§8710 — Title 5 Government Organization and Employees | U.S. Code

Summary

The Office of Personnel Management must set up reinsurance so parts of group life policies it issues can be passed to other life insurers under rules the Office approves. Before each policy year, and at least every 3 years or when a company leaves, the Office will pick which companies may be reinsurers and decide how much each issuing company keeps and how much each reinsurer gets. The split is based on each company’s total group life insurance in force in the United States on the most recent December 31 for which the Office has data, excluding insurance bought under this chapter. Amounts over $100,000,000 are counted less: reduce the first extra $100,000,000 by 25 percent, the next $100,000,000 by 50 percent, the next $100,000,000 by 75 percent, and anything above that by 95 percent. A fraternal benefit association that is licensed to sell life insurance in a State or the District of Columbia and that issues policies only to United States employees may be included. An issuing company or reinsurer must get at least any amount equal to the drop in its group life insurance from December 31, 1953 to the determination date, but any increase is lowered by the amount in force on the determination date of policies the Office has assumed. The Office can change the calculations as needed to carry out this plan.

Title 5, §8710

Government Organization and Employees — Source: USLM XML via OLRC

(a)The Office of Personnel Management shall arrange with a company issuing a policy under this chapter for the reinsurance, under conditions approved by the Office, of portions of the total amount of insurance under the policy, determined under this section, with other life insurance companies which elect to participate in the reinsurance.

(b)The Office shall determine for and in advance of a policy year which companies are eligible to participate as reinsurers and the amount of insurance under a policy which is to be allocated to the issuing company and to reinsurers. The Office shall make this determination at least every 3 years and when a participating company withdraws.

(c)The Office shall establish a formula under which the amount of insurance retained by an issuing company after ceding reinsurance, and the amount of reinsurance ceded to each reinsurer, is in proportion to the total amount of each company’s group life insurance, excluding insurance purchased under this chapter, in force in the United States on the determination date, which is the most recent December 31 for which information is available to the Office. In determining the proportions, the portion of a company’s group life insurance in force on the determination date in excess of $100,000,000 shall be reduced by—

(1)25 percent of the first $100,000,000 of the excess;

(2)50 percent of the second $100,000,000 of the excess;

(3)75 percent of the third $100,000,000 of the excess; and

(4)95 percent of the remaining excess.

(d)A fraternal benefit association which is—

(1)licensed to transact life insurance under the laws of a State or the District of Columbia; and

(2)engaged in issuing insurance certificates on the lives of employees of the United States exclusively;

(e)An issuing company or reinsurer is entitled, as a minimum, to be allocated an amount of insurance under the policy equal to any reduction from December 31, 1953, to the determination date, in the amount of the company’s group life insurance under policies issued to associations of employees of the United States. However, any increase under this subsection in the amount allocated is reduced by the amount in force on the determination date of any policy covering life insurance agreements assumed by the Office.

(f)The Office may modify the computations under this section as necessary to carry out the intent of this section.

Notes & Related Subsidiaries

Historical and Revision Notes

DerivationU.S. CodeRevised Statutes andStatutes at Large 5 U.S.C. 2096(c)–(e).Aug. 17, 1954, ch. 752, § 7(c)–(e), 68 Stat. 739.Aug. 11, 1955, ch. 794, § 3, 69 Stat. 677. The section is reorganized to clarify the steps in the computation of the insurance allocable to issuing and reinsuring companies. In subsections (c) and (d), references to the first determination date, December 31, 1953, are omitted as executed. Standard changes are made to conform with the definitions applicable and the style of this title as outlined in the preface to the report.

Editorial Notes

Amendments

1978—Subsecs. (a) to (c), (e), (f). Pub. L. 95–454 substituted “Office of Personnel Management” and “Office” for “Civil Service Commission” and “Commission”, respectively, wherever appearing.

Statutory Notes and Related Subsidiaries

Effective Date

of 1978 AmendmentAmendment by Pub. L. 95–454 effective 90 days after Oct. 13, 1978, see section 907 of Pub. L. 95–454, set out as a note under section 1101 of this title.

§8710 Reinsurance