The original instrument and the following digest, which constitutes no part of the
legislative instrument, were prepared by Jerry Guillot.
DIGEST
SB 409 Original 2016 Regular Session John Smith
Present law provides that the current method for calculation of life insurer reserves is based on a
statutory formula in present law. Further provides, however, for a change to the method of
calculation of life insurer reserves to principle-based reserves based on a Standard Valuation Manual
to be adopted by the National Association of Insurance Commissioners (NAIC) upon the adoption
of the present NAIC Standard Valuation Model Law by 42 states having 75% of the life insurance
premium of the United States.
Present law allows a domestic insurer to apply to the commissioner of insurance for an exemption
from the Standard Valuation Manual so that the insurer may continue to use the statutory reserve
formula for the entire company or for specific product forms or lines.
Proposed law repeals the present process and authority for the commissioner of insurance to exempt
a domestic insurer from the requirements of the Standard Valuation Manual.
Proposed law adopts the single-state exemption from the NAIC Standard Valuation Model Law,
which permits the commissioner to exempt from the requirements of the Standard Valuation Manual
a domestic insurer or certain types of policies of a domestic insurer that only does business in
Louisiana. Specifically authorizes the commissioner to exempt specific product forms or product
lines of such a company if both of the following occur:
(1)The commissioner has issued a written exemption to the company that has not been revoked.
(2)The company computes reserves using assumptions and methods used prior to the operative
date of the valuation in addition to any requirements established by the commissioner and
promulgated by regulation.
Proposed law further specifies that domestic insurers granted the exemption pursuant to proposed
law shall continue to follow all other provisions of present law that govern actuarial opinions and
calculation of life insurance reserves.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Adds R.S. 22:753.1; repeals R.S. 22:753(C)(8))