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Missouri House Bill HB2145

Missouri 2022 Regular Session

Missouri House Bill HB2145 Compare Versions

Only one version of the bill is available at this time.
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11 SECONDREGULARSESSION
22 HOUSEBILLNO.2145
33 101STGENERALASSEMBLY
44 INTRODUCEDBYREPRESENTATIVEMURPHY.
55 4949H.01I DANARADEMANMILLER,ChiefClerk
66 ANACT
77 Torepealsection376.380,RSMo,andtoenactinlieuthereofonenewsectionrelatingtothe
88 legalminimumstandardforvaluationofinsurancepoliciesandcontracts.
99 BeitenactedbytheGeneralAssemblyofthestateofMissouri,asfollows:
1010 SectionA.Section376.380,RSMo,isrepealedandonenewsectionenactedinlieu
1111 2thereof,tobeknownassection376.380,toreadasfollows:
1212 376.380.1.Thelegalminimumstandardforvaluationofpoliciesandcontractsand
1313 2thereservestobemaintainedthereonshallbeasfollows:
1414 3 (1)Forthosepoliciesandcontractsissuedpriortotheoperativedateprovidedin
1515 4subsection20ofsection376.670:
1616 5 (a)Exceptasotherwiseprovidedinsubdivision(3)ofthissubsection,thelegal
1717 6minimumstandardforvaluationofpoliciesoflifeinsuranceorannuitycontractsissuedprior
1818 7toApril13,1934,shallbetheActuaries'orCombinedExperienceTableofMortality,with
1919 8interestattherateoffivepercentperannumforgroupannuitycontractsandfourpercentper
2020 9annumforallotherpoliciesandcontracts;andforpoliciesoflifeinsuranceandannuity
2121 10contractsissuedonandafterApril13,1934,suchminimumstandardshallbetheAmerican
2222 11ExperienceTableofMortalitywithinterestattherateoffivepercentperannumforgroup
2323 12annuitycontractsandthreeandone-halfpercentperannumforallotherpoliciesand
2424 13contracts;
2525 14 (b)Thedirectormayvarythelegalminimumstandardsofinterestandmortalityfor
2626 15annuitycontractsandinparticularcasesofinvalidorsubstandardlivesandotherextra
2727 16hazards,andshallhavetherightandauthoritytodesignatethelegalminimumstandardfor
2828 17valuationoftotalandpermanentdisabilitybenefitsandadditionalaccidentaldeathbenefits;
2929 EXPLANATION—Matterenclosedinbold-facedbrackets[thus] intheabovebillisnotenactedandis
3030 intendedtobeomittedfromthelaw.Matterinbold-facetypeintheabovebillisproposedlanguage. 18 (c)Policiesissuedbycompaniesdoingbusinessinthisstatemayprovidefornot
3131 19morethanoneyearpreliminaryterminsurancebyincorporatingintheprovisionsthereof,
3232 20specifyingthepremiumconsiderationtobereceived,aclauseplainlyshowingthatthefirst
3333 21year'sinsuranceundersuchpoliciesisterminsurance,purchasedbythewholeorapartofthe
3434 22premiumtobereceivedduringthefirstpolicyyearandshallbevaluedaccordingly;provided,
3535 23thatifthepremiumchargedforterminsuranceunderalimitedpaymentlifepreliminaryterm
3636 24policyprovidingforthepaymentofallpremiumsthereoninlessthantwentyyearsfromthe
3737 25dateofthepolicy,orunderanendowmentpreliminarytermpolicy,exceedsthatchargedfor
3838 26lifeinsurancetwentypaymentlifepreliminarytermpoliciesofthesamecompany,thereserve
3939 27thereonattheendofanyyear,includingthefirst,shallnotbelessthanthereserveona
4040 28twentypaymentlifepreliminarytermpolicyissuedinthesameyearandatthesameage,
4141 29togetherwithanamountwhichshallbeequivalenttotheaccumulationofanetlevelpremium
4242 30sufficienttoprovideforapureendowmentattheendofthepremiumpaymentperiodequalto
4343 31thedifferencebetweenthevalueattheendofsuchperiodofsuchtwentypaymentlife
4444 32preliminarytermpolicyandthefullreserveatsuchtimeofsuchalimitedpaymentlifeor
4545 33endowmentpolicy.Thepremiumpaymentperiodistheperiodduringwhichpremiumsare
4646 34concurrentlypayableundersuchtwentypaymentlifepreliminarytermpolicyandsuch
4747 35limitedpaymentlifeorendowmentpolicy;
4848 36 (d)Reservesforallsuchpoliciesandcontractsmaybecalculated,attheoptionofthe
4949 37company,accordingtoanystandardswhichproducegreateraggregatereservesforallsuch
5050 38policiesandcontractsthantheminimumreservesrequiredbythissubdivision.Inthecaseof
5151 39policyobligationsofaninsolventlifeinsurancecompanyassumedorreinsuredinbulkbyan
5252 40insurancecompanyuponabasisrequiringaseparateaccountingofthebusinessandassetsof
5353 41suchinsolventcompanyandanapplicationofanypartoftheearningstherefromupon
5454 42obligationswhicharenotimplicitintheoriginaltermsofthepoliciesorcontractsassumedor
5555 43reinsured,thedirector,inordertoprotectallpolicyholdersofthereinsuringcompany,
5656 44includingtheholdersofallpoliciessoassumedorreinsured,andtosafeguardthefuture
5757 45solvencyofsuchreinsuringcompany,shallhavetherightandauthoritytodesignatestandards
5858 46ofvaluationforsuchreinsuredpoliciesandcontractswhichwillproducegreateraggregate
5959 47reservesforallsuchpoliciesandcontractsthantheminimumreservesrequiredbythis
6060 48subdivisionorthetermsandprovisionsofthepoliciesandcontractssoassumedorreinsured,
6161 49and,insuchevent,suchreinsuringcompanyshallnot,thereafter,adoptanylowerstandards
6262 50ofvaluationwithouttheapprovalofthedirector.
6363 51 (2)Forthosepoliciesandcontractsissuedonoraftertheoperativedateprovidedin
6464 52subsection20ofsection376.670:
6565 53 (a)Exceptasotherwiseprovidedinsubdivision(3)ofthissubsectionandsubsection
6666 542ofthissection,theminimumstandardforthevaluationofallsuchpoliciesandcontracts
6767 HB2145 2 55shallbethecommissionersreservevaluationmethodsdefinedinparagraphs(b),(c),(d),(e),
6868 56and(h)ofthissubdivision,threeandone-halfpercentinterestonallsuchpoliciesand
6969 57contractsexceptthosecontractsspecifiedinsubparagraphc.ofthisparagraphwhichconsist
7070 58ofsinglepremiumannuitycontractsandinsubparagraphd.ofthisparagraphwhichconsists
7171 59ofgroupannuitycontractswheretheinterestrateshallbefivepercent,andexceptpolicies
7272 60andcontracts,otherthanannuityandpureendowmentcontracts,issuedonorafterSeptember
7373 6128,1975,wheretheinterestrateshallbefourpercentinterestforsuchpoliciesissuedpriorto
7474 62September28,1979,andfourandone-halfpercentinterestforsuchpoliciesissuedonorafter
7575 63September28,1979,andthefollowingtables:
7676 64 a.Forallordinarypoliciesoflifeinsuranceissuedpriortotheoperativedateprovided
7777 65insubsection12ofsection376.670onthestandardbasis,excludinganydisabilityand
7878 66accidentaldeathbenefitsinsuchpolicies,theCommissioners1941StandardOrdinary
7979 67MortalityTable,andforsuchpoliciesissuedonoraftertheoperativedateprovidedin
8080 68subsection12ofsection376.670,andpriortotheoperativedateofsubsection14ofsection
8181 69376.670,theCommissioners1958StandardOrdinaryMortalityTable;providedthatforany
8282 70categoryofsuchpoliciesissuedonorafterSeptember28,1979,onfemalerisksallmodified
8383 71netpremiumsandpresentvaluesreferredtointhissectionmaybecalculatedaccordingtoan
8484 72agenotmorethansixyearsyoungerthantheactualageoftheinsured;andforsuchpolicies
8585 73issuedonoraftertheoperativedateofsubsection14ofsection376.670:
8686 74 (i)TheCommissioners1980StandardOrdinaryMortalityTable;or
8787 75 (ii)Attheelectionofthecompanyforanyoneormorespecifiedplansoflife
8888 76insurance,theCommissioners1980StandardOrdinaryMortalityTablewithTen-YearSelect
8989 77MortalityFactors;or
9090 78 (iii)Anyordinarymortalitytable,adoptedafter1980bytheNAIC,thatisapproved
9191 79byregulationpromulgatedbythedirectorforuseindeterminingtheminimumstandardof
9292 80valuationforsuchpolicies;
9393 81 b.Forallindustriallifeinsurancepoliciesissuedonthestandardbasis,excludingany
9494 82disabilityandaccidentaldeathbenefitsinsuchpolicies,the1941StandardIndustrial
9595 83MortalityTableforsuchpoliciesissuedpriortotheoperativedateofsubsection13ofsection
9696 84376.670andforsuchpoliciesissuedonoraftersuchoperativedate,theCommissioners1961
9797 85StandardIndustrialMortalityTableoranyindustrialmortalitytable,adoptedafter1980by
9898 86theNAIC,thatisapprovedbyregulationpromulgatedbythedirectorforuseindetermining
9999 87theminimumstandardofvaluationforsuchpolicies;
100100 88 c.Forindividualannuityandpureendowmentcontracts,excludinganydisabilityand
101101 89accidentaldeathbenefitsinsuchpolicies,the1937StandardAnnuityMortalityTableor,at
102102 90theoptionofthecompany,theAnnuityMortalityTablefor1949,Ultimate,orany
103103 91modificationofeitherofthesetablesapprovedbythedirector;
104104 HB2145 3 92 d.Forgroupannuityandpureendowmentcontracts,excludinganydisabilityand
105105 93accidentaldeathbenefitsinsuchpolicies,theGroupAnnuityMortalityTablefor1951,any
106106 94modificationofsuchtableapprovedbythedirector,or,attheoptionofthecompany,anyof
107107 95thetablesormodificationsoftablesspecifiedforindividualannuityandpureendowment
108108 96contracts;
109109 97 e.Fortotalandpermanentdisabilitybenefitsinorsupplementarytoordinarypolicies
110110 98orcontracts,forpoliciesorcontractsissuedonorafterJanuary1,1966,thetablesofperiod
111111 99twodisablementratesandthe1930to1950terminationratesofthe1952disabilitystudyof
112112 100theSocietyofActuaries,withdueregardtothetypeofbenefitoranytablesofdisablement
113113 101ratesandterminationrates,adoptedafter1980bytheNAIC,thatareapprovedbyregulation
114114 102promulgatedbythedirectorforuseindeterminingtheminimumstandardofvaluationfor
115115 103suchpolicies;forpoliciesorcontractsissuedonorafterJanuary1,1961,andpriortoJanuary
116116 1041,1966,eithersuchtablesorattheoptionofthecompany,theClass(3)DisabilityTable
117117 105(1926);andforpoliciesissuedpriortoJanuary1,1961,theClass(3)DisabilityTable(1926).
