A. General Description. The statement of
actuarial opinion submitted in accordance with this section shall consist of:
(1) A paragraph identifying the appointed
actuary and his or her qualifications (see Subsection (B)(1));
(2) A scope paragraph identifying the
subjects on which an opinion is to be expressed and describing 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, (see Subsection (B)(2)) and identifying the reserves and
related actuarial items covered by the opinion that have not been so
analyzed;
(3) A reliance paragraph
describing those areas, if any, where the appointed actuary has deferred to
other experts in developing data, procedures or assumptions, (e.g., anticipated
cash flows from currently owned assets, including variation in cash flows
according to economic scenarios (see Subsection (B(3)), supported by a
statement of each such expert in the form prescribed by Subsection (E);
and
(4) An opinion paragraph
expressing the appointed actuary's opinion with respect to the adequacy of the
supporting assets to mature the liabilities (see Subsection (B)(6)).
(5) One 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 an
inconsistency in the method of analysis or basis of asset allocation used at
the prior opinion date with that used for this opinion.
(c) If the appointed actuary must disclose
whether additional reserves as of the prior opinion date are released as of
this opinion date, and the extent of the release.
(d) If the appointed actuary chooses to add a
paragraph briefly describing the assumptions that form the basis for the
actuarial opinion.
B. Recommended Language
The following paragraphs are to be included in the statement
of actuarial opinion in accordance with this section. Language is that which in
typical circumstances should be included in a statement of actuarial opinion.
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. However, in any event the opinion
shall retain all pertinent aspects of the language provided in this
section.
(1) The opening paragraph
should generally indicate the
appointed actuary's relationship to the company
and his or her qualifications to sign the opinion. For a company actuary, the
opening paragraph of the
actuarial opinion should include a statement such as
follows:
"I, [name], am [title] of [insurance company name] and a
member of the American Academy of Actuaries. I was appointed by, or by the
authority of, the Board of Directors of said insurer to render this opinion as
stated in the letter to the Superintendent 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."
For a consulting actuary, the opening paragraph should
include a statement such as:
"I, [name], a member of the American Academy of Actuaries, am
associated with the firm of [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 Superintendent 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 should include a statement such as:
I have examined the actuarial assumptions and actuarial
methods used in determining reserves and related actuarial items hoed below, as
shown in the annual statement of the company, as prepared for filing with state
regulatory officials, as of December 31, 20[ ]. Tabulated below are 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) |
Exhibit 8 A. Life Insurance |
B. Annuities |
C. Supplementary Contracts Involving Life
Contingencies |
D. Accidental Death Benefit |
E. Disability - Active |
F. Disability - Disabled |
G. Miscellaneous |
Total (Exhibit 8 Item 1, Page(3) |
Exhibit 9 A. Active Life Reserve |
B. Claim Reserve |
Total (Exhibit 9 Item 2, Page(3) |
Exhibit 10 Premiums And Other Deposit Funds (Column 5,
Line 14) |
Guaranteed Interest Contracts (Column 2, Line 14)
|
Other (Column 6, Line 14) |
Supplemental Contracts and Annuities Certain (Column
3, Line 14) |
Dividend Accumulations or Refunds (Column 4, Line 14)
|
Total Exhibit 10 (Column 1, Line 14) |
Exhibit 11 Part 1 1 Life (Page 3, Line 4.1) |
2 Health ( Page 3, Line 4.2) |
Total Exhibit 11, Part 1 |
Separate Accounts (Page 3 of the Annual Statement of
the Separate Accounts, Lines 1,2,3.1, 3.2, 3.3) |
Total Reserves |
IMR (General Account, Page ____ Line ______) |
(Separate Accounts, Page ______ Line ____) |
AVR (Page ____ Line ______) |
(c) |
Net Deferred and Uncollected Premium |
Notes:
(a) The
additional actuarial reserves are the reserves established under Paragraphs (2)
of Section
5(E).
(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 of Asset Valuation
Reserve (AVR).
(3) If
the
appointed actuary has relied on other experts to develop certain portions
of the analysis, the reliance paragraph should include a statement such as:
"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 should be
accompanied by a statement by each of such experts of the form prescribed by
Section
6(E).
(4) If the
appointed actuary has
examined the underlying asset and liability records, the reliance paragraph
should include a statement such as:
"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."
(5) If
the
appointed actuary has not examined the underlying records, but has relied
upon data (e.g., listings and summaries of policies in force and/or asset
records prepared by the company, the reliance paragraph should include a
statement such as:
"In forming my opinion on [specify types of 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."
The section shall be accompanied by a statement by each
person relied upon of the form prescribed by Subsection (E).
(6) The opinion paragraph should 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 that
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 the Insurance Law and regulation of the state of [state of
domicile]; 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);
and
(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 the
assets, and the considerations anticipated to be received and retained under
the 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.
(At the discretion of the Superintendent, this language may be omitted for an
opinion filed on behalf of a company doing business only in this state and in
no other state.)
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.
or
The following material change(s) which occurred between the
date of the statement for which this opinion is applicable and the date of this
opinion should be considered in reviewing this opinion: (Describe the change or
changes.)
Note: Choose one of the above two paragraphs, whichever is
applicable.
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 all the assumptions used in the
analysis.
Signature of Appointed Actuary
Address of Appointed Actuary
Telephone Number of Appointed Actuary
Date?
E.
Reliance on Information Furnished by Other Persons
If the appointed actuary relies on the certification of
others on matters concerning the accuracy and completeness of any data
underlying the actuarial opinion or the appropriateness of any other
information by the appointed actuary in forming the actuarial opinion, the
actuarial opinion should so indicate the person the actuary is relying upon and
a precise identification of the items subject to reliance. In addition, the
persons on whom the appointed actuary relies shall provide certification that
precisely identifies the items on which the person is providing information and
a statement as to the accuracy, completeness or reasonableness, as applicable
of the items. This certification shall include the signature, title, company,
address and telephone number of the person rendering the certification, as well
as the date on which it is signed.
F. Alternate Option
(1) The Standard Valuation Law gives the
Superintendent broad authority to accept the valuation of a foreign insurer
when that valuation meets the requirements applicable to a
company domiciled in
this state in the aggregate. As an alternative to the requirements of
Subsection B(6)(c), the Superintendent may make one or more of the following
additional approaches available to the opining actuary:
(a) 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
Superintendent 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.
(b) 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 law 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 Superintendent 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. It shall remain valid until rescinded or modified by the
Superintendent. The rescission or modifications shall be issued no later than
March 31 of the year they are 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 Superintendent has not denied the
request by that date.
(c) 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."
(i) If the Superintendent chooses to allow
this alternative, a formal written list of products (to be added to the table
in Item (ii) below) 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.
(ii) 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 |
(iii) The information listed shall include
all products identified by either the state of filing or any other states
subscribing to this alternative.
(iv) 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.
(v) The comparison provided by the company is
to be kept confidential to the same extent and under the same conditions as the
actuarial memorandum.
(2) Notwithstanding the above, the
Superintendent 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 Superintendent after
consultation with the company, the Superintendent may contract an independent
actuary at the company's expense to prepare and file the opinion.