Qualifications of Actuary or Consulting Actuary

PURPOSE: This rule describes the necessary qualifications of an actuary signing and certifying the life and accident and health annual statement of an insurer. This rule was adopted pursuant to the provisions of section 374.045, RSMo and implements section 376.350, RSMo. (1) Every life insurance company authorized to do business in this state files an annual statement. Missouri instructions for completing the life and accident and health annual statement blank require that these forms be signed and certified by a qualified actuary. (2) For this purpose, a “qualified actuary” means a member in good standing of the American Academy of Actuaries. (3) Scope. This rule applies to all reports, statements and other documents filed with the director or issued to the public in relation to the business of insurance. (4) Restriction of Signing as an Actuary. No report, statement or document shall be filed with the director or issued to the public in relation to the business of insurance if it is signed by a person who represents him/herself in the instrument to be an actuary unless the person signing as an actuary is a qualified actuary. (5) Actuarial Representation. No person in any representation made to the public or to the director in respect to any matter subject to this rule shall use the word actuary or actuarial to indicate a degree of professional competence unless the representation was prepared or approved by a qualified actuary. (6) Annual Statements of Domestic Life Insurance Companies. Section 376.350, RSMo prescribes the general form of the annual statement which must be filed with the director each year. The form which is required by the director is that which has been developed by the National Association of Insurance Commissioners. This form now includes a requirement relating to policy reserves and other actuarial items. The instructions for completion of the blank describe the content of this requirement. The items on which actuarial opinion is required are— (A) Aggregate reserve for life policies and contracts (Exhibit 8); (B) Aggregate reserve for accident and health policies (Exhibit 9); (C) Net deferred and uncollected premiums; and (D) Policy and Contract Claims—Liability End of Current Year (Exhibit 11, Part 1). The expanded actuarial opinion requirements with respect to life insurance company reserves has been designed with the intent to provide greater assurance that policyholders’ benefits and shareholders’ interests are being properly protected through adequate reserve practices. If the company does not employ an actuary on a staff or consulting basis, the department will use the verification made by the department’s actuary or the consulting actuary to the department in lieu of that called for in the instructions. The necessary information and data to render an opinion must be provided by the company and the individual of the company responsible for this compilation must submit a statement to the department that the listings and summaries of policies in force and other information necessary to comply with these rules are complete and accurate to the best of his/her knowledge and belief. If the company intends to rely upon the verification by the department’s actuary or consultant, it should so indicate in the space provided for certification. (7) Qualified Opinions. A qualified opinion is usually an indication that some corrective action is indicated. The director will question any company, foreign or domestic, about which the opinion is received, whether that opinion is rendered by its own staff, its consultant or the department, as to its plans for correcting the indicated problem. It is recommended that in any situation in which an actuary finds it necessary to give a qualified opinion, s/he notify both the company and the department. If the department’s actuary or consultant is unable to render an unqualified opinion, the department may require the company to obtain a separate opinion from another qualified actuary, which may be limited to the subject matter in question. (8) Special Provisions for Certain Domestic Companies. The department is aware of the existence of some business in force on which there is no statutory basis for reserves. Lack of a statute, however, does not imply that no liability exists. The actuary valuing the business is not limited to statutory requirements for comparable business, but should use any appropriate assumptions and methods to establish the true liability. S/he, of course, must be prepared to justify to the director his/her choice of assumptions and methods. AUTHORITY: sections 374.045 and 376.350, RSMo 2016.* This rule was previously filed as 4 CSR 190-11.080. Original rule filed Aug. 5, 1974, effective Aug. 15, 1974. Amended: Filed Aug. 16, 1977, effective Dec. 11, 1977. Amended: Filed Dec. 14, 2000, effective July 30, 2001. Amended: Filed Oct. 30, 2018, effective April 30, 2019. *Original authority: 374.045, RSMo 1967, amended 1993, 1995, 2008 and 376.350, RSMo 1939, amended 2000.