Alaska Administrative Code
Title 3 - Commerce, Community, and Economic Development
Part 2 - Division of Insurance
Chapter 21 - Insurer - Financial
Article 6 - Reinsurance
3 AAC 21.695 - Definitions

Universal Citation: 3 AK Admin Code 21.695

Current through February 24, 2025

In 3 AAC 21.600 - 3 AAC 21.695, unless the context requires otherwise,

(1) "as of date" means a specific measurement date for a set of statutory financial statements;

(2) "authorized assuming insurer" means an assuming insurer that meets the requirements of AS 21.12.020(a);

(3) "beneficiary" means a ceding insurer for whose sole benefit a trust or letter of credit has been established or a successor in interest of the ceding insurer by operation of law, including, without limitation, a liquidator, rehabilitator, receiver, or conservator of the ceding insurer;

(4) "deficiency reserves" means a supplemental reserve that a life insurer is required to show in the life insurer's balance sheet if the gross premium charged on a class of those insured is less than the net level premium reserve or modified reserve;

(5) "excess interest reserve" means a supplemental reserve for interest credited to an insured's contract in excess of the amount guaranteed by the terms of the contract;

(6) "grantor" means an assuming insurer that has established a trust for the sole benefit of a beneficiary;

(7) "negative experience" means the condition that results from a contract of reinsurance before its termination date when, considering only the cash flows under that contract adjusted for the time value of money using the discount factor inherent in the contract, the total amount paid out by the reinsurer in losses, commission, and expense allowance exceeds the amount the reinsurer has received in premiums from the ceding company;

(8) "obligation" means

(A) a reinsured loss or allocated loss expense paid by the ceding company, but not recovered from the assuming insurer;

(B) a reserve for a reinsured loss reported and outstanding;

(C) a reserve for a reinsured loss incurred but not reported; or

(D) a reserve for an allocated reinsured loss expense or unearned premium;

(9) "unauthorized assuming insurer" means an assuming insurer that does not meet the requirements of AS 21.12.020(a);

(10) "high grade investments" has the meaning given in 3 AAC 21.399;

(11) "qualified United States financial institution" means an institution that meets the requirements of AS 21.12.020(f);

(12) "securities valuation office" has the meaning given in 3 AAC 21.399.

(13"actuarial method" means the methodology used to determine the required level of primary security, as described in 3 AAC 21.615(c);

(14)"covered policies"

(A) means
(i) insurance policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits, except for flexible premium universal life insurance policies; or

(ii) flexible premium universal life insurance policies with provisions resulting in the ability of a policy holder to keep a policy in force over a secondary guarantee period,

(B)does not include a
(i) policies subject to an exemption under 3AAC 21.615(j); or

(ii)grandfathered policies;

(15) grandfathered policies" means covered policies that were

(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 out in 3 AAC 21.615(j) had that subsection then been in effect;

(16) "non-covered policies" means policies that are not covered policies or including grandfathered policies

(17) "other security" means the security acceptable to the director other than primary security

(18) "primary security" means the following forms of security:

(A) cash meeting the requirements of AS 21.12.020(c)(1);

(B) securities listed by the Securities Valuation Office meeting the ' requirements of AS 21.12.020(c)(2), but excluding a synthetic letter of credit, contingent note, credit-linked not or other similar security that operates in a manner similar to a letter of credit, and excluding the securities issued by the ceding insurer or its affiliates; and

(C) for security held in connection with funds-withheld and modified coinsurance reinsurance treaties:
(i) commercial loans in good standing of CMS 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 under the reinsurance treaty;

(19) 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

(20) "valuation manual" means the valuation manual adopted by the National Association of Insurance Commissioner as described in AS 21.18.112, with all amendments adopted by National Association of Insurance Commissioner that are effective for the financial statement date on which credit for reinsurance is claimed

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

Authority:AS 21.06.090

AS 21.12.020

Disclaimer: These regulations may not be the most recent version. Alaska may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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