Bill Text: TX SB1379 | 2013-2014 | 83rd Legislature | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to the standard valuation for life insurance, accident and health insurance, and annuities.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Engrossed - Dead) 2013-05-24 - House appoints conferees-reported [SB1379 Detail]

Download: Texas-2013-SB1379-Introduced.html

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83R7953 TJS-F
By: Hancock S.B. No. 1379

A BILL TO BE ENTITLED
AN ACT
relating to the standard valuation for life insurance, accident and
health insurance, and annuities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 425.052, Insurance Code, is amended by
amending Subsection (a) and adding Subsection (c) to read as
follows:
(a) In this subchapter:
(1) "Accident and health insurance" means contracts
that incorporate morbidity risk and provide protection against
economic loss resulting from accident, sickness, or medical
conditions and as may be specified in the valuation manual.
(2) "Appointed actuary" means a qualified actuary who
is appointed in accordance with the valuation manual to prepare the
actuarial opinion required by Section 425.054.
(3) "Company" means an entity that has written,
issued, or reinsured life insurance contracts, accident and health
insurance contracts, or deposit-type contracts in this state and:
(A) has at least one such policy in force or on
claim; or
(B) is required to hold a certificate of
authority to write life insurance, accident and health insurance,
or deposit-type contracts in this state.
(4) "Deposit-type contract" means a contract that does
not incorporate mortality or morbidity risk and as may be specified
in the valuation manual.
(5) "Life insurance" means contracts that incorporate
mortality risk, including annuity and pure endowment contracts, and
as may be specified in the valuation manual.
(6) "Policyholder behavior" means any action a
policyholder, a contract holder, or any other person with the right
to elect options, such as a certificate holder, may take under a
policy or contract subject to this subchapter, including lapse,
withdrawal, transfer, deposit, premium payment, loan,
annuitization, or benefit elections prescribed by the policy or
contract but excluding events of mortality or morbidity that result
in benefits prescribed in their essential aspects by the terms of
the policy or contract.
(7) "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 such statements and who meets the
requirements specified in the valuation manual.
(8) "Reserves" [, "reserves"] means reserve
liabilities.
(9) "Tail risk" means a risk that occurs either where
the frequency of low probability events is higher than expected
under a normal probability distribution or where there are observed
events of very significant size or magnitude.
(10) "Valuation manual" means the manual of valuation
instructions adopted by the commissioner by rule.
(c) The definitions under Subsection (a) of "accident and
health insurance," "appointed actuary," "company," "deposit-type
contract," "life insurance," "policyholder behavior," "qualified
actuary," and "tail risk" apply only on and after the operative date
of the valuation manual.
SECTION 2. The heading to Section 425.053, Insurance Code,
is amended to read as follows:
Sec. 425.053. ANNUAL VALUATION OF RESERVES BEFORE OPERATIVE
DATE OF VALUATION MANUAL.
SECTION 3. Section 425.053, Insurance Code, is amended by
amending Subsection (a) and adding Subsections (d) and (e) to read
as follows:
(a) The department shall annually value or cause to be
[have] valued the reserves for all outstanding life insurance
policies and annuity and pure endowment contracts of each life
insurance company engaged in business in this state issued on or
after June 10, 1963, and before the operative date of the valuation
manual. The department may certify the amount of those reserves,
specifying the mortality table or tables, rate or rates of
interest, and methods, including the net level premium method or
another method, used in computing those reserves.
(d) Except as otherwise provided by this subchapter,
policies and contracts issued after the operative date of the
valuation manual are governed by Section 425.0535.
(e) The minimum standards for the valuation of policies and
contracts issued on and after June 10, 1963, and before the
operative date of the valuation manual are as provided by the law in
effect immediately before that date, including the minimum
standards provided by Sections 425.058 through 425.071 as
applicable. Sections 425.072 through 425.077 do not apply to a
policy or contract described by this subsection.
SECTION 4. Subchapter B, Chapter 425, Insurance Code, is
amended by adding Section 425.0535 to read as follows:
Sec. 425.0535. POLICIES AND CONTRACTS ISSUED ON OR AFTER
OPERATIVE DATE OF VALUATION MANUAL. (a) On or after the operative
date of the valuation manual, the commissioner shall annually
value, or cause to be valued, the reserves for all outstanding life
insurance contracts, annuity and pure endowment contracts,
accident and health contracts, and deposit-type contracts of each
company issued in this state as provided by this section.
