reglab/statecodes huggingface dataset:
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:30 - Life and health reinsurance › Section 20:06:30:13 - Definitions

Current through Register Vol. 51, page 10, July 15, 2024
The following definitions apply to §§ 20:06:30:13  to 20:06:30:20, inclusive:
(1) "Actuarial method," the methodology used to determine the required level of primary security, as described in §
									20:06:30:14;
(2) "Covered policy," subject to the exemptions described in §
									20:06:30:18, a covered policy is a policy, other than a grandfathered policy, of the following policy types:
(a) Life insurance policy with guaranteed nonlevel gross premiums and/or guaranteed nonlevel benefits, except for flexible premium universal life insurance policy; or
(b) Flexible premium universal life insurance policy with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period;
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:30 - Life and health reinsurance › Section 20:06:30:14.1 - Adjustments for other reinsurance treaties

Current through Register Vol. 51, page 10, July 15, 2024
The adjustments for other reinsurance treaties may only be made with respect to reinsurance treaties entered into directly by the ceding insurer. The ceding insurer may not make no adjustment as a result of a retrocession treaty entered into by the assuming insurers.
The required level of primary security resulting from application of the actuarial method may not exceed the amount of statutory reserves ceded.
If the ceding insurer cedes risks with respect to a covered policy, including any riders, in more than one reinsurance treaty subject to §§
									20:06:30:13  to 20:06:30:20, inclusive, the aggregate required level of primary security for those reinsurance treaties may not be less than the required level of primary security calculated using the actuarial method as if all risks ceded in those treaties were ceded in a single treaty subject to §§
									20:06:30:13  to 20:06:30:20, inclusive; and
If a reinsurance treaty subject to §§
									20:06:30:13  to 20:06:30:20, inclusive, cedes risk on both covered and non-covered policies, credit for the ceded reserves must be determined as follows:
(1) The actuarial method shall be used to determine the required level of primary security for the covered policy, and §
									20:06:30:16  shall be used to determine the credit for reinsurance for the covered policy reserves; and
(2) Credit for the non-covered policy reserves shall be granted only to the extent that security, in addition to the security held to satisfy the requirements of subdivision 20:06:3014.1(1), is held by or on behalf of the ceding insurer in accordance with SDCL Ch. 58-26. Any primary security used to meet the requirements of this subdivision may not be used to satisfy the required level of primary security for the covered policy.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-17.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:30 - Life and health reinsurance › Section 20:06:30:15 - Valuation used for purposes of calculations

Current through Register Vol. 51, page 10, July 15, 2024
For the purposes of both calculating the required level of primary security pursuant to the actuarial method and determining the amount of primary security and other security, as applicable, held by or on behalf of the ceding insurer, the following shall apply:
(1) For assets, including any assets held in trust, that would be admitted under the Accounting Practices and Procedures Manual, as adopted by the director under SDCL  58-6-75 and §
									20:06:25:01, if the assets are held by the ceding insurer, the valuations are to be determined according to statutory accounting procedures as if the assets were held in the ceding insurer's general account and without taking into consideration the effect of any prescribed or permitted practices; and
(2) For all other assets, the valuations are to be those that are assigned to the assets for the purpose of determining the amount of reserve credit taken. In addition, the asset spread tables and asset default cost tables required by VM-20 shall be included in the actuarial method if adopted by the NAIC Life Actuarial (A) Task Force no later than the December thirty-first on or immediately preceding the valuation date for which the required level of primary security is being calculated and adopted by the director pursuant to SDCL  58-26-45.1 and §
									20:06:59:01. The tables of asset spreads and asset default costs shall be incorporated into the actuarial method in the manner specified in VM-20.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-17.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:30 - Life and health reinsurance › Section 20:06:30:17 - Requirements at inception date and on an on-going basis-Remediation

