Compilation of Rules and Regulations of the State of Georgia › Department 120 - OFFICE OF COMMISSIONER OF INSURANCE, SAFETY FIRE COMMISSIONER AND INDUSTRIAL LOAN COMMISSIONER › Chapter 120-2 - RULES OF COMMISSIONER OF INSURANCE › Subject 120-2-109 - TERM AND UNIVERSAL LIFE INSURANCE RESERVE FINANCING REGULATION › Rule 120-2-109-.07 - Requirements Applicable to Covered Policies to Obtain Credit For Reinsurance; Opportunity for Remediation

Current through Rules and Regulations filed through June 27, 2024
(1) Requirements
Subject to the exemptions described in
				  120-2-109-.04 and the provisions
				  of section (2), credit for reinsurance shall be allowed with respect to ceded
				  liabilities pertaining to Covered Policies pursuant to O.C.G.A. §
										33-7-14(a) and
				  (b) if, and only if, in addition to all other
				  requirements imposed by law or regulation, the following requirements are met
				  on a treaty-by-treaty basis:
(a) The
				ceding insurer's statutory policy reserves with respect to the Covered Policies
				are established in full and in accordance with the applicable requirements of
				O.C.G.A. §
										33-10-13 and related regulations
				and actuarial guidelines, and credit claimed for any reinsurance treaty subject
				to this regulation does not exceed the proportionate share of those reserves
				ceded under the contract; and
(b)
				The ceding insurer determines the Required Level of Primary Security with
				respect to each reinsurance treaty subject to this regulation and provides
				support for its calculation as determined to be acceptable to the commissioner;
				and
(c) Funds consisting of Primary
				Security, in an amount at least equal to the Required Level of Primary
				Security, are held by or on behalf of the ceding insurer, as security under the
				reinsurance treaty within the meaning of O.C.G.A. §
										33-7-14(b), on a
				funds withheld, trust, or modified coinsurance basis; and
(d) Funds consisting of Other Security, in an
				amount at least equal to any portion of the statutory reserves as to which
				Primary Security is not held pursuant to Subsection (c) above, are held by or
				on behalf of the ceding insurer as security under the reinsurance treaty within
				the meaning of OC.G.A.§
										33-7-14(b);
				and
(e) Any trust used to satisfy
				the requirements of
				120-2-109-.07 shall comply with
				all of the conditions and qualifications of
				120-2-78-.12, except that:
(i) Funds consisting of Primary Security or
				Other Security held in trust, shall for the purposes identified in
				120-2-109-.06(2),
				be valued according to the valuation rules set forth in
				120-2-109-.06(2),
				as applicable; and
(ii) There are
				no affiliate investment limitations with respect to any security held in such
				trust if such security is not needed to satisfy the requirements of
				120-2-109-.07(1)(c);
				and
(iii) The reinsurance treaty
				must prohibit withdrawals or substitutions of trust assets that would leave the
				fair market value of the Primary Security within the trust (when aggregated
				with Primary Security outside the trust that is held by or on behalf of the
				ceding insurer in the manner required by
				120-2-109-.07(1)(c)
				below 102% of the level required by
				120-2-109-.07(1)(c)
				at the time of the withdrawal or substitution; and
(iv) The determination of reserve credit
				under 120-2-78-.12
				shall be determined according to the valuation rules set forth in
				120-2-109-.06(2),
				as applicable; and
(f)
				The reinsurance treaty has been approved by the
				commissioner.