(b) In lieu of the valuation of the reserves required of a
foreign or alien company, the commissioner may accept a valuation
made, or caused to be made, by the insurance supervisory official of
another state if the valuation complies with the minimum standard
provided by this subchapter.
(c) Sections 425.072 through 425.077 apply to all policies
and contracts issued on or after the operative date of the valuation
manual.
SECTION 5. The heading to Section 425.054, Insurance Code,
is amended to read as follows:
Sec. 425.054. ACTUARIAL OPINION OF RESERVES BEFORE
OPERATIVE DATE OF VALUATION MANUAL [REQUIRED].
SECTION 6. Section 425.054, Insurance Code, is amended by
amending Subsection (a) and adding Subsections (a-1), (j), (k),
(l), (m), (n), (o), (p), (q), and (r) to read as follows:
(a) This section applies only to an actuarial opinion of
reserves required before the operative date of the valuation
manual.
(a-1) For purposes of this section, "qualified actuary"
means:
(1) a qualified actuary, as that term is defined by
Section 802.002; or
(2) a person who, before September 1, 1993, satisfied
the requirements of the former State Board of Insurance to submit an
opinion under former Section 2A(a)(1), Article 3.28.
(j) Except as provided by Subsections (l), (n), (o), and
(p), any document or other information in the possession or control
of the department, including a memorandum in support of the opinion
or other material provided by the company to the commissioner in
connection with a memorandum, is:
(1) confidential and not subject to disclosure under
Chapter 552, Government Code;
(2) privileged from subpoena or discovery in a private
civil action; and
(3) inadmissible as evidence in a private civil
action.
(k) The commissioner or any person who receives a document
or other information described by Subsection (j) while acting under
the authority of the commissioner may not testify and may not be
compelled to testify in a private civil action concerning the
content of the document or other information.
(l) The commissioner may:
(1) share documents or other information, including
the confidential and privileged documents or information described
by Subsection (j), with another state, federal, or international
regulatory agency, with the National Association of Insurance
Commissioners and its affiliates and subsidiaries, and with state,
federal, and international law enforcement authorities, provided
that the recipient agrees to maintain the confidentiality and
privileged status of the document or information;
(2) receive documents or other information, including
confidential and privileged documents or information, from the
National Association of Insurance Commissioners and its affiliates
and subsidiaries, and from regulatory and law enforcement officials
of other foreign or domestic jurisdictions, provided that the
commissioner shall maintain as confidential or privileged any
document or information received with notice or understanding that
it is confidential or privileged under the laws of the jurisdiction
that is the source of the document or information; and
(3) enter into agreements governing sharing and use of
documents and other information consistent with this section.
(m) Disclosing information or providing a document to the
commissioner under this section, or sharing information as
authorized under this section, does not result in a waiver of any
applicable privilege or claim of confidentiality that may apply to
the document or information.
(n) A memorandum in support of the opinion, and any other
material provided by the company to the commissioner in connection
with the memorandum, may be subject to subpoena for the purpose of
defending an action seeking damages from the actuary submitting the
memorandum by reason of an action required by this section or rules
adopted under this section.
(o) The memorandum or other material provided by the company
to the commissioner in connection with the memorandum may otherwise
be released by the commissioner with the written consent of the
company, or to the American Academy of Actuaries on receipt of a
request stating that the memorandum or other material is required
for the purpose of professional disciplinary proceedings and
setting forth procedures satisfactory to the commissioner for
preserving the confidentiality of the memorandum or other material.
(p) The memorandum ceases to be confidential if:
(1) any portion of the memorandum is cited by the
company in its marketing;
(2) the memorandum is cited by the company before a
government agency other than a state insurance department; or
(3) the memorandum is released by the company to the
news media.
(q) This section applies to an actuarial opinion for
policies and contracts issued before the operative date of the
valuation manual. Actuarial opinions for policies and contracts
issued on or after the operative date of the valuation manual are
governed by Section 425.0545.
(r) This section does not prohibit the commissioner from
using information acquired under this section in the furtherance of
a legal or regulatory action relating to the administration of this
code.
