Section 161.4. Trust fund requirements

(a) A trust required under § 161.3(3) or (4) (relating to credit for reinsurance) shall be established and maintained in a form approved by the Commissioner. The trust instrument shall provide that contested claims shall be valid and enforceable out of funds in trust to the extent remaining unsatisfied 30 days after entry of the final order of a court of competent jurisdiction in the United States. The trust shall vest legal title to its assets in the trustees of the trust for the benefit of the grantor’s United States policyholders and ceding insurers, their assigns and successors in interest. The trust and the assuming insurer shall be subject to examination as determined by the Commissioner. The trust described in this section shall remain in effect for as long as the assuming insurer or a member or former member of a group of insurers shall have outstanding obligations due under reinsurance agreements subject to the trust.

(b) By February 28 of each year, the trustees of a trust established to comply with § 161.3(3) or (4) shall report to the Commissioner in writing setting forth the balance of the trust and listing the trust’s investments at the preceding year’s end and shall certify the date of termination of the trust, if so planned, or certify that the trust will not expire prior to the next following December 31. The assuming insurer shall annually submit a financial exhibit which quantifies the liabilities attributable to business directly written or assumed in the United States.

(c) An amendment to the trust will not be effective unless reviewed and approved in advance by the Commissioner.

Notation

Cross References

This section cited in 31 Pa. Code § 161.6 (relating to revocation of reinsurer qualification or certification).