Current through Register Vol. 41, No. 3, September 23, 2024
This chapter does not apply to the situations described in
subdivisions 1 through 6 of this section.
1. Reinsurance of:
a. Policies that satisfy the criteria for
exemption set forth in
14VAC5-319-50 F or G and that are
issued before the later of:
(1) January 1,
2018; and
(2) The date on which the
ceding insurer begins to apply the provisions of VM-20 to establish the ceded
policies' statutory reserves, but in no event later than January 1,
2020;
b. Portions of
policies that satisfy the criteria for exemption set forth in
14VAC5-319-50 E and that are
issued before the later of:
(1) January 1,
2018; and
(2) The date on which the
ceding insurer begins to apply the provisions of VM-20 to establish the ceded
policies' statutory reserves, but in no event later than January 1,
2020;
c. Any universal
life policy that meets all of the following requirements:
(1) Secondary guarantee period, if any, is
five years or less;
(2) Specified
premium for the secondary guarantee period is equal to or greater than the net
level reserve premium for the secondary guarantee period based on the
Commissioners Standard Ordinary (CSO) valuation tables and valuation interest
rate applicable to the issue year of the policy; and
(3) The initial surrender charge is equal to
or greater than 100% of the first year annualized specified premium for the
secondary guarantee period;
d. Credit life insurance;
e. Any variable life insurance policy that
provides for life insurance, the amount or duration of which varies according
to the investment experience of any separate account or accounts; or
f. Any 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 in
excess of one year;
2.
Reinsurance ceded to an assuming insurer that meets the applicable requirements
of subdivision C 4 of §
38.2-1316.2 of the Code of
Virginia and
14VAC5-300-90 C 1;
3. Reinsurance ceded to an assuming insurer
that meets the applicable requirements of subdivision C 1, C 2, or C 3 of
§
38.2-1316.2 of the Code of
Virginia and that in addition:
a. Prepares
statutory financial statements in compliance with §
38.2-1300 of the Code of
Virginia, without any departures from NAIC statutory accounting practices and
procedures pertaining to the admissibility or valuation of assets or
liabilities that increase the assuming insurer's reported surplus and are
material enough that they need to be disclosed in the financial statement of
the assuming insurer pursuant to Statement of Statutory Accounting Principles
No. 1 ("SSAP 1"); and
b. Is not in
a Company Action Level Event, Regulatory Action Level Event, Authorized Control
Level Event, or Mandatory Control Level Event as those terms are defined in
Chapter 55 (§
38.2-5500 et seq.) of Title 38.2
of the Code of Virginia when its risk-based capital (RBC) is calculated in
accordance with §
38.2-5502 of the Code of
Virginia;
4. Reinsurance
ceded to an assuming insurer that meets the applicable requirements of
subdivision C 1, C 2, or C 3 of §
38.2-1316.2 of the Code of
Virginia and that in addition:
a. Is not an
affiliate, as that term is defined in §
38.2-1322 of the Code of
Virginia, of:
(1) The insurer ceding the
business to the assuming insurer; or
(2) Any insurer that directly or indirectly
ceded the business to that ceding insurer;
b. Prepares statutory financial statements in
compliance with the NAIC Accounting Practices and Procedures Manual;
c. Is both:
(1) Licensed or accredited in at least 10
states (including its state of domicile); and
(2) 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 similar
licensing regime; and
d.
Is not, or would not be, below 500% of the Authorized Control Level RBC as that
term is defined in §
38.2-5501 of the Code of
Virginia when its RBC is calculated in accordance with §
38.2-5502 of the Code of
Virginia and without recognition of any departures from NAIC statutory
accounting practices and procedures pertaining to the admission or valuation of
assets or liabilities that increase the assuming insurer's reported
surplus;
5. Reinsurance
ceded to an assuming insurer that meets the requirements of either subdivision
B 4 a or B 4 b of §
38.2-1316.7 of the Code of
Virginia; or
6. Reinsurance not
otherwise exempt under subdivisions 1 through 5 of this section if the
commission, after consulting with the NAIC Financial Analysis Working Group or
other group of regulators designated by the NAIC, as applicable, determines
under all the facts and circumstances that all of the following apply:
a. The risks are clearly outside of the
intent and purpose of this chapter, as described in 14VAC5-318-10;
b. The risks are included within the scope of
this chapter only as a technicality; and
c. The application of this chapter to those
risks is not necessary to provide appropriate protection to policyholders. The
commission shall publicly disclose any decision made pursuant to this
subdivision to exempt a reinsurance treaty from this chapter, as well as the
general basis therefor (including a summary description of the
treaty).
Statutory Authority: §§
12.1-13,
38.2-223, and
38.2-1316.7 of the Code of
Virginia.
