§ 508.36 — Standard valuations

Iowa § 508.36

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 508: LIFE INSURANCE COMPANIES

Text

This section shall be known as the “Standard Valuation Law”.
1. Definitions.
a. As used in this section, unless the context otherwise requires:
(1) “Accident and health insurance” means policies or contracts that incorporate
morbidity risk and provide protection against economic loss resulting from accident,
sickness, or medical conditions and as may be specified in the valuation manual.
(2) “Appointed actuary” means a qualified actuary who is appointed in accordance with
thevaluationmanualtopreparetheactuarialopinionrequiredinsubsection3, paragraph“b”.
(3) “Company” means an entity which has done any of the following:
(a) Written, issued, or reinsured life insurance policies or contracts, accident and health
insurance policies or contracts, or deposit-type policies or contracts in this state and has at
least one such policy or contract in force or on claim.
(b) Written, issued, or reinsured life insurance policies or contracts, accident and
health insurance policies or contracts, or deposit-type policies or contracts in any state
and is required to hold a certificate of authority to write life insurance, accident and health
insurance, or deposit-type policies or contracts in any state and is required to hold a
certificate of authority to write life insurance, accident and health insurance, or deposit-type
policies or contracts in this state.
(4) “Deposit-type policy or contract” means policies or contracts that do not incorporate
mortalityormorbidityrisksandsuchpoliciesorcontractsasmaybespecifiedinthevaluation
manual.
(5) “Life insurance” means policies or contracts that incorporate mortality risk, including
annuity and pure endowment contracts, and such policies or contracts as may be specified in
the valuation manual.
(6) “NAIC” means the national association of insurance commissioners.

(7) “Operative date of the valuation manual” means the operative date of the valuation
manual as provided in subsection 14.
(8) “Policyholder behavior” means any action a policyholder, contract holder, or any other
person with the right to elect options, such as a certificate holder, may take under a policy
or contract subject to this section including but not limited to lapse, withdrawal, transfer,
deposit, premium payment, loan, annuitization, or benefit elections prescribed by the policy
or contract, but excluding events of mortality or morbidity that result in benefits prescribed
in their essential aspects by the terms of the policy or contract.
(9) “Principle-based valuation” means a reserve valuation that uses one or more methods
or one or more assumptions determined by the insurer and that is required to comply with
subsection 15 as specified in the valuation manual.
(10) “Qualified actuary” means an individual who is qualified to sign the applicable
statement of actuarial opinion in accordance with the American academy of actuaries
qualification standards for actuaries signing such statements and who meets the
requirements specified in the valuation manual.
(11) “Tail risk” means a risk that occurs either where the frequency of low probability
events is higher than expected under a normal probability distribution or where there are
observed events of very significant size or magnitude.
(12) “Valuationmanual”meansthemanualofvaluationinstructionsadoptedbytheNAIC
as specified in this section or as subsequently amended.
b. This subsection is applicable on or after the operative date of the valuation manual.
2. Reserve valuation.
a. Policies and contracts issued prior to operative date of valuation manual.
(1) The commissioner shall annually value, or cause to be valued, the reserve liabilities,
referred to in this section as reserves, for all outstanding life insurance policies and annuity
and pure endowment contracts of every life insurance company doing business in this state,
issued on or after July 1, 1973, and prior to the operative date of the valuation manual.
In calculating the reserves, the commissioner may use group methods and approximate
averages for fractions of a year or otherwise. In lieu of the valuation of the reserves required
in this section of any foreign or alien company, the commissioner may accept any valuation
made, or caused to be made, by the insurance supervisory official of any state or other
jurisdiction when such valuation complies with the minimum standard provided for in this
section.
(2) The provisions set forth in subsections 4 through 13 shall apply to all policies and
contracts, as appropriate, subject to this section that were issued on or after July 1, 1973, and
prior to the operative date of the valuation manual and the provisions set forth in subsections
14 and 15 shall not apply to any such policies or contracts.
(3) The minimum standard for the valuation of policies and contracts issued prior to July
1, 1973, shall be the standard provided by the laws in effect immediately prior to that date.
b. Policies and contracts issued on or after operative date of valuation manual.
(1) The commissioner shall annually value, or cause to be valued, the reserve liabilities
for all outstanding life insurance policies or contracts, annuity and pure endowment policies
or contracts, accident and health insurance policies or contracts, and deposit-type policies or
contracts of every company issued on or after the operative date of the valuation manual. In
lieu of the valuation of the reserves required of a foreign or alien company, the commissioner
may accept a valuation made, or caused to be made, by the insurance supervisory official
of any state or other jurisdiction when the valuation complies with the minimum standard
provided in this section.
(2) The provisions set forth in subsections 14 and 15 shall apply to all policies or contracts
issued on or after the operative date of the valuation manual.
3. Actuarial opinion of reserves.
a. Actuarial opinion of reserves prior to operative date of valuation manual. This
paragraph “a” applies to an actuarial opinion of reserves submitted prior to the operative
date of the valuation manual.
(1) General. A life insurance company doing business in this state shall annually submit
the written opinion of a qualified actuary as to whether the reserves and related actuarial

