2013 Kentucky Revised Statutes CHAPTER 304 - INSURANCE CODE Subtitle 6 - Assets and Liabilities 6.6-171 Requirement for actuarial opinion as to appropriate computation of reserves and related items and compliance with state law.
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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, 1996;
(b)
(c)
(d)
(e)
(f)
(g)
(h)
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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