Wisconsin Administrative Code › Office of the Commissioner of Insurance › Chapter Ins 52 - Credit For Reinsurance › Subchapter II - Credit for Reinsurance Involving Term and Universal Life Reserve Financing › Section Ins 52.24 - Requirements applicable to covered policies to obtain credit for reinsurance: opportunity for remediation

Current through June 24, 2024
(1) REQUIREMENTS.
				Subject to the exemptions in s. Ins 52.21 and sub. (2), credit for reinsurance
				shall be allowed with respect to ceded liabilities pertaining to covered
				policies pursuant to ss.
				Ins
				52.02 or 52.04 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
				s.
				623.06,
				Stats., 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
(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; and
(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 s.
				Ins
				52.04, on a funds withheld, trust, or modified
				coinsurance basis; and
(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 par.
				(c) are held by or on behalf of the ceding insurer as security under the
				reinsurance treaty within the meaning of s.
				Ins
				52.04; and
(e) Any trust used to satisfy the
				requirements of this section shall comply with all of the conditions and
				qualifications of ss.
				Ins
				52.04 and 52.05, except that:
1. Funds consisting of primary security or
				other security held in trust, shall for the purposes identified in s. Ins
				52.23(2), be valued according to the valuation rules set forth in s. Ins
				52.23(2), as applicable; and
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
				par. (c); and
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 par. (c), below 102% of the
				level required by par. (c) at the time of the withdrawal or substitution;
				and
4. The determination of reserve
				credit under s.
				Ins
				52.05(2), shall be determined
				according to the valuation rules set forth in s. Ins 52.23(2), as applicable;
				and
(f) The reinsurance
				treaty has been approved by the commissioner.