In this chapter, the following terms have the meanings indicated. Terms Defined. “Accredited reinsurer” means an unauthorized insurer who is accepted by the Commissioner to act as a reinsurer in the State under Insurance Article, §5-906, Annotated Code of Maryland. “Actuarial method”, as used in Regulation .29 of this chapter, means the methodology used to determine the required level of primary security as described in Regulation .29C of this chapter. “Beneficiary” means: The entity for whose sole benefit the trust has been established; or Any successor of the beneficiary by operation of law or, if a court of law appoints a successor in interest to the named beneficiary, then the named beneficiary is the court appointed domiciliary receiver, including conservator, rehabilitator, or liquidator. “Covered policies”, subject to the exemptions in Regulation .29B of this chapter, means those policies, other than grandfathered policies, of the following policy types: Life insurance policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits, except for flexible premium universal life insurance policies; or Flexible premium universal life insurance policies with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period. “Grandfathered policies” means policies of the types described in §B(4) of this regulation that were: Issued prior to January 1, 2015; and Ceded, as of December 31, 2014, as part of a reinsurance treaty that would not have met one of the exemptions set forth in Regulation .29B of this chapter had that section been in effect. Grantor. “Grantor” means the entity that has established a trust for the sole benefit of the beneficiary. When established in conjunction with a reinsurance contract, the grantor is the unauthorized unaccredited assuming insurer. “Liabilities”, as used in Regulations .08—.11 of this chapter, means the assuming insurer's gross liabilities attributable to reinsurance ceded by U.S. domiciled insurers that are not otherwise secured by acceptable means, and shall include: For business ceded by domestic insurers authorized to write accident and health, and property and casualty insurance: Losses and loss adjustment expenses paid by the ceding insurer, recoverable from the assuming insurer; Reserves for losses reported and outstanding; Reserves for losses incurred but not reported; Reserves for loss adjustment expenses; and Unearned premiums; and For business ceded by domestic insurers authorized to write life, health, and annuity insurance: Aggregate reserves for life policies and contracts net of policy loans and net due and deferred premiums; Aggregate reserves for accident and health policies; Deposit funds and other liabilities without life or disability contingencies; and Liabilities for policy and contract claims. “Mortgage-related security”, as used in Regulation .10 of this chapter, means an obligation that is rated AA or higher (or the equivalent) by a nationally recognized statistical rating organization approved by the Securities Valuation Office and that either: Represents ownership of one or more promissory notes or certificates of interest or participation in the notes (including any rights designed to assure servicing of, or the receipt or timeliness of receipt by the holders of the notes, certificates, or participation of amounts payable under, the notes, certificates or participation), that: Are directly secured by a first lien on a single parcel of real estate, including stock allocated to a dwelling unit in a residential cooperative housing corporation, upon which is located a dwelling or mixed residential and commercial structure, or on a residential manufactured home as defined in 42 U.S.C. §5402(6), whether the manufactured home is considered real or personal property under the laws of the state in which it is located; and Were originated by a savings and loan association, savings bank, commercial bank, credit union, insurance company, or similar institution that is supervised and examined by a federal or state housing authority, or by a mortgagee approved by the Secretary of Housing and Urban Development pursuant to 12 U.S.C. §§1709 and 1715-b, or, where the notes involve a lien on the manufactured home, by an institution or by a financial institution approved for insurance by the Secretary of Housing and Urban Development pursuant to 12 U.S.C. §1703; or Is secured by one or more promissory notes or certificates of deposit or participations in the notes (with or without recourse to the insurer of the notes) and, by its terms, provides for payments of principal in relation to payments, or reasonable projections of payments, or notes meeting the requirements of §B(5)(a)(i) and (ii) of this regulation. “NAIC” means National Association of Insurance Commissioners. “Non-covered policies”, as used in Regulation .29 of this chapter, means any policy that does not meet the definition of covered policies, including grandfathered policies. “Obligations”, as used in Regulation .17 of this chapter, means: Reinsured losses and loss adjustment expenses paid by the ceding insurer, but not recovered from the assuming insurer; Reserves for reinsured losses reported and outstanding; Reserves for reinsured losses incurred but not reported; and Reserves for allocated reinsured loss expenses and unearned premiums. “Other security”, as used in Regulation .29 of this chapter, means any security acceptable to the Commissioner other than security meeting the definition of primary security. “Primary security”, as used in Regulation .29 of this chapter, means the following forms of security: Cash; Securities listed by the Securities Valuation Office meeting the requirements of Insurance Article, §5-914(c)(2), Annotated Code of Maryland, 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 For security held in connection with funds-withheld and modified coinsurance reinsurance treaties: Commercial loans in good standing of CM3 quality and higher; Policy loans; and 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. “Promissory note”, as used in Regulation .10 of this chapter, when used in connection with a manufactured home, also includes a loan, advance, or credit sale as evidenced by a retail installment sales contract or other instrument. “Qualified jurisdiction” has the meaning set forth in Insurance Article, §5-901(d), Annotated Code of Maryland. “Qualified U.S. financial institution” means: For purposes of those provisions of Regulation .14 of this chapter specifying those institutions that are eligible to act as a fiduciary of a trust, an institution that: Is organized, or in the case of a U.S. branch or agency office of a foreign banking organization, licensed, under the laws of the United States or any state and has been granted authority to operate with fiduciary powers; and Is regulated, supervised, and examined by federal or state authorities having regulatory authority over banks and trust companies; or For purposes of those provisions of Regulation .14 of this chapter specifying those institutions that are eligible to issue letters of credit, an institution that: Is organized or, in the case of a U.S. office of a foreign banking organization, licensed, under the laws of the United States or any state; Is regulated, supervised, and examined by U.S. federal or state authorities having regulatory authority over banks and trust companies; and Has been determined by either the Commissioner or the Securities Valuation Office of the NAIC to meet the standards of financial condition and standing as are considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the Commissioner. “Reinsurance intermediary” has the meaning set forth in Insurance Article, §8-501(e), Annotated Code of Maryland. “Required level of primary security”, as used in Regulation .29 of this chapter, means the dollar amount determined by applying the actuarial method to the risks ceded with respect to covered policies, but not more than the total reserve ceded. “Securities Valuation Office” refers to the Securities Valuation Office of the NAIC. “Valuation manual”, as used in Regulation .29 of this chapter, means the valuation manual adopted by the NAIC as described in Insurance Article, §5-313(b), Annotated Code of Maryland, with all amendments adopted by the NAIC that are effective for the financial statement date on which credit for reinsurance is claimed. “VM-20” means “Requirements for Principle-Based Reserves for Life Products,” including all relevant definitions from the Valuation Manual.