28 Tex. Admin. Code § 3.62 - Actuarial Information for Life and Annuity Filings

(a) Each life filing that changes the nonforfeiture values of a particular policy or certificate must be accompanied by the information described in this subsection.

(1) For a life insurance product that is subject to Insurance Code Chapter 1105, concerning Standard Nonforfeiture Law for Life Insurance, an issuer must include an actuarial memorandum that demonstrates compliance with Insurance Code Chapter 1105.

(2) For a universal life filing, an issuer must include:

(A) an actuarial memorandum, signed by a qualified actuary, with a detailed and complete explanation of the basis for computing the policy value and the cash surrender value of the policy, including:

(i) the guaranteed maximum expense charges and loads;

(ii) the guaranteed interest rate or rates;

(iii) the guaranteed maximum mortality charges;

(iv) any other guaranteed charges; and

(v) any surrender or partial withdrawal charges;

(B) a comparison table for issue age 35 that displays columns of:

(i) the guaranteed death benefits;

(ii) guaranteed accumulated values;

(iii) cash surrender values; and

(iv) reserves for the policy; and

(C) itemized monthly universal life calculations for the first and 50th years showing:

(i) beginning values;

(ii) maximum expense charges;

(iii) maximum cost-of-insurance deductions;

(iv) monthly expense and/or policy fees;

(v) interest accumulations; and

(vi) the ending values for the specimen policy.

(3) For variable life forms, the issuer must provide actuarial information as required by § 4.1504 of this title (relating to Insurance Contract and Filing Requirements), and as required by this section.

(4) The issuer must provide a certification that it will calculate all premiums, reserves, and nonforfeiture values in a manner consistent with the information submitted under this subchapter.

(b) For each annuity filing, an actuarial memorandum must be provided to meet the minimum requirements of Insurance Code Chapter 1107, concerning Standard Nonforfeiture Law for Certain Annuities, and specify the guaranteed interest rates, the maximum surrender charges, and any other maximum charges applicable in the determination of nonforfeiture values. If the issuer intends to change the guaranteed interest rates specified in the form, notification must be submitted to the department before the change. The notification must specify the new guaranteed interest rate and the date when the new guaranteed interest rate will be effective for new issues of a specified policy form, as required by § 3.1004 of this title (relating to Policy Form Review).

(1) For variable annuities, the actuarial information must include the information required in this subsection and the information required by § 4.2105 of this title (relating to Contract Requirements) to the extent such material is applicable.

(2) For policies or contracts that contain a market-value adjustment, the actuarial memorandum must:

(A) identify the name of the separate account;

(B) indicate the basis for the market-value-adjustment formula and that the formula provides reasonable equity to both the contract holder and the issuer;

(C) detail that the reserve liabilities are established in accordance with actuarial procedures that recognize that assets of the separate account are based on market values, the variable nature of the benefits provided, and any mortality guarantees;

(D) include a table of minimum guaranteed policy values and cash surrender values that:

(i) are based on the longest guaranteed investment period;

(ii) reflect both upward and downward market-value adjustments; and

(iii) show that the minimum guaranteed values before the adjustment are not less than the minimum nonforfeiture values required by law; and

(E) provide a numerical illustration reproducing the values shown in the table for the first, second, and third years of investment, and at the end of the guaranteed investment period.

(c) For a filing that includes more than one guaranteed interest charge period, the actuarial memorandum must address each guaranteed interest charge period.

Notes

28 Tex. Admin. Code § 3.62

Adopted by Texas Register, Volume 50, Number 15, April 11, 2025, TexReg 2409, eff. 4/17/2025