Kansas Administrative Regulations › Agency 40 - INSURANCE DEPARTMENT › Article 2 - LIFE INSURANCE › Section 40-2-24 - Life and health reinsurance agreements

Current through Register Vol. 43, No. 28, July 11, 2024
Sections 3, 4, 5, and 6 of the national association of
				insurance commissioners' "life and health reinsurance agreements model
				regulation," adopted by the NAIC on September 20, 1992, are hereby adopted by
				reference, subject to the following additions and exceptions:
(a) The formula in section 4A(7)(b) is hereby
			 amended to read as follows: "The following formula shall be acceptable:
"Rate = 2(I + CG)
X + Y -I -CG
"Where: 'I' is the net investment income [(exhibit 2, line 16,
				column 7 of the life and accident and health annual statement) or (underwriting
				and investment exhibit part 1, line 15, column 8 of the property and casualty
				annual statement)];
"'CG' is the capital gains less capital losses [(exhibit 3,
				line 12, column 4 plus exhibit 4, line 10, column 4 of the life and accident
				and health annual statement) or (part 1A, line 10, column 7 of the property and
				casualty annual statement)];
"'X' is the current year cash and invested assets [(page 2,
				line 11, column 4 of the life and accident and health annual statement) or
				(page 2, line 9, column 4 of the property and casualty annual statement)] plus
				investment income due and accrued [(page 2, line 17, column 4 of the life and
				accident and health annual statement) or (page 2, line 16, column 4 of the
				property and casualty annual statement)] less borrowed money [(page 3, line 22,
				column 1 of the life and accident and health annual statement) or (page 3, line
				7, column 1 plus line 8, column 1 of the property and casualty annual
				statement)]; and
"'Y' is the same as X but for the prior year."
(b) The first paragraph of section
			 4C(2) is hereby amended to read as follows: "Any increase in the surplus net of
			 federal income tax resulting from arrangements described in subsection C(1)
			 shall be identified separately on the insurer's statutory financial statement
			 as a surplus item [(aggregate write-ins for gains and losses in surplus in the
			 capital and surplus account, page 4, line 46, column 1 of the life and accident
			 and health annual statement) or (aggregate write-ins for gains and losses in
			 surplus in the capital and surplus account, page 4, line 30, column 1 of the
			 property and casualty annual statement)], and recognition of the surplus
			 increase as income shall be reflected on a net of tax basis in "commissions and
			 expense allowances on reinsurance ceded" (page 4, line 5, column 1 of the life
			 and accident and health annual statement) or in "other underwriting expenses
			 incurred" (page 4, line 4, column 1 of the property and casualty annual
			 statement) as earnings emerge from the reinsured business."
(c) Section 6 is hereby amended to read as
			 follows: "Insurers subject to this regulation shall reduce to zero by December
			 31, 1997 any reserve credits or assets established with respect to reinsurance
			 agreements entered into prior to the effective date of this regulation that,
			 under the provisions of this regulation, would not be entitled to recognition
			 of the reserve credits or assets. However, these reinsurance agreements shall
			 have been in compliance with laws or regulations in existence immediately
			 preceding the effective date of this regulation.