D.C. Mun. Regs. tit. 26, r. 26-A2899

Current through Register Vol. 71, No. 49, December 6, 2024

Rule 26-A2899 - DEFINITIONS

2899.1

When used in this chapter, the following terms and phrases shall have the meanings ascribed:

Actuarial method - the methodology used to determine the Required Level of Primary Security, as described in §2851.

Covered policies - those policies, other than Grandfathered policies, of the following policy types:

(1) Life insurance policies with guaranteed nonlevel gross premiums and/or guaranteed nonlevel benefits, except for flexible premium universal life insurance policies; or

(2) Flexible premium universal life insurance policies with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period.

Grandfathered policies - policies that would be covered policies except that they were issued prior to January 1, 2015, and were ceded, as of December 31, 2014, as part of a reinsurance treaty that would not have met one of the exemptions set forth in §2855 had that section then been in effect.

IFRS - the international financial reporting standards adopted by the International Accounting Standards Board of the IFRS Foundation, available at http://www.ifrs.org/issued-standards/list-of-standards/.

Law on Credit for Reinsurance Act of 1993 - the Law on Credit for Reinsurance Act of 1993, effective October 15, 1993 (D.C. Law 10-36; D.C. Official Code § 31-501et seq.).

NAIC - the National Association of Insurance Commissioners.

Non-covered policies - any policy that does not meet the definition of covered policies.

Other security - any security acceptable to the Commissioner other than security meeting the definition of primary security.

Primary security - the following forms of security:

(1) Cash meeting the requirements of §3(b)(1) of the Law on Credit for Reinsurance Act of 1993 (D.C. Official Code § 31-502(b)(1)) ;

(2) Securities listed by the Securities Valuation Office of the National Association of Insurance Commissioners meeting the requirements of §3(b)(2) of the Law on Credit for Reinsurance Act of 1993 (D.C. Official Code § 31-502(b)(2)), but excluding any synthetic letter of credit, contingent note, credit-linked note or other similar security that operates in a manner similar to a letter of credit, and excluding any securities issued by the ceding insurer or any of its affiliates; and

(3) For security held in connection with funds-withheld and modified coinsurance reinsurance treaties:

(a) Commercial loans in good standing of CM3 quality or higher;

(b) Policy Loans; and

(c) Derivatives acquired in the normal course and used to support the hedge liabilities, pertaining to the actual risks in the policies ceded pursuant to the reinsurance treaty.

Required level of primary security - the dollar amount determined by applying the actuarial method to the risks ceded with respect to covered policies, but not more than the total reserve ceded.

U.S. GAAP - the generally accepted accounting principles established by the Financial Accounting Standards Board adopted by the U.S. Securities and Exchange Commission, available at https://asc.fasb.org//.

Valuation manual - the valuation manual adopted by the NAIC as described in Section 11(B)(1) of the Standard Valuation Law, with all amendments adopted by the NAIC that are effective for the financial statement date on which credit for reinsurance is claimed.

VM-20 - "Requirements for Principle-Based Reserves for Life Products," including all relevant definitions, from the Valuation Manual.

D.C. Mun. Regs. tit. 26, r. 26-A2899

Final Rulemaking published at 68 DCR 6518 (6/25/2021); amended by Final Rulemaking published at 69 DCR 15557 (12/30/2022)