(1)
General
Description. The statement of actuarial opinion submitted in
accordance with
211 CMR
132.08 shall
consist of:
(a) A paragraph identifying the
appointed actuary and his or her qualifications (
see211 CMR
132.06(2)(a) );
(b) 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, (
see211 CMR
132.06(2)(b) ) and identifying the reserves and related actuarial items covered
by the opinion which have not been so analyzed;
(c) 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 (
see211 CMR
132.06(2)(c) ),
supported by a statement of each such expert in the form prescribed by 211 CMR
132.06(5); and
(d) An opinion
paragraph expressing the appointed actuary's opinion with respect to the
adequacy of the supporting assets to mature the liabilities
(
see211 CMR
132.06(2)(f) ).
(e) One or more additional paragraphs will be
needed in individual company cases as follows:
1. If the appointed actuary considers it
necessary to state a qualification of his or her opinion;
2. 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.
3. 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.
4. If the appointed actuary chooses to add a
paragraph briefly describing the assumptions that form the basis for the
actuarial opinion.
(2)
Recommended
Language. 211 CMR
132.06(2)(a) and (b) are to be included in the
statement of actuarial opinion in accordance with 211 CMR
132.06. 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 211 CMR
132.06(2).
(a) 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:
"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 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."
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 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."
(b)
The scope paragraph should include a statement such as the following:
"I have examined the actuarial assumptions and actuarial
methods used in determining reserves and related actuarial items, as shown in
the annual statement of the company, as prepared for filing with state
regulatory officials, as of December 31, 20[ ]. Tabulated are those reserves
and related actuarial items which have been subjected to asset adequacy
analysis."
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Asset Adequacy Tested Amounts Reserves and
Liabilities
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Statement Item
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Formula Reserves (1)
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Additional Actuarial
Reserves1 (2)
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Analysis Method
2
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Other Amount (3)
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Total
Amount
(1)+(2)+(3)
(4)
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Exhibit 8
A Life Insurance
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B Annuities
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C Supplementary
Contracts Involving Life Contingencies
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D Accidental Death Benefit
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E Disability - Active
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F Disability - Disabled
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G Miscellaneous
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Total (Exhibit 8 Item 1, Page 3)
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Exhibit 9
A Active Life Reserve
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B Claim Reserve
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Total (Exhibit 9 Item 2, Page 3)
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Exhibit 10
Premiums and Other Deposit Funds (Column 5, Line
14)
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Guaranteed Interest Contracts (Column 2, Line
14)
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Other
(Column 6, Line 14)
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Supplemental
Contracts and Annuities Certain (Column 3, Line
14)
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Dividend
Accumulations and
Refunds
(Column 4, Line 14)
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Total Exhibit 10
(Column 1, Line 14)
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Asset Adequacy Tested Amounts Reserves and
Liabilities (continued)
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Statement Item
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Formula Reserves (1)
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Additional Actuarial
Reserves1 (2)
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Analysis Method
2
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Other Amount (3)
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Total Amount (1)+(2)+(3) (4)
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Exhibit 11 Part 1
1 Life (Page 3, Line 4.1)
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2 Health (Page 3, Line 4.2)
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Total Exhibit 11, Part 1
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Separate Accounts (Page 3, of the Annual Statement of
the Separate
Accounts Lines 1, 2, 3.1,
, 3.3)
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TOTAL RESERVES
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Notes:
1 The additional actuarial reserves
are the reserves established under
211 CMR
132.05(5)(b).
2 The appointed actuary should
indicate the method of analysis, determined in accordance with the standards
for asset adequacy analysis referred to in
211 CMR
132.05(4), by means of
symbols that should be defined in footnotes to the table.
3 Allocated amount of Asset
Valuation Reserve (AVR).
(c) 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 in the form prescribed by 211 CMR
132.06(5).
(d) 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."
(e) 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 date] 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 ."
211 CMR 132.06 shall be accompanied by a statement by each
person relied upon of the form prescribed by 211 CMR 132.06(5).
(f) The opinion paragraph should
include a statement such as:
"In my opinion the reserves and related actuarial values
concerning the statement items":
1.
Are computed in accordance with presently accepted actuarial standards
consistently applied and are fairly stated, in accordance with sound actuarial
principles;
2. 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;
3. Meet the requirements of the insurance
laws and regulations of the Commonwealth of Massachusetts and are at least as
great as the minimum aggregate amounts required by the state in which this
statement is filed;
4. 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); and
5. 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 Commissioner, this language may be omitted for an opinion filed on
behalf of a company doing business only in Massachusetts 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
(6)
Alternate
Option.
(a) M.G.L. c. 175,
ยง 9B gives the Commissioner 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 211 CMR
132.06(2)(f)3., the Commissioner may make one 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
1st 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 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 Commissioner chooses to allow this alternative, a formal written
statement of such allowance shall be issued no later than March
31st of the year it is first effective. It shall
remain valid until rescinded or modified by the Commissioner. The rescission or
modification shall be issued no later than March
31st 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 30th
of the year of the opinion to be filed. The request shall be deemed approved on
October 1st 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."
a. If the Commissioner chooses to allow this
alternative, a formal written list of products (to be added to the Table in 211
CMR
132.06(6)(a)3.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
st 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:
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(1)
Product Type
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(2)
Death Benefit or
Account Value
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(3)
Reserves Held
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(4)
Codification
Reserves
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(5)
Codification
Standard
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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.
(b) 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 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.