Current through Register Vol. 51, page 10, July 15, 2024
The requirements of §
									20:06:30:16  must be satisfied as of the date that risks under a covered policy is ceded, if that date is on or after the effective date of §§
									20:06:30:13  to 20:06:30:20, inclusive, and on an ongoing basis thereafter. Under no circumstances shall a ceding insurer take or consent to any action or series of actions that would result in a deficiency under subdivision 20:06:30:16(3) or 20:06:30:16(4) with respect to any reinsurance treaty under which a covered policy has been ceded, and in the event that a ceding insurer becomes aware at any time that a deficiency exists, it shall use its best efforts to arrange for the deficiency to be eliminated as expeditiously as possible.
Prior to the due date of each quarterly or annual statement, each life insurance company that has ceded reinsurance within the scope of chapter § 20:06:30 shall perform an analysis, on a treaty-by-treaty basis, to determine, as to each reinsurance treaty under which covered policy has been ceded, whether as of the end of the immediately preceding calendar quarter (the valuation date) the requirements of subdivisions 20:06:30:16(3) or 20:06:30:16(4) are satisfied. The ceding insurer shall establish a liability equal to the excess of the credit for reinsurance taken over the amount of primary security actually held pursuant to subdivision 20:06:30:16(3), unless either:
(1) The requirements of subdivision 20:06:30:16(3) or 20:06:30:16(4) were fully satisfied as of the valuation date as to the reinsurance treaty; or
(2) Any deficiency has been eliminated before the due date of the quarterly or annual statement to which the valuation date relates through the addition of primary security and/or other security, as the case may be, in such amount and form as would have caused the requirements of subdivision 20:06:30:16(3) or 20:06:30:16(4) to be fully satisfied as of the valuation date.
Nothing in this section shall be construed to allow a ceding company to maintain any deficiency under subdivision 20:06:30:16(3) or 20:06:30:16(4) for any period of time longer than is reasonably necessary to eliminate it.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-17.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:30 - Life and health reinsurance › Section 20:06:30:18 - Exemptions

Current through Register Vol. 51, page 10, July 15, 2024
Sections 20:06:30:13 to 20:06:30:20, inclusive, do not apply to the reinsurance situations described in the following :
(1) Reinsurance of:
(a) A policy that satisfy the criteria for an exemption under the attained-age-based yearly renewable term life insurance policies exemption or the unitary reserves for certain yearly renewable term life insurance policies, as defined and set forth in Appendix A-830 of the Accounting Practices and Procedures Manual, as adopted under SDCL  58-6-75 and §
										20:06:25:01, and which are issued before the later of:
(i) The effective date of §§
											20:06:30:13  to 20:06:30:20, inclusive; and
(ii) The date on which the ceding insurer begins to apply the provisions of VM-20 to establish the ceded policy's statutory reserves;
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:30 - Life and health reinsurance › Section 20:06:30:19 - Prohibition against avoidance

Current through Register Vol. 51, page 10, July 15, 2024
No insurer that has a covered policy as to which §§
									20:06:30:13  to 20:06:30:20, inclusive, applies shall take any action or series of actions, or enter into any transaction or arrangement or series of transactions or arrangements if the purpose of that action, transaction or arrangement or series thereof is to avoid the requirements of §§
									20:06:30:13  to 20:06:30:20, inclusive, or to circumvent its purpose and intent.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-17.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:30 - Life and health reinsurance › Section 20:06:30:20 - Applicability

Current through Register Vol. 51, page 10, July 15, 2024
In the event of a direct conflict between the provisions of §§
									20:06:30:13  to 20:06:30:20, inclusive, and the provisions in chapter 20:06:31, the provisions of §§
									20:06:30:13  to 20:06:30:20, inclusive, shall apply but only to the extent of the conflict.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-17.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:01 - Reinsurer licensed in this state

Current through Register Vol. 51, page 10, July 15, 2024
The director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that was licensed in this state as of any date on which statutory financial statement credit for reinsurance is claimed.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-8,  58-14-17.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:02 - Accredited reinsurers

Current through Register Vol. 51, page 10, July 15, 2024
The director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that is accredited as a reinsurer in this state as of the date on which statutory financial statement credit for reinsurance is claimed. An accredited reinsurer shall:
(1) File a completed Form AR-1 provided by the director as evidence of its submission to this state's jurisdiction and to this state's authority to examine its books and records.
(2) File with the director a certified copy of a letter or a certificate of authority or other acceptable evidence that it is licensed to transact insurance or reinsurance in at least one state, or, in the case of a United States branch of an alien assuming insurer, is entered through and licensed to transact insurance or reinsurance in at least one state;
(3) File annually with the director a copy of its annual statement filed with the insurance department of its state of domicile or, in the case of an alien assuming insurer, a copy of its annual statement filed with the state through which it is entered and in which it is licensed to transact insurance or reinsurance, and a copy of its most recent audited financial statement; and
(4) Maintain a surplus as regards policyholders in an amount not less than $20,000,000, or obtain the affirmative approval of the director upon a finding that it has adequate financial capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers.
Credit shall not be allowed a domestic ceding insurer under this section if the assuming insurers accreditation has been revoked by the director, or if the reinsurance was ceded while the assuming insurers accreditation was under suspension by the director.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-9,  58-14-17.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:03 - Reinsurer domiciled and licensed in another jurisdiction