itemsheldinsupportofthepoliciesandcontractsspecifiedbythecommissionerbyregulation
are computed appropriately, are based on assumptions which satisfy contractual provisions,
are consistent with prior reported amounts, and are in compliance with applicable laws of
thisstate. Thecommissionershalldefinebyruletherequirementsandcontentofthisopinion
and add any other items deemed to be necessary.
(2) Actuarial analysis of reserves and assets supporting such reserves.
(a) Unless exempted by rule, a life insurance company shall also annually include in the
opinion required by subparagraph (1), an opinion of the same qualified actuary as to whether
the reserves and related actuarial items held in support of policies and contracts specified by
the commissioner by rule, when considered in light of the assets held by the company with
respect to the 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 for the company’s obligations under the
policiesandcontracts,includingbutnotlimitedtothebenefitsunderandexpensesassociated
with the policies and contracts.
(b) The commissioner may provide by rule for a transition period for establishing any
higher reserves which the qualified actuary may deem necessary in order to render the
opinion required by this paragraph “a”.
(3) Requirements for opinions subject to subparagraph (2). An opinion required by
subparagraph (2) shall be governed by the following provisions:
(a) A memorandum, in form and substance acceptable to the commissioner as specified
by rule, shall be prepared to support each actuarial opinion.
(b) If the insurance company fails to provide a supporting memorandum at the request
of the commissioner within a period specified by rule or the commissioner determines that
the supporting memorandum provided by the insurance company fails to meet the standards
prescribed by the rules or is otherwise unacceptable to the commissioner, the commissioner
may engage a qualified actuary at the expense of the company to review the opinion and
the basis for the opinion and prepare such supporting memorandum as is required by the
commissioner.
(4) Requirement for all opinions subject to this paragraph. An opinion required under
this paragraph “a” is governed by the following provisions:
(a) The opinion shall be submitted with the annual statement reflecting the valuation of
such reserve liabilities for each year ending on or after December 31, 1995.
(b) The opinion shall apply to all business in force, including individual and group health
insurance plans, in form and substance acceptable to the commissioner as specified by rule.
(c) The opinion shall be based on standards adopted from time to time by the actuarial
standardsboardandonsuchadditionalstandardsasthecommissionermaybyruleprescribe.
(d) In the case of an opinion required to be submitted by a foreign or alien company, the
commissioner may accept the opinion filed by that company with the insurance supervisory
official of another state if the commissioner determines that the opinion reasonably meets
the requirements applicable to a company domiciled in this state.
(e) For the purposes of this paragraph “a”, “qualified actuary” means a member in
good standing of the American academy of actuaries who meets the requirements of the
commissioner as specified by rule.
(f) Except in cases of fraud or willful misconduct, a qualified actuary is not liable for
damages to any person, other than to the insurance company and the commissioner, for any
act, error, omission, decision, or conduct with respect to the actuary’s opinion.
(g) Disciplinary action which may be taken by the commissioner against the company or
the qualified actuary shall be defined in rules adopted by the commissioner.
(h) (i) Any memorandum in support of the opinion, and any other material provided by
the company to the commissioner in connection with the opinion, shall be kept confidential
by the commissioner and shall not be made public and shall not be subject to subpoena, other
than for the purpose of defending an action seeking damages from any person by reason of
any action required by this paragraph “a” or by rules adopted pursuant to this paragraph
“a”. Notwithstanding this subparagraph division, the memorandum or other material may be
released by the commissioner if either of the following applies:

(A) Thecommissionerreceivesthewrittenconsentofthecompanywithwhichtheopinion
is associated.
(B) The American academy of actuaries requests that the memorandum or other
material is required for the purpose of professional disciplinary proceedings and setting
forth procedures satisfactory to the commissioner for preserving the confidentiality of the
memorandum or other material.
(ii) Once any portion of the confidential memorandum is cited by the company in
its marketing, is cited before any governmental agency other than a state insurance
department, or is released by the company to the news media, all portions of the confidential
memorandum are no longer confidential.
b. Actuarial opinion of reserves on or after operative date of valuation manual. This
paragraph “b” applies to an actuarial opinion of reserves submitted on or after the operative
date of the valuation manual.
(1) General. Every company with outstanding life insurance policies or contracts,
accident and health insurance policies or contracts, or deposit-type policies or contracts in
this state and subject to regulation by the commissioner shall annually submit the opinion
of the appointed actuary as to whether the reserves and related actuarial items held in
support of the policies and contracts are computed appropriately, are based on assumptions
that satisfy contractual provisions, are consistent with prior reported amounts, and comply
with applicable laws of this state. The valuation manual shall prescribe the specifics of this
opinion including any items deemed to be necessary to its scope.
(2) Actuarial analysis of reserves and assets supporting reserves. Every company with
outstanding life insurance policies or contracts, accident and health insurance policies or
contracts, or deposit-type policies or contracts in this state and subject to regulation by the
commissioner, except as exempted in the valuation manual, shall annually include in the
opinionrequiredbysubparagraph(1),anopinionofthesameappointedactuaryastowhether
the reserves and related actuarial items held in support of the policies and contracts specified
in the valuation manual, when considered in light of the assets held by the company with
respect to the 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 for the company’s obligations under the
policiesandcontracts,includingbutnotlimitedtothebenefitsunderandexpensesassociated
with the policies and contracts.
(3) Requirements for opinions subject to subparagraph (2). An opinion required by
subparagraph (2) shall be governed by the following provisions:
(a) A memorandum, in form and substance as specified in the valuation manual, and that
is acceptable to the commissioner, shall be prepared to support each actuarial opinion.
(b) If the company fails to provide a supporting memorandum at the request of the
commissioner within a period specified in the valuation manual or the commissioner
determines that the supporting memorandum provided by the company fails to meet
the standards prescribed by the valuation manual or is otherwise unacceptable to the
commissioner, the commissioner may engage a qualified actuary at the expense of the
company to review the opinion and the basis for the opinion and prepare the supporting
memorandum required by the commissioner.
(4) Requirements for all opinions subject to this paragraph. Every opinion subject to this
paragraph “b” shall be governed by the following provisions:
(a) The opinion shall be in form and substance as specified in the valuation manual and
acceptable to the commissioner.
(b) The opinion shall be submitted with the annual statement reflecting the valuation of
such reserve liabilities for each year ending on or after the operative date of the valuation
manual.
(c) The opinion shall apply to all policies and contracts subject to subparagraph (2) plus
other actuarial liabilities as may be specified in the valuation manual.
(d) The opinion shall be based on standards adopted from time to time by the actuarial
standards board or its successor, and on such additional standards as may be prescribed in
the valuation manual.

