Kentucky Administrative Regulations
Title 806 - PUBLIC PROTECTION CABINET - DEPARTMENT OF INSURANCE
Chapter 3 - Authorization of Insurers and General Requirements
Section 806 KAR 3:160 - Life and health reinsurance agreements
Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO: KRS 304.3-240, 304.5-120
NECESSITY, FUNCTION, AND CONFORMITY: KRS 304.2-110 provides that the Executive Director of Insurance may promulgate administrative regulations to implement the Kentucky Insurance Code, KRS Chapter 304. This administrative regulation restricts the use of life and health reinsurance agreements as "surplus relief" if the effect is to distort reporting of the life and health insurer's true financial condition, take credit for or a reduction from liability for reinsurance agreements which do not involve a transfer of risk, and which conceal the fact that the insurer is in hazardous financial condition.
Section 1. Purpose and Scope.
Section 2. Accounting Requirements.
A risk shall be considered significant if it is:
Where: I is the net investment income.
CG is capital gains less capital losses.
X is the current year cash and invested assets plus investment income due and accrued less borrowed money.
Y is the same as X but for the prior year.
Section 3.
Section 4. Written Agreements.
Section 5. Existing Agreements. An insurer may continue to reduce liabilities or establish assets in financial statements filed with the Office of Insurance for reinsurance ceded under types of reinsurance agreements described in Sections 1. (1) and 2 of this administrative regulation if:
Section 6. Risk Categories Table.
Classes of Insurance Business |
Risk Categories |
|||||
a |
b |
c |
d |
e |
f |
|
Health Insurance - other than LTC/LTD* |
+ |
0 |
+ |
0 |
0 |
0 |
Health Insurance - LTC/LTD* |
+ |
0 |
+ |
+ |
+ |
0 |
Immediate Annuities |
0 |
+ |
0 |
+ |
+ |
0 |
Single Premium Deferred Annuities |
0 |
0 |
+ |
+ |
+ |
+ |
Flexible Premium Deferred Annuities |
0 |
0 |
+ |
+ |
+ |
+ |
Guaranteed Interest Contracts |
0 |
0 |
0 |
+ |
+ |
+ |
Other Annuity Deposit Business |
0 |
0 |
+ |
+ |
+ |
+ |
Single Premium Whole Life |
0 |
+ |
+ |
+ |
+ |
+ |
Traditional Non par Permanent |
0 |
+ |
+ |
+ |
+ |
+ |
Traditional Non par Term |
0 |
+ |
+ |
0 |
0 |
0 |
Traditional Par Permanent |
0 |
+ |
+ |
+ |
+ |
+ |
Traditional Par Term |
0 |
+ |
+ |
0 |
0 |
0 |
Adjustable Premium Permanent |
0 |
+ |
+ |
+ |
+ |
+ |
Indeterminate Premium Permanent |
0 |
+ |
+ |
+ |
+ |
+ |
Universal Life Flexible Premium |
0 |
+ |
+ |
+ |
+ |
+ |
Universal Life Fixed Premium |
0 |
+ |
+ |
+ |
+ |
+ |
Where: + = significant risk 0 = insignificant risk *LTC = long-term care *LTD = long-term disability |
STATUTORY AUTHORITY: KRS 304.2-110(1)