Current through Register Vol. 51, page 10, July 15, 2024
The director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that as of any date on which statutory financial statement credit for reinsurance is claimed:
(1) Is domiciled in a state, or, in the case of an alien assuming insurer with the state through which it is entered, that employs standards regarding credit for reinsurance substantially similar to this state;
(2) Maintains a surplus as regards policyholders in an amount not less than $20,000,000; and
(3) Has filed a properly executed Form AR-1 with the director as evidence of its submission to this states authority to examine its books and records on a form to be provided by the director.
The provisions of this section relating to surplus as regards policyholders may not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same holding company system. As used in this section, substantially similar standards, means credit for reinsurance standards that the director determines equal or exceed the standards of SDCL chapter 58-14 and this chapter.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-10,  58-14-17.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:04

Current through Register Vol. 51, page 10, July 15, 2024
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-11,  58-14-13,  58-14-17.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:04.01 - Group of incorporated insurers under common administration

Current through Register Vol. 51, page 10, July 15, 2024
The trust fund for a group of incorporated insurers under common administration, whose members possess aggregate policyholders surplus of $10,000,000,000, calculated in substantially the same manner as prescribed by the annual statement instructions and Accounting Practices and Procedures Manual of the National Association of Insurance Commissioners as provided in §
									20:06:25:01
,
and which has continuously transacted an insurance business outside the United States for at least three years immediately prior to making application for accreditation, shall:
(1) Consist of funds in trust in an amount not less than the assuming insurers several liabilities attributable to business ceded by U.S. domiciled ceding insurers to any members of the group pursuant to reinsurance contracts issued in the name of such group; and
(2) File a properly executed Form AR-1, provided by the director, as evidence of the submission to this states authority to examine the books and records of any of its members and shall certify that any member examined will bear the expense of any such examination on a form provided by the director.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-11,  58-14-12,  58-14-17.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:04.02 - Trust liabilities

Current through Register Vol. 51, page 10, July 15, 2024
For purposes of SDCL  58-14-11 to  58-14-12.1, inclusive, and §§
									20:06:31:03  and 20:06:31:04.01, the term, liabilities, shall mean the assuming insurers gross liabilities attributable to reinsurance ceded by U.S. domiciled insurers excluding liabilities that are otherwise secured by acceptable means, and, shall include:
(1) Business ceded by domestic insurers authorized to write accident and health, and property and casualty insurance, including losses and allocated loss expenses paid by the ceding insurer, recoverable from the assuming insurer, reserves for losses reported and outstanding, reserves for losses incurred but not reported, reserves for allocated loss expenses, and unearned premiums.
(2) Business ceded by domestic insurers authorized to write life, health and annuity insurance, including aggregate reserves for life policies and contracts net of policy loans and net due and deferred premiums, aggregate reserves for accident and health policies, deposit funds and other liabilities without life or disability contingencies, and liabilities for policy and contract claims.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-11,  58-14-13,  58-14-17,  58-14-20.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:04.03 - Trust assets and investments

Current through Register Vol. 51, page 10, July 15, 2024
Assets deposited in trusts established pursuant to SDCL  58-14-11 and this chapter shall be valued according to their current fair market value and shall consist only of cash in U.S. dollars, certificates of deposit issued by a U.S. financial institution as defined SDCL  58-14-16.18, clean, irrevocable, unconditional and evergreen letters of credit issued or confirmed by a qualified U.S. financial institution, as defined in SDCL  58-14-16.18, and investments of the type specified in this chapter, but investments in or issued by an entity controlling, controlled by or under common control with either the grantor or beneficiary of the trust may not exceed five percent of total investments. No more than 20 percent of the total of the investments in the trust may be foreign investments authorized under §§
									20:06:31:04.04(5), 20:06:31:04.06, 20:06:31:04.09(2) or 20:06:31:04.10, and no more than ten percent of the total of the investments in the trust may be securities denominated in foreign currencies. A depository receipt denominated in U.S. dollars and representing rights conferred by a foreign security shall be classified as a foreign investment denominated in a foreign currency. The assets of a trust established to satisfy the requirements of SDCL  58-14-11 shall be invested in accordance with §§ 20:06:31:04.04 to 20:06:31:04.13, inclusive.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-11,  58-14-13,  58-14-17,  58-14-20.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:04.04 - Government obligations

