Chapter 6 - Assets And Liabilities
CHAPTER 6 - ASSETS AND LIABILITIES
ARTICLE 1 - ASSETS AND LIABILITIES GENERALLY
26-6-101. Assets allowed.
(a) In any determination of an insurer's financial condition,only the insurer owned assets set forth and allowed in the most recent NationalAssociation of Insurance Commissioners' accounting practices and proceduresmanual or authorized in accordance with this section shall be allowed asassets. Assets not inconsistent with this article shall be allowed at valuesthe commissioner determines, if he deems them available for the payment oflosses and claims.
(i) Repealed By Laws 2001, Ch. 9, 2.
(ii) Repealed By Laws 2001, Ch. 9, 2.
(iii) Repealed By Laws 2001, Ch. 9, 2.
(iv) Repealed By Laws 2001, Ch. 9, 2.
(v) Repealed By Laws 2001, Ch. 9, 2.
(vi) Repealed By Laws 2001, Ch. 9, 2.
(vii) Repealed By Laws 2001, Ch. 9, 2.
(viii) Repealed By Laws 2001, Ch. 9, 2.
(ix) Repealed By Laws 2001, Ch. 9, 2.
(x) Repealed By Laws 2001, Ch. 9, 2.
(xi) Repealed By Laws 2001, Ch. 9, 2.
(xii) Repealed By Laws 2001, Ch. 9, 2.
(xiii) Repealed By Laws 2001, Ch. 9, 2.
(xiv) Repealed By Laws 2001, Ch. 9, 2.
26-6-102. Assets not allowed.
(a) In addition to assets impliedly excluded by the most recentNational Association of Insurance Commissioners' accounting practices andprocedures manual pursuant to W.S. 26-6-101, the following are not allowed asassets in any determination of an insurer's financial condition:
(i) Goodwill, trade names and other similar intangible assets;
(ii) Repealed By Laws 2001, Ch. 9, 2.
(iii) Repealed By Laws 2001, Ch. 9, 2.
(iv) Repealed By Laws 2001, Ch. 9, 2.
(v) Repealed By Laws 2001, Ch. 9, 2.
26-6-103. Liabilities generally.
(a) In any determination of an insurer's financial condition,capital stock and liabilities to be charged against its assets include thecapital stock and liability items set forth in the most recent NationalAssociation of Insurance Commissioners' accounting practices and proceduresmanual and the following:
(i) The amount of its capital stock outstanding, if any;
(ii) The amount, estimated consistent with this code, necessaryto pay all of its unpaid losses and claims incurred on or prior to the date ofstatement together with the expenses of adjustment or settlement thereof;
(iii) Concerning life insurance and annuity contracts anddisability and accidental death benefits in or supplemental thereto:
(A) The amount of reserves on life insurance policies and annuitycontracts in force, valued according to the mortality tables, rates of interestand methods adopted pursuant to this code which are applicable thereto;
(B) Reserves for disability benefits for both active anddisabled lives;
(C) Reserves for accidental death benefits;
(D) Any additional reserves the commissioner requiresconsistent with applicable customary and general practice in insuranceaccounting.
(iv) Concerning disability insurance, the reserves requiredunder W.S. 26-6-107;
(v) Concerning insurance other than specified in paragraphs(iii) and (iv) of this subsection, and other than title insurance, the amountof reserves equal to the unearned portions of the gross premiums charged onpolicies in force, computed in accordance with this chapter;
(vi) Taxes, expenses and other obligations due or accrued at thedate of the statement.
26-6-104. Disallowance of "wash" transactions.
(a) The commissioner, after a hearing thereon, shall disallowas an asset or as a credit against liabilities any reinsurance he finds to havebeen arranged principally for the purpose of deception as to the cedinginsurer's financial condition on the date of an insurer's financial statement.Without limiting the general purport of this provision, reinsurance of anysubstantial part of the insurer's outstanding risks contracted for in factwithin four (4) months prior to the date of a financial statement and cancelledafter the date of that statement, or reinsurance under which the reinsurerbears no substantial insurance risk or chance of net loss to itself, is primafacie evidence of an arrangement principally for the purpose of deception.
(b) The commissioner, after a hearing thereon, shall disallowas an insurer's asset any deposit, funds or other assets he finds:
(i) Not to be in good faith the insurer's property;
(ii) Not freely subject to the insurer's withdrawal orliquidation at any time for the payment or discharge of claims or otherobligations arising under its policies; and
(iii) To be resulting from arrangements made principally for thepurpose of deception as to the insurer's financial condition on the date of anyfinancial statement of the insurer.
(c) The commissioner may suspend or revoke the certificate ofauthority of any insurer which has knowingly been a party to any actual orattempted deception.
26-6-105. Unearned premium reserve; generally.
(a) As to property, casualty and surety insurances the insurershall maintain an unearned premium reserve on all policies in force as requiredunder regulations adopted by the commissioner. In promulgating regulationsunder this subsection, the commissioner shall take into consideration standardsrecommended by the National Association of Insurance Commissioners AccountingPractices and Procedures Manual.
(b) Repealed By Laws 2000, Ch. 57, 2.
26-6-106. Unearned premium reserve; marine and transportationinsurance.
Asto marine and transportation insurance, the unearned premium reserve shall bedetermined pursuant to the most recent National Association of InsuranceCommissioners' accounting practices and procedures manual.
26-6-107. Unearned premium reserve; reserve for disability insurance.
