Authority: IC
27-1-12.8-21
Affected: IC
27-1-12.8-21
Sec. 8.
(a) The
statement of actuarial opinion based on an asset adequacy analysis required by
IC
27-1-12-10.1
[IC 27-1-1210.1 was repealed by
P.L.
276-2013,
SECTION
6, effective July 1, 2013.] shall
consist of the following:
(1) An opening
paragraph.
(2) A scope
paragraph.
(3) A reliance
paragraph.
(4) An opinion
paragraph.
(5) One (1) or more
additional paragraphs will be needed in individual company cases as follows:
(A) If the appointed actuary considers it
necessary to state a qualification of his or her opinion.
(B) If the appointed actuary must disclose
the method or aggregation for reserves of different products or lines of
business for asset adequacy analysis.
(C) If the appointed actuary must disclose
reliance upon any portion of the assets supporting the Asset Valuation Reserve
(AVR), Interest Maintenance Reserve (IMR), or other mandatory or voluntary
statement of reserves for asset adequacy analysis.
(D) If the appointed actuary must disclose an
inconsistency in the method of analysis or basis of asset allocation used at
the prior opinion date with that used for this opinion.
(E) If the appointed actuary must disclose
whether additional reserves of the prior opinion date are released as of this
opinion date, and the extent of the release.
(F) If the appointed actuary chooses to add a
paragraph briefly describing the assumptions that form the basis for the
actuarial opinion.
(b) A statement of actuarial opinion issued
in accordance with this section must contain all pertinent aspects of the
language provided in this section. The language may be modified as needed to
meet the circumstances of a particular case, but the appointed actuary should
use language that clearly expresses his or her professional judgment. The
following language is that which in typical circumstances would be included in
a statement of actuarial opinion in accordance with this section:
(1) The opening paragraph shall include an
identification of the appointed actuary and a description of the appointed
actuary's relationship to the company and his or her qualifications to sign the
opinion. The opening paragraph of the actuarial opinion shall read as follows:
(A) For a company actuary, "I, [name], am
[title] of [company] and a member of the American Academy of Actuaries. I was
appointed by, or by the authority of, the Board of Directors of said company to
render this opinion as stated in the letter to the Commissioner dated [insert
date]. I meet the Academy qualification standards for rendering the opinion and
am familiar with the valuation requirements applicable to life and health
insurance companies.".
(B) For a
consulting actuary, "I, [name and title of actuary], am a member of the
American Academy of Actuaries and am associated with the firm of [insert name
of consulting firm]. I have been appointed by, or by the authority of, the
Board of Directors of [name of company] to render this opinion as stated in the
letter to the Commissioner dated [insert date]. I meet the Academy
qualification standards for rendering the opinion and am familiar with the
valuation requirements applicable to life and health insurance
companies.".
(2) The
scope paragraph must identify the subjects on which an opinion is to be
expressed and describe the scope of the appointed actuary's work, including a
tabulation delineating the reserves and related actuarial items that have been
analyzed for asset adequacy and the method of analysis, and identify the
reserves and related actuarial items covered by the opinion that have not been
so analyzed. The scope paragraph shall include a statement such as, "I have
examined the actuarial assumptions and actuarial methods used in determining
reserves and related actuarial items listed below, as shown in the annual
statement of the company, as prepared for filing with state regulatory
officials, as of December 31, [ ]. The following tabulation contains those
reserves and related actuarial items which have been subjected to asset
adequacy analysis":
|
Asset Adequacy Tested Amounts
Reserves and Liabilities
|
| Statement Item |
Formula Reserves
(1) |
Additional Actuarial Reserves (a)(2) |
Analysis Method
(b) |
Other Amount (3) |
Total Amount (1) + (2) + (3) (4) |
| Aggregate Reserves for Life Policies and
Contracts |
|
|
|
|
|
| A. Life
Insurance |
|
|
|
|
|
| B.
Annuities |
|
|
|
|
|
| C. Supplementary Contracts Involving Life
Contingencies |
|
|
|
|
|
| D. Accidental Death
Benefit |
|
|
|
|
|
| E.
Disability-Active |
|
|
|
|
|
| F.
Disability-Disabled |
|
|
|
|
|
| G.
Miscellaneous |
|
|
|
|
|
| Total (Page __, Line
__) |
|
|
|
|
|
| Aggregate Reserves for Accident and Health
Contracts |
|
|
|
|
|
| A. Active Life
Reserve |
|
|
|
|
|
| B. Claim
Reserve |
|
|
|
|
|
| Total (Page __, Line
__) |
|
|
|
|
|
| Deposit Type
Contracts |
|
|
|
|
|
| 1. Premiums and Other Deposit
Funds |
|
|
|
|
|
| 1.1. Policyholder Premiums (Page __, Line
__) |
|
|
|
|
|
| 1.2. Guaranteed Interest Contracts (Page __, Line
__) |
|
|
|
|
|
| 1.3. Other Contract Deposit Funds (Page __, Line
__) |
|
|
|
|
|
| 2. Supplementary Contracts Not Involving Life
Contingencies (Page __, Line
__) |
|
|
|
|
|
| 3. Dividend and Coupon Accumulations (Page __, Line
__) |
|
|
|
|
|
|
Total |
|
|
|
|
|
| Policy and Contract Claims for Life and Accident and
Health Policies and Contracts, Part
1 |
|
|
|
|
|
| 1. Life (Page __, Line
__) |
|
|
|
|
|
| 2. Health (Page __, Line
__) |
|
|
|
|
|
| Total (Page __, Line
__) |
|
|
|
|
|
| Separate Accounts (Page __, Line
__) |
|
|
|
|
|
| TOTAL
RESERVES |
|
|
|
|
|
| IMR (Page __ Line __) |
|
| AVR (Page __ Line __) |
(c) |
Notes:
(a) The
additional actuarial reserves are the reserves established under section
5(e)(2) of this rule.
