SECONDREGULARSESSION
HOUSEBILLNO.2145
101STGENERALASSEMBLY
INTRODUCEDBYREPRESENTATIVEMURPHY.
4949H.01I DANARADEMANMILLER,ChiefClerk
ANACT
Torepealsection376.380,RSMo,andtoenactinlieuthereofonenewsectionrelatingtothe
legalminimumstandardforvaluationofinsurancepoliciesandcontracts.
BeitenactedbytheGeneralAssemblyofthestateofMissouri,asfollows:
SectionA.Section376.380,RSMo,isrepealedandonenewsectionenactedinlieu
2thereof,tobeknownassection376.380,toreadasfollows:
376.380.1.Thelegalminimumstandardforvaluationofpoliciesandcontractsand
2thereservestobemaintainedthereonshallbeasfollows:
3 (1)Forthosepoliciesandcontractsissuedpriortotheoperativedateprovidedin
4subsection20ofsection376.670:
5 (a)Exceptasotherwiseprovidedinsubdivision(3)ofthissubsection,thelegal
6minimumstandardforvaluationofpoliciesoflifeinsuranceorannuitycontractsissuedprior
7toApril13,1934,shallbetheActuaries'orCombinedExperienceTableofMortality,with
8interestattherateoffivepercentperannumforgroupannuitycontractsandfourpercentper
9annumforallotherpoliciesandcontracts;andforpoliciesoflifeinsuranceandannuity
10contractsissuedonandafterApril13,1934,suchminimumstandardshallbetheAmerican
11ExperienceTableofMortalitywithinterestattherateoffivepercentperannumforgroup
12annuitycontractsandthreeandone-halfpercentperannumforallotherpoliciesand
13contracts;
14 (b)Thedirectormayvarythelegalminimumstandardsofinterestandmortalityfor
15annuitycontractsandinparticularcasesofinvalidorsubstandardlivesandotherextra
16hazards,andshallhavetherightandauthoritytodesignatethelegalminimumstandardfor
17valuationoftotalandpermanentdisabilitybenefitsandadditionalaccidentaldeathbenefits;
EXPLANATION—Matterenclosedinbold-facedbrackets[thus] intheabovebillisnotenactedandis
intendedtobeomittedfromthelaw.Matterinbold-facetypeintheabovebillisproposedlanguage. 18 (c)Policiesissuedbycompaniesdoingbusinessinthisstatemayprovidefornot
19morethanoneyearpreliminaryterminsurancebyincorporatingintheprovisionsthereof,
20specifyingthepremiumconsiderationtobereceived,aclauseplainlyshowingthatthefirst
21year'sinsuranceundersuchpoliciesisterminsurance,purchasedbythewholeorapartofthe
22premiumtobereceivedduringthefirstpolicyyearandshallbevaluedaccordingly;provided,
23thatifthepremiumchargedforterminsuranceunderalimitedpaymentlifepreliminaryterm
24policyprovidingforthepaymentofallpremiumsthereoninlessthantwentyyearsfromthe
25dateofthepolicy,orunderanendowmentpreliminarytermpolicy,exceedsthatchargedfor
26lifeinsurancetwentypaymentlifepreliminarytermpoliciesofthesamecompany,thereserve
27thereonattheendofanyyear,includingthefirst,shallnotbelessthanthereserveona
28twentypaymentlifepreliminarytermpolicyissuedinthesameyearandatthesameage,
29togetherwithanamountwhichshallbeequivalenttotheaccumulationofanetlevelpremium
30sufficienttoprovideforapureendowmentattheendofthepremiumpaymentperiodequalto
31thedifferencebetweenthevalueattheendofsuchperiodofsuchtwentypaymentlife
32preliminarytermpolicyandthefullreserveatsuchtimeofsuchalimitedpaymentlifeor
33endowmentpolicy.Thepremiumpaymentperiodistheperiodduringwhichpremiumsare
34concurrentlypayableundersuchtwentypaymentlifepreliminarytermpolicyandsuch
35limitedpaymentlifeorendowmentpolicy;
36 (d)Reservesforallsuchpoliciesandcontractsmaybecalculated,attheoptionofthe
37company,accordingtoanystandardswhichproducegreateraggregatereservesforallsuch
38policiesandcontractsthantheminimumreservesrequiredbythissubdivision.Inthecaseof
39policyobligationsofaninsolventlifeinsurancecompanyassumedorreinsuredinbulkbyan
