Sec. 1. 24-A MRSA §731-B, sub-§1, ķA, as amended by PL 1991, c. 828, §16, is further amended to read:

A. Is licensed to transact insurance or reinsurance in this State, provided the assuming insurer maintains surplus as regards policyholders in an amount not less than the sum of paid-in capital stock, if any, and surplus as otherwise required for a certificate of authority for the kinds and amount of insurance and assumed reinsurance the insurer has in force net of any applicable ceded reinsurance.__If the assuming insurer is licensed as a special purpose reinsurance vehicle pursuant to section 782 and maintains capital and surplus in accordance with the requirements of section 787, credit for reinsurance under a special purpose reinsurance vehicle contract, as defined in section 781, subsection 15, is allowed only to the extent that:

(1)__The fair value of the assets held in trust for the benefit of the ceding insurer equals or exceeds the obligations due and payable to the ceding insurer by the special purpose reinsurance vehicle under the special purpose reinsurance vehicle contract;

(2)__The assets are held in trust in accordance with the requirements in subchapter 6;

(3)__The assets are administered in the manner and pursuant to arrangements under subchapter 6;

(4)__The assets are held or invested in one or more of the forms allowed in section 795; and

(5)__The contract complies with all other relevant requirements of subchapter 6;

Sec. 2. 24-A MRSA c. 9, sub-c. 6 is enacted to read:

SUBCHAPTER 6

SPECIAL PURPOSE REINSURANCE VEHICLE

§781.__Definitions

As used in this subchapter, unless the context otherwise indicates, the following terms have the following meanings.