Bill Text: IA HSB535 | 2013-2014 | 85th General Assembly | Introduced
Bill Title: A study bill relating to standard valuation and standard forfeiture provisions for life insurance policies or contracts and including applicability provisions.
Spectrum: Unknown
Status: (N/A - Dead) 0000-00-00 - In Commerce [HSB535 Detail]
Download: Iowa-2013-HSB535-Introduced.html
House
Study
Bill
535
-
Introduced
SENATE/HOUSE
FILE
_____
BY
(PROPOSED
DEPARTMENT
OF
COMMERCE/INSURANCE
DIVISION
BILL)
A
BILL
FOR
An
Act
relating
to
standard
valuation
and
standard
forfeiture
1
provisions
for
life
insurance
policies
or
contracts
and
2
including
applicability
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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Section
1.
Section
508.36,
Code
2014,
is
amended
by
adding
1
the
following
new
subsection:
2
NEW
SUBSECTION
.
01.
Definitions.
3
a.
As
used
in
this
section,
unless
the
context
otherwise
4
requires:
5
(1)
“Accident
and
health
insurance”
means
policies
6
or
contracts
that
incorporate
morbidity
risk
and
provide
7
protection
against
economic
loss
resulting
from
accident,
8
sickness,
or
medical
conditions
and
as
may
be
specified
in
the
9
valuation
manual.
10
(2)
“Appointed
actuary”
means
a
qualified
actuary
who
is
11
appointed
in
accordance
with
the
valuation
manual
to
prepare
12
the
actuarial
opinion
required
in
subsection
2,
paragraph
“a”
.
13
(3)
“Company”
means
an
entity
which
has
done
any
of
the
14
following:
15
(a)
Written,
issued,
or
reinsured
life
insurance
policies
16
or
contracts,
accident
and
health
insurance
policies
or
17
contracts,
or
deposit-type
policies
or
contracts
in
this
state
18
and
has
at
least
one
such
policy
or
contract
in
force
or
on
19
claim.
20
(b)
Written,
issued,
or
reinsured
life
insurance
policies
21
or
contracts,
accident
and
health
insurance
policies
or
22
contracts,
or
deposit-type
policies
or
contracts
in
any
state
23
and
is
required
to
hold
a
certificate
of
authority
to
write
24
life
insurance,
accident
and
health
insurance,
or
deposit-type
25
policies
or
contracts
in
any
state
and
is
required
to
hold
a
26
certificate
of
authority
to
write
life
insurance,
accident
and
27
health
insurance,
or
deposit-type
policies
or
contracts
in
this
28
state.
29
(4)
“Deposit-type
policy
or
contract”
means
policies
or
30
contracts
that
do
not
incorporate
mortality
or
morbidity
risks
31
and
such
policies
or
contracts
as
may
be
specified
in
the
32
valuation
manual.
33
(5)
“Life
insurance”
means
policies
or
contracts
that
34
incorporate
mortality
risk,
including
annuity
and
pure
35
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endowment
contracts,
and
such
policies
or
contracts
as
may
be
1
specified
in
the
valuation
manual.
2
(6)
“NAIC”
means
the
national
association
of
insurance
3
commissioners.
4
(7)
“Operative
date
of
the
valuation
manual”
means
the
5
operative
date
of
the
valuation
manual
as
provided
in
6
subsection
13.
7
(8)
“Policyholder
behavior”
means
any
action
a
policyholder,
8
contract
holder,
or
any
other
person
with
the
right
to
elect
9
options,
such
as
a
certificate
holder,
may
take
under
a
policy
10
or
contract
subject
to
this
section
including
but
not
limited
11
to
lapse,
withdrawal,
transfer,
deposit,
premium
payment,
loan,
12
annuitization,
or
benefit
elections
prescribed
by
the
policy
or
13
contract,
but
excluding
events
of
mortality
or
morbidity
that
14
result
in
benefits
prescribed
in
their
essential
aspects
by
the
15
terms
of
the
policy
or
contract.
16
(9)
“Principle-based
valuation”
means
a
reserve
valuation
17
that
uses
one
or
more
methods
or
one
or
more
assumptions
18
determined
by
the
insurer
and
that
is
required
to
comply
with
19
subsection
14
as
specified
in
the
valuation
manual.
20
(10)
“Qualified
actuary”
means
an
individual
who
is
21
qualified
to
sign
the
applicable
statement
of
actuarial
22
opinion
in
accordance
with
the
American
academy
of
actuaries
23
qualification
standards
for
actuaries
signing
such
statements
24
and
who
meets
the
requirements
specified
in
the
valuation
25
manual.
26
(11)
“Tail
risk”
means
a
risk
that
occurs
either
where
the
27
frequency
of
low
probability
events
is
higher
than
expected
28
under
a
normal
probability
distribution
or
where
there
are
29
observed
events
of
very
significant
size
or
magnitude.
30
(12)
“Valuation
manual”
means
the
manual
of
valuation
31
instructions
adopted
by
the
NAIC
as
specified
in
this
section
32
or
as
subsequently
amended.
33
b.
This
subsection
is
applicable
on
or
after
the
operative
34
date
of
the
valuation
manual.
35
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Sec.
2.
Section
508.36,
subsection
1,
Code
2014,
is
amended
1
to
read
as
follows:
2
1.
Reserve
valuation.
3
a.
Policies
and
contracts
issued
prior
to
operative
date
of
4
valuation
manual.
5
(1)
The
commissioner
shall
annually
value,
or
cause
to
be
6
valued,
the
reserve
liabilities,
referred
to
in
this
section
7
as
reserves,
for
all
outstanding
life
insurance
policies
and
8
annuity
and
pure
endowment
contracts
of
every
life
insurance
9
company
doing
business
in
this
state,
and
may
certify
the
10
amount
of
any
such
reserves,
specifying
the
mortality
table
11
or
tables,
rate
or
rates
of
interest,
and
the
net
level
12
premium
method
or
other
methods
used
in
the
calculation
of
13
such
reserves
issued
on
or
after
July
1,
1973,
and
prior
to
14
the
operative
date
of
the
valuation
manual
.
In
calculating
15
the
reserves,
the
commissioner
may
use
group
methods
and
16
approximate
averages
for
fractions
of
a
year
or
otherwise.
In
17
lieu
of
the
valuation
of
the
reserves
required
in
this
section
18
of
any
foreign
or
alien
company,
the
commissioner
may
accept
19
any
valuation
made,
or
caused
to
be
made,
by
the
insurance
20
supervisory
official
of
any
state
or
other
jurisdiction
when
21
such
valuation
complies
with
the
minimum
standard
provided
22
for
in
this
section
and
if
the
official
of
such
state
or
23
jurisdiction
accepts
as
sufficient
and
valid
for
all
legal
24
purposes
the
certificate
of
valuation
of
the
commissioner
when
25
such
certificate
states
the
valuation
to
have
been
made
in
a
26
specified
manner
according
to
which
the
aggregate
reserves
27
would
be
at
least
as
large
as
if
they
had
been
computed
in
the
28
manner
prescribed
by
the
law
of
that
state
or
jurisdiction
.
