New York Codes, Rules and Regulations › Title 11 - INSURANCE › Chapter III - Policy and Certificate Provisions › Subchapter A - Life, Accident and Health Insurance › Part 43 - Individual Life Insurance Market-value Adjustment › Section 43.10 - Funding and reserves

Current through Register Vol. 46, No. 28, July 10, 2024
(a) Choice
				  of funding. A company may fund its policies where permitted by law in a
				  separate account holding assets valued at market and may value its reserve
				  liabilities for policies using a current interest rate determined in accordance
				  with this section. Alternatively, a company may fund policies in its general
				  account or where permitted by law in a separate account holding assets valued
				  in accordance with section 1414  of the Insurance Law, and in either
				  case value its reserve liabilities using an interest rate determined in
				  accordance with this section and section 4217  of the Insurance Law.
(b) Market-value separate accounts.
(1) A company may fund its policies in a
				  separate account holding assets valued at market only if all of the following
				  conditions are met:
(i) the company does not
				  invest such assets in other than publicly traded obligations, short-term debt
				  and cash (and cash equivalents) unless at least 90 percent of the market-value
				  of such assets consist of fixed income obligations and other securities (and
				  hedging instruments purchased in connection therewith) and cash (and cash
				  equivalents), having a Macaulay duration within one year of the Macaulay
				  duration of the policy liabilities, determined in accordance with one of the
				  two ways provided in paragraph (2) of this subdivision;
(ii) the company invests the assets of the
				  separate account so that at least 80 percent of the market-value of such assets
				  consist of fixed income obligations and short-term debt (and hedging
				  instruments purchased in connection therewith) and cash (and cash equivalents),
				  having a Macaulay duration within one year of the Macaulay duration of the
				  policy liabilities, determined in accordance with one of the two ways provided
				  in paragraph (2) of this subdivision;
(iii) the policies provide for separate
				  account funding;
(iv) the company
				  obtains the superintendent's approval of its plan of operation for the separate
				  account; and
(v) the company
				  submits annually to the superintendent, an opinion, in form and substance
				  satisfactory to the superintendent, of a qualified actuary meeting the
				  requirements of Part 95 of this Title that, after taking into account any risk
				  charge payable from the assets of the separate account with respect to policy
				  liabilities, the reserves for the policies and the separate account assets make
				  good and sufficient provision for the company's liabilities with respect
				  thereto, such opinion to be accompanied by a memorandum, also in form and
				  substance satisfactory to the superintendent, of the qualified actuary,
				  describing the calculations made in support of such opinion and the assumptions
				  used in the calculations. The form of the opinion and memorandum shall comply
				  with said Part 95 of this Title.