§ 27-4.5-3. Actuarial opinion of reserves.
(a) Actuarial opinion prior to the operative date of the valuation manual.
(1) General. Every life insurance company doing business in this state shall annually submit the
opinion of a qualified actuary as to whether the reserves and related actuarial items
held in support of the policies and contracts specified by the commissioner of insurance
by regulation 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 commissioner of insurance by regulation shall define the specifics
of this opinion and add any other items deemed to be necessary to its scope.
(2) Actuarial analysis of reserves and assets supporting reserves.
(i) Every life insurance company, except as exempted by regulation, shall also annually
include in the opinion required by subsection (a) above an opinion of the same qualified
actuary as to whether the reserves and related actuarial items held in support of
the policies and contracts specified by the commissioner of insurance by regulation,
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 policies and contracts, including, but not limited to, the benefits under
and expenses associated with the policies and contracts.
(ii) The commissioner of insurance may provide by regulation for a transition period for
establishing any higher reserves that the qualified actuary may deem necessary in
order to render the opinion required by this section.
(3) Requirement for opinion under subsection (a)(2) above. Each opinion required by subsection (a)(2) shall be governed by the following provisions:
(i) A memorandum, in form and substance acceptable to the commissioner of insurance as
specified by regulation, shall be prepared to support each actuarial opinion; and
(ii) If the insurance company fails to provide a supporting memorandum at the request of
the commissioner of insurance within a period specified by regulation or the commissioner
of insurance determines that the supporting memorandum provided by the insurance company
fails to meet the standards prescribed by the regulations or is otherwise unacceptable
to the commissioner of insurance, the commissioner of insurance 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 of insurance.
(4) Requirement for all opinions subject to subsection (a). Every opinion required by subsection (a) shall be governed by the following provisions:
(i) The opinion shall be submitted with the annual statement reflecting the valuation
of the reserve liabilities for each year ending on or after December 31, 1994.
(ii) The opinion shall apply to all business in force including individual and group health
insurance plans, in a form and substance acceptable to the commissioner of insurance
as specified by regulation.
(iii) The opinion shall be based on standards adopted by the actuarial standards board and
on any additional standards as the commissioner of insurance may by regulation prescribe.
(iv) In the case of an opinion required to be submitted by a foreign or alien company,
the commissioner of insurance may accept the opinion filed by that company with the
insurance supervisory official of another state if the commissioner of insurance determines
that the opinion reasonably meets the requirements applicable to a company domiciled
in this state.
(v) For the purposes of this section, "qualified actuary� means a member in good standing
of the American Academy of Actuaries who meets the requirements set forth in the regulations.
(vi) Except in cases of fraud or willful misconduct, the qualified actuary shall not be
liable for damages to any person, other than the insurance company and the commissioner
of insurance, for any act, error, omission, decision, or conduct with respect to the
actuary's opinion.
(vii) Disciplinary action by the commissioner of insurance against the company or the qualified
actuary shall be defined in regulations by the commissioner of insurance.
(viii) Except as provided in subsections (a)(4)(xii), (xiii), and (xiv) below, documents,
materials, or other information in the possession or control of the department of
insurance that are a memorandum in support of the opinion, and any other material
provided by the company to the commissioner in connection with the memorandum, shall
be confidential and privileged, shall not be subject to chapter 35 of title 42, shall not be subject to subpoena, and shall not be subject to discovery or admissible
in evidence in any private civil action. However, the commissioner is authorized to
use the documents, materials, or other information in the furtherance of any regulatory
or legal action brought as a part of the commissioner's official duties.
(ix) Neither the commissioner nor any person who received documents, materials, or other
information while acting under the authority of the commissioner shall be permitted
or required to testify in any private civil action concerning any confidential documents,
materials, or information subject to subsection (a)(4)(viii).
(x) In order to assist in the performance of the commissioner's duties, the commissioner:
(A) May share documents, materials, or other information, including the confidential and
privileged documents, materials, or information subject to subsection (a)(4)(viii)
with other state, federal, and international regulatory agencies, with the NAIC and
its affiliates and subsidiaries, and with state, federal, and international law enforcement
authorities, provided that the recipient agrees to maintain the confidentiality and
privileged status of the document, material, or other information;
(B) May receive documents, materials, or information, including otherwise confidential
and privileged documents, materials, or information, from the NAIC and its affiliates
and subsidiaries, and from regulatory and law enforcement officials of other foreign
or domestic jurisdictions, and shall maintain as confidential or privileged any document,
material, or 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 document,
material, or information; and
(C) May enter into agreements governing sharing and use of information consistent with
subsections (a)(4)(viii) — (a)(4)(x).
(xi) No waiver of any applicable privilege or claim of confidentiality in the documents,
materials, or information shall occur as a result of disclosure to the commissioner
under this section or as a result of sharing as authorized in subsection (a)(4)(x).
(xii) A memorandum in support of the opinion, and any other material provided by the company
to the commissioner in connection with the memorandum, may be subject to subpoena
for the purpose of defending an action seeking damages from the actuary submitting
the memorandum by reason of an action required by this section or by regulations promulgated
hereunder.
(xiii) The memorandum or other material may otherwise be released by the commissioner with
the written consent of the company or to the American Academy of Actuaries upon request
stating 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.
(xiv) Once any portion of the confidential memorandum is cited by the company in its marketing
or is cited before a governmental agency other than a state insurance department or
is released by the company to the news media, all portions of the confidential memorandum
shall be no longer confidential.
(b) Actuarial opinion of reserves after the operative date of the valuation manual.
(1) General. Every company with outstanding life insurance contracts, accident and health insurance
contracts, or deposit-type 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 will 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 contracts, accident and health insurance
contracts, or deposit-type contracts in this state and subject to regulation by the
commissioner, except as exempted in the valuation manual, shall also annually include
in the opinion required by subsection (a)(1) of this section, an opinion of the same
appointed actuary as to whether 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 policies and contracts,
including but not limited to the benefits under and expenses associated with the policies
and contracts.
(3) Requirements for opinions subject to subsection (b)(2). Each opinion required by subsection (b)(2) shall be governed by the following provisions:
(i) A memorandum, in form and substance as specified in the valuation manual, and acceptable
to the commissioner, shall be prepared to support each actuarial opinion.
(ii) If the insurance 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 insurance 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) Requirement for all opinions subject to subsection (b). Every opinion shall be governed by the following provisions:
(i) The opinion shall be in form and substance as specified in the valuation manual and
acceptable to the commissioner.
(ii) 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.
(iii) The opinion shall apply to all policies and contracts subject to subsection (b)(2),
plus other actuarial liabilities as may be specified in the valuation manual.
(iv) 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.
(v) 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.
(vi) Except in cases of fraud or willful misconduct, the appointed actuary shall not be
liable for damages to any person (other than the insurance company and the commissioner)
for any act, error, omission, decision, or conduct with respect to the appointed actuary's
opinion.
(vii) Disciplinary action by the commissioner against the company or the appointed actuary
shall be defined in regulations by the commissioner.