West Virginia Code of State Rules › Agency 114 - Insurance Commission › Title 114 - LEGISLATIVE RULE INSURANCE COMMISSIONER › Series 114-102 - Term and Universal Life Insurance Reserve Financing › Section 114-102-4 - Requirements Applicable to Covered Policies to Obtain Credit for Reinsurance; Opportunity for Remediation

Current through Register Vol. XLI, No. 28, July 12, 2024
4.1. Subject
				to the provisions of section 4.2 of this rule and the exemptions described in
				section 6 of this rule, credit for reinsurance shall be allowed with respect to
				ceded liabilities pertaining to covered policies pursuant to W. Va. Code §
									33-4-15a(b) and
				(c) if, and only if, in addition to all other
				requirements imposed by law or rule, the following requirements are met on a
				treaty-by-treaty basis:
4.1.1. 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 W. Va. Code §
										33-7-9 and
				related rules and actuarial guidelines, and credit claimed for any reinsurance
				treaty subject to this rule, does not exceed the proportionate share of those
				reserves ceded under the contract;
4.1.2. The ceding insurer determines the required
				level of primary security with respect to each reinsurance treaty subject to this
				rule and provides support for its calculation as determined to be acceptable to the
				commissioner;
4.1.3. 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 W. Va. Code §
										33-4-15a(c),
				on a funds withheld, trust, or modified coinsurance basis;
4.1.4. 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 subsection 4.1.3 of this rule, are held by or on
				behalf of the ceding insurer as security under the reinsurance treaty within the
				meaning of W. Va. Code §
										33-4-15a(c);
4.1.5. Any trust used to satisfy the requirements
				of this section shall comply with all of the conditions and qualifications of W. Va.
				Code St. R. § 114-40-10, except that:
4.1.5.a. Funds consisting of primary security or
				other security held in trust, shall for the purposes identified in section 3.2 of
				this rule, be valued according to the valuation rules set forth in section 3.2 of
				this rule, as applicable;
4.1.5.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 4.1.3
				of this rule;
4.1.5.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 4.1.3 of this rule) below one hundred
				and two percent (102%) of the level required by subsection 4.1.3 of this rule at the
				time of the withdrawal or substitution; and
4.1.5.d. The determination of reserve credit under
				W. Va. Code St. R. § 114-40-10.4.c shall be determined according to the
				valuation rules set forth in section 3.2 of this rule, as applicable;
				and
4.1.6. The reinsurance
				treaty has been approved by the commissioner.