(e) In the case of an opinion required to be submitted by a foreign or alien company, the
commissioner may accept the opinion filed by that company with the insurance supervisory
official of another state if the commissioner determines that the opinion reasonably meets
the requirements applicable to a company domiciled in this state.
(f) Except in cases of fraud or willful misconduct, the appointed actuary shall not be liable
for damages to any person, other than the company and the commissioner, for any act, error,
omission, decision, or conduct with respect to the appointed actuary’s opinion.
(g) Disciplinaryactionbythecommissioneragainstthecompanyortheappointedactuary
shall be defined in rules adopted by the commissioner pursuant to chapter 17A.
4. Computations of minimum standards. Except as otherwise provided in subsections 5,
6, and 13, the minimum standard for the valuation of all such policies and contracts issued
prior to July 1, 1994, shall be that provided by the laws in effect immediately prior to such
date. Except as otherwise provided in subsections 5, 6, and 13, the minimum standard for
the valuation of all such policies and contracts shall be the commissioner’s reserve valuation
methods defined in subsections 7, 8, 11, and 12, five percent interest for group annuity and
pure endowment contracts and three and one-half percent interest for all other policies and
contracts, or in the case of policies and contracts, other than annuity and pure endowment
contracts, issuedonorafterJuly1, 1974, fourpercentinterestforsuchpoliciesissuedpriorto
January 1, 1980, five and one-half percent interest for single premium life insurance policies
and four and one-half percent interest for all other such policies issued on and after January
1, 1980, and the following tables:
a. For ordinary policies of life insurance issued on the standard basis, excluding any
disability and accidental death benefits in the policies, the following:
(1) The commissioners 1941 standard ordinary mortality table for policies issued prior to
the operative date of section 508.37, subsection 6, paragraph “a”.
(2) The commissioners 1958 standard ordinary mortality table for such policies issued on
or after the operative date of section 508.37, subsection 6, paragraph “a”, and prior to the
operative date of section 508.37, subsection 6, paragraph “c”, provided that for any category
of policies issued on female risks, all modified net premiums and present values referred to
in this section may be calculated according to an age not more than six years younger than
the actual age of the insured.
(3) For policies issued on or after the operative date of section 508.37, subsection 6,
paragraph “c”, any of the following:
(a) The commissioners 1980 standard ordinary mortality table.
(b) Attheelectionofthecompanyforanyoneormorespecifiedplansoflifeinsurance,the
commissioners 1980 standard ordinary mortality table with ten-year select mortality factors.
(c) Any ordinary mortality table, adopted after 1980 by the national association of
insurance commissioners, that is approved by rule adopted by the commissioner for use in
determining the minimum standard of valuation for such policies.
b. For all industrial life insurance policies issued on the standard basis, excluding any
disability and accidental death benefits in the policies, the following:
(1) For policies issued prior to the operative date of section 508.37, subsection 6,
paragraph “b”, the 1941 standard industrial mortality table.
(2) For policies issued on or after the operative date of section 508.37, subsection 6,
paragraph “b”, the commissioners 1961 standard industrial mortality table, or any industrial
mortality table adopted after 1980 by the national association of insurance commissioners,
that is approved by rule adopted by the commissioner for use in determining the minimum
standard of valuation for such policies.
c. For individual annuity and pure endowment contracts, excluding any disability and
accidental death benefits in such policies, the 1937 standard annuity mortality table or, at the
option of the company, the annuity mortality table for 1949, ultimate, or any modification of
either of these tables approved by the commissioner.
d. For group annuity and pure endowment contracts, excluding any disability and
accidental death benefits in such policies, the group annuity mortality table for 1951, or a
modification of the table approved by the commissioner, or at the option of the company, any

of the tables or modifications of tables specified for individual annuity and pure endowment
contracts.
e. (1) For total and permanent disability benefits in or supplementary to ordinary policies
or contracts, the following:
(a) For policies or contracts issued on or after January 1, 1966, the tables of period 2
disablement rates and the 1930 to 1950 termination rates of the 1952 disability study of the
society of actuaries, with due regard to the type of benefit, or any tables of disablement
rates and termination rates adopted after 1980 by the national association of insurance
commissioners and approved by rule adopted by the commissioner for use in determining
the minimum standard of valuation for such policies.
(b) For policies or contracts issued on or after January 1, 1961, and prior to January 1,
1966, either of the tables identified under subparagraph division (a), or at the option of the
company, the class (3) disability table (1926).
(c) For policies issued prior to January 1, 1961, the class (3) disability table (1926).
(2) A table used under this paragraph “e” shall, for active lives, be combined with a
mortality table permitted for calculating the reserves for life insurance policies.
f. (1) For accidental death benefits in or supplementary to policies, the following:
(a) For policies issued on or after January 1, 1966, the 1959 accidental death benefits
table, or any accidental death benefits table adopted after 1980 by the national association
of insurance commissioners and approved by rule adopted by the commissioner for use in
determining the minimum standard of valuation for such policies.
(b) For policies issued on or after January 1, 1961, and prior to January 1, 1966, either
of the tables identified under subparagraph division (a), or at the option of the company, the
intercompany double indemnity mortality table.
(c) For policies issued prior to January 1, 1961, the intercompany double indemnity
mortality table.
(2) A table used under this paragraph “f” shall be combined with a mortality table for
calculating the reserves for life insurance policies.
g. For group life insurance, life insurance issued on the substandard basis, and other
special benefits, tables approved by the commissioner.
5. Computation for minimum standards for annuities.
a. Except as provided in subsection 6, the minimum standard for the valuation of all
individual annuity and pure endowment contracts issued on or after the operative date
of this subsection, and for all annuities and pure endowments purchased on or after the
operative date of this subsection under group annuity and pure endowment contracts, shall
be the commissioner’s reserve valuation methods defined in subsections 7 and 8, and the
following tables and interest rates:
(1) For individual annuity and pure endowment contracts issued prior to January 1, 1980,
excludinganydisabilityandaccidentaldeathbenefitsinsuchcontracts, bothofthefollowing:
(a) The 1971 individual annuity mortality table, or any modification of this table approved
by the commissioner.
(b) Sixpercentinterestforsinglepremiumimmediateannuitycontracts, andfourpercent
interest for all other individual annuity and pure endowment contracts.
(2) For individual single premium immediate annuity contracts issued on or after January
1, 1980, excluding any disability and accidental death benefits in such contracts, both of the
following:
(a) One of the following tables:
(i) The 1971 individual annuity mortality table.
(ii) An individual annuity mortality table, adopted after 1980 by the national association
of insurance commissioners and approved by rule adopted by the commissioner for use in
determining the minimum standard of valuation for such contracts.
(iii) A modification of the tables identified in subparagraph subdivisions (i) and (ii)
approved by the commissioner.
(b) Seven and one-half percent interest.
(3) For individual annuity and pure endowment contracts issued on or after January 1,