Current through Register Vol. 51, page 10, July 15, 2024
Trust assets may be invested in government obligations that are not in default as to principal or interest, that are valid and legally authorized and that are issued, assumed or guaranteed by:
(1) The United States or by any agency or instrumentality of the United States;
(2) A state of the United States;
(3) A territory, possession or other governmental unit of the United States;
(4) An agency or instrumentality of a governmental unit if the obligations shall be payable by law, as to both principal and interest, from taxes levied or required by law to be levied or from adequate special revenues pledged or otherwise appropriated or required by law to be provided for making these payments, but may not be obligations eligible for investment under this section if payable solely out of special assessments on properties benefited by local improvements; or
(5) The government of any other country that is a member of the Organization for Economic Cooperation and Development and whose government obligations are rated A or higher, or the equivalent, by a rating agency recognized by the Securities Valuation Office of the National Association of Insurance Commissioners.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-11,  58-14-13,  58-14-17,  58-14-20.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:04.05 - Securities ratings

Current through Register Vol. 51, page 10, July 15, 2024
Trust assets may be invested in obligations that are issued in the United States, or that are dollar denominated and issued in a non-U.S. market by a solvent U.S. institution other than an insurance company, or that are assumed or guaranteed by a solvent U.S. institution other than an insurance company, and that are not in default as to principal or interest if the obligations:
(1) Are rated A or higher, or the equivalent, by a securities rating agency recognized by the Securities Valuation Office of the National Association of Insurance Commissioners, or if not so rated, are similar in structure and other material respects to other obligations of the same institution that are so rated;
(2) Are insured by at least one authorized insurer, other than the investing insurer or a parent, subsidiary or affiliate of the investing insurer, licensed to insure obligations in this state and, after considering the insurance, are rated AAA, or the equivalent, by a securities rating agency recognized by the Securities Valuation Office of the National Association of Insurance Commissioners; or
(3) Have been designated as Class One or Class Two by the Securities Valuation Office of the National Association of Insurance Commissioners.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-11,  58-14-13,  58-14-17,  58-14-20.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:04.06 - Organization for Economic Cooperation and Development

Current through Register Vol. 51, page 10, July 15, 2024
Trust assets may be invested in obligations issued, assumed or guaranteed by a solvent non U.S. institution chartered in a country that is a member of the Organization for Economic Cooperation and Development or obligations of U.S. corporations issued in a non-U.S. currency, provided that in either case the obligations are rated A or higher, or the equivalent, by a rating agency recognized by the Securities Valuation Office of the National Association of Insurance Commissioners.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-11,  58-14-13,  58-14-17,  58-14-20.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:04.07 - Investment limitations

Current through Register Vol. 51, page 10, July 15, 2024
An investment made pursuant to §§
									20:06:31:04.04 to 20:06:31:04.06, inclusive, shall be subject to the following additional limitations:
(1) An investment in or loan upon the obligations of an institution other than an institution that issues mortgage-related securities may not exceed five percent of the assets of the trust;
(2) An investment in any one mortgage-related security may not exceed five percent of the assets of the trust;
(3) The aggregate total investment in mortgage-related securities may not exceed 25 percent of the assets of the trust; and
(4) Preferred or guaranteed shares issued or guaranteed by a solvent U.S. institution are permissible investments if all of the institutions obligations are eligible as investments under subdivisions 20:06:31:04.05(1) and 20:06:31:04.05(3), but may not exceed two percent of the assets of the trust.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-11,  58-14-13,  58-14-17,  58-14-20.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:04.08 - Definition of mortgage-related security

