LD 1553
pg. 13
Page 12 of 25 An Act To Permit Special Purpose Reinsurance Vehicles Page 14 of 25
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LR 1915
Item 1

 
the trust account without diminution because of the
insolvency of the ceding insurer or the reinsurance
vehicle for the following purposes:

 
(a)__To pay or reimburse the ceding insurer
amounts due to the ceding insurer under the
contract, including, but not limited to, unearned
premiums due to the ceding insurer if not
otherwise paid by the reinsurance vehicle in
accordance with the terms of that trust agreement;
or

 
(b)__When the ceding insurer has received
notification of termination of the trust account
referred to in paragraph E and when some or all of
the reinsurance vehicle's obligations under the
specific contract remain unliquidated and
undischarged 10 days before the termination date,
to withdraw amounts equal to the undischarged
obligations and deposit the amounts in a separate
account in the name of the ceding insurer in any
qualified United States financial institution
apart from its general assets in trust for the
sole purpose of discharging any contractual
obligations of the reinsurance vehicle that may
remain executory after the withdrawal and for any
period after the termination date.__Assets so held
must revert to the reinsurance vehicle when they
are no longer necessary to secure the obligations
of the reinsurance vehicle and may not exceed the
sum of the following amounts as determined in good
faith by the ceding insurer:

 
(i)__Losses and loss expenses paid by the
ceding insurer but not recovered from the
reinsurance vehicle;

 
(ii)__Reserves for losses reported and
outstanding;

 
(iii)__Reserves for losses incurred but not
reported;

 
(iv)__Reserves for loss expenses;

 
(v)__Reserves for unearned premiums; and

 
(vi)__Any additional amount necessary to maintain full funding of
the aggregate limit remaining under the contract if the period of


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