(1) General
Description. The statement of actuarial opinion submitted in accordance with
this rule must consist of:
(a) A paragraph
identifying the appointed actuary and the qualifications of the qualified
actuary, as provided in subsection (2)(a) of this rule;
(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, as provided in subsection (2)(b) of this rule, and
identifying the reserves and related actuarial items covered by the opinion
that 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, as provided
in subsection (2)(c) of this rule, supported by a statement of each such expert
in the form prescribed by section (5) of this rule;
(d) An opinion paragraph expressing the
appointed actuary's opinion with respect to the adequacy of the supporting
assets to mature the liabilities, as provided in subsection (2)(f) of this
rule; and
(e) One or more
additional paragraphs, to be included in individual company cases as follows:
(A) If the appointed actuary considers it
necessary to state a qualification of the appointed actuary's
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 the
appointed actuary's opinion;
(C) 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; and
(D) If the appointed
actuary chooses to add a paragraph briefly describing the assumptions forming
the basis for the actuarial opinion.
(2) Recommended Language. The following
paragraphs must be included in the statement of actuarial opinion in accordance
with this section. The following provisions of this section are those that in
typical circumstances would 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 must use language that clearly
expresses the professional judgment of the appointed actuary. However, in any
event, the opinion must retain all pertinent aspects of the language provided
in this section. The following provisions apply:
(a) The opening paragraph must indicate
generally the appointed actuary's relationship to the company and
qualifications of the appointed actuary to sign the opinion, as follows:
(A) For a company actuary, the opening
paragraph of the actuarial opinion must 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 the insurer to render this opinion as stated in
the letter to the director 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, the opening paragraph must include a statement such as:
"I, (name), a member of the American Academy of
Actuaries, am associated with the firm of (name of consulting form). 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."
(b) The scope paragraph must 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 that have been subjected to asset adequacy
analysis." See Table 1 (Reserves and Liabilities).
(c) If the appointed actuary has relied on
other experts to develop certain portions of the analysis, the reliance
paragraph must include a statement such as the following:
"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."
Such a statement of reliance on other experts must be
accompanied by a statement by each of such experts on the form prescribed in
section (5) of this rule.
(d) If the appointed actuary has examined the
underlying asset and liability records, the reliance paragraph must 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 or asset records) prepared by the company, the reliance
paragraph must 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."
Such a section shall be accompanied by a statement by
each person relied upon, in the form prescribed by section (5) of this
rule.
(f) The
opinion paragraph must include a statement such as:
"In my opinion, the reserves and related actuarial values
concerning the statement items identified above:
(i) Are computed in accordance with presently
accepted actuarial standards consistently applied and are fairly stated, in
accordance with sound actuarial principles;
(ii) 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;
(iii) 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;
(iv) 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);
(v) Include provision for
all actuarial reserves and related statement items that 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 currently
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 director, this language may be omitted for an opinion
filed on behalf of a company doing business only in Oregon 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 that should be considered in reviewing this opinion; or
The following material change or changes that 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.)
The appointed actuary must 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"
(3) 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 rule.
(4) Adverse Opinions. If the appointed
actuary is unable to form an opinion, the appointed actuary must refuse to
issue a statement of actuarial opinion. If the appointed actuary's opinion is
adverse or qualified, the appointed actuary must issue an adverse or qualified
actuarial opinion explicitly stating the reason or reasons for the opinion.
Such a statement must follow the scope paragraph and precede the opinion
paragraph.
(5) 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.
(6) Alternate Option
(a) The Standard Valuation Law gives the
director 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 director 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 director
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 director for approval
of that request have been met." If the director 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 director. Such 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
director 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 director 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:
Product Type
Death Benefit or Account Value
Reserves Held
Codification Reserves
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.
(b) Notwithstanding the above, the director
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 director after consultation with the company,
the director may contract an independent actuary at the company's expense to
prepare and file the opinion.
