40-767. Reinsurance; limitations; credit for reserves on ceded risks. - Kansas Statutes

40-767

Chapter 40.--INSURANCE Article 7.--FRATERNAL BENEFIT SOCIETIES

      40-767.   Reinsurance; limitations; credit for reserves on ceded risks.(a) A domestic society may, by a reinsurance agreement, cedeany individual risk or risks in whole or in part to an insurer, other thananother fraternal benefit society, having the power to make suchreinsurance and authorized to do business in this state, or if not soauthorized, one which is approved by the commissioner of insurance, but nosuch society may reinsure substantially all of its insurance in forcewithout the written permission of the commissioner. It may take credit forthe reserves on such ceded risks to the extent reinsured, but no creditshall be allowed as an admitted asset or as a deduction from liability toa ceding society for reinsurance made, ceded, renewed or otherwise becomingeffective after the effective date of this act unless the reinsurance ispayable by the assuming insurer on the basis of the liability of the cedingsociety under the contract or contracts reinsured without diminutionbecause of the insolvency of the ceding society.

      (b)   Notwithstanding the limitation in subsection (a), a society mayreinsure the risks of another society in a consolidation or merger approvedby the commissioner under K.S.A. 40-768.

      History:   L. 1988, ch. 154, § 30; Jan. 1, 1989.