Hawaii Administrative Rules
Title 16 - DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS
Chapter 169 - ACTUARIAL OPINION AND MEMORANDUM
Subchapter 1 - INSURANCE COMPANIES, MUTUAL BENEFIT SOCIETIES, AND FRATERNAL BENEFIT SOCIETIES AUTHORIZED AS LIFE INSURERS
Section 16-169-7 - Statement of actuarial opinion based on asset adequacy analysis
Current through February, 2024
(a) General description. The statement of actuarial opinion submitted in accordance with this section shall consist of:
(b) Recommended language. The following paragraphs are to be included in the statement of actuarial opinion in accordance with this section. Language is that which in typical circumstances should be included in a statement of actuarial opinion. The language may be modified as needed to meet the circumstances of a particular case, but the appointed actuary should use language which clearly expresses the actuary's professional judgment. However, in any event the opinion shall retain all pertinent aspects of the language provided in this section.
"I, (name), am (title) of (insurance company name) 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 insurance companies."
For a consulting actuary, the opening paragraph should contain a sentence such as:
"I, (name), a member of the American Academy of Actuaries, am associated with the firm of (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."
"I have examined the actuarial assumptions and actuarial methods used in determining reserves and related actuarial items listed in Appendix A, chapter 16-169, Hawaii Administrative Rules, as shown in the annual statement of the company, as prepared for filing with state regulatory officials, as of December 31, 20( ). Tabulated in Appendix A, chapter 16-169, Hawaii Administrative Rules, are those reserves and related actuarial items which have been subjected to asset adequacy analysis."
"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 opinion,) and as certified in the attached statement. I have reviewed the information relied upon for reasonableness."
A statement of reliance on other experts should be accompanied by a statement by each of the experts in the form prescribed by subsection (e).
"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 bank asset and liability records to (exhibit and schedules listed as applicable) of the company's 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 of the form prescribed by subsection (e).
"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 such assets, and the considerations anticipated to be received and retained under such policies and contracts, make adequate provision, 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: (Describe 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 which 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 the actuary shall refuse to issue a statement of actuarial opinion. If the appointed actuary's opinion is adverse or qualified, then the actuary shall issue an adverse or qualified actuarial opinion explicitly stating the reasons for the opinion. This statement should 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 should so indicate whom the actuary is relying upon and a precise identification of the items subject to reliance. In addition, the persons upon whom the appointed actuary relies shall provide a certification that precisely identifies the information provided by that person and a statement as to the accuracy, completeness, or reasonableness, as applicable, of the information. 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 Option. The Standard Valuation Law section 431:5.307, HRS, gives the commissioner broad authority to accept the valuation of a foreign insurer when that valuation meets the requirements applicable to a company domiciled in this state in the aggregate. As an alternative to the requirements of subsection (b)(6), the commissioner may make one or more of the following additional approaches available to the opining actuary:
(1) Product Type |
(2) Death Benefit or Account Value |
(3) Reserves Held |
(4) Codification Reserves |
(5) Codification Standard |
Notwithstanding the above, 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 this State. If a company is unable to provide the opinion within sixty (60) days of the request or such other period of time determined by the commissioner after consultation with the company, the commissioner may contract an independent actuary at the company's expense to prepare and file the opinion.