Financial Statement Credit Clause Samples
The Financial Statement Credit clause establishes the conditions under which a party may receive credit or recognition for amounts reflected in financial statements. Typically, this clause outlines how credits, offsets, or deductions are calculated based on the financial records provided, and may specify the types of transactions or balances that qualify. Its core function is to ensure that financial adjustments are handled transparently and consistently, reducing disputes over accounting entries and clarifying the financial position of the parties involved.
Financial Statement Credit. The Retrocessionaire agrees to take all actions as may be necessary to permit the Retrocedent to obtain financial statement credit in all United States jurisdictions for the reinsurance provided by this Agreement. It is understood and agreed that any term or condition required to be included in this Agreement for the Retrocedent to receive statutory financial statement credit will be deemed to be incorporated in this Agreement by reference.
Financial Statement Credit. Should the laws or regulations of any jurisdiction applicable to the Company prevent the Company from taking financial statement credit for the liabilities reinsured by the Reinsurer based on the terms and conditions of this Agreement, the Reinsurer shall use its best efforts to enable the Company to obtain such credit. The Reinsurer shall make any changes required in connection with the Reinsurance Reserve Obligation (a) by any regulatory authority having jurisdiction over the Company in the ordinary course of exercising its powers or otherwise required by law; (b) by changes in NAIC regulations or guidelines relating to the calculation of the Reinsurance Reserve Obligation; or (c) by changes in the Company's good faith interpretation of NAIC regulations and guidelines relating to the calculation of the Reinsurance Reserve Obligation.
Financial Statement Credit. The Reinsurer will take, and upon the request and at the discretion of the Company, will provide the Company evidence that the Reinsurer has taken, all steps necessary, if any, to ensure that the Company obtains full financial statement credit according to statutory requirements in all applicable United States jurisdictions in which the Company is licensed to transact insurance business (or to whose jurisdiction the Company otherwise submits), including Section 6906 of the New York Insurance Law, for the reinsurance ceded to the Reinsurer hereunder, including the posting of security, the maintenance of Reserves or aggregate risk limits, the posting of a letter of credit, the establishment of a trust, or a combination of the foregoing, by the Reinsurer in such amount, in such form and on such other terms and conditions as shall be required for the Company to obtain such full financial statement credit. Any term or condition required by such law or regulation to be included in this Agreement for the Company to receive full financial statement credit for the reinsurance provided hereunder will be deemed incorporated in this Agreement by this reference to the extent not inconsistent with the express terms of this Agreement.
Financial Statement Credit. The Reinsurer, upon the request and at the discretion of the Company, shall take all steps necessary to ensure that the Company obtains full financial statement credit according to statutory requirements in all applicable States of the United States for the reinsurance provided by the Reinsurer hereunder and shall provide evidence of the same. Notwithstanding the foregoing, the Reinsurer shall not be required to provide credit for statutory premium reserves or for incurred but not reported losses.
Financial Statement Credit l (z) of the Coinsurance Agreement is hereby deleted in its entire ty and replaced with the following:
Financial Statement Credit. To the extent necessary to provide statutory financial statement credit to the Company, the Reinsurer agrees that, no later than the end of each calendar quarter during the Term and the five-year period following the end of the Term, the Reinsurer shall either:
1) Deliver to the Company a clean, irrevocable, unconditional and evergreen letter of credit, in form and substance satisfactory to the Company (including a waiver by the issuing bank of its right to delay payment under the letter of credit), in an amount equal to 102% of the Reserve Amount (or if the Reinsurer has previously delivered such a letter of credit to the Company, the Reinsurer shall deliver an amendment thereto that increases the letter of credit to an amount equal to 102% of the Reserve Amount most recently communicated by the Company). Such letter of credit shall be drawn only on those financial institutions which are (a) approved by the National Association of Insurance Commissioners as acceptable issuers of letters of credit, and (b) acceptable to the Company. Should the letter of credit be issued for less than the term of this Treaty, the Reinsurer shall cause the issuer of the letter of credit to notify the Company, not less than 30 calendar days prior to the date of expiry, of its decision to renew or its decision not to extend the letter of credit for an additional period, or
2) establish a trust account at a bank, acceptable to the Company, and on terms that are in complete conformance with all applicable state law and with all additional requirements of governmental authorities having jurisdiction over the Company’s reserves, in an amount equal to 102% of the Reserve Amount (or, if the Reinsurer has previously established such a trust account, the Reinsurer shall deposit additional assets in the trust account so that the market value of the assets in the trust account is at least equal to 102% of the Reserve Amount as most recently communicated by the Company), or
3) deposit with the Company an amount equal to 102% of the Reserve Amount (or, if the Reinsurer has previously deposited funds with the Company, the Reinsurer shall deposit additional funds so that the total funds deposited are at least equal to 102% of the Reserve Amount as most recently communicated by the Company). The Reinsurer shall have complete discretion to chose which of the above-described forms of reinsurance security it shall provide. Upon the request of the Reinsurer and subject to the approval of the Com...
Financial Statement Credit. Should the laws or regulations of any jurisdiction applicable to the Company prevent the Company from taking financial statement credit for the liabilities reinsured by the Reinsurer based on the terms and conditions of this Agreement and the Reinsurance Trust Agreement, the Reinsurer shall take such measures as may be necessary to enable the Company to obtain such credit.
Financial Statement Credit. The Reinsurer, upon the request and at the discretion of the Company, shall provide the Company evidence that the Reinsurer has taken all steps necessary to assure that the Company obtains full credit on its financial statements, according to statutory requirements in all applicable jurisdictions, for the reinsurance ceded and any obligations arising hereunder in a form and amount satisfactory to the Company under such statutory requirements, including the posting of security, if required.