3 AAC 21.630. Existing agreements

(a) An insurer subject to 3 AAC 21.600 - 3 AAC 21.695 shall reduce to zero by December 31, 1995 a reserve credit or asset established by a reinsurance agreement entered into before January 1, 1995 which, under the provisions of 3 AAC 21.600 - 3 AAC 21.695, would not be allowed a reserve credit or asset.

(b) An agreement entered into after December 31, 1994 that involves the reinsurance of insurance business written before the effective date of the agreement, along with any subsequent amendments, must be filed by the ceding company with the director within 30 days of the date of execution. A filing must include data detailing the financial impact of the transaction. A ceding insurer's actuary who signs the statutory financial statement actuarial opinion with respect to valuation of reserves shall consider 3 AAC 21.600 - 3 AAC 21.695 and any applicable actuarial standards of practice when determining the proper credit in a statutory financial statement filed with the division. The actuary shall maintain adequate documentation and, upon request of the division, describe the actuarial work performed for inclusion in the statutory financial statement and demonstrate that the work conforms to 3 AAC 21.600 - 3 AAC 21.695.

(c) An increase in surplus net of federal income tax resulting from arrangements described in (b) of this section must be identified separately on the insurer's statutory financial statement as a surplus item, and recognition of the surplus increase as income must be reflected on a net of tax basis on the reinsurance ceded line of the statutory financial statement when earnings result from the insurance business reinsured.

History: Eff. 10/21/92, Register 124; am 11/25/94, Register 132

Authority: AS 21.06.090

AS 21.12.020

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