2012 Kentucky Revised Statutes
CHAPTER 304 INSURANCE CODE
SUBTITLE 6. Assets and Liabilities
6..171 Requirement for actuarial opinion as to appropriate computation of reserves and related items and compliance with state law.
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<![CDATA[304.6-171 Requirement for actuarial opinion as to appropriate computation of
reserves and related items and compliance with state law.
(1)
(2)
(3)
(4)
(5)
This section shall become operative at the end of the first full calendar year
following the year of enactment.
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 commissioner 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 commissioner by administrative
regulation shall define the specifics of this opinion and add any other items deemed
to be necessary to its scope.
(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 commissioner 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 commissioner 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.
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 commissioner as
specified by administrative regulation, shall be prepared to support each
actuarial opinion; and
(b) If the insurance company fails to provide a supporting memorandum at the
request of the commissioner within a period specified by administrative
regulation or the commissioner 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
commissioner, the commissioner 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 commissioner.
Every opinion shall be governed by the following provisions:
(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,
(b)
(c)
(d)
(e)
(f)
(g)
(h)
1996;
The opinion shall apply to business in force including individual and group
health insurance plans, in form and substance acceptable to the commissioner
as specified by administrative regulation;
The opinion shall be based on standards adopted from time to time by the
Actuarial Standards Board and on such additional standards as the
commissioner may by administrative regulation prescribe;
In the case of an opinion required to be submitted by a foreign or alien
company, the commissioner may accept the opinion filed by that company
with the insurance supervisory official of another state if the commissioner
determines that the opinion reasonably meets the requirements applicable to a
company domiciled in this state;
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;
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
commissioner, for any act, error, omission, decision, or conduct with respect
to the actuary's opinion;
Disciplinary action by the commissioner against the company or the qualified
actuary shall be defined in administrative regulations by the commissioner;
and
Any memorandum in support of the opinion, and any other material provided
by the company to the commissioner in connection therewith, shall be kept
confidential by the commissioner 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
commissioner 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 commissioner 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, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1006, effective July 15, 2010. -- Created
1996 Ky. Acts ch. 289, sec. 4, effective July 15, 1996.
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