North Dakota Administrative Code › Title 45 - Insurance, Commissioner of › Article 45-03 - Regulation of Insurance Companies › Chapter 45-03-26 - Term and Universal Life Insurance Reserve Financing Model Regulation › Section 45-03-26-07 - Requirements applicable to covered policies to obtain credit for reinsurance - Opportunity for remediation

Current through Supplement No. 393, July, 2024
1. Subject to the
				exemptions described in section 45-03-26-04 and the provisions of subsection 2,
				credit for reinsurance shall be allowed with respect to ceded liabilities
				pertaining to covered policies pursuant to North Dakota Century Code sections
				26.1-31.2-01 and 26.1-31.2-02 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 North
				Dakota Century Code chapter 26.1-35 and related chapters and actuarial
				guidelines, and credit claimed for any reinsurance treaty subject to this
				chapter does not exceed the proportionate share of those reserves ceded under
				the contract;
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;
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 North Dakota Century Code section 26.1-31.2-02 on a funds
				withheld, trust, or modified coinsurance basis;
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 subdivision c, are held by or on
				behalf of the ceding insurer as security under the reinsurance treaty within
				the meaning of North Dakota Century Code section 26.1-31.2-02;
e. Any trust used to satisfy the requirements
				of this section shall comply with all of the conditions and qualifications of
				section 45-03-07.1-08 except that:
(1) Funds
				consisting of primary security or other security held in trust, shall for the
				purposes identified in subsection 2 of section 45-03-07.1-08, be valued
				according to the valuation rules set forth in subsection 2 of section
				45-03-07.1-08, as applicable;
(2)
				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
				subdivision c;
(3) 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 subdivision c below one hundred
				two percent of the level required by subdivision c at the time of the
				withdrawal or substitution; and
(4)
				The determination of reserve credit under subdivision c of subsection 4 of
				section 45-03-07.1-08 shall be determined according to the valuation rules set
				forth in subsection 2 of section 45-03-26-06, as applicable; and
f. The reinsurance treaty has been
				approved by the commissioner.