(a)(1) The operative date of the Valuation Manual, as defined in subsection (a) of § 38a-78, shall be January first of the first calendar year following the first July first as of which all of the following have occurred:

(A) The Valuation Manual has been adopted by NAIC, as defined in subsection (a) of § 38a-78, by an affirmative vote of at least forty-two NAIC members or three-quarters of NAIC members voting, whichever is greater;

(B) The Standard Valuation Law, as amended by NAIC in 2009, or legislation including substantially similar terms and provisions has been enacted by states representing greater than seventy-five per cent of the direct written premiums as reported in the following annual statements submitted to NAIC for 2008: Life insurance, accident and health insurance, health insurance or fraternal annual statements; and

(C) The Standard Valuation Law, as amended by NAIC in 2009, or legislation including substantially similar terms and provisions has been enacted by at least forty-two of the following fifty-five jurisdictions: The fifty states of the United States, the District of Columbia, the United States Virgin Islands, the Commonwealth of Puerto Rico, American Samoa and Guam.

(2) After all the events set forth in subdivision (1) of this subsection have occurred, the commissioner shall certify that all such events have occurred and notify companies of such certification and the effective date of the operation of the Valuation Manual.

(b) (1) Unless a later effective date has been specified, a change to the Valuation Manual shall apply on January first of the first calendar year following the date as of which both of the following have occurred:

(A) The change to the Valuation Manual has been adopted by NAIC by an affirmative vote of at least three-quarters of NAIC members voting but not less than a majority of the total NAIC membership; and

(B) The change to the Valuation Manual has been adopted by NAIC members representing jurisdictions totaling greater than seventy-five per cent of the direct written premiums, as reported in the most recent annual statements submitted to NAIC prior to the vote in subparagraph (A) of this subdivision, for the following: Life insurance, accident and health insurance, health insurance or fraternal annual statements.

(2) After both events set forth in subdivision (1) of this subsection have occurred, the commissioner shall certify that both such events have occurred and notify companies of such certification, the change to the Valuation Manual and the effective date of such change.

(c) (1) The Valuation Manual shall specify:

(A) The minimum valuation standards for policies or contracts subject to subparagraph (C) of subdivision (2) of subsection (a) of § 38a-78 as follows: (i) For life insurance contracts, other than annuity contracts, the commissioners’ reserve valuation method, and (ii) for annuity contracts, the commissioners’ annuity reserve valuation method. The Valuation Manual shall specify minimum reserves for all other policies or contracts subject to subparagraph (C) of subdivision (2) of subsection (a) of § 38a-78;

(B) The specific policies or contracts or types of policies or contracts subject to this section that are required to establish reserves using a principle-based valuation as set forth in subdivision (2) of subsection (m) of § 38a-78 and the minimum valuation standards consistent with such requirements;

(C) For policies or contracts subject to a principle-based valuation, (i) requirements for the format of reports submitted to the commissioner pursuant to subparagraph (C) of subdivision (3) of subsection (m) of § 38a-78, including the information deemed necessary to determine if the valuation is appropriate and in compliance with this section, (ii) the assumptions prescribed for risks over which the company does not have significant control or influence, and (iii) the procedures for the corporate governance and oversight of the actuarial function and a process for appropriate waiver or modification of such procedures;

(D) For policies or contracts not subject to a principle-based valuation, the minimum valuation standard, which shall (i) be consistent with the minimum valuation standard in effect prior to the operative date of the Valuation Manual, or (ii) develop reserves that quantify the benefits, guarantees and funding associated with the policies or contracts and their risks, at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring;

(E) Other requirements including, but not limited to, reserve methods, models for measuring risk, generation of economic scenarios, assumptions, margins, use of company experience, risk measurement, disclosures, certifications, reports, actuarial opinions and memoranda, transition rules and internal controls; and

(F) The data a company is required to submit under subdivision (5) of subsection (m) of § 38a-78, the form of such data and to whom such data shall be submitted and other information that may be required, including data analyses and reporting of such analyses.

(2) (A) In the absence of a specific valuation requirement or if a specific valuation requirement in the Valuation Manual is not, in the opinion of the commissioner, in compliance with this subsection or subsection (m) of § 38a-78 with respect to such requirement, the commissioner shall direct a company to comply with the minimum valuation standards prescribed by regulations adopted in accordance with the provisions of chapter 54.

(B) The commissioner may engage the services by employment or by contract of a qualified actuary, at a company’s expense, to perform an actuarial examination of the company and provide an opinion on the appropriateness of any reserve assumption or method used by the company or to review and provide an opinion on the company’s compliance with any requirement set forth in this subsection, subdivision (2) of subsection (a) of § 38a-78 or subsection (c), (m) or (n) of § 38a-78. The commissioner may rely on the opinion, regarding requirements set forth in this subsection, subdivision (2) of subsection (a) of § 38a-78 or subsection (c), (m) or (n) of § 38a-78, of a qualified actuary engaged by the insurance regulatory official of another state, district or territory of the United States.

(C) The commissioner may require a company to change any assumption or method that the commissioner deems necessary to comply with the requirements of this subsection, subdivision (2) of subsection (a) of § 38a-78 or subsection (c), (m) or (n) of § 38a-78 or the Valuation Manual, and the company shall adjust its reserves as required by the commissioner.