Code of Maine Rules
02 - DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION
031 - BUREAU OF INSURANCE
Chapter 735 - Term and Universal Life Insurance Reserve Financing
Section 031-735-1 - Authority and Purpose
Current through 2024-38, September 18, 2024
The Superintendent of Insurance adopts this rule pursuant to 24-A M.R.S. §§212 and 731-B(2-B) & (7), to implement uniform national standards for reserve financing arrangements pertaining to life insurance policies with guaranteed nonlevel gross premiums, life insurance policies with guaranteed nonlevel benefits, and universal life insurance policies with secondary guarantees; and to ensure that, with respect to each such financing arrangement, adequate security, including adequate Primary Security as defined in Subsection 4(7), is held by or on behalf of ceding insurers in the forms and amounts required herein. In general, reinsurance ceded for reserve financing purposes involves arrangements where some or all of the assets used to secure the reinsurance treaty or to capitalize the reinsurer have one or more of the following characteristics:
(1) they are issued by the ceding insurer or its affiliates;
(2) they are not unconditionally available to satisfy the general account obligations of the ceding insurer; or
(3) they 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 and used to support and hedge liabilities pertaining to the actual risks in the policies ceded pursuant to the reinsurance treaty).