SECTION 7. Subchapter B, Chapter 425, Insurance Code, is
amended by adding Section 425.0545 to read as follows:
Sec. 425.0545. ACTUARIAL OPINION OF RESERVES AFTER
OPERATIVE DATE OF VALUATION MANUAL. (a) A company that has
outstanding life insurance contracts, accident and health
insurance contracts, or deposit-type contracts in this state and is
subject to regulation by the department shall annually submit the
opinion of the appointed actuary as to whether the reserves and
related actuarial items held in support of the policies and
contracts are computed appropriately, are based on assumptions that
satisfy contractual provisions, are consistent with prior reported
amounts, and are in compliance with applicable laws of this state.
A valuation under this section must comply with provisions of the
valuation manual, including in regard to its scope.
(b) Unless exempted by the valuation manual, a company
described by Subsection (a) shall include with the opinion required
by that subsection an opinion of the same appointed actuary
concerning whether the reserves and related actuarial items held in
support of the policies and contracts specified in the valuation
manual, when considered in light of the assets held by the company
with respect to the reserves and related actuarial items, including
investment earnings on the assets and 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 benefits under and expenses associated
with the policies and contracts.
(c) The company shall submit a supporting memorandum in
accordance with the valuation manual and in a form and manner
determined by the commissioner by rule to support each actuarial
opinion under this section. If the company fails to provide a
supporting memorandum at the request of the commissioner within the
time specified by the valuation manual, or the commissioner
determines that the supporting memorandum provided by the company
fails to meet the standards prescribed by the valuation manual or is
otherwise unacceptable to the commissioner, the commissioner may
employ or contract with a qualified actuary at the expense of the
company to review the opinion and the basis for the opinion and
prepare the supporting memorandum required by the commissioner.
(d) Each opinion required by this section must:
(1) be in the form and contain the substance that is
specified by the valuation manual and is acceptable to the
commissioner;
(2) be submitted with the annual statement reflecting
the valuation of reserves for each year ending on or after the
operative date of the valuation manual;
(3) apply to all policies and contracts subject to
this section, plus other actuarial liabilities specified by the
valuation manual; and
(4) be based on standards adopted from time to time by
the Actuarial Standards Board or its successor, and on any
additional standards prescribed by the valuation manual.
(e) In the case of an opinion required to be submitted by a
foreign or alien company, the commissioner may accept the opinion
filed by the company with the insurance supervisory official of
another state if the commissioner determines that the opinion
reasonably meets the requirements applicable to a company domiciled
in this state.
SECTION 8. Section 425.055(a), Insurance Code, is amended
to read as follows:
(a) A memorandum that, in form and substance, complies with
the commissioner's rules shall be prepared to support each
actuarial opinion required by Section 425.054 or 425.0545.
SECTION 9. Section 425.056(a), Insurance Code, is amended
to read as follows:
(a) Except in cases of fraud or wilful misconduct or as
provided by Subsection (b), a person who certifies an opinion under
Section 425.054 or 425.0545 is not liable for damages to a person,
other than the life insurance company covered by the opinion, for an
act, error, omission, decision, or other conduct with respect to
the person's opinion.
SECTION 10. Section 425.057, Insurance Code, is amended to
read as follows:
Sec. 425.057. DISCIPLINARY ACTION: COMPANY OR PERSON
CERTIFYING OPINION. A company or person that certifies an opinion
under Section 425.054 or 425.0545 and that violates Section
425.054, 425.0545, or 425.055 or rules adopted under those sections
is subject to disciplinary action under Chapter 82.
SECTION 11. The heading to Section 425.058, Insurance Code,
is amended to read as follows:
Sec. 425.058. COMPUTATION [VALUATION] OF MINIMUM STANDARD
[POLICY OR CONTRACT]: GENERAL RULE.
SECTION 12. The heading to Section 425.059, Insurance Code,
is amended to read as follows:
Sec. 425.059. COMPUTATION [VALUATION] OF MINIMUM STANDARD
FOR CERTAIN ANNUITIES AND PURE ENDOWMENT CONTRACTS.
SECTION 13. The heading to Section 425.064, Insurance Code,
is amended to read as follows:
Sec. 425.064. COMMISSIONERS RESERVE VALUATION METHOD FOR
LIFE INSURANCE AND ENDOWMENT BENEFITS.
SECTION 14. The heading to Section 425.065, Insurance Code,
is amended to read as follows:
Sec. 425.065. COMMISSIONERS ANNUITY RESERVE VALUATION
METHOD FOR ANNUITY AND PURE ENDOWMENT BENEFITS.
