Provisions in reinsurance agreements entered into in conjunction with letters of credit.

When a reinsurance agreement is entered into in conjunction with a letter of credit, either the reinsurance agreement or an ancillary agreement thereto shall contain provisions that:

(1) Require the reinsurer to provide letters of credit to the ceding insurer.

(2) Specify what recoverables and reserves are covered by the letter of credit.

(3) Specify that notice of nonrenewal of the letter of credit is a reason that the ceding insurer may draw down the full amount of the letter of credit.