(a)
General Description. The
statement of actuarial opinion submitted in accordance with this section shall
consist of (1) a paragraph identifying the appointed actuary and his or her
qualifications consistent with the requirements of subdivision (1) of
subsection (b) of this section; (2) a scope paragraph identifying the subjects
on which the 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 in accordance with subdivision (2) of subsection (b) of this
section and identifying the reserves and related actuarial items covered by the
opinion that may not have been so analyzed; (3) a reliance paragraph, in
accordance with subdivision (3) of subsection (b) of this section, describing
those areas, if any, where the appointed actuary has deferred to other experts
in developing data, procedures, or assumptions such as anticipated cash flows
from currently owned assets, including variation in cash flows according to
economic scenarios, supported by a statement of each such expert in the form
prescribed by subsection (e) of this section; (4) an opinion paragraph, in
accordance with subdivision (6) of subsection (b) of this section, expressing
the appointed actuary's opinion with respect to the adequacy of the supporting
assets to mature the liabilities; (5) one or more additional paragraphs in
individual company cases as follows; (A) if the appointed actuary considers it
necessary to state a qualification of his or her 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 this
opinion; (C) if the appointed actuary must disclose whether additional reserves
as of the prior opinion date are released as of this opinion date, and the
extent of the release; (D) if the appointed actuary chooses to add a paragraph
briefly describing the assumptions that form the basis for the actuarial
opinion.
(b)
Recommended
Language. The following language provided is that which in typical
circumstances would be included in a statement of actuarial opinion in
accordance with this section. The language may be modified as needed to meet
the circumstances of a particular case, but the appointed actuary shall use
language which clearly expresses his professional judgment. However, in any
event the opinion shall retain all pertinent aspects of the language provided
in this Section.
(1) The opening paragraph
shall indicate the appointed actuary's relationship to the company and his
qualifications to sign the opinion. For a company actuary, the opening
paragraph of the actuarial opinion shall include a statement such as:
"I, (name of actuary), am (title) of (name of company) and a
member of the American Academy of Actuaries. I was appointed by, or by the
authority of, the Board of Directors of said insurer 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 companies."
For a consulting actuary, the opening paragraph of the
actuarial opinion shall contain a sentence such as:
"I, (name and title of actuary), a member of the American
Academy of Actuaries, am associated with the firm of (insert name of consulting
firm). 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."
(2) The scope paragraph shall contain a
sentence such as the following: "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, ( )."
Tabulated below are those reserves and related actuarial items
that shall be subjected to asset adequacy analysis.
Asset Adequacy Tested Amounts - Reserves and
Liabilities
|
Statement Item
|
Formula Reserves (1)
|
Additional Actuarial Reserves (a)
(2)
|
Analysis Methods (b)
|
Other Amount (3)
|
Total Amount (1)+(2)+(3) (4)
|
Exhibit 5 Life
Insurance
|
Annuities
|
Supplementary Contracts with Line
Contingencies
|
Accidental Death
Benefits
|
Disability - Active
Lives
|
Disability - Disabled
Lives
|
Miscellaneous
Reserves
|
Total Exhibit 5 (Line 1, Page
3)
|
Exhibit 6 Active Life
Reserve
|
Claim
Reserve
|
Total Exhibit 6 (Line 2, Page
3)
|
Exhibit 7 Premium and Other Deposit Funds (Column 6,
Line 14)
|
Guaranteed Interest Contracts (Column 2, Line
14)
|
Annuities Certain (Column 3, Line
14)
|
Supplemental Contracts (Column 4, Line
14)
|
Dividend Accumulations or Refunds (Column 5, Line
14)
|
Total Exhibit 7 (Line 3, Page
3)
|
Exhibit 8 Part 1 1 Life (Line 4.1, Page
3)
|
2 Health (Line 4.2, Page
3)
|
Total Exhibit 8 Part
1
|
Separate Accounts (Page 3 of the Annual Statement of
the Separate Accounts, Lines 1 and 2)
|
TOTAL
RESERVES
|
IMR (General Account, Page _________ Line _________
)
|
(Separate Accounts, Page _________ Line
_________)
|
AVR (Page _________ Line _________ )
|
(c)
|
Net Deferred and Uncollected
Premium
|
Notes:
(a) The
additional actuarial reserves established under subdivision (2) of subsection
(e) of section
38a-78-5 of
the Regulations of the Connecticut State Agencies.