Forall disability insurance policies the insurer shall maintain an active life reservewhich shall place a sound value on its liabilities under those policies and benot less than the reserve according to appropriate standards set forth inregulations the commissioner issues, but not less in the aggregate than the prorata gross unearned premiums for the policies.
26-6-108. Unearned premium reserve; increase of inadequate reserves.
Ifan insurer's loss experience shows or the commissioner determines that its lossreserves are inadequate, the insurer shall maintain loss reserves in anincreased amount as is needed to make them adequate.
ARTICLE 2 - STANDARD VALUATION LAW POLICIES AND CONTRACTS
26-6-201. Short title.
Thisarticle is known as the Standard Valuation Law.
26-6-202. Annual valuation of reserves required; minimum standardvaluation; other valuations accepted; conditions.
(a) The commissioner, annually, shall value, or cause to bevalued, the reserve liabilities (or reserves) for all outstanding lifeinsurance policies and annuity and pure endowment contracts of any authorizedlife insurer and may certify the amount of those reserves, specifying themortality tables, interest rates and methods used in calculating the reserves.The commissioner may use group methods and approximate averages for fractionsof a year or otherwise in calculating reserves. In the case of an alieninsurer, the valuation is limited to its United States business.
(b) Instead of the valuation of reserves required of anyforeign or alien insurer, the commissioner may accept any valuation from theinsurance supervisory official of any state or other jurisdiction if thatvaluation complies with the minimum standard provided in this article and ifthe official of the state or jurisdiction accepts as sufficient and valid forall legal purposes the commissioner's certificate of valuation when thecertificate states the valuation was made in a manner in which the aggregatereserves would be at least as large as if they had been computed in the mannerprescribed by the law of that state or jurisdiction. The commissioner mayaccept the valuation made by any domestic life insurer upon satisfactory proofof its correctness and compliance with W.S. 26-6-208.
(c) Any insurer which adopts any standard of valuationproducing greater aggregate reserves than those calculated according to theminimum standard provided in this article, with the commissioner's approval,may adopt any lower standard of valuation, but not lower than the minimumstandard. For the purposes of this section, the holding of additional reservespreviously determined by a qualified actuary to be necessary to render theopinion required by W.S. 26-6-208 shall not be deemed to be the adoption of ahigher standard of valuation.
(d) Reserves for any category of policies, contracts or benefitsas the commissioner establishes, may at the insurer's option, be calculatedaccording to any standards which produce greater aggregate reserves for thecategory than those calculated according to the minimum standard provided inthis article. However, the rates of interest used for policies and contractsother than annuity and pure endowment contracts shall not be higher than thecorresponding rates of interest used in calculating any nonforfeiture benefitsprovided in the policies and contracts.
26-6-203. Reserve calculation; valuation net premium exceeding grosspremium charged.
(a) If in any contract year the gross premium charged by anylife insurer on any policy or contract is less than the valuation net premiumfor the policy or contract calculated by the method used in calculating thereserve thereon but using the minimum valuation standards of mortality and rateof interest, the minimum reserve for the policy or contract shall be thegreater of either the reserve calculated according to:
(i) The mortality table, rate of interest and method actuallyused for the policy or contract; or
(ii) The method actually used for the policy or contract butusing the minimum valuation standards of mortality and rate of interest andreplacing the valuation net premium with the actual gross premium in eachcontract year for which the valuation net premium exceeds the actual grosspremium. The minimum valuation standards of mortality and rate of interestreferred to in this section are the standards stated in W.S. 26-6-205(b) and26-6-206(b). However, for any life insurance policy issued on or after January1, 1998 for which the gross premium in the first policy year exceeds that ofthe second year and for which no comparable additional benefit is provided inthe first year for such excess and which provides an endowment benefit or acash surrender value or a combination thereof in an amount greater than suchexcess premium, the foregoing provisions of this subsection shall be applied asif the method actually used in calculating the reserve for such policy were themethod described in W.S. 26-6-205(c)(i). The minimum reserve at each policyanniversary of such a policy shall be the greater of the minimum reservecalculated in accordance with W.S. 26-6-205(c) and (d), and the minimum reservecalculated in accordance with this subsection.
26-6-204. Repealed by Laws 1994, ch. 76, 3.
26-6-205. Computation of minimum standard; reserve valuation method,life insurance and endowment benefits; annuity and pure endowment benefits;minimum reserves; reserve calculation; indeterminate plans.
(a) Repealed by Laws 1994, ch. 76, 3.
(b) Except as otherwise provided in W.S. 26-6-206 and 26-6-207the minimum standard for the valuation of all policies and contracts subject tothis article issued prior to the effective date of the standard valuation lawshall be that provided by the laws in effect immediately prior to that date. Except as otherwise provided in W.S. 26-6-206 and 26-6-207 the minimum standardfor the valuation of all policies and contracts subject to this article issuedon or after the effective date of the standard valuation law shall be thecommissioners' reserve valuation method defined in subsections (c) and (e) ofthis section, W.S. 26-6-203 and 26-6-207, three and one-half percent (3 1/2%)interest or four percent (4%) interest for life insurance policies andcontracts other than annuity and pure endowment contracts issued on or afterJuly 1, 1975 and prior to May 20, 1981, five and one-half percent (5 1/2%)interest for single premium life insurance policies, and four and one-halfpercent (4 1/2%) interest for all other such policies issued on or after May20, 1981, and the following tables:
(i) For all ordinary policies of life insurance issued on thestandard basis, excluding any disability and accidental death benefits in thosepolicies:
(A) The commissioners' 1941 standard ordinary mortality tablefor such policies issued prior to the effective date of W.S. 26-16-208(a);
(B) The commissioners' 1958 standard ordinary mortality tablefor such policies issued on or after the effective date of W.S. 26-16-208(a)and prior to the operative date of W.S. 26-16-209, provided that for anycategory of such policies issued on female risks all modified net premiums andpresent values referred to in this subsection may be calculated according to anage not more than six (6) years younger than the actual age of the insured; and
(C) For such policies issued on or after the operative date ofW.S. 26-16-209:
(I) The commissioners' 1980 standard ordinary mortality table;or
(II) At the election of the company for any one (1) or morespecified plans of life insurance, the commissioners' 1980 standard ordinarymortality table with ten (10) year select mortality factors; or
(III) Any ordinary mortality table adopted after 1980 by theNational Association of Insurance Commissioners and approved by regulation thecommissioner promulgates for use in determining the minimum standard ofvaluation for those policies.
