SLS 16RS-1034 ORIGINAL
2016 Regular Session
SENATE BILL NO. 409
BY SENATORS JOHN SMITH AND JOHNS
LIFE INSURANCE. Provides relative to valuation of life insurance reserves. (gov sig)
1 AN ACT
2 To enact R.S. 22:753.1 and to repeal R.S. 22:753(C)(8), relative to exemptions from
3 principle-based reserves for life insurance; to provide with respect to an exemption
4 for single-state life insurers domiciled in this state; to provide for the repeal of the
5 exemption for domestic life insurers upon approval of the commissioner of
6 insurance; and to provide for related matters.
7 Be it enacted by the Legislature of Louisiana:
8 Section 1. R.S. 22:753.1 is hereby enacted to read as follows:
9 ยง753.1. Single state exemption
10 A. The commissioner may exempt specific product forms or product
11 lines of a domestic company that is authorized and doing business only in this
12 state from the requirements of R.S. 22:753(C) provided both of the following
13 occur:
14 (1) The commissioner has issued an exemption in writing to the
15 company and has not subsequently revoked the exemption in writing.
16 (2) The company computes reserves using assumptions and methods
17 used prior to the operative date of the valuation in addition to any requirements
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions. SB NO. 409
SLS 16RS-1034 ORIGINAL
1 established by the commissioner and promulgated by regulation.
2 B. For any company granted an exemption pursuant to this Section, the
3 provisions of R.S. 22:752 and 753 shall apply with the exemption of any
4 reference to R.S. 22:753(C), which shall not apply.
5 Section 2. R.S. 22:753(C)(8) is hereby repealed in its entirety.
6 Section 3. This Act shall become effective upon signature by the governor or, if not
7 signed by the governor, upon expiration of the time for bills to become law without signature
8 by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
9 vetoed by the governor and subsequently approved by the legislature, this Act shall become
10 effective on the day following such approval.
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.
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions. SB NO. 409
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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))
Page 3 of 3
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.