NAC681A.180. Filing of agreement regarding reinsurance of business; financial statement; increase in surplus net of federal income taxes.

     1. An agreement entered into on or after May 13, 1996, for the reinsurance of a business, including any amendments thereto, must be filed with the Commissioner by the ceding company within 30 days after the date of the execution of the agreement. Each filing must include information detailing the financial impact of the transaction. The ceding insurer’s actuary who signs the actuarial opinion of the financial statement shall, with respect to the valuation of reserves, consider the provisions of NAC 681A.150 to 681A.190, inclusive, and any applicable actuarial standards of practice when determining the proper credit in financial statements filed with the Division. The actuary shall maintain adequate documentation and be prepared, upon request, to describe the actuarial work performed for inclusion in the financial statements and to demonstrate that such work complies with the provisions of NAC 681A.150 to 681A.190, inclusive.

     2. Any increase in surplus net of federal income taxes resulting from agreements described in subsection 1 must be identified separately on the insurer’s annual financial statement as a surplus item. Recognition of such surplus as income must be reflected on a net of tax basis on the financial statement as reinsurance ceded as earnings are generated from the business reinsured.

     (Added to NAC by Comm’r of Insurance, eff. 5-13-96)