118118 106Anysuchtableshall,foractivelives,becombinedwithamortalitytablepermittedfor
119119 107calculatingthereservesforlifeinsurancepolicies;
120120 108 f.Foraccidentaldeathbenefitsinorsupplementarytopoliciesissuedonorafter
121121 109January1,1966,the1959AccidentalDeathBenefitsTableoranyaccidentaldeathbenefits
122122 110table,adoptedafter1980bytheNAIC,thatisapprovedbyregulationpromulgatedbythe
123123 111directorforuseindeterminingtheminimumstandardofvaluationforsuchpolicies;for
124124 112policiesissuedonorafterJanuary1,1961,andpriortoJanuary1,1966,eithersuchtableor,
125125 113attheoptionofthecompany,theInter-CompanyDoubleIndemnityMortalityTable;andfor
126126 114policiesissuedpriortoJanuary1,1961,theInter-CompanyDoubleIndemnityMortality
127127 115Table.Eithertableshallbecombinedwithamortalitytablepermittedforcalculatingthe
128128 116reservesforlifeinsurancepolicies;
129129 117 g.Forgrouplifeinsurance,lifeinsuranceissuedonthesubstandardbasisandother
130130 118specialbenefits,suchtablesasmaybeapprovedbythedirector;
131131 119 (b)Exceptasotherwiseprovidedinparagraphs(d),(e),and(h)ofthissubdivision,
132132 120reservesaccordingtothecommissionersreservevaluationmethod,forthelifeinsuranceand
133133 121endowmentbenefitsofpoliciesprovidingforauniformamountofinsuranceandrequiring
134134 122thepaymentofuniformpremiumsshallbetheexcess,ifany,ofthepresentvalue,atthedate
135135 123ofvaluation,ofsuchfutureguaranteedbenefitsprovidedforbysuchpolicies,overthethen
136136 124presentvalueofanyfuturemodifiednetpremiumstherefor.Themodifiednetpremiumsfor
137137 125anysuchpolicyshallbesuchuniformpercentageoftherespectivecontractpremiumsfor
138138 126suchbenefitsthatthepresentvalue,atthedateofissueofthepolicy,ofallsuchmodifiednet
139139 127premiumsshallbeequaltothesumofthethenpresentvalueofsuchbenefitsprovidedforby
140140 128thepolicyandtheexcessofa.overb.,asfollows:
141141 HB2145 4 129 a.Anetlevelannualpremiumequaltothepresentvalue,atthedateofissue,ofsuch
142142 130benefitsprovidedforafterthefirstpolicyyear,dividedbythepresentvalue,atthedateof
143143 131issue,ofanannuityofoneperannumpayableonthefirstandeachsubsequentanniversaryof
144144 132suchpolicyonwhichapremiumfallsdue;provided,however,thatsuchnetlevelannual
145145 133premiumshallnotexceedthenetlevelannualpremiumonthenineteenyearpremiumwhole
146146 134lifeplanforinsuranceofthesameamountatanageoneyearhigherthantheageatissueof
147147 135suchpolicy;
148148 136 b.Anetoneyeartermpremiumforsuchbenefitprovidedforinthefirstpolicyyear;
149149 137provided,thatforanylifeinsurancepolicyissuedonorafterJanuary1,1986,forwhichthe
150150 138contractpremiuminthefirstpolicyyearexceedsthatofthesecondyearandforwhichno
151151 139comparableadditionalbenefitisprovidedinthefirstyearforsuchexcessandwhichprovides
152152 140anendowmentbenefitoracashsurrendervalueoracombinationthereofinanamountgreater
153153 141thansuchexcesspremium,thereserveaccordingtothecommissionersreservevaluation
154154 142methodasofanypolicyanniversaryoccurringonorbeforetheassumedendingdatedefined
155155 143hereinasthefirstpolicyanniversaryonwhichthesumofanyendowmentbenefitandany
156156 144cashsurrendervaluethenavailableisgreaterthansuchexcesspremiumshall,exceptas
157157 145otherwiseprovidedinparagraph(h)ofthissubdivision,bethegreaterofthereserveasof
158158 146suchpolicyanniversarycalculatedasdescribedinparagraph(b)ofthissubdivisionandthe
159159 147reserveasofsuchpolicyanniversarycalculatedasdescribedinparagraph(b)ofthis
160160 148subdivision,butwith:
161161 149 (i)Thevaluedefinedinsubparagrapha.ofparagraph(b)ofthissubdivisionbeing
162162 150reducedbyfifteenpercentoftheamountofsuchexcessfirstyearpremium;
163163 151 (ii)Allpresentvaluesofbenefitsandpremiumsbeingdeterminedwithoutreference
164164 152topremiumsorbenefitsprovidedforbythepolicyaftertheassumedendingdate;
165165 153 (iii)Thepolicybeingassumedtomatureonsuchdateasanendowment;and
166166 154 (iv)Thecashsurrendervalueprovidedonsuchdatebeingconsideredasan
167167 155endowmentbenefit.
