be limited to members whose policies are other than term policies for term of less the [than] twenty (20) years or group policies, and have been in effect for more than one year.

History: Laws 1984, ch. 127, § 586.

Bracketed material. — The bracketed material was inserted by the compiler and it is not part of the law.