South Dakota Administrative Rules
Title 20 - PUBLIC SAFETY
Article 20:06 - INSURANCE
Chapter 20:06:30 - Life and health reinsurance
Section 20:06:30:16 - Requirements applicable to a covered policy to obtain credit for reinsurance
Current through Register Vol. 50, page 114, March 25, 2024
Subject to the exemptions described in § 20:06:30:18 and the provisions of § 20:06:30:17, credit for reinsurance shall be allowed with respect to ceded liabilities pertaining to a covered policy pursuant to SDCL Ch. 58-26 if, in addition to all other requirements imposed by law or rule, the following requirements are met on a treaty-by-treaty basis:
(1) The ceding insurer's statutory policy reserves with respect to the covered policy are established in full and in accordance with the applicable requirements of SDCL 58-26-45 to 5826-105, inclusive, and related rules and actuarial guidelines, and credit claimed for any reinsurance treaty subject to §§ 20:06:30:13 to 20:06:30:20, inclusive, do not exceed the proportionate share of those reserves ceded under the reinsurance treaty;
(2) The ceding insurer determines the required level of primary security with respect to each reinsurance treaty subject to §§ 20:06:30:13 to 20:06:30:20, inclusive, and provides support for its calculation as determined to be acceptable to the director;
(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 SDCL 58-14-16, 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 subdivision 20:06:30:16(3), are held by or on behalf of the ceding insurer as security under the reinsurance treaty within the meaning of SDCL 58-14-16;
(5) Any trust used to satisfy the requirements of this section shall comply with all of the conditions and qualifications of § 20:06:31:06, except that:
(6) The reinsurance treaty has been approved by the director.
General Authority: SDCL 58-14-1, 58-26-45.1.
Law Implemented: SDCL 58-14-17.