§ 27-4.5-3 - Actuarial opinion of reserves. - Rhode Island Statutes

SECTION 27-4.5-3

   § 27-4.5-3  Actuarial opinion of reserves.– (a) General. Every life insurance company doing business in this stateshall annually submit the opinion of a qualified actuary as to whether thereserves and related actuarial items held in support of the policies andcontracts specified by the commissioner of insurance by regulation are computedappropriately, are based on assumptions which satisfy contractual provisions,are consistent with prior reported amounts, and comply with applicable laws ofthis state. The commissioner of insurance by regulation shall define thespecifics of this opinion and add any other items deemed to be necessary to itsscope.

   (b) Actuarial analysis of reserves and assets supportingthe reserves. (1)  Every life insurance company, except asexempted by or pursuant to regulation, shall also annually include in theopinion required by subsection (a) an opinion of the same qualified actuary asto whether the reserves and related actuarial items held in support of thepolicies and contracts specified by the commissioner of insurance byregulation, when considered in light of the assets held by the company withrespect to the reserves and related actuarial items, including, but not limitedto, the investment earnings on the assets and the considerations anticipated tobe received and retained under the policies and contracts, make adequateprovision for the company's obligations under the policies and contracts,including, but not limited to, the benefits under and expenses associated withthe policies and contracts.

   (2) The commissioner of insurance may provide by regulationfor a transition period for establishing any higher reserves that the qualifiedactuary may deem necessary in order to render the opinion required by thissection.

   (c) Requirement for opinion under subsection (b). Eachopinion required by subsection (b) shall be governed by the followingprovisions:

   (1) A memorandum, in form and substance acceptable to thecommissioner of insurance as specified by regulation, shall be prepared tosupport each actuarial opinion; and

   (2) If the insurance company fails to provide a supportingmemorandum at the request of the commissioner of insurance within a periodspecified by regulation or the commissioner of insurance determines that thesupporting memorandum provided by the insurance company fails to meet thestandards prescribed by the regulations or is unacceptable to the commissionerof insurance, the commissioner of insurance may engage a qualified actuary forthe opinion and prepare the supporting memorandum required by the commissionerof insurance.

   (d) Requirement for all opinions. Every opinion shallbe governed by the following provisions:

   (1) The opinion shall be submitted with the annual statementreflecting the valuation of the reserve liabilities for each year ending on orafter December 31, 1994;

   (2) The opinion shall apply to all business in forceincluding individual and group health insurance plans, in a form and substanceacceptable to the commissioner of insurance as specified by regulation;

   (3) The opinion shall be based on standards adopted by theactuarial standards board and on any additional standards as that commissionerof insurance may by regulation prescribe;

   (4) In the case of an opinion required to be submitted by aforeign or alien company, the commissioner of insurance may accept the opinionfiled by that company with the insurance supervisory official of another stateif the commissioner of insurance determines that the opinion reasonably meetsthe requirements applicable to a company domiciled in this state;

   (5) For the purposes of this section, "qualified actuary"means a member in good standing of the American Academy of Actuaries who meetsthe requirements set forth in the regulations;

   (6) Except in cases of fraud or willful misconduct, thequalified actuary shall not be liable for damages to any person, other than theinsurance company and the commissioner of insurance, for any act, error,omission, decision, or conduct with respect to the actuary's opinion;

   (7) Disciplinary action by the commissioner of insuranceagainst the company or the qualified actuary shall be defined in regulations bythe commissioner of insurance; and

   (8) Any memorandum in support of the opinion, and any othermaterial provided by the company to the commissioner of insurance in connectionwith the opinion, shall be kept confidential by the commissioner of insuranceand shall not be made public and shall not be subject to subpoena, other thanfor the purpose of defending an action seeking damages from any person byreason of any action required by this section or by regulations promulgatedunder this section; provided, that the memorandum or other material may bereleased by the commissioner of insurance (i) with the written consent of thecompany or (ii) to the American Academy of Actuaries upon request stating thatthe memorandum or other material is required for the purpose of professionaldisciplinary proceedings and setting forth procedures satisfactory to thecommissioner of insurance for preserving the confidentiality of the memorandumor other material. Once any portion of the confidential memorandum is cited bythe company in its marketing or is cited before any governmental agency otherthan a state insurance department or is released by the company to the newsmedia, all portions of the confidential memorandum shall be no longerconfidential.