40insurancecompanyuponabasisrequiringaseparateaccountingofthebusinessandassetsof
41suchinsolventcompanyandanapplicationofanypartoftheearningstherefromupon
42obligationswhicharenotimplicitintheoriginaltermsofthepoliciesorcontractsassumedor
43reinsured,thedirector,inordertoprotectallpolicyholdersofthereinsuringcompany,
44includingtheholdersofallpoliciessoassumedorreinsured,andtosafeguardthefuture
45solvencyofsuchreinsuringcompany,shallhavetherightandauthoritytodesignatestandards
46ofvaluationforsuchreinsuredpoliciesandcontractswhichwillproducegreateraggregate
47reservesforallsuchpoliciesandcontractsthantheminimumreservesrequiredbythis
48subdivisionorthetermsandprovisionsofthepoliciesandcontractssoassumedorreinsured,
49and,insuchevent,suchreinsuringcompanyshallnot,thereafter,adoptanylowerstandards
50ofvaluationwithouttheapprovalofthedirector.
51 (2)Forthosepoliciesandcontractsissuedonoraftertheoperativedateprovidedin
52subsection20ofsection376.670:
53 (a)Exceptasotherwiseprovidedinsubdivision(3)ofthissubsectionandsubsection
542ofthissection,theminimumstandardforthevaluationofallsuchpoliciesandcontracts
HB2145 2 55shallbethecommissionersreservevaluationmethodsdefinedinparagraphs(b),(c),(d),(e),
56and(h)ofthissubdivision,threeandone-halfpercentinterestonallsuchpoliciesand
57contractsexceptthosecontractsspecifiedinsubparagraphc.ofthisparagraphwhichconsist
58ofsinglepremiumannuitycontractsandinsubparagraphd.ofthisparagraphwhichconsists
59ofgroupannuitycontractswheretheinterestrateshallbefivepercent,andexceptpolicies
60andcontracts,otherthanannuityandpureendowmentcontracts,issuedonorafterSeptember
6128,1975,wheretheinterestrateshallbefourpercentinterestforsuchpoliciesissuedpriorto
62September28,1979,andfourandone-halfpercentinterestforsuchpoliciesissuedonorafter
63September28,1979,andthefollowingtables:
64 a.Forallordinarypoliciesoflifeinsuranceissuedpriortotheoperativedateprovided
65insubsection12ofsection376.670onthestandardbasis,excludinganydisabilityand
66accidentaldeathbenefitsinsuchpolicies,theCommissioners1941StandardOrdinary
67MortalityTable,andforsuchpoliciesissuedonoraftertheoperativedateprovidedin
68subsection12ofsection376.670,andpriortotheoperativedateofsubsection14ofsection
69376.670,theCommissioners1958StandardOrdinaryMortalityTable;providedthatforany
70categoryofsuchpoliciesissuedonorafterSeptember28,1979,onfemalerisksallmodified
71netpremiumsandpresentvaluesreferredtointhissectionmaybecalculatedaccordingtoan
72agenotmorethansixyearsyoungerthantheactualageoftheinsured;andforsuchpolicies
73issuedonoraftertheoperativedateofsubsection14ofsection376.670:
74 (i)TheCommissioners1980StandardOrdinaryMortalityTable;or
75 (ii)Attheelectionofthecompanyforanyoneormorespecifiedplansoflife
76insurance,theCommissioners1980StandardOrdinaryMortalityTablewithTen-YearSelect
77MortalityFactors;or
78 (iii)Anyordinarymortalitytable,adoptedafter1980bytheNAIC,thatisapproved
79byregulationpromulgatedbythedirectorforuseindeterminingtheminimumstandardof
80valuationforsuchpolicies;
81 b.Forallindustriallifeinsurancepoliciesissuedonthestandardbasis,excludingany
82disabilityandaccidentaldeathbenefitsinsuchpolicies,the1941StandardIndustrial
83MortalityTableforsuchpoliciesissuedpriortotheoperativedateofsubsection13ofsection
84376.670andforsuchpoliciesissuedonoraftersuchoperativedate,theCommissioners1961
85StandardIndustrialMortalityTableoranyindustrialmortalitytable,adoptedafter1980by