(ii) For all industrial life insurance policies issued on thestandard basis, excluding any disability and accidental death benefits in thosepolicies:
(A) The 1941 standard industrial life insurance policies forsuch policies issued prior to the effective date of W.S. 26-16-208(b);
(B) For such policies issued on or after the effective date ofW.S. 26-16-208(b), the commissioners' 1961 standard industrial mortality tableor any industrial mortality table adopted after 1980 by the NationalAssociation of Insurance Commissioners and approved by regulation thecommissioner promulgates for use in determining the minimum standard ofvaluation for those policies.
(iii) For individual annuity and pure endowment contracts,excluding any disability and accidental death benefits in those policies, the1937 standard annuity mortality table, or, at the insurer's option, the annuitymortality table for 1949, ultimate, or any modification of either of thesetables the commissioner approves;
(iv) For group annuity and pure endowment contracts, excludingany disability and accidental death benefits in those policies, the groupannuity mortality table for 1951, any modification of that table thecommissioner approves, or, at the insurer's option, any of the tables ormodifications of tables specified for individual annuity and pure endowmentcontracts;
(v) For total and permanent disability benefits in orsupplementary to ordinary policies or contracts, the following tables, providedany such table, for active lives, shall be combined with a mortality tablepermitted for calculating the reserves for life insurance policies:
(A) For policies or contracts issued on or after January 1,1966, the tables of period 2 disablement rates and the 1930 to 1950 terminationrates of the 1952 disability study of the Society of Actuaries, with due regardto the type of benefit, or any table of disablement rates and termination ratesthe National Association of Insurance Commissioners adopts after 1980 and is approvedby regulation the commissioner promulgates for use in determining the minimumstandard of valuation for those policies;
(B) For policies or contracts issued on or after January 1,1961 and prior to January 1, 1966, either such tables or, at the option of thecompany, the Class 3 Disability Table of 1926; and
(C) For policies issued prior to January 1, 1961, the Class 3Disability Table of 1926.
(vi) For accidental death benefits in or supplementary topolicies, the following tables, provided any table shall be combined with amortality table for calculating the reserves for life insurance policies:
(A) For policies issued on or after January 1, 1966, the 1959accidental death benefits table or any accidental death benefits table the NationalAssociation of Insurance Commissioners adopts after 1980 and is approved byregulation the commissioner promulgates for use in determining the minimumstandard of valuation of those policies;
(B) For policies issued on or after January 1, 1961 and priorto January 1, 1966, either such table or, at the option of the company, theInter-Company Double Indemnity Mortality Table;
(C) For policies issued prior to January 1, 1961, theInter-Company Double Indemnity Mortality Table.
(vii) For group life insurance, life insurance issued on thesubstandard basis and other special benefits, any tables the commissionerapproves.
(c) Except as provided in W.S. 26-6-203, 26-6-207 andsubsection (e) of this section reserves according to the commissioners' reservevaluation method:
(i) For the life insurance and endowment benefits of policiesproviding for a uniform amount of insurance and requiring the payment ofuniform premiums, shall be the excess, if any, of the present value, at thedate of valuation, of the future guaranteed benefits provided by thosepolicies, over the then present value of any future modified net policypremiums. The modified net premiums for any such policy shall be a uniformpercentage of the contract premiums for the benefits that the present value, atthe date of issue of the policy, of all the modified net premiums shall beequal to the sum of the then present value of the benefits provided by thepolicy and the excess of (1) over (2) as follows: (1) A net level annual premiumequal to the present value, at the date of issue, of the benefits providedafter the first policy year, divided by the present value at the date of issue,of an annuity of one (1) per annum payable on each policy anniversary on whicha premium falls due. The net level annual premium shall not exceed the netlevel annual premium on the nineteen (19) year premium whole life plan forinsurance of the same amount at an age one (1) year higher than the age atissue of the policy; (2) A net one (1) year term premium for benefits providedin the first policy year;
(ii) For any life insurance policy issued on or after January 1,1998 for which the contract premium in the first policy year exceeds that ofthe second year and for which no comparable additional benefit is provided inthe first year for the excess and which provides an endowment benefit or a cashsurrender value or a combination thereof in an amount greater than the excesspremium, the reserve according to the commissioners' reserve valuation method asof any policy anniversary occurring on or before the assumed ending datedefined herein as the first policy anniversary on which the sum of anyendowment benefit and any cash surrender value then available is greater thanthe excess premium, except as otherwise provided in W.S. 26-6-203, shall be thegreater of the reserve as of the policy anniversary calculated as described inparagraph (i) of this subsection and the reserve as of the policy anniversarycalculated as described in that paragraph, but with:
(A) The value defined in subdivision (1) of paragraph (i) ofthis subsection being reduced by fifteen percent (15%) of the amount of suchexcess first year premium;
(B) All present values of benefits and premiums beingdetermined without reference to premiums or benefits provided for by the policyafter the assumed ending date;
(C) The policy being assumed to mature on such date as anendowment;
(D) The cash surrender value provided on such date beingconsidered as an endowment benefit; and
(E) In making the comparison specified in this paragraph themortality and interest bases stated in subsections (b) and (h) of this sectionshall be used.
