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Searching 2021-2022 Session

The Vermont Statutes Online

 

Title 8 : Banking and Insurance

Chapter 101 : INSURANCE COMPANIES GENERALLY

Subchapter 007 : Examination and Reports

(Cite as: 8 V.S.A. § 3577)
  • § 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 which 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 which 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.)