29
(2)
The
provisions
set
forth
in
subsections
3
through
12
30
shall
apply
to
all
policies
and
contracts,
as
appropriate,
31
subject
to
this
section
that
were
issued
on
or
after
July
1,
32
1973,
and
prior
to
the
operative
date
of
the
valuation
manual
33
and
the
provisions
set
forth
in
subsections
13
and
14
shall
not
34
apply
to
any
such
policies
or
contracts.
35
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(3)
The
minimum
standard
for
the
valuation
of
policies
and
1
contracts
issued
prior
to
July
1,
1973,
shall
be
the
standard
2
provided
by
the
laws
in
effect
immediately
prior
to
that
date.
3
b.
Policies
and
contracts
issued
on
or
after
operative
date
4
of
valuation
manual.
5
(1)
The
commissioner
shall
annually
value,
or
cause
to
6
be
valued,
the
reserve
liabilities
for
all
outstanding
life
7
insurance
policies
or
contracts,
annuity
and
pure
endowment
8
policies
or
contracts,
accident
and
health
insurance
policies
9
or
contracts,
and
deposit-type
policies
or
contracts
of
every
10
company
issued
on
or
after
the
operative
date
of
the
valuation
11
manual.
In
lieu
of
the
valuation
of
the
reserves
required
12
of
a
foreign
or
alien
company,
the
commissioner
may
accept
13
a
valuation
made,
or
caused
to
be
made,
by
the
insurance
14
supervisory
official
of
any
state
or
other
jurisdiction
when
15
the
valuation
complies
with
the
minimum
standard
provided
in
16
this
section.
17
(2)
The
provisions
set
forth
in
subsections
13
and
14
shall
18
apply
to
all
policies
or
contracts
issued
on
or
after
the
19
operative
date
of
the
valuation
manual.
20
Sec.
3.
Section
508.36,
subsection
2,
Code
2014,
is
amended
21
to
read
as
follows:
22
2.
Actuarial
opinion
of
reserves.
This
subsection
is
23
effective
January
1,
1996.
24
a.
Actuarial
opinion
of
reserves
prior
to
operative
date
of
25
valuation
manual.
This
paragraph
“a”
applies
to
an
actuarial
26
opinion
of
reserves
submitted
prior
to
the
operative
date
of
27
the
valuation
manual.
28
a.
(1)
General.
A
life
insurance
company
doing
business
29
in
this
state
shall
annually
submit
the
written
opinion
of
30
a
qualified
actuary
as
to
whether
the
reserves
and
related
31
actuarial
items
held
in
support
of
the
policies
and
contracts
32
specified
by
the
commissioner
by
regulation
are
computed
33
appropriately,
are
based
on
assumptions
which
satisfy
34
contractual
provisions,
are
consistent
with
prior
reported
35
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amounts,
and
are
in
compliance
with
applicable
laws
of
this
1
state.
The
commissioner
shall
define
by
rule
the
requirements
2
and
content
of
this
opinion
and
add
any
other
items
deemed
to
3
be
necessary.
4
b.
(2)
Actuarial
analysis
of
reserves
and
assets
supporting
5
such
reserves.
6
(1)
(a)
Unless
exempted
by
rule,
a
life
insurance
company
7
shall
also
annually
include
in
the
opinion
required
by
8
paragraph
“a”
subparagraph
(1)
,
an
opinion
of
the
same
qualified
9
actuary
as
to
whether
the
reserves
and
related
actuarial
items
10
held
in
support
of
policies
and
contracts
specified
by
the
11
commissioner
by
rule,
when
considered
with
respect
to
in
light
12
of
the
assets
held
by
the
company
associated
with
respect
to
13
the
reserves
and
related
actuarial
items,
including
,
but
not
14
limited
to
,
the
investment
earnings
on
the
assets
and
the
15
considerations
anticipated
to
be
received
and
retained
under
16
the
policies
and
contracts,
are
sufficient
make
adequate
17
provision
for
the
company’s
obligations
under
the
policies
and
18
contracts,
including
but
not
limited
to
the
benefits
under
and
19
expenses
associated
with
the
policies
and
contracts.
20
(2)
(b)
The
commissioner
may
provide
by
rule
for
a
21
transition
period
for
establishing
any
higher
reserves
which
22
the
qualified
actuary
may
deem
necessary
in
order
to
render
the
23
opinion
required
by
this
section
paragraph
“a”
.
24
c.
(3)
Requirements
for
actuarial
analysis
opinions
subject
25
to
subparagraph
(2)
.
An
opinion
required
by
paragraph
“b”
26
subparagraph
(2)
shall
be
governed
by
the
following
provisions:
27
(1)
(a)
A
memorandum,
in
form
and
substance
acceptable
to
28
the
commissioner
as
specified
by
rule,
shall
be
prepared
to
29
support
each
actuarial
opinion.
30
(2)
(b)
If
the
insurance
company
fails
to
provide
a
31
supporting
memorandum
at
the
request
of
the
commissioner
within
32
a
period
specified
by
rule
or
the
commissioner
determines
that
33
the
supporting
memorandum
provided
by
the
insurance
company
34
fails
to
meet
the
standards
prescribed
by
the
rules
or
is
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otherwise
unacceptable
to
the
commissioner,
the
commissioner
1
may
engage
a
qualified
actuary
at
the
expense
of
the
company
to
2
review
the
opinion
and
the
basis
for
the
opinion
and
prepare
3
such
supporting
memorandum
as
is
required
by
the
commissioner.
4
d.
(4)
Requirement
for
all
opinions
subject
to
this
5
paragraph
.
An
opinion
required
under
this
section
paragraph
“a”
6
is
governed
by
the
following
provisions:
7
(1)
(a)
The
opinion
shall
be
submitted
with
the
annual
8
statement
reflecting
the
valuation
of
such
reserve
liabilities
9
for
each
year
ending
on
or
after
December
31,
1995.
10
(2)
(b)
The
opinion
shall
apply
to
all
business
in
force,
11
including
individual
and
group
health
insurance
plans,
in
form
12
and
substance
acceptable
to
the
commissioner
as
specified
by
13
rule.
14
(3)
(c)
The
opinion
shall
be
based
on
standards
adopted
15
from
time
to
time
by
the
actuarial
standards
board
and
on
such
16
additional
standards
as
the
commissioner
may
by
rule
prescribe.
17
(4)
(d)
In
the
case
of
an
opinion
required
to
be
submitted
18
by
a
foreign
or
alien
company,
the
commissioner
may
accept
the
19
opinion
filed
by
that
company
with
the
insurance
supervisory
20
official
of
another
state
if
the
commissioner
determines
that
21
the
opinion
reasonably
meets
the
requirements
applicable
to
a
22
company
domiciled
in
this
state.