(d) Reserves according to the commissioners' reserve valuationmethod for benefits provided by the following policies or contracts shall becalculated by a method consistent with the principles of subsection (c) of thissection:
(i) Life insurance policies providing for a varying amount ofinsurance or requiring the payment of varying premiums;
(ii) Group annuity and pure endowment contracts purchased undera retirement or deferred compensation plan established or maintained by anemployer, an employee organization or both, other than a plan providingindividual retirement accounts or annuities under section 408 of the InternalRevenue Code;
(iii) Disability and accidental death benefits in all policiesand contracts; and
(iv) All other benefits, except life insurance and endowmentbenefits in life insurance policies and benefits provided by other annuity andpure endowment contracts.
(e) This section applies to annuity and pure endowmentcontracts other than group annuity and pure endowment contracts purchased undera retirement or deferred compensation plan established or maintained by anemployer, including a partnership or sole proprietorship, an employeeorganization, or both, and other than a plan providing individual retirementaccounts or annuities under section 408 of the Internal Revenue Code. Reservesaccording to the commissioners' annuity reserve method for benefits underannuity or pure endowment contracts, excluding disability and accidental deathbenefits in those contracts, shall be the greatest of the excesses of thepresent values, at the date of valuation, of any future guaranteed benefits,including guaranteed nonforfeiture benefits, provided by those contracts at theend of each contract year, over the present value, at the date of valuation, ofany future valuation considerations derived from future gross considerations requiredby the terms of the contract that are payable prior to the end of the contractyear. The future guaranteed benefits shall be determined by using the mortalitytable and the interest rates specified in the contracts for determiningguaranteed benefits. The valuation considerations are the portions of the grossconsiderations applied under the contracts to determine nonforfeiture values.
(f) No insurer's aggregate reserves for all life insurancepolicies, excluding disability and accidental death benefits, shall be lessthan the aggregate reserves calculated in accordance with the method set forthin subsections (b), (c), (d), (e) and (h) of this section and W.S. 26-6-203,and the mortality tables and rates of interest used in calculating nonforfeiturebenefits for those policies. In no event shall the aggregate reserves for allpolicies, contracts and benefits be less than the aggregate reserves determinedby the qualified actuary to be necessary to render the opinion required by W.S.26-6-208.
(g) Repealed by Laws 1994, ch. 76, 3.
(h) For any plan of life insurance which provides that theamounts of future premiums will be determined by the insurance company based onthe then estimates of future experience or which is of a nature that minimumreserves cannot be determined by the methods described in subsections (c), (d)and (e) of this section and W.S. 26-6-203, the commissioner shall promulgateregulations for determining the reserves so they are:
(i) Appropriate in relation to the benefits and the pattern ofpremiums for that plan; and
(ii) Computed by a method which is consistent with theprinciples of this article.
26-6-206. Computation of minimum standard for annuities; computationof minimum standard valuation by calendar year of issue.
(a) Except as provided in subsection (b) of this section theminimum standard for the valuation of all individual annuity and pure endowmentcontracts issued on or after the operative date of this section as defined insubsection (b) of this section, and for all annuities and pure endowmentspurchased on or after that operative date under group annuity and pureendowment contracts, shall be the commissioners' reserve valuation methoddefined in W.S. 26-6-205(c), (d) and (e) and the following tables and interestrates:
(i) For individual annuity and pure endowment contracts issued:
(A) Prior to May 20, 1981, excluding any disability andaccidental death benefits in those contracts, the 1971 individual annuitymortality table, or any modification of this table the commissioner approves,with six percent (6%) interest for single premium immediate annuity contractsand four percent (4%) interest for all other individual annuity and pureendowment contracts;
(B) On or after May 20, 1981, excluding any disability andaccidental death benefits in those contracts, the 1971 individual annuitymortality table or any individual annuity mortality table the NationalAssociation of Insurance Commissioners adopts after 1980 and is approved byregulation the commissioner promulgates for use in determining the minimumstandard of valuation for those contracts, or any modification of these tablesthe commissioner approves, and seven and one-half percent (7 1/2%) interestfor single premium immediate annuity contracts, five and one-half percent (51/2%) interest for single premium deferred annuity and pure endowment contractsand four and one-half percent (4 1/2%) interest for all other individualannuity and pure endowment contracts.
(ii) For all annuities and pure endowments purchased:
(A) Prior to May 20, 1981 under group annuity and pureendowment contracts, excluding any disability and accidental death benefitspurchased under those contracts, the 1971 group annuity mortality table, or anymodification of this table the commissioner approves, and six percent (6%)interest;
(B) On or after May 20, 1981 under group annuity and pureendowment contracts, excluding any disability and accidental death benefitspurchased under those contracts, the 1971 group annuity mortality table or anygroup annuity mortality table the National Association of InsuranceCommissioners adopts after 1980 and the commissioner approves for use indetermining the minimum standard of valuation for those annuities and pure endowments,or any modification of these tables the commissioner approves, and seven andone-half percent (7 1/2%) interest.
