<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.s69dc7bab-78dc-4bcd-902f-012862f5d2ebP0 { 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.s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0 { color: black; background: white; font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000000 { color: #0000FF; background: white; font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000001 { color: black; background: white; font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000002 { color: #0000FF; background: white; font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s69dc7bab-78dc-4bcd-902f-012862f5d2eb000003 { 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="s69dc7bab-78dc-4bcd-902f-012862f5d2ebP0"><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">    </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:17"><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000000">20</span><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000000">:</span><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000000">06</span><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000000">:</span><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000000">30</span><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000000">:</span><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000000">17</span></a><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000001">.  Requirements at inception date and on an on-going basis -- Remediation.</span><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0"> </span><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">The requirements of §</span><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0"> </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:16"><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000002">20:06:30:16</span></a><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0"> must be satisfied as of the date that risks under a covered policy are ceded, if that date is on or after the effective date of §§</span><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0"> </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:13"><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000002">20:06:30:13</span></a><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0"> to </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:20"><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000002">20:06:30:20</span></a><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">, inclusive, and on an ongoing basis thereafter. A ceding insurer may not take or consent to any action that would result in a deficiency under subdivision </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:16"><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000002">20:06:30:16</span></a><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">(3) or </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:16"><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000002">20:06:30:16</span></a><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">(4), with respect to any reinsurance treaty under which a covered policy has been ceded, if a ceding insurer becomes aware that a deficiency exists, it shall use its best efforts to arrange for the deficiency to be eliminated as expeditiously as possible</span><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">.</span></p><p dir="ltr" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebP0"><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2eb000003"> </span></p><p dir="ltr" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebP0"><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">    </span><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">Prior to the due date of each quarterly or annual statement, each life insurance company that has ceded reinsurance, within the scope of chapter </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30"><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000002">20:06:30</span></a><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">, shall perform an analysis, on a treaty-by-treaty basis, to determine, as to each reinsurance treaty under which a covered policy has been ceded, whether, as of the end of the immediately preceding calendar quarter, the valuation date, the requirements of subdivisions </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30"><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000002">20:06:30</span></a><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">:16(3) or </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30"><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000002">20:06:30</span></a><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">:16(4) are satisfied. The ceding insurer shall establish a liability equal to the excess of the credit for reinsurance taken over the amount of primary security actually held pursuant to subdivision </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30"><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000002">20:06:30</span></a><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">:16(3), unless</span><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">:</span></p><p dir="ltr" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebP0"><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2eb000003"> </span></p><p dir="ltr" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebP0"><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">    (1)  </span><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">The requirements of subdivision </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:16"><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000002">20:06:30:16</span></a><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">(3) or </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:16"><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000002">20:06:30:16</span></a><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">(4) were fully satisfied, as of the valuation date and as to the reinsurance treaty; or</span></p><p dir="ltr" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebP0"><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">    (2)  </span><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">Any deficiency was 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, in such amount and form as would have caused the requirements of subdivision </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:16"><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000002">20:06:30:16</span></a><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">(3) or </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:16"><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000002">20:06:30:16</span></a><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">(4) to be fully satisfied as of the valuation date.</span></p><p dir="ltr" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebP0"><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2eb000003"> </span></p><p dir="ltr" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebP0"><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">    </span><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">A ceding company shall not maintain any deficiency under subdivision </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:16"><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000002">20:06:30:16</span></a><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">(3) or </span><a href="https://sdlegislature.gov/Rules?Rule=20:06:30:16"><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000002">20:06:30:16</span></a><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">(4) for any period of time longer than is reasonably necessary to eliminate it</span><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">.</span></p><p dir="ltr" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebP0"><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2eb000003"> </span></p><p dir="ltr" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebP0"><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">    </span><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000001">Source:</span><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0"> </span><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">49 SDR 9, effective August 9, 2022</span><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">.</span></p><p dir="ltr" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebP0"><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">    </span><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000001">General Authority:</span><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0"> SDCL </span><a href="https://sdlegislature.gov/Statutes?Statute=58-14-17"><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000002">58-14-17</span></a><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">.</span></p><p dir="ltr" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebP0"><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">    </span><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000001">Law Implemented:</span><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0"> SDCL </span><a href="https://sdlegislature.gov/Statutes?Statute=58-14-17"><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0-000002">58-14-17</span></a><span class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebC0">.</span></p><p dir="ltr" class="s69dc7bab-78dc-4bcd-902f-012862f5d2ebP0"><span xml:space="preserve" class="s69dc7bab-78dc-4bcd-902f-012862f5d2eb000003"> </span></p></div></body></html>