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RULE §7.616Term and Universal Life Insurance Reserve Financing

    (B) Before the due date of each quarterly or annual statement, each life insurance company that has ceded reinsurance within the scope of subsection (b) of this section must perform an analysis, on a reinsurance agreement-by-reinsurance agreement basis, to determine, as to each reinsurance agreement under which covered policies have been ceded, whether as of the end of the immediately preceding calendar quarter (the valuation date) the requirements of paragraph (1)(C) and (D) of this subsection were satisfied. The ceding insurer must establish a liability equal to the excess of the credit for reinsurance taken over the amount of primary security actually held under paragraph (1)(C) of this subsection, unless:

      (i) the requirements of paragraph (1)(C) and (D) of this subsection were fully satisfied as of the valuation date as to the reinsurance agreement; or

      (ii) any deficiency has been eliminated before the due date of the quarterly or annual statement to which the valuation date relates through the addition of primary security or other security, or both, in the amount and in the form that would have caused the requirements of paragraph (1)(C) and (D) of this subsection to be fully satisfied as of the valuation date.

    (C) Nothing in paragraph (2)(B) of this subsection may be construed to allow a ceding company to maintain any deficiency under paragraph (1)(C) and (D) of this subsection longer than is reasonably necessary to eliminate the deficiency.

Source Note: The provisions of this §7.616 adopted to be effective January 1, 2022, 46 TexReg 8069

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