Vermont § 3577 - Requirements for actuarial opinions

§ 3577. Requirements for actuarial opinions

• (a) Each licensed insurance company shall include on or attached to its annual statement
  submitted under section 3561 of this title a statement of a qualified actuary, entitled “statement of actuarial opinion,” setting
  forth an opinion on life and health policy and claim reserves and an opinion on property
  and casualty loss and loss adjustment expenses reserves. (b) The “statement of actuarial opinion” shall be treated as a public document and shall
  conform to the Standards of Practice promulgated by the Actuarial Standards Board
  of the American Academy of Actuaries, the standards of the Casualty Actuarial Society,
  and such additional standards as the Commissioner may establish by rule. The Commissioner
  by rule shall establish minimum standards applicable to the valuation of health disability,
  sickness, and accident plans. (c) Opinions required by this section shall apply to all business in force, and shall
  be stated in form and in substance acceptable to the Commissioner as prescribed by
  rule. (1) In the case of property and casualty insurance companies domiciled in this State,
  every company that is required to submit a statement of actuarial opinion shall annually
  submit an actuarial opinion summary, written by the company’s appointed actuary. This
  actuarial opinion summary shall be filed in accordance with the appropriate Property
  and Casualty Annual Statement Instructions of the National Association of Insurance
  Commissioners (NAIC) and shall be considered as a document supporting the actuarial
  opinion required in subsection (a) of this section. A property and casualty insurance
  company licensed but not domiciled in this State shall provide the actuarial opinion
  summary upon request. (2) In the case of property and casualty insurance companies, an actuarial report and
  underlying work papers, as required by the appropriate Property and Casualty Annual
  Statement Instructions of the NAIC, shall be prepared to support each actuarial opinion.
  If the property and casualty insurance company fails to provide a supporting actuarial
  report or work papers at the request of the Commissioner or if the Commissioner determines
  that the supporting actuarial report or work papers provided by the insurance company
  is otherwise unacceptable to the Commissioner, the Commissioner may engage a qualified
  actuary at the expense of the company to review the opinion and the basis for the
  opinion and prepare the supporting actuarial report or work papers. (3) In the case of property and casualty insurance companies, the appointed actuary shall
  not be liable for damages to any person other than the insurance company and the Commissioner
  for any act, error, omission, decision, or conduct with respect to the actuary’s opinion,
  except in cases of fraud or willful misconduct on the part of the appointed actuary. (d) In the case of life insurance companies doing business in this State, the opinion
  shall state whether the reserves and related actuarial items held in support of the
  policies and contracts specified by the Commissioner by rule are computed appropriately,
  are based on assumptions that satisfy contractual provisions, are consistent with
  prior reported amounts, comply with applicable laws of this State, and comply with
  such further standards as the Commissioner may establish by rule. (e) Every life insurance company shall annually include in the opinion required by this
  section an opinion of the same qualified actuary as to whether the reserves and related
  actuarial items held in support of the policies and contracts specified by the Commissioner
  by rule, when considered in light of the assets held by the company with respect to
  the reserves and related actuarial items, including the investment earnings on the
  assets and the considerations anticipated to be received and retained under the policies
  and contracts, make adequate provision for the company’s obligations under the policies
  and contracts, including the benefits under and expenses associated with the policies
  and contracts. (f) In the case of an opinion required to be submitted by a foreign or alien company,
  the Commissioner may accept the opinion filed by that 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. (g) The Commissioner may provide by rule for a transition period for establishing any
  higher reserves that the qualified actuary may deem necessary in order to render the
  opinion required by this section. (h) In the case of life and health insurance companies, “qualified actuary” is an individual
  who: (1) is a member of good standing of the American Academy of Actuaries; (2) is qualified to sign statements of actuarial opinion for life and health insurance
  company annual statements in accordance with the American Academy of Actuaries qualification
  standards for actuaries signing such statements; and (3) is familiar with the valuation requirements applicable to life and health insurance
  companies. (i) In the case of property and casualty insurance companies, “qualified actuary” is an
  individual who: (1) is a member of good standing of the Casualty Actuarial Society; (2) is qualified to sign statements of actuarial opinion for property and casualty insurance
  company annual statements in accordance with the Casualty Actuarial Society qualification
  standards for actuaries signing such statements; and (3) is familiar with the valuation requirements applicable to property and casualty insurance
  companies. (j) The Commissioner, after notice and administrative hearing, may disqualify an actuary
  who has: (1) violated any provision of, or any obligation imposed by, the insurance law or other
  law in the course of his or her dealings as a qualified actuary; or (2) been found guilty of fraudulent or dishonest practices; or (3) demonstrated his or her incompetency, lack of cooperation, or unethical behavior to
  act as a qualified actuary; or (4) submitted to the Commissioner during the past five years an actuarial opinion or memorandum
  that the Commissioner rejected because it did not meet the provisions of this section
  or the standards set by the Actuarial Standards Board or the Casualty Actuarial Society;
  or (5) resigned or been removed as an actuary within the past five years as a result of acts
  or omissions indicated in any adverse report on examination or as a result of failure
  to adhere to generally acceptable actuarial standards; or (6) has failed to notify the Commissioner of any action taken by any commissioner of any
  other state similar to that under this subsection. (k) Upon written application of any insurer, the Commissioner may, in his or her discretion,
  grant an exemption from compliance with this section if the Commissioner finds, upon
  review of the application, that compliance with this rule would constitute a financial
  or organizational hardship upon the insurer. An exemption may be granted at any time
  and from time to time for a specified period or periods. (l) Actuarial reports, actuarial opinion summaries, work papers, and any other documents,
  information, or materials provided to the Department in connection with the actuarial
  report, work papers, or actuarial opinion summary shall be confidential by law and
  privileged, shall not be subject to inspection and copying under 1 V.S.A. § 316, shall not be subject to subpoena, and shall not be subject to discovery or admissible
  in evidence in any private litigation. (1) This subsection shall not be construed to limit the Commissioner’s authority to release
  documents to the Actuarial Board for Counseling and Discipline, provided the material
  is required for the purpose of professional disciplinary proceedings and further provided
  that procedures satisfactory to the Commissioner are established for preserving the
  confidentiality of the documents, nor shall this subsection be construed to limit
  the Commissioner’s authority to use the documents, materials, or other information
  in furtherance of any regulatory or legal action brought as part of the Commissioner’s
  official duties. (2) Neither the Commissioner nor any person who receives documents, materials, or other
  information while acting under the authority of the Commissioner shall be permitted
  or required to testify in any private civil action concerning any confidential documents,
  materials, or information under this subsection. (3) In order to assist in the performance of the Commissioner’s duties, the Commissioner
  may: (A) Share documents, materials, or other information, including the confidential and privileged
  documents, materials, or information subject to subsection (d) of this section, with
  other state, federal, and international regulatory agencies, with the NAIC 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, material, or other information and has the legal
  authority to maintain confidentiality. (B) Receive documents, materials, or information, including otherwise confidential and
  privileged documents, materials, or information, from the NAIC and its affiliates
  and subsidiaries, and from regulatory and law enforcement officials of other foreign
  or domestic jurisdictions, and shall maintain as confidential or privileged any document,
  material, or 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,
  material, or information. (4) No waiver of any applicable privilege or claim of confidentiality in the documents,
  materials, or information shall occur as a result of the disclosure to the Commissioner
  under this section or as a result of sharing as authorized by subdivision (3) of this
  subsection. (Added 1991, No. 249 (Adj. Sess.), § 9; amended 2009, No. 137 (Adj. Sess.), § 4a.)