Sections
2303.23,
2303.24,
2303.26,
2303.27 and
2303.28 of this article do not
apply to:
(a) Reinsurance of:
1. Policies that satisfy the criteria for
exemption set forth in Section
2542.5(f) of
article 12.3 or Section
2542.5(g) of
article 12.3; and which are issued before the later of:
A. The effective date of Sections
2303.23 through
2303.28 of this article,
and
B. The date on which the ceding
insurer begins to apply the provisions of VM-20 to establish the ceded
policies' statutory reserves, but in no event later than January 1,
2020.
2. Portions of
policies that satisfy the criteria for exemption set forth in Section
2542.5(e) of
article 12.3 and which are issued before the later of:
A. The effective date of Sections
2303.23 through
2303.28 of this article,
and
B. The date on which the ceding
insurer begins to apply the provisions of VM-20 to establish the ceded
policies' statutory reserves, but in no event later than January 1,
2020.
3. Any universal
life policy that meets all of the following requirements:
A. Secondary guarantee period, if any, is
five (5) years or less,
B.
Specified premium for the secondary guarantee period is not less than the net
level reserve premium for the secondary guarantee period based on the
Commissioner's Standard Ordinary (CSO) valuation tables and valuation interest
rate applicable to the issue year of the policy, and
C. The initial surrender charge is not less
than 100 percent (100%) of the first year annualized specified premium for the
secondary guarantee period.
4. Credit life insurance.
5. Any variable life insurance policy that
provides for life insurance, the amount or duration of which varies according
to the investment experience of any separate account or accounts.
6. Any group life insurance certificate
unless the certificate provides for a stated or implied schedule of maximum
gross premiums required in order to continue coverage in force for a period in
excess of one year.
(b)
Reinsurance ceded to an assuming insurer that meets the applicable requirements
of Code Section 922.4(d).
(c)
Reinsurance ceded to an assuming insurer that meets the applicable requirements
of Code Sections 922.4(a) or (b), and that, in addition:
1. Prepares statutory financial statements in
compliance with the NAIC Accounting Practices and Procedures Manual, without
any departures from NAIC statutory accounting practices and procedures
pertaining to the admissibility or valuation of assets or liabilities that
increase the assuming insurer's reported surplus and are material enough that
they need to be disclosed in the financial statement of the assuming insurer
pursuant to Statement of Statutory Accounting Principles No. 1 ("SSAP 1"),
and
2. Is not in a Company Action
Level Event, Regulatory Action Level Event, Authorized Control Level Event, or
Mandatory Control Level Event as those terms are defined in Article 4.1 of Code
Sections 739et seq. when its RBC is calculated in accordance
with the life risk-based capital report including overview and instructions for
companies, as the same may be amended by the NAIC from time to time, without
deviation.
(d)
Reinsurance ceded to an assuming insurer that meets the applicable requirements
of Code Sections 922.4(a) or (b), and that, in addition:
1. Is not an affiliate, as that term is
defined in Code Section 1215(a), of:
A. The
insurer ceding the business to the assuming insurer, or
B. Any insurer that directly or indirectly
ceded the business to that ceding insurer.
2. Prepares statutory financial statements in
compliance with the NAIC Accounting Practices and Procedures Manual;
3. Is both:
A. Licensed or accredited in at least 10
states (including its state of domicile), and
B. Not licensed in any state as a captive,
special purpose vehicle, special purpose financial captive, special purpose
life reinsurance company, limited purpose subsidiary, or any other similar
licensing regime, and
4.
Is not, or would not be, below 500% of the Authorized Control Level RBC as that
term is defined in Code Sections 739et seq. when its Risk
Based Capital (RBC) is calculated in accordance with the life risk-based
capital report including overview and instructions for companies, as the same
may be amended by the NAIC from time to time, without deviation, and without
recognition of any departures from NAIC statutory accounting practices and
procedures pertaining to the admission or valuation of assets or liabilities
that increase the assuming insurer's reported surplus.
(e) Reinsurance ceded to an assuming insurer
that meets the requirements of Code Section 922.85(b)(5)(A) pertaining to
insurers meeting the conditions of Code Section 922.425, Code Section
922.85(b)(5)(B) pertaining to certain certified reinsurers, or Code Section
922.85(b)(5)(C), pertaining to reinsurers meeting certain threshold size and
licensing requirements.
(f)
Reinsurance not otherwise exempt under subdivisions (a) through (e) if the
commissioner, after consulting with the NAIC Financial Analysis Working Group
(FAWG) or other group of regulators designated by the NAIC, as applicable,
determines under all the facts and circumstances that all of the following
apply:
1. The risks are clearly outside of
the intent and purpose of Sections
2303.23 through
2303.28 of this article (as
described in Section
2303.23 of this
article),
2. The risks are included
within the scope of Sections
2303.23 through
2303.28 of this article only as a
technicality, and
3. The
application of Sections
2303.23 through
2303.28 of this article to those
risks is not necessary to provide appropriate protection to policyholders. The
commissioner shall post on the Department's public web site a notice of any
decision made pursuant to this subdivision to exempt a reinsurance treaty from
Sections
2303.23 through
2303.28 of this article, as well
as the general basis therefor (including a summary description of the
treaty).