(b)(i) The interest rates used in determining the minimum standardfor the valuation of:
(A) All life insurance policies issued in a particular calendaryear, on or after the operative date of W.S. 26-16-209;
(B) All individual annuity and pure endowment contracts issuedin a particular calendar year on or after January 1, 1995;
(C) All annuities and pure endowments purchased in a particularcalendar year on or after January 1, 1995, under group annuity and pureendowment contracts; and
(D) The net increase, if any, in a particular calendar yearafter January 1, 1995, in amounts held under guaranteed interest contractsshall be the calendar year statutory valuation interest rates as defined inthis subsection.
(ii) The calendar year statutory valuation interest rates, I,shall be determined as follows and the results rounded to the nearer one-fourthpercent (1/4%):
(A) For Life Insurance,
I = .03 + W (R1 - .03) + W (R2 - .09);
2
(B) For single premium immediate annuities and for annuitybenefits involving life contingencies arising from other annuities with cashsettlement options and from guaranteed interest contracts with cash settlementoptions;
I = .03 + W (R - .03)
Where R1 is the lesserof R and .09, R2 is the greater of R and .09, R is the reference interest ratedefined in this subsection, and W is the weighting factor defined in thissubsection;
(C) For other annuities with cash settlement options andguaranteed interest contracts with cash settlement options, valued on an issueyear basis, except as stated in subparagraph (B) of this paragraph, the formulafor life insurance stated in subparagraph (A) of this paragraph shall apply toannuities and guaranteed interest contracts with guarantee durations in excessof ten (10) years and the formula for single premium immediate annuities statedin subparagraph (B) of this paragraph shall apply to annuities and guaranteedinterest contracts with guarantee duration of ten (10) years or less;
(D) For other annuities with no cash settlement options and forguaranteed interest contracts with no cash settlement options, the formula forsingle premium immediate annuities stated in subparagraph (B) of this paragraphshall apply;
(E) For other annuities with cash settlement options andguaranteed interest contracts with cash settlement options, valued on a changein fund basis, the formula for single premium immediate annuities stated insubparagraph (B) of this paragraph shall apply.
(iii) However, if the calendar year statutory valuation interestrate for any life insurance policies issued in any calendar year determinedwithout reference to this sentence differs from the corresponding actual ratefor similar policies issued in the immediately preceding calendar year by lessthan one-half percent (1/2%), the calendar year statutory valuation interestrate for such life insurance policies shall be equal to the correspondingactual rate for the immediately preceding calendar year. For purposes ofapplying the immediately preceding sentence, the calendar year statutoryvaluation interest rate for life insurance policies issued in a calendar yearshall be determined for 1980 (using the reference interest rate defined for1979) and shall be determined for each subsequent calendar year regardless ofwhen W.S. 26-16-209 becomes operative;
(iv) The weighting factors referred to in the formulas statedabove are given in the following tables:
(A) Weighting factors for life insurance:
GUARANTEE WEIGHTING
DURATION FACTORS
(YEARS)
10 or less .50
More than 10, but notmore than 20 .45
More than 20 .35
Forlife insurance, the guarantee duration is the maximum number of years the lifeinsurance can remain in force on a basis guaranteed in the policy or underoptions to convert to plans of life insurance with premium rates ornonforfeiture values or both which are guaranteed in the original policy;
(B) Weighting factor for single premium immediate annuities andfor annuity benefits involving life contingencies arising from other annuitieswith cash settlement options and guaranteed interest contracts with cashsettlement options:
.80
(C) Weighting factors for other annuities and for guaranteedinterest contracts, except as stated in subparagraph (B) of this paragraph,shall be as specified in tables (I), (II) and (III) of this subparagraph,according to the rules and definitions in subdivisions (IV), (V) and (VI) ofthis subparagraph:
(I) For annuities andguaranteed interest contracts valued on an issue year basis:
GUARANTEE WEIGHTING FACTOR
DURATION FOR PLAN TYPE
(YEARS) A B C
5or less: .80 .60 .50
Morethan 5, but not more than 10: .75 .60 .50
Morethan 10, but not more than 20: .65 .50 .45
Morethan 20: .45 .35 .35
(II)
PLAN TYPE
A B C
For annuities and guaranteed interest contracts valued on achange in fund basis, the factors shown in subdivision (I) of this subparagraphincreased by: .15 .25 .05
(III)
PLAN TYPE
A B C
For annuities and guaranteed interest contracts valued onan issue year basis (other than those with no cash settlement options) which donot guarantee interest on considerations received more than one (1) year afterissue or purchase and for annuities and guaranteed interest contracts valued ona change in fund basis which do not guarantee interest rates on considerationsreceived more than twelve (12) months beyond the valuation date, the factorsshown in subdivision (I) of this subparagraph or derived in subdivision (II) ofthis subparagraph increased by: .05 .05 .05
(IV) For other annuitieswith cash settlement options and guaranteed interest contracts with cashsettlement options, the guarantee duration is the number of years for which thecontract guarantees interest rates in excess of the calendar year statutoryvaluation interest rate for life insurance policies with guarantee duration inexcess of twenty (20) years. For other annuities with no cash settlementoptions and for guaranteed interest contracts with no cash settlement options,the guarantee duration is the number of years from the date of issue or date ofpurchase to the date annuity benefits are scheduled to commence;
(V) Plan type as usedin the tables in this subparagraph is defined as follows:
PlanType A: At any time policyholder may withdraw funds only (1) with an adjustmentto reflect changes in interest rates or asset values since receipt of the fundsby the insurance company, or (2) without such adjustment but in installmentsover five (5) years or more, or (3) as an immediate life annuity, or (4) nowithdrawal permitted.
