<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.sc370760b-28db-43db-bdb5-820175e72060P0 { 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.sc370760b-28db-43db-bdb5-820175e72060C0 { color: black; background: white; font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.sc370760b-28db-43db-bdb5-820175e72060C0-000000 { color: #0000FF; background: white; font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.sc370760b-28db-43db-bdb5-820175e72060C0-000001 { color: black; background: white; font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.sc370760b-28db-43db-bdb5-820175e72060000002 { color: black; background: white; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.sc370760b-28db-43db-bdb5-820175e72060C0-000003 { color: #0000FF; background: white; font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } </style></head><body><div><p dir="ltr" class="sc370760b-28db-43db-bdb5-820175e72060P0"><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0">    </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:14.01"><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000000">20</span><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000000">:</span><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000000">06</span><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000000">:</span><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000000">30</span><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000000">:</span><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000000">14.01</span></a><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000001">.  Adjustments for other reinsurance treaties.</span><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0"> </span><span class="sc370760b-28db-43db-bdb5-820175e72060C0">The adjustments for other reinsurance treaties may only be made with respect to reinsurance treaties entered into directly by the ceding insurer. The ceding insurer may not make an adjustment as a result of a retrocession treaty entered into by the assuming insurers</span><span class="sc370760b-28db-43db-bdb5-820175e72060C0">.</span></p><p dir="ltr" class="sc370760b-28db-43db-bdb5-820175e72060P0"><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060000002"> </span></p><p dir="ltr" class="sc370760b-28db-43db-bdb5-820175e72060P0"><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0">    </span><span class="sc370760b-28db-43db-bdb5-820175e72060C0">The required level of primary security resulting from an application of the actuarial method may not exceed the amount of statutory reserves ceded</span><span class="sc370760b-28db-43db-bdb5-820175e72060C0">.</span></p><p dir="ltr" class="sc370760b-28db-43db-bdb5-820175e72060P0"><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060000002"> </span></p><p dir="ltr" class="sc370760b-28db-43db-bdb5-820175e72060P0"><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0">    If the ceding insurer cedes risks with respect to a covered policy, including any riders, in more than one reinsurance treaty subject to </span><span class="sc370760b-28db-43db-bdb5-820175e72060C0">§§</span><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0"> </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:13"><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000003">20:06:30:13</span></a><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0"> to </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:20"><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000003">20:06:30:20</span></a><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0">, inclusive, the aggregate required level of primary security for those reinsurance treaties may not be less than the required level of primary security calculated using the actuarial method as if all risks ceded in those treaties were ceded in a single treaty subject to </span><span class="sc370760b-28db-43db-bdb5-820175e72060C0">§§</span><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0"> </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:13"><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000003">20:06:30:13</span></a><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0"> to 20:06:30:30, inclusive; and</span></p><p dir="ltr" class="sc370760b-28db-43db-bdb5-820175e72060P0"><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060000002"> </span></p><p dir="ltr" class="sc370760b-28db-43db-bdb5-820175e72060P0"><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0">    </span><span class="sc370760b-28db-43db-bdb5-820175e72060C0">If a reinsurance treaty subject to §§</span><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0"> </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:13"><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000003">20:06:30:13</span></a><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0"> to </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:20"><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000003">20:06:30:20</span></a><span class="sc370760b-28db-43db-bdb5-820175e72060C0">, inclusive, cedes risk on both covered and non-covered policies, credit for the ceded reserves must be determined as follows:</span></p><p dir="ltr" class="sc370760b-28db-43db-bdb5-820175e72060P0"><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060000002"> </span></p><p dir="ltr" class="sc370760b-28db-43db-bdb5-820175e72060P0"><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0">    (1)  </span><span class="sc370760b-28db-43db-bdb5-820175e72060C0">The actuarial method must be used to determine the required level of primary security for the covered policy, and §</span><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0"> </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:16"><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000003">20:06:30:16</span></a><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0"> must be used to determine the credit for reinsurance for the covered policy reserves; and</span></p><p dir="ltr" class="sc370760b-28db-43db-bdb5-820175e72060P0"><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0">    (2)  </span><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0">Credit for the non-covered policy reserves may be granted only to the extent that security, in addition to the security held to satisfy the requirements of subdivision </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30"><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000003">20:06:30</span></a><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0">14.1(1), is held by or on behalf of the ceding insurer, in accordance with SDCL chapter </span><a href="https://sdlegislature.gov/Statutes?Statute=58-26"><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000003">58-26</span></a><span class="sc370760b-28db-43db-bdb5-820175e72060C0">. Any primary security used to meet the requirements of this subdivision may not be used to satisfy the required level of primary security for the covered policy</span><span class="sc370760b-28db-43db-bdb5-820175e72060C0">.</span></p><p dir="ltr" class="sc370760b-28db-43db-bdb5-820175e72060P0"><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060000002"> </span></p><p dir="ltr" class="sc370760b-28db-43db-bdb5-820175e72060P0"><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0">    </span><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000001">Source:</span><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0"> </span><span class="sc370760b-28db-43db-bdb5-820175e72060C0">49 SDR 9, effective August 9, 2022.</span></p><p dir="ltr" class="sc370760b-28db-43db-bdb5-820175e72060P0"><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0">    </span><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000001">General Authority:</span><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0"> SDCL </span><a href="https://sdlegislature.gov/Statutes?Statute=58-14-17"><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000003">58-14-17</span></a><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0">, </span><a href="https://sdlegislature.gov/Statutes?Statute=58-26-45.1"><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000003">58-26-45.1</span></a><span class="sc370760b-28db-43db-bdb5-820175e72060C0">.</span></p><p dir="ltr" class="sc370760b-28db-43db-bdb5-820175e72060P0"><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0">    </span><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000001">Law Implemented:</span><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060C0"> SDCL </span><a href="https://sdlegislature.gov/Statutes?Statute=58-14-17"><span class="sc370760b-28db-43db-bdb5-820175e72060C0-000003">58-14-17</span></a><span class="sc370760b-28db-43db-bdb5-820175e72060C0">.</span></p><p dir="ltr" class="sc370760b-28db-43db-bdb5-820175e72060P0"><span xml:space="preserve" class="sc370760b-28db-43db-bdb5-820175e72060000002"> </span></p></div></body></html>