A. Pursuant to a reinsurance agreement, a domestic fraternal benefit society may cede any part or all of its risks to an insurer other than another fraternal benefit society that has the power to take the reinsurance and that is authorized to transact business in this state, or if the reinsurer is not authorized to transact business in this state, that is approved by the director. A society may not reinsure substantially all of its insurance in force without the written permission of the director. A society may take credit for the reserves on the ceded risks to the extent that the risks are reinsured. Any credit taken by a ceding society is not allowed as an admitted asset or as a deduction from liability for reinsurance that is made, ceded, renewed or otherwise effective after January 1, 1995, unless the reinsurance is payable by the assuming insurer on the basis of the liability of the ceding society under the contract or contracts reinsured without diminution because of the insolvency of the ceding society.
B. Notwithstanding subsection A of this section, a society may reinsure the risks of another society in a consolidation or merger that is approved by the director pursuant to section 20 873. 20872