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OMB No: 1510-0057(B)
For Paperwork Reduction Act
Statement and Burden Estimate
Statement See Last Page of Letter
December 31, 2023
ANNUAL LETTER TO EXECUTIVE OFFICERS OF SURETY
COMPANIES REPORTING
TO THE DEPARTMENT OF THE TREASURY
AS ADMITTED
REINSURERS
Congress authorized the Secretary of the Treasury (the Secretary) in 31 U.S.C. §§ 9304-9305 to certify
a surety company to do business with the United States if the Secretary determines that the company
meets certain conditions and is able to carry out its contracts. Treasury has published its requirements
for companies applying to underwrite or reinsure federal bonds at 31 C.F.R. Part 223.
Pursuant to 31 C.F.R. 223.12, Treasury also recognizes companies as Admitted Reinsurers on bonds
or policies not running to the United States. This Annual Letter describes the documentation
companies seeking such recognition must submit.
PLEASE NOTE:
This letter and all forms are available on our website:
https://www.fiscal.treasury.gov/surety-bonds/downloads.html
The 2023 NAIC UPLOAD FILE (s.txt file only) for your Company and all insurance company
subsidiaries, and all supporting information must be sent via email to the Treasury Department no later
than March 1, 2024.
Annual Statement NAIC File Upload (s.txt file only) should be filed for your company as well as for all
insurance company subsidiaries shown on the year-end Schedule D. The Annual
Financial Statement
Jurat Page must be signed and sworn to
by the company’s President and Secretaryor if being signed
by someone other than the President and Secretary, must be signed and sworn in accordance with the
state requirements and provide the state provision in support. The form must be notarized (wet or
electronic signatures and notary seals are acceptable) for the reporting company and all insurance
company subsidiaries shown on Schedule D. A checklist of items to be
submitted with the annual filing
can be downloaded from the website above. Please make one
complete filing of all documents, to
assist us in accounting for all filings accurately and
expeditiously.
The NAIC Upload File (s.txt file only) must be in accordance with the NAIC Annual Statement Filing
Specifications. Please note, the Surety Bond Branch should be notified if the Company's NAIC Upload
File (s.txt file only) is rejected by the
NAIC, faulty in any way, or have submitted an amended 2023
annual statement.
Treasury Schedule F can be downloaded from the website above. It is required that the
information
reflected in Schedule F of the company's annual statement be reported on the Treasury form
in
accordance with instructions on the Schedule. The Schedule F is a formula driven workbook and
automatically transfers data to the appropriate summary pages. All companies are reminded that the
summary page of Schedule F must be included and
be accurately completed. Companies are required
to submit the Treasury Schedule F as a MS Excel document. If errors are found in the document,
Treasury will notify the appropriate staff members from the company.
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Questions or comments on the Schedule F can be directed to the Surety Bond Branch at
[email protected]. Please indicate in the subject line: Treasury Schedule F
Comments/Suggestions.
Pursuant to 31 C.F.R. 223.12 (a)(4) and (c), Treasury requires companies seeking recognition as Admitted
Reinsurers to submit annual financial statements.
Copies of the Letters of Credit and Trust Agreements and Trust Account balances as of year-end
must be submitted to support the largest three amounts reported on the Treasury Schedule F, Part 2, Cols.
B
and C. If such LOC’s are issued by more than one bank, the LOC should specify how the funds are to be
drawn on. Please forward the supporting
documents to this Department. All companies are cautioned that
the
summary page of Schedule F must be completed accurately, also.
Letters of Credit should be in U.S. currency and should be valid for a period of not less than one year, with an
option to renew thereafter, and must be clean, irrevocable, unconditional letters of credit issued by any of the
banks on NAIC’s current list of “Banks Meeting Credit Standards for Issuing Letters of Credit.”
