210 Neb. Admin. Code, ch. 47, § 005

Current through September 17, 2024

Section 210-47-005 - Reserves

A risk management pool shall maintain the same reserves as required of a Nebraska domestic insurance company offering the same coverage as the group insurance offered by a pool to its members, except that a pool may discount loss reserves if the pool's annual statement is accompanied by a certified statement of opinion by a qualified actuary which accurately reflects the effect of discounting of claim or loss reserves on the pool's financial condition. In the event a pool discounts its claim or loss reserves, the certified actuarial opinion defined in this section shall include the following:

005.01 An assessment of the adequacy of the undiscounted reserves;

005.02 An assessment of the appropriateness of the assumed interest rate, considering at least the following:

005.02A Valuation basis of bonds;

005.02B Yield on assets; and

005.02C The match of asset maturities to corresponding liabilities.

005.03 An assessment of the appropriateness of the liabilities to surplus ratio of the company;

005.04 An assessment of the appropriateness of the anticipated payment schedule, considering at least the following:

005.04A The pool's own paid claim or loss development history to the extent relevant and credible;

005.04B To the extent that such history is not relevant or credible, the experience of other insurers after allowance for any differences in form of coverage, nature of risks insured, limits written or retention levels after excess stop-loss reinsurance or reinsurance; and

005.04C Timing of excess stop-loss reinsurance or reinsurance recoverables and, if applicable, any additional excess stop-loss reinsurance or reinsurance premiums that may become due.

005.05 A description of the formulas used for discounting, including any provision for adverse deviation;

005.06 An assessment of the appropriateness of the claim or loss reserve to surplus ratio of the pool;

005.07 For a pool described in Neb.Rev.Stat. § 44-4304(1), an evaluation of any additional reinsurance premiums which may be due if loss development covered under retrospectively rated reinsurance proves adverse; and

005.08 Any other factors needed to accurately reflect the effect of discounting on the financial condition of the pool or as required by the director.

210 Neb. Admin. Code, ch. 47, § 005

Amended effective 11/19/2022