Current through Register Vol. 51, page 10, July 15, 2024
The term, mortgage-related security, means an obligation that is rated AA or higher, or the equivalent, by a securities rating agency recognized by the Securities Valuation Office of the National Association of Insurance Commissioners and that either:
(1) Represents ownership of one or more promissory notes or certificates of interest or participation in the notes, including any rights designed to assure servicing of, or the receipt or timeliness of receipt by the holders of the notes, certificates, or participation of amounts payable under, the notes, certificates, or participation, that:
(a) Are directly secured by a first lien on a single parcel of real estate, including stock allocated to a dwelling unit in a residential cooperative housing corporation, upon which is located a dwelling or mixed residential and commercial structure, or on a residential manufactured home as defined in 42 U.S.C.A. Section 5402(6), whether the manufactured home is considered real or personal property under the laws of the state in which it is located; and
(b) Were originated by a savings and loan association, savings bank, commercial bank, credit union, insurance company, or similar institution that is supervised and examined by a federal or state housing authority, or by a mortgagee approved by the Secretary of Housing and Urban Development pursuant to 12 U.S.C.A. Sections 1709 and 1715 -b, or, where the notes involve a lien on the manufactured home, by an institution or by a financial institution approved for insurance by the Secretary of Housing and Urban Development pursuant to 12 U.S.C.A. Section 1703; or
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:04.09 - Equity interests

Current through Register Vol. 51, page 10, July 15, 2024
Trust investments shall be made in accordance with the following requirements:
(1) Investments in common shares or partnership interests of a solvent U.S. institution are permissible if, its obligations and preferred shares, if any, are eligible as investments under this section; and the equity interests of the institution, except an insurance company, are registered on a national securities exchange as provided in the Securities Exchange Act of 1934, 15 U.S.C. §§
										78a to 78kk or otherwise registered pursuant to that Act, and if otherwise registered, price quotations for them are furnished through a nationwide automated quotations system approved by the Financial Industry Regulatory Authority, or successor organization. A trust may not invest in equity interests under this section an amount exceeding one percent of the assets of the trust even though the equity interests are not so registered and are not issued by an insurance company;
(2) Investments in common shares of a solvent institution organized under the laws of a country that is a member of the Organization for Economic Cooperation and Development are permissible if all its obligations are rated A or higher, or the equivalent, by a rating agency recognized by the Securities Valuation Office of the National Association of Insurance Commissioners and the equity interests of the institution are registered on a securities exchange regulated by the government of a country that is a member of the Organization for Economic Cooperation and Development; and
(3) An investment in or loan upon any one institutions outstanding equity interests may not exceed one percent of the assets of the trust. The cost of an investment in equity interests, when added to the aggregate cost of other investments in equity interests, may not exceed ten percent of the assets in the trust.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-11,  58-14-13,  58-14-17,  58-14-20.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:04.10 - Obligations guaranteed by multinational development banks

Current through Register Vol. 51, page 10, July 15, 2024
Trust assets may be invested in obligations issued, assumed or guaranteed by a multinational development bank are permissible provided the obligations are rated A or higher, or the equivalent, by a rating agency recognized by the Securities Valuation Office of the National Association of Insurance Commissioners.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-11,  58-14-13,  58-14-17,  58-14-20.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:04.11 - Investment companies

Current through Register Vol. 51, page 10, July 15, 2024
Securities of an investment company registered pursuant to the Investment Company Act of 1940, 15 U.S.C. § 80a, are permissible investments if the investment company:
(1) Invests at least 90 percent of its assets in the types of securities that qualify as an investment under §§
									20:06:31:04.04 to 20:06:31:06.06 or invests in securities that are determined by the director to be substantively similar to the types of securities set forth in §§
									20:06:31:04.04 to 20:06:31:06.06; or
(2) Invests at least 90 percent of its assets in the types of equity interests that qualify as an investment under subdivision 20:06:31:04.09(1).
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-17,  58-14-20.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:04.12 - Limitations on investment companies

Current through Register Vol. 51, page 10, July 15, 2024
Investments made by a trust in investment companies pursuant to §
									20:06:31:04.11 may not exceed the following limitations:
(1) An investment in an investment company qualifying under subdivision 20:06:31:04.11(1) may not exceed ten percent of the assets in the trust and the aggregate amount of investment in qualifying investment companies may not exceed 25 percent of the assets in the trust; and
(2) Investments in an investment company qualifying under subdivision 20:06:31:04.11(2) may not exceed five percent of the assets in the trust and the aggregate amount of investment in qualifying investment companies shall be included when calculating the permissible aggregate value of equity interests pursuant to subdivision 20:06:31:04.09(1).
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-16,  58-14-17,  58-14-20.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:04.13 - Letters of credit

