accreditation is revoked by the commissioner after a notice and hearing.
     (5) (a) A domestic ceding insurer is allowed a credit if:
     (i) the reinsurance is ceded to an assuming insurer that is:
     (A) domiciled in a state meeting the requirements of Subsection (5)(a)(ii); or
     (B) in the case of a United States branch of an alien assuming insurer, is entered through a state meeting the requirements of Subsection (5)(a)(ii);
     (ii) the state described in Subsection (5)(a)(i) employs standards regarding credit for reinsurance substantially similar to those applicable under this section; and
     (iii) the assuming insurer or United States branch of an alien assuming insurer:
     (A) maintains a surplus with regard to policyholders in an amount not less than $20,000,000; and
     (B) submits to the authority of the commissioner to examine its books and records.
     (b) The requirements of Subsections (5)(a)(i) and (ii) do not apply to reinsurance ceded and assumed pursuant to a pooling arrangement among insurers in the same holding company system.
     (6) (a) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an assuming insurer that maintains a trust fund:
     (i) created in accordance with rules made by the commissioner; and
     (ii) in a qualified United States financial institution for the payment of a valid claim of:
     (A) a United States ceding insurer of the assuming insurer;
     (B) an assign of the United States ceding insurer; and
     (C) a successor in interest to the United States ceding insurer.
     (b) To enable the commissioner to determine the sufficiency of the trust fund described in Subsection (6)(a), the assuming insurer shall:
     (i) report annually to the commissioner information substantially the same as that required to be reported on the National Association of Insurance Commissioners Annual Statement form by a licensed insurer; and
     (ii) (A) submit to examination of its books and records by the commissioner; and
     (B) pay the cost of an examination.
     (c) (i) Credit for reinsurance may not be granted under this Subsection (6) unless the form of the trust and any amendment to the trust is approved by:
     (A) the commissioner of the state where the trust is domiciled; or
     (B) the commissioner of another state who, pursuant to the terms of the trust instrument, accepts principal regulatory oversight of the trust.
     (ii) The form of the trust and an amendment to the trust shall be filed with the commissioner of every state in which a ceding insurer beneficiary of the trust is domiciled.
     (iii) The trust instrument shall provide that a contested claim is valid and enforceable upon the final order of a court of competent jurisdiction in the United States.
     (iv) The trust shall vest legal title to its assets in its one or more trustees for the benefit of:
     (A) a United States ceding insurer of the assuming insurer;
     (B) an assign of the United States ceding insurer; or
     (C) a successor in interest to the United States ceding insurer.
     (v) The trust and the assuming insurer are subject to examination as determined by the commissioner.

attributable to business ceded by the one or more United States domiciled ceding insurers to a member of the group pursuant to a reinsurance contract issued in the name of the group;
     (D) in addition to complying with the other provisions of this Subsection (6)(d)(iii), maintain a joint trusteed surplus of which $100,000,000 is held jointly for the benefit of the one or more United States domiciled ceding insurers of a member of the group as additional security for these liabilities; and
     (E) within 90 days after the day on which the group's financial statements are due to be filed with the group's domiciliary regulator, make available to the commissioner:
     (I) an annual certification of each underwriter member's solvency by the member's domiciliary regulator; and
     (II) a financial statement of each underwriter member of the group prepared by an independent public accountant.
     (7) If reinsurance is ceded to an assuming insurer not meeting the requirements of Subsection (3), (4), (5), or (6), a domestic ceding insurer is allowed credit only as to the insurance of a risk located in a jurisdiction where the reinsurance is required by applicable law or regulation of that jurisdiction.
     (8) Reinsurance credit may not be allowed a domestic ceding insurer unless the assuming insurer under the reinsurance contract submits to the jurisdiction of Utah courts by:
     (a) (i) being an admitted insurer; and
     (ii) submitting to jurisdiction under Section 31A-2-309;
     (b) having irrevocably appointed the commissioner as the domestic ceding insurer's agent for service of process in an action arising out of or in connection with the reinsurance, which appointment is made under Section 31A-2-309; or
     (c) agreeing in the reinsurance contract:
     (i) that if the assuming insurer fails to perform its obligations under the terms of the reinsurance contract, the assuming insurer, at the request of the ceding insurer, shall:
     (A) submit to the jurisdiction of a court of competent jurisdiction in a state of the United States;
     (B) comply with all requirements necessary to give the court jurisdiction; and
     (C) abide by the final decision of the court or of an appellate court in the event of an appeal; and
     (ii) to designate the commissioner or a specific attorney licensed to practice law in this state as its attorney upon whom may be served lawful process in an action, suit, or proceeding instituted by or on behalf of the ceding company.
     (9) Submitting to the jurisdiction of Utah courts under Subsection (8) does not override a duty or right of a party under the reinsurance contract, including a requirement that the parties arbitrate their disputes.
     (10) If an assuming insurer does not meet the requirements of Subsection (3), (4), or (5), the credit permitted by Subsection (6) may not be allowed unless the assuming insurer agrees in the trust instrument to the following conditions:
     (a) (i) Notwithstanding any other provision in the trust instrument, if an event described in Subsection (10)(a)(ii) occurs the trustee shall comply with:
     (A) an order of the commissioner with regulatory oversight over the trust; or
     (B) an order of a court of competent jurisdiction directing the trustee to transfer to the commissioner with regulatory oversight all of the assets of the trust fund.

Amended by Chapter 257, 2008 General Session
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