168168 156
169169 157Inmakingtheabovecomparisonthemortalityandinterestbasesstatedinparagraph(a)of
170170 158thissubdivisionandsubsection2ofthissectionshallbeused;
171171 159 (c)Reservesaccordingtothecommissionersreservevaluationmethodfor:
172172 160 a.Lifeinsurancepoliciesprovidingforavaryingamountofinsuranceorrequiring
173173 161thepaymentofvaryingpremiums;
174174 162 b.Groupannuityandpureendowmentcontractspurchasedunderaretirementplanor
175175 163planofdeferredcompensation,establishedormaintainedbyanemployer(includinga
176176 164partnershiporsoleproprietorship)orbyanemployeeorganization,orbyboth,otherthana
177177 HB2145 5 165planprovidingindividualretirementaccountsorindividualretirementannuitiesunderSection
178178 166408oftheInternalRevenueCode,asnoworhereafteramended;
179179 167 c.Disabilityandaccidentaldeathbenefitsinallpoliciesandcontracts;and
180180 168 d.Allotherbenefits,exceptlifeinsuranceandendowmentbenefitsinlifeinsurance
181181 169policiesandbenefitsprovidedbyallotherannuityandpureendowmentcontracts,shallbe
182182 170calculatedbyamethodconsistentwiththeprinciplesofparagraph(b)ofthissubdivision;
183183 171 (d)Paragraph(e)ofthissubdivisionshallapplytoallannuityandpureendowment
184184 172contractsotherthangroupannuityandpureendowmentcontractspurchasedundera
185185 173retirementplanorplanofdeferredcompensation,establishedormaintainedbyanemployer
186186 174(includingapartnershiporsoleproprietorship),orbyanemployeeorganization,orbyboth,
187187 175otherthanaplanprovidingindividualretirementaccountsorindividualretirementannuities
188188 176underSection408oftheInternalRevenueCode,asnoworhereafteramended;
189189 177 (e)Reservesaccordingtothecommissionersannuityreservemethodforbenefits
190190 178underannuityorpureendowmentcontracts,excludinganydisabilityandaccidentaldeath
191191 179benefitsinsuchcontracts,shallbethegreatestoftherespectiveexcessesofthepresent
192192 180values,atthedateofvaluation,ofthefutureguaranteedbenefits,includingguaranteed
193193 181nonforfeiturebenefits,providedforbysuchcontractsattheendofeachrespectivecontract
194194 182year,overthepresentvalue,atthedateofvaluation,ofanyfuturevaluationconsiderations
195195 183derivedfromfuturegrossconsiderations,requiredbythetermsofsuchcontract,thatbecome
196196 184payablepriortotheendofsuchrespectivecontractyear.Thefutureguaranteedbenefitsshall
197197 185bedeterminedbyusingthemortalitytable,ifany,andtheinterestrate,orrates,specifiedin
198198 186suchcontractsfordeterminingguaranteedbenefits.Thevaluationconsiderationsarethe
199199 187portionsoftherespectivegrossconsiderationsappliedunderthetermsofsuchcontractsto
200200 188determinenonforfeiturevalues;
201201 189 (f)Innoeventshallacompany'saggregatereservesforalllifeinsurancepolicies,
202202 190excludingdisabilityandaccidentaldeathbenefits,belessthantheaggregatereserves
203203 191calculatedinaccordancewiththemethodsetforthinparagraphs(b),(c),(d),(e),(h)and(i)of
204204 192thissubdivisionandthemortalitytableortablesandrateorratesofinterestusedin
205205 193calculatingnonforfeiturebenefitsforsuchpolicies;
206206 194 (g)Innoeventshalltheaggregatereservesforallpolicies,contractsandbenefitsbe
207207 195lessthantheaggregatereservesdeterminedbythequalifiedactuarytobenecessarytorender
208208 196theopinionrequiredbysubsections4and5ofthissection;
209209 197 (h)Ifinanycontractyearthegrosspremiumchargedbyanylifeinsurancecompany
210210 198onanypolicyorcontractislessthanthevaluationnetpremiumforthepolicyorcontract
211211 199calculatedbythemethodusedincalculatingthereservethereonbutusingtheminimum
212212 200valuationstandardsofmortalityandrateofinterest,theminimumreserverequiredforsuch
213213 201policyorcontractshallbethegreaterofeitherthereservecalculatedaccordingtothe
214214 HB2145 6 202mortalitytable,rateofinterest,andmethodactuallyusedforsuchpolicyorcontract,orthe
215215 203reservecalculatedbythemethodactuallyusedforsuchpolicyorcontractbutusingthe
216216 204minimumvaluationstandardsofmortalityandrateofinterestandreplacingthevaluationnet
217217 205premiumbytheactualgrosspremiumineachcontractyearforwhichthevaluationnet
218218 206premiumexceedstheactualgrosspremium.Theminimumvaluationstandardsofmortality
219219 207andrateofinterestreferredtointhissectionarethosestandardsstatedinparagraph(a)ofthis
220220 208subdivisionandsubsection2ofthissection;provided,thatforanylifeinsurancepolicy
221221 209issuedonorafterJanuary1,1986,forwhichthegrosspremiuminthefirstpolicyyear
222222 210exceedsthatofthesecondyearandforwhichnocomparableadditionalbenefitisprovidedin
223223 211thefirstyearforsuchexcessandwhichprovidesanendowmentbenefitoracashsurrender
224224 212valueoracombinationthereofinanamountgreaterthansuchexcesspremium,theforegoing
225225 213provisionsofthisparagraphshallbeappliedasifthemethodactuallyusedincalculatingthe
226226 214reserveforsuchpolicywerethemethoddescribedinparagraph(b)ofthissubdivision.The
227227 215minimumreserveateachpolicyanniversaryofsuchapolicyshallbethegreaterofthe
228228 216minimumreservecalculatedinaccordancewithparagraphs(b)and(c)ofthissubdivisionand
229229 217theminimumreservecalculatedinaccordancewiththisparagraph;
230230 218 (i)Inthecaseofanyplanoflifeinsurancewhichprovidesforfuturepremium
231231 219determination,theamountsofwhicharetobedeterminedbytheinsurancecompanybasedon
232232 220thenestimatesoffutureexperience,orinthecaseofanyplanoflifeinsuranceorannuity
233233 221whichisofsuchanaturethattheminimumreservescannotbedeterminedbythemethods
234234 222describedinparagraphs(b)to(e)ofthissubdivision,andparagraph(h)ofthissubdivision,
235235 223thereserveswhichareheldunderanysuchplanmust:
236236 224 a.Beappropriateinrelationtothebenefitsandthepatternofpremiumsforthatplan;
237237 225and
238238 226 b.Becomputedbyamethodwhichisconsistentwiththeprinciplesofthissectionas
239239 227determinedbyregulationspromulgatedbythedirector.
240240 228 (3)Exceptasprovidedinsubsection2ofthissection,theminimumstandardforthe
241241 229valuationofallindividualannuityandpureendowmentcontractsissuedonorafterthe
242242 230operativedateofthissubdivision,asdefinedherein,andforallannuitiesandpure
243243 231endowmentspurchasedonoraftersuchoperativedateundergroupannuityandpure
244244 232endowmentcontracts,shallbethecommissionersreservevaluationmethodsdefinedin
245245 233paragraphs(b),(c),(d),and(e)ofsubdivision(2)ofthissubsection,andthefollowingtables
246246 234andinterestrates:
247247 235 (a)ForindividualannuityandpureendowmentcontractsissuedpriortoSeptember
248248 23628,1979,excludinganydisabilityandaccidentaldeathbenefitsinsuchcontracts,the1971
249249 237IndividualAnnuityMortalityTable,oranymodificationofthistableapprovedbythe
250250 HB2145 7 238director,andsixpercentinterestforsinglepremiumimmediateannuitycontracts,andfour
251251 239percentinterestforallotherindividualannuityandpureendowmentcontracts;
252252 240 (b)Forindividualsinglepremiumimmediateannuitycontractsissuedonorafter
253253 241September28,1979,excludinganydisabilityandaccidentaldeathbenefitsinsuchcontracts,
254254 242the1971IndividualAnnuityMortalityTable,oranyindividualannuitymortalitytable
255255 243adoptedafter1980bytheNAIC,thatisapprovedbyregulationpromulgatedbythedirector
256256 244foruseindeterminingtheminimumstandardofvaluationforsuchcontracts,orany
257257 245modificationofthesetablesapprovedbythedirector,andsevenandone-halfpercentinterest;
258258 246 (c)Forindividualannuityandpureendowmentcontractsissuedonorafter
259259 247September28,1979,otherthansinglepremiumimmediateannuitycontracts,excludingany
260260 248disabilityandaccidentaldeathbenefitsinsuchcontracts,the1971IndividualAnnuity
261261 249MortalityTable,oranyindividualannuitymortalitytableadoptedafter1980bytheNAIC,
262262 250thatisapprovedbyregulationpromulgatedbythedirectorforuseindeterminingthe
263263 251minimumstandardofvaluationforsuchcontracts,oranymodificationofthesetables
264264 252approvedbythedirector,andfiveandone-halfpercentinterestforsinglepremiumdeferred
265265 253annuityandpureendowmentcontractsandfourandone-halfpercentinterestforallother
266266 254suchindividualannuityandpureendowmentcontracts;
267267 255 (d)ForallannuitiesandpureendowmentspurchasedpriortoSeptember28,1979,
268268 256undergroupannuityandpureendowmentcontracts,excludinganydisabilityandaccidental
269269 257deathbenefitspurchasedundersuchcontracts,the1971GroupAnnuityMortalityTable,or
270270 258anymodificationofthistableapprovedbythedirector,andsixpercentinterest;
271271 259 (e)ForallannuitiesandpureendowmentspurchasedonorafterSeptember28,1979,
272272 260undergroupannuityandpureendowmentcontracts,excludinganydisabilityandaccidental
273273 261deathbenefitspurchasedundersuchcontracts,the1971GroupAnnuityMortalityTable,or
274274 262anygroupannuitymortalitytableadoptedafter1980bytheNAIC,thatisapprovedby
275275 263regulationpromulgatedbythedirectorforuseindeterminingtheminimumstandardof
276276 264valuationforsuchannuitiesandpureendowments,oranymodificationofthesetables
277277 265approvedbythedirector,andsevenandone-halfpercentinterest;
278278 266 (f)OnandafterSeptember28,1975,anycompanymayfilewiththedirectora
279279 267writtennoticeofitselectiontocomplywiththeprovisionsofthissubdivisionafteraspecified
280280 268datebeforeJanuary1,1980,whichshallbetheoperativedateofthissubdivisionforsuch
281281 269company,providedacompanymayelectadifferentoperativedateforindividualannuityand
282282 270pureendowmentcontractsfromthatelectedforgroupannuityandpureendowmentcontracts.
283283 271Ifacompanymakesnosuchelection,theoperativedateofthissubdivisionforsuchcompany
284284 272shallbeJanuary1,1980.
285285 273 2.(1)Thecalendaryearstatutoryvaluationinterestratesasdefinedinthissubsection
286286 274shallbetheinterestratesusedindeterminingtheminimumstandardforthevaluationof:
287287 HB2145 8 275 (a)Alllifeinsurancepoliciesissuedinaparticularcalendaryear,onorafterthe
288288 276operativedateofsubsection14ofsection376.670;
289289 277 (b)Allindividualannuityandpureendowmentcontractsissuedinaparticular
290290 278calendaryearonorafterJanuary1,1983;
291291 279 (c)Allannuitiesandpureendowmentcontractspurchasedinaparticularcalendar
292292 280yearonorafterJanuary1,1983,undergroupannuityandpureendowmentcontracts;and
293293 281 (d)Thenetincrease,ifany,inaparticularcalendaryearafterJanuary1,1983,in
294294 282amountsheldunderguaranteedinterestcontracts.