86theNAIC,thatisapprovedbyregulationpromulgatedbythedirectorforuseindetermining
87theminimumstandardofvaluationforsuchpolicies;
88 c.Forindividualannuityandpureendowmentcontracts,excludinganydisabilityand
89accidentaldeathbenefitsinsuchpolicies,the1937StandardAnnuityMortalityTableor,at
90theoptionofthecompany,theAnnuityMortalityTablefor1949,Ultimate,orany
91modificationofeitherofthesetablesapprovedbythedirector;
HB2145 3 92 d.Forgroupannuityandpureendowmentcontracts,excludinganydisabilityand
93accidentaldeathbenefitsinsuchpolicies,theGroupAnnuityMortalityTablefor1951,any
94modificationofsuchtableapprovedbythedirector,or,attheoptionofthecompany,anyof
95thetablesormodificationsoftablesspecifiedforindividualannuityandpureendowment
96contracts;
97 e.Fortotalandpermanentdisabilitybenefitsinorsupplementarytoordinarypolicies
98orcontracts,forpoliciesorcontractsissuedonorafterJanuary1,1966,thetablesofperiod
99twodisablementratesandthe1930to1950terminationratesofthe1952disabilitystudyof
100theSocietyofActuaries,withdueregardtothetypeofbenefitoranytablesofdisablement
101ratesandterminationrates,adoptedafter1980bytheNAIC,thatareapprovedbyregulation
102promulgatedbythedirectorforuseindeterminingtheminimumstandardofvaluationfor
103suchpolicies;forpoliciesorcontractsissuedonorafterJanuary1,1961,andpriortoJanuary
1041,1966,eithersuchtablesorattheoptionofthecompany,theClass(3)DisabilityTable
105(1926);andforpoliciesissuedpriortoJanuary1,1961,theClass(3)DisabilityTable(1926).
106Anysuchtableshall,foractivelives,becombinedwithamortalitytablepermittedfor
107calculatingthereservesforlifeinsurancepolicies;
108 f.Foraccidentaldeathbenefitsinorsupplementarytopoliciesissuedonorafter
109January1,1966,the1959AccidentalDeathBenefitsTableoranyaccidentaldeathbenefits
110table,adoptedafter1980bytheNAIC,thatisapprovedbyregulationpromulgatedbythe
111directorforuseindeterminingtheminimumstandardofvaluationforsuchpolicies;for
112policiesissuedonorafterJanuary1,1961,andpriortoJanuary1,1966,eithersuchtableor,
113attheoptionofthecompany,theInter-CompanyDoubleIndemnityMortalityTable;andfor
114policiesissuedpriortoJanuary1,1961,theInter-CompanyDoubleIndemnityMortality
115Table.Eithertableshallbecombinedwithamortalitytablepermittedforcalculatingthe
116reservesforlifeinsurancepolicies;
117 g.Forgrouplifeinsurance,lifeinsuranceissuedonthesubstandardbasisandother
118specialbenefits,suchtablesasmaybeapprovedbythedirector;
119 (b)Exceptasotherwiseprovidedinparagraphs(d),(e),and(h)ofthissubdivision,
120reservesaccordingtothecommissionersreservevaluationmethod,forthelifeinsuranceand
121endowmentbenefitsofpoliciesprovidingforauniformamountofinsuranceandrequiring
122thepaymentofuniformpremiumsshallbetheexcess,ifany,ofthepresentvalue,atthedate
123ofvaluation,ofsuchfutureguaranteedbenefitsprovidedforbysuchpolicies,overthethen
124presentvalueofanyfuturemodifiednetpremiumstherefor.Themodifiednetpremiumsfor
125anysuchpolicyshallbesuchuniformpercentageoftherespectivecontractpremiumsfor
126suchbenefitsthatthepresentvalue,atthedateofissueofthepolicy,ofallsuchmodifiednet
127premiumsshallbeequaltothesumofthethenpresentvalueofsuchbenefitsprovidedforby
128thepolicyandtheexcessofa.overb.,asfollows:
HB2145 4 129 a.Anetlevelannualpremiumequaltothepresentvalue,atthedateofissue,ofsuch
130benefitsprovidedforafterthefirstpolicyyear,dividedbythepresentvalue,atthedateof
131issue,ofanannuityofoneperannumpayableonthefirstandeachsubsequentanniversaryof
132suchpolicyonwhichapremiumfallsdue;provided,however,thatsuchnetlevelannual