1980, other than single premium immediate annuity contracts, excluding any disability and
accidental death benefits in such contracts, both of the following:
(a) One of the following tables:
(i) The 1971 individual annuity mortality table.
(ii) An individual annuity mortality table adopted after 1980 by the national association
of insurance commissioners and approved by rule adopted by the commissioner for use in
determining the minimum standard of valuation for such contracts.
(iii) A modification of the tables identified in subparagraph subdivisions (i) and (ii)
approved by the commissioner.
(b) Five and one-half percent interest for single premium deferred annuity and pure
endowment contracts and four and one-half percent interest for all other such individual
annuity and pure endowment contracts.
(4) For all annuities and pure endowments purchased prior to January 1, 1980, under
group annuity and pure endowment contracts, excluding any disability and accidental death
benefits purchased under such contracts, both of the following:
(a) The 1971 group annuity mortality table or any modification of this table approved by
the commissioner.
(b) Six percent interest.
(5) For all annuities and pure endowments purchased on or after January 1, 1980, under
group annuity and pure endowment contracts, excluding any disability and accidental death
benefits purchased under such contracts, both of the following:
(a) One of the following tables:
(i) The 1971 group annuity mortality table.
(ii) A group annuity mortality table adopted after 1980 by the national association of
insurance commissioners and approved by rule adopted by the commissioner for use in
determining the minimum standard of valuation for such annuities and pure endowments.
(iii) A modification of the tables identified in subparagraph subdivisions (i) and (ii)
approved by the commissioner.
(b) Seven and one-half percent interest.
b. After July 1, 1973, a company may file with the commissioner a written notice of its
election to comply with the provisions of this subsection after a specified date before January
1, 1979, which shall be the operative date of this section for such company, provided, if a
company makes no election, the effective date of this section for a company is January 1,
1979.
6. Computation of minimum standard by calendar year of issue.
a. Applicability of this subsection. The calendar year statutory valuation interest rates,
as defined in this subsection, shall be used in determining the minimum standard for the
valuation of all of the following:
(1) All life insurance policies issued in a particular calendar year, on or after the operative
date of section 508.37, subsection 6, paragraph “c”.
(2) All individual annuity and pure endowment contracts issued in a particular calendar
year on or after January 1, 1995.
(3) All annuities and pure endowments purchased in a particular calendar year on or after
January 1, 1995, under group annuity and pure endowment contracts.
(4) The net increase, if any, in a particular calendar year on or after January 1, 1995, in
amounts held under guaranteed interest contracts.
b. Calendar year statutory valuation interest rates.
(1) The calendar year statutory valuation interest rates, referred to in this paragraph as
“I”, shall be determined as follows and the results rounded to the nearer one-quarter of one
percent:
(a) For life insurance,
I equals .03 + W(R1 – .03) + (W/2) x (R2 – .09),
where R1 is the lesser of R and .09, R2 is the greater of R and .09, R is the reference interest
rate defined in paragraph “d” of this subsection, and W is the weighting factor defined in
paragraph “c” of this subsection.

(b) For single premium immediate annuities and for annuity benefits involving life
contingencies arising from other annuities with cash settlement options and from guaranteed
interest contracts with cash settlement options,
I equals .03 + W(R – .03),
where R1 is the lesser of R and .09, R2 is the greater of R and .09, R is the reference interest
rate defined in paragraph “d” of this subsection, and W is the weighting factor defined in
paragraph “c” of this subsection.
(c) For other annuities with cash settlement options and guaranteed interest contracts
with cash settlement options, valued on an issue-year basis, except as stated in subparagraph
division (b), the formula for life insurance stated in subparagraph division (a) applies to
annuities and guaranteed interest contracts with guarantee durations in excess of ten years,
and the formula for single premium immediate annuities stated in subparagraph division (b)
applies to annuities and guaranteed interest contracts with guarantee durations of ten years
or less.
(d) For other annuities with no cash settlement options and for guaranteed interest
contracts with no cash settlement options, the formula for single premium immediate
annuities stated in subparagraph division (b) applies.
(e) For other annuities with cash settlement options and guaranteed interest contracts
with cash settlement options, valued on a change-in-fund basis, the formula for single
premium immediate annuities stated in subparagraph division (b) applies.
(2) However, if the calendar year statutory valuation interest rate for any life insurance
policies issued in any calendar year determined under subparagraph (1), subparagraph
division (a), without reference to this sentence differs from the corresponding actual rate
for similar policies issued in the immediately preceding calendar year by less than one-half
of one percent, the calendar year statutory valuation interest rate for the life insurance
policies is equal to the corresponding actual rate for the immediately preceding calendar
year. For purposes of applying the immediately preceding sentence, the calendar year
statutory valuation interest rate for life insurance policies issued in a calendar year shall
be determined for 1980, using the reference interest rate defined in 1979, and shall be
determined for each subsequent calendar year regardless of the operative date of section
508.37, subsection 6, paragraph “c”.
c. Weighting factors.
(1) The weighting factors referred to in paragraph “b” are given in the following tables:
(a) (i) Weighting Factors for Life Insurance:
Guarantee Duration (Years) Weighting Factors
10 or less .50
More than 10,
but not more than 20 .45
More than 20 .35
(ii) For life insurance, the guarantee duration is the maximum number of years the
life insurance can remain in force on a basis guaranteed in the policy or under options to
convert to plans of life insurance with premium rates or nonforfeiture values or both which
are guaranteed in the original policy.
(b) Theweightingfactorsforsinglepremiumimmediateannuitiesandforannuitybenefits
involving life contingencies arising from other annuities with cash settlement options and
guaranteed interest contracts with cash settlement options is .80.
(c) Weighting factors for other annuities and for guaranteed interest contracts, except as
statedinsubparagraphdivision(b), shallbeasspecifiedinsubparagraphsubdivisions(i), (ii),
and (iii) of this subparagraph division, according to the rules and definitions in subparagraph
subdivisions (iv), (v), and (vi) of this subparagraph division:
(i) For annuities and guaranteed interest contracts valued on an issue-year basis:

Weighting Factor
for Plan Type
Guarantee Duration (Years) A B C
5 or less .80 .60 .50
More than 5,
but not more than 10 .75 .60 .50
More than 10,
but not more than 20 .65 .50 .45
More than 20 .45 .35 .35
(ii) For annuities and guaranteed interest contracts valued on a change-in-fund basis, the
factors shown in subparagraph subdivision (i) of this subparagraph division increased by:
Plan Type
A B C
.15 .25 .05
(iii) For annuities and guaranteed interest contracts valued on an issue-year basis,
other than those with no cash settlement options, which do not guarantee interest on
considerations received more than one year after issue or purchase and for annuities and
guaranteed interest contracts valued on a change-in-fund basis which do not guarantee
interest rates on considerations received more than twelve months beyond the valuation
date, the factors shown in subparagraph subdivision (i) of this subparagraph division or
derived in subparagraph subdivision (ii) of this subparagraph division increased by:
Plan Type
A B C
.05 .05 .05
(iv) For other annuities with cash settlement options and guaranteed interest contracts
with cash settlement options, the guarantee duration is the number of years for which the
contract guarantees interest rates in excess of the calendar year statutory valuation interest
rate for life insurance policies with guarantee durations in excess of twenty years. For other
annuities with no cash settlement options and for guaranteed interest contracts with no cash
settlement options, the guarantee duration is the number of years from the date of issue or
date of purchase to the date annuity benefits are scheduled to commence.
(v) “Plantype”,asusedinsubparagraphsubdivisions(i),(ii),and(iii)ofthissubparagraph
division, is defined as follows:
(A) “Plan Type A”: At any time, the policyholder may withdraw funds only with an
adjustment to reflect changes in interest rates or asset values since receipt of the funds by the
insurance company, or may withdraw funds without that adjustment but in installments over
five years or more, or may withdraw funds as in immediate life annuity; or no withdrawal is
permitted.
(B) “Plan Type B”: Before expiration of the interest rate guarantee, the policyholder may
withdraw funds only with an adjustment to reflect changes in interest rates or asset values
since receipt of the funds by the insurance company, or may withdraw funds without that
adjustment but in installments over five years or more; or no withdrawal is permitted. At the
end of interest rate guarantee, funds may be withdrawn without adjustment in a single sum
or installments over less than five years.
(C) “Plan Type C”: The policyholder may withdraw funds before expiration of interest
rate guarantee in a single sum or installments over less than five years either without
adjustment to reflect changes in interest rates or asset values since receipt of the funds by
the insurance company, or subject only to a fixed surrender charge stipulated in the contract
as a percentage of the fund.
(vi) A company may elect to value guaranteed interest contracts with cash settlement
options and annuities with cash settlement options on either an issue-year basis or on a
change-in-fund basis. Guaranteed interest contracts with no cash settlement options and
other annuities with no cash settlement options must be valued on an issue-year basis. As
used in this section, an issue-year basis of valuation refers to a valuation basis under which

