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 Oklahoma Statutes (Last Updated: September 18, 2014)
 Title 36. INSURANCE

  § 36-5123. Asset or reduction from liability for ceded reinsurance - Security.  

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  • An asset or reduction from liability for the reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of Section 5122 of this title shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer.  The reduction shall be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the ceding insurer, under a reinsurance contract with such assuming insurer as security for the payment of obligations thereunder, if such security is held in the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer; or, in the case of a trust, held in a qualified United States financial institution, as defined in Section 5122 of this title.  This security may be in one or more of the following forms:

    1.  Cash;

    2.  Securities listed by the Securities Valuation Office of the National Association of Insurance Commissioners and qualifying as admitted assets;

    3.  Any other form of security acceptable to the Insurance Commissioner; and

    4.  a.              Clean, irrevocable, unconditional letters of credit, issued or confirmed by a qualified United States financial institution, as defined in paragraph 1 of subsection J of Section 5122 of this title, effective no later than December 31 of the year for which filing is being made, and in the possession of, or in trust for, the ceding company on or before the filing date of its annual statement.

    b.              Letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance or confirmation shall, notwithstanding the issuing or confirming institution's subsequent failure to meet applicable standards of issuer acceptability, continue to be acceptable as security until their expiration, extension, renewal, modification or amendment, whichever first occurs.

Added by Laws 1992, c. 178, § 37, eff. Sept. 1, 1992.  Amended by Laws 1995, c. 52, § 1, emerg. eff. April 10, 1995; Laws 2000, c. 169, § 3, eff. Nov. 1, 2000; Laws 2002, c. 307, § 33, eff. Nov. 1, 2002.