(A) Purpose
The purpose of this rule is to establish the information
required by the superintendent in setting an acceptable total capital and
surplus requirement for insurers that cede risks and obligations to a special
purpose financial captive insurance company pursuant to division (E)(6) of
section 3964.03 of the Revised Code and
for special purpose financial captive insurance companies pursuant to division
(G)(2) of section 3964.07 of the Revised
Code.
(B) Authority
This rule is promulgated pursuant to the authority vested in
the superintendent under sections
3901.041 and
3964.21 of the Revised
Code.
(C) Definitions
(1) "Insurer" means a domestic legal reserve
life insurance company organized pursuant to Chapter 3907. of the Revised
Code.
(2) "Qualified Actuary" means
an individual who is both of the following:
(a) A member of the American academy of
actuaries; and
(b) Qualified to
provide such certifications as described in the United States qualifications
standards promulgated by the American academy of actuaries pursuant to the code
of professional conduct adopted by the American academy of actuaries, the
society of actuaries, the American society of pension professionals and
actuaries, the casualty actuarial society and the conference of consulting
actuaries.
(3) "Special
Purpose Financial Captive Insurance Company" means a captive insurance company
organized pursuant to sections
3964.19 to
3964.194 of the Revised
Code.
(D) Methodology
(1) In determining the capital and surplus
requirement for an insurer that will cede risks and obligations to a special
purpose financial captive insurance company, and the capital and surplus of a
special purpose financial captive insurance company, the superintendent is by
statute required to employ a methodology that:
(a) Is consistent with current risk-based
capital principles; and
(b) Takes
into account all material risks and obligations, as well as the assets of the
insurer or special purpose financial captive insurance company, as
appropriate.
(2)
Pursuant to division (E)(6) of section
3964.03 of the Revised Code an
insurer that cedes risks and obligations to a special purpose financial captive
insurance company shall provide the superintendent a proposed capital and
surplus requirement that is supported by:
(a)
An actuarial report prepared by a qualified actuary. The qualified actuary
shall perform a risk evaluation for purposes of enterprise risk management and
provide the superintendent an actuarial report documenting that evaluation. The
risk evaluation shall conform to all applicable actuarial standards of practice
including those specifically addressing risk evaluation and risk treatment in
enterprise risk management; and
(b)
Any other information the superintendent deems necessary.
(3) Pursuant to division (G) of section
3964.07 of the Revised Code an
applicant for authority to be licensed as a special purpose financial captive
insurance company shall provide the superintendent a proposed capital and
surplus requirement that is supported by:
(a)
An actuarial report prepared by a qualified actuary. The qualified actuary
shall perform a risk evaluation for purposes of enterprise risk management of
the risks and obligations specific to the special purpose financial captive
insurance company and provide the superintendent an actuarial report
documenting that evaluation. The risk evaluation shall conform to all
applicable actuarial standards of practice including those specifically
addressing risk evaluation and risk treatment in enterprise risk management;
and
(b) Any other information the
superintendent deems necessary.
(E) Severability
If any paragraph, term or provision
of this rule is adjudged invalid for any reason, the judgment shall not affect,
impair or invalidate any other paragraph, term or provision of this rule, but
the remaining paragraphs, terms and provisions shall be and continue in full
force and effect.
If any portion of this rule
or the application thereof to any person or circumstance is held invalid, the
invalidity does not affect other provisions or applications of the rule or
related rules which can be given effect without the invalid portion or
application, and to this end the provisions of this rule are
severable.
Notes
Ohio Admin. Code
3901-11-06
Effective:
11/14/2024
Five Year Review (FYR) Dates:
8/30/2024 and
08/30/2029
Promulgated
Under: 119.03
Statutory
Authority: 3901.041,
3964.21
Rule
Amplifies: 3964.03,
3964.07
Prior
Effective Dates: 06/11/2015