Current through Register Vol. 51, page 10, July 15, 2024
In order for a letter of credit to qualify as an asset of the trust, the trustee shall have the right and the obligation pursuant to the deed of trust or some other binding agreement, as duly approved by the director, to immediately draw down the full amount of the letter of credit and hold the proceeds in trust for the beneficiaries of the trust if the letter of credit will otherwise expire without being renewed or replaced.
The trust agreement shall provide that the trustee shall be liable for its negligence, willful misconduct or lack of good faith. The failure of the trustee to draw against the letter of credit in circumstances where such draw would be required shall be deemed to be negligence or willful misconduct.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-16,  58-14-17,  58-14-20.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:05 - Jurisdiction defined

Current through Register Vol. 51, page 10, July 15, 2024
For purposes of this chapter, "jurisdiction" means any state, district, or territory of the United States and any lawful national government.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-14,  58-14-17.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:05.01 - Security for risks located in foreign or alien jurisdictions

Current through Register Vol. 51, page 10, July 15, 2024
A specific security provided to a ceding insurer by an assuming insurer pursuant to SDCL  58-14-14 shall be applied, until exhausted, to the payment of liabilities of the assuming insurer to the ceding insurer holding the specific security prior to, and as a condition precedent for, presentation of a claim by the ceding insurer for payment by a trustee of a trust established by the assuming insurer pursuant to §§
									20:06:31:04.01 to 20:06:31:04.13, inclusive.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-17,  58-14-20.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:06 - Reduction from liability for reinsurance ceded to an unauthorized assuming insurer

Current through Register Vol. 51, page 10, July 15, 2024
The director shall allow a reduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of SDCL  58-14-7 to  58-14-16.1, inclusive, and 58-14-16.16 to 58-14-16.20, inclusive, in an amount not exceeding the liabilities carried by the ceding insurer. The reduction shall be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the exclusive benefit of the ceding insurer, under a reinsurance contract with such assuming insurer as security for the payment of obligations under the reinsurance contract. The security shall be held in the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer or, in the case of a trust, held in a qualified United States financial institution as defined in SDCL  58-14-23. This security may be in the form of any of the following:
(1) Cash;
(2) Securities listed by the Securities Valuation Office of the National Association of Insurance Commissioners, including those deemed exempt from filing as defined by the Purposes and Procedures Manual of the Securities Valuation Office, and qualifying as admitted assets;
(3) Clean, irrevocable, unconditional and evergreen letters of credit issued or confirmed by a qualified United States institution, as defined in SDCL  58-14-16.18, effective no later than December 31 of the year for which filing is being made, and in the possession of, or in trust for, the ceding insurer on or before the filing date of its annual statement. Letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance or confirmation shall, notwithstanding the issuing or confirming institutions subsequent failure to meet applicable standards of issuer acceptability, continue to be acceptable as security until their expiration, extension, renewal, modification or amendment, whichever first occurs; or
(4) Any other form of security acceptable to the director.
An admitted asset or a reduction from liability for reinsurance ceded to an unauthorized assuming insurer pursuant to this section shall be allowed only when the requirements of §
										20:06:31:24  and the applicable portions of §§
										20:06:31:07  to 20:06:31:16, inclusive, or §§
										20:06:31:18  to 20:06:31:23, inclusive, have been satisfied.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-16,  58-14-20.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:07 - Trust agreements qualified under SDCL 58-14-16 - Definitions

Current through Register Vol. 51, page 10, July 15, 2024
The terms used in this chapter as they apply to trust agreements qualified under SDCL  58-14-16 mean:
(1) "Beneficiary," the entity for whose sole benefit the trust has been established and any successor of the beneficiary by operation of law. If a court of law appoints a successor in interest to the named beneficiary, the named beneficiary is limited to the court-appointed domiciliary receiver, including the conservator, rehabilitator, or liquidator;
(2) "Grantor," the entity that has established a trust for the sole benefit of the beneficiary. When established in conjunction with a reinsurance agreement, the grantor is the unlicensed, unaccredited assuming insurer;
(3) "Obligations," as used in §
									20:06:31:09  include:
(a) Reinsured losses and allocated loss expenses paid by the ceding company, but not recovered from the assuming insurer;
(b) Reserves for reinsured losses reported and outstanding;
(c) Reserves for reinsured losses incurred but not reported; and
(d) Reserves for allocated reinsured loss expenses and unearned premiums.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:08 - Trust agreements qualified under SDCL 58-14-16 - Required conditions