133premiumshallnotexceedthenetlevelannualpremiumonthenineteenyearpremiumwhole
134lifeplanforinsuranceofthesameamountatanageoneyearhigherthantheageatissueof
135suchpolicy;
136 b.Anetoneyeartermpremiumforsuchbenefitprovidedforinthefirstpolicyyear;
137provided,thatforanylifeinsurancepolicyissuedonorafterJanuary1,1986,forwhichthe
138contractpremiuminthefirstpolicyyearexceedsthatofthesecondyearandforwhichno
139comparableadditionalbenefitisprovidedinthefirstyearforsuchexcessandwhichprovides
140anendowmentbenefitoracashsurrendervalueoracombinationthereofinanamountgreater
141thansuchexcesspremium,thereserveaccordingtothecommissionersreservevaluation
142methodasofanypolicyanniversaryoccurringonorbeforetheassumedendingdatedefined
143hereinasthefirstpolicyanniversaryonwhichthesumofanyendowmentbenefitandany
144cashsurrendervaluethenavailableisgreaterthansuchexcesspremiumshall,exceptas
145otherwiseprovidedinparagraph(h)ofthissubdivision,bethegreaterofthereserveasof
146suchpolicyanniversarycalculatedasdescribedinparagraph(b)ofthissubdivisionandthe
147reserveasofsuchpolicyanniversarycalculatedasdescribedinparagraph(b)ofthis
148subdivision,butwith:
149 (i)Thevaluedefinedinsubparagrapha.ofparagraph(b)ofthissubdivisionbeing
150reducedbyfifteenpercentoftheamountofsuchexcessfirstyearpremium;
151 (ii)Allpresentvaluesofbenefitsandpremiumsbeingdeterminedwithoutreference
152topremiumsorbenefitsprovidedforbythepolicyaftertheassumedendingdate;
153 (iii)Thepolicybeingassumedtomatureonsuchdateasanendowment;and
154 (iv)Thecashsurrendervalueprovidedonsuchdatebeingconsideredasan
155endowmentbenefit.
156
157Inmakingtheabovecomparisonthemortalityandinterestbasesstatedinparagraph(a)of
158thissubdivisionandsubsection2ofthissectionshallbeused;
159 (c)Reservesaccordingtothecommissionersreservevaluationmethodfor:
160 a.Lifeinsurancepoliciesprovidingforavaryingamountofinsuranceorrequiring
161thepaymentofvaryingpremiums;
162 b.Groupannuityandpureendowmentcontractspurchasedunderaretirementplanor
163planofdeferredcompensation,establishedormaintainedbyanemployer(includinga
164partnershiporsoleproprietorship)orbyanemployeeorganization,orbyboth,otherthana
HB2145 5 165planprovidingindividualretirementaccountsorindividualretirementannuitiesunderSection
166408oftheInternalRevenueCode,asnoworhereafteramended;
167 c.Disabilityandaccidentaldeathbenefitsinallpoliciesandcontracts;and
168 d.Allotherbenefits,exceptlifeinsuranceandendowmentbenefitsinlifeinsurance
169policiesandbenefitsprovidedbyallotherannuityandpureendowmentcontracts,shallbe
170calculatedbyamethodconsistentwiththeprinciplesofparagraph(b)ofthissubdivision;
171 (d)Paragraph(e)ofthissubdivisionshallapplytoallannuityandpureendowment
172contractsotherthangroupannuityandpureendowmentcontractspurchasedundera
173retirementplanorplanofdeferredcompensation,establishedormaintainedbyanemployer
174(includingapartnershiporsoleproprietorship),orbyanemployeeorganization,orbyboth,
175otherthanaplanprovidingindividualretirementaccountsorindividualretirementannuities
176underSection408oftheInternalRevenueCode,asnoworhereafteramended;
177 (e)Reservesaccordingtothecommissionersannuityreservemethodforbenefits
178underannuityorpureendowmentcontracts,excludinganydisabilityandaccidentaldeath
179benefitsinsuchcontracts,shallbethegreatestoftherespectiveexcessesofthepresent
180values,atthedateofvaluation,ofthefutureguaranteedbenefits,includingguaranteed
181nonforfeiturebenefits,providedforbysuchcontractsattheendofeachrespectivecontract