295295 283 (2)Thecalendaryearstatutoryvaluationinterestrates,I,shallbedeterminedas
296296 284followsandtheresultsroundedtothenearerone-quarterofonepercent:
297297 285 (a)Forlifeinsurance:
298298 286 I=.03+W(R
299299 1
300300 -.03)+W/2(R
301301 2
302302 -.09);
303303 287 (b)Forsinglepremiumimmediateannuitiesandforannuitybenefitsinvolvinglife
304304 288contingenciesarisingfromotherannuitieswithcashsettlementoptionsandfromguaranteed
305305 289interestcontractswithcashsettlementoptions:
306306 290 I=.03+W(R-.03),whereR
307307 1
308308 isthelesserofRand.09;R
309309 2
310310 isthegreaterofRand.09;
311311 291Risthereferenceinterestratedefinedinthissubsection;andWistheweightingfactor
312312 292definedinthissubsection;
313313 293 (c)Forotherannuitieswithcashsettlementoptionsandguaranteedinterestcontracts
314314 294withcashsettlementoptions,valuedonanissueyearbasis,exceptasstatedinparagraph(b)
315315 295ofthissubdivision,theformulaforlifeinsurancestatedinparagraph(a)ofthissubdivision
316316 296shallapplytoannuitiesandguaranteedinterestcontractswithguaranteedurationsinexcess
317317 297oftenyearsandtheformulaforsinglepremiumimmediateannuitiesstatedinparagraph(b)
318318 298ofthissubdivisionshallapplytoannuitiesandguaranteedinterestcontractswithguarantee
319319 299durationsoftenyearsorless;
320320 300 (d)Forotherannuitieswithnocashsettlementoptionsandforguaranteedinterest
321321 301contractswithnocashsettlementoptions,theformulaforsinglepremiumimmediate
322322 302annuitiesstatedinparagraph(b)ofthissubdivisionshallapply;
323323 303 (e)Forotherannuitieswithcashsettlementoptionsandguaranteedinterestcontracts
324324 304withcashsettlementoptions,valuedonachangeinfundbasis,theformulaforsingle
325325 305premiumimmediateannuitiesstatedinparagraph(b)ofthissubdivisionshallapply.Ifthe
326326 306calendaryearstatutoryvaluationinterestrateforanylifeinsurancepoliciesissuedinany
327327 307calendaryeardeterminedwithoutreferencetothissentencediffersfromthecorresponding
328328 308actualrateforsimilarpoliciesissuedintheimmediatelyprecedingcalendaryearbylessthan
329329 309one-halfofonepercent,thecalendaryearstatutoryvaluationinterestrateforsuchlife
330330 310insurancepoliciesshallbeequaltothecorrespondingactualratefortheimmediately
331331 311precedingcalendaryear.Forpurposesofapplyingtheimmediatelyprecedingsentence,the
332332 HB2145 9 312calendaryearstatutoryvaluationinterestrateforlifeinsurancepoliciesissuedinacalendar
333333 313yearshallbedeterminedfor1980(usingthereferenceinterestratedefinedfor1979)andshall
334334 314bedeterminedforeachsubsequentcalendaryearregardlessofwhensubsection14ofsection
335335 315376.670becomesoperative.
336336 316 (3)Theweightingfactorsreferredtointheformulasstatedinsubdivision(2)ofthis
337337 317subsectionaregiveninthefollowingtables:
338338 318 (a)Weightingfactorsforlifeinsurance:
339339 319 Guarantee Weighting
340340 320 Duration Factors
341341 321 (Years)
342342 322 10orless .50
343343 323 Morethan10,butnotmorethan20 .45
344344 324 Morethan20 .35
345345 325
346346 326Forlifeinsurance,theguaranteedurationisthemaximumnumberofyearsthelifeinsurance
347347 327canremaininforceonabasisguaranteedinthepolicyorunderoptionstoconverttoplansof
348348 328lifeinsurancewithpremiumratesornonforfeiturevaluesorbothwhichareguaranteedinthe
349349 329originalpolicy;
350350 330 (b)Weightingfactorforsinglepremiumimmediateannuitiesandforannuitybenefits
351351 331involvinglifecontingenciesarisingfromotherannuitieswithcashsettlementoptionsand
352352 332guaranteedinterestcontractswithcashsettlementoptions:.80;
353353 333 (c)Weightingfactorsforotherannuitiesandforguaranteedinterestcontracts,except
354354 334asstatedinparagraph(b)ofthissubdivision,shallbeasspecifiedinsubparagraphsa.,b.,and
355355 335c.ofthisparagraph,accordingtotherulesanddefinitionsinsubparagraphsd.,e.,andf.of
356356 336thisparagraph:
357357 337 a.Forannuitiesandguaranteedinterestcontractsvaluedonanissueyearbasis:
358358 338 Guarantee WeightingFactor
359359 339 Duration forPlanType
360360 340 (Years) A B C
361361 341 5orless: .80.60.50
362362 342 Morethan5,butnotmorethan10: .75.60.50
363363 343 Morethan10,butnotmorethan20: .65.50.45
364364 344 Morethan20: .45.35.35
365365 345 b.Forannuitiesandguaranteedinterestcontractsvaluedonachangeinfundbasis,
366366 346thefactorsshowninsubparagrapha.ofthisparagraphincreasedby:
367367 347 PlanType
368368 HB2145 10 348 ABC
369369 349 .15.25.05
370370 350 c.Forannuitiesandguaranteedinterestcontractsvaluedonanissueyearbasis(other
371371 351thanthosewithnocashsettlementoptions)whichdonotguaranteeinterestonconsiderations
372372 352receivedmorethanoneyearafterissueorpurchaseandforannuitiesandguaranteedinterest
373373 353contractsvaluedonachangeinfundbasiswhichdonotguaranteeinterestrateson
374374 354considerationsreceivedmorethantwelvemonthsbeyondthevaluationdate,thefactors
375375 355showninsubparagrapha.ofthisparagraphorderivedinsubparagraphb.ofthisparagraph
376376 356increasedby:
377377 357 PlanType
378378 358 ABC
379379 359 .05.05.05
380380 360 d.Forotherannuitieswithcashsettlementoptionsandguaranteedinterestcontracts
381381 361withcashsettlementoptions,theguaranteedurationisthenumberofyearsforwhichthe
382382 362contractguaranteesinterestratesinexcessofthecalendaryearstatutoryvaluationinterest
383383 363rateforlifeinsurancepolicieswithguaranteedurationinexcessoftwentyyears.Forother
384384 364annuitieswithnocashsettlementoptionsandforguaranteedinterestcontractswithnocash
385385 365settlementoptions,theguaranteedurationisthenumberofyearsfromthedateofissueor
386386 366dateofpurchasetothedateannuitybenefitsarescheduledtocommence;
387387 367 e.Plantypeasusedinsubparagraphsa.,b.,andc.ofthisparagraphisdefinedas
388388 368follows:
389389 369 PlanTypeA:Atanytimepolicyholdermaywithdrawfundsonlywithanadjustment
390390 370toreflectchangesininterestratesorassetvaluessincereceiptofthefundsbytheinsurance
391391 371company,orwithoutsuchadjustmentbutininstallmentsoverfiveyearsormore,orasan
392392 372immediatelifeannuity,ornowithdrawalpermitted;
393393 373 PlanTypeB:Beforeexpirationoftheinterestrateguarantee,policyholdermay
394394 374withdrawfundsonlywithanadjustmenttoreflectchangesininterestratesorassetvalues
395395 375sincereceiptofthefundsbytheinsurancecompany,orwithoutsuchadjustmentbutin
396396 376installmentsoverfiveyearsormore,ornowithdrawalpermitted.Attheendofinterestrate
397397 377guarantee,fundsmaybewithdrawnwithoutsuchadjustmentinasinglesumorinstallments
398398 378overfewerthanfiveyears;
399399 379 PlanTypeC:Policyholdermaywithdrawfundsbeforeexpirationofinterestrate
400400 380guaranteeinasinglesumorinstallmentsoverfewerthanfiveyearseitherwithoutadjustment
401401 381toreflectchangesininterestratesorassetvaluessincereceiptofthefundsbytheinsurance
402402 382company,orsubjectonlytoafixedsurrenderchargestipulatedinthecontractasapercentage
403403 383ofthefund;
404404 HB2145 11 384 f.Acompanymayelecttovalueguaranteedinterestcontractswithcashsettlement
405405 385optionsandannuitieswithcashsettlementoptionsoneitheranissueyearbasisoronachange
406406 386infundbasis.Guaranteedinterestcontractswithnocashsettlementoptionsandother
407407 387annuitieswithnocashsettlementoptionsmustbevaluedonanissueyearbasis.Asusedin
408408 388thissubsectionanissueyearbasisofvaluationreferstoavaluationbasisunderwhichthe
409409 389interestrateusedtodeterminetheminimumvaluationstandardfortheentiredurationofthe
410410 390annuityorguaranteedinterestcontractisthecalendaryearvaluationinterestratefortheyear
411411 391ofissueoryearofpurchaseoftheannuityorguaranteedinterestcontract,andthechangein
412412 392fundbasisofvaluationreferstoavaluationbasisunderwhichtheinterestrateusedto
413413 393determinetheminimumvaluationstandardapplicabletoeachchangeinthefundheldunder
414414 394theannuityorguaranteedinterestcontractisthecalendaryearvaluationinterestrateforthe
415415 395yearofthechangeinthefund.
