Current through Register Vol. 46, No. 39, September 25, 2024
(a)
General description.
The statement of actuarial opinion required by this section
shall consist of:
(1) a paragraph
identifying the appointed actuary and his or her qualifications; and
(2) a regulatory authority paragraph stating
that the company is exempt pursuant to this Part from submitting a statement of
actuarial opinion based on an asset adequacy analysis and that the opinion,
which is not based on an asset adequacy analysis, is rendered in accordance
with section
95.7 of this Part;
(3) a scope paragraph identifying the
subjects on which the opinion is expressed and describing the scope of the
appointed actuary's work; and
(4)
an opinion paragraph expressing the appointed actuary's 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 met the
circumstances of a particular case, but the appointed actuary should use
language which clearly expresses his or her professional judgment. However, in
any event the opinion shall retain all pertinent aspects of the language
provided in this section.
(1) The
opening paragraph shall indicate the appointed actuary's relationship to the
company and his or her qualifications to sign the opinion.
(i) For a company actuary the opening
paragraph of the actuarial opinion shall contain a statement such as:
"I, [name of actuary, initials of actuarial organizations
that actuary belongs to, e.g., M.A.A.A. and F.S.A., and title
of actuary], was 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
Superintendent dated [insert date]. I meet the Academy qualification standards
for rendering the opinion and am familiar with the valuation requirements of
the State of New York applicable to life and health insurance
companies."
(ii) For a
consulting actuary, the opening paragraph of the actuarial opinion shall
contain a statement such as:
"I, [name of actuary, initials of actuarial organizations
that actuary belongs to, e.g., M.A.A.A. and F.S.A., and title
of actuary], 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
Superintendent dated [insert date]. I meet the Academy qualification standards
for rendering the opinion and am familiar with the valuation requirements of
the State of New York applicable to life and health insurance
companies."
(2)
The regulatory authority paragraph shall include a statement such as the
following:
"Said company is exempt pursuant to 11 NYCRR 95 (New York
Insurance Regulation 126) from submitting a statement of actuarial opinion
based on an asset adequacy analysis. This opinion, which is not based on an
asset adequacy analysis, is rendered in accordance with section
95.7 of the
regulation."
(3) The scope
paragraph shall contain a sentence such as the following:
"I have examined the actuarial assumptions and actuarial
methods used in determining reserves and related actuarial items listed below,
as shown in the annual statement of the company, as prepared for filing with
state regulatory officials, as of December 31, [ ]."
The paragraph shall list items and amounts with respect to
which the appointed actuary is expressing an opinion. The list shall include
but not be necessarily limited to:
(i)
aggregate reserve and deposit funds for policies and contracts included in
exhibit 8;
(ii) aggregate reserve
and deposit funds for policies and contracts included in exhibit 9;
(iii) deposit funds, premiums, dividend and
coupon accumulations and supplementary contracts not involving life
contingencies included in exhibit 10; and
(iv) policy and contract claims-liability end
of current year included in exhibit 11, Part I.
(4) If the appointed actuary has examined the
underlying records, the scope paragraph shall also include a statement such as
the following:
"My examination included such review of the actuarial
assumptions and actuarial methods and of the underlying basic records, which
records, to the best of my knowledge and belief, are substantially accurate and
complete, and such tests of the actuarial calculations as I considered
necessary."
(5) If the
appointed actuary has not examined the underlying records, but has relied upon
the company or a third party for the preparation of listings and summaries of
policies in force and for the substantial accuracy of such records, the scope
paragraph shall include a statement such as one of the following:
(i) "I have relied upon [name and title of
company officer certifying in force records] for the preparation of listings
and summaries of policies and contracts and other liabilities in force and for
the substantial accuracy of such records, as certified in the attached
statement. I have reviewed such listings and summaries for reasonableness and
consistency and I am so satisfied. In other respects my examination included
review of the actuarial assumptions and actuarial methods and such tests of the
actuarial calculations as I considered necessary and I am satisfied as to their
reasonableness and consistency."
or
(ii)
"I have relied upon [name of accounting firm] for the substantial accuracy of
the in force records inventory and information concerning other liabilities, as
certified in the attached statement. I have reviewed such inventories and
information for reasonableness and consistency and I am so satisfied. In other
respects my examination included review of the actuarial assumptions and
actuarial methods and such tests of the actuarial calculations as I considered
necessary and I am satisfied to their reasonableness and consistency."
The statement of the person certifying shall follow the
form indicated by paragraph (11) of this subdivision.