182year,overthepresentvalue,atthedateofvaluation,ofanyfuturevaluationconsiderations
183derivedfromfuturegrossconsiderations,requiredbythetermsofsuchcontract,thatbecome
184payablepriortotheendofsuchrespectivecontractyear.Thefutureguaranteedbenefitsshall
185bedeterminedbyusingthemortalitytable,ifany,andtheinterestrate,orrates,specifiedin
186suchcontractsfordeterminingguaranteedbenefits.Thevaluationconsiderationsarethe
187portionsoftherespectivegrossconsiderationsappliedunderthetermsofsuchcontractsto
188determinenonforfeiturevalues;
189 (f)Innoeventshallacompany'saggregatereservesforalllifeinsurancepolicies,
190excludingdisabilityandaccidentaldeathbenefits,belessthantheaggregatereserves
191calculatedinaccordancewiththemethodsetforthinparagraphs(b),(c),(d),(e),(h)and(i)of
192thissubdivisionandthemortalitytableortablesandrateorratesofinterestusedin
193calculatingnonforfeiturebenefitsforsuchpolicies;
194 (g)Innoeventshalltheaggregatereservesforallpolicies,contractsandbenefitsbe
195lessthantheaggregatereservesdeterminedbythequalifiedactuarytobenecessarytorender
196theopinionrequiredbysubsections4and5ofthissection;
197 (h)Ifinanycontractyearthegrosspremiumchargedbyanylifeinsurancecompany
198onanypolicyorcontractislessthanthevaluationnetpremiumforthepolicyorcontract
199calculatedbythemethodusedincalculatingthereservethereonbutusingtheminimum
200valuationstandardsofmortalityandrateofinterest,theminimumreserverequiredforsuch
201policyorcontractshallbethegreaterofeitherthereservecalculatedaccordingtothe
HB2145 6 202mortalitytable,rateofinterest,andmethodactuallyusedforsuchpolicyorcontract,orthe
203reservecalculatedbythemethodactuallyusedforsuchpolicyorcontractbutusingthe
204minimumvaluationstandardsofmortalityandrateofinterestandreplacingthevaluationnet
205premiumbytheactualgrosspremiumineachcontractyearforwhichthevaluationnet
206premiumexceedstheactualgrosspremium.Theminimumvaluationstandardsofmortality
207andrateofinterestreferredtointhissectionarethosestandardsstatedinparagraph(a)ofthis
208subdivisionandsubsection2ofthissection;provided,thatforanylifeinsurancepolicy
209issuedonorafterJanuary1,1986,forwhichthegrosspremiuminthefirstpolicyyear
210exceedsthatofthesecondyearandforwhichnocomparableadditionalbenefitisprovidedin
211thefirstyearforsuchexcessandwhichprovidesanendowmentbenefitoracashsurrender
212valueoracombinationthereofinanamountgreaterthansuchexcesspremium,theforegoing
213provisionsofthisparagraphshallbeappliedasifthemethodactuallyusedincalculatingthe
214reserveforsuchpolicywerethemethoddescribedinparagraph(b)ofthissubdivision.The
215minimumreserveateachpolicyanniversaryofsuchapolicyshallbethegreaterofthe
216minimumreservecalculatedinaccordancewithparagraphs(b)and(c)ofthissubdivisionand
217theminimumreservecalculatedinaccordancewiththisparagraph;
218 (i)Inthecaseofanyplanoflifeinsurancewhichprovidesforfuturepremium
219determination,theamountsofwhicharetobedeterminedbytheinsurancecompanybasedon
220thenestimatesoffutureexperience,orinthecaseofanyplanoflifeinsuranceorannuity
221whichisofsuchanaturethattheminimumreservescannotbedeterminedbythemethods
222describedinparagraphs(b)to(e)ofthissubdivision,andparagraph(h)ofthissubdivision,
223thereserveswhichareheldunderanysuchplanmust:
224 a.Beappropriateinrelationtothebenefitsandthepatternofpremiumsforthatplan;
225and
226 b.Becomputedbyamethodwhichisconsistentwiththeprinciplesofthissectionas
227determinedbyregulationspromulgatedbythedirector.
