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U.S. Code as of:
01/03/05
Section 8710. Reinsurance
(a) The Office of Personnel Management shall arrange with a
company issuing a policy under this chapter for the reinsurance,
under conditions approved by the Office, of portions of the total
amount of insurance under the policy, determined under this
section, with other life insurance companies which elect to
participate in the reinsurance.
(b) The Office shall determine for and in advance of a policy
year which companies are eligible to participate as reinsurers and
the amount of insurance under a policy which is to be allocated to
the issuing company and to reinsurers. The Office shall make this
determination at least every 3 years and when a participating
company withdraws.
(c) The Office shall establish a formula under which the amount
of insurance retained by an issuing company after ceding
reinsurance, and the amount of reinsurance ceded to each reinsurer,
is in proportion to the total amount of each company's group life
insurance, excluding insurance purchased under this chapter, in
force in the United States on the determination date, which is the
most recent December 31 for which information is available to the
Office. In determining the proportions, the portion of a company's
group life insurance in force on the determination date in excess
of $100,000,000 shall be reduced by -
(1) 25 percent of the first $100,000,000 of the excess;
(2) 50 percent of the second $100,000,000 of the excess;
(3) 75 percent of the third $100,000,000 of the excess; and
(4) 95 percent of the remaining excess.
However, the amount retained by or ceded to a company may not
exceed 25 percent of the amount of the company's total life
insurance in force in the United States on the determination date.
(d) A fraternal benefit association which is -
(1) licensed to transact life insurance under the laws of a
State or the District of Columbia; and
(2) engaged in issuing insurance certificates on the lives of
employees of the United States exclusively;
is eligible to act as a reinsuring company and may be allocated an
amount of reinsurance equal to 25 percent of its total life
insurance in force on employees of the United States on the
determination date named by subsection (c) of this section.
(e) An issuing company or reinsurer is entitled, as a minimum, to
be allocated an amount of insurance under the policy equal to any
reduction from December 31, 1953, to the determination date, in the
amount of the company's group life insurance under policies issued
to associations of employees of the United States. However, any
increase under this subsection in the amount allocated is reduced
by the amount in force on the determination date of any policy
covering life insurance agreements assumed by the Office.
(f) The Office may modify the computations under this section as
necessary to carry out the intent of this section.
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