P&CMAmedium
Under 211 CMR 130.00, a Massachusetts ceding insurer may take financial-statement credit for reinsurance ceded to an unauthorized reinsurer only if which condition is met?
AThe reinsurer's CEO personally guarantees the obligation in a signed and notarized affidavit delivered to the ceding insurer
BThe reinsurance contract is filed with the Massachusetts Attorney General
CThe ceding company maintains a captive in Bermuda
The reinsurer's obligation is secured by qualifying collateral such as a clean, irrevocable letter of credit or a U.S. trust
Why this is the answer
211 CMR 130.00 implements the NAIC Credit for Reinsurance Model in Massachusetts. A MA ceding insurer can reduce its reserve liability for reinsurance ceded only if the reinsurer is authorized, accredited, certified, or its obligation is fully secured by qualifying collateral such as a clean letter of credit or a U.S. trust.
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