New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter IV - Financial Condition Of Insurer and Reports to Superintendent
Subchapter B - Life Insurers
Part 95 - REGULATIONS GOVERNING AN ACTUARIAL OPINION AND MEMORANDUM
Section 95.8 - Statement of actuarial opinion based on an asset adequacy analysis

Universal Citation: 11 NY Comp Codes Rules and Regs § 95.8

Current through Register Vol. 46, No. 39, September 25, 2024

(a) General description.

The statement of actuarial opinion submitted in accordance with this section shall consist of:

(1) a paragraph identifying the appointed actuary and his or her qualifications;

(2) a scope paragraph identifying the subjects on which an opinion is expressed and describing the scope of the appointed actuary's work, including a tabulation delineating the reserves and related actuarial items which have been analyzed for asset adequacy and the method of analysis, and identifying the reserves and related actuarial items covered by the opinion which have not been so analyzed;

(3) a reliance paragraph describing those areas, if any, where the appointed actuary has deferred to other experts in developing data, procedures or assumptions (e.g., anticipated cash flows from currently owned assets, including variation in cash flows according to economic scenarios) supported by a statement of each such expert in the form prescribed by subdivision (e) of this section;

(4) an opinion paragraph expressing the appointed actuary's opinion with respect to the adequacy of the supporting assets to mature the liabilities; and

(5) one or more additional paragraphs may be needed in individual company cases as follows:

(i) If the appointed actuary considers it necessary to state a qualification of his or her opinion.

(ii) If the appointed actuary must disclose the method of aggregation for reserves of different products or lines of business for asset adequacy analysis.

(iii) If the appointed actuary must disclose reliance upon any portion of the assets supporting the Asset Valuation Reserve (AVR), Interest Maintenance Reserve (IMR) or other mandatory or voluntary statement reserves for asset adequacy analysis.

(iv) If the appointed actuary must disclose an inconsistency in the method of analysis or basis of asset allocation used at the prior opinion date with that used for this opinion.

(v) If the appointed actuary must disclose whether additional reserves as of the prior opinion date are released as of this opinion date, and the extent of the release.

(vi) If the appointed actuary chooses to add a paragraph briefly describing the assumptions which form the basis for the actuarial 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 meet 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 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 scope paragraph shall include a statement 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, 19[ ]. Tabulated below are those reserves and related actuarial items which have been subjected to asset adequacy analysis and those not so subjected.

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(3) If the appointed actuary has relied on other experts to develop certain portions of the analysis, the reliance paragraph shall include a statement such as the following:

"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" and/or, "certain critical aspects of the analysis performed in conjunction with forming my opinion"] as certified in the attached statement(s). I have reviewed the information relied upon for reasonableness and consistency and I am so satisfied."

Such a statement of reliance on other experts shall be accompanied by a statement by each of such experts in the form prescribed by subdivisions (e)(2) and (f) of this section.

(4) If the appointed actuary has examined the underlying asset and liability records, the reliance 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 asset and liability 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 data (e.g., listings and summaries of policies in force and/or asset records) prepared by the company or by a third party, the reliance paragraph should include a sentence such as the following:

"In forming an opinion on [specify types of reserves] I relied upon data prepared by [name and title of company officer(s) or third parties (name, title and firm) certifying in-force records and/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 such review of the actuarial assumptions and actuarial methods used and such tests of the calculations as I considered necessary and I am so satisfied as to their reasonableness and consistency."

Such a section must be accompanied by a statement by each person relied upon in the form prescribed by paragraph (e)(1) of this section.

(6) The opinion statement shall include a statement such as the following:

"In my opinion the reserves and related actuarial values concerning the statement items identified above:

(i) Are computed in accordance with those presently accepted actuarial standards of practice that specifically relate to the opinion required under section 95.8 of New York Insurance Regulation 126 to the extent not inconsistent therewith and in accordance with the requirements of such regulation, and that are consistently applied and fairly stated, in accordance with sound actuarial principles;

(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 noted below);

(v) Include provision for all actuarial reserves and related statement items which ought to be established; and

(vi) 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, 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.

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, to the extent not inconsistent with Insurance Regulation 126 and conform to the requirements of such regulation.

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."

"The following material change(s) that 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.

"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), as amended from time to time. This opinion covers business in force as of December 31, 20[ ] and does not cover new business issued subsequent to this date. This opinion does not cover all matters needed to assess the future capital and surplus adequacy of the company.

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 Opinion is Signed."

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, 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 statement for any adverse or qualified actuarial opinion shall follow the scope paragraph and precede the opinion paragraph.

(e) Reliance on data furnished by other persons.

(1) If the appointed actuary does not express an opinion as to the accuracy and completeness of the data (e.g., listings and summaries of policies and contracts in force and/or asset oriented information) used in the analysis, there shall be attached to the opinion the statement of a company officer who prepared the underlying data similar to the following:

"I [name of officer], [title] of [name of company or accounting firm] hereby affirm that the data (e.g., listings and summaries of policies and contracts in force as of December 31, 19[ ] and other liabilities and/or asset oriented information) 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.

Address of the Officer of the Company.

Telephone Number of the Officer of the Company.

Date Signed."

(2) If the appointed actuary does not express an opinion as to the accuracy and completeness of asset oriented information, including asset cash flows under different interest rate scenarios, but excluding listings and summaries of assets, there shall be attached to the opinion the statement of the person relied upon who provided the analysis similar to the following:

"I [name of person relied upon], [title], [professional designation], of [name of company] hereby affirm that the analysis relating to information including asset cash flows prepared for and submitted to [name of appointed actuary] in support of the asset oriented aspects of the opinion were prepared under my direction, and to the best of my knowledge and belief, is substantially accurate and complete.

Signature.

Address.

Telephone Number.

Date Signed."

(f) Reliance on the analysis of other experts.

If the appointed actuary relies upon personnel for certain critical aspects of the analysis, there shall be attached to the opinion the statement of the person relied upon who provides the analysis similar to the following:

"I [name of the person relied upon], [title], of [name of the company] hereby affirm that the analysis relating to information prepared for and submitted to [name of appointed actuary] in support of the opinion were prepared under my direction and to the best of my knowledge and belief, is substantially accurate and complete.

Signature.

Address.

Telephone Number.

Date Signed."

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