Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a)
Submission of Statement of Actuarial Opinion.
(1)
There is to be included on or attached to Page 1 of the Annual Statement for each
year beginning with the year in which this regulation becomes effective the
statement of an Appointed Actuary, entitled "Statement of Actuarial Opinion,"
setting forth an opinion relating to reserves and related actuarial items held in
support of policies and contracts, in accordance with Section
2580.5 of this regulation.
(2) Upon written request by the Company, the
Commissioner may grant an extension of the date for submission of the Statement of
Actuarial Opinion.
(b) A
"qualified actuary" is an individual who:
(1) Is a
member in good standing of the American Academy of Actuaries; and
(2) Is qualified to sign statements of actuarial
opinion for life and health insurance company annual statements in accordance with
the American Academy of Actuaries qualification standards for actuaries signing such
statements;
(3) Is familiar with the
valuation requirements applicable to life and health insurance companies;
(4) Has not been found by the Commissioner (or if
so found has subsequently been reinstated as a qualified actuary), following
appropriate notice and hearing to have:
(A)
Violated any provision of, or any obligation imposed by, the Insurance Law or other
law in the course of his or her dealings as a qualified actuary;
(B) Been found guilty of fraudulent or dishonest
practices;
(C) Demonstrated his or her
incompetency, lack of cooperation, or untrustworthiness to act as a qualified
actuary;
(D) Submitted to the
Commissioner during the past five years, pursuant to this regulation, an actuarial
opinion or memorandum that the Commissioner rejected because it did not meet the
provisions of this regulation including standards set by the Actuarial Standards
Board; or
(E) Resigned or been removed
as an actuary within the past five years as a result of acts or omissions indicated
in any adverse report on examination or as a result of failure to adhere to
generally acceptable actuarial standards; and
(5) Has not failed to notify the Commissioner of
any action taken by any Commissioner of any other state similar to that under
Paragraph (4) above.
(c) An
"appointed actuary" is a Qualified Actuary who is appointed or retained to prepare
the Statement of Actuarial Opinion required by this regulation, either directly by
or by the authority of the board of directors through an executive officer of the
Company who is not said Qualified Actuary. The Company shall mail the Commissioner
timely notice of the name, title (and, in the case of a consulting actuary, the name
of the firm) and manner of appointment or retention of each person appointed or
retained by the Company as an appointed actuary and shall state in the notice that
such person meets the requirements set forth in Subsection
2580.4(b). Once notice
is furnished, no further notice is required with respect to this person, provided
that the Company shall inform the Commissioner by written notice postmarked or
received within sixty calendar days of the event, in the event the actuary ceases to
be appointed or retained as an appointed actuary or to meet the requirement set
forth in Subsection
2580.4(b). If any
person appointed or retained as an appointed actuary replaces a previously appointed
actuary, the notice shall so state and give the reasons for replacement.
(d) Standards for Asset Adequacy Analysis.
The asset adequacy analysis required by this regulation:
(1) Shall conform to the Standards of Practice as
promulgated from time to time by the Actuarial Standards Board and any additional
standards under this regulation, which standards are to form the basis of the
statement of Actuarial Opinion in accordance with this regulation; and
(2) Shall be based on methods of analysis as are
deemed appropriate for such purposes by the Actuarial Standards
Board.
(e) Liabilities to be
Covered.
(1) Under the authority of Section
10489.15 of the
Insurance Code, the statement of Actuarial Opinion shall apply to all in force
business on the statement date, whether directly issued or assumed, regardless of
when or where issued, namely, reserves of Exhibits 5, 6, and 7, and claim
liabilities in Exhibit 8, Part 1 and any other policy or contract liabilities and
equivalent items in the separate account statement or statements. Exhibits 5, 6, 7,
and 8 are included in the chart attached to Paragraph 2580.5(b)(2).
(2) If the Appointed Actuary determines as the
result of Asset Adequacy Analysis that a reserve should be held in addition to the
aggregate reserve held by the Company and calculated in accordance with methods set
forth in Division 2, Part 2, Chapter 5, Article 3A (Section 10489.1, et seq.) of the
Insurance Code, the Company shall establish the additional reserve.
(3) Additional reserves established under
Paragraph (2) above and deemed not necessary in subsequent years may be released.
Any amounts released must be disclosed in the Actuarial Opinion for the applicable
year. The release of such reserves would not be deemed an adoption of a lower
standard of valuation.
1. New section
filed 12-6-94; operative 1-5-95 (Register 94, No. 49).
2. Amendment filed
12-27-2004; operative 1-1-2005 pursuant to Government Code section
11343.4
(Register 2004, No. 53).
Note: Authority cited: Section
10489.15,
Insurance Code. Reference: Section
10489.15,
Insurance Code.
