Indiana Code 27-1-12.8-34. Minimum standard of valuation for contracts issued on or after operative date of Valuation Manual; operative date determination; changes to Valuation Manual; requirements
(b) The operative date of the Valuation Manual is January 1 of the first calendar year following the first July 1 as of which all of the following have occurred:
Terms Used In Indiana Code 27-1-12.8-34
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Commissioner: means the "insurance commissioner" of this state. See Indiana Code 27-1-2-3
- life insurance: means insurance under a contract that incorporates mortality risk, including annuity and pure endowment contracts. See Indiana Code 27-1-12.8-10
- NAIC: refers to the National Association of Insurance Commissioners. See Indiana Code 27-1-12.8-11
- Oversight: Committee review of the activities of a Federal agency or program.
- person: includes individuals, corporations, associations, and partnerships; personal pronoun includes all genders; the singular includes the plural and the plural includes the singular. See Indiana Code 27-1-2-3
- qualified actuary: means an individual who is qualified to sign the applicable statement of actuarial opinion in accordance with the American Academy of Actuaries qualification standards. See Indiana Code 27-1-12.8-14
- reserves: means reserve liabilities. See Indiana Code 27-1-12.8-15
- United States: includes the District of Columbia and the commonwealths, possessions, states in free association with the United States, and the territories. See Indiana Code 1-1-4-5
- Year: means a calendar year, unless otherwise expressed. See Indiana Code 1-1-4-5
(2) Legislation containing substantially similar terms and provisions as the terms and provisions contained in this chapter has been enacted by states representing greater than seventy-five percent (75%) of the direct premiums written as reported in the following annual statements submitted for 2008:
(A) Life, accident, and health annual statements.
(B) Health annual statements.
(C) Fraternal annual statements.
(3) Legislation containing substantially similar terms and provisions as the terms and provisions contained in this chapter has been enacted by at least forty-two (42) of the following fifty-five (55) jurisdictions:
(A) The fifty (50) states of the United States.
(B) American Samoa.
(C) The American Virgin Islands.
(D) The District of Columbia.
(E) Guam.
(F) Puerto Rico.
(c) Unless a change in the Valuation Manual specifies a later effective date, changes to the Valuation Manual are effective on the January 1 following the date when the change to the Valuation Manual has been adopted by the NAIC by an affirmative vote representing:
(1) at least three-fourths (3/4) of the members of the NAIC voting, but not less than a majority of the total membership; and
(2) members of the NAIC representing jurisdictions totaling greater than seventy-five percent (75%) of the direct premiums written, as reported in the following annual statements most recently available before the vote:
(A) Life, accident, and health annual statements.
(B) Health annual statements.
(C) Fraternal annual statements.
(d) The Valuation Manual must specify all of the following:
(1) Minimum valuation standards for contracts that are subject to section 20 of this chapter are the following:
(A) The commissioners reserve valuation method for life insurance contracts, other than annuity contracts.
(B) The commissioners annuity reserve valuation method for annuity contracts.
(C) Minimum reserves for all other contracts.
(2) The contracts or types of contracts that are subject to the requirements of a principle based valuation under section 35 of this chapter and the minimum valuation standards consistent with the requirements.
(3) For contracts that are subject to a principle based valuation under section 35 of this chapter, the following:
(A) Requirements for:
(i) the format of the reports to the commissioner under section 35(c)(3) of this chapter; and
(ii) which certifications described in item (i) must include information necessary to determine whether the valuation is appropriate and in compliance with sections 19 through 40 of this chapter.
(B) Assumptions prescribed for risks over which the company does not have significant control or influence.
(C) Procedures for corporate governance and oversight of the actuarial function and a process for appropriate waiver or modification of the procedures.
(4) For contracts that are not subject to a principle-based valuation under section 35 of this chapter, the minimum valuation standard must:
(A) be consistent with the minimum standard of valuation before the operative date of the Valuation Manual; or
(B) develop reserves that quantify:
(i) the benefits, guarantees, and funding associated with the contracts; and
(ii) the contracts’ risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring.
(5) Other requirements, including requirements relating to:
(A) Reserve methods.
(B) Models for measuring risk.
(C) Generation of economic scenarios.
(D) Assumptions.
(E) Margins.
(F) Use of company experience.
(G) Risk measurement.
(H) Disclosure.
(I) Certifications.
(J) Reports.
(K) Actuarial opinions and memorandums.
(L) Transition rules.
(M) Internal controls.
(6) The data and form of the data required under section 36 of this chapter, including:
(A) the person to whom the data must be submitted;
(B) data analyses; and
(C) reporting of analyses.
(e) If:
(1) there is no specific valuation requirement; or
(2) a specific valuation requirement in the Valuation Manual is not, in the opinion of the commissioner, in compliance with sections 19 through 40 of this chapter;
a company shall, with respect to the specific valuation requirements, comply with minimum valuation standards prescribed by the commissioner in rules adopted under IC 4-22-2.
(f) The commissioner may employ or contract with a qualified actuary, at the expense of a company, to:
(1) perform an actuarial examination of the company and provide an opinion concerning the appropriateness of any reserve assumption or method used by the company; or
(2) review and provide an opinion concerning the company’s compliance with a requirement of this chapter. The commissioner may rely upon an opinion of a qualified actuary engaged by the commissioner of another state, district, or territory of the United States concerning sections 19 through 40 of this chapter.
(g) The commissioner may:
(1) require a company to change an assumption or method that in the opinion of the commissioner is necessary to comply with the requirements of the Valuation Manual or sections 19 through 40 of this chapter; and
(2) take other disciplinary action allowed by law.
A company described in subdivision (1) shall adjust reserves as required by the commissioner.
As added by P.L.276-2013, SEC.10. Amended by P.L.124-2018, SEC.27.