416416 396 (4)The"referenceinterestrate"referredtoinsubdivision(2)ofthissubsectionshall
417417 397bedefinedasfollows:
418418 398 (a)Foralllifeinsurance,thelesseroftheaverageoveraperiodofthirty-sixmonths
419419 399andtheaverageoveraperiodoftwelvemonths,endingonJunethirtiethofthecalendaryear
420420 400nextprecedingtheyearofissue,oftheMonthlyAverageoftheCompositeYieldonSeasoned
421421 401CorporateBonds,aspublishedbyMoody'sInvestorsService,Inc.;
422422 402 (b)Forsinglepremiumimmediateannuitiesandforannuitybenefitsinvolvinglife
423423 403contingenciesarisingfromotherannuitieswithcashsettlementoptionsandguaranteed
424424 404interestcontractswithcashsettlementoptions,theaverageoveraperiodoftwelvemonths,
425425 405endingonJunethirtiethofthecalendaryearofissueorpurchase,oftheMonthlyAverageof
426426 406theCompositeYieldonSeasonedCorporateBonds,aspublishedbyMoody'sInvestors
427427 407Service,Inc.;
428428 408 (c)Forotherannuitieswithcashsettlementoptionsandguaranteedinterestcontracts
429429 409withcashsettlementoptions,valuedonayearofissuebasis,exceptasstatedinparagraph(b)
430430 410ofthissubdivision,withguaranteedurationinexcessoftenyears,thelesseroftheaverage
431431 411overaperiodofthirty-sixmonthsandtheaverageoveraperiodoftwelvemonths,endingon
432432 412Junethirtiethofthecalendaryearofissueorpurchase,oftheMonthlyAverageofthe
433433 413CompositeYieldonSeasonedCorporateBonds,aspublishedbyMoody'sInvestorsService,
434434 414Inc.;
435435 415 (d)Forotherannuitieswithcashsettlementoptionsandguaranteedinterestcontracts
436436 416withcashsettlementoptions,valuedonayearofissuebasis,exceptasstatedinparagraph(b)
437437 417ofthissubdivision,withguaranteedurationoftenyearsorless,theaverageoveraperiodof
438438 418twelvemonths,endingonJunethirtiethofthecalendaryearofissueorpurchase,ofthe
439439 419MonthlyAverageoftheCompositeYieldonSeasonedCorporateBonds,aspublishedby
440440 420Moody'sInvestorsService,Inc.;
441441 HB2145 12 421 (e)Forotherannuitieswithnocashsettlementoptionsandforguaranteedinterest
442442 422contractswithnocashsettlementoptions,theaverageoveraperiodoftwelvemonths,ending
443443 423onJunethirtiethofthecalendaryearofissueorpurchase,oftheMonthlyAverageofthe
444444 424CompositeYieldonSeasonedCorporateBonds,aspublishedbyMoody'sInvestorsService,
445445 425Inc.;
446446 426 (f)Forotherannuitieswithcashsettlementoptionsandguaranteedinterestcontracts
447447 427withcashsettlementoptions,valuedonachangeinfundbasis,exceptasstatedinparagraph
448448 428(b)ofthissubdivision,theaverageoveraperiodoftwelvemonths,endingonJunethirtiethof
449449 429thecalendaryearofthechangeinthefund,oftheMonthlyAverageoftheCompositeYield
450450 430onSeasonedCorporateBonds,aspublishedbyMoody'sInvestorsService,Inc.
451451 431 (5)IntheeventthattheMonthlyAverageoftheCompositeYieldonSeasoned
452452 432CorporateBondsisnolongerpublishedbyMoody'sInvestorsService,Inc.,orintheevent
453453 433thattheNAICdeterminesthattheMonthlyAverageoftheCompositeYieldonSeasoned
454454 434CorporateBondsaspublishedbyMoody'sInvestorsService,Inc.,isnolongerappropriatefor
455455 435thedeterminationofthereferenceinterestrate,thenanalternativemethodfordetermination
456456 436ofthereferenceinterestrate,whichisadoptedbytheNAICandapprovedbyregulation
457457 437promulgatedbythedirector,maybesubstituted.
458458 438 3.Foraccidentandhealthinsurancecontractsissuedonoraftertheoperativedateof
459459 439thevaluationmanual,thestandardprescribedinthevaluationmanualistheminimum
460460 440standardofvaluationrequiredundersubsection2ofsection376.370.Fordisability,accident
461461 441andsickness,andaccidentandhealthinsurancecontractsissuedonoraftertheoperativedate
462462 442providedinsubsection20ofsection376.670andpriortotheoperativedateofthevaluation
463463 443manual,theminimumstandardofvaluationisthestandardadoptedbythedirectorby
464464 444regulation.
465465 445 4.(1)Thissubsectionshallapplytoactuarialopinionsofreservespriortothedateof
466466 446thevaluationmanual.
467467 447 (2)Everylifeinsurancecompanydoingbusinessinthisstateshallannuallysubmit
468468 448theopinionofaqualifiedactuaryastowhetherthereservesandrelatedactuarialitemsheldin
469469 449supportofthepoliciesandcontractsspecifiedbythedirectorbyregulationarecomputed
470470 450appropriately,arebasedonassumptionswhichsatisfycontractualprovisions,areconsistent
471471 451withpriorreportedamountsandcomplywithapplicablelawsofthisstate.Thedirectorby
472472 452regulationshalldefinethespecificsofthisopinionandaddanyotheritemsdeemedtobe
473473 453necessarytoitsscope.
474474 454 (3)(a)Everylifeinsurancecompany,exceptasexemptedbyorpursuantto
475475 455regulation,shallalsoannuallyincludeintheopinionrequiredbysubdivision(2)ofthis
476476 456subsection,anopinionofthesamequalifiedactuaryastowhetherthereservesandrelated
477477 457actuarialitemsheldinsupportofthepoliciesandcontractsspecifiedbythedirectorby
478478 HB2145 13 458regulation,whenconsideredinlightoftheassetsheldbythecompanywithrespecttothe
479479 459reservesandrelatedactuarialitems,includingbutnotlimitedtotheinvestmentearningson
480480 460theassetsandtheconsiderationsanticipatedtobereceivedandretainedunderthepoliciesand
481481 461contracts,makeadequateprovisionforthecompany'sobligationsunderthepoliciesand
482482 462contracts,includingbutnotlimitedtothebenefitsunderandexpensesassociatedwiththe
483483 463policiesandcontracts.
484484 464 (b)Thedirectormayprovidebyregulationforatransitionperiodforestablishingany
485485 465higherreserveswhichthequalifiedactuarymaydeemnecessaryinordertorenderthe
486486 466opinionrequiredbythissubsection.
487487 467 (4)Eachopinionrequiredbysubdivision(3)ofthissubsectionshallbegovernedby
488488 468thefollowingprovisions:
489489 469 (a)Amemorandum,informandsubstanceacceptabletothedirectorasspecifiedby
490490 470regulation,shallbepreparedtosupporteachactuarialopinion;and
491491 471 (b)Iftheinsurancecompanyfailstoprovideasupportingmemorandumattherequest
492492 472ofthedirectorwithinaperiodspecifiedbyregulationorthedirectordeterminesthatthe
493493 473supportingmemorandumprovidedbytheinsurancecompanyfailstomeetthestandards
494494 474prescribedbytheregulationsorisotherwiseunacceptabletothedirector,thedirectormay
495495 475engageaqualifiedactuaryattheexpenseofthecompanytoreviewtheopinionandthebasis
496496 476fortheopinionandpreparesuchsupportingmemorandumasisrequiredbythedirector.
497497 477 (5)Everyopinionrequiredbythissubsectionshallbegovernedbythefollowing
498498 478provisions:
499499 479 (a)Theopinionshallbesubmittedwiththeannualstatementreflectingthevaluation
500500 480ofsuchreserveliabilitiesforeachyearendingonorafterDecember31,1993;
501501 481 (b)Theopinionshallapplytoallbusinessinforceincludingindividualandgroup
502502 482healthinsuranceplans,informandsubstanceacceptabletothedirectorasspecifiedby
503503 483regulation;
504504 484 (c)Theopinionshallbebasedonstandardsadoptedfromtimetotimebythe
505505 485ActuarialStandardsBoardandonsuchadditionalstandardsasthedirectormaybyregulation
506506 486prescribe;
507507 487 (d)Inthecaseofanopinionrequiredtobesubmittedbyaforeignoraliencompany,
508508 488thedirectormayaccepttheopinionfiledbythatcompanywiththeinsurancesupervisory
509509 489officialofanotherstateifthedirectordeterminesthattheopinionreasonablymeetsthe
510510 490requirementsapplicabletoacompanydomiciledinthisstate;
511511 491 (e)Forthepurposesofthissection,"qualifiedactuary"meansamemberingood
512512 492standingoftheAmericanAcademyofActuarieswhomeetstherequirementssetforthinsuch
513513 493regulations;
514514 HB2145 14 494 (f)Exceptincasesoffraudorwillfulmisconduct,thequalifiedactuaryshallnotbe
515515 495liablefordamagestoanyperson,otherthantheinsurancecompanyandthedirector,forany
516516 496act,error,omission,decisionorconductwithrespecttotheactuary'sopinion;
517517 497 (g)Disciplinaryactionbythedirectoragainstthecompanyorthequalifiedactuary
518518 498shallbedefinedinregulationsbythedirector;and
519519 499 (h)Anymemoranduminsupportoftheopinion,andanyothermaterialprovidedby
520520 500thecompanytothedirectorinconnectiontherewith,shallbekeptconfidentialbythedirector
521521 501andshallnotbemadepublicandshallnotbesubjecttosubpoena,otherthanforthepurpose
522522 502ofdefendinganactionseekingdamagesfromanypersonbyreasonofanyactionrequiredby
523523 503thissectionorbyregulationspromulgatedhereunder;exceptthatthememorandumorother
524524 504materialmayotherwisebereleasedbythedirector:
525525 505 a.Withthewrittenconsentofthecompany;or
526526 506 b.TotheAmericanAcademyofActuariesuponrequeststatingthatthememorandum
527527 507orothermaterialisrequiredforthepurposeofprofessionaldisciplinaryproceedingsand
528528 508settingforthproceduressatisfactorytothedirectorforpreservingtheconfidentialityofthe
529529 509memorandumorothermaterial.
