<html xmlns="http://www.w3.org/1999/xhtml"><head><meta charset="UTF-8" /><title></title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.s87592c39-b77c-4091-b031-c323ce7c05d8P0 { margin-top: 0; margin-bottom: 0; margin-left: 0; margin-right: 0; text-indent: 0.00in; text-align: justify; background: white; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; } span.s87592c39-b77c-4091-b031-c323ce7c05d8C0 { color: black; background: white; font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s87592c39-b77c-4091-b031-c323ce7c05d8C0-000000 { color: #0000FF; background: white; font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s87592c39-b77c-4091-b031-c323ce7c05d8C0-000001 { color: black; background: white; font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s87592c39-b77c-4091-b031-c323ce7c05d8C0-000002 { color: #0000FF; background: white; font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s87592c39-b77c-4091-b031-c323ce7c05d8000003 { color: black; background: white; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } </style></head><body><div><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">    </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:13"><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000000">20</span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000000">:</span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000000">06</span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000000">:</span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000000">30</span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000000">:</span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000000">13</span></a><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000001">.  </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000001">Definitions</span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000001">.</span><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0"> </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">The following definitions apply to §§</span><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0"> </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:13"><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000002">20:06:30:13</span></a><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0"> to </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:20"><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000002">20:06:30:20</span></a><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">, inclusive</span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">:</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8000003"> </span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">    </span><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">(1)  </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0"> Actuarial method, the methodology used to determine the required level of primary security, as described in §</span><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0"> </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:14"><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000002">20:06:30:14</span></a><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">;</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">    (2)  </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0"> Covered policy, subject to the exemptions described in §</span><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0"> </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:18"><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000002">20:06:30:18</span></a><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">, a policy, other than a grandfathered policy, that is</span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">:</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">        (a)  </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">A life insurance policy with either guaranteed nonlevel gross premiums or guaranteed nonlevel benefits, or with both, except for flexible premium universal life insurance policy; or</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">        (b)  </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">A flexible premium universal life insurance policy with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period</span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">;</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">    (3) </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0"> Grandfathered policy, a covered policy that was</span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">:</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">        (a)   </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">Issued prior to January 1, 2015; and</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">        (b)  </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">Ceded, as of December 31, 2014, as part of a reinsurance treaty that would not have met one of the exemptions set forth in §</span><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0"> </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:18"><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000002">20:06:30:18</span></a><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">, had that section then been in effect;</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">    (4)  </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0"> Non-covered policy, any policy that does not meet the definition of a covered policy, including grandfathered policy</span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">;</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">    (5)  </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0"> Other security, any security acceptable to the director, other than primary security</span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">;</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">    (6)  </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0"> Primary security, :</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">        (a)  </span><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">Cash meeting the requirements of SDCL </span><a href="https://sdlegislature.gov/Statutes?Statute=58-14-16"><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000002">58-14-16</span></a><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">;</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">        (b)  </span><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">Securities listed by the National Association of Insurance Commissioners Securities Valuation Office and meeting the requirements of SDCL </span><a href="https://sdlegislature.gov/Statutes?Statute=58-14-16"><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000002">58-14-16</span></a><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">, 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</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">        (c)  </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">For security held in connection with funds withheld and modified coinsurance reinsurance treaties:</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">            (i)  </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">Commercial loans in good standing of CM3 quality and higher, as defined in the Valuation Manual</span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">;</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">            (ii)  </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">Policy loans; and</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">            (iii)  </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">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</span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">;</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">    (7)  </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0"> Required level of primary security, the dollar amount determined by applying the actuarial method to the risks ceded with respect to a covered policy, but not more than the total reserve ceded</span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">;</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">    (8)  </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0"> Valuation Manual, the manual adopted by the director under §</span><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0"> </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:59:01"><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000002">20:06:59:01</span></a><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0"> and SDCL </span><a href="https://sdlegislature.gov/Statutes?Statute=58-26-45.1"><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000002">58-26-45.1</span></a><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">, 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; and</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">    (9)  </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0"> VM-20, the definition of  Requirements for Principle-Based Reserves for Life Products from the Valuation Manual, including all relevant definitions</span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">.</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8000003"> </span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">    </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000001">Source:</span><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0"> </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">49 SDR 9, effective August 9, 2022</span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">.</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">    </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000001">General Authority:</span><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0"> SDCL </span><a href="https://sdlegislature.gov/Statutes?Statute=58-14-17"><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000002">58-14-17</span></a><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">, </span><a href="https://sdlegislature.gov/Statutes?Statute=58-26-45.1"><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000002">58-26-45.1</span></a><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">.</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">    </span><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000001">Law Implemented:</span><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8C0"> SDCL </span><a href="https://sdlegislature.gov/Statutes?Statute=58-14-17"><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0-000002">58-14-17</span></a><span class="s87592c39-b77c-4091-b031-c323ce7c05d8C0">.</span></p><p dir="ltr" class="s87592c39-b77c-4091-b031-c323ce7c05d8P0"><span xml:space="preserve" class="s87592c39-b77c-4091-b031-c323ce7c05d8000003"> </span></p></div></body></html>