<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.s4dcfa8b2-801d-4280-b471-a27657f2243fP0 { 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.s4dcfa8b2-801d-4280-b471-a27657f2243fC0 { color: black; background: white; font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000000 { color: #0000FF; background: white; font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000001 { color: black; background: white; font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002 { color: #0000FF; background: white; font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s4dcfa8b2-801d-4280-b471-a27657f2243f000003 { 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="s4dcfa8b2-801d-4280-b471-a27657f2243fP0"><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">    </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:16"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000000">20</span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000000">:</span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000000">06</span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000000">:</span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000000">30</span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000000">:</span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000000">16</span></a><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000001">.  Requirements applicable to a covered policy to obtain credit for reinsurance.</span><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0"> </span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">Subject to the exemptions described in §</span><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0"> </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:18"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">20:06:30:18</span></a><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0"> and the provisions of §</span><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0"> </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:17"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">20:06:30:17</span></a><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">, credit for reinsurance must be allowed with respect to ceded liabilities pertaining to a covered policy pursuant to SDCL chapter </span><a href="https://sdlegislature.gov/Statutes?Statute=58-26"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">58-26</span></a><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0"> if, in addition to all other requirements imposed by law or rule, the following requirements are met on a treaty-by-treaty basis</span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">:</span></p><p dir="ltr" class="s4dcfa8b2-801d-4280-b471-a27657f2243fP0"><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243f000003"> </span></p><p dir="ltr" class="s4dcfa8b2-801d-4280-b471-a27657f2243fP0"><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">    </span><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">(1)  </span><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">The ceding insurer s statutory policy reserves, with respect to the covered policy, are established in accordance with SDCL </span><a href="https://sdlegislature.gov/Statutes?Statute=58-26-45"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">58-26-45</span></a><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0"> to </span><a href="https://sdlegislature.gov/Statutes?Statute=58-26-105"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">58-26-105</span></a><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">, inclusive, and related rules and actuarial guidelines, and credit claimed for any reinsurance treaty subject to §§</span><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0"> </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:13"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">20:06:30:13</span></a><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0"> to </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:20"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">20:06:30:20</span></a><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">, inclusive, does not exceed the proportionate share of those reserves ceded under the reinsurance treaty</span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">;</span></p><p dir="ltr" class="s4dcfa8b2-801d-4280-b471-a27657f2243fP0"><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">    (2)  </span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">The ceding insurer determines the required level of primary security with respect to each reinsurance treaty subject to §§</span><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0"> </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:13"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">20:06:30:13</span></a><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0"> to </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:20"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">20:06:30:20</span></a><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">, inclusive, and provides support for its calculation, as determined acceptable by the director</span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">;</span></p><p dir="ltr" class="s4dcfa8b2-801d-4280-b471-a27657f2243fP0"><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">    (3)  </span><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">Funds consisting of primary security, in an amount at least equal to the required level of primary security, are held by or on behalf of the ceding insurer, as security under the reinsurance treaty, within the meaning of SDCL </span><a href="https://sdlegislature.gov/Statutes?Statute=58-14-16"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">58-14-16</span></a><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">, on a funds withheld, trust, or modified coinsurance basis</span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">;</span></p><p dir="ltr" class="s4dcfa8b2-801d-4280-b471-a27657f2243fP0"><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">    (4)  </span><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">Funds consisting of other security, in an amount at least equal to any portion of the statutory reserves as to which primary security is not held pursuant to subdivision </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:16"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">20:06:30:16</span></a><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">(3), are held by or on behalf of the ceding insurer, as security under the reinsurance treaty, within the meaning of SDCL </span><a href="https://sdlegislature.gov/Statutes?Statute=58-14-16"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">58-14-16</span></a><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">;</span></p><p dir="ltr" class="s4dcfa8b2-801d-4280-b471-a27657f2243fP0"><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">    (5)  </span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">Any trust used to satisfy the requirements of this section must comply with the conditions and qualifications of §</span><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0"> </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:31:06"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">20:06:31:06</span></a><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">, except that</span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">:</span></p><p dir="ltr" class="s4dcfa8b2-801d-4280-b471-a27657f2243fP0"><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">        (a)  </span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">Funds consisting of primary security or other security held in trust must, for the purposes identified in §</span><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0"> </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:15"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">20:06:30:15</span></a><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">, be valued according to the valuation rules set forth in §</span><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0"> </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:17"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">20:06:30:17</span></a><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">, as applicable</span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">;</span></p><p dir="ltr" class="s4dcfa8b2-801d-4280-b471-a27657f2243fP0"><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">        (b)  </span><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">There may be no affiliate investment limitations with respect to any security held in the trust, if that security is not needed to satisfy the requirements of subdivision </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:16"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">20:06:30:16</span></a><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">(3)</span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">;</span></p><p dir="ltr" class="s4dcfa8b2-801d-4280-b471-a27657f2243fP0"><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">        (c)  </span><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">The reinsurance treaty must prohibit withdrawals or substitutions of trust assets that would leave the fair market value of the primary security within the trust, when aggregated with primary security outside the trust that is held by or on behalf of the ceding insurer in the manner required by subdivision </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:16"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">20:06:30:16</span></a><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">(3), below one hundred two percent of the level required by subdivision </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:16"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">20:06:30:16</span></a><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">(3), at the time of the withdrawal or substitution; and</span></p><p dir="ltr" class="s4dcfa8b2-801d-4280-b471-a27657f2243fP0"><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">        (d)  </span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">The determination of reserve credit in §</span><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0"> </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:31:13"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">20:06:31:13</span></a><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0"> must be determined according to the valuation rules set forth in §</span><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0"> </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:15"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">20:06:30:15</span></a><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">, as applicable; and</span></p><p dir="ltr" class="s4dcfa8b2-801d-4280-b471-a27657f2243fP0"><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">    (6)  </span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">The reinsurance treaty has been approved by the director</span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">.</span></p><p dir="ltr" class="s4dcfa8b2-801d-4280-b471-a27657f2243fP0"><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243f000003"> </span></p><p dir="ltr" class="s4dcfa8b2-801d-4280-b471-a27657f2243fP0"><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">    </span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000001">Source:</span><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0"> </span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">49 SDR 9, effective August 9, 2022</span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">.</span></p><p dir="ltr" class="s4dcfa8b2-801d-4280-b471-a27657f2243fP0"><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">    </span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000001">General Authority:</span><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0"> SDCL </span><a href="https://sdlegislature.gov/Statutes?Statute=58-14-1"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">58-14-1</span></a><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">, </span><a href="https://sdlegislature.gov/Statutes?Statute=58-26-45.1"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">58-26-45.1</span></a><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">.</span></p><p dir="ltr" class="s4dcfa8b2-801d-4280-b471-a27657f2243fP0"><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">    </span><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000001">Law Implemented:</span><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0"> SDCL </span><a href="https://sdlegislature.gov/Statutes?Statute=58-14-17"><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0-000002">58-14-17</span></a><span class="s4dcfa8b2-801d-4280-b471-a27657f2243fC0">.</span></p><p dir="ltr" class="s4dcfa8b2-801d-4280-b471-a27657f2243fP0"><span xml:space="preserve" class="s4dcfa8b2-801d-4280-b471-a27657f2243f000003"> </span></p></div></body></html>