23
(5)
(e)
For
the
purposes
of
this
section
paragraph
“a”
,
24
“qualified
actuary”
means
a
member
in
good
standing
of
the
25
American
academy
of
actuaries
who
meets
the
requirements
of
the
26
commissioner
as
specified
by
rule.
27
(6)
(f)
Except
in
cases
of
fraud
or
willful
misconduct,
28
a
qualified
actuary
is
not
liable
for
damages
to
any
person,
29
other
than
to
the
insurance
company
and
the
commissioner,
for
30
any
act,
error,
omission,
decision,
or
conduct
with
respect
to
31
the
actuary’s
opinion.
32
(7)
(g)
Disciplinary
action
which
may
be
taken
by
the
33
commissioner
against
the
company
or
the
qualified
actuary
shall
34
be
defined
in
rules
adopted
by
the
commissioner.
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(8)
(a)
(h)
(i)
Any
memorandum
in
support
of
the
1
opinion,
and
any
other
material
provided
by
the
company
to
2
the
commissioner
in
connection
with
the
opinion,
shall
be
3
kept
confidential
by
the
commissioner
and
shall
not
be
made
4
public
and
shall
not
be
subject
to
subpoena,
other
than
for
the
5
purpose
of
defending
an
action
seeking
damages
from
any
person
6
by
reason
of
any
action
required
by
this
section
paragraph
“a”
7
or
by
rules
adopted
pursuant
to
this
section
paragraph
“a”
.
8
Notwithstanding
this
subparagraph
division
,
the
memorandum
or
9
other
material
may
be
released
by
the
commissioner
if
either
of
10
the
following
applies:
11
(i)
(A)
The
commissioner
receives
the
written
consent
of
12
the
company
with
which
the
opinion
is
associated.
13
(ii)
(B)
The
American
academy
of
actuaries
requests
that
14
the
memorandum
or
other
material
is
required
for
the
purpose
15
of
professional
disciplinary
proceedings
and
setting
forth
16
procedures
satisfactory
to
the
commissioner
for
preserving
the
17
confidentiality
of
the
memorandum
or
other
material.
18
(b)
(ii)
Once
any
portion
of
the
confidential
memorandum
19
is
cited
by
the
company
in
its
marketing,
is
cited
before
any
20
governmental
agency
other
than
a
state
insurance
department,
or
21
is
released
by
the
company
to
the
news
media,
all
portions
of
22
the
confidential
memorandum
are
no
longer
confidential.
23
b.
Actuarial
opinion
of
reserves
on
or
after
operative
date
24
of
valuation
manual.
This
paragraph
“b”
applies
to
an
actuarial
25
opinion
of
reserves
submitted
on
or
after
the
operative
date
26
of
the
valuation
manual.
27
(1)
General.
Every
company
with
outstanding
life
insurance
28
policies
or
contracts,
accident
and
health
insurance
policies
29
or
contracts,
or
deposit-type
policies
or
contracts
in
30
this
state
and
subject
to
regulation
by
the
commissioner
31
shall
annually
submit
the
opinion
of
the
appointed
actuary
32
as
to
whether
the
reserves
and
related
actuarial
items
33
held
in
support
of
the
policies
and
contracts
are
computed
34
appropriately,
are
based
on
assumptions
that
satisfy
35
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_____
H.F.
_____
contractual
provisions,
are
consistent
with
prior
reported
1
amounts,
and
comply
with
applicable
laws
of
this
state.
The
2
valuation
manual
shall
prescribe
the
specifics
of
this
opinion
3
including
any
items
deemed
to
be
necessary
to
its
scope.
4
(2)
Actuarial
analysis
of
reserves
and
assets
supporting
5
reserves.
Every
company
with
outstanding
life
insurance
6
policies
or
contracts,
accident
and
health
insurance
policies
7
or
contracts,
or
deposit-type
policies
or
contracts
in
this
8
state
and
subject
to
regulation
by
the
commissioner,
except
as
9
exempted
in
the
valuation
manual,
shall
annually
include
in
10
the
opinion
required
by
subparagraph
(1),
an
opinion
of
the
11
same
appointed
actuary
as
to
whether
the
reserves
and
related
12
actuarial
items
held
in
support
of
the
policies
and
contracts
13
specified
in
the
valuation
manual,
when
considered
in
light
of
14
the
assets
held
by
the
company
with
respect
to
the
reserves
15
and
related
actuarial
items,
including
but
not
limited
to
16
the
investment
earnings
on
the
assets
and
the
considerations
17
anticipated
to
be
received
and
retained
under
the
policies
18
and
contracts,
make
adequate
provision
for
the
company’s
19
obligations
under
the
policies
and
contracts,
including
but
not
20
limited
to
the
benefits
under
and
expenses
associated
with
the
21
policies
and
contracts.
22
(3)
Requirements
for
opinions
subject
to
subparagraph
23
(2).
An
opinion
required
by
subparagraph
(2)
shall
be
governed
24
by
the
following
provisions:
25
(a)
A
memorandum,
in
form
and
substance
as
specified
in
the
26
valuation
manual,
and
that
is
acceptable
to
the
commissioner,
27
shall
be
prepared
to
support
each
actuarial
opinion.
28
(b)
If
the
company
fails
to
provide
a
supporting
memorandum
29
at
the
request
of
the
commissioner
within
a
period
specified
30
in
the
valuation
manual
or
the
commissioner
determines
that
31
the
supporting
memorandum
provided
by
the
company
fails
to
32
meet
the
standards
prescribed
by
the
valuation
manual
or
is
33
otherwise
unacceptable
to
the
commissioner,
the
commissioner
34
may
engage
a
qualified
actuary
at
the
expense
of
the
company
to
35
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_____
H.F.
_____
review
the
opinion
and
the
basis
for
the
opinion
and
prepare
1
the
supporting
memorandum
required
by
the
commissioner.
2
(4)
Requirements
for
all
opinions
subject
to
this
3
paragraph.
Every
opinion
subject
to
this
paragraph
“b”
shall
be
4
governed
by
the
following
provisions:
5
(a)
The
opinion
shall
be
in
form
and
substance
as
specified
6
in
the
valuation
manual
and
acceptable
to
the
commissioner.
7
(b)
The
opinion
shall
be
submitted
with
the
annual
statement
8
reflecting
the
valuation
of
such
reserve
liabilities
for
each
9
year
ending
on
or
after
the
operative
date
of
the
valuation
10
manual.
11
(c)
The
opinion
shall
apply
to
all
policies
and
contracts
12
subject
to
subparagraph
(2)
plus
other
actuarial
liabilities
as
13
may
be
specified
in
the
valuation
manual.
14
(d)
The
opinion
shall
be
based
on
standards
adopted
from
15
time
to
time
by
the
actuarial
standards
board
or
its
successor,
16
and
on
such
additional
standards
as
may
be
prescribed
in
the
17
valuation
manual.