the interest rate used to determine the minimum valuation standard for the entire duration
of the annuity or guaranteed interest contract is the calendar year valuation interest rate for
the year of issue or year of purchase of the annuity or guaranteed interest contract, and the
change-in-fund basis of valuation refers to a valuation basis under which the interest rate
used to determine the minimum valuation standard applicable to each change in the fund
held under the annuity or guaranteed interest contract is the calendar year valuation interest
rate for the year of the change in the fund.
d. Reference interest rate. The reference interest rate referred to in paragraph “b” is
defined as follows:
(1) For all life insurance, the lesser of the average over a period of thirty-six months
and the average over a period of twelve months, ending on June 30 of the calendar year
next preceding the year of issue, of the monthly average of the composite yield on seasoned
corporate bonds, as published by Moody’s investors service, inc.
(2) For single premium immediate annuities and for annuity benefits involving life
contingencies arising from other annuities with cash settlement options and guaranteed
interest contracts with cash settlement options, the average over a period of twelve months,
ending on June 30 of the calendar year of issue or year of purchase, of the monthly average
of the composite yield on seasoned corporate bonds, as published by Moody’s investors
service, inc.
(3) For other annuities with cash settlement options and guaranteed interest contracts
with cash settlement options, valued on an issue-year basis, except as stated in subparagraph
(2), with guarantee duration in excess of ten years, the lesser of the average over a period of
thirty-six months and the average over a period of twelve months, ending on June 30 of the
calendaryearofissueorpurchase, ofthemonthlyaverageofthecompositeyieldonseasoned
corporate bonds, as published by Moody’s investors service, inc.
(4) For other annuities with cash settlement options and guaranteed interest contracts
with cash settlement options, valued on an issue-year basis, except as stated in subparagraph
(2), with guarantee duration of ten years or less, the average over a period of twelve months,
ending on June 30 of the calendar year of issue or purchase, of the monthly average of the
compositeyieldonseasonedcorporatebonds, aspublishedbyMoody’sinvestorsservice, inc.
(5) For other annuities with no cash settlement options and for guaranteed interest
contracts with no cash settlement options, the average over a period of twelve months,
ending on June 30 of the calendar year of issue or purchase, of the monthly average of the
compositeyieldonseasonedcorporatebonds, aspublishedbyMoody’sinvestorsservice, inc.
(6) For other annuities with cash settlement options and guaranteed interest contracts
with cash settlement options, valued on a change-in-fund basis, except as stated in
subparagraph (2), the average over a period of twelve months, ending on June 30 of the
calendar year of the change in the fund, of the monthly average of the composite yield on
seasoned corporate bonds, as published by Moody’s investors service, inc.
e. Alternative method for determining reference interest rates. In the event that the
monthly average of the composite yield on seasoned corporate bonds is no longer published
by Moody’s investors service, inc., or in the event that the national association of insurance
commissioners determines that the monthly average of the composite yield on seasoned
corporate bonds as published by Moody’s investors service, inc. is no longer appropriate for
the determination of the reference interest rate, an alternative method for determination
of the reference interest rate, which is adopted by the national association of insurance
commissioners and approved by rule adopted by the commissioner, may be substituted.
7. Reserve valuation method — life insurance and endowment benefits.
a. Except as otherwise provided in subsections 8, 11, and 12, reserves calculated
according to the commissioner’s reserve valuation method, for the life insurance and
endowment benefits of policies providing for a uniform amount of insurance and requiring
the payment of uniform premiums, shall be the excess, if any, of the present value, at the date
of valuation, of future guaranteed benefits provided for by such policies, over the present
value, at the date of valuation, of any future modified net premiums for such policies. The
modified net premiums for such policy is the uniform percentage of the respective contract
premiums for the benefits such that the present value, at the date of issue of the policy, of all

modified net premiums shall be equal to the sum of the present value, at the date of valuation,
of such benefits provided for by the policy and the excess of the amount determined in
subparagraph (1) over the amount determined in subparagraph (2), as follows:
(1) A net level annual premium equal to the present value at the date of issue, of the
benefits provided for after the first policy year, divided by the present value at the date of
issue, of an annuity of one per annum payable on the first, and each subsequent, anniversary
of the policy on which a premium falls due. However, the net level annual premium shall
not exceed the net level annual premium on the nineteen-year premium whole life plan for
insurance of the same amount at an age one year more than the age of the insured at issue
of the policy.
(2) A net one-year term premium for the benefits provided for in the first policy year.
b. (1) However, for a life insurance policy issued on or after January 1, 1998, for which
the contract premium in the first policy year exceeds that of the second year and for which no
comparable additional benefit is provided in the first year for such additional premium and
which provides an endowment benefit or a cash surrender value or a combination of such
benefit or value in an amount greater than the additional premium, the reserve according
to the commissioner’s reserve valuation method as of any policy anniversary occurring on
or before the assumed ending date defined as the first policy anniversary on which the sum
of any endowment benefit and any cash surrender value then available is greater than such
additional premium shall be, except as otherwise provided in subsection 11, the greater of
the reserve as of such policy anniversary calculated as described in paragraph “a” and the
reserve as of such policy anniversary calculated as described in paragraph “a”, but with the
following modifications:
(a) The value defined in paragraph “a” being reduced by fifteen percent of the amount of
such excess first year premium.
(b) All present values of benefits and premiums being determined without reference to
premiums or benefits provided for by the policy after the assumed ending date.
(c) The policy being assumed to mature on such date as an endowment.
(d) The cash surrender value provided on such date being considered as an endowment
benefit.
(2) In making the above comparison the mortality and interest bases stated in subsections
5 and 6 shall be used.
c. Reserves according to the commissioner’s reserve valuation method shall be calculated
pursuant to a method consistent with this subsection for all of the following:
(1) Life insurance policies providing for a varying amount of insurance or requiring the
payment of varying premiums.
(2) Group annuity and pure endowment contracts purchased under a retirement plan
or plan of deferred compensation established or maintained by an employer, including a
partnership or sole proprietorship, or by an employee organization, or by both, other than
a plan providing individual retirement accounts or individual retirement annuities under
section 408 of the Internal Revenue Code.
(3) Disability and accidental death benefits in all policies and contracts.
(4) All other benefits, except life insurance and endowment benefits in life insurance
policies and benefits provided by all other annuity and pure endowment contracts.
8. Reserve valuation method — annuity and pure endowment benefits.
a. This subsection applies to all annuity and pure endowment contracts other than
group annuity and pure endowment contracts purchased under a retirement plan or plan of
deferred compensation established or maintained by an employer, including a partnership or
sole proprietorship, or by an employee organization, or by both, other than a plan providing
individual retirement accounts or individual retirement annuities under section 408 of the
Internal Revenue Code.
b. Reserves according to the commissioner’s annuity reserve method for benefits under
annuity or pure endowment contracts, excluding any disability and accidental death benefits
in such contracts, shall be the greatest of the respective excesses of the present values, at
the date of valuation, of the future guaranteed benefits, including guaranteed nonforfeiture
benefits, provided for by such contracts at the end of each respective contract year, over the

