Louisiana Administrative Code
Title 37 - INSURANCE Part
Part XIII - Regulations
Chapter 183 - Regulation Number 121-Term and Universal Life Insurance Reserve Financing
Section XIII-18311 - Requirements Applicable to Covered Policies to Obtain Credit for Reinsurance; Opportunity for Remediation

1. the ceding insurer's statutory policy reserves with respect to the covered policies are established in full and in accordance with the applicable requirements of R.S. 22:753 and related regulations and actuarial guidelines, and credit claimed for any reinsurance treaty subject to this regulation does not exceed the proportionate share of those reserves ceded under the contract; and

2. the ceding insurer determines the required level of primary security with respect to each reinsurance treaty subject to this regulation and provides support for its calculation as determined to be acceptable to the commissioner; and

3. funds consisting of primary security, in an amount at least equal to the required level of primary security, are held by or on behalf of the ceding insurer, as security under the reinsurance treaty within the meaning of R.S. 22:652, on a funds withheld, trust, or modified coinsurance basis;

4. funds consisting of other security, in an amount at least equal to any portion of the statutory reserves as to which primary security is not held pursuant to Paragraph 3 above, are held by or on behalf of the ceding insurer as security under the reinsurance treaty within the meaning of R.S. 22:652; and

5. any trust used to satisfy the requirements of §18311 shall comply with all of the conditions and qualifications of §3517 of Regulation 56, except that:

6. the reinsurance treaty has been approved by the commissioner.

1. The requirements of Subsection A must be satisfied as of the date that risks under covered policies are ceded if such date is on or after September 1, 2022, and on an ongoing basis thereafter. Under no circumstances shall a ceding insurer take or consent to any action or series of actions that would result in a deficiency under Subsection A.3 or A.4 with respect to any reinsurance treaty under which covered policies have been ceded, and in the event that a ceding insurer becomes aware at any time that such a deficiency exists, it shall use its best efforts to arrange for the deficiency to be eliminated as expeditiously as possible.

2. Prior to the due date of each quarterly or annual statement, each life insurance company that has ceded reinsurance within the scope of §18303 shall perform an analysis, on a treaty-by-treaty basis, to determine, as to each reinsurance treaty under which covered policies have been ceded, whether as of the end of the immediately preceding calendar quarter (the valuation date) the requirements of Subsection A.3 or A.4 were satisfied. The ceding insurer shall establish a liability equal to the excess of the credit for reinsurance taken over the amount of primary security actually held pursuant to Subsection A.3, unless either:

3. Nothing in Subsection B.2 shall be construed to allow a ceding company to maintain any deficiency under subdivision Subsection A.3 or A.4 for any period of time longer than is reasonably necessary to eliminate it.