18
(e)
In
the
case
of
an
opinion
required
to
be
submitted
by
19
a
foreign
or
alien
company,
the
commissioner
may
accept
the
20
opinion
filed
by
that
company
with
the
insurance
supervisory
21
official
of
another
state
if
the
commissioner
determines
that
22
the
opinion
reasonably
meets
the
requirements
applicable
to
a
23
company
domiciled
in
this
state.
24
(f)
Except
in
cases
of
fraud
or
willful
misconduct,
the
25
appointed
actuary
shall
not
be
liable
for
damages
to
any
26
person,
other
than
the
company
and
the
commissioner,
for
any
27
act,
error,
omission,
decision,
or
conduct
with
respect
to
the
28
appointed
actuary’s
opinion.
29
(g)
Disciplinary
action
by
the
commissioner
against
the
30
company
or
the
appointed
actuary
shall
be
defined
in
rules
31
adopted
by
the
commissioner
pursuant
to
chapter
17A.
32
Sec.
4.
Section
508.36,
subsection
3,
paragraph
a,
33
unnumbered
paragraph
1,
Code
2014,
is
amended
to
read
as
34
follows:
35
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S.F.
_____
H.F.
_____
For
all
ordinary
policies
of
life
insurance
issued
on
the
1
standard
basis,
excluding
any
disability
and
accidental
death
2
benefits
in
the
policies,
the
following:
3
Sec.
5.
Section
508.36,
subsection
3,
paragraph
a,
4
subparagraph
(2),
Code
2014,
is
amended
to
read
as
follows:
5
(2)
The
commissioners
1958
standard
ordinary
mortality
6
table
for
such
policies
issued
on
or
after
the
operative
date
7
of
section
508.37,
subsection
5
,
paragraph
“c”
“a”
,
and
prior
to
8
the
operative
date
of
section
508.37,
subsection
5,
paragraph
9
“c”
,
provided
that
for
any
category
of
policies
issued
on
female
10
risks,
all
modified
net
premiums
and
present
values
referred
to
11
in
this
section
may
be
calculated
according
to
an
age
not
more
12
than
six
years
younger
than
the
actual
age
of
the
insured.
13
Sec.
6.
Section
508.36,
subsection
6,
paragraph
a,
14
unnumbered
paragraph
1,
Code
2014,
is
amended
to
read
as
15
follows:
16
Except
as
otherwise
provided
in
subsections
7,
10,
and
12
17
11
,
reserves
calculated
according
to
the
commissioner’s
reserve
18
valuation
method,
for
the
life
insurance
and
endowment
benefits
19
of
policies
providing
for
a
uniform
amount
of
insurance
and
20
requiring
the
payment
of
uniform
premiums,
shall
be
the
excess,
21
if
any,
of
the
present
value,
at
the
date
of
valuation,
of
22
future
guaranteed
benefits
provided
for
by
such
policies,
over
23
the
present
value,
at
the
date
of
valuation,
of
any
future
24
modified
net
premiums
for
such
policies.
The
modified
net
25
premiums
for
such
policy
is
the
uniform
percentage
of
the
26
respective
contract
premiums
for
the
benefits
such
that
the
27
present
value,
at
the
date
of
issue
of
the
policy,
of
all
28
modified
net
premiums
shall
be
equal
to
the
sum
of
the
present
29
value,
at
the
date
of
valuation,
of
such
benefits
provided
30
for
by
the
policy
and
the
excess
of
the
amount
determined
in
31
subparagraph
(1)
over
the
amount
determined
in
subparagraph
32
(2),
as
follows:
33
Sec.
7.
Section
508.36,
subsection
10,
paragraph
a,
Code
34
2014,
is
amended
to
read
as
follows:
35
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_____
H.F.
_____
a.
If
in
any
contract
year
the
gross
premium
charged
by
a
1
life
insurance
company
on
a
policy
or
contract
is
less
than
the
2
valuation
net
premium
for
the
policy
or
contract,
as
calculated
3
by
the
method
used
in
calculating
the
reserve
for
such
policy
4
or
contract
but
using
the
minimum
valuation
standards
of
5
mortality
and
rate
of
interest,
the
minimum
reserve
required
6
for
such
policy
or
contract
is
the
greater
of
either
the
7
reserve
calculated
according
to
the
mortality
table,
rate
of
8
interest,
and
method
actually
used
for
such
policy
or
contract,
9
or
the
reserve
calculated
by
the
method
actually
used
for
such
10
policy
or
contract
but
using
the
minimum
valuation
standards
11
of
mortality
and
rate
of
interest
and
replacing
the
valuation
12
net
premium
by
the
actual
gross
premium
in
each
contract
year
13
for
which
the
valuation
net
premium
exceeds
the
actual
gross
14
premium.
The
minimum
valuation
standards
of
mortality
and
rate
15
of
interest
referred
to
in
this
section
are
those
standards
16
established
in
subsections
4
and
5
.
17
Sec.
8.
Section
508.36,
subsection
12,
Code
2014,
is
amended
18
to
read
as
follows:
19
12.
Minimum
standards
for
accident
and
health
(disability,
20
accident,
and
sickness)
plans
insurance
policies
or
21
contracts
.
The
commissioner
shall
adopt
rules
containing
22
the
minimum
standards
applicable
to
the
valuation
of
health,
23
disability,
and
sickness
and
accident
plans.
For
accident
and
24
health
insurance
policies
or
contracts
issued
on
or
after
the
25
operative
date
of
the
valuation
manual,
the
standard
prescribed
26
in
the
valuation
manual
is
the
minimum
standard
of
valuation
27
required
under
subsection
1,
paragraph
“b”
.
For
health,
28
disability,
and
sickness
and
accident
insurance
policies
or
29
contracts
issued
on
or
after
July
1,
1973,
and
prior
to
the
30
operative
date
of
the
valuation
manual,
the
minimum
standard
of
31
valuation
is
the
standard
adopted
by
the
commissioner
by
rule.
32
Sec.
9.
Section
508.36,
Code
2014,
is
amended
by
adding
the
33
following
new
subsections:
34
NEW
SUBSECTION
.
13.
Valuation
manual
for
policies
or
35
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S.F.
_____
H.F.
_____
contracts
issued
on
or
after
operative
date
of
valuation
manual.
1
a.
For
policies
or
contracts
issued
on
or
after
the
2
operative
date
of
the
valuation
manual,
the
standard
prescribed
3
in
the
valuation
manual
is
the
minimum
standard
of
valuation
4
required
under
subsection
1,
paragraph
“b”
,
except
as
provided
5
under
paragraph
“e”
or
“g”
of
this
subsection.
6
b.
