LD 1553
pg. 11
Page 10 of 25 An Act To Permit Special Purpose Reinsurance Vehicles Page 12 of 25
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LR 1915
Item 1

 
F.__The provisions for withdrawal by ceding insurers of funds
from the trust must be clean and unconditional, subject only
to the following requirements:

 
(1)__The ceding insurer has the right to withdraw
assets from the trust account at any time without
notice to the reinsurance vehicle subject only to
written notice to the trustee from the ceding insurer
that funds in the amount requested are due and payable
by the reinsurance vehicle;

 
(2)__No other statement or document need be presented
in order to withdraw assets, except that the ceding
insurer may be required to acknowledge receipt of
withdrawn assets;

 
(3)__The trust agreement described in paragraph E must
indicate that it is not subject to any conditions or
qualifications outside of the trust agreement;

 
(4)__The trust agreement described in paragraph E may
not contain references to any other agreements or
documents; and

 
(5)__Reference may not be made to the fact that these
funds may represent reinsurance premiums or that the
funds have been deposited for any specific purpose.

 
G.__The trust agreement described in paragraph E must be
established for the sole use and benefit of the ceding
insurer at least to the full extent of the reinsurance
vehicle's obligations to the ceding insurer under the
contract.__In the case of more than one ceding insurer, a
separate trust agreement must be entered into with each
ceding insurer and a separate trust account must be
maintained for each ceding insurer.

 
H.__The trust agreement described in paragraph E must
provide for the trustee to:

 
(1)__Receive assets and hold all assets in a safe
place;

 
(2)__Determine that all assets are in a form that the
ceding insurer or the trustee, upon direction by the
ceding insurer, may whenever necessary negotiate the
assets, without consent or signature from the
reinsurance vehicle or any other person or entity;


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