Reinsurance payables, i.e., ceded (premium) balances payable as would be reported for the cessions on
statutory statement Schedule F, Part 3, Column 17, are allowed as offsets for Treasury rating purposes
provided there is a legal right of offset. Credit may also be taken, with prior approval from this Department, for
multi-beneficiary trust agreements established and maintained in the United States by overseas accredited or
trusteed reinsurers, to the extent the unauthorized ceded business is covered by those accounts.
A statement of actuarial opinion on the adequacy of all loss reserves of the company must be provided by a
“qualified actuary” as defined by the NAIC. The scope, format and opinion of the report should also conform with
the requirements of the NAIC Annual Statement Instructions for Property and Casualty Companies. Where a
pooling arrangement exists, an actuarial opinion on the reserve adequacy of the pool should be
provided, along with a worksheet showing the percentage participation and reserves allocated to each of
the individual pool members.
Companies with annual statement results which show materially adverse reserve development may wish to make
plans
to obtain confirmation, satisfactory to the Treasury, from a CPA firm, independent actuary or State
Insurance
Department, that its reserves are adequate at December 31. If adverse development continues to
appear,
such confirmation may not be accepted from the same person (CPA firm, actuary, etc.) for two
consecutive
years. However, if the development of the reserves is not adverse, an actuarial opinion provided
by a “qualified
actuary” employed by the company will suffice.
In order to be satisfied that Treasury recognized Admitted Reinsurers are solvent and able to keep and perform
their contracts, Treasury will rely upon a company’s Risk-Based Capital (RBC). RBC is not designed to be used as a
stand-alone tool in determining the financial solvency of an insurance company. As such, Treasury uses it in
conjunction with its regulations and a company’s overall financial results, ratios and trends to evaluate its financial
strength and solvency. The RBC ratio should be maintained at 200% or more at all times. If a company’s RBC ratio
falls below this threshold or otherwise exhibits a concerning trend, Treasury may require the company to take
corrective action to maintain its certification.
A copy of the most recent Examination Report made by a State Insurance Department should accompany the
Annual
Financial Statement, provided that the Treasury has not already been furnished a copy. Correspondence
responding to the recommendations made by the State Examiner should be provided to this Department.
Companies are also required to submit a copy of their NAIC calculated IRIS ratio results, as soon as they
become available. If a company's results are not calculated by the NAIC, Treasury should be notified by March 1.
Companies recognized as Admitted Reinsurers are expected to maintain results within the usual ranges
for these ratios. When a company's ratio results do not fall within the usual ranges, Treasury may notify the
company of its concern over the company's financial condition. The company will be afforded an opportunity to
respond to Treasury's concern
.If a company does not meet these criteria, Treasury may request additional
information from the Company to substantiate its qualification for continued recognition as an Admitted Reinsurer.
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Please note that in accordance with 31 CFR 223.22, a fee of $3,200 is required for determining the
co
ntinued qualification of a company as an Admitted Reinsurer. It is due February 15, 2024. To pay
your fee, go to our
internet web site at https://www.fiscal.treasury.gov/surety-bonds/and click on
“PAY ONLINE”. You may pay online by credit card or ACH Debit. We
accept American Express,
Discover, Visa, and Master Card. If you choose to pay via automatic debit, you
must first make
sure that there are no restrictions on debit activity for the bank account you plan to use
for your
renewal fee payment.
The timely submission of the required data due March 1, 2024 in support of the annual reporting (e.g.,
financial statements and related supporting documents of subsidiary companies, real estate appraisal
reports, actuarial opinions, NAIC Ratios, explanatory memoranda, etc.) is the responsibility of the
reporting company.
EMAIL ALL DOCUMENTATION TO:
(and/or to the financial analyst assigned to examine your company)
If your Company assumed only a nominal amount of reinsurance or no longer reinsures Treasury Certified
companies, and you no longer wish to file the above material to continue your current Admitted Reinsurer Status,
please submit a written request to be removed from Treasury’s List of Admitted Reinsurers.
