Exemptions from this chapter

This chapter does not apply to the situations described in subsections 1 through 6. 1. Reinsurance of: a. Policies that satisfy the criteria for exemption set forth in subsection 6 of section 45-04-12-04 or subsection 7 of section 45-04-12-04 and which are issued before the later of: (1) The effective date of this chapter, 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 subsection 5 of section 45-04-12-04 and which are issued before the later of: (1) The effective date of this chapter, 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 not less than the net level reserve premium for the secondary guarantee period based on the commissioners standard ordinary valuation tables and valuation interest rate applicable to the issue year of the policy; and (3) The initial surrender charge is not less than one hundred percent 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 subsection 5 of North Dakota Century Code section 26.1-31.2-01; 3. Reinsurance ceded to an assuming insurer that meets the applicable requirements of subsection 2, 3, or 4 of North Dakota Century Code section 26.1-31.2-01 and that, in addition: a. Prepares statutory financial statements in compliance with the national association of insurance commissioners' "Accounting Practices and Procedures Manual", without any departures from national association of insurance commissioners 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; 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 North Dakota Century Code chapter 26.1-03.1 when its risk-based capital is calculated in accordance with the life risk-based capital report, including overview and instructions for companies, as the same may be amended by the national association of insurance commissioners from time to time, without deviation; 4. Reinsurance ceded to an assuming insurer that meets the applicable requirements of subsection 2, 3, or 4 of North Dakota Century Code section 26.1-31.2-01 and that, in addition: a. Is not an affiliate, as that term is defined in subsection 1 of North Dakota Century Code section 26.1-10-01 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 national association of insurance commissioners' "Accounting Practices and Procedures Manual"; c. Is both: (1) Licensed or accredited in at least ten states, including its state of domicile; or (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 five hundred percent of the authorized control level risk-based capital as that term is defined in North Dakota Century Code chapter 26.1-03.1 when its risk-based capital is calculated in accordance with the life risk-based capital report, including overview and instructions for companies, as the same may be amended by the national association of insurance commissioners from time to time, without deviation, and without recognition of any departures from national association of insurance commissioners' statutory accounting practices and procedures pertaining to the admission or valuation of assets or liabilities that increase the assuming insurer’s reported surplus; 5. Cessions to an assuming insurer that: a. Meets the conditions set forth in subsection 7 of North Dakota Century Code section 26.1-31.2-01 or is operating in accordance with provisions substantially equivalent to subsection 7 of North Dakota Century Code section 26.1-31.2-01 in a minimum of five other states; b. Is certified in this state as set forth in subsection 6 of North Dakota Century Code section 26.1-31.2-01 or certified in accordance with provisions substantially equivalent to subsection 6 of North Dakota Century Code section 26.1-31.2-01 in a minimum of five other states; or c. Maintains at least two hundred fifty million dollars in capital and surplus when determined in accordance with national association of insurance commissioners' "Accounting Practices and Procedures Manual", including all amendments thereto adopted by the national association of insurance commissioners, excluding the impact of any permitted or prescribed practices; and is: (1) Licensed in at least twenty-six states; or (2) Licensed in at least ten states, and licensed or accredited in a total of at least thirty-five states; or 6. Reinsurance not otherwise exempt under subsections 1 through 5 if the commissioner, after consulting with the national association of insurance commissioners' financial analysis working group or other group of regulators designated by the national association of insurance commissioners, 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 section 45-03-26-02; 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 commissioner shall publicly disclose any decision made pursuant to this subsection to exempt a reinsurance treaty from this chapter, as well as the general basis therefor, including a summary description of the treaty.