The
operative
date
of
the
valuation
manual
is
January
7
1
of
the
first
calendar
year
following
the
first
July
1
as
of
8
which
all
of
the
following
have
occurred:
9
(1)
The
valuation
manual
has
been
adopted
by
the
NAIC
10
by
an
affirmative
vote
of
at
least
forty-two
members,
or
11
three-fourths
of
the
members
voting,
whichever
is
greater.
12
(2)
The
standard
valuation
law,
as
amended
by
the
NAIC
in
13
2009,
or
legislation
including
substantially
similar
terms
and
14
provisions,
has
been
enacted
by
states
representing
greater
15
than
seventy-five
percent
of
the
direct
premiums
written
as
16
reported
in
the
following
annual
statements
submitted
for
2008:
17
(a)
Life,
accident,
and
health
insurance
annual
statements.
18
(b)
Health
insurance
annual
statements.
19
(c)
Fraternal
benefit
society
annual
statements.
20
(3)
The
standard
valuation
law,
as
amended
by
the
NAIC
in
21
2009,
or
legislation
including
substantially
similar
terms
22
and
provisions,
has
been
enacted
by
at
least
forty-two
of
the
23
following
fifty-five
jurisdictions:
the
fifty
states
of
the
24
United
States,
American
Samoa,
the
American
Virgin
Islands,
the
25
District
of
Columbia,
Guam,
and
Puerto
Rico.
26
c.
Unless
a
change
in
the
valuation
manual
specifies
a
27
later
effective
date,
changes
to
the
valuation
manual
shall
28
be
effective
on
January
1
following
the
date
when
all
of
the
29
following
have
occurred:
30
(1)
The
changes
to
the
valuation
manual
have
been
adopted
by
31
the
NAIC
by
an
affirmative
vote
representing:
32
(a)
At
least
three-fourths
of
the
members
of
the
NAIC
33
voting,
but
not
less
than
a
majority
of
the
total
membership.
34
(b)
Members
of
the
NAIC
representing
jurisdictions
totaling
35
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_____
H.F.
_____
greater
than
seventy-five
percent
of
the
direct
premiums
1
written
as
reported
in
the
following
annual
statements
most
2
recently
available
prior
to
the
vote
in
subparagraph
division
3
(a):
4
(i)
Life,
accident,
and
health
insurance
annual
statements.
5
(ii)
Health
insurance
annual
statements.
6
(iii)
Fraternal
benefit
society
annual
statements.
7
d.
The
valuation
manual
shall
specify
all
of
the
following:
8
(1)
Minimum
valuation
standards
for
and
definitions
of
9
the
policies
or
contracts
subject
to
subsection
1,
paragraph
10
“b”
.
Such
minimum
valuation
standards
shall
include
all
of
the
11
following:
12
(a)
The
commissioner’s
reserve
valuation
method
for
life
13
insurance
contracts,
other
than
annuity
contracts,
subject
to
14
subsection
1,
paragraph
“b”
.
15
(b)
The
commissioner’s
annuity
reserve
valuation
method
for
16
annuity
contracts
subject
to
subsection
1,
paragraph
“b”
.
17
(c)
Minimum
reserves
for
all
other
policies
of
contracts
18
subject
to
subsection
1,
paragraph
“b”
.
19
(2)
Which
policies
or
contracts
or
types
of
policies
or
20
contracts
are
subject
to
the
requirements
of
a
principle-based
21
valuation
in
subsection
14,
paragraph
“a”
,
and
the
minimum
22
valuation
standards
consistent
with
those
requirements.
23
(3)
For
policies
and
contracts
subject
to
a
principle-based
24
valuation
under
subsection
14,
specify
all
of
the
following:
25
(a)
Requirements
for
the
format
of
reports
to
the
26
commissioner
under
subsection
14
which
shall
include
27
information
necessary
to
determine
if
the
valuation
is
28
appropriate
and
in
compliance
with
this
section.
29
(b)
Assumptions
that
are
prescribed
for
risks
over
which
the
30
company
does
not
have
significant
control
or
influence.
31
(c)
Procedures
for
corporate
governance
and
oversight
of
32
the
actuarial
function,
and
a
process
for
appropriate
waiver
or
33
modification
of
such
procedures.
34
(4)
For
policies
or
contracts
not
subject
to
a
35
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_____
H.F.
_____
principle-based
valuation
under
subsection
14,
the
minimum
1
valuation
standard
shall
do
either
of
the
following:
2
(a)
Be
consistent
with
the
minimum
standard
of
valuation
3
prior
to
the
operative
date
of
the
valuation
manual.
4
(b)
Develop
reserves
that
quantify
the
benefits
and
5
guarantees,
and
the
funding,
associated
with
the
policies
or
6
contracts
and
their
risks
at
a
level
of
conservatism
that
7
reflects
conditions
that
include
unfavorable
events
that
have
a
8
reasonable
probability
of
occurring.
9
(5)
Other
requirements,
including
but
not
limited
to
10
those
relating
to
reserve
methods,
models
for
measuring
11
risk,
generation
of
economic
scenarios,
assumptions,
margins,
12
use
of
company
experience,
risk
measurement,
disclosure,
13
certifications,
reports,
actuarial
opinions
and
memorandums,
14
transition
rules,
and
internal
controls.
15
(6)
The
data
and
form
of
the
data
required
under
subsection
16
15,
to
whom
the
data
must
be
submitted,
and
other
specified
17
requirements,
including
data
analyses
and
reporting
of
18
analyses.
19
e.
In
the
absence
of
a
specific
valuation
requirement
or
20
if
a
specific
valuation
requirement
in
the
valuation
manual
21
is
not,
in
the
opinion
of
the
commissioner,
in
compliance
22
with
this
subsection,
then
the
company
shall,
with
respect
to
23
such
requirements,
comply
with
minimum
valuation
standards
24
prescribed
by
the
commissioner
by
rule.
25
f.
The
commissioner
may
engage
a
qualified
actuary,
at
the
26
expense
of
the
company,
to
perform
an
actuarial
examination
of
27
the
company
and
opine
on
the
appropriateness
of
any
reserve
28
assumption
or
method
used
by
the
company,
or
to
review
and
29
opine
on
a
company’s
compliance
with
any
requirements
set
forth
30
in
this
section.
The
commissioner
may
rely
upon
the
opinion,
31
regarding
provisions
contained
in
this
section,
of
a
qualified
32
actuary
engaged
by
the
commissioner
of
another
state,
district,
33
or
territory
of
the
United
States.
As
used
in
this
paragraph,
34
“engage”
includes
employment
of
and
contracting
with
a
qualified
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actuary.
1
g.
The
commissioner
may
require
a
company
to
change
any
2
assumption
or
method
that
in
the
opinion
of
the
commissioner
3
is
necessary
in
order
to
comply
with
the
requirements
of
the
4
valuation
manual
or
this
section
and
the
company
shall
adjust
5
the
reserves
as
required
by
the
commissioner.
The
commissioner
6
may
take
other
disciplinary
action
as
authorized
pursuant
to
7
section
505.8.
8
NEW
SUBSECTION
.