Melvin Saunders
Manager
Surety Bond Branch
Enclosure
Paperwork Reduction Act Statement
By authority of 31 U.S.C. 9304-9308, 31 CFR, Part 223, the information requested in this letter is required to retain a benefit and to enable the
Assistant Commissioner, Fiscal Accounting, Bureau of the Fiscal Service, Department of the Treasury, to determine if your company is
maintaining compliance with the requirements of the Department of the Treasury in order for your company to remain qualified and acceptable as
a surety or reinsurer of Federal bonds. Certified companies are required to file this information with Treasury once each year on March 1. Failure
to provide this information will result in non-compliance with Treasury regulations and may result in a loss of your company's authority to act as a
surety or reinsurer of Federal bonds.
Burden Estimate Statement
The estimated average burden associated with this collection is 39.75 hours per respondent or record keeper, depending on individual
circumstances. Comments concerning the accuracy of this burden estimate and suggestions for reducing this burden should be directed to the
Bureau of the Fiscal Service, Forms Management Officer, Parkersburg, WV 26106-1328. THIS ADDRESS SHOULD ONLY BE USED FOR
COMMENTS AND/OR SUGGESTIONS CONCERNING THE AMOUNT OF TIME SPENT TO COLLECT THIS DATA. DO NOT SENDTHE
COMPLETEDPAPERWORKTO THE ADDRESS ABOVE FORPROCESSING.
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ANNUAL CALENDAR OF FILINGS IN 2024 FOR COMPANIES RECOGNIZED
BY THE TREASURY AS ADMITTED REINSURERS OF SURETY COMPANIES
DOING BUSINESS WITH THE UNITED STATES GOVERNMENT
Due February 15 (or the following business day if the 15
th
falls on a weekend) RenewalFeeof$3,200(email
proofofpaymenttoTheSuretyBonds Branch)
Due March 1 (or the following bu
siness day if the 1
st
falls on a weekend) (Refer also to the Checklist posted
on our website.)
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Annual Financial Statement Jurat Page, signed, sealed and notarized for reporting company and all insurance
company subsidiaries shown on Schedule D.
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The NAIC File Upload (s.txt file only) for reporting company and all insurance company subsidiaries shown on
Schedule D.
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Treasury Schedule F* (ceded reinsurance only). The Treasury Schedule F should be submitted as an
MS Excel Document. Note: The Schedule F included in the company’s
Annual Statement reporting
assumed reinsurance is sufficient for Treasury rating purposes. However, if
Schedule F - Part 1 of the
company’s Annual Statement showing their assumed reinsurance is not included
in the company’s Annual
Statement filed by March 1, it can be submitted separately no later than April 1.
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Statement of Actuarial Opinion.
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Annual Checklist* for Filings for Admitted Reinsurer Companies (including contact person information and email
address)
https://www.fiscal.treasury.gov/surety-bonds/downloads.html
>> Please no
te, we do not require the Insurance Expense Exhibit to be filed or the PDF format of the
Annual Financial Statement.
Due M
ay 1 (o
r the following business day if the 1
st
falls on a weekend)
IRIS Ratio Results** (with management explanations for unusual results)
Due June 1 (or the followi
ng business day if the 1
st
falls on a weekend)
CPA Audited Financial Statements** (specific to the reporting company – no consolidated statements unless
approved by in advance by the Surety Bond Branch)
CPA Report on Internal Control and the Management Letter as received.
CPA’s Management Letter 10-K Report, if applicable
Due December 31 (or the following business day if the 31
st
falls on a weekend)
Request for filing consolidated CPA reports, if applicable
Due Whenever Released by the State
State Exam Report
Due Whenever Applicable
Updated Biographical Affidavits on New Officers and Directors/Others (use NAIC format)
Information on Changes in Reinsurance Agreements
Information on Ownership and/or Name Changes
Any additional data requested by Treasury
* All of our forms are now available on-line:
https:
//www.fiscal.treasury.gov/surety-bonds/downloads.html
** These items should be sent as early as possible.
Revised 12/2023
