§ 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.)