Connecticut Administrative Code › Title 38a - Insurance Department › 459 - Synthetic Guaranteed Investment Contracts › Section 38a-459-2 - Definitions

Current through July 10, 2024
As used in sections
				38a-459-1
				to
				38a-459-9,
				inclusive, of the Regulations of Connecticut State Agencies:
(1) "Account assets" means the assets in the
			 segregated portfolio plus any assets held in the general account or a separate
			 account to meet the asset maintenance requirements.
(2) "Actuarial opinion and memorandum" means
			 the opinion and memorandum of the valuation actuary required pursuant to
			 section
			 38a-459-8(h)
			 of the Regulations of Connecticut State Agencies.
(3) "Affirmatively approved" means approval
			 of an insurance company's plan of operation for a class of contracts containing
			 the form of contract under review, after the plan of operation associated with
			 the class of contracts has been reviewed by the insurance company's domiciliary
			 insurance department, and the plan of operation has been found to be in
			 compliance with requirements substantially similar to those contained in
			 sections
			 38a-459-1
			 to
			 38a-459-9,
			 inclusive, of the Regulations of Connecticut State Agencies by the domiciliary
			 insurance department. Affirmatively approved does not mean approval as a result
			 of an expiration of the time for review, such as when a plan of operation is
			 "deemed approved" as set forth in section
			 38a-459-3(c)
			 or
			 38a-459-4(b)
			 of the Regulations of Connecticut State Agencies.
(4) "Appointed actuary" means the qualified
			 actuary appointed or retained either directly by or by the authority of the
			 board of directors through an executive officer of the insurance company to
			 prepare the annual statement of actuarial opinion for the insurance company as
			 a whole pursuant to section 38a-78 of the Connecticut General
			 Statutes.
(5) "Asset maintenance
			 requirement" means the requirement to maintain assets to fund contract benefits
			 in accordance with section
			 38a-459-8(a)
			 of the Regulations of Connecticut State Agencies.
(6) "Class of contracts" means the set of all
			 contracts to which a given plan of operation pertains.
(7) "Contract value record" means an
			 accounting record, provided by the contract in relation to a segregated
			 portfolio of assets, that is credited with a fixed rate of return over regular
			 periods, and that is used to measure the extent of the insurance company's
			 obligation to the contract holder. The fixed rate of return credited to the
			 contract value record is determined by means of a crediting rate formula or
			 declared at the inception of the contract and valid for the entire term of the
			 contract.
(8) "Crediting rate
			 formula" means a mathematical formula used to calculate the fixed rate of
			 return credited to the contract value record during any rate period and based
			 in part upon the difference between the contract value record and the market
			 value record amortized over an appropriate period. The fixed rate of return
			 calculated by means of this formula may reflect prior and current market
			 conditions with respect to the segregated portfolio, but shall not be based on
			 future changes in market conditions.
(9) "Date of filing," with respect to a
			 filing for approval of a contract form, means the date the form is filed
			 pursuant to section
			 38a-8-14 of the
			 Regulations of Connecticut State Agencies.
(10) "Duration" means, with respect to the
			 segregated portfolio assets or guaranteed contract liabilities, a measure of
			 price sensitivity to changes in interest rates, such as the Macaulay duration
			 or option-adjusted duration.
(11)
			 "Fair market value" means a reasonable estimate of the amount that a buyer of
			 an asset would be willing to pay, and a seller of an asset would be willing to
			 accept, for the asset without duress in an arm's length transaction. In the
			 case of a publicly traded security, the "fair market value" is the price at
			 which the security is traded or, if no price is available, a price that
			 appropriately reflects the latest bid and asked prices for the security. In the
			 case of a debt instrument that is not publicly traded, the "fair market value"
			 is the discounted present value of the asset calculated at a reasonable
			 discount rate. For all other non-publicly traded assets, "fair market value"
			 shall be determined in accordance with valuation practices customarily used
			 within the financial industry.
(12)
			 "Guaranteed minimum benefits" means contract benefits on a specified date that
			 shall be either:
(A) A principal guarantee,
			 with or without a fixed minimum interest rate guarantee, related to the
			 segregated portfolio;
(B) An
			 assurance as to the future investment return or performance of the segregated
			 portfolio; or
(C) The fair market
			 value of the segregated portfolio, to the extent that the fair market value of
			 the assets determines the contract holder's benefits.