20 : 06 : 30 : 17 . Requirements at inception date and on an on-going basis -- Remediation. The requirements of § 20:06:30:16 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 §§ 20:06:30:13 to 20:06:30:20 , 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 20:06:30:16 (3) or 20:06:30:16 (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 .

1. (1) The requirements of subdivision 20:06:30:16(3) or 20:06:30:16(4) were fully satisfied, as of the valuation date and as to the reinsurance treaty; or

2. (2) 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 20:06:30:16(3) or 20:06:30:16(4) to be fully satisfied as of the valuation date.

   A ceding company shall not maintain any deficiency under subdivision 20:06:30:16(3) or 20:06:30:16(4) for any period of time longer than is reasonably necessary to eliminate it.

Prior to the due date of each quarterly or annual statement, each life insurance company that has ceded reinsurance, within the scope of chapter 20:06:30, 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 20:06:30:16(3) or 20:06:30:16(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 20:06:30:16(3), unless:

Source: 49 SDR 9, effective August 9, 2022 .

General Authority: SDCL 58-14-17 .

Law Implemented: SDCL 58-14-17 .