26-24-150. Bulk reinsurance.

(a) A domestic insurer may reinsure all or substantially all of its business in force, or all or substantially all of a major class thereof, with another insurer, stock or mutual, by an agreement of bulk reinsurance after compliance with this section. No agreement is effective unless it is filed with the commissioner and he approves it in writing.

(b) The commissioner shall approve an agreement within a reasonable time after filing if he finds that:

(i) The plan and agreement are fair and equitable to each insurer and to the policyholders involved;

(ii) The reinsurance, if carried out, would not substantially reduce the protection or service to the policyholders of any domestic insurer involved;

(iii) The agreement embodies adequate provisions by which the reinsuring insurer is liable to the original insureds for any loss or damage occurring under the policies reinsured in accordance with the original terms of the policies, and the reinsuring insurer shall furnish each insured with a certificate evidencing assumption of liability;

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

(v) 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 that business; and

(vi) The proposed bulk reinsurance is free of other reasonable objections.

(c) If the commissioner does not approve the agreement he shall immediately notify each insurer involved, in writing, specifying his reasons for disapproval.

(d) If for reinsurance of any 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 shall be approved by vote of not less than two-thirds (2/3) of the mutual insurer's members voting thereon at a meeting of members called for that purpose, pursuant to any reasonable notice and procedure provided for in the agreement. If a life insurer, the right to vote may be limited to members whose policies are other than term or group policies and have been in effect for more than one (1) year.

(e) No director, officer, agent or employee of any insurer party to the reinsurance, nor any other person, shall receive any compensation for arranging the bulk reinsurance other than as provided in the agreement submitted to and approved by the commissioner.