Bill 3898

                    Current Status

Bill Number:                    3898
Type of Legislation:            General Bill GB
Introducing Body:               House
Introduced Date:                19970410
Primary Sponsor:                Kirsh 
All Sponsors:                   Kirsh 
Drafted Document Number:        PT\2807JM.97
Residing Body:                  House
Date Tabled:                    19980324
Current Committee:              Labor, Commerce and Industry
                                Committee 26 HLCI
Subject:                        Reinsurance, asset applies to
                                provisions regarding insurance
                                companies and reduction from liability
                                for

Body    Date      Action Description                       Com     Leg Involved
______  ________  _______________________________________  _______ ____________

House   19980324  Tabled in Committee                      26 HLCI
House   19970410  Introduced, read first time,             26 HLCI
                  referred to Committee

TO AMEND SECTION 38-9-210, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO CAPITAL, SURPLUS, RESERVES, AND OTHER FINANCIAL MATTERS REGARDING INSURANCE COMPANIES AND THE REDUCTION FROM LIABILITY FOR REINSURANCE, SO AS TO, AMONG OTHER THINGS, MAKE THE PROVISIONS OF THIS SECTION APPLICABLE TO "AN ASSET".

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Section 38-9-210 of the 1976 Code, as added by Act 13 of 1991 and amended by Section 535 of Act 181 of 1993, is further amended to read:

"Section 38-9-210. A An asset or a reduction from liability for the reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of Section 38-9-200 must be allowed in an amount not exceeding the liabilities carried by the ceding insurer. The asset or reduction must be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the ceding insurer, under a reinsurance contract with the assuming insurer as security for the payment of obligations, if the security is held in the United States subject to withdrawal solely by and under the exclusive control of the ceding insurer or, for a trust, held in a qualified United States financial institution, defined in Section 38-9-220(B). This security may be in the form of:

(1) cash;

(2) securities listed by the Securities Valuation Office of the National Association of Insurance Commissioners and qualifying as admitted assets under Section 38-11-100;

(3) clean, irrevocable, unconditional letters of credit issued or confirmed by a qualified United States financial institution defined in Section 38-9-220(A) no later than December thirty-first of the year for which filing is being made and in the possession of, or in trust for, the ceding company on or before the filing date of its annual statement. Letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance or confirmation, notwithstanding the issuing or confirming institution's subsequent failure to meet applicable standards of issuer acceptability, continue to be acceptable as security until their expiration, extension, renewal, modification, or amendment, whichever first occurs; or

(4) other form of security acceptable to the director or designee."

SECTION 2. This act takes effect upon approval by the Governor.