Connecticut Administrative Code
Title 38a - Insurance Department
78 - Connecticut Standard Valuation Law Actuarial Opinion and Memorandum
Section 38a-78-7 - Statement of actuarial opinion based on an asset adequacy analysis
Current through March 14, 2024
(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.
"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."
Tabulated below are those reserves and related actuarial items that shall be subjected to asset adequacy analysis.
Asset Adequacy Tested Amounts - Reserves and Liabilities |
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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 |
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Annuities |
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Supplementary Contracts with Line Contingencies |
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Accidental Death Benefits |
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Disability - Active Lives |
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Disability - Disabled Lives |
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Miscellaneous Reserves |
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Total Exhibit 5 (Line 1, Page 3) |
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Exhibit 6 Active Life Reserve |
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Claim Reserve |
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Total Exhibit 6 (Line 2, Page 3) |
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Exhibit 7 Premium and Other Deposit Funds (Column 6, Line 14) |
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Guaranteed Interest Contracts (Column 2, Line 14) |
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Annuities Certain (Column 3, Line 14) |
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Supplemental Contracts (Column 4, Line 14) |
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Dividend Accumulations or Refunds (Column 5, Line 14) |
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Total Exhibit 7 (Line 3, Page 3) |
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Exhibit 8 Part 1 1 Life (Line 4.1, Page 3) |
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2 Health (Line 4.2, Page 3) |
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Total Exhibit 8 Part 1 |
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Separate Accounts (Page 3 of the Annual Statement of the Separate Accounts, Lines 1 and 2) |
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TOTAL RESERVES |
IMR (General Account, Page _________ Line _________ ) |
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(Separate Accounts, Page _________ Line _________) |
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AVR (Page _________ Line _________ ) |
(c) |
Net Deferred and Uncollected Premium |
Notes:
"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.
"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."
"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.
"In my opinion the reserves and related actuarial values concerning the statement items identified above:
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) Product Type |
(2) Death Benefit or Account Value |
(3) Reserves Held |
(4) Codification Reserves |
(5) Codification Standard |