Actuarial Opinions of Reserves of Life and Health Insurance Policies, Annuities and Pure Endowment Contracts

PURPOSE: This rule effectuates or aids in the interpretation of sections 376.370, 376.380 and 376.390, RSMo. (1) Actuarial Opinion Required. (A) Every life insurance company doing business in this state annually shall submit the opinion of a qualified actuary as to whether the reserves and related actuarial items held in support of the company’s policies and contracts 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. (B) The opinion shall be submitted with the annual statement reflecting the valuation of those reserve liabilities for each year ending on or after December 31, 1992. (C) The opinion shall apply to all business in force including individual and group health insurance plans. (D) The opinion shall be based on standards adopted from time-to-time by the Actuarial Standards Board. (E) In the case of an opinion required to be submitted by a foreign or alien company, the director may accept the opinion filed by that company with the insurance supervisory official of another state if the director determines that the opinion reasonably meets the requirements applicable to a company domiciled in this state. (F) 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 those rules. (G) 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 director) for any act, error, omission, decision or conduct with respect to the actuary’s opinion. (H) Disciplinary action by the director against the company or the qualified actuary shall include any actions authorized by the insurance laws of this state and as to the qualified actuary, refusal to accept future opinions. (I) A memorandum, in form and substance acceptable to the director, shall be prepared to support each actuarial opinion. (J) If the insurance company fails to provide a supporting memorandum at the request of the director within thirty (30) days of that request, or the director determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by this rule, or is otherwise unacceptable to the director, the director 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 director. (K) Any memorandum in support of the opinion, and any other material provided by the company to the director in connection with the opinion shall be kept confidential by the director 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 rule; provided, that the memorandum or other material may otherwise be released by the director—a) with the written consent of the company or b) 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 director 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 is released by the company to the news media, all portions of the confidential memorandum shall no longer be confidential. (2) Matching Assets to Liabilities. (A) Annually every life insurance company, except as may be exempted by or pursuant to this rule, also shall include in the opinion required by subsection (1)(A) of this rule, 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 director by this rule, 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 director, on a case-by-case basis, may provide 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. AUTHORITY: section 374.045.1(3), RSMo Supp. 1993.* Original rule filed July 2, 1991, effective Dec. 9, 1991. *Original authority: 374.045.1(3), RSMo 1967, amended 1993.