(6) The opinion paragraph shall
include a statement such as the following:
"In my opinion the amounts carried in the balance sheet on
account of the actuarial items identified above:
(i) Are computed in accordance with those
presently accepted actuarial standards of practice and actuarial compliance
guidelines that specifically relate to the opinion required under section
95.7 of New York Insurance
Regulation 126 to the extent not inconsistent therewith and in accordance with
the requirements of such regulation, and which are consistently
applied;
(ii) Are based on
actuarial assumptions which produce reserves at least as great as those called
for in any contract provision as to reserve basis and method, and are in
accordance with all other contract provisions;
(iii) Meet the requirements of the insurance
law and regulations of the State of [state of domicile] and are at least as
great as the minimum aggregate amounts required by the State of New
York;
(iv) Are computed on the
basis of assumptions consistent with those used in computing the corresponding
items in the annual statement of the preceding year- end (with any exceptions
as noted below); and
(v) Include
provision for all actuarial reserves and related statement items which ought to
be established.
The actuarial methods, considerations and analyses used in
forming my opinion conform to the appropriate Standards of Practice and
Compliance Guidelines as promulgated by the Actuarial Standards Board, to the
extent not inconsistent with New York Insurance Regulation 126 and conform to
the requirements of such regulation."
(7) A paragraph should document the
eligibility for the company to provide an opinion as provided by this section.
It shall include the following:
"This opinion is provided in accordance with section
95.7 of Insurance Regulation 126.
As such it does not include an opinion regarding the adequacy of reserves and
related actuarial items when considered in light of the assets which support
them.
Eligibility for section
95.7 is confirmed as follows based
on the annual statement for the year ended December 31, 20 _:
(i) The ratio of the sum of capital and
surplus to the total admitted assets is [insert amount], which equals or
exceeds the applicable criterion based on the admitted assets of the
company.
(ii) The ratio of the sum
of the reserves and liabilities for annuities and deposits to the total
admitted assets is [insert amount], which is less than the applicable criteria
based on the admitted assets of the company.
(iii) The ratio of the book value of the
noninvestment grade bonds to the sum of capital and surplus is [insert amount],
which is less than the applicable criteria of.50
(iv) To my knowledge, based on such inquiry
as I considered reasonable, the NAIC Examiner Team has not designated the
company as a first priority company in either 20 _ or 20 _ generally based on
the annual statements for 20 _ and 20 _, or a second priority company in each
of such years or the company has resolved the first or second priority status
to the satisfaction of the commissioner of the state of domicile.
(v) To my knowledge, based on such inquiry as
I considered reasonable, there is not a specific request from the insurance
regulator in any jurisdiction in which the company does business requiring an
asset adequacy analysis opinion."
(8) The concluding paragraph may state
purposes for which the opinion is rendered, for example:
"This opinion is prepared for the use of company management
and the New York Department of Financial Services for the purposes set forth in
New York Insurance Law § 4217 and 11 NYCRR 95 (Insurance Regulation 126). This
opinion covers business in force as of December 31, 20[ ] and does not cover
new business issued subsequent to this date.
Signature of Appointed Actuary.
Address of Appointed Actuary.
Telephone Number of Appointed Actuary.
Date Opinion is Signed."
(9) If there has been any change in the
actuarial assumptions from those previously employed, that change should be
described in the annual statement and in a paragraph of the statement of
actuarial opinion, and the reference in subparagraph (6)(iv) of this
subdivision to consistency should read as follows:
". . . with the exception of the change described on Page [
] of the annual statement (or in a separate paragraph in this opinion)."
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
paragraph.
(10) If the
appointed actuary is unable to form an opinion, he or she shall refuse to issue
a statement of actuarial opinion. If the appointed actuary's opinion is adverse
or qualified, he or she shall issue an adverse or qualified actuarial opinion
explicitly stating the reasons for such opinion. Any statements for any adverse
or qualified actuarial opinion should follow the scope paragraph and precede
the opinion paragraph.
(11) If the
appointed actuary does not express an opinion as to the accuracy and
completeness of the listings and summaries of policies in force, there shall be
attached to the opinion the statement of a company officer or accounting firm
who prepared such underlying data similar to the following:
"I [name of officer], [title] of [name and address of
company or accounting firm], hereby affirm that the listings and summaries of
policies and contracts in force as of December 31, [ ], prepared for and
submitted to [name of appointed actuary], were prepared under my direction and,
to the best of my knowledge and belief, are substantially accurate and
complete.
Signature of the Officer of the Company or Accounting
Firm.
Address of the Officer of the Company or Accounting
Firm.
Telephone Number of the Officer of the Company or
Accounting Firm.
Date Signed."