14.
Requirements
of
principle-based
9
valuation.
10
a.
A
company
shall
establish
reserves
using
a
11
principle-based
valuation
that
meets
all
of
the
following
12
conditions
for
policies
or
contracts
as
specified
in
the
13
valuation
manual:
14
(1)
Quantifies
the
benefits
and
guarantees,
and
the
15
funding,
associated
with
the
policies
or
contracts
and
the
16
risks
of
the
policies
or
contracts
at
a
level
of
conservatism
17
that
reflects
conditions
that
include
unfavorable
events
that
18
have
a
reasonable
probability
of
occurring
during
the
lifetime
19
of
the
policies
or
contracts.
For
policies
or
contracts
with
20
a
significant
tail
risk,
the
valuation
reflects
conditions
21
appropriately
adverse
to
quantify
the
tail
risk.
22
(2)
Incorporates
assumptions,
risk
analysis
methods,
and
23
financial
models
and
management
techniques
that
are
consistent
24
with,
but
not
necessarily
identical
to,
those
utilized
25
within
the
company’s
overall
risk
assessment
process,
while
26
recognizing
potential
differences
in
financial
reporting
27
structures
and
any
prescribed
assumptions
or
methods.
28
(3)
Incorporates
assumptions
that
are
derived
in
one
of
the
29
following
manners:
30
(a)
The
assumption
is
prescribed
in
the
valuation
manual.
31
(b)
For
assumptions
that
are
not
prescribed
in
the
valuation
32
manual,
the
assumptions
shall
meet
either
of
the
following
33
requirements:
34
(i)
Be
established
utilizing
the
company’s
available
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experience,
to
the
extent
that
the
experience
is
relevant
and
1
statistically
credible.
2
(ii)
To
the
extent
that
company
data
is
not
available,
3
relevant,
or
statistically
credible,
be
established
utilizing
4
other
relevant,
statistically
credible
experience.
5
(4)
Provides
margins
for
uncertainty
including
adverse
6
deviation
and
estimation
error,
such
that
the
greater
the
7
uncertainty
the
larger
the
margin
and
resulting
reserve.
8
b.
A
company
using
a
principle-based
valuation
for
one
9
or
more
policies
or
contracts
subject
to
this
subsection
10
as
specified
in
the
valuation
manual
shall
do
all
of
the
11
following:
12
(1)
Establish
procedures
for
corporate
governance
and
13
oversight
of
the
actuarial
valuation
function
consistent
with
14
those
described
in
the
valuation
manual.
15
(2)
Provide
to
the
commissioner
and
the
board
of
directors
16
an
annual
certification
of
the
effectiveness
of
the
company’s
17
internal
controls
with
respect
to
the
principle-based
18
valuation.
Such
controls
shall
be
designed
to
assure
that
19
all
material
risks
inherent
in
the
liabilities
and
associated
20
assets
subject
to
such
valuation
are
included
in
the
valuation,
21
and
that
the
valuation
is
made
in
accordance
with
the
valuation
22
manual.
The
certification
shall
be
based
on
the
internal
23
controls
in
place
as
of
the
end
of
the
preceding
calendar
year.
24
(3)
Develop,
and
file
with
the
commissioner
upon
request,
a
25
principle-based
valuation
report
that
complies
with
standards
26
prescribed
in
the
valuation
manual.
27
c.
A
principle-based
valuation
may
include
a
prescribed
28
formulaic
reserve
component.
29
NEW
SUBSECTION
.
15.
Experience
reporting
for
policies
30
or
contracts
in
force
on
or
after
operative
date
of
valuation
31
manual.
A
company
shall
submit
mortality,
morbidity,
32
policyholder
behavior,
or
expense
experience
and
other
data
as
33
prescribed
in
the
valuation
manual.
34
NEW
SUBSECTION
.
16.
Confidentiality.
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a.
Definition.
For
purposes
of
this
subsection,
1
“confidential
information”
means
all
of
the
following:
2
(1)
A
memorandum
in
support
of
an
opinion
submitted
3
under
subsection
2
and
any
other
documents,
materials,
or
4
other
information,
including
but
not
limited
to
all
working
5
papers,
and
copies
thereof,
created,
produced,
obtained
by,
or
6
disclosed
to
the
commissioner
or
any
other
person
in
connection
7
with
the
memorandum.
8
(2)
All
documents,
materials,
or
other
information,
9
including
but
not
limited
to
all
working
papers,
and
copies
10
thereof,
created,
produced,
obtained
by,
or
disclosed
11
to
the
commissioner
or
any
other
person
in
the
course
of
12
an
examination
made
under
subsection
13,
paragraph
“f”
;
13
provided,
however,
that
if
an
examination
report
or
other
14
materials
prepared
in
connection
with
an
examination
made
15
under
chapter
507
is
not
held
as
private
and
confidential
16
information
under
section
507.14,
an
examination
report
or
17
other
material
prepared
in
connection
with
an
examination
made
18
under
subsection
13,
paragraph
“f”
,
shall
not
be
“confidential
19
information”
to
the
same
extent
as
if
such
examination
report
or
20
other
material
had
been
prepared
under
chapter
507.
21
(3)
Any
reports,
documents,
materials,
or
other
information
22
developed
by
a
company
in
support
of,
or
in
connection
with,
23
an
annual
certification
by
the
company
under
subsection
14,
24
paragraph
“b”
,
subparagraph
(2),
evaluating
the
effectiveness
25
of
the
company’s
internal
controls
with
respect
to
a
26
principle-based
valuation
and
any
other
documents,
materials,
27
or
other
information,
including
but
not
limited
to
all
working
28
papers,
and
copies
thereof,
created,
produced,
obtained
by,
or
29
disclosed
to
the
commissioner
or
any
other
person
in
connection
30
with
such
reports,
documents,
materials,
or
other
information.
31
(4)
Any
principle-based
valuation
report
developed
under
32
subsection
14,
paragraph
“b”
,
subparagraph
(3),
and
any
other
33
documents,
materials,
or
other
information,
including
but
not
34
limited
to
all
working
papers,
and
copies
thereof,
created,
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produced,
obtained
by,
or
disclosed
to
the
commissioner
or
any
1
other
person
in
connection
with
such
report.
2
(5)
Any
documents,
materials,
data,
or
other
information
3
submitted
by
a
company
under
subsection
15,
collectively
known
4
as
“experience
data”
or
“experience
materials”
,
and
any
other
5
documents,
materials,
data,
or
other
information,
including
6
but
not
limited
to
all
working
papers,
and
copies
thereof,
7
created
or
produced
in
connection
with
such
experience
data,
8
in
each
case
that
includes
any
potentially
company-identifying
9
or
personally
identifiable
information,
that
is
provided
to
or
10
obtained
by
the
commissioner,
together
with
any
“experience
11
data”
or
“experience
materials”
,
and
any
other
documents,
12
materials,
data,
or
other
information,
including
but
not
13
limited
to
all
working
papers,
and
copies
thereof,
created,
14
produced,
obtained
by,
or
disclosed
to
the
commissioner
or
15
any
other
person
in
connection
with
such
experience
data
or
16
experience
materials.
