Dodd-Frank/Credit for Reinsurance
Federal legislation known as the Dodd-Frank Wall Street Reform and Consumer Protection Act authorizes the U.S. Treasury Secretary and the U.S. Trade Representative to negotiate and enter into covered agreements. The United States has entered into covered agreements with the European Union and United Kingdom which eliminates reinsurance collateral requirements for reinsurers licensed and domiciled in these jurisdictions. The following clarifies Vermont’s reciprocal jurisdiction and filing requirements.
Reinsurers Assuming Risks from Vermont Domestic Insurance Companies
Credit for reinsurance is allowed on the Annual Statement of a Vermont Domestic insurance company if the assuming insurer is licensed to write reinsurance in a Reciprocal Jurisdiction that meets the requirements set forth in Reg. I-1997-03(Revised).
A reciprocal jurisdiction is a non-U.S. jurisdiction that is subject to the in-force covered agreement with the United States and the European Union pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act that addresses the elimination of collateral requirements as a condition for entering into a reinsurance agreement with a ceding insurer domiciled in Vermont or for allowing the ceding insurer to recognize credit for reinsurance.
The assuming reinsurer must agree to and provide adequate assurance in the Form RJ-1.
For Reciprocal Jurisdiction application criteria, please see 8 V.S.A. § 3634a (b)(6)(A).
Reciprocal Jurisdiction Listing
For Reciprocal Jurisdiction listing. (None currently available.)
Form RJ-1 and any inquires can be sent to DFR Company licensing at DFR.CompLic@vermont.gov.