(b) The
appointed actuary should indicate the method of analysis, determined in
accordance with the standards for asset adequacy analysis referred to in
section 5(d) of this rule, by means of symbols that should be defined in
footnotes to the table.
(c)
Allocated amount.
(3)
The reliance paragraph shall describe those areas, if any, where the appointed
actuary has deferred to other experts in developing data, procedures, or
assumptions, for example, anticipated cash flows according to economic
scenarios. The reliance paragraph shall include the following:
(A) If the appointed actuary has relied on
other experts to develop certain portions of the analysis, the reliance
paragraph shall include the statement:
"I have relied on [name], [title] for [e.g., 'anticipated
cash flows from currently owned assets, including variations in cash flows
according to economic scenarios' or 'certain critical aspects of the analysis
performed in conjunction with forming my opinion'] as certified in the attached
statement. I have reviewed the information relied upon for
reasonableness.".
A statement of reliance on other experts shall be accompanied
by a statement by each of such experts in the form prescribed by subsection
(e).
(B) If the appointed
actuary has examined the underlying asset and liability records, the reliance
paragraph shall also include the statement, "My examination included such
review of the actuarial assumptions and actuarial methods and of the underlying
basic asset and liability records and such tests of the actuarial calculations
as I considered necessary. I also reconciled the underlying basic asset and
liability records to [exhibits and schedules listed as applicable] of the
company's current annual statement.".
(C) If the appointed actuary has not examined
the underlying records, but has relied upon data (for example, listings and
summaries of policies in force and/or asset records) prepared by the company,
the reliance paragraph shall include the statement,
"In forming my opinion on [specify reserves] I relied upon
data prepared by [name and title of company officer certifying in-force records
or other data] as certified in the attached statements. I evaluated that data
for reasonableness and consistency. I also reconciled that data to [exhibits
and schedules to be listed as applicable] of the company's current annual
statement. In other respects, my examination included review of the actuarial
assumptions and actuarial methods used and tests of the calculations I
considered necessary.".
A statement of reliance on other experts shall be accompanied
by a statement by each of such experts in the form prescribed by subsection
(e).
(4) The
opinion paragraph shall express the appointed actuary's opinion with respect to
the adequacy of the supporting assets to mature the liabilities. The opinion
paragraph shall include a statement, such as, "In my opinion the reserves and
related actuarial values concerning the statement items identified above:
(A) are computed in accordance with presently
accepted actuarial standards consistently applied and are fairly stated, in
accordance with sound actuarial principles;
(B) are based on actuarial assumptions which
produce reserves at least as great as those called for in any contract
provision as to reserve basis and method and are in accordance with all other
contract provisions;
(C) meet the
requirements of [state of domicile] insurance law and regulations and are at
least as great as the minimum aggregate amounts required by the state in which
this statement is filed;
(D) are
computed on the basis of assumptions consistent with those used in computing
the corresponding items in the annual statement of the preceding year end (with
any exceptions noted below); or
(E)
include provision for all actuarial reserves and related statement items which
ought to be established.
The reserves and related items, when considered in light of
the assets held by the company with respect to such reserves and related
actuarial items, including, but not limited to, the investment earnings on such
assets, and the considerations anticipated to be received and retained under
such policies and contracts, make adequate provision, according to presently
accepted actuarial standards of practice, for the anticipated cash flows
required by the contractual obligations and related expenses of the
company.
The actuarial methods, considerations, and analyses used in
forming my opinion conform to the appropriate Standards of Practice as
Promulgated by the Actuarial Standards Board, which standards form the basis of
this statement of opinion. This opinion is updated annually as required by
statute. To the best of my knowledge, there have been no material changes from
the applicable date of the annual statement to the date of the rendering of
this opinion which should be considered in reviewing this opinion.
The impact of unanticipated events subsequent to the date of
this opinion is beyond the scope of this opinion. The analysis of asset
adequacy portion of this opinion should be viewed recognizing that the
company's future experience may not follow the assumptions used in the
analysis.
____________________________________________________________________________
Signature of Appointed Actuary
____________________________________________________________________________
Address of Appointed Actuary
____________________________________________________________________________
Telephone Number of Appointed Actuary".
(c) The adoption for
new issues or new claims or other new liabilities of an actuarial assumption,
which differs from a corresponding assumption used for prior new issues or new
claims or other new liabilities, is not a change in actuarial assumptions
within the meaning of this section.
