What Does Licensed for Reinsurance Only Mean?
Licensed for Reinsurance Only is a status that grants a reinsurance company or its employees the right to operate as reinsurers. It also allows reinsurance managers and reinsurance brokers to work in the state that licensed them. Like any other license, it can expire or be suspended.
Insuranceopedia Explains Licensed for Reinsurance Only
In the US, it is the state and not the federal government that grants licenses to insurance companies and insurance professionals. It is the same with reinsurers and the people who work for them.
Once the license is issued, the reinsurance company must follow their state's insurance regulations. One of these is maintaining solvency. Failure to do so can strip the company of its license.