Requirements for Approved Trusteed Reinsurers

Kansas Statutes Annotated (K.S.A.) 40-221a(b)(3) provides for Approved Trusteed Reinsurers, which may be reported as authorized reinsurers by Kansas domestic insurers.

Initial Filing Requirements

To apply for Approved Trusteed Reinsurer status in the State of Kansas, the reinsurer must submit the following:

  1. A formal written request for Approved Trusteed Reinsurer status;
  2. The most recent quarterly and annual financial statement of the trust.  Such statements should be substantially the same as that required to be reported on the National Association of Insurance Commissioners annual and quarterly statement form by licensed insurers to enable the commissioner to determine the sufficiency of the trust fund;
  3. A listing of the trust’s investments at the end of the preceding year;
  4. A certification of the balance of the trust from the trustee as of the most recent annual and quarterly statement date; and
  5. A copy of the current deed of trust.  The deed of trust must comply with K.A.R. 40-1-43(b) and K.S.A. 40-221a(b)(3).

Pursuant to K.S.A. 40-221a(b)(3), in the case of a single assuming insurer, the trust shall consist of a trusteed account representing the assuming insurer’s liability attributable to business written in the United States and, in addition, the assuming insurer shall maintain a trusteed surplus of not less than $20,000,000.  In the case of a group including incorporated and individual unincorporated underwriters, the trust shall consist of a trusteed account representing the group’s liabilities attributable to business written in the United States and, in addition, the group shall maintain a trusteed surplus of which $100,000,000 shall be held jointly for the benefit of United States ceding insurers of any member of the group.

Subsequent Filing Requirements

Following approval, the Approved Trusteed Reinsurer should submit the following information quarterly and as of year-end:

  1. The financial statement of the trust reported substantially the same as that required to be reported on the National Association of Insurance Commissioners annual and quarterly statement form by licensed insurers; and
  2. A certification of the balance of the trust from the trustee as of the statement date.

Additionally, pursuant to K.S.A. 40-221a(b)(3)(B), no later than February 28 of each year, the trustees of the trust shall report to the commissioner in writing setting forth the following:

  1. The balance in the trust at the preceding year end;
  2. a listing of the trust’s investments at the preceding year end; and
  3. a certification of the date of termination of the trust, if so planned, or a certification that the trust shall not expire prior to the next following December 31.

A list of Kansas Cedents as of the preceding year-end should also be provided with the information provided on or before February 28 each year.