present value, at the date of valuation, of any future valuation considerations derived from
future gross considerations, required by the terms of such contract, that become payable
prior to the end of such respective contract year. The future guaranteed benefits shall be
determined by using the mortality table, if any, and the interest rate or rates, specified in such
contracts for determining guaranteed benefits. The valuation considerations are the portions
of the respective gross considerations applied under the terms of such contracts to determine
nonforfeiture values.
9. Minimum reserves.
a. A company’s aggregate reserves for all life insurance policies, excluding disability and
accidental death benefits, issued on or after the operative date of section 508.37, shall not
be less than the aggregate reserves calculated in accordance with the methods set forth in
subsections 7, 8, 11, and 12, and the mortality table or tables and rate or rates of interest used
in calculating nonforfeiture benefits for such policies.
b. A company’s aggregate reserves for all policies, contracts, and benefits shall not be less
than the aggregate reserves determined by the qualified actuary to be necessary to render the
opinion required by subsection 3.
10. Optional reserve calculation.
a. Reserves for all policies and contracts issued prior to the operative date of section
508.37, may be calculated, at the option of the company, according to any standards which
produce greater aggregate reserves for all such policies and contracts than the minimum
reserves required prior to July 1, 1994.
b. Reserves for any category of policies, contracts, or benefits, as established by the
commissioner, issued on or after the operative date of section 508.37, may be calculated,
at the option of the company, according to any standards which produce greater aggregate
reserves for such category than those calculated according to the minimum standard as
provided in this section, but the rate or rates of interest used for policies and contracts, other
than annuity and pure endowment contracts, shall not be higher than the corresponding rate
or rates of interest used in calculating any nonforfeiture benefits as provided in this section.
c. A company which at any time adopts a standard of valuation producing greater
aggregate reserves than those calculated according to the minimum standard as provided
in this section may adopt, with the approval of the commissioner, any lower standard of
valuation, not to be lower than the minimum as provided in this section, provided, however,
that, for purposes of this section, the holding of additional reserves previously determined
by a qualified actuary to be necessary to render the opinion required by subsection 3 shall
not be deemed to be the adoption of a higher standard of valuation.
11. Reserve calculation — valuation net premium exceeding the gross premium charge.
a. If in any contract year the gross premium charged by a company on a policy or contract
is less than the valuation net premium for the policy or contract, as calculated by the method
used in calculating the reserve for such policy or contract but using the minimum valuation
standards of mortality and rate of interest, the minimum reserve required for such policy or
contract is the greater of either the reserve calculated according to the mortality table, rate of
interest, andmethodactuallyusedforsuchpolicyorcontract, orthereservecalculatedbythe
method actually used for such policy or contract but using the minimum valuation standards
of mortality and rate of interest and replacing the valuation net premium by the actual gross
premium in each contract year for which the valuation net premium exceeds the actual gross
premium. The minimum valuation standards of mortality and rate of interest referred to in
this section are those standards established in subsections 5 and 6.
b. However, for any life insurance policy issued on or after January 1, 1998, for which
the gross premium in the first policy year exceeds that of the second year and for which no
comparable additional benefit is provided in the first year for such excess and which provides
an endowment benefit or a cash surrender value, or a combination of such benefit and value,
in an amount greater than the excess premium, the provisions of paragraph “a” apply as if the
method actually used in calculating the reserve for such policy is the method established in
subsection 7, excluding paragraph “b” of that subsection. The minimum reserve of the policy
at each policy anniversary shall be the greater of the minimum reserve calculated pursuant
to subsection 7 and the minimum reserve calculated in accordance with this subsection.

