AN ACT INCREASING REINSURANCE CAPACITY IN THE COMMONWEALTH.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
SECTION 1. Section 20A of chapter 175 of the General Laws, as appearing in the 1998 Official Edition, is hereby amended by striking out, in line 4, the words "subsection two" and inserting in place thereof the following words:- this subsection.
SECTION 2. Said section 20A of said chapter 175, as so appearing, is hereby further amended by striking out, in line 5, the words "or (D)".
SECTION 3. The first paragraph of subsection (1) of said section 20A of said chapter 175, as so appearing, is hereby further amended by adding the following sentence:- If meeting the requirements of paragraph (D), the requirements of paragraphs (F) and (G) shall also be met.
SECTION 4. Said section 20A of said chapter 175, as so appearing, is hereby amended by striking out, in line 59, the words "fifty million dollars" and inserting in place thereof the following figure:- $20,000,000.
SECTION 5. Subsection (1) of said section 20A of said chapter 175, as so appearing, is hereby amended by adding the following paragraph:-
(G) If the assuming insurer does not meet the requirements of paragraphs (A), (B) or (C), the credit permitted by paragraph (D) shall not be allowed unless the assuming insurer agrees in substance in the trust agreements to the following conditions:
(1) Notwithstanding any other provisions in the trust instrument, if the trust fund is inadequate because it contains an amount less than the amount set forth in paragraph (D), or if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation or similar proceedings under the laws of its state or country of domicile, the trustee shall comply with an order of the commissioner with regulatory oversight over the trust or with an order of a court of competent jurisdiction directing the trustee to transfer to the commissioner with regulatory oversight all of the assets of the trust fund.
(2) The assets shall be distributed by and claims of United States trust beneficiaries shall be filed with and valued by the commissioner with regulatory oversight in accordance with the laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic insurance companies.
(3) If the commissioner with regulatory oversight determines that the assets of the trust fund or any part thereof are not necessary to satisfy the claims of the United States ceding insurers which are United States trust beneficiaries, the assets or part thereof shall be returned by the commissioner with regulatory oversight to the trustee for distribution in accordance with the trust agreement.
(4) The grantor shall waive any right otherwise available to it under United States law that is inconsistent with this provision.