SECTION 15. Subchapter B, Chapter 425, Insurance Code, is
amended by adding Sections 425.072, 425.073, 425.074, 425.075,
425.076, and 425.077 to read as follows:
Sec. 425.072. MINIMUM STANDARD FOR ACCIDENT AND HEALTH
INSURANCE CONTRACTS. (a) The standard prescribed by the valuation
manual for accident and health insurance contracts issued on or
after the operative date of the valuation manual is the minimum
standard of valuation required under Section 425.0535.
(b) For disability, accident and sickness, and accident and
health insurance contracts issued before the operative date of the
valuation manual, the minimum standard of valuation is the standard
in existence before the operative date of the valuation manual.
Sec. 425.073. VALUATION MANUAL FOR CERTAIN POLICIES. (a)
Except as otherwise provided by this section, for policies issued
on or after the operative date of the valuation manual, the standard
prescribed by the valuation manual is the minimum standard of
valuation required under Section 425.0535.
(b) The commissioner by rule shall adopt a valuation manual
and determine the operative date of the valuation manual. A
valuation manual adopted by the commissioner under this section
must be substantially similar to the valuation manual approved by
the National Association of Insurance Commissioners. The operative
date must be January 1 of the first calendar year immediately
following a year in which, on or before July 1, the commissioner
determines that:
(1) the valuation manual has been 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;
(2) the National Association of Insurance
Commissioners Standard Model 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 percent of
the direct premiums written as reported in the following annual
statements submitted for 2008:
(A) life insurance and accident and health annual
statements;
(B) health annual statements; or
(C) fraternal annual statements; and
(3) the National Association of Insurance
Commissioners Standard Model 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:
(A) the 50 United States;
(B) American Samoa;
(C) the United States Virgin Islands;
(D) the District of Columbia;
(E) Guam; and
(F) Puerto Rico.
(c) After a valuation manual has been adopted by the
commissioner by rule, any changes to the valuation manual must be
adopted by rule and must be consistent with changes adopted by the
National Association of Insurance Commissioners. Unless a change
in the valuation specifies a later effective date, the effective
date for changes to the valuation manual may not be earlier than
January 1 of the year immediately following the date on which the
commissioner determines that the changes to the valuation manual
have been adopted by the National Association of Insurance
Commissioners by an affirmative vote representing:
(1) 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
(2) members of the National Association of Insurance
Commissioners representing jurisdictions totaling greater than 75
percent of the direct premiums written as reported in the annual
statements submitted for 2008 as provided by Subsection (b)(2).
(d) The valuation manual must specify:
(1) the minimum valuation standards for and
definitions of the policies or contracts subject to Section
425.0535, including:
(A) the commissioner's reserve valuation method
for life insurance contracts subject to Section 425.0535;
(B) the commissioner's annuity reserve
valuation method for annuity contracts subject to Section 425.0535;
and
(C) the minimum reserves for all other policies
or contracts subject to Section 425.0535;
(2) the policies or contracts that are subject to the
requirements of a principle-based valuation under Section 425.074
and the minimum valuation standards consistent with those
requirements, including:
(A) the requirements for the format of reports to
the commissioner under Section 425.074(b)(3), which must include
the information necessary to determine if a valuation is
appropriate and in compliance with this subchapter;
(B) the assumptions prescribed for risks over
which the company does not have significant control or influence;
and
(C) the procedures for corporate governance and
oversight of the actuarial function, and a process for appropriate
waiver or modification of the procedures;
(3) the policies that are not subject to a
principle-based valuation under Section 425.074;
(4) the data and form of data required under Section
425.074, to whom the data must be submitted, and other desired
requirements, including requirements concerning data analyses and
reporting of analyses; and
(5) other requirements, including requirements
relating to reserve methods, risk measurement, generation of
economic scenarios, assumptions, margins, use of company
experience, disclosure, certification, reports, actuarial opinions
and memorandums, transition rules, and internal controls.
(e) With respect to policies that are not subject to a
principle-based valuation under Section 425.074 as described by
Subsection (d)(3), the minimum valuation standard must:
(1) be consistent with the minimum valuation standard
before the operative date of the valuation manual; or
(2) 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.
