The Arizona Revised Statutes have been updated to include the revised sections from the 56th Legislature, 1st Regular Session. Please note that the next update of this compilation will not take place until after the conclusion of the 56th Legislature, 2nd Regular Session, which convenes in January 2024.
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This online version of the Arizona Revised Statutes is primarily maintained for legislative drafting purposes and reflects the version of law that is effective on January 1st of the year following the most recent legislative session. The official version of the Arizona Revised Statutes is published by Thomson Reuters.
20-1098.20 - Security for branch business and branch operations
20-1098.20. Security for branch business and branch operations
A. In the case of a branch captive insurer, as security for the payment of liabilities attributable to the branch operations, the director shall require that either a trust fund that is funded by assets acceptable to the director or an irrevocable letter of credit be established and maintained in the United States for the benefit of United States policyholders and United States ceding insurers under insurance policies issued or reinsurance contracts issued or assumed by the branch captive insurer through its branch operations.
B. The amount of each security shall be at least the amount prescribed in section 20-1098.03 and the reserves on such insurance policies or such reinsurance contracts, including reserves for losses, allocated loss adjustment expenses, incurred but not reported losses and unearned premiums with regard to business written through the branch operations. Notwithstanding this section the director may permit a branch captive insurer that is required to post security for loss reserves on branch business by its reinsurer to reduce the monies in the trust account or the amount payable under the irrevocable letter of credit required by this section by the same amount if the security remains posted with the reinsurer.
C. If the form of security selected is a letter of credit, the letter of credit must be established by, or issued or confirmed by, a qualified United States financial institution.