HAR §16-187-104. Definitions

For the purposes of this chapter: "Actuarial method" means the methodology used to determine the required level of primary security, as described in section 16-187-105. "Covered policies" means the following: subject to the exemptions described in section 16-187-103, covered policies are 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" means covered policies that were: (1) Issued prior to January 1, 2015; and (2) Ceded, as of December 31, 2014, as part of a reinsurance treaty that would not have met one of the exemptions set forth in section 16-187-103 had that section then been in effect. "Non-covered policies" means any policy that does not meet the definition of covered policies, including grandfathered policies. "Required level of primary security" means 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. "Primary security" means the following forms of security: §16-187-104 187-8 (1) Cash meeting the requirements of section 431:4A-102(1), HRS; (2) Securities listed by the Securities Valuation Office meeting the requirements of section 431:4A-102(2), HRS, 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 and higher; (B) Policy loans; and (C) Derivatives acquired in the normal course and used to support and hedge liabilities pertaining to the actual risks in the policies ceded pursuant to the reinsurance treaty. "Other security" means any security acceptable to the commissioner other than security meeting the definition of primary security. "Valuation manual" means the valuation manual adopted by the National Association of Insurance Commissioners as described in section 431:5- 307(o)(2)(A), HRS, with all amendments adopted by the National Association of Insurance Commissioners that are effective for the financial statement date on which credit for reinsurance is claimed. "VM-20" means "requirements for principle-based reserves for life products," including all relevant definitions, from the valuation manual. [Eff 7/28/22;] (Auth: HRS §§431:2-201, 431:4A-104) (Imp: HRS §§431:4A-101 through 431:4A-104) §16-187-105 187-9