§ 27-62-10 - Annual certifications. - Rhode Island Statutes

SECTION 27-62-10

   § 27-62-10  Annual certifications. –(a) The board of directors of each insurer shall appoint one or moreillustration actuaries.

   (b) The illustration actuary shall certify that thedisciplined current scale used in illustration is in conformity with theactuarial standard of practice of compliance with the NAIC model regulation onlife insurance illustration promulgated by the actuarial standards board, andthat the illustrated scales used in insurer-authorized illustrations meet therequirements of this regulation.

   (c) The illustration actuary shall:

   (1) Be a member in good standing of the American Academy ofActuaries;

   (2) Be familiar with the standard of practice regarding lifeinsurance policy illustrations;

   (3) Not have been found by the director of the department ofbusiness regulation, following appropriate notice and hearing, to have:

   (i) Violated any provision of, or any obligation imposed by,the insurance law or other law in the course of his or her dealings as anillustration actuary;

   (ii) Been found guilty of fraudulent or dishonest practices;

   (iii) Demonstrated incompetence, lack of cooperation, oruntrustworthiness to act as an illustration actuary; or

   (iv) Resigned or been removed as an illustration actuarywithin the past five (5) years as a result of acts or omissions indicated inany adverse report on examination or as a result of a failure to adhere togenerally acceptable actuarial standards;

   (4) Not fail to notify the insurance division of thedepartment of business regulation of any action taken by another state similarto that under subdivision (3) of this subsection;

   (5) Disclose in the annual certification whether, since thelast certification, a currently payable scale applicable for business issuedwithin the previous five (5) years and within the scope of the certificationhas been reduced for reasons other than changes in the experience factorsunderlying the disciplined current scale. If non-guaranteed elementsillustrated for new policies are not consistent with those illustrated forsimilar in force policies, this must be disclosed in the annual certification.If non-guaranteed elements illustrated for both new and in force policies arenot consistent with the non-guaranteed elements actually being paid, charged orcredited to the same or similar forms, this must be disclosed in the annualcertification; and

   (6) Disclose in the annual certification the method used toallocate overhead expenses for all illustrations:

   (i) Fully allocated expenses;

   (ii) Marginal expenses; or

   (iii) A generally recognized expense table based on fullyallocated expenses representing a significant portion of insurance companiesand approved by the commissioner.

   (d) The illustration actuary shall file a certification withthe board and with the insurance division of the department of businessregulation:

   (i) Annually for all policy forms for which illustrations areused; and

   (ii) Before a new policy form is illustrated.

   (2) If an error in a previous certification is discovered,the illustration actuary shall promptly notify the board of directors of theinsurer and the insurance division of the department of business regulation.

   (e) If an illustration actuary is unable to certify the scalefor any policy form illustration the insurer intends to use, the actuary shallnotify the board of directors of the insurer and the commissioner promptly ofhis or her inability to certify.

   (f) A responsible officer of the insurer, other than theillustration actuary, shall annually certify :

   (1) That the illustration formats meet the requirements ofthis regulation and that the scales used in insurer-authorized illustrationsare those scales certified by the illustration actuary; and

   (2) That the company has provided its agents with informationabout the expense allocation method used by the company in its illustration anddisclosed as required in subdivision (c)(6) of this section.

   (g) The annual certifications shall be provided to theinsurance division of the department of business regulation by a datedetermined by the insurer.

   (h) If an insurer changes the illustration actuaryresponsible for all or a portion of the company's policy forms, the insurershall promptly notify the insurance division of the department of businessregulation of that fact and disclose the reason for the change.