California Code of Regulations
Title 10 - Investment
Chapter 5 - Insurance Commissioner
Subchapter 3 - Insurers
Article 3 - Annual Statements
Premiums in Course of Collection
Section 2303.23 - Term and Universal Life Insurance Reserve Financing, Purpose and Intent

Sections 2303.23 through 2303.28 establish standards governing reserve financing arrangements pertaining to life insurance policies issued by domestic life insurers containing guaranteed non-level gross premiums, life insurance policies containing guaranteed non-level benefits, and universal life insurance policies with secondary guarantees; and are intended to ensure that, with respect to each such financing arrangement, funds consisting of Primary Security and Other Security, as defined in Section 2303.2 of this article, are held by or on behalf of ceding insurers in the forms and amounts required herein. In general, reinsurance ceded for reserve financing purposes has one or more of the following characteristics: some or all of the assets used to secure the reinsurance treaty or to capitalize the reinsurer (1) are issued by the ceding insurer or its affiliates; or (2) are not unconditionally available to satisfy the general account obligations of the ceding insurer; or (3) create a reimbursement, indemnification or other similar obligation on the part of the ceding insurer or any if its affiliates (other than a payment obligation under a derivative contract acquired in the normal course of business and used to support and hedge liabilities pertaining to the actual risks in the policies ceded pursuant to the reinsurance treaty).

1. New section filed 10-24-2006; operative 11-23-2006 (Register 2006, No. 43).
2. Change without regulatory effect renumbering former section 2303.23 to section 2303.22 and renumbering former section 2303.24 to new section 2303.23, including amendment of NOTE, filed 3-25-2015 pursuant to section 100, title 1, California Code of Regulations (Register 2015, No. 13).
3. Renumbering of former section 2303.23 to new section 2303.30 and new section 2303.23 filed 11-27-2017; operative 1-1-2018 (Register 2017, No. 48).

Note: Authority cited: Sections 739.9, 922.85, 923, 10489.94 and 12921, Insurance Code; CalFarm Insurance Company v. Deukmejian, 48 Cal. 3d 805 (1989); and 20th Century Insurance Company v. Garamendi, 8 Cal. 4th 216 (1994). Reference: Sections 739, 900, 922.4, 922.5, 922.85, 923, 10489.1, 10489.12, 10489.96 and 12921, Insurance Code.