2006 Kentucky Revised Statutes - .171   Requirement for actuarial opinion as to appropriate computation of reserves and related items and compliance with state law.

304.6-171 Requirement for actuarial opinion as to appropriate computation of reserves and related items and compliance with state law. (1) This section shall become operative at the end of the first full calendar year following the year of enactment. (2) Every life insurance company doing business in this state shall annually submit the opinion of a qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the executive director by administrative regulation are computed appropriately, are based on assumptions which satisfy contractual provisions, are consistent with prior reported amounts, and comply with applicable laws of this state. The executive director by administrative regulation shall define the specifics of this opinion and add any other items deemed to be necessary to its scope. (3) (a)  Every life insurance company, except as exempted by or pursuant to administrative regulation, shall also annually include in the opinion required by subsection (2) of this section, an opinion of the same qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the executive director by administrative regulation, when considered in light of the assets held by the company with respect to the reserves and related actuarial items, including but not limited to the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the company's obligations under the policies and contracts, including but not limited to the benefits under and expenses associated with the policies and contracts. (b)  The executive director may provide by administrative regulation for a transition period for establishing any higher reserves which the qualified actuary may deem necessary in order to render the opinion required by this section. (4) Each opinion required by subsection (2) of this section shall be governed by the following provisions: (a)  A memorandum, in form and substance acceptable to the executive director as specified by administrative regulation, shall be prepared to support each actuarial opinion. (b)  If the insurance company fails to provide a supporting memorandum at the request of the executive director within a period specified by administrative regulation or the executive director determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by the administrative regulations or is otherwise unacceptable to the executive director, the executive director may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting memorandum as is required by the executive director. (5) Every opinion shall be governed by the following provisions: Page 1 of 3 (a) The opinion shall be submitted with the annual statement reflecting the valuation of reserve liabilities for each year ending on or after December 31, 1996. (b) The opinion shall apply to business in force including individual and group health insurance plans, in form and substance acceptable to the executive director as specified by administrative regulation. (c) The opinion shall be based on standards adopted from time to time by the Actuarial Standards Board and on such additional standards as the executive director may by administrative regulation prescribe. (d) In the case of an opinion required to be submitted by a foreign or alien company, the executive director may accept the opinion filed by that company with the insurance supervisory official of another state if the executive director determines that the opinion reasonably meets the requirements 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 in administrative regulations. (f) Except in cases of fraud or willful misconduct, the qualified actuary shall not be liable for damages to any person, other than the insurance company and the executive director, for any act, error, omission, decision, or conduct with respect to the actuary's opinion. (g) Disciplinary action by the executive director against the company or the qualified actuary shall be defined in administrative regulations by the executive director. (h) Any memorandum in support of the opinion, and any other material provided by the company to the executive director in connection therewith, shall be kept confidential by the executive director and shall not be made public and shall not be subject to subpoena, other than for the purpose of defending an action seeking damages from any person by reason of any action required by this section or by administrative regulations promulgated hereunder. The memorandum or other material may otherwise be released by the executive director with the written consent of the company or to the American Academy of Actuaries upon request stating that the memorandum or other material is required for the purpose of professional disciplinary proceedings and setting forth procedures satisfactory to the executive director for preserving the confidentiality of the memorandum or other material. Once any portion of the confidential memorandum is cited by the company in its marketing, or is cited before any governmental agency other than a state insurance department or office, or is released by the company to the news media, all portions of the confidential memorandum shall be no longer confidential. Effective: July 15, 1996 History:Created 1996 Ky. Acts ch. 289, sec. 4, effective July 15, 1996. Legislative Research Commission Note (6/20/2005). 2005 Ky. Acts chs. 11, 85, 95, 97, 98, 99, 123, and 181 instruct the Reviser of Statutes to correct statutory references to Page 2 of 3 agencies and officers whose names have been changed in 2005 legislation confirming the reorganization of the executive branch. Such a correction has been made in this section. Page 3 of 3