La. Admin. Code tit. 37 § XIII-18305

Current through Register Vol. 50, No. 6, June 20, 2024

Section XIII-18305 - Definitions

A. Strictly for the purposes of Regulation 121, the following terms are defined as follows.

Actuarial Method-the methodology used to determine the required level of primary security, as described in §18309 A

Commissioner-the Louisiana Commissioner of Insurance.

Covered Policies-subject to the exemptions described in §18307, covered policies, other than grandfathered policies, of the following policy types:

a. life insurance policies with guaranteed nonlevel gross premiums and/or guaranteed nonlevel benefits, except for flexible premium universal life insurance policies; or

b. flexible premium universal life insurance policies with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period.

Grandfathered Policies-policies of the types described in the definition of covered policies that were:

a. issued prior to January 1, 2015; and

b. ceded, as of December 31, 2014, as part of a reinsurance treaty that would not have met one of the exemptions set forth in §18307 had that section then been in effect.

Noncovered Policies-any policy that does not meet the definition of covered policies, including grandfathered policies.

Other Security-any security acceptable to the commissioner other than security meeting the definition of primary security.

Primary Security-includes the following forms of security:

a. cash meeting the requirements of R.S. 22:652

b. securities listed by the Securities Valuation Office meeting the requirements of R.S. 22:652, but excluding any synthetic letter of credit, contingent note, credit-linked note, or other similar security that operates in a manner similar to a letter of credit, and excluding any securities issued by the ceding insurer or any of its affiliates; and

c. for security held in connection with funds-withheld and modified coinsurance reinsurance treaties:

i. commercial loans in good standing of CM3 quality and higher;

ii. policy loans; and

iii. derivatives acquired in the normal course and used to support and hedge liabilities pertaining to the actual risks in the policies ceded pursuant to the reinsurance treaty.

Required Level of Primary Security-the dollar amount determined by applying the actuarial method to the risks ceded with respect to covered policies, but not more than the total reserve ceded.

Valuation Manual-the valuation manual adopted by the NAIC as described in R.S. 22:753(C)(2)(a), with all amendments adopted by the NAIC that are effective for the financial statement date on which credit for reinsurance is claimed.

VM-20-"Requirements for Principle-Based Reserves for Life Products," including all relevant definitions, from the valuation manual.

La. Admin. Code tit. 37, § XIII-18305

Promulgated by the Department of Insurance, Office of the Commissioner, LR 481584 (6/1/2022). §18307

AUTHORITY NOTE: Promulgated in accordance with R.S. 22:11, 22:651, 22:652, 22:661, 22:753, and the Administrative Procedure Act, R.S. 49:950 et seq.