Nevada Administrative Code
Chapter 681A - Kinds of Insurance; Reinsurance
Section 681A.Sec. 18 - NEW
Universal Citation: NV Admin Code 681A.Sec. 18
Current through September 16, 2024
1. The provisions of sections 2 to 22, inclusive apply to all reinsurance treaties that cede liabilities pertaining to a covered policy issued by a life insurance company domiciled in this State.
2. The provisions of sections 2 to 22, inclusive do not apply to reinsurance:
(a) Of the following types of policies that
are issued before the effective date or the date on which the ceding insurer
begins to apply the provisions of the Valuation Manual to
establish the statutory reserves of the ceded policies, whichever occurs later,
but not later than January 1, 2022:
(1) An
attained-age-based yearly renewable term life insurance policy.
(2) A policy that becomes an
attained-age-based yearly renewable term life insurance policy after an initial
period of coverage if one of the following conditions are met:
(I) The initial period of coverage is
constant for all insureds of the same sex, risk class and plan of insurance;
or
(II) The initial period of
coverage runs to a common attained age for all insureds of the same sex, risk
class and plan of insurance and, after the initial period of coverage, the
policy meets the conditions of an attained-age-based yearly renewable term life
insurance policy.
(3) A
renewable term life insurance policy if:
(I)
The policy consists of a series of renewal periods that are identical in
length, except for the final renewal period, which may be truncated or extended
to reach the expiry age, provided that the final renewal period is less than 10
years and less than twice the size of any other renewal period under the
policy, and for each period the premium rates on both the initial current
premium scale and the guaranteed maximum premium scale are level;
(II) The guaranteed gross premium in all
renewal periods are not less than the corresponding net premiums based upon the
Ultimate 1980 CSO Mortality Table, with or without the
Ten-Year Select Mortality Factors; and
(III) There are no cash surrender values in
any policy year.
(b) Of a portion of a yearly renewable term
reinsurance policy in which the mortality risk is reinsured and issued not
later than:
(1) The effective date;
or
(2) The date on which the ceding
insurer begins to apply the provisions of the Valuation Manual
to establish the statutory reserves of the ceded policies, whichever occurs
later, but not later than January 1, 2022.
(c) Of a universal life policy that has:
(1) A secondary guarantee period, if any, of
not more than 5 years;
(2) A
specified premium for the secondary guarantee period of not less than the net
level reserve premium for the secondary guarantee period, based on the CSO
valuation tables and valuation interest rate applicable to the issue year of
the policy; and
(3) An initial
surrender charge that is not less than 100 percent of the first year annualized
specified premium for the secondary guarantee period.
(d) Of credit life insurance.
(e) Of a variable life insurance policy that
provides for life insurance in which the amount or duration of the policy
varies according to the investment experience of a separate account.
(f) Of a group life insurance certificate
unless the certificate provides for a stated or implied schedule of maximum
gross premiums required in order to continue coverage in force for a period of
more than 1 year.
(g) That is ceded
to an assuming insurer that meets the applicable requirements of
NRS
681A.180 and
681A.190.
(h) That is ceded to an assuming insurer
that:
(1) Meets the applicable requirements of
NRS
681A.155,
681A.160 and
681A.170;
(2) Prepares statutory financial statements
in compliance with the Accounting Practices and Procedures
Manual of the National Association of Insurance Commissioners, adopted
by reference in NAC
679B.033, without any departures
relating to the admissibility or valuation of assets or liabilities that
increase the assuming insurer's reported surplus and reach a level of
materiality that require disclosure in the financial statements pursuant to the
Statement of Statutory Accounting Principles No. 1 of the
National Association of Insurance Commissioners; and
(3) Has not triggered a company action level
event, regulatory action level event, authorized control level event or a
mandatory control level event when its risk-based capital is calculated in
accordance with the life risk-based capital report, including, without
limitation, overview and instructions for companies, as amended by the National
Association of Insurance Commissioners.
(i) That is ceded to an assuming insurer
that:
(1) Meets the applicable requirements of
NRS
681A.155,
681A.160 and
681A.170;
(2) Is not an affiliate of:
(I) The insurer ceding the business to the
assuming insurer; or
(II) An
insurer that directly or indirectly ceded the business to the current ceding
insurer;
(3) Prepares
statutory financial statements in compliance with the Accounting
Practices and Procedures Manual of the National Association of
Insurance Commissioners, adopted by reference in NAC 679B.033;
(4) Is licensed or accredited in not less
than 10 states, including its state of domicile;
(5) Is not licensed in any state as a
captive, special purpose vehicle, special purpose financial captive, special
purpose life reinsurance company, limited purpose subsidiary or any other
similarly situated licensing regime; and
(6) Is not below 500 percent of the
authorized control level when its risk-based capital is calculated in
accordance with the life risk-based capital report, including, without
limitation, overview and instructions for companies, as amended by the National
Association of Insurance Commissioners, and without recognition of any
departures relating to the admissibility or valuation of assets or liabilities
that increase the reported surplus of the assuming insurer.
(j) That is ceded to an assuming
insurer that meets the requirements of subsection 3 of
NRS
681A.145.
(k) That is not otherwise exempt from the
provisions of sections 2 to 22, inclusive pursuant to this subsection if the
Commissioner, in consultation with the Financial Analysis Working Group of the
National Association of Insurance Commissioners or another group of regulators
approved by the National Association of Insurance Commissioners, determines
that the application of the provisions of sections 2 to 22, inclusive to the
risks associated with such form of reinsurance is not necessary to provide
adequate protection to policyholders. If the Commissioner exempts a reinsurance
treaty pursuant to this paragraph, he or she will, in a manner the Commissioner
deems sufficient, publicly disclose the exemption, the basis for the
determination and a summary description of the treaty.
Added to NAC by Comm'r of Insurance by R187-22A, eff. 12/14/2022
NRS 679B.130, 681A.130, 681A.145
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