(b) The appointed actuary shall indicate the
method of analysis, determined in accordance with the standards for asset
adequacy analysis referred to in subsection (d) of section
38a-78-5 of
the Regulations of Connecticut State Agencies, by means of symbols that shall
be defined in footnotes to the table.
(c) Allocated amount of Asset Valuation
Reserve (AVR).
(3) If
the appointed actuary has relied on other experts to develop certain portions
of the analysis, the reliance paragraph shall include a statement such as:
"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 own opinion"), as certified in the attached
statement. I have reviewed the information relied upon for
reasonableness."
A statement of reliance on other experts shall be accompanied
by a statement by each of the experts in the form prescribed by subsection (e)
of this section.
(4) If the
appointed actuary has examined the underlying asset and liability records, the
reliance paragraph shall 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."
(5) If
the appointed actuary has not examined the underlying records, but has relied
upon data such as listings and summaries of policies in force or asset records,
prepared by the company, the reliance paragraph shall 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."
The section shall be accompanied by a statement by each person
relied upon in the form prescribed by subsection (e) of this section.
(6) The opinion paragraph shall
include a statement such as:
"In my opinion the reserves and related actuarial values
concerning the statement items identified above:
(A) are computed in accordance with presently
accepted actuarial standards consistently applied and are fairly stated, in
accordance with sound actuarial principles;
(B) 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;
(C) meet the
requirements of the insurance laws 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;
(D)
are computed on the basis of assumptions consistent with those used in
computing the corresponding items in the annual statement of the preceding
yearend (with any exceptions noted below); and
(E) include provision for all actuarial
reserves and related statement items which 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 provisions, according to presently accepted
actuarial standards of practice, for the anticipated cash flows required by the
contractual obligations and related expenses of the company.
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 which should be considered in reviewing this opinion.) or (The
following material changes which 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: (insert description of the change or
changes).
Note: 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"
|
(c)
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 section.
(d)
Adverse Opinions. If the
appointed actuary is unable to form an opinion, then he or she shall refuse to
issue a statement of actuarial opinion. If the appointed actuary's opinion is
adverse or qualified, then he or she shall issue an adverse or qualified
actuarial opinion explicitly stating the reasons for the opinion. This
statement shall follow the scope paragraph and precede the opinion
paragraph.
(e)
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 shall so indicate the
persons the appointed 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.
(f)
Alternate Opinion.
(1) As an
alternative to the requirements of subparagraph (C) of subdivision (6) of
subsection (b) of this section, the commissioner 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 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 commissioner chooses
to allow this alternative, a formal written list of standards and conditions
shall be made available to all insurers. 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 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 commissioner for approval of
that request has been met." If the commissioner 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 commissioner. The 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 annually file a request to do so, along
with justification for its use, no later than April 30 of the year in which the
opinion is to be filed. The request shall be deemed approved on October 1 of
that year if the commissioner 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 domicile) and I have submitted the required comparison as specified by
this state."
(i) If the commissioner chooses
to allow this alternative, a formal written list of products, to be added to
the table set forth in subparagraph C(ii) of this subdivision, for which the
required comparison is to 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
chooses 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 the 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 include, at a minimum:
(1) Product Type
|
(2) Death Benefit or Account Value
|
(3) Reserves Held
|
(4) Codification Reserves
|
(5) 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
shall be kept confidential to the same extent and under the same conditions as
the actuarial memorandum.
(2) Notwithstanding subsection (f)(1) of this
section, the commissioner may reject an opinion based on the laws and
regulations of the state of domicile and require an opinion based on the laws
of Connecticut. If a company is unable to provide the opinion within sixty (60)
days of such request or such other period of time determined by the
commissioner after consultation with the company, the commissioner may contract
with an independent actuary at the company's expense to prepare and file the
opinion.