SB 1044 - Credit for Reinsurance

• Repeals sections 20-261.01 through 20-261.08 of Arizona Revised Statutes relating to reinsurance credit requirements and replaces them with a comprehensive new Chapter 30.

• Establishes multiple pathways for domestic ceding insurers to take credit for reinsurance, including cessions to licensed insurers, accredited reinsurers, certified reinsurers, and insurers in reciprocal jurisdictions.

• Requires assuming insurers to maintain security for reinsurance obligations through various forms including cash, securities, letters of credit from qualified U.S. financial institutions, or trust funds with specified minimum surplus requirements.

• Creates a "reciprocal jurisdiction" framework allowing credit for reinsurance from foreign insurers in jurisdictions that have covered agreements with the United States or meet specified accreditation standards.

• Requires domestic ceding insurers to manage reinsurance recoverables and diversification exposure, including notifying the director when exposures from a single assuming insurer exceed specified thresholds (50% of surplus or 20% of gross written premium).