31A-17-514. Valuation manual for policies issued on or after the operative date of the valuation manual.
(1)
For a policy issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required under Subsection 31A-17-502(2), except as provided under Subsection (5) or (6).
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.
Annuity: means an agreement to make periodical payments for a period certain or over the lifetime of one or more individuals if the making or continuance of all or some of the series of the payments, or the amount of the payment, is dependent upon the continuance of human life. See Utah Code 31A-1-301
Company: means an entity that:
(i)
has written, issued, or reinsured a life insurance contract, accident and health insurance contract, or deposit-type contract in this state and has at least one such policy in force or on claim; or
(ii)
has written, issued, or reinsured a life insurance contract, accident and health insurance contract, or deposit-type contract in any state and is required to hold a certificate of authority to write life insurance, accident and health insurance, or deposit-type contracts in this state. See Utah Code 31A-17-501
Contract: A legal written agreement that becomes binding when signed.
Form: means one of the following prepared for general use:
a risk distributing arrangement providing for compensation or replacement for damages or loss through the provision of a service or a benefit in kind;
(ii)
a contract of guaranty or suretyship entered into by the guarantor or surety as a business and not as merely incidental to a business transaction; and
(iii)
a plan in which the risk does not rest upon the person who makes an arrangement, but with a class of persons who have agreed to share the risk. See Utah Code 31A-1-301
life insurance: means a contract that incorporates mortality risk, including annuity and pure endowment contracts, and as may be specified in the valuation manual. See Utah Code 31A-17-501
Principle-based valuation: means a reserve valuation that uses one or more methods or one or more assumptions determined by the insurer and is required to comply with Section 31A-17-515 as specified in the valuation manual. See Utah Code 31A-17-501
Process: means a writ or summons issued in the course of a judicial proceeding. See Utah Code 68-3-12.5
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 for actuaries signing the statements and who meets the requirements specified in the valuation manual. See Utah Code 31A-17-501
State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5
United States: includes each state, district, and territory of the United States of America. See Utah Code 68-3-12.5
Valuation manual: means the manual of valuation instructions adopted in accordance with Section 31A-17-514. See Utah Code 31A-17-501
(2)
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:
(a)
the valuation manual is adopted by the National Association of Insurance Commissioners by an affirmative vote of at least 42 members, or three-fourths of the members voting, whichever is greater;
(b)
the Standard Valuation Law, as amended by the National Association of Insurance Commissioners in 2009, or legislation including substantially similar terms and provisions, has been enacted by states representing greater than 75% of the direct premiums written as reported in the following annual statements submitted for 2008:
(i)
life;
(ii)
accident and health annual statements;
(iii)
health annual statements; or
(iv)
fraternal annual statements; and
(c)
the Standard Valuation Law, as amended by the National Association of Insurance Commissioners in 2009, or legislation including substantially similar terms and provisions, has been enacted by at least 42 of the following 55 jurisdictions:
(i)
the 50 states of the United States;
(ii)
American Samoa;
(iii)
the American Virgin Islands;
(iv)
the District of Columbia;
(v)
Guam; and
(vi)
Puerto Rico.
(3)
Unless a change in the valuation manual specifies a later effective date, changes to the valuation manual shall be effective on January 1 following the date when the change to the valuation manual has been adopted by the National Association of Insurance Commissioners by an affirmative vote representing:
(a)
at least three-fourths of the members of the National Association of Insurance Commissioners voting, but not less than a majority of the total membership; and
(b)
members of the National Association of Insurance Commissioners representing jurisdictions totaling greater than 75% of the direct premiums written as reported in the following annual statements most recently available before the vote in Subsection (3)(a):
(i)
life;
(ii)
accident and health annual statements;
(iii)
health annual statements; or
(iv)
fraternal annual statements.
(4)
The valuation manual shall specify all of the following:
(a)
minimum valuation standards for and definitions of a policy or contract subject to Subsection 31A-17-502(2), except such minimum valuation standards shall be:
(i)
the commissioner’s reserve valuation method for life insurance contracts, other than annuity contracts, subject to Subsection 31A-17-502(2);
(ii)
the commissioner’s annuity reserve valuation method for annuity contracts subject to Subsection 31A-17-502(2); and
(iii)
minimum reserves for other policies or contracts subject to Subsection 31A-17-502(2);
(b)
which policies or contracts or types of policies or contracts are subject to the requirements of a principle-based valuation in Subsection 31A-17-515(1) and the minimum valuation standards consistent with those requirements;
(c)
for policies and contracts subject to a principle-based valuation under Section 31A-17-515:
(i)
requirements for the format of reports to the commissioner under Subsection 31A-17-515(2)(c), which shall include information necessary to determine if the valuation is appropriate in compliance with this part;
(ii)
prescribed assumptions for risks over which the company does not have significant control; and
(iii)
procedures for corporate governance and oversight of the actuarial function, and a process for appropriate waiver or modification of such procedures;
(d)
for policies not subject to a principle-based valuation under Section 31A-17-515 the minimum valuation standard shall either:
(i)
be consistent with the minimum standard of valuation before the operative date of the valuation manual; or
(ii)
develop reserves that quantify the benefits and guarantees, and the funding, associated with the 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 those relating to reserve methods, models for measuring risk, generation of economic scenarios, assumptions, margins, use of company experience, risk measurement, disclosure, certifications, reports, actuarial opinions and memorandums, transition rules, and internal controls; and
(f)
the data and form of the data required under Section 31A-17-516, with whom the data must be submitted, and may specify other requirements including data analyses and reporting of analyses.
(5)
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 part, then the company shall, with respect to the requirement, comply with minimum valuation standards prescribed by the commissioner by rule.
(6)
The commissioner may engage a qualified actuary, at the expense of the company, to perform an actuarial examination of the company and opine on the appropriateness of any reserve assumption or method used by the company, or to review and opine on a company’s compliance with any requirement set forth in this part. The commissioner may rely upon the opinion, regarding provisions contained within this part, of a qualified actuary engaged by the commissioner of another state, district, or territory of the United States. As used in this Subsection (6), “engage” includes employment and contracting.
(7)
The commissioner may require a company to change any assumption or method that in the opinion of the commissioner is necessary in order to comply with the requirements of the valuation manual or this part, and the company shall adjust the reserves as required by the commissioner. The commissioner may take other disciplinary action as permitted pursuant to Section 31A-2-308 and Title 63G, Chapter 4, Administrative Procedures Act.