(d) If the appointed actuary is unable to
form an opinion, then he or she shall refuse to issue a statement of actuarial
opinion. If the appointed actuary's opinion is adverse or qualified, he or she
shall issue an adverse or qualified actuarial opinion explicitly stating the
reason or reasons for such opinion. This statement should follow the scope
paragraph and precede the opinion paragraph.
(e) If the appointed actuary does not express
an opinion as to the accuracy and completeness of the listings and summaries of
policies in force and/or asset oriented information, there shall be attached to
the opinion a statement similar to either of the following by a company officer
or the accounting firm who prepared such underlying data:
(1) "I [name of officer], [title], of [name
and address of company or accounting firm], hereby affirm that the listings and
summaries of policies and contracts in force as of December 31, [ ], prepared
for and submitted to [name of appointed actuary] were prepared under my
direction and, to the best of my knowledge and belief, are substantially
accurate and complete.
____________________________________________________________________________
Signature of the Officer of the Company or Accounting
Firm
____________________________________________________________________________
Address of the Officer of the Company or Accounting
Firm
____________________________________________________________________________
Telephone Number of the Officer of the Company or Accounting
Firm".
(2) "I, [name of
officer], [title] of [name and address of company, accounting firm, or security
analyst], hereby affirm that the listings, summaries, and analyses relating to
data prepared for and submitted to [name of appointed actuary] in support of
the asset oriented aspects of the opinion were prepared under my direction and,
to the best of my knowledge and belief, are substantially accurate and
complete.
____________________________________________________________________________
Signature of the Officer of the Company, the Accounting Firm,
or the Security Analyst
____________________________________________________________________________
Address of the Officer of the Company, the Accounting Firm,
or the Security Analyst
____________________________________________________________________________
Telephone Number of the Officer of the Company, the
Accounting Firm, or the Security Analyst".
(f) The commissioner may accept the valuation
of a foreign insurer when that valuation meets the requirement applicable to a
company domiciled in this state in the aggregate. As an alternative to the
requirements of subsection (b)(4)(C), the commissioner may make one (1) or more
of the following additional approaches available to the opining actuary:
(1) A statement that the reserves "meet the
requirements of the insurance laws and regulations of the State of [state of
domicile] and the formal written standards and conditions of this state for
filing an opinion based on the law of the state of domicile". If the
commissioner chooses to allow this alternative, a formal written list of
standards and conditions shall be made available. If a company chooses to use
this alternative, the standards and conditions in effect on July 1 of a
calendar year shall apply to statements for that calendar year, and they shall
remain in effect until they are revised or revoked. If no list is available,
this alternative is not available.
(2) A statement that the reserves "meet the
requirements of the insurance laws and regulations of the State of [state of
domicile] and I have verified that the company's request to file an opinion
based on the laws of the state of domicile has been approved and that any
conditions required by the commissioner for approval of that request have been
met". If the commissioner chooses to allow this alternative, a formal written
statement of such allowance shall be issued no later than March 31 of the year
it is first effective. Subsequent to that statement being issued, if a company
chooses to use this alternative, the company shall file a request to do so,
along with justification for its use, no later than April 30 of the year of the
opinion to be filed. The request shall be deemed approved on October 1 of that
year if the commissioner has not denied the request by that date.
(3) A statement that the reserves "meet the
requirements of the insurance laws and regulations of the State of [state of
domicile] and I have submitted the required comparison as specified by this
state", including the following:
(A) If the
commissioner chooses to allow this alternative, a formal written list of
products (to be added to the table in clause (B)) for which the required
comparison shall be provided will be published. If a company chooses to use
this alternative, the list in effect on July 1 of a calendar year shall apply
to statements for that calendar year, and it shall remain in effect until it is
revised or revoked. If no list is available, this alternative is not
available.
(B) If a company desires
to use this alternative, the appointed actuary shall provide a comparison of
the gross nationwide reserves held to the gross nationwide reserves that would
be held under NAIC codification standards. Gross nationwide reserves are the
total reserves calculated for the total company in force business directly sold
and assumed, indifferent to the state in which the risk resides, without
reduction for reinsurance ceded. The information provided shall be at least:
| (1) Product Type |
(2) Death Benefit or
Account Value |
(3) Reserves Held |
(4) Codification
Reserves |
(5) Codification Standard |
|
|
|
|
|
|
|
|
|
|
(C)
The information listed shall include all products identified by either the
state of filing or any other states subscribing to this alternative.
(D) If there is no codification standard for
the type of product or risk in force or if the codification standard does not
directly address the type of product or risk in force, the appointed actuary
shall provide detailed disclosure of the specific method and assumptions used
in determining the reserves held.
(E) The comparison provided by the company is
to be kept confidential to the same extent and under the same conditions as the
actuarial memorandum.
Notwithstanding this subsection, the commissioner may reject
an opinion based on the laws and regulations of the state of domicile and
require an opinion based on the laws of this state. If a company is unable to
provide the opinion within sixty (60) days of the request or such other period
of time determined by the commissioner after consultation with the company, the
commissioner may contract an independent actuary at the company's expense to
prepare and file the opinion.
