5 U.S.C. § 8710 — Reinsurance
submitted 60 years ago by Pub. L. 89-554 to r/title-5-GOVERNMENT-ORGANIZATION-AND-EMPLOYEES · 474 words · no verdicts yet
This section governs reinsurance allocations among life insurers participating in the federal employee policy.
(a) The Office must arrange for an issuing company to reinsure portions of the policy’s total insurance with participating life insurers under Office-approved conditions. (b) Before each policy year, and at least every three years or when a participant withdraws, the Office must decide eligible reinsurers and the amounts allocated to the issuer and reinsurers. (c) The Office must use a formula proportional to each company’s U.S. group life insurance, excluding this chapter’s insurance, on the latest available December 31. For amounts above $100 million, reduce the excess by 25% of the first $100 million, 50% of the second, 75% of the third, and 95% of the remainder. No company may retain or receive more than 25% of its total U.S. life insurance. (d) A qualifying fraternal benefit association may reinsure up to 25% of its U.S.-employee life insurance. (e) Each issuer or reinsurer must receive at least the amount by which its employee-association group insurance fell between December 31, 1953, and the determination date, reduced by insurance then in force under agreements the Office assumed. (f) The Office may modify calculations to carry out this section.
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.
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.
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—
25 percent of the first $100,000,000 of the excess;
50 percent of the second $100,000,000 of the excess;
75 percent of the third $100,000,000 of the excess; and
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.
A fraternal benefit association which is—
licensed to transact life insurance under the laws of a State or the District of Columbia; and
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.
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.
The Office may modify the computations under this section as necessary to carry out the intent of this section.
Source credit: (Pub. L. 89–554, Sept. 6, 1966, 80 Stat. 596; Pub. L. 95–454, title IX, § 906(a)(2), (3), Oct. 13, 1978, 92 Stat. 1224.)
- 1966Enacted · Pub. L. 89-554 · 80 Stat. 596
- 1978Amended · Pub. L. 95-454 · 92 Stat. 1224
A history note hasn’t been published yet. The record shows enactment by Pub. L. 89-554 on 1966-09-06.
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