530530 510
531531 511Onceanyportionoftheconfidentialmemorandumiscitedbythecompanyinitsmarketingor
532532 512iscitedbeforeanygovernmentalagencyotherthanastateinsurancedepartmentorisreleased
533533 513bythecompanytothenewsmedia,allportionsoftheconfidentialmemorandumshallbeno
534534 514longerconfidential.
535535 515 5.(1)Thissubsectionshallapplytoactuarialopinionsofreservesaftertheoperative
536536 516dateofthevaluationmanual.
537537 517 (2)Everycompanywithoutstandinglifeinsurancecontracts,accidentandhealth
538538 518insurancecontracts,ordeposit-typecontractsinMissouriandsubjecttoregulationbythe
539539 519directorshallannuallysubmittheopinionoftheappointedactuaryastowhetherthereserves
540540 520andrelatedactuarialitemsheldinsupportofthepoliciesandcontractsarecomputed
541541 521appropriately,arebasedonassumptionsthatsatisfycontractualprovisions,areconsistentwith
542542 522priorreportedamounts,andcomplywithapplicableMissourilaw.Thevaluationmanual
543543 523shallprescribethespecificsofsuchopinion,includinganyitemsdeemedtobenecessaryto
544544 524itsscope.
545545 525 (3)Everycompanywithoutstandinglifeinsurancecontracts,accidentandhealth
546546 526insurancecontracts,ordeposit-typecontractsinMissouriandsubjecttoregulationbythe
547547 527director,exceptasexemptedinthevaluationmanual,shallalsoannuallyincludeinthe
548548 528opinionrequiredundersubdivision(2)ofthissubsectionanopinionofthesameappointed
549549 529actuaryastowhetherthereservesandrelatedactuarialitemsheldinsupportofthepolicies
550550 530andcontractsspecifiedinthevaluationmanual,whenconsideredinlightoftheassetsheldby
551551 HB2145 15 531thecompanywithrespecttothereservesandrelatedactuarialitemsincluding,butnotlimited
552552 532to,theinvestmentearningsontheassetsandtheconsiderationsanticipatedtobereceivedand
553553 533retainedunderthepoliciesandcontracts,makeadequateprovisionforthecompany's
554554 534obligationsunderthepoliciesandcontractsincluding,butnotlimitedto,benefitsunderand
555555 535expensesassociatedwiththepoliciesandcontracts.
556556 536 (4)Eachopinionrequiredbysubdivision(3)ofthissubsectionshallbegovernedby
557557 537thefollowingprovisions:
558558 538 (a)Amemorandum,informandsubstanceasspecifiedinthevaluationmanualand
559559 539acceptabletothedirector,shallbepreparedtosupporteachactuarialopinion;and
560560 540 (b)Iftheinsurancecompanyfailstoprovideasupportingmemorandumattherequest
561561 541ofthedirectorwithinaperiodspecifiedinthevaluationmanualorthedirectordetermines
562562 542thatthesupportingmemorandumprovidedbytheinsurancecompanyfailstomeetthe
563563 543standardsprescribedbythevaluationmanualorisotherwiseunacceptabletothedirector,the
564564 544directormayengageaqualifiedactuaryattheexpenseofthecompanytoreviewtheopinion
565565 545andthebasisfortheopinionandpreparethesupportingmemorandumrequiredbythe
566566 546director.
567567 547 (5)Everyopinionrequiredbythissubsectionshallbegovernedbythefollowing:
568568 548 (a)Theopinionshallbeinformandsubstanceasspecifiedinthevaluationmanual
569569 549andacceptabletothedirector;
570570 550 (b)Theopinionshallbesubmittedwiththeannualstatementreflectingthevaluation
571571 551ofsuchreserveliabilitiesforeachyearendingonoraftertheoperativedateofthevaluation
572572 552manual;
573573 553 (c)Theopinionshallapplytoallpoliciesandcontractssubjecttosubdivision(3)of
574574 554thissubsection,plusotheractuarialliabilitiesasmaybespecifiedinthevaluationmanual;
575575 555 (d)Theopinionshallbebasedonstandardsadoptedfromtimetotimebythe
576576 556ActuarialStandardsBoardoritssuccessor,andonsuchadditionalstandardsasmaybe
577577 557prescribedinthevaluationmanual;
578578 558 (e)Inthecaseofanopinionrequiredtobesubmittedbyaforeignoraliencompany,
579579 559thedirectormayaccepttheopinionfiledbysuchcompanywiththeinsurancesupervisory
580580 560officialofanotherstateifthedirectordeterminesthattheopinionreasonablymeetsthe
581581 561requirementsapplicabletoacompanydomiciledinMissouri;
582582 562 (f)Exceptincasesoffraudorwillfulmisconduct,theappointedactuaryshallnotbe
583583 563liablefordamagestoanyperson,otherthantheinsurancecompanyandthedirector,forany
584584 564act,error,omission,decision,orconductwithrespecttotheappointedactuary'sopinion;and
585585 565 (g)Disciplinaryactionbythedirectoragainstthecompanyortheappointedactuary
586586 566shallbedefinedinregulationsbythedirector.
587587 HB2145 16 567 6.(1)Forpoliciesissuedonoraftertheoperativedateofthevaluationmanual,the
588588 568standardprescribedinthevaluationmanualistheminimumstandardofvaluationrequired
589589 569undersubsection2ofsection376.370,exceptasprovidedundersubdivision(5)or(7)ofthis
590590 570subsection.
591591 571 (2)TheoperativedateofthevaluationmanualisJanuaryfirstofthefirstcalendar
592592 572yearfollowingthefirstJulyfirstasofwhichallofthefollowinghaveoccurred:
593593 573 (a)ThevaluationmanualhasbeenadoptedbytheNAICbyanaffirmativevoteofat
594594 574leastforty-twomembersorthree-fourthsofthemembersvoting,whicheverisgreater;
595595 575 (b)ThestandardvaluationlawasamendedbytheNAICin2009orlegislation
596596 576includingsubstantiallysimilartermsandprovisionshasbeenenactedbystatesrepresenting
597597 577greaterthanseventy-fivepercentofthedirectpremiumswrittenasreportedinthefollowing
598598 578annualstatementssubmittedfor2008:life,accident,andhealthannualstatements;health
599599 579annualstatements;orfraternalannualstatements;
600600 580 (c)ThestandardvaluationlawasamendedbytheNAICin2009orlegislation
601601 581includingsubstantiallysimilartermsandprovisionshasbeenenactedbyatleastforty-twoof
602602 582thefollowingfifty-fivejurisdictions:thefiftystatesoftheUnitedStates,AmericanSamoa,
603603 583theAmericanVirginIslands,theDistrictofColumbia,Guam,andPuertoRico;and
604604 584 (d)Thevaluationmanualbecomeseffectiveunderanorderofthedirector.
605605 585 (3)Unlessachangeinthevaluationmanualspecifiesalatereffectivedate,changesto
606606 586thevaluationmanualshallbeeffectiveonJanuaryfirstfollowingthedatewhenallofthe
607607 587followinghaveoccurred:
608608 588 (a)ThechangetothevaluationmanualhasbeenadoptedbytheNAICbyan
609609 589affirmativevoterepresenting:
610610 590 a.Atleastthree-fourthsofthemembersoftheNAICvoting,butnotlessthana
611611 591majorityofthetotalmembership;and
612612 592 b.MembersoftheNAICrepresentingjurisdictionstotalinggreaterthanseventy-five
613613 593percentofthedirectpremiumswrittenasreportedinthefollowingannualstatementsmost
614614 594recentlyavailablepriortothevoteinsubparagrapha.ofthisparagraph:life,accident,and
615615 595healthannualstatements;healthannualstatements;orfraternalannualstatements;
616616 596 (b)Thevaluationmanualbecomeseffectiveunderanorderofthedirector.
