Louisiana Administrative Code › Title 37 - INSURANCE › Part XIII - Regulations › Chapter 183 - Regulation Number 121-Term and Universal Life Insurance Reserve Financing › Section XIII-18311 - Requirements Applicable to Covered Policies to Obtain Credit for Reinsurance; Opportunity for Remediation

Current through Register Vol. 50, No. 6, June 20, 2024
A.
				Subject to the exemptions described in §18307 and the provisions of Subsection
				B, credit for reinsurance shall be allowed with respect to ceded liabilities
				pertaining to covered policies pursuant to
				R.S.
				22:651 and
				R.S.
				22:652 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:
1. 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
				R.S.
				22:753 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
2. 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
3. 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
				R.S.
				22:652, on a funds withheld, trust, or
				modified coinsurance basis;
4.
				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
				Paragraph 3 above, are held by or on behalf of the ceding insurer as security
				under the reinsurance treaty within the meaning of
				R.S.
				22:652; and
5. any trust used to satisfy the requirements
				of §18311 shall comply with all of the conditions and qualifications of
				§3517 of Regulation 56, except that:
a. funds consisting of primary security or
				other security held in trust, shall for the purposes identified in §18309 B, be
				valued according to the valuation rules set forth in §18309 B, as applicable;
				and
b. 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 Subsection A.3;
				and
c. 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 Subsection A.3) below 102 percent of the
				level required by Subsection A.3 at the time of the withdrawal or substitution;
				and
d. the determination of reserve
				credit under
				§3517.E of Regulation
				56 shall be determined according to the valuation rules set forth in §18309 B,
				as applicable; and
6.
				the reinsurance treaty has been approved by the commissioner.