Sec. 38a-86. Reduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer. - Connecticut Statutes

      Sec. 38a-86. Reduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer. A reduction in liability for the reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of section 38a-85 shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer and such 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 subsection (b) of section 38a-87. This security may be in the form of (1) cash, (2) securities listed by the Securities Valuation Office of the National Association of Insurance Commissioners and qualifying as admitted assets, (3) clean, irrevocable, unconditional letters of credit, issued or confirmed by a qualified United States financial institution, as defined in subsection (a) of section 38a-87, not later than December thirty-first in respect of the year for which filing is being made, and in the possession of the ceding company on or before the filing date of its annual statement; provided 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 or (4) any other form of security acceptable to the commissioner.

      (P.A. 90-41, S. 2, 6.)