31A-17-503 - Actuarial opinion of reserves.
31A-17-503. Actuarial opinion of reserves.
(1) This section becomes operative on December 31, 1993.
(2) General: Every life insurance company doing business in this state shall annuallysubmit the opinion of a qualified actuary as to whether the reserves and related actuarial itemsheld in support of the policies and contracts specified by the commissioner by rule are computedappropriately, are based on assumptions which satisfy contractual provisions, are consistent withprior reported amounts, and comply with applicable laws of this state. The commissioner by ruleshall define the specifics of this opinion and add any other items considered to be necessary to itsscope.
(3) Actuarial analysis of reserves and assets supporting reserves:
(a) Every life insurance company, except as exempted by or pursuant to rule, shall alsoannually include in the opinion required by Subsection (2), an opinion of the same qualifiedactuary as to whether the reserves and related actuarial items held in support of the policies andcontracts specified by the commissioner by rule, when considered in light of the assets held bythe company with respect to the reserves and related actuarial items, including but not limited tothe investment earnings on the assets and the considerations anticipated to be received andretained under the policies and contracts, make adequate provision for the company's obligationsunder the policies and contracts, including but not limited to the benefits under the expensesassociated with the policies and contracts.
(b) The commissioner may provide by rule for a transition period for establishing anyhigher reserves which the qualified actuary may consider necessary in order to render the opinionrequired by this section.
(4) Requirement for opinion under Subsection (3): Each opinion required by Subsection(3) shall be governed by the following provisions:
(a) A memorandum, in form and substance acceptable to the commissioner as specifiedby rule, shall be prepared to support each actuarial opinion.
(b) If the insurance company fails to provide a supporting memorandum at the request ofthe commissioner within a period specified by rule or the commissioner determines that thesupporting memorandum provided by the insurance company fails to meet the standardsprescribed by the rule or is otherwise unacceptable to the commissioner, the commissioner mayengage a qualified actuary at the expense of the company to review the opinion and the basis forthe opinion and prepare such supporting memorandum as is required by the commissioner.
(5) Requirement for all opinions: Every opinion shall be governed by the followingprovisions:
(a) The opinion shall be submitted with the annual statement reflecting the valuation ofthe reserve liabilities for each year ending on or after December 31, 1993.
(b) The opinion shall apply to all business in force including individual and group healthinsurance plans, in form and substance acceptable to the commissioner as specified by rule.
(c) The opinion shall be based on standards adopted from time to time by the ActuarialStandards Board and on such additional standards as the commissioner may by rule prescribe.
(d) In the case of an opinion required to be submitted by a foreign or alien company, thecommissioner may accept the opinion filed by that company with the insurance supervisoryofficial of another state if the commissioner determines that the opinion reasonably meets therequirements applicable to a company domiciled in this state.
(e) For the purposes of this section, "qualified actuary" means a member in good
standing of the American Academy of Actuaries who meets the requirements set forth bydepartment rule.
(f) Except in cases of fraud or willful misconduct, the qualified actuary is not liable fordamages to any person, other than the insurance company and the commissioner, for any act,error, omission, decision, or conduct with respect to the actuary's opinion.
(g) Disciplinary action by the commissioner against the company or the qualified actuaryshall be defined in rules by the commissioner.
(h) Any memorandum in support of the opinion, and any other material provided by thecompany to the commissioner in connection therewith, are considered protected records underSection 63G-2-305 and may not be made public and are not subject to subpoena underSubsection 63G-2-202(7), other than for the purpose of defending an action seeking damagesfrom any person by reason of any action required by this section or rules promulgated under thissection. However, the memorandum or other material may otherwise be released by thecommissioner (i) with the written consent of the company or (ii) to the American Academy ofActuaries upon request stating that the memorandum or other material is required for the purposeof professional disciplinary proceedings and setting forth procedures satisfactory to thecommissioner for preserving the confidentiality of the memorandum or other material. Once anyportion of the confidential memorandum is cited in its marketing or is cited before anygovernmental agency other than the department or is released to the news media, all portions ofthe memorandum are no longer confidential.
Amended by Chapter 382, 2008 General Session