§ 27-1-12.8-34 — Minimum standard of valuation for contracts issued on or after operative date of Valuation Manual; operative date determination; changes to Valuation Manual; requirements

Indiana § 27-1-12.8-34

• Jurisdiction: Indiana
• Title 27: INSURANCE
• Art. 1: DEPARTMENT OF INSURANCE
• Ch. 12.8: Standard Valuation Law

Text

(a) Except as provided in subsections (e)
and (g), for 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 section 20 of this
chapter.
(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 (42) members, or
three-fourths (3/4) of the members voting, whichever is greater.
(2) Legislation containing substantially similar terms and
provisions as the terms and provisions contained in this chapter
has been enacted by states representing greater than seventy-five
percent (75%) of the direct premiums written as reported in the
following annual statements submitted for 2008:
(A) Life, accident, and health annual statements.
(B) Health annual statements.
(C) Fraternal annual statements.
(3) Legislation containing substantially similar terms and
provisions as the terms and provisions contained in this chapter
has been enacted by at least forty-two (42) of the following
fifty-five (55) jurisdictions:
(A) The fifty (50) states of the United States.
(B) American Samoa.
(C) The American Virgin Islands.
(D) The District of Columbia.
(E) Guam.
(F) Puerto Rico.
(c) Unless a change in the Valuation Manual specifies a later
effective date, changes to the Valuation Manual are effective on the
January 1 following the date when the change to the Valuation Manual
has been adopted by the NAIC by an affirmative vote representing:
(1) at least three-fourths (3/4) of the members of the NAIC voting,
but not less than a majority of the total membership; and
(2) members of the NAIC representing jurisdictions totaling
greater than seventy-five percent (75%) of the direct premiums
written, as reported in the following annual statements most
recently available before the vote:
(A) Life, accident, and health annual statements.
(B) Health annual statements.
(C) Fraternal annual statements.
(d) The Valuation Manual must specify all of the following:
(1) Minimum valuation standards for contracts that are subject to
section 20 of this chapter are the following:
(A) The commissioners reserve valuation method for life
insurance contracts, other than annuity contracts.
(B) The commissioners annuity reserve valuation method for
annuity contracts.
(C) Minimum reserves for all other contracts.
(2) The contracts or types of contracts that are subject to the
requirements of a principle based valuation under section 35 of
this chapter and the minimum valuation standards consistent with
the requirements.
(3) For contracts that are subject to a principle based valuation
under section 35 of this chapter, the following:
(A) Requirements for:
(i) the format of the reports to the commissioner under
section 35(c)(3) of this chapter; and
(ii) which certifications described in item (i) must include
information necessary to determine whether the valuation is
appropriate and in compliance with sections 19 through 40 of
this chapter.
(B) Assumptions 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 the procedures.
(4) For contracts that are not subject to a principle-based
valuation under section 35 of this chapter, the minimum valuation
standard must:
(A) be consistent with the minimum standard of valuation
before the operative date of the Valuation Manual; or
(B) develop reserves that quantify:
(i) the benefits, guarantees, and funding associated with the
contracts; and
(ii) the contracts' risks at a level of conservatism that reflects
conditions that include unfavorable events that have a
reasonable probability of occurring.
(5) Other requirements, including requirements relating to:
(A) Reserve methods.
(B) Models for measuring risk.
(C) Generation of economic scenarios.
(D) Assumptions.
(E) Margins.
(F) Use of company experience.
(G) Risk measurement.
(H) Disclosure.
(I) Certifications.
(J) Reports.
(K) Actuarial opinions and memorandums.
(L) Transition rules.
(M) Internal controls.
(6) The data and form of the data required under section 36 of this
chapter, including:
(A) the person to whom the data must be submitted;
(B) data analyses; and
(C) reporting of analyses.
(e) If:
(1) there is no specific valuation requirement; or
(2) a specific valuation requirement in the Valuation Manual is
not, in the opinion of the commissioner, in compliance with
sections 19 through 40 of this chapter;
a company shall, with respect to the specific valuation requirements,
comply with minimum valuation standards prescribed by the
commissioner in rules adopted under IC 4-22-2.
(f) The commissioner may employ or contract with a qualified
actuary, at the expense of a company, to:
(1) perform an actuarial examination of the company and provide
an opinion concerning the appropriateness of any reserve
assumption or method used by the company; or
(2) review and provide an opinion concerning the company's
compliance with a requirement of this chapter. The commissioner
may rely upon an opinion of a qualified actuary engaged by the
commissioner of another state, district, or territory of the United
States concerning sections 19 through 40 of this chapter.
(g) The commissioner may:
(1) require a company to change an assumption or method that in
the opinion of the commissioner is necessary to comply with the
requirements of the Valuation Manual or sections 19 through 40
of this chapter; and
(2) take other disciplinary action allowed by law.
A company described in subdivision (1) shall adjust reserves as
required by the commissioner.

Legislative History

As added by P.L.276-2013, SEC.10. Amended by P.L.124-2018, SEC.27.