12. Reserve calculation — indeterminate premium plans. In the case of any plan of
life insurance which provides for future premium determination, the amounts of such
premium which are to be determined by the insurance company based on estimates of future
experience, or in the case of any plan of life insurance or annuity, the minimum reserves
of which cannot be determined by the methods established in subsections 7, 8, and 11,
the reserves which are held under the plan must be appropriate in relation to the benefits
and the pattern of premiums for that plan, and shall be computed by a method which is
consistent with this section, as determined by rules adopted by the commissioner.
13. Minimum standards for accident and health insurance policies or contracts. For
accident and health insurance policies or contracts issued on or after the operative date
of the valuation manual, the standard prescribed in the valuation manual is the minimum
standard of valuation required under subsection 2, paragraph “b”. For health, disability, and
sickness and accident insurance policies or contracts issued on or after July 1, 1973, and
prior to the operative date of the valuation manual, the minimum standard of valuation is
the standard adopted by the commissioner by rule.
14. Valuationmanualforpoliciesorcontractsissuedonorafteroperativedateofvaluation
manual.
a. For policies or contracts issued on or after the operative date of the valuation manual,
the standard prescribed in the valuation manual is the minimum standard of valuation
required under subsection 2, paragraph “b”, except as provided under paragraph “e” or “g”
of this subsection.
b. The operative date of the valuation manual is January 1 of the first calendar year
following the first July 1 as of which all of the following have occurred:
(1) The valuation manual has been adopted by the NAIC by an affirmative vote of at least
forty-two members, or three-fourths of the members voting, whichever is greater.
(2) The standard valuation law, as amended by the NAIC in 2009, or legislation including
substantially similar terms and provisions, has been enacted by states representing greater
than seventy-five percent of the direct premiums written as reported in the following annual
statements submitted for 2008:
(a) Life, accident, and health insurance annual statements.
(b) Health insurance annual statements.
(c) Fraternal benefit society annual statements.
(3) The standard valuation law, as amended by the NAIC in 2009, or legislation including
substantially similar terms and provisions, has been enacted by at least forty-two of the
following fifty-five jurisdictions: the fifty states of the United States, American Samoa, the
American Virgin Islands, the District of Columbia, Guam, and Puerto Rico.
c. Unless a change in the valuation manual specifies a later effective date, changes to the
valuation manual shall be effective on January 1 following the date when all of the following
have occurred:
(1) ThechangestothevaluationmanualhavebeenadoptedbytheNAICbyanaffirmative
vote representing:
(a) At least three-fourths of the members of the NAIC voting, but not less than a majority
of the total membership.
(b) Members of the NAIC representing jurisdictions totaling greater than seventy-five
percent of the direct premiums written as reported in the following annual statements most
recently available prior to the vote in subparagraph division (a):
(i) Life, accident, and health insurance annual statements.
(ii) Health insurance annual statements.
(iii) Fraternal benefit society annual statements.
d. The valuation manual shall specify all of the following:
(1) Minimum valuation standards for and definitions of the policies or contracts subject
to subsection 2, paragraph “b”. Such minimum valuation standards shall include all of the
following:
(a) The commissioner’s reserve valuation method for life insurance contracts, other than
annuity contracts, subject to subsection 2, paragraph “b”.

(b) The commissioner’s annuity reserve valuation method for annuity contracts subject
to subsection 2, paragraph “b”.
(c) Minimumreservesforallotherpoliciesorcontractssubjecttosubsection2, paragraph
“b”.
(2) Which policies or contracts or types of policies or contracts are subject to the
requirements of a principle-based valuation in subsection 15, paragraph “a”, and the
minimum valuation standards consistent with those requirements.
(3) For policies and contracts subject to a principle-based valuation under subsection 15,
specify all of the following:
(a) Requirements for the format of reports to the commissioner under subsection 15
which shall include information necessary to determine if the valuation is appropriate and
in compliance with this section.
(b) Assumptions that are prescribed for risks over which the company does not have
significant control or influence.
(c) Procedures for corporate governance and oversight of the actuarial function, and a
process for appropriate waiver or modification of such procedures.
(4) For policies or contracts not subject to a principle-based valuation under subsection
15, the minimum valuation standard shall do either of the following:
(a) Be consistent with the minimum standard of valuation prior to the operative date of
the valuation manual.
(b) Develop reserves that quantify the benefits and guarantees, and the funding,
associated with the policies or contracts and their risks at a level of conservatism that reflects
conditions that include unfavorable events that have a reasonable probability of occurring.
(5) Other requirements, including but not limited to those relating to reserve methods,
models for measuring risk, generation of economic scenarios, assumptions, margins, use of
companyexperience, riskmeasurement,disclosure,certifications,reports,actuarialopinions
and memorandums, transition rules, and internal controls.
(6) The data and form of the data required under subsection 16, to whom the data must
be submitted, and other specified requirements, including data analyses and reporting of
analyses.
e. In the absence of a specific valuation requirement or if a specific valuation requirement
in the valuation manual is not, in the opinion of the commissioner, in compliance with this
subsection,thenthecompanyshall,withrespecttosuchrequirements,complywithminimum
valuation standards prescribed by the commissioner by rule.
f. The commissioner may engage a qualified actuary, at the expense of the company, to
perform an actuarial examination of the company and opine on the appropriateness of any
reserve assumption or method used by the company, or to review and opine on a company’s
compliance with any requirements set forth in this section. The commissioner may rely upon
the opinion, regarding provisions contained in this section, of a qualified actuary engaged by
the commissioner of another state, district, or territory of the United States. As used in this
paragraph, “engage” includes employment of and contracting with a qualified actuary.
g. The commissioner may require a company to change any assumption or method that in
the opinion of the commissioner is necessary in order to comply with the requirements of the
valuation manual or this section and the company shall adjust the reserves as required by the
commissioner. The commissioner may take other disciplinary action as authorized pursuant
to section 505.8.
15. Requirements of principle-based valuation.
a. A company shall establish reserves using a principle-based valuation that meets all of
the following conditions for policies or contracts as specified in the valuation manual:
(1) Quantifies the benefits and guarantees, and the funding, associated with the policies
or contracts and the risks of the policies or contracts at a level of conservatism that reflects
conditions that include unfavorable events that have a reasonable probability of occurring
during the lifetime of the policies or contracts. For policies or contracts with a significant tail
risk, the valuation reflects conditions appropriately adverse to quantify the tail risk.
(2) Incorporates assumptions, risk analysis methods, and financial models and
management techniques that are consistent with, but not necessarily identical to, those

