15 U.S.C. § 8221 — Regulation of credit for reinsurance and reinsurance agreements

(a) Credit for reinsurance^*: Suppose the ceding insurer's home state^* (called its "State of domicile^*") is accredited by the NAIC^*, or has financial solvency rules that are basically as strong as NAIC accreditation requires. If that home state gives the insurer credit for reinsurance on the risk it passed to another insurer, then no other state is allowed to refuse that same credit.

(b) Additional preemption of extraterritorial application of State law: Beyond what subsection (a) says, the laws, regulations, and other actions of any state other than the ceding insurer's home state are preempted (blocked from applying) whenever they do any of the following. This preemption does not cover taxes or assessments on insurance companies or their income. (1) It cannot restrict or remove the right of the ceding insurer^* or the assuming insurer to settle disputes through contractual arbitration, as long as doing so does not conflict with title 9 (the federal arbitration law). (2) It cannot require that some particular state's law control the reinsurance contract, disputes about it, or its requirements. (3) It cannot try to enforce the reinsurance contract using terms different from what the contract actually says, as long as those terms don't conflict with this subchapter. (4) It cannot otherwise apply that state's laws to reinsurance agreements of ceding insurers that are not domiciled (based) in that state.