Current through Register Vol. 56, No. 6, March 18,
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 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 these
rules.
(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 Commissioner, following appropriate notice and hearing to have:
i. 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;
ii. Been found guilty of fraudulent or
dishonest practices;
iii.
Demonstrated his or her incompetence, lack of cooperation, or untrustworthiness
to act as an illustration actuary; or
iv. Resigned or been removed as an
illustration 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 a
failure to adhere to generally acceptable actuarial standards;
4. Not fail to notify the
Commissioner of any action taken by a commissioner of another state similar to
that under (c)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 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
nonguaranteed 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 nonguaranteed elements illustrated for both new and in
force policies are not consistent with the nonguaranteed 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
single method used to allocate overhead expenses for all illustrations:
i. Fully allocated expenses;
ii. Marginal expenses or;
iii. 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.
(d) The illustration actuary shall file a
certification with the board of directors and with the Commissioner annually
for all policy forms for which illustrations are used, and before a new policy
form is illustrated.
1. If an error in a
previous certification is discovered, the illustration actuary shall notify the
board of directors of the insurer and the Commissioner within 10
days.
(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 Commissioner within 10 days 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 these rules 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 agents with information about the expense allocation method
used by the company in its illustrations and disclosed as required in (c)6
above.
(g) The annual
certifications shall be provided to the Commissioner each year by a date
determined by the insurer. Subsequent annual certifications shall be provided
by the anniversary date of the initial annual certification, or a request to
change the date of certification with a full explanation of the basis of the
request shall be filed by that date. The original certification shall be mailed
to the following address:
New Jersey Department of Banking and Insurance
Life and Health Actuarial
PO Box 325
Trenton, New Jersey 08625-0325
(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 Commissioner within 10 days and disclose the reason
for the change.
