Vermont § 3791n - Valuation manual for policies issued on or after the operative date of the valuation manual

§ 3791n. Valuation manual for policies issued on or after the operative date of the valuation manual

• (a) For policies issued on or after the operative date of the Valuation Manual, the standard
  prescribed in the Valuation Manual is the minimum standard of valuation required under
  subsection 3791b(b) of this subchapter, except as provided under subsection (e) or
  (g) of this section. (b) The operative date of the Valuation Manual is January 1 of the first calendar year
  following the first July 1 as of which all of the following have occurred: (1) The Valuation Manual has been adopted by the NAIC by an affirmative vote of at least
  42 members, or three-fourths of the members voting, whichever is greater. (2) The Standard Valuation Law, as amended by the NAIC 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: life, accident and health annual statements;
  health annual statements; or fraternal annual statements. (3) The Standard Valuation Law, as amended by the NAIC in 2009, or legislation including
  substantially similar terms and provisions, has been enacted by at least 42 of the
  following 55 jurisdictions: The 50 states of the United States, American Samoa, the
  American Virgin Islands, the District of Columbia, Guam, and Puerto Rico. (c) Unless a change in the Valuation Manual specifies a later effective date, changes
  to the Valuation Manual shall be effective on January 1 following the date when the
  change to the Valuation Manual has been adopted by the NAIC by an affirmative vote
  representing: (1) at least three-fourths of the members of the NAIC voting, but not less than a majority
  of the total membership; and (2) members of the NAIC representing jurisdictions totaling greater than 75 percent of
  the direct premiums written as reported in the following annual statements most recently
  available prior to the vote in subdivision (1) of this subsection: life, accident
  and health annual statements, health annual statements, or fraternal annual statements. (d) The Valuation Manual must specify all of the following: (1) Minimum valuation standards for and definitions of the policies or contracts subject
  to subsection 3791b(b) of this subchapter. Such minimum valuation standards shall
  be: (A) the Commissioner’s reserve valuation method for life insurance contracts, other than
  annuity contracts, subject to subsection 3791b(b) of this subchapter; (B) the Commissioner’s annuity reserve valuation method for annuity contracts subject
  to subsection 3791b(b) of this subchapter; and (C) minimum reserves for all other policies or contracts subject to subsection 3791b(b)
  of this subchapter. (2) Which policies or contracts or types of policies or contracts that are subject to
  the requirements of a principle-based valuation in subsection 3791o(a) of this subchapter
  and the minimum valuation standards consistent with those requirements. (3) For policies and contracts subject to a principle-based valuation under section 3791o
  of this subchapter: (A) requirements for the format of reports to the Commissioner under subdivision 3791o(b)(3)
  of this subchapter and that shall include information necessary to determine if the
  valuation is appropriate and in compliance with this subchapter; (B) assumptions shall be prescribed for risks over which the company does not have significant
  control or influence; and (C) procedures for corporate governance and oversight of the actuarial function, and a
  process for appropriate waiver or modification of such procedures. (4) For policies not subject to a principle-based valuation section 3791o of this subchapter,
  the minimum valuation standard shall either: (A) be consistent with the minimum standard of valuation prior to the operative date of
  the Valuation Manual; or (B) 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. (5) Other requirements including those relating to reserve methods, models for measuring
  risk, generation of economic scenarios, assumptions, margins, use of company experience,
  risk measurement, disclosure, certifications, reports, actuarial opinions and memorandum,
  transition rules, and internal controls. (6) The data and form of the data required under section 3791p of this subchapter with
  whom the data must be submitted, and may specify other requirements including data
  analyses and reporting of analyses. (e) In the absence of a specific valuation requirement or if a specific valuation requirement
  in the Valuation Manual is not, in the opinion of the Commissioner, in compliance
  with this subchapter, then the company shall, with respect to such requirements, comply
  with minimum valuation standards prescribed by the Commissioner by rule. (f) The Commissioner may engage a qualified actuary, at the expense of the company, to
  perform an actuarial examination of the company and opine on the appropriateness of
  any reserve assumption or method used by the company, or to review and opine on a
  company’s compliance with any requirement of this subchapter. The Commissioner may
  rely upon the opinion, regarding provisions contained within this subchapter, of a
  qualified actuary engaged by the Commissioner of another state, district, or territory
  of the United States. As used in this subsection, the term “engage” includes employ
  or contract with. (g) The Commissioner may require a company to change any assumption or method that in
  the opinion of the Commissioner is necessary in order to comply with the requirements
  of the Valuation Manual or this subchapter; and the company shall adjust the reserves
  as required by the Commissioner. The Commissioner may take other disciplinary action
  he or she deems appropriate. (Added 2015, No. 63, § 1.)