Current through Register Vol. 48, No. 12, March 22, 2024
a)
The Board of Directors of each insurer shall appoint one or more illustration
actuaries.
b) The illustration
actuary shall certify that the disciplined current scale used in illustrations
is in conformity with the Actuarial Standard of Practice No. 24, Compliance
with the NAIC Life Insurance Illustrations Model Regulation promulgated by the
Actuarial Standards Board (ASB), as of December 2016 (no subsequent dates or
editions), 1850 M Street NW, Suite 300, Washington DC 20006; website
http://www.actuarialstandardsboard.org/),
and that the illustrated scales used in insurer-authorized illustrations meet
the requirements of this Part.
c)
The illustration actuary shall:
1) Be a
member of the American Academy of Actuaries;
2) Be familiar with the standard of practice
regarding life insurance policy illustrations;
3) Not have been found by the Director,
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 an illustration actuary;
B) Been found guilty of fraudulent or
dishonest practices;
C)
Demonstrated his or her incompetence, lack of cooperation, or untrustworthiness
to act as an illustration actuary; or
D) Resigned or been removed as an
illustration actuary within the past 5 years as a result of acts or omissions
indicated in any adverse report on examination or as a result of a failure to
adhere to generally acceptable actuarial standards;
4) Not fail to notify the Director of any
action taken by a commissioner of another state similar to that identified
under subsection (c)(3);
5)
Disclose in the annual certification whether, since the last certification, a
currently payable scale applicable for business issued within the previous 5
years and within the scope of the certification has been reduced for reasons
other than changes in the experience factors underlying the disciplined current
scale. If non-guaranteed elements illustrated for new policies are not
consistent with those illustrated for similar in force policies, this must be
disclosed in the annual certification. If non-guaranteed elements illustrated
for both new and in force policies are not consistent with the non-guaranteed
elements actually being paid, charged or credited to the same or similar forms,
this must be disclosed in the annual certification; and
6) Disclose, in the annual certification, the
method, of the following, used to allocate overhead expenses for all
illustrations:
A) Fully allocated
expenses;
B) Marginal expenses;
or
C) A generally recognized
expense table based on fully allocated expenses representing a significant
portion of insurance companies and approved by the NAIC or by the
Director.
d)
The illustration actuary shall:
1) File a
certification with the insurer's Board of Directors and the Director:
A) Annually for all policy forms for which
illustrations are used; and
B)
Before a new policy form is illustrated.
2) If an error in a previous certification is
discovered, the illustration actuary shall notify the insurer's Board of
Directors and the Director promptly.
e) If an illustration actuary is unable to
certify the scale for any policy form illustration the insurer intends to use,
the actuary shall notify the Board of Directors of the insurer promptly of his
or her inability to certify.
f) An
annual certification shall be filed with the Director by the insurer by no
later than December 31 of each year for the 12 months immediately preceding the
certification date. A responsible officer of the insurer, other than the
illustration actuary, shall certify:
1) That
the illustration formats meet the requirements of this Part and that the scales
used in insurer-authorized illustrations are those scales certified by the
illustration actuary; and
2) That
the insurer has provided its insurance producers with information about the
expense allocation method used by the insurer in its illustrations and
disclosed as required by subsection (c)(6).
g) If an insurer changes the illustration
actuary responsible for all or a portion of the insurer's policy forms, the
insurer shall notify the Director of that fact promptly and disclose the reason
for the change.