utilized within the company’s overall risk assessment process, while recognizing potential
differences in financial reporting structures and any prescribed assumptions or methods.
(3) Incorporates assumptions that are derived in one of the following manners:
(a) The assumption is prescribed in the valuation manual.
(b) Forassumptionsthatarenotprescribedinthevaluationmanual,theassumptionsshall
meet either of the following requirements:
(i) Be established utilizing the company’s available experience, to the extent that the
experience is relevant and statistically credible.
(ii) To the extent that company data is not available, relevant, or statistically credible, be
established utilizing other relevant, statistically credible experience.
(4) Provides margins for uncertainty including adverse deviation and estimation error,
such that the greater the uncertainty the larger the margin and resulting reserve.
b. A company using a principle-based valuation for one or more policies or contracts
subject to this subsection as specified in the valuation manual shall do all of the following:
(1) Establishproceduresforcorporategovernanceandoversightoftheactuarialvaluation
function consistent with those described in the valuation manual.
(2) Provide to the commissioner and the board of directors an annual certification of the
effectivenessofthecompany’sinternalcontrolswithrespecttotheprinciple-basedvaluation.
Such controls shall be designed to assure that all material risks inherent in the liabilities
and associated assets subject to such valuation are included in the valuation, and that the
valuation is made in accordance with the valuation manual. The certification shall be based
on the internal controls in place as of the end of the preceding calendar year.
(3) Develop, and file with the commissioner upon request, a principle-based valuation
report that complies with standards prescribed in the valuation manual.
c. A principle-based valuation may include a prescribed formulaic reserve component.
16. Experience reporting for policies or contracts in force on or after operative date of
valuation manual. A company shall submit mortality, morbidity, policyholder behavior, or
expense experience and other data as prescribed in the valuation manual.
17. Confidentiality.
a. Definition. For purposes of this subsection, “confidential information” means all of the
following:
(1) A memorandum in support of an opinion submitted under subsection 3 and any other
documents, materials, or other information, including but not limited to all working papers,
and copies thereof, created, produced, obtained by, or disclosed to the commissioner or any
other person in connection with the memorandum.
(2) All documents, materials, or other information, including but not limited to all
working papers, and copies thereof, created, produced, obtained by, or disclosed to the
commissioner or any other person in the course of an examination made under subsection
14, paragraph “f”; provided, however, that if an examination report or other materials
prepared in connection with an examination made under chapter 507 is not held as private
and confidential information under section 507.14, an examination report or other material
prepared in connection with an examination made under subsection 14, paragraph “f”, shall
not be “confidential information” to the same extent as if such examination report or other
material had been prepared under chapter 507.
(3) Any reports, documents, materials, or other information developed by a company in
support of, or in connection with, an annual certification by the company under subsection
15, paragraph “b”, subparagraph (2), evaluating the effectiveness of the company’s internal
controls with respect to a principle-based valuation and any other documents, materials, or
otherinformation,includingbutnotlimitedtoallworkingpapers,andcopiesthereof,created,
produced, obtained by, or disclosed to the commissioner or any other person in connection
with such reports, documents, materials, or other information.
(4) Any principle-based valuation report developed under subsection 15, paragraph “b”,
subparagraph (3), and any other documents, materials, or other information, including but
not limited to all working papers, and copies thereof, created, produced, obtained by, or
disclosed to the commissioner or any other person in connection with such report.
(5) Any documents, materials, data, or other information submitted by a company

under subsection 16, collectively known as “experience data” or “experience materials”,
and any other documents, materials, data, or other information, including but not limited
to all working papers, and copies thereof, created or produced in connection with such
experience data, in each case that includes any potentially company-identifying or personally
identifiable information, that is provided to or obtained by the commissioner, together with
any “experience data” or “experience materials”, and any other documents, materials, data,
or other information, including but not limited to all working papers, and copies thereof,
created, produced, obtained by, or disclosed to the commissioner or any other person in
connection with such experience data or experience materials.
b. Privilege for, and confidentiality of, confidential information.
(1) Except as provided in this subsection, a company’s confidential information is
confidential by law and privileged, and shall not be subject to chapter 22, shall not be subject
to subpoena, and shall not be subject to discovery or admissible in evidence in any private
civil action; provided, however, that the commissioner is authorized to use the confidential
information in the furtherance of any regulatory or legal action brought against the company
as a part of the commissioner’s official duties.
(2) Neitherthecommissionernoranypersonwhoreceivedconfidentialinformationwhile
acting under the authority of the commissioner shall be permitted or required to testify in any
private civil action concerning any confidential information.
(3) In order to assist in the performance of the commissioner’s duties, the commissioner
may share confidential information as follows:
(a) With other state, federal, or international regulatory agencies and with the NAIC and
its affiliates and subsidiaries.
(b) In the case of confidential information specified in paragraph “a”, subparagraphs (1)
and (4) only, with the actuarial board for counseling and discipline or its successor upon
request stating that the confidential information is required for the purpose of professional
disciplinary proceedings, and with state, federal, and international law enforcement officials.
(c) The sharing of confidential information under subparagraph division (a) or (b)
requires that the recipient of the confidential information agrees, and has the legal authority
to agree to maintain the confidentiality and privileged status of such documents, materials,
data, and other information in the same manner and to the same extent as required for the
commissioner.
(4) The commissioner may receive documents, materials, data, and other information,
including otherwise confidential and privileged documents, materials, data, or information,
fromtheNAICanditsaffiliatesandsubsidiaries, fromregulatoryorlawenforcementofficials
of other foreign or domestic jurisdictions, and from the actuarial board for counseling and
discipline, or its successor, and shall maintain as confidential or privileged any documents,
materials, data, or other information received with notice or the understanding that it
is confidential or privileged under the laws of the jurisdiction that is the source of the
documents, materials, data, or other information.
(5) The commissioner may enter into agreements governing the sharing and use of
information consistent with this paragraph “b”.
(6) No waiver of any applicable privilege or claim of confidentiality in the confidential
information shall occur as a result of disclosure to the commissioner under this subsection
or as a result of sharing as authorized in subparagraph (3).
(7) A privilege established under the law of any state or jurisdiction that is substantially
similar to the privilege established in this paragraph “b” shall be available and enforced in
any proceeding in, and in any court of, this state.
(8) For the purposes of this subsection, “regulatory agency”, “law enforcement agency”,
and the “NAIC”, include but are not limited to their employees, agents, consultants, and
contractors.
c. Sharing of confidential information. Notwithstanding paragraph “b”, any confidential
information specified in paragraph “b” may be shared as follows:
(1) May be subject to subpoena for the purpose of defending an action seeking damages
from the appointed actuary submitting the related memorandum in support of an opinion
submitted under subsection 3 or a principle-based valuation report developed under

subsection 15, paragraph “b”, subparagraph (3), by reason of an action required by this
section or by rules promulgated under this section.
(2) May otherwise be released by the commissioner with the written consent of the
company.
(3) Once any portion of a memorandum in support of an opinion submitted under
subsection 3 or a principle-based valuation report developed under subsection 15, paragraph
“b”, subparagraph (3), is cited by a company in its marketing or is publicly volunteered to or
before a governmental agency other than a state insurance department or is released by the
company to the news media, all portions of such memorandum or report shall no longer be
confidential information.
18. Single state exemption.
a. The commissioner may exempt specific product forms or product lines of a domestic
company that is licensed and doing business only in this state from the requirements of
subsection 14 provided that all of the following have occurred:
(1) The commissioner has issued an exemption in writing to the company and has not
subsequently revoked the exemption in writing.
(2) The company computes reserves using assumptions and methods used prior to the
operative date of the valuation manual in addition to any requirements established by the
commissioner and promulgated by rule.
b. For any company granted an exemption under this subsection, subsections 3 through
13 shall be applicable. With respect to any company applying this exemption, any reference
to subsection 14 found in subsections 3 through 13 shall not be applicable.

Legislative History

[C73, §1169; C97, §1774; C24, 27, 31, 35, 39, §8654; C46, 50, 54, 58, 62, §508.12; C66, 71, 73, 75, 77, 79, 81, §508.36; 82 Acts, ch 1072, §1, 2]