17
b.
Privilege
for,
and
confidentiality
of,
confidential
18
information.
19
(1)
Except
as
provided
in
this
subsection,
a
company’s
20
confidential
information
is
confidential
by
law
and
privileged,
21
and
shall
not
be
subject
to
chapter
22,
shall
not
be
subject
22
to
subpoena,
and
shall
not
be
subject
to
discovery
or
23
admissible
in
evidence
in
any
private
civil
action;
provided,
24
however,
that
the
commissioner
is
authorized
to
use
the
25
confidential
information
in
the
furtherance
of
any
regulatory
26
or
legal
action
brought
against
the
company
as
a
part
of
the
27
commissioner’s
official
duties.
28
(2)
Neither
the
commissioner
nor
any
person
who
received
29
confidential
information
while
acting
under
the
authority
of
30
the
commissioner
shall
be
permitted
or
required
to
testify
31
in
any
private
civil
action
concerning
any
confidential
32
information.
33
(3)
In
order
to
assist
in
the
performance
of
the
34
commissioner’s
duties,
the
commissioner
may
share
confidential
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information
as
follows:
1
(a)
With
other
state,
federal,
or
international
regulatory
2
agencies
and
with
the
NAIC
and
its
affiliates
and
subsidiaries.
3
(b)
In
the
case
of
confidential
information
specified
4
in
paragraph
“a”
,
subparagraphs
(1)
and
(4)
only,
with
the
5
actuarial
board
for
counseling
and
discipline
or
its
successor
6
upon
request
stating
that
the
confidential
information
7
is
required
for
the
purpose
of
professional
disciplinary
8
proceedings,
and
with
state,
federal,
and
international
law
9
enforcement
officials.
10
(c)
The
sharing
of
confidential
information
under
11
subparagraph
division
(a)
or
(b)
requires
that
the
recipient
12
of
the
confidential
information
agrees,
and
has
the
legal
13
authority
to
agree
to
maintain
the
confidentiality
and
14
privileged
status
of
such
documents,
materials,
data,
and
15
other
information
in
the
same
manner
and
to
the
same
extent
as
16
required
for
the
commissioner.
17
(4)
The
commissioner
may
receive
documents,
materials,
18
data,
and
other
information,
including
otherwise
confidential
19
and
privileged
documents,
materials,
data,
or
information,
from
20
the
NAIC
and
its
affiliates
and
subsidiaries,
from
regulatory
21
or
law
enforcement
officials
of
other
foreign
or
domestic
22
jurisdictions,
and
from
the
actuarial
board
for
counseling
23
and
discipline,
or
its
successor,
and
shall
maintain
as
24
confidential
or
privileged
any
documents,
materials,
data,
or
25
other
information
received
with
notice
or
the
understanding
26
that
it
is
confidential
or
privileged
under
the
laws
of
the
27
jurisdiction
that
is
the
source
of
the
documents,
materials,
28
data,
or
other
information.
29
(5)
The
commissioner
may
enter
into
agreements
governing
30
the
sharing
and
use
of
information
consistent
with
this
31
paragraph
“b”
.
32
(6)
No
waiver
of
any
applicable
privilege
or
claim
33
of
confidentiality
in
the
confidential
information
shall
34
occur
as
a
result
of
disclosure
to
the
commissioner
under
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this
subsection
or
as
a
result
of
sharing
as
authorized
in
1
subparagraph
(3).
2
(7)
A
privilege
established
under
the
law
of
any
state
or
3
jurisdiction
that
is
substantially
similar
to
the
privilege
4
established
in
this
paragraph
“b”
shall
be
available
and
5
enforced
in
any
proceeding
in,
and
in
any
court
of,
this
state.
6
(8)
For
the
purposes
of
this
subsection,
“regulatory
7
agency”
,
“law
enforcement
agency”
,
and
the
“NAIC”
,
include
but
8
are
not
limited
to
their
employees,
agents,
consultants,
and
9
contractors.
10
c.
Sharing
of
confidential
information.
Notwithstanding
11
paragraph
“b”
,
any
confidential
information
specified
in
12
paragraph
“b”
may
be
shared
as
follows:
13
(1)
May
be
subject
to
subpoena
for
the
purpose
of
defending
14
an
action
seeking
damages
from
the
appointed
actuary
submitting
15
the
related
memorandum
in
support
of
an
opinion
submitted
under
16
subsection
2
or
a
principle-based
valuation
report
developed
17
under
subsection
14,
paragraph
“b”
,
subparagraph
(3),
by
reason
18
of
an
action
required
by
this
section
or
by
rules
promulgated
19
under
this
section.
20
(2)
May
otherwise
be
released
by
the
commissioner
with
the
21
written
consent
of
the
company.
22
(3)
Once
any
portion
of
a
memorandum
in
support
of
an
23
opinion
submitted
under
subsection
2
or
a
principle-based
24
valuation
report
developed
under
subsection
14,
paragraph
“b”
,
25
subparagraph
(3),
is
cited
by
a
company
in
its
marketing
or
is
26
publicly
volunteered
to
or
before
a
governmental
agency
other
27
than
a
state
insurance
department
or
is
released
by
the
company
28
to
the
news
media,
all
portions
or
such
memorandum
or
report
29
shall
no
longer
be
confidential
information.
30
NEW
SUBSECTION
.
17.
Single
state
exemption.
31
a.
The
commissioner
may
exempt
specific
product
forms
or
32
product
lines
of
a
domestic
company
that
is
licensed
and
doing
33
business
only
in
this
state
from
the
requirements
of
subsection
34
13
provided
that
all
of
the
following
have
occurred:
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(1)
The
commissioner
has
issued
an
exemption
in
writing
to
1
the
company
and
has
not
subsequently
revoked
the
exemption
in
2
writing.
3
(2)
The
company
computes
reserves
using
assumptions
and
4
methods
used
prior
to
the
operative
date
of
the
valuation
5
manual
in
addition
to
any
requirements
established
by
the
6
commissioner
and
promulgated
by
rule.
7
b.
For
any
company
granted
an
exemption
under
this
8
subsection,
subsections
2
through
12
shall
be
applicable.
With
9
respect
to
any
company
applying
this
exemption,
any
reference
10
to
subsection
13
found
in
subsections
2
through
12
shall
not
11
be
applicable.
12
Sec.
10.
Section
508.37,
Code
2014,
is
amended
by
adding
the
13
following
new
subsection:
14
NEW
SUBSECTION
.
01.
As
used
in
this
section,
“operative
15
date
of
the
valuation
manual”
means
the
same
as
provided
in
16
section
508.36,
subsection
13.
17
Sec.
11.