PlanType B: Before expiration of the interest rate guarantee, policyholder maywithdraw funds only (1) with an adjustment to reflect changes in interest ratesor assets values since receipt of the funds by the insurance company, or (2)without such adjustment but in installments over five (5) years or more, or (3)no withdrawal permitted. At the end of interest rate guarantee, funds may bewithdrawn without such adjustment in a single sum or installments over lessthan five (5) years.
PlanType C: Policyholder may withdraw funds before expiration of interest rateguarantee in a single sum or installments over less than five (5) years eitherwithout adjustment to reflect changes in interest rates or asset values sincereceipt of the funds by the insurance company, or subject only to a fixedsurrender charge stipulated in the contract as a percentage of the fund.
(VI) A company mayelect to value guaranteed interest contracts with cash settlement options andannuities with cash settlement options on either an issue year basis or on achange in fund basis. Guaranteed interest contracts with no cash settlementoptions and other annuities with no cash settlement options must be valued onan issue year basis. As used in this subsection, an issue year basis ofvaluation refers to a valuation basis under which the interest rate used todetermine the minimum valuation standard for the entire duration of the annuityor guaranteed interest contract is the calendar year valuation interest ratefor the year of issue or year of purchase of the annuity or guaranteed interestcontract, and the change in fund basis of valuation refers to a valuation basisunder which the interest rate used to determine the minimum valuation standardapplicable to each change in the fund held under the annuity or guaranteedinterest contract is the calendar year valuation interest rate for the year ofthe change in the fund.
(v) The reference interest rate referred to in paragraphs (ii)and (iii) of this subsection shall be defined as follows:
(A) For all life insurance, the lesser of the average over aperiod of thirty-six (36) months and the average over a period of twelve (12)months, ending on June 30 of the calendar year next preceding the year ofissue, of the monthly average of the composite yield on seasoned corporatebonds, as published by Moody's Investors Service, Inc.;
(B) For single premium immediate annuities and for annuitybenefits involving life contingencies arising from other annuities with cashsettlement options and guaranteed interest contracts with cash settlementoptions, the average over a period of twelve (12) months, ending on June 30 ofthe calendar year of issue or year of purchase, of the monthly average of thecomposite yield on seasoned corporate bonds, as published by Moody's InvestorsService, Inc.;
(C) For other annuities with cash settlement options andguaranteed interest contracts with cash settlement options, valued on a year ofissue basis, except as stated in subparagraph (B) of this paragraph, withguarantee duration in excess of ten (10) years, the lesser of the average overa period of thirty-six (36) months and the average over a period of twelve (12)months, ending on June 30 of the calendar year of issue or purchase, of the monthlyaverage of the composite yield on seasoned corporate bonds, as published byMoody's Investors Service, Inc.;
(D) For other annuities with cash settlement options andguaranteed interest contracts with cash settlement options, valued on a year ofissue basis, except as stated in subparagraph (B) of this paragraph, withguarantee duration of ten (10) years or less, the average over a period oftwelve (12) months, ending on June 30 of the calendar year of issue orpurchase, of the monthly average of the composite yield on seasoned corporatebonds, as published by Moody's Investors Service, Inc.;
(E) For other annuities with no cash settlement options and forguaranteed interest contracts with no cash settlement options, the average overa period of twelve (12) months, ending on June 30 of the calendar year of issueor purchase, of the monthly average of the composite yield on seasonedcorporate bonds, as published by Moody's Investors Service, Inc.;
(F) For other annuities with cash settlement options andguaranteed interest contracts with cash settlement options, valued on a changein fund basis, except as stated in subparagraph (B) of this paragraph, theaverage over a period of twelve (12) months, ending on June 30 of the calendaryear of the change in the fund, of the monthly average of the composite yieldon seasoned corporate bonds, as published by Moody's Investors Service, Inc.
(vi) If the monthly average of the composite yield on seasonedcorporate bonds is no longer published by Moody's Investor's Service, Inc., orif the National Association of Insurance Commissioners determines that themonthly average of the composite yield on seasoned corporate bonds as publishedby Moody's Investors Service, Inc. is no longer appropriate for the determinationof the reference interest rate, then an alternative method for determination ofthe reference interest rate, which is adopted by the National Association ofInsurance Commissioners and approved by regulation promulgated by thecommissioner, may be substituted.
(c) Any insurer may file with the commissioner a written noticeof its election to comply with this section after a specified date beforeJanuary 1, 1979, which is the operative date of this section for that insurer.An insurer may elect a different operative date for individual annuity and pureendowment contracts from that elected for group annuity and pure endowmentcontracts. If an insurer makes no election, the operative date of this sectionfor that insurer is January 1, 1979.
26-6-207. Minimum standards for disability plans.
Thecommissioner shall promulgate regulations containing the minimum standardsapplicable to the valuation of disability plans.
26-6-208. Actuarial opinion of reserves.
(a) This section shall become operative December 31, 1995.
(b) Every life insurer doing business in this state shallannually submit the opinion of a qualified actuary as to whether the reservesand related actuarial items held in support of the policies and contractsspecified by the commissioner by regulation are computed appropriately, arebased on assumptions which satisfy contractual provisions, are consistent withprior reported amounts and comply with applicable laws of this state. Thecommissioner by regulation shall define the specifics of this opinion and addany other items deemed to be necessary to its scope.