(f) In the absence of a specific valuation requirement or if
a specific valuation requirement in the valuation manual does not
in the commissioner's opinion comply with this subchapter, the
company shall, with respect to the requirement, comply with minimum
valuation standards prescribed by the commissioner by rule.
(g) The commissioner may employ or contract with a qualified
actuary, at the expense of the company, to perform an actuarial
examination of the company and provide an opinion concerning the
appropriateness of any reserve assumption method used by the
company, or to review and provide an opinion on a company's
compliance with any requirement of this section. The commissioner
may rely on the opinion, regarding provisions contained within this
section, of a qualified actuary engaged by the insurance
supervisory official of another state.
(h) The commissioner may require a company to change an
assumption or method as necessary in the commissioner's opinion to
comply with a requirement of the valuation manual or this
subchapter.
(i) The commissioner may take other disciplinary action as
permitted under Chapter 82.
Sec. 425.074. PRINCIPLE-BASED VALUATION REQUIRED. (a) A
company shall establish reserves using a principle-based valuation
that meets the conditions for policies or contracts provided by the
valuation manual. At a minimum, the valuation shall:
(1) 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 during the
terms of the contracts;
(2) with respect to policies and contracts with
significant tail risk, reflect conditions appropriately adverse to
quantify the tail risk;
(3) incorporate assumptions, risk analysis methods,
and financial models and management techniques that are consistent
with those used in the company's overall risk assessment process,
while recognizing potential differences in financial reporting
structures and any prescribed assumptions or methods;
(4) incorporate assumptions:
(A) prescribed by the valuation manual; or
(B) established:
(i) using the company's available
experience, to the extent that data is relevant and statistically
credible; or
(ii) to the extent that the company data is
not available, relevant, or statistically credible, using other
relevant, statistically credible experience; and
(5) provide margins for uncertainty including adverse
deviation and estimation error, such that the greater the
uncertainty the larger the margin and resulting reserve.
(b) A company using a principle-based valuation for one or
more policies or contracts subject to this section and as specified
by the valuation manual shall:
(1) establish procedures for corporate governance and
oversight of the actuarial valuation function consistent with
procedures specified by the valuation manual;
(2) provide to the commissioner and the company's
board of directors an annual certification of the effectiveness of
the internal controls with respect to the principle-based
valuation; and
(3) develop, and file with the commissioner on
request, a principle-based valuation report that complies with
standards prescribed in the valuation manual.
(c) A company's internal controls with respect to the
principle-based valuation must be designed to ensure that all
material risks inherent in the liabilities and associated assets
subject to the valuation are included in the valuation, and that
valuations are made in accordance with the valuation manual. The
certification described by Subsection (b)(2) must be based on the
controls in place as of the end of the preceding calendar year.
(d) A principle-based valuation may include a prescribed
formulaic reserve component.
Sec. 425.075. EXPERIENCE REPORTING FOR POLICIES IN FORCE ON
OR AFTER OPERATIVE DATE OF VALUATION MANUAL. A company shall submit
mortality, morbidity, policyholder behavior, or expense experience
and other data as prescribed in the valuation manual.
Sec. 425.076. CONFIDENTIALITY. (a) This section applies
to:
(1) a memorandum in support of an opinion submitted
under Section 425.0545;
(2) any documents or other information, produced or
obtained by or disclosed to the commissioner or any other person:
(A) in connection with the memorandum;
(B) in the course of an examination made under
Section 425.073(g), except that if an examination report or other
material prepared in connection with an examination made under
Subchapter B, Chapter 401, is not held as privileged and
confidential under Chapter 401, an examination report or other
material prepared in connection with an examination made under
Section 425.073(g) is not confidential to the same extent as if the
examination report or other material had been prepared under
Subchapter B, Chapter 401;
(C) in support of, or in connection with, an
annual certification by the company under Section 425.074(b)(2)
evaluating the effectiveness of the company's internal controls
with respect to a principle-based valuation; or
(D) in the development of a principle-based
valuation report developed under Section 425.074(b)(3); and
(3) any documents or other information submitted by
the company under Section 425.074, including experience data to the
extent that the data contain information that could potentially
identify a company or individual.
(b) Except as provided by this section, a memorandum and any
documents or other information described by Subsection (a) are:
(1) confidential and not subject to disclosure under
Chapter 552, Government Code;
(2) privileged from subpoena or discovery in a private
civil action; and
(3) inadmissible as evidence in a private civil
action.
