3 Colo. Code Regs. § 702-3-3-4-4
Current through Register Vol. 47, No. 24, December 25, 2024
Section 3 CCR 702-3-3-4-4 - DefinitionsA. "Annual Statement" means, for the purpose of this regulation, the NAIC convention blank life, fraternal or health financial annual statement.B. "Credit for reinsurance" means, for the purpose of this regulation, any reduction of liability, establishment of asset or contra-liability, or any combination thereof.C. "Credit quality risk" means, for the purpose of this regulation, the risk that invested assets supporting the reinsured business will decrease in value. The main hazards are that assets will default or that there will be a decrease in earning power. It excludes market value declines due to changes in interest rates. It is commonly referred to as the "C1" risk.D. "Division" means, for the purpose of this regulation, the Colorado Division of Insurance.E. "Disintermediation risk" means, for the purpose of this regulation, the risk that interest rates rise and policy loans and surrenders increase, or that maturing contracts do not renew at anticipated rates of renewal. If asset durations are greater than the liability durations the mismatch will increase. Policyholders will move their funds into new products offering higher rates. The company may have to sell assets at a loss to provide for these withdrawals. It is commonly included in the "C3" risk.F. "Financial statement" means, for the purpose of this regulation, any monthly, quarterly or Annual Statement that is submitted to the Division.G. "Lapse risk" means, for the purpose of this regulation, the risk that the policy will voluntarily terminate prior to the recoupment of a statutory surplus strain experienced at issue of the policy.H. "LTC" means, for the purpose of this regulation, Long-Term Care Insurance.I. "LTD" means, for the purpose of this regulation, Long-Term Disability Insurance.J. "Reinvestment risk" means, for the purpose of this regulation, the risk that interest rates will fall and funds reinvested (coupon payments or monies received upon asset maturity or call) will therefore earn less than expected. If asset durations are less than liability durations, the mismatch will increase. It is commonly included in the "C3" risk.37 CR 20, October 25,2014, effective 11/15/201437 CR 20, October 25,2014, effective 1/1/201537 CR 23, December 10, 2014, effective 1/1/201538 CR 17, September 10, 2015, effective 10/1/201539 CR 05, March 10, 2016, effective 4/1/201639 CR 14, July 25, 2016, effective 8/15/201639 CR 23, December 10, 2016, effective 1/1/201740 CR 03, February 10, 2017, effective 3/15/201740 CR 05, March 10, 2017, effective 4/1/201740 CR 13, July 10, 2017, effective 8/1/201740 CR 17, September 10, 2017, effective 11/1/201743 CR 06, March 25, 2020, effective 4/15/202044 CR 03, February 10, 2021, effective 3/15/202144 CR 23, December 10, 2021, effective 1/1/202246 CR 03, February 10, 2023, effective 3/2/2023