Section 21: Examination of reinsurance treaties

21. Examination of reinsurance treaties (1) An insurer shall enter into reinsurance treaties in respect of risks insured or to be insured in the course of its insurance business which are consistent with sound insurance business principles. (2) An insurer shall produce to the Commission for examination such particulars of its reinsurance treaties, or copies of its treaties or other reinsurance contracts as the Commission may request. (3) Where the Commission finds that— (a) the terms of the reinsurance treaties are unfavourable to the insurer; (b) the reinsurance treaties are not technically appropriate to the portfolio of the insurer; or (c) the reinsurer or reinsurance broker is not a fit and proper person to do business with, the Commission may give such direction as it considers fit, including termination or modification of the treaty or requiring additional reinsurance cover or prohibiting the insurer from entering into contract with a reinsurer or through a reinsurance broker. (4) In issuing a direction under subsection (1), the Commission shall have regard to— (a) the category and class of insurance business carried on by the insurer; (b) the amount of premiums received by or due to be received by the insurer during its last preceding balance sheet date in respect of each class of insurance business carried on by it; (c) the nature and value of the assets of the insurer; and (d) the reinsurer with whom the reinsurance is undertaken. (5) An insurer shall submit to the Commission such returns in respect of its reinsurance treaties including its facultative reinsurance as the Commission may require.