(c) This section does not prohibit the commissioner from
using information acquired under this section in the furtherance of
a legal or regulatory action relating to the administration of this
code.
(d) The commissioner or any person who receives a document
or other information described by Subsection (a) while acting under
the authority of the commissioner may not testify and may not be
compelled to testify in a private civil action concerning the
content of the document or other information.
(e) Subject to Subsection (f), the commissioner may share
information described by Subsection (a) with:
(1) another state, federal, or international
regulatory agency;
(2) the National Association of Insurance
Commissioners and its affiliates and subsidiaries;
(3) in the case of information described by Subsection
(a)(1) or (2)(D), the Actuarial Board for Counseling and Discipline
or its successor on receipt of a request stating that the
information is required for the purpose of professional
disciplinary proceedings; and
(4) state, federal, and international law enforcement
officials.
(f) With respect to Subsections (e)(1) and (2), the
commissioner may not share documents or other information described
by Subsection (a) unless the recipient agrees and has the legal
authority to agree to maintain the confidentiality and privileged
status of the documents or information in the same manner and to the
same extent as is required for the commissioner.
(g) The commissioner may receive documents and other
information, including otherwise confidential and privileged
documents or information, from the National Association of
Insurance Commissioners and its affiliates and subsidiaries, from
regulatory or law enforcement officials of other foreign or
domestic jurisdictions, and from the Actuarial Board for Counseling
and Discipline or its successor, and shall maintain as confidential
or privileged any document or other information received with
notice or the understanding that it is confidential or privileged
under the laws of the jurisdiction that is the source of the
document or other information.
(h) The commissioner may enter agreements governing sharing
and use of information consistent with this section.
(i) Disclosing information or providing a document to the
commissioner under this section, or sharing information as
authorized under this section, does not result in a waiver of any
applicable privilege or claim of confidentiality that may apply to
the document or information.
(j) A privilege established under the law of any state or
jurisdiction that is substantially similar to the privilege
established under this section is enforceable in any proceeding in,
and in any court of, this state.
(k) In this section, a reference to a regulatory agency, law
enforcement agency, or the National Association of Insurance
Commissioners includes an employee, agent, consultant, or
contractor of the agency or association, as applicable.
(l) Notwithstanding this section, any confidential
information specified in Subsection (a) may be:
(1) subject to subpoena for the purpose of defending
an action seeking damages from the appointed actuary submitting the
related memorandum in support of an opinion submitted under Section
425.054 or 425.0545 or a principle-based valuation report developed
under Section 425.074(b)(3) by reason of an action required by this
subchapter or by rules adopted under this subchapter; and
(2) released by the commissioner with the written
consent of the company.
(m) A memorandum in support of an opinion submitted under
Section 425.054 or 425.0545 or a principle-based valuation report
developed under Section 425.074(b)(3) ceases to be confidential if:
(1) any portion of the memorandum or report is cited by
the company in its marketing;
(2) the memorandum or report is cited by the company
before a government agency other than a state insurance department;
or
(3) the memorandum or report is released by the
company to the news media.
Sec. 425.077. SINGLE STATE EXEMPTION. (a) The
commissioner may exempt specific product forms or product lines of
a domestic company that is licensed and doing business only in this
state from the requirements of Section 425.073 if:
(1) the commissioner has issued an exemption in
writing to the company and has not subsequently revoked the
exemption in writing; and
(2) the company computes reserves using assumptions
and methods used before the operative date of the valuation manual
in addition to any requirements established by the commissioner and
adopted by rule.
(b) Sections 425.054, 425.058, and 425.072 apply to a
company granted an exemption under this section. For a company
applying for this exemption, any reference to Section 425.073 found
in Section 425.054, 425.058, or 425.072 does not apply.
SECTION 16. The commissioner of insurance shall determine
whether the National Association of Insurance Commissioners and a
sufficient number of states and other jurisdictions have adopted a
valuation manual as required by Section 425.073(b), Insurance Code,
as added by this Act. As soon as practicable after the commissioner
of insurance determines that the National Association of Insurance
Commissioners and a sufficient number of states and other
jurisdictions have adopted the valuation manual as required by that
section, the commissioner of insurance shall adopt rules necessary
to implement this Act.
SECTION 17. This Act takes effect January 1, 2014.