617617 597 (4)Thevaluationmanualshallspecifyallofthefollowing:
618618 598 (a)Minimumvaluationstandardsforanddefinitionsofthepoliciesorcontracts
619619 599subjecttosubsection2ofsection376.370.Suchminimumstandardsshallbe:
620620 600 a.Thecommissionersreservevaluationmethodforlifeinsurancecontracts,other
621621 601thanannuitycontracts,subjecttosubsection2ofsection376.370;
622622 602 b.Thecommissionersannuityreservevaluationmethodforannuitycontractssubject
623623 603tosubsection2ofsection376.370;and
624624 HB2145 17 604 c.Minimumreservesforallotherpoliciesandcontractssubjecttosubsection2of
625625 605section376.370;
626626 606 (b)Whichpoliciesorcontractsortypesofpoliciesorcontractsaresubjecttothe
627627 607requirementsofaprinciple-basedvaluationundersubdivision(1)ofsubsection7ofthis
628628 608sectionandtheminimumvaluationstandardsconsistentwithsuchrequirements;
629629 609 (c)Forpoliciesandcontractssubjecttoprinciple-basedvaluationundersubsection7
630630 610ofthissection:
631631 611 a.Requirementsfortheformatofreportstothedirectorunderparagraph(c)of
632632 612subdivision(2)ofsubsection7ofthissectionandwhichshallincludeinformationnecessary
633633 613todetermineifthevaluationisappropriateandincompliancewithsections376.365to
634634 614376.380;
635635 615 b.Assumptionswhichshallbeprescribedforrisksoverwhichthecompanydoesnot
636636 616havesignificantcontrolorinfluence;
637637 617 c.Proceduresforcorporategovernanceandoversightoftheactuarialfunction,anda
638638 618processforappropriatewaiverormodificationofsuchprocedures;
639639 619 (d)Forpoliciesnotsubjecttoaprinciple-basedvaluationundersubsection7ofthis
640640 620section,theminimumvaluationstandardshalleither:
641641 621 a.Beconsistentwiththeminimumstandardofvaluationpriortotheoperativedateof
642642 622thevaluationmanual;or
643643 623 b.Developreservesthatquantifythebenefitsandguarantees,andthefunding,
644644 624associatedwiththecontractsandtheirrisksatalevelofconservatismthatreflectsconditions
645645 625thatincludeunfavorableeventsthathaveareasonableprobabilityofoccurring;
646646 626 (e)Otherrequirementsincluding,butnotlimitedto,thoserelatingtoreserve
647647 627methods,modelsformeasuringrisk,generationofeconomicscenarios,assumptions,
648648 628margins,useofcompanyexperience,riskmeasurement,disclosure,certifications,reports,
649649 629actuarialopinionsandmemorandums,transitionrules,andinternalcontrols;and
650650 630 (f)Thedataandformofthedatarequiredundersubsection8ofthissection,towhom
651651 631thedatashallbesubmitted,andmayspecifyotherrequirements,includingdataanalysesand
652652 632reportingofanalyses.
653653 633 (5)Intheabsenceofaspecificvaluationrequirementorifaspecificvaluation
654654 634requirementinthevaluationmanualisnot,intheopinionofthedirector,incompliancewith
655655 635sections376.365to376.380,thecompanyshall,withrespecttosuchrequirements,comply
656656 636withminimumvaluationstandardsprescribedbythedirectorbyregulation.
657657 637 (6)Thedirectormayengageaqualifiedactuary,attheexpenseofthecompany,to
658658 638performanactuarialexaminationofthecompanyandopineontheappropriatenessofany
659659 639reserveassumptionormethodusedbythecompany,ortoreviewandopineonacompany's
660660 640compliancewithanyrequirementsetforthinsections376.365to376.380.Thedirectormay
661661 HB2145 18 641relyupontheopinionregardingprovisionscontainedinsections376.365to376.380ofa
662662 642qualifiedactuaryengagedbythedirectorofanotherstate,district,orterritoryoftheUnited
663663 643States.Asusedinthissubdivision,engageincludesemploymentandcontracting.
664664 644 (7)Thedirectormayrequireacompanytochangeanyassumptionormethodthatin
665665 645theopinionofthedirectorisnecessaryinordertocomplywiththerequirementsofthe
666666 646valuationmanualorsections376.365to376.380,andthecompanyshalladjustthereservesas
667667 647requiredbythedirector.Thedirectormaytakeotherdisciplinaryactionaspermittedunder
668668 648chapter354andchapters374to385.
669669 649 7.(1)Acompanyshallestablishreservesusingaprinciple-basedvaluationthat
670670 650meetsthefollowingconditionsforpoliciesorcontractsasspecifiedinthevaluationmanual:
671671 651 (a)Quantifythebenefitsandguarantees,andthefunding,associatedwiththe
672672 652contractsandtheirrisksatalevelofconservatismthatreflectsconditionsthatinclude
673673 653unfavorableeventsthathaveareasonableprobabilityofoccurringduringthelifetimeofthe
674674 654contracts.Forpoliciesorcontractswithsignificanttailrisk,thecompany'svaluationshall
675675 655reflectconditionsappropriatelyadversetoquantifythetailrisk;
676676 656 (b)Incorporateassumptions,riskanalysismethods,andfinancialmodelsand
677677 657managementtechniquesthatareconsistentwith,butnotnecessarilyidenticalto,those
678678 658utilizedwithinthecompany'soverallriskassessmentprocess,whilerecognizingpotential
679679 659differencesinfinancialreportingstructuresandanyprescribedassumptionsormethods;
680680 660 (c)Incorporateassumptionsthatarederivedinoneofthefollowingmanners:
681681 661 a.Theassumptionisprescribedinthevaluationmanual;or
682682 662 b.Forassumptionsthatarenotprescribed,theassumptionshall:
683683 663 (i)Beestablishedutilizingthecompany'savailableexperiencetotheextentitis
684684 664relevantandstatisticallycredible;or
685685 665 (ii)Totheextentthatcompanydataisnotavailable,relevant,orstatisticallycredible,
686686 666beestablishedutilizingotherrelevantstatisticallycredibleexperience;
687687 667 (d)Providemarginsforuncertainty,includingadversedeviationandestimationerror,
688688 668suchthatthegreatertheuncertaintythelargerthemarginandresultingreserve.
689689 669 (2)Acompanyusingaprinciple-basedvaluationforoneormorepoliciesorcontracts
690690 670subjecttothissectionasspecifiedinthevaluationmanualshall:
691691 671 (a)Establishproceduresforcorporategovernanceandoversightoftheactuarial
692692 672valuationfunctionconsistentwiththosedescribedinthevaluationmanual;
693693 673 (b)Providetothedirectoranannualcertificationoftheeffectivenessoftheinternal
694694 674controlswithrespecttotheprinciple-basedvaluation.Suchcontrolsshallbedesignedto
695695 675ensurethatallmaterialrisksinherentintheliabilitiesandassociatedassetssubjecttosuch
696696 676valuationareincludedinthevaluationandthatvaluationsaremadeinaccordancewiththe
697697 HB2145 19 677valuationmanual.Thecertificationshallbebasedonthecontrolsinplaceasoftheendofthe
698698 678precedingcalendaryear;
699699 679 (c)Develop,andfilewiththedirectoruponrequest,aprinciple-basedvaluation
700700 680reportthatcomplieswithstandardsprescribedinthevaluationmanual.
701701 681 (3)Aprinciple-basedvaluationmayincludeaprescribedformulaicreserve
702702 682component.
703703 683 8.Forpoliciesinforceonoraftertheoperativedateofthevaluationmanual,a
704704 684companyshallsubmitmortality,morbidity,policyholderbehavior,orexpenseexperienceand
705705 685otherdataasprescribedinthevaluationmanual.
706706 686 9.(1)Forpurposesofthissubsection,"confidentialinformation"means:
707707 687 (a)Amemoranduminsupportofanopinionsubmittedundersubsection4or5of
708708 688thissectionandanyotherdocuments,materials,andotherinformationincluding,butnot
709709 689limitedto,allworkingpapersandcopiesthereofcreated,produced,orobtainedbyor
710710 690disclosedtothedirectororanyotherpersoninconnectionwithsuchmemorandum;
711711 691 (b)Alldocuments,materials,andotherinformationincluding,butnotlimitedto,all
712712 692workingpapersandcopiesthereofcreated,produced,orobtainedbyordisclosedtothe
713713 693directororanyotherpersoninthecourseofanexaminationmadeundersubdivision(6)of
714714 694subsection6ofthissection;provided,however,thatifanexaminationreportorothermaterial
715715 695preparedinconnectionwithanexaminationmadeundersection374.205isnotheldasprivate
716716 696andconfidentialinformationundersection374.205,anexaminationreportorothermaterial
717717 697preparedinconnectionwithanexaminationmadeundersubdivision(6)ofsubsection6of
718718 698thissectionshallnotbeconfidentialinformationtothesameextentasifsuchexamination
719719 699reportorothermaterialhadbeenpreparedundersection374.205;
720720 700 (c)Anyreports,documents,materials,andotherinformationdevelopedbya
721721 701companyinsupportoforinconnectionwithanannualcertificationbythecompanyunder
722722 702paragraph(b)ofsubdivision(2)ofsubsection7ofthissectionevaluatingtheeffectivenessof
723723 703thecompany'sinternalcontrolswithrespecttoaprinciple-basedvaluationandanyother
724724 704documents,materials,andotherinformationincluding,butnotlimitedto,allworkingpapers
725725 705andcopiesthereofcreated,produced,orobtainedbyordisclosedtothedirectororanyother
726726 706personinconnectionwithsuchreports,documents,material,andotherinformation;
727727 707 (d)Anyprinciple-basedvaluationreportdevelopedunderparagraph(c)of
728728 708subdivision(2)ofsubsection7ofthissectionandanyotherdocuments,materials,and
729729 709otherinformationincluding,butnotlimitedto,allworkingpapersandcopiesthereofcreated,
730730 710produced,orobtainedbyordisclosedtothedirectororanyotherpersoninconnectionwith
731731 711suchreport;and
732732 712 (e)Anydocuments,materials,data,andotherinformationsubmittedbyacompany
733733 713undersubsection8ofthissection(collectively,"experiencedata")andanyotherdocuments,
734734 HB2145 20 714materials,data,andotherinformationincluding,butnotlimitedto,allworkingpapersand
735735 715copiesthereofcreatedorproducedinconnectionwithsuchexperiencedata,ineachcasethat
736736 716includeanypotentiallycompany-identifyingorpersonallyidentifiableinformation,thatis
737737 717providedtoorobtainedbythedirector(togetherwithany"experiencedata",the"experience
738738 718materials")andanyotherdocuments,materials,data,andotherinformationincluding,but
739739 719notlimitedto,allworkingpapersandcopiesthereofcreated,produced,orobtainedbyor
740740 720disclosedtothedirectororanyotherpersoninconnectionwithsuchexperiencematerials.
