Wis. Admin. Code Office of the Commissioner of Insurance Ins 52.22

Current through May 28, 2024

Section Ins 52.22 - Definitions

In this subchapter, unless the context otherwise requires:

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

(2) "Covered policies" means the following: subject to the exemptions described in s. Ins 52.21 covered policies are those 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.

(3) "Grandfathered policies" means policies of the types in sub. (2) that were issued prior to January 1, 2015; and ceded, as of December 31, 2014, as part of a reinsurance treaty that would not have met one of the exemptions set forth in s. Ins 52.21, had that section then been in effect.

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

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

(6) "Primary security" means the following forms of security:

(a) Cash meeting the requirements of s. Ins 52.04(1);

(b) Securities listed by the securities valuation office meeting the requirements of s. Ins 52.04(2) and (3), 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 of any of its affiliates; and

(c) For security held in connection with funds-withheld or modified coinsurance reinsurance treaties, primary security may include any of the following:

1. Commercial loans in good standing of CM3 quality and higher, as assigned by the national association of insurance commissioners;

2. Policy loans; and

3. 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.

(7) "Required level of primary security" means 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.

(8) "Universal life insurance policy" has the meaning provided under s. Ins 2.80(3) (L).

(9) "Valuation manual" means the valuation manual adopted by the national association of insurance commissioners as described s. 623.06(9) (b), Stats., with all amendments adopted by the national association of insurance commissioners that are effective for the financial statement date on which credit for reinsurance is claimed.

(10) "VM-20" means the requirements for principle-based reserves for life products, including all relevant definitions, from the valuation manual.

Wis. Admin. Code Office of the Commissioner of Insurance Ins 52.22

Adopted by, CR 21-066: cr. Register May 2022 No. 797, eff. 6/1/2022