836-012-0240 Exemptions from OAR 836-012-0200 to 836-012-0270 OAR 836-012-0200 to 836-012-0270 do not apply to the following: (1) Reinsurance of: (a) Policies that satisfy the criteria for exemption set forth OAR 836-031-0770 (7); and which are issued before the later of: (A) January 1, 2023, and (B) The date on which the ceding insurer begins to apply the provisions of VM-20 from the Valuation Manual to establish the ceded policies’ statutory reserves, but in no event later than January 1, 2020; (b) Portions of policies that satisfy the criteria for exemption set forth in OAR 836-031-0770 (5) and which are issued before the later of: (A) January 1, 2023, and (B) The date on which the ceding insurer begins to apply the provisions of VM-20 from the Valuation Manual to establish the ceded policies’ statutory reserves, but in no event later than January 1, 2020; (c) Any universal life policy that meets all of the following requirements: (A) Secondary guarantee period, if any, is 5 years or less; (B) Specified premium for the secondary guarantee period is not less than the net level reserve premium for the secondary guarantee period based on the Commissioners Standard Ordinary (CSO) valuation tables and valuation interest rate applicable to the issue year of the policy; and (C) The initial surrender charge is not less than 100 percent of the first year annualized specified premium for the secondary guarantee period; (d) Credit life insurance; (e) Any variable life insurance policy that provides for life insurance, the amount or duration of which varies according to the investment experience of any separate account or accounts; or (f) Any group life insurance certificate unless the certificate provides for a stated or implied schedule of maximum gross premiums required in order to continue coverage in force for a period in excess of one year. (2) Reinsurance ceded to an assuming insurer that meets the applicable requirements of OAR 836-012-0041; or (3) Reinsurance ceded to an assuming insurer that meets the applicable requirements of OAR 836-012-0031, and that, in addition: (a) Prepares statutory financial statements in compliance with the NAIC Accounting Practices and Procedures Manual, without any departures from NAIC statutory accounting practices and procedures pertaining to the admissibility or valuation of assets or liabilities that increase the assuming insurer’s reported surplus and are material enough that they need to be disclosed in the financial statement of the assuming insurer pursuant to Statement of Statutory Accounting Principles No. 1; and (b) Is not in a company action level event, regulatory action level event, authorized control level event, or mandatory control level event (as those terms are defined in OAR 836-011-0320 to 836-011-0350) when its risk-based capital is calculated in accordance with the life risk-based capital report including overview and instructions for companies, without deviation; or (4) Reinsurance ceded to an assuming insurer that meets the applicable requirements of OAR 836-012-0031, and that, in addition: (a) Is not an affiliate, as that term is defined in ORS 732.548 (1), of: (A) The insurer ceding the business to the assuming insurer; or (B) Any insurer that directly or indirectly ceded the business to that ceding insurer; (b) Prepares statutory financial statements in compliance with the NAIC Accounting Practices and Procedures Manual; (c) Is both: (A) Licensed or accredited in at least 10 states (including its state of domicile), and (B) Not licensed in any state as a captive, special purpose vehicle, special purpose financial captive, special purpose life reinsurance company, limited purpose subsidiary, or any other similar licensing regime; and (d) Is not, or would not be, below 500 percent of the Authorized Control Level RBC (as that term is defined in OAR 836-011-0305) when its risk-based capital is calculated in accordance with the life risk-based capital report including overview and instructions for companies without deviation, and without recognition of any departures from NAIC statutory accounting practices and procedures pertaining to the admission or valuation of assets or liabilities that increase the assuming insurer’s reported surplus; or (5) Reinsurance ceded to an assuming insurer that meets the following requirements: (a) The conditions set forth in ORS 731.520 (1); or (b) Is certified in this state as described in ORS 731.510 (4) and ORS 731.511; or (c) Maintains at least $250,000,000 in capital and surplus when determined in accordance with the NAIC Accounting Practices and Procedures Manual, including all amendments adopted by the NAIC, excluding the impact of any permitted or prescribed practices; and is (A) Licensed in at least 26 states; or (B) Licensed in at least 10 states, and licensed or accredited in a total of at least 35 states; (6) Reinsurance not otherwise exempt under OAR 836-012-0240 (1) to 836-012-0240 (5) if the director determines under all the facts and circumstances that all of the following apply: (a) The risks are clearly outside of the intent and purpose of this rule (as described in OAR 836-012-0220); (b) The risks are included within the scope of this rule only as a technicality; and (c) The application of this rule to those risks is not necessary to provide appropriate protection to policyholders. The director shall publicly disclose any decision made pursuant to OAR 836-012-0240 (6) to exempt a reinsurance treaty from this rule, as well as the general basis therefor (including a summary description of the treaty). Statutory/Other Authority: ORS 731.244, ORS 731.508 - 731.511 & 731.514 Statutes/Other Implemented: ORS 731.508 - 731.511 & 731.514 History: ID 10-2022, adopt filed 12/27/2022, effective 01/01/2023