Utah Admin. Code 590-289-3

Current through Bulletin 2024-20, October 15, 2024

Section R590-289-3 - Definitions

Terms used in this rule are defined in Section 31A-1-301. Additional terms are defined as follows:

(1) "Actuarial method" means the methodology used to determine the required level of primary security.

(2) "Covered policy" means a policy, other than a grandfathered policy, that is:

(a) a life insurance policy with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits, except for flexible premium universal a life insurance policy; or

(b) a 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.

(3) "Grandfathered policy" means a covered policy that was:

(a) issued before 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 Subsection R590-289-2(4) had that section then been in effect.

(4) "Non-covered policy" means a policy that does not meet the definition of a covered policy, including a grandfathered policy.

(5) "Other security" means security acceptable to the commissioner other than security meeting the definition of primary security.

(6) "Primary security" means:

(a) cash;

(b) security meeting the requirements of Subsection 31A-17-404.1(2)(b), but excluding:

(i) a 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

(ii) security issued by the ceding insurer or its affiliate; and

(c) in the case of a security held in connection with funds-withheld and modified coinsurance reinsurance treaties:

(i) a commercial loan in good standing of CM3 quality or higher;

(ii) a policy loan; or

(iii) a derivative acquired in the normal course and used to support and hedge liabilities pertaining to the actual risks in the policy ceded pursuant to the reinsurance treaty.

(7) "Required level of primary security" means the dollar amount determined by applying the actuarial method to the risks ceded with respect to a covered policy, but not more than the total reserve ceded.

(8) "Valuation manual" means the valuation manual adopted by the NAIC as described in Subsection 31A-17-514(2)(a).

(9) "VM-20" means "Requirements for Principle-Based Reserves for Life Products," including all relevant definitions, from the Valuation Manual.

Utah Admin. Code R590-289-3

Adopted by Utah State Bulletin Number 2022-23, effective 11/22/2022