# COMAR Title 31 — Maryland Insurance Administration

## Subtitle 05 — Assets, Liabilities, Reserves, and Investments of Insurers

### Chapter 07 — Life and Health Reinsurance Agreements

#### Regulation .06 Determining Whether Significant Risk Exists.

*COMAR 31.05.07.06*

A. Risk Table.

  (1) The table contained in this section identifies for a representative sampling of products or types of business the risks that are considered to be significant.

  (2) For products that are not included in the table, the risks determined to be significant shall be consistent with the table.

  (3) Table.

KEY: + = Significant 	0 = Insignificant

B. Classes of Business for Which Separation of Assets Not Required. Notwithstanding Regulation .05A(7) of this chapter, a ceding insurer may hold assets supporting reserves without segregating the assets for the following classes of business:

  (1) Health insurance—long-term care or long-term disability;

  (2) Traditional non-par permanent;

  (3) Traditional par permanent;

  (4) Adjustable premium permanent;

  (5) Indeterminate premium permanent;

  (6) Universal life fixed premium with no dump-in premiums allowed; and

  (7) Any other class of business that does not have a significant credit quality risk, reinvestment risk, or disintermediation risk.

C. Formula for Determining Reserve Interest Rate Adjustment.

  (1) The associated formula for determining the reserve interest rate adjustment shall be a formula that:

    (a) Reflects the ceding insurer's investment earnings; and

    (b) Incorporates all realized and unrealized gains and losses reflected in the statutory statement.

  (2) The following is an acceptable formula:

  (3) In the formula under §C(2) of this regulation:

    (a) I is the net investment income;

    (b) CG is capital gains less capital losses;

    (c) X is the current year cash and investment assets plus investment income due and accrued less borrowed money; and

    (d) Y is the same as X, but for the prior year.