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 for Compliance with
the NAIC Model Regulation on Life Insurance Illustrations promulgated by the
Actuarial Standards Board, and that the illustrated scales used in
insurer-authorized illustrations meet the requirements of this Rule.
C. The illustration actuary shall:
(1) Be a member in good standing 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 Superintendent, 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 five (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
Superintendent of any action taken by a commissioner of another state similar
to that under Paragraph (3) above;
(5) Disclose in the annual certification
whether, since the last certification, a currently payable scale applicable for
business issued within the previous five (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 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 National Association of
Insurance Commissioners or by the Superintendent.
D.
(1) The illustration actuary shall file a
certification with the board and with the Superintendent
(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 board of directors of
the insurer and the Superintendent 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 and the
Superintendent promptly of his or her inability to certify.
F. A responsible officer of the insurer,
other than the illustration actuary, shall certify annually:
(1) That the illustration formats meet the
requirements of this Rule and that the scales used in insurer-authorized
illustrations are those scales certified by the illustration actuary;
and
(2) That the company has
provided its producers with information about the expense allocation method
used by the company in its illustrations and disclosed as required in
Subsection C(6) of this section.
G. The annual certifications shall be
provided to the Superintendent each year by a date determined by the
insurer.
H. If an insurer changes
the illustration actuary responsible for all or a portion of the company's
policy forms, the insurer shall notify the Superintendent of that fact promptly
and disclose the reason for the change.
