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Your not required to have reinsurance. Its a business decision. You can't voluntarily enter into an agreement with someone and then blame the other party for the conditions of the contract you entered into voluntarily. Assuming all things being equal, regulators don't care IF you have reinsurance - they only examine the treaties to make sure their legal, etc. In fact, regulators would rather you not have reinsurance. They might allow you to write more business if you have reinsurance than if you don't.
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