Section
508.37,
subsection
6,
paragraph
h,
18
subparagraph
(6),
Code
2014,
is
amended
to
read
as
follows:
19
(6)
Any
For
policies
issued
prior
to
the
operative
date
20
of
the
valuation
manual,
any
commissioners’
standard
ordinary
21
mortality
tables
adopted
after
1980
by
the
national
association
22
of
insurance
commissioners
and
approved
by
rule
adopted
by
the
23
commissioner
for
use
in
determining
the
minimum
nonforfeiture
24
standard
may
be
substituted
for
the
Commissioners
1980
Standard
25
Ordinary
Mortality
Table
with
or
without
Ten-Year
Select
26
Mortality
Factors
or
for
the
Commissioners
1980
Extended
Term
27
Insurance
Table.
28
Sec.
12.
Section
508.37,
subsection
6,
paragraph
h,
Code
29
2014,
is
amended
by
adding
the
following
new
subparagraph:
30
NEW
SUBPARAGRAPH
.
(07)
For
policies
issued
on
or
after
the
31
operative
date
of
the
valuation
manual,
the
valuation
manual
32
shall
provide
the
commissioners’
standard
mortality
table
for
33
use
in
determining
the
minimum
forfeiture
standard
that
may
34
be
substituted
for
the
Commissioners’
1980
Standard
Ordinary
35
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Mortality
Table
with
or
without
Ten-year
Select
Mortality
1
Factors
or
for
the
Commissioners’
1980
Extended
Term
Insurance
2
Table.
If
the
commissioner
approves
by
rule
the
Commissioners’
3
Standard
Ordinary
Mortality
Table
adopted
by
the
national
4
association
of
insurance
commissioners
for
use
in
determining
5
the
minimum
nonforfeiture
standard
for
policies
or
contracts
6
issued
on
or
after
the
operative
date
of
the
valuation
manual,
7
then
that
minimum
nonforfeiture
standard
supersedes
the
minimum
8
nonforfeiture
standard
provided
by
the
valuation
manual.
9
Sec.
13.
Section
508.37,
subsection
6,
paragraph
i,
Code
10
2014,
is
amended
to
read
as
follows:
11
i.
The
nonforfeiture
interest
rate
is
defined
as
follows:
12
(1)
The
For
policies
issued
prior
to
the
operative
date
of
13
the
valuation
manual,
the
nonforfeiture
interest
rate
per
annum
14
for
any
policy
issued
in
a
particular
calendar
year
shall
be
15
equal
to
one
hundred
twenty-five
percent
of
the
calendar
year
16
statutory
valuation
interest
rate
for
the
policy
as
defined
17
in
section
508.36
,
rounded
to
the
nearest
one
quarter
of
one
18
percent.
19
(2)
For
policies
issued
on
or
after
the
operative
date
of
20
the
valuation
manual,
the
nonforfeiture
interest
rate
per
annum
21
for
any
policy
issued
in
a
particular
calendar
year
shall
be
22
provided
by
the
valuation
manual.
23
Sec.
14.
APPLICABILITY.
This
Act
applies
on
and
after
the
24
operative
date
of
the
valuation
manual
as
provided
in
section
25
508.36,
as
amended
in
this
Act.
26
EXPLANATION
27
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
28
the
explanation’s
substance
by
the
members
of
the
general
assembly.
29
This
Act
relates
to
standard
valuation
and
standard
30
forfeiture
provisions
for
life
insurance
policies
or
contracts
31
and
includes
applicability
provisions.
The
bill
includes
32
provisions
of
model
acts
adopted
by
the
national
association
33
of
insurance
commissioners
(NAIC)
pertaining
to
such
standard
34
valuations
and
forfeitures.
The
bill
refers
to
a
valuation
35
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manual
which
is
a
manual
of
valuation
instructions
adopted
by
1
the
NAIC.
2
Code
section
508.36
concerning
standard
valuations
for
3
life
insurance
policies
or
contracts
is
amended
to
include
4
definitions
that
are
applicable
on
or
after
the
operative
date
5
of
the
valuation
manual.
Code
section
508.36
is
also
amended
6
to
provide
that
specified
existing
valuation
standards
apply
7
to
policies
and
contracts
issued
prior
to
the
operative
date
8
of
the
valuation
manual
and
specified
new
standards
apply
on
9
or
after
the
operative
date
of
the
valuation
manual.
The
bill
10
includes
changes
to
valuation
standards
pertaining
to
reserve
11
valuation,
actuarial
opinions
of
reserves,
computations
of
12
minimum
standards,
and
minimum
standards
for
accident
and
13
health
insurance
policies
or
contracts.
14
New
standards
are
added
pertaining
to
minimum
standards
for
15
accident
and
health
insurance;
use
of
the
valuation
manual;
16
requirements
of
a
principle-based
valuation;
experience
17
reporting
for
policies
or
contracts
in
force
or
effect
after
18
the
operative
date
of
the
valuation
manual;
confidentiality
19
of
documents,
materials,
or
other
information
relating
to
an
20
actuarial
opinion
of
reserves;
and
single
state
exemptions
of
21
certain
product
forms
or
lines
of
insurance.
22
New
Code
section
508.36,
subsection
13,
paragraph
“b”
,
sets
23
forth
the
conditions
which
must
be
met
before
the
valuation
24
manual
becomes
operative.
The
operative
date
of
the
manual
25
will
occur
on
January
1
of
the
first
calendar
year
following
26
the
first
July
1
after
all
of
the
following
events
have
27
occurred:
(1)
the
valuation
manual
has
been
adopted
by
28
the
NAIC
by
an
affirmative
vote
of
at
least
42
members
or
29
three-fourths
of
the
members
voting,
whichever
is
greater;
(2)
30
the
standard
valuation
law,
as
amended
by
the
NAIC
in
2009,
31
or
substantially
similar
legislation,
has
been
enacted
by
32
states
representing
greater
than
75
percent
of
specified
direct
33
premiums
written
as
reported
in
annual
statements
for
2008;
(3)
34
the
standard
valuation
law,
as
amended
by
the
NAIC
in
2009,
35
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or
substantially
similar
legislation,
has
been
enacted
by
at
1
least
42
of
the
55
jurisdictions
including
the
50
states
of
the
2
United
States,
American
Samoa,
the
American
Virgin
Islands,
the
3
District
of
Columbia,
Guam,
and
Puerto
Rico.
4
Code
section
508.37
concerning
standard
forfeiture
5
provisions
applicable
to
life
insurance
policies
or
contracts
6
is
amended
to
provide
that
specified
existing
standards
apply
7
to
policies
or
contracts
issued
prior
to
the
operative
date
8
of
the
valuation
manual
and
specified
new
standards
apply
to
9
policies
issued
on
or
after
the
operative
date
of
the
manual.
10
The
bill
is
applicable
on
and
after
the
operative
date
of
the
11
new
NAIC
valuation
manual.
12
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