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
Paragraph (1) of Subsection B of this section);
(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 Paragraph (2) of Subsection B of this section) 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
Paragraph (3) of Subsection B of this section), supported by a statement of
each such expert in the form prescribed by Subsection E of this section;
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 Paragraph (6) of Subsection B
of this section).
(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: "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
listed 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." (See
13.2.6.11 NMAC.)
(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 the experts in the form prescribed by
Subsection E of this section.
(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 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 in the form prescribed
by Subsection E of this section.
(6) The opinion paragraph should include a
statement such as:
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"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 changes 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.) 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"
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C.
Assumptions for New Issues.
The adoption for new issues or new claims or other new liabilities of an
actuarial assumption that 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.
Adverse Opinions. 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, then he or she shall issue an adverse or qualified
actuarial opinion explicitly stating the reasons for the opinion. This
statement should follow the scope paragraph and precede the opinion
paragraph.
E.
Reliance on
Information Furnished by Other Persons. If the appointed actuary relies
on the certification of others on matters concerning the accuracy or
completeness of any data underlying the actuarial opinion, or the
appropriateness of any other information used by the appointed actuary in
forming the actuarial opinion, the actuarial opinion should so indicate the
persons 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 a 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) Section
59A-8-6 NMSA 1978 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
Subparagraph (c) of Paragraph (6) of Subsection B of this section, 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 superintendent 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 national association of insurance commissioners 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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(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.
