Accreditation of a Foreign Stock Reinsurer
The kinds of insurance that are authorized in New York are specified in the various paragraphs of Section 1113 of the New York Insurance Law. To be accredited in New York, a company must meet the New York capital and surplus requirements for all lines for which it is licensed to write in its state of domicile. A company engaged in the business of property/casualty insurance may not engage in the business of life insurance, annuities, title insurance, mortgage guaranty insurance or financial guaranty insurance.
Section 107(a)(2) of the New York Insurance Law defines ‘accredited reinsurer.’ There is no prescribed form of application for accreditation in New York. Section 1106 of the Insurance Law sets forth the requirements for admission of a foreign stock insurance company; these requirements apply to accreditation as well. Formal application for accreditation in New York may be accomplished by a letter from the company stating that it is applying for such accreditation and its reasons therefore.
The capital and surplus requirements for an accredited property/casualty reinsurance company are set forth in Section 4103 of the Insurance Law. The amount required depends upon the kinds of insurance for which a company is licensed in its state of incorporation. Stock Property/Casualty Company Financial Requirements
A maintained surplus of $35,000,000 is required for a property/casualty insurance company desiring to reinsure risks of every kind or description, or to insure property or risks of every kind or description located or resident outside of the United States, its territories and possessions for the lines of business not in its license, and to reinsure mortgage guaranty insurance or financial guaranty insurance.
The capital and surplus requirements set forth above are minimum financial requirements; amounts greater than those so stated may be required by the Superintendent of Financial Services.
The deposit requirements for an accredited stock property/casualty company are set forth in Section 4104 of the Insurance Law which provides that a property/casualty insurance company shall make a deposit with the Superintendent (or the proper officer of its home state) of eligible securities in the amount which is at least equal to $500,000 or the amount required as minimum paid-in capital for the kind or kinds of insurance which such company is licensed to write in its home state, whichever is less, but in no event shall the amount of the deposit be less than $400,000 for any such company doing any two kinds of insurance business designated in Section 4104. The amount of deposit for any such company to reinsure risks of every kind or description and to insure property or risks of every kind or description located or resident outside of the United States, its territories and possessions for lines of business not in its license, is $3,000,000. These deposits are included in the capital and surplus requirements. It is recommended that the company include a cushion (i. e. 20%) in its deposit to allow for fluctuations in the market value of the securities in order to minimize the chances of the market value falling below the required amount.
Additional requirements for accredited reinsurers are set forth in Regulation 20 (11 NYCRR 125) of the New York State Department of Financial Services.
A company seeking accreditation in New York must also meet the seasoning requirement of Section 4119 of the New York Insurance Law. This section provides that the company must have continuously transacted an insurance business in its state of incorporation for at least three years.
Two sets of the documents and materials listed on the attached list must be submitted. (Accreditation – Stock Property/Casualty Company - Checklist) One set of original documents should go to the Office of General Counsel in Albany and one set of original documents should go to the Property Bureau in Albany.
Each assuming insurer issued a Certificate of Recognition as an Accredited Reinsurer shall pay to the Superintendent of Financial Services of New York an annual filing and processing charge of $1,000.00 to be paid on or before the first day of July. Payment of the first year's annual filing and processing charge must be received before a Certificate of Recognition as an Accredited Reinsurer will be issued.