Hawaii Administrative Rules
Title 16 - DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS
Chapter 20 - LIFE AND HEALTH REINSURANCE AGREEMENTS
Exhibit A - Risk categories

Universal Citation: HI Admin Rules A

Current through November, 2023

(A) Morbidity;

(B) Mortality;

(C) Lapse.

The risk that a policy will voluntarily terminate before the statutory surplus strain experienced at issue of the policy is recouped;

(D) Credit Quality.

The risk that invested assets supporting the reinsured business will decrease in value. The main hazards are that assets will default or that there will be a decrease in earning power. Credit quality risk excludes market value declines due to changes in interest rates.

(E) Reinvestment.

The risk that interest rates will fall and funds reinvested (coupon payments or monies received upon asset maturity or call) will earn less than expected. If asset durations are less than liability durations, the mismatch will increase.

(F) Disintermediation.

The risk of disintermediation, which is the risk that interest rates may rise and policy loans and surrenders increase or maturing contracts do not renew at anticipated rates or renewal. If asset durations are greater than liability durations, the mismatch will increase. Policyholders will move their funds into new products offering higher rates. The company may have to sell assets at a loss to provide for these withdrawals.

SIGNIFICANCE OF RISK:

Risk Categories
ABCDEF
Health insurance, other than long-term care or long term disability +o+ooo
Health insurance, including long-term care or long-term disability +o+++o
Immediate annuities o+o++o
Single premium deferred annuities oo++++
Flexible premium deferred annuities ooo+++
Guaranteed interest contracts ooo+++
Other annuity deposit business oo++++
Single premium whole life o+++++
Traditional non-participating permanent o+++++
Traditional non-participating term o++ooo
Traditional participating permanent o+++++
Traditional participating term o++ooo
Adjustable premium permanent o+++++
Indeterminate premium permanent o+++++
Universal life flexible premium o+++++
Universal life fixed premium with dump-in premiums allowed o+++++
+ - significant o-insignificant
Disclaimer: These regulations may not be the most recent version. Hawaii 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.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.