
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 5USC8710]

 
             TITLE 5--GOVERNMENT ORGANIZATION AND EMPLOYEES
 
                           PART III--EMPLOYEES
 
                   Subpart G--Insurance and Annuities
 
                       CHAPTER 87--LIFE INSURANCE
 
Sec. 8710. Reinsurance

    (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.

However, the amount retained by or ceded to a company may not exceed 25 
percent of the amount of the company's total life insurance in force in 
the United States on the determination date.
    (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;

is eligible to act as a reinsuring company and may be allocated an 
amount of reinsurance equal to 25 percent of its total life insurance in 
force on employees of the United States on the determination date named 
by subsection (c) of this section.
    (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.

(Pub. L. 89-554, Sept. 6, 1966, 80 Stat. 596; Pub. L. 95-454, title IX, 
Sec. 906(a)(2), (3), Oct. 13, 1978, 92 Stat. 1224.)

                      Historical and Revision Notes
------------------------------------------------------------------------
                                                    Revised Statutes and
     Derivation                U.S. Code             Statutes at Large
------------------------------------------------------------------------
                     5 U.S.C. 2096(c)-(e).         Aug. 17, 1954, ch.
                                                    752, Sec.  7(c)-(e),
                                                    68 Stat. 739.
                                                   Aug. 11, 1955, ch.
                                                    794, Sec.  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.


                               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.


                    Effective Date of 1978 Amendment

    Amendment 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.

                  Section Referred to in Other Sections

    This section is referred to in sections 8714a, 8714b, 8714c of this 
title.