Current through Register Vol. 51, page 10, July 15, 2024
The following required conditions apply to trust agreements qualified under SDCL  58-14-16:
(1) The trust agreement must be entered into between the beneficiary, the grantor, and a trustee which is a qualified United States institution as defined in SDCL  58-14-23;
(2) The trust agreement must create a trust account into which assets are deposited;
(3) All assets in the trust account must be held by the trustee's office in the United States;
(4) The trust agreement shall provide that:
(a) The beneficiary has the right to withdraw assets from the trust account at any time, without notice to the grantor, subject only to written notice from the beneficiary to the trustee;
(b) No other statement or document is required to be presented in order to withdraw assets, except that the beneficiary may be required to acknowledge receipt of withdrawn assets;
(c) It is not subject to any conditions or qualifications outside of the trust agreement; and
(d) It does not contain references to any other agreements or documents except as provided for under §§
										20:06:31:09  or 20:06:31:09.01 of this chapter;
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:09 - Trust agreements in conjunction with reinsurance agreements covering certain risks

Current through Register Vol. 51, page 10, July 15, 2024
Notwithstanding other provisions of this chapter, when a trust agreement is established in conjunction with a reinsurance agreement covering risks other than life, annuities, and accident and health, where it is customary practice to provide a trust agreement for a specific purpose, such a trust agreement may provide that the ceding insurer shall undertake to use and apply amounts drawn upon the trust account, without diminution because of the insolvency of the ceding insurer or the assuming insurer, for the following purposes:
(1) To pay or reimburse the ceding insurer for the assuming insurer's share under the specific reinsurance agreement regarding any losses and allocated loss expenses paid by the ceding insurer but not recovered from the assuming insurer or for unearned premiums due to the ceding insurer if not otherwise paid by the assuming insurer;
(2) To make payment to the assuming insurer of any amounts held in the trust account that exceed 102 percent of the actual amount required to fund the assuming insurer's obligations under the specific reinsurance agreement; or
(3) If the ceding insurer has received notice of termination of the trust account and the assuming insurer's entire obligations under the specific reinsurance agreement remain unliquidated and undischarged ten days before the termination date, to withdraw amounts equal to the obligations and deposit those amounts in a separate account in the name of the ceding insurer in any qualified United States financial institution, as defined in SDCL  58-14-23, apart from its general assets, in trust for the uses and purposes specified in subdivisions (1) and (2) of this section, that may remain executory after the withdrawal and for any period after the termination date.
The reinsurance agreement entered into in conjunction with the trust agreement may contain the provisions required by subdivision 20:06:31:11(2), but need not contain them if these required conditions are included in the trust agreement.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-11 to  58-14-13,  58-14-17,  58-14-23.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:09.01 - Trust agreements established under SDCL 58-14-16

Current through Register Vol. 51, page 10, July 15, 2024
Notwithstanding other provisions of this chapter, when a trust agreement is established to meet the requirements of SDCL  58-14-16 in conjunction with a reinsurance agreement covering life, annuities or accident and health risks, where it is customary to provide a trust agreement for a specific purpose, the trust agreement may provide that the ceding insurer shall undertake to use and apply amounts drawn upon the trust account, without diminution because of the insolvency of the ceding insurer or the assuming insurer, only for the following purposes:
(1) To pay or reimburse the ceding insurer for:
(a) The assuming insurers share under the specific reinsurance agreement of premiums returned, but not yet recovered from the assuming insurer, to the owners of policies reinsured under the reinsurance agreement on account of cancellations of the policies; and
(b) The assuming insurers share under the specific reinsurance agreement of surrenders and benefits or losses paid by the ceding insurer, but not yet recovered from the assuming insurer, under the terms and provisions of the policies reinsured under the reinsurance agreement;
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:09.02 - Assets deposited in trust account

