31.16.06.01

.01 Reinsurance Agreement.

A number of reinsurance treaties, particularly Quota-Share Treaties, provide for provisional commissions on a sliding scale which are adjusted periodically or on final settlement based upon the experience developed on business reinsured under these treaties. It is hereby ordered that when a company enters into such a reinsurance agreement the commission for which credit will be allowed in the preparation of your Annual Statements or any interim statements filed with this Administration will be the minimum guaranteed commission under the sliding scale provision. This, however, does not preclude the allowance as an asset of any commission in excess of the guaranteed minimum which may be due the company on final settlement of the Treaty.