Current through Register Vol. XLI, No. 38, September 20, 2024
10.1. The
board of directors of each insurer shall appoint one or more illustration
actuaries.
10.2. 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.
10.3. The illustration actuary shall:
a. Be a member in good standing of the American
Academy of Actuaries;
b. Be familiar
with the standard of practice regarding life insurance policy
illustrations;
c. Not have been found by
the Insurance Commissioner, following appropriate notice and hearing to have:
1. 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;
2. Been
convicted of an offense involving fraudulent or dishonest practices;
3. Demonstrated his or her incompetence, lack of
cooperation, or untrustworthiness to act as an illustration actuary; or
4. 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;
d. Not fail to notify the Insurance Commissioner
of any action taken by a commissioner of another state similar to that under
Paragraph 3 above;
e. 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 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
f. Disclose in the annual
certification the method used to allocate overhead expenses for all illustrations:
1. Fully allocated expenses;
2. Marginal expenses; or
3. A generally recognized expense table based on
fully allocated expenses representing a significant portion of insurance companies
and approved by the Insurance Commissioner.
10.4.
a. The
illustration actuary shall file a certification with the board and with the
Insurance Commissioner:
1. Annually for all policy
forms for which illustrations are used; and
2. Before a new policy form is
illustrated.
b. If an error
in a previous certification is discovered, the illustration actuary shall notify the
board of directors of the insurer and the Insurance Commissioner promptly.
10.5. 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
Insurance Commissioner promptly of his or her inability to certify.
10.6. A responsible officer of the insurer, other
than the illustration actuary, shall certify annually:
a. 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
b. 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 subdivision e, subsection 10.3 of this
section.
10.7. The insurer
shall provide annual certifications to the Insurance Commissioner each year by a
date determined by the insurer.
10.8.
The insurer shall promptly notify the Insurance Commissioner if it changes the
illustration actuary responsible for all or a portion of the company's policy forms
and disclose the reason for the change.