(c) Every life insurer, except as exempted by regulation, shallalso annually include in the opinion required by subsection (b) of thissection, an opinion of the same qualified actuary as to whether the reservesand related actuarial items held in support of the policies and contractsspecified by the commissioner by regulation, when considered in light of theassets held by the insurer with respect to the reserves and related actuarialitems, including but not limited to the investment earnings on the assets andthe considerations anticipated to be received and retained under the policiesand contracts, make adequate provision for the insurer's obligations under the policiesand contracts, including but not limited to the benefits under and expensesassociated with the policies and contracts. The commissioner may provide byregulation for a transition period for establishing any higher reserves whichthe qualified actuary deems necessary in order to render the opinion requiredby this section.
(d) Each opinion required by subsection (c) of this sectionshall be governed by the following provisions:
(i) A memorandum, in form and substance acceptable to thecommissioner as specified by regulation, shall be prepared to support eachactuarial opinion;
(ii) If the insurer fails to provide a supporting memorandum atthe request of the commissioner within a period specified by regulation or thecommissioner determines that the supporting memorandum provided by the insurerfails to meet the standards prescribed by regulation or is unacceptable to thecommissioner, the commissioner may engage a qualified actuary at the expense ofthe insurer to review the opinion and the basis for the opinion and prepare anysupporting memorandum required by the commissioner.
(e) Every opinion shall be governed by the followingprovisions:
(i) The opinion shall be submitted with the annual statementreflecting the valuation of reserve liabilities for each year ending on orafter December 31, 1995;
(ii) The opinion shall apply to all business in force includingindividual and group health insurance plans, in form and substance acceptableto the commissioner as specified by regulation;
(iii) The opinion shall be based on standards adopted by theactuarial standards board and on additional standards as the commissioner byregulation prescribes;
(iv) In the case of an opinion required to be submitted by aforeign or alien insurer, the commissioner may accept the opinion filed by thatinsurer with the insurance supervisory official of another state if thecommissioner determines that the opinion reasonably meets the requirementsapplicable to an insurer domiciled in this state;
(v) Except in cases of fraud, willful misconduct or negligencethe qualified actuary shall not be liable for damages to any person, other thanthe insurer and the commissioner, for any act, error, omission, decision orconduct with respect to the actuary's opinion;
(vi) Disciplinary action by the commissioner against the insureror the qualified actuary shall be defined in regulations by the commissioner;
(vii) Any memorandum in support of the opinion, and any othermaterial provided by the insurer to the commissioner in connection with theopinion, shall be kept confidential by the commissioner, may be shared asauthorized by and in accordance with the provisions of W.S. 26-2-113(d), andshall not be made public other than for the purpose of defending an actionseeking damages from any person by reason of any action required by thissection or by regulations promulgated under this section. Once any portion ofthe confidential memorandum is cited by the insurer in its marketing or iscited before any governmental agency other than a state insurance department oris released by the insurer to the news media, no portion of the memorandumshall be confidential. The memorandum or other material may otherwise bereleased by the commissioner:
(A) With the written consent of the insurer; or
(B) To the American Academy of Actuaries upon request statingthat the memorandum or other material is required for the purpose ofprofessional disciplinary proceedings and setting forth procedures satisfactoryto the commissioner for preserving the confidentiality of the memorandum orother material.
(f) For the purposes of this section, "qualifiedactuary" means a member in good standing of the American Academy ofActuaries and who meets requirements prescribed by regulation of thecommissioner.
ARTICLE 3 - VALUATION OF OTHER SECURITIES
26-6-301. Valuation of bonds and other debt securities.
(a) The commissioner may, by rule or regulation, require thatany bond or other evidence of debt held by an insurer be valued in accordancewith the most recent published valuation standards of the National Associationof Insurance Commissioners. Any bonds or other evidences of debt as to whichthe National Association of Insurance Commissioners has not published valuationstandards in its valuations of securities manual, if amply secured and not indefault as to principal or interest, shall be valued as follows:
(i) If purchased at par, at the par value;
(ii) If purchased above or below par, on the basis of thepurchase price adjusted so as to bring the value to par at maturity and so asto yield in the meantime the effective rate of interest at which the purchasewas made, or instead of this method, according to an accepted method ofvaluation the commissioner approves;
(iii) Purchase price shall in no case be taken at a higher figurethan the actual fair value at the time of acquisition regardless of howacquired, plus actual brokerage, transfer, postage or express charges paid inthe acquisition of the securities;
(iv) Unless otherwise provided by valuation the commissionerestablishes or approves, no such security shall be carried at above the callprice for the entire issue during any period within which the security may becalled.
(b) The commissioner has full discretion in determining themethod of calculating values according to the rules set forth in this section.
26-6-302. Valuation of other securities.
(a) The commissioner may, by rule or regulation, require thatsecurities other than securities referred to in W.S. 26-6-301 and except asprovided in W.S. 26-16-502(a)(iv), held by an insurer, be valued in accordancewith the most recent published valuation standards of the National Associationof Insurance Commissioners. At the commissioner's discretion, securities as towhich the National Association of Insurance Commissioners has not publishedvaluation standards shall be valued at their fair value, or at their appraisedvalue or at prices the commissioner determines as representing their fairvalue.
(b) Preferred or guaranteed stocks or shares while paying fulldividends may be carried at a fixed value instead of fair value at thecommissioner's discretion and in accordance with a method of computation heapproves.