Current through Register Vol. 51, page 10, July 15, 2024
The reinsurance agreement or the trust agreement must stipulate that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash in United States dollars, certificates of deposit issued by a United States bank and payable in United States dollars, and investments permitted by the Insurance Code or any combination of the above, provided investments in or issued by an entity controlling, controlled by or under common control with either the grantor or the beneficiary of the trust may not exceed five percent of total investments. The agreement may further specify the types of investments to be deposited. If the reinsurance agreement covers life, annuities or accident and health risks, then the provisions required by this section must be included in the reinsurance agreement.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-16,  58-14-17,  58-14-20.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:10 - Trust agreements qualified under SDCL 58-14-16 - Permitted conditions

Current through Register Vol. 51, page 10, July 15, 2024
The following permitted conditions apply to trust agreements qualified under SDCL  58-14-16:
(1) The trust agreement may provide that the trustee may resign upon delivery of a written notice of resignation, effective not less than 90 days after receipt by the beneficiary and grantor of the notice and that the trustee may be removed by the grantor by delivery to the trustee and the beneficiary of a written notice of removal, effective not less than 90 days after receipt by the trustee and the beneficiary of the notice. Such a resignation or removal may not be effective until a successor trustee has been appointed and approved by the beneficiary and the grantor and all assets in the trust have been transferred to the new trustee;
(2) The grantor may have the full and unqualified right to vote any shares of stock in the trust account and to receive from time to time payments of any dividends or interest on any shares of stock or obligations included in the trust account. Any interest or dividends must be either forwarded promptly upon receipt to the grantor or deposited in a separate account established in the grantor's name;
(3) The trustee may be given authority to invest and may accept substitutions of any funds in the account, but no investment or substitution may be made without prior approval of the beneficiary, unless the trust agreement specifies categories of investments acceptable to the beneficiary and authorizes the trustee to invest funds and to accept substitutions which the trustee determines are at least equal in current fair market value to the assets withdrawn and that are consistent with the restrictions in subdivision 20:06:31:11(2);
(4) The trust agreement may provide that the beneficiary may, at any time, designate a party to which all or part of the trust assets are to be transferred. The transfer may be conditioned upon the trustee receiving, prior to or simultaneously with, other specified assets; and
(5) The trust agreement may provide that, upon termination of the trust account, all assets not previously withdrawn by the beneficiary shall, with written approval by the beneficiary, be delivered over to the grantor.
General Authority:
SDCL  58-14-17.
Law Implemented:
SDCL  58-14-16,  58-14-17,  58-14-20.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:31 - Credit for reinsurance › Section 20:06:31:11 - Trust agreements qualified under SDCL 58-14-16 - Additional conditions applicable to reinsurance agreements - Assets

Current through Register Vol. 51, page 10, July 15, 2024
A reinsurance agreement which is entered into in conjunction with a trust agreement and the establishment of a trust account may contain provisions that require the following:
(1) Require the assuming insurer to enter into a trust agreement, specifying what the agreement is to cover, and to establish a trust account for the benefit of the ceding insurer;
(2) Require the assuming insurer, before depositing assets with the trustee, to execute assignments or endorsements in blank or to transfer legal title to the trustee of all shares, obligations, or any other assets requiring assignments, in order that the ceding insurer, or the trustee upon the direction of the ceding insurer, may as necessary negotiate these assets without consent or signature from the assuming insurer or any other entity;
(3) Require that all settlements of account between the ceding insurer and the assuming insurer be made in cash or its equivalent; and
(4) Stipulate that the assuming insurer and the ceding insurer agree that the assets in the trust account, established pursuant to the provisions of the reinsurance agreement, may be withdrawn by the ceding insurer at any time and may be utilized and applied only for the following purposes by the ceding insurer or its successors in interest by operation of law, including any liquidator, rehabilitator, receiver, or conservator of the company, without diminution because of insolvency on the part of the ceding insurer or the assuming insurer, only for the following purposes:
(a) To pay or reimburse the ceding insurer for:
(i) The assuming insurer's share under the specific reinsurance agreement of premiums returned, but not yet recovered from the assuming insurer, to the owners of policies reinsured under the reinsurance agreement because of cancellations of the policies;
(ii)The assuming insurer's share of surrenders and the benefits or losses paid by the ceding insurer, pursuant to the provisions of the policies reinsured under the reinsurance agreement; and
(iii) Any other amounts necessary to secure the credit or reduction from liability for reinsurance taken by the ceding insurer; or