Mississippi Administrative Code › Title 19 - Department of Insurance › Part 2 - Life Insurance › Chapter 20 - Term and Universal Life Insurance Reserve Financing Model Regulation › Rule 19-2-20.07 - Requirements Applicable to Covered Policies to Obtain Credit for Reinsurance; Opportunity for Remediation

Current through June 25, 2024
A. Requirements
Subject to the exemptions described in Rule 20.04 and the
				  provisions of Rule 20.07(B), credit for reinsurance shall be allowed with
				  respect to ceded liabilities pertaining to Covered Policies pursuant to
Miss. Code Ann
. §§
										83-19-151 and  83-19-153 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 Miss. Code Ann. §
										83-7-23
				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
Miss. Code Ann
. §8319-153, on a
				funds withheld, trust, or modified coinsurance basis; and
(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
Miss. Code Ann
. §
										83-19-153; and
(5) Any trust used to satisfy the
				requirements of this Rule 20.07 shall comply with all of the conditions and
				qualifications of 19 Miss. Admin. Code, Pt. 1, R. 22.11, except that:
(a) Funds consisting of Primary Security or
				Other Security held in trust, shall for the purposes identified in Rule
				20.06(B), be valued according to the valuation rules set forth in Rule
				20.06(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
				Rule 20.07(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 Rule 20.07(A)(3) ) below
				102% of the level required by Rule 20.07(A)(3) at the time of the withdrawal or
				substitution; and
(d) The
				determination of reserve credit under 19 Miss. Admin. Code, Pt. 1, R. 22.11(3) shall be determined according to the valuation rules set forth in Rule
				20.06(B), as applicable; and
(6) The reinsurance treaty has been approved
				by the commissioner.