741741 721 (2)(a)Exceptasprovidedinthissubsection,acompany'sconfidentialinformationis
742742 722confidentialbylawandprivileged,andshallnotbesubjecttochapter610,shallnotbesubject
743743 723tosubpoena,andshallnotbesubjecttodiscoveryoradmissibleinevidenceinanyprivate
744744 724civilaction;provided,however,thatthedirectorisauthorizedtousetheconfidential
745745 725informationinthefurtheranceofanyregulatoryorlegalactionbroughtagainstthecompany
746746 726asapartofthedirector'sofficialduties.
747747 727 (b)Neitherthedirectornoranypersonwhoreceivedconfidentialinformationwhile
748748 728actingundertheauthorityofthedirectorshallbepermittedorrequiredtotestifyinany
749749 729privatecivilactionconcerninganyconfidentialinformation.
750750 730 (c)Inordertoassistintheperformanceofthedirector'sduties,thedirectormayshare
751751 731confidentialinformationwith:
752752 732 a.Otherstate,federal,andinternationalregulatoryagenciesandwiththeNAICand
753753 733itsaffiliatesandsubsidiaries;and
754754 734 b.Inthecaseofconfidentialinformationspecifiedinparagraphs(a)and(d)of
755755 735subdivision(1)ofthissubsectiononly,theActuarialBoardforCounselingandDisciplineor
756756 736itssuccessoruponrequeststatingthattheconfidentialinformationisrequiredforthepurpose
757757 737ofprofessionaldisciplinaryproceedingsandwithstate,federal,andinternationallaw
758758 738enforcementofficials.
759759 739 (d)Thesharingofconfidentialinformationdetailedinparagraph(c)ofthis
760760 740subdivisionshallbecontingentonsuchrecipientagreeingandhavingthelegalauthorityto
761761 741agreetomaintaintheconfidentialityandprivilegedstatusofsuchdocuments,materials,data,
762762 742andotherinformationinthesamemannerandtothesameextentasrequiredforthedirector.
763763 743 (e)Thedirectormayreceivedocuments,materials,data,andotherinformation,
764764 744includingotherwiseconfidentialandprivilegeddocuments,materials,data,orinformation,
765765 745fromtheNAICanditsaffiliatesandsubsidiaries,fromregulatoryorlawenforcement
766766 746officialsofotherforeignordomesticjurisdictions,andfromtheActuarialBoardfor
767767 747CounselingandDisciplineoritssuccessorandshallmaintainasconfidentialorprivileged
768768 748anydocument,material,data,orotherinformationreceivedwithnoticeortheunderstanding
769769 749thatitisconfidentialorprivilegedunderthelawsofthejurisdictionthatisthesourceofthe
770770 750document,material,orotherinformation.
771771 HB2145 21 751 (f)Thedirectormayenterintoagreementsgoverningsharinganduseofinformation
772772 752consistentwiththissubdivision.
773773 753 (g)Nowaiverofanyapplicableprivilegeorclaimofconfidentialityinthe
774774 754confidentialinformationshalloccurasaresultofdisclosuretothedirectorunderthissection
775775 755orasaresultofsharingasauthorizedinparagraph(c)ofthissubdivision.
776776 756 (h)Aprivilegeestablishedunderthelawofanystateorjurisdictionthatis
777777 757substantiallysimilartotheprivilegeestablishedunderthissubdivisionshallbeavailableand
778778 758enforcedinanyproceedingin,andinanycourtof,Missouri.
779779 759 (i)Inthissubsection,regulatoryagency,lawenforcementagency,andtheNAIC
780780 760include,butarenotlimitedto,theiremployees,agents,consultantsandcontractors.
781781 761 (3)Notwithstandingsubdivision(2)ofthissubsection,anyconfidentialinformation
782782 762specifiedinparagraphs(a)and(d)ofsubdivision(1)ofthissubsection:
783783 763 (a)Maybesubjecttosubpoenaforthepurposeofdefendinganactionseeking
784784 764damagesfromtheappointedactuarysubmittingtherelatedmemoranduminsupportofan
785785 765opinionsubmittedundersubsection4or5ofthissectionorprinciple-basedvaluationreport
786786 766developedunderparagraph(c)ofsubdivision(2)ofsubsection7ofthissectionbyreasonof
787787 767anactionrequiredbysections376.365to376.380orbyregulationspromulgatedhereunder;
788788 768 (b)Mayotherwisebereleasedbythedirectorwiththewrittenconsentofthe
789789 769company;and
790790 770 (c)Onceanyportionofamemoranduminsupportofanopinionsubmittedunder
791791 771subsection4or5ofthissectionoraprinciple-basedvaluationreportdevelopedunder
792792 772paragraph(c)ofsubdivision(2)ofsubsection7ofthissectioniscitedbythecompanyinits
793793 773marketing,orispubliclyvolunteeredtoorbeforeagovernmentalagencyotherthanastate
794794 774insurancedepartment,orisreleasedbythecompanytothenewsmedia,allportionsofsuch
795795 775memorandumorreportshallnolongerbeconfidential.
796796 776 10.Thedirectormayexemptspecificproductformsorproductlinesofadomestic
797797 777companythatislicensedanddoingbusinessonlyinMissourifromtherequirementsof
798798 778subsection6ofthissectionprovided:
799799 779 (1)Thedirectorhasissuedanexemptioninwritingtothecompanyandhasnot
800800 780subsequentlyrevokedtheexemptioninwriting;and
801801 781 (2)Thecompanycomputesreservesusingassumptionsandmethodsusedpriortothe
802802 782operativedateofthevaluationmanualinadditiontoanyrequirementsestablishedbythe
803803 783directorandpromulgatedbyregulation.
804804 784
805805 785Foranycompanygrantedanexemptionunderthissection,subsection3ofsection376.370
806806 786andsubsections1to5ofthissectionshallbeapplicable.Withrespecttoanycompany
807807 HB2145 22 787applyingthisexemption,anyreferencetosubsection6ofthissectionfoundinsubsection3of
808808 788section376.370andsubsections1to5ofthissectionshallnotbeapplicable.
809809 789 [11.(1)Acompanythathaslessthanthreehundredmilliondollarsofordinarylife
810810 790premiumandthatislicensedanddoingbusinessinMissouriandthatissubjecttothe
811811 791requirementsofsubsections6and7ofthissectionmayholdreservesbasedonthemortality
812812 792tablesandinterestratesdefinedbythevaluationmanualfornetpremiumreservesandusing
813813 793themethodologydefinedintheprovisionsofparagraphs(b)through(i)ofsubdivision(2)of
814814 794subsection1ofthissectionandsubsection3ofsection376.370astheyapplytoordinarylife
815815 795insuranceinlieuofthereservesrequiredbysubsections6and7ofthissection,providedthat:
816816 796 (a)Ifthecompanyisamemberofagroupoflifeinsurers,thegrouphascombined
817817 797ordinarylifepremiumsoflessthansixhundredmilliondollars;
818818 798 (b)Thecompanyreportedtotaladjustedcapitalofatleastfourhundredfiftypercent
819819 799ofauthorizedcontrollevelrisk-basedcapitalintherisk-basedcapitalreportfortheprior
820820 800calendaryear;
821821 801 (c)Theappointedactuaryhasprovidedanunqualifiedopiniononthereservesin
822822 802accordancewithsubsections4and5ofthissectionforthepriorcalendaryear;
823823 803 (d)Thecompanyhasprovidedacertificationbyaqualifiedactuarythatanyuniversal
824824 804lifepolicywithasecondaryguaranteeissuedaftertheoperativedateofthevaluationmanual
825825 805meetsthedefinitionofanonmaterialsecondaryguaranteeuniversallifeproductasdefinedin
826826 806thevaluationmanual.
827827 807 (2)Forpurposesofsubdivision(1)ofthissubsection,ordinarylifepremiumsare
828828 808measuredasdirectpremiumplusreinsuranceassumedfromanunaffiliatedcompany,as
829829 809reportedinthepriorcalendaryearannualstatement.
830830 810 (3)Adomesticcompanymeetingalloftheaboveconditionsmayfileastatement
831831 811priortoJulyfirstwiththedirectorcertifyingthattheseconditionsaremetforthecurrent
832832 812calendaryearbasedonpremiumsandothervaluesfromthepriorcalendaryearfinancial
833833 813statements.ThedirectormayrejectsuchstatementpriortoSeptemberfirstandrequirea
834834 814companytocomplywiththevaluationmanualrequirementsforlifeinsurancereserves.]
835835 âś”
836836 HB2145 23