210 Neb. Admin. Code, ch. 80, § 004
As used in this regulation, the following terms shall have these meanings:
"Account assets" means the assets in the segregated portfolio plus any assets held in the general account or a separate account to meet the asset maintenance requirements.
"Actuarial opinion and memorandum" means the opinion and memorandum of the valuation actuary required to be submitted to the Director pursuant to Subsection 010.02 of this regulation.
"Affirmatively approved" means approval of an insurer's plan of operation for a class of contracts containing the form of contract under review, after the plan of operation associated with the class of contracts has been reviewed by the insurer's domiciliary insurance department, and the plan of operation has been found to be in compliance with guidelines substantially similar to the NAIC Synthetic Guaranteed Investment Contracts Model Regulation by the domiciliary insurance department. Affirmatively approved does not mean approval as a result of the deemer provision.
"Appointed actuary" means the qualified actuary appointed or retained either directly by or by the authority of the board of directors through an executive officer of the company to prepare the annual statement of actuarial opinion for the company as a whole pursuant to Neb. Rev. Stat. § 44-8905.
"Asset maintenance requirement" means the requirement to maintain assets to fund contract benefits in accordance with Section 010 of this regulation.
"Class of contracts" or "contracts in the class" means the set of all contracts to which a given plan of operation pertains.
"Contract value record" means an accounting record, provided by the contract in relation to the segregated portfolio of assets, that is credited with a fixed rate of return over regular periods, and that is used to measure the extent of the insurer's obligation to the contract holder. The fixed rate of return credited to the contract value record is determined by means of a crediting rate formula or declared at the inception of the contract and valid for the entire term of the contract.
"Crediting rate formula" means a mathematical formula used to calculate the fixed rate of return credited to the contract value record during any rate period and based in part upon the difference between the contract value record and the market value record amortized over an appropriate period. The fixed rate of return calculated by means of this formula may reflect prior and current market conditions with respect to the segregated portfolio, but may not reference future changes in market conditions.
"Department" means the Nebraska Department of Insurance and any employee of the Department authorized to act on behalf of the Department.
"Director" means the Director of the Nebraska Department of Insurance.
"Duration" means, with respect to the segregated portfolio assets or guaranteed contract liabilities, a measure of price sensitivity to changes in interest rates, such as the Macaulay duration or option-adjusted duration.
"Fair market value" means a reasonable estimate of the amount that a knowledgeable buyer of an asset would be willing to pay, and a knowledgeable seller of an asset would be willing to accept, for the asset without duress in an arm's length transaction. In the case of a publicly traded security, the fair market value is the price at which the security is traded or, if no price is available, a price that appropriately reflects the latest bid and asked prices for the security. In the case of a debt instrument that is not publicly traded, the fair market value is the discounted present value of the asset calculated at a reasonable discount rate. For all other non-publicly traded assets, fair market value will be determined in accordance with valuation practices customarily used within the financial industry.
"Guaranteed minimum benefits" means contract benefits on a specified date that may be either.
"Hedging instrument" means:
An instrument is not a hedging instrument or a part of a bona fide hedging transaction if it is purchased in conjunction with another instrument where the effect of the combined transaction is an increase in the portfolio's exposure to market risk.
"Investment guidelines" means the set of written guidelines established in advance by the person with investment authority over the segregated portfolio, to be followed by the investment manager. The guidelines will include a description of:
"Investment manager" means the person (including subcontractor) responsible for managing the assets in the segregated portfolio in accordance with the investment guidelines in a fiduciary capacity to the owner of the assets.
"Market value record" means an accounting record provided by the contract to reflect the fair market value of the segregated portfolio.
"Permitted custodial institution" means a bank, trust company or other licensed fiduciary services provider.
"Plan of operation" means a written plan meeting the requirements of Subsection 005.03 A of this regulation.
"Qualified actuary" means an individual who meets the qualification standards set forth in Neb. Rev. Stat. § 44-420(2).
"Rate period" means the period of time during which the fixed rate of return credited to the contract value record is applicable between crediting formula adjustments.
"Segregated portfolio" means:
"Synthetic guaranteed investment contract" or "contract" means a group annuity contract or other agreement that establishes the insurer's obligations by reference to a segregated portfolio of assets that is not owned by the insurer. The contract functions as an accounting record for an accumulation fund and the fixed rate of return credited to the fund reflects an amortization of the segregated portfolio's market gains and losses based on the period specified in the crediting rate formula, subject to any minimum interest rate guarantee.
"Unilateral contract termination event" means an event allowing the insurer to unilaterally and immediately terminate the contract, without future liability or obligation to the contract holder.
"United States government obligation" means a direct obligation issued, assumed, guaranteed or insured by the United States of America or by an agency or instrumentality of the United States government.
"Valuation actuary" means the appointed actuary or, alternatively, a qualified actuary designated by the appointed actuary to render the actuarial opinion pursuant to Section 010. Written documentation of any such designation shall be on file at the company and available for review by the Director upon request.
210 Neb. Admin. Code, ch. 80, § 004