(c) The stock of an insurer's subsidiary shall be valued on thebasis of the value of only those assets of the subsidiary as would constitutelawful investments of the insurer if acquired or held directly by the insurer.
26-6-303. Valuation of real and personal property.
(a) All real property shall be valued as set forth in the mostrecent National Association of Insurance Commissioners' accounting practicesand procedures manual.
(i) Repealed by Laws 1994, ch. 76, 3.
(ii) Repealed by Laws 1994, ch. 76, 3.
(iii) Repealed by Laws 1994, ch. 76, 3.
(iv) Repealed By Laws 2001, Ch. 9, 2.
(v) Repealed By Laws 2001, Ch. 9, 2.
(b) Repealed by Laws 1994, ch. 76, 3.
(c) Personal property acquired pursuant to loans on thesecurity of chattels made in accordance with W.S. 26-7-111 shall not be valuedat an amount greater than the unpaid balance of principal on the defaulted loanat the date of acquisition together with taxes and expenses incurred inconnection with the acquisition, or the fair value of the property, whicheveris less.
26-6-304. Valuation of purchase money mortgages.
Purchasemoney mortgages on real property shall be valued in accordance with the mostrecent National Association of Insurance Commissioners' accounting practicesand procedures manual.
26-6-305. "Insolvency" and "impairment" defined.
(a) An insurer is insolvent if its total assets, as in thischapter provided, are less than its total liabilities, excluding as aliability, as to a stock insurer, the aggregate par value of its outstandingcapital stock.
(b) An insurer is impaired if:
(i) As to a stock insurer, the sum of its assets is less thanthe sum of:
(A) Its liabilities;
(B) The aggregate par value of its outstanding capital stock;and
(C) The amount of surplus the insurer is required to maintainfor the kinds of insurance transacted.
(ii) As to a mutual or reciprocal insurer, the sum of its assetsis less than the sum of its liabilities and the amount of surplus the insureris required to maintain for the kinds of insurance transacted.
ARTICLE 4 - PROPERTY AND CASUALTY ACTUARIAL OPINIONS
26-6-401. Short title; effective date.
This article shall be known as the property and casualtyactuarial opinion law. W.S. 26-6-402 and 26-6-403 shall be effective beginningJanuary 1, 2008 and shall be applicable to filings submitted after January 1,2009.
26-6-402. Actuarial opinion of reserves and supporting documentation.
(a) Every property and casualty insurance company doingbusiness in this state, unless otherwise exempted by the domiciliarycommissioner, shall annually submit the opinion of an appointed actuaryentitled "statement of actuarial opinion." This opinion shall befiled in accordance with the appropriate National Association of InsuranceCommissioners property and casualty annual statement instructions.
(b) Every property and casualty insurance company domiciled inthis state that is required to submit a statement of actuarial opinion shallannually submit an actuarial opinion summary, written by the company'sappointed actuary. This actuarial opinion summary shall be filed in accordancewith the appropriate National Association of Insurance Commissioners propertyand casualty annual statement instructions and shall be considered as adocument supporting the actuarial opinion required in subsection (a) of thissection. A company licensed but not domiciled in this state shall provide theactuarial opinion summary upon request.
(c) An actuarial report and underlying workpapers as requiredby the appropriate National Association of Insurance Commissioners property andcasualty annual statement instructions shall be prepared to support eachactuarial opinion required under this article. If the insurance company failsto provide a supporting actuarial report or workpapers at the request of thecommissioner or the commissioner determines that the supporting actuarialreport or workpapers provided by the insurance company is otherwiseunacceptable to the commissioner, the commissioner may engage a qualified actuaryat the expense of the company to review the opinion and the basis for theopinion and prepare the supporting actuarial report or workpapers.
(d) The appointed actuary shall not be liable for damages toany person, other than the insurance company and the commissioner, for any act,error, omission, decision or conduct with respect to the actuary's opinion,except in cases of fraud or willful misconduct on the part of the appointedactuary.
26-6-403. Confidentiality.
(a) The statement of actuarial opinion required under W.S.26-6-402 shall be provided with the annual statement in accordance withNational Association of Insurance Commissioners property and casualty annualstatement instructions and shall be treated as a public document.
(b) Documents, materials or other information in the possessionor control of the department that are considered an actuarial report,workpapers or actuarial opinion summary provided in support of the opinion, andany other material provided by the company to the commissioner in connectionwith the actuarial report, workpapers or actuarial opinion summary, shall beconfidential by law and privileged, shall not be subject to inspection underW.S. 16-4-201 through 16-4-205, shall not be subject to subpoena, and shall notbe subject to discovery or admissible in evidence in any private civil action. This provision shall not be construed to limit the commissioner's authority torelease the documents to the actuarial board for counseling and disciplineestablished by the American academy of actuaries so long as the material isrequired for the purpose of professional disciplinary proceedings and that theactuarial board for counseling and discipline establishes proceduressatisfactory to the commissioner for preserving the confidentiality of thedocuments. Nor shall this section be construed to limit the commissioner'sauthority to use the documents, materials or other information in furtheranceof any regulatory or legal action brought as part of the commissioner's officialduties.
(c) Neither the commissioner nor any person who receiveddocuments, materials or other information while acting under the authority ofthe commissioner shall be permitted or required to testify in any private civilaction concerning any confidential documents, materials or information subjectto subsection (b) of this section.
(d) In order to assist in the performance of the commissioner'sduties, the commissioner may:
(i) Share documents, materials o