Credit for Reinsurance standards for Captive Risk Retention Groups (RRGs) filing on a U.S. Generally Accepted Accounting Principles (GAAP) basis

BRIAN SANDOVAL Governor STATE OF NEVADA BRUCE H. BRESLOW Director [LOGO] BARBARA D. RICHARDSON Commissioner DEPARTMENT OF BUSINESS AND INDUSTRY DIVISION OF INSURANCE 1818 East College Pkwy., Suite 103 Carson City, Nevada 89706 (775) 687-0700 • Fax (775) 687-0787 Website: doi.nv.gov E-mail: insinfo@doi.nv.gov Bulletin 16-003 June 9, 2016 # CREDIT FOR REINSURANCE STANDARDS FOR CAPTIVE RISK RETENTION GROUPS FILING ON A U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES BASIS Nevada Revised Statute (“NRS”) 694C.350.2 states that a captive insurer may take credit for reserves on risks ceded to a reinsurer that is in compliance with NRS 681A.140 to .240. For RRGs, the Division expects that, when using an unauthorized reinsurer, a reduction in liabilities would not be greater than the amount of collateral held by the ceding RRG pursuant to NRS 681A.110 to .240. Accounting for the provision for unauthorized reinsurance can be accounted for on the Property & Casualty Annual Statement as a liability on line 16 of page 3, or as a reduction of reinsurance recoverables on line 16 of page 2. If you have any questions related to this Bulletin, contact insinfo@doi.nv.gov. Barbara D. Richardson Commissioner of Insurance