228 (3)Exceptasprovidedinsubsection2ofthissection,theminimumstandardforthe
229valuationofallindividualannuityandpureendowmentcontractsissuedonorafterthe
230operativedateofthissubdivision,asdefinedherein,andforallannuitiesandpure
231endowmentspurchasedonoraftersuchoperativedateundergroupannuityandpure
232endowmentcontracts,shallbethecommissionersreservevaluationmethodsdefinedin
233paragraphs(b),(c),(d),and(e)ofsubdivision(2)ofthissubsection,andthefollowingtables
234andinterestrates:
235 (a)ForindividualannuityandpureendowmentcontractsissuedpriortoSeptember
23628,1979,excludinganydisabilityandaccidentaldeathbenefitsinsuchcontracts,the1971
237IndividualAnnuityMortalityTable,oranymodificationofthistableapprovedbythe
HB2145 7 238director,andsixpercentinterestforsinglepremiumimmediateannuitycontracts,andfour
239percentinterestforallotherindividualannuityandpureendowmentcontracts;
240 (b)Forindividualsinglepremiumimmediateannuitycontractsissuedonorafter
241September28,1979,excludinganydisabilityandaccidentaldeathbenefitsinsuchcontracts,
242the1971IndividualAnnuityMortalityTable,oranyindividualannuitymortalitytable
243adoptedafter1980bytheNAIC,thatisapprovedbyregulationpromulgatedbythedirector
244foruseindeterminingtheminimumstandardofvaluationforsuchcontracts,orany
245modificationofthesetablesapprovedbythedirector,andsevenandone-halfpercentinterest;
246 (c)Forindividualannuityandpureendowmentcontractsissuedonorafter
247September28,1979,otherthansinglepremiumimmediateannuitycontracts,excludingany
248disabilityandaccidentaldeathbenefitsinsuchcontracts,the1971IndividualAnnuity
249MortalityTable,oranyindividualannuitymortalitytableadoptedafter1980bytheNAIC,
250thatisapprovedbyregulationpromulgatedbythedirectorforuseindeterminingthe
251minimumstandardofvaluationforsuchcontracts,oranymodificationofthesetables
252approvedbythedirector,andfiveandone-halfpercentinterestforsinglepremiumdeferred
253annuityandpureendowmentcontractsandfourandone-halfpercentinterestforallother
254suchindividualannuityandpureendowmentcontracts;
255 (d)ForallannuitiesandpureendowmentspurchasedpriortoSeptember28,1979,
256undergroupannuityandpureendowmentcontracts,excludinganydisabilityandaccidental
257deathbenefitspurchasedundersuchcontracts,the1971GroupAnnuityMortalityTable,or
258anymodificationofthistableapprovedbythedirector,andsixpercentinterest;
259 (e)ForallannuitiesandpureendowmentspurchasedonorafterSeptember28,1979,
260undergroupannuityandpureendowmentcontracts,excludinganydisabilityandaccidental
261deathbenefitspurchasedundersuchcontracts,the1971GroupAnnuityMortalityTable,or
262anygroupannuitymortalitytableadoptedafter1980bytheNAIC,thatisapprovedby
263regulationpromulgatedbythedirectorforuseindeterminingtheminimumstandardof
264valuationforsuchannuitiesandpureendowments,oranymodificationofthesetables
265approvedbythedirector,andsevenandone-halfpercentinterest;
266 (f)OnandafterSeptember28,1975,anycompanymayfilewiththedirectora
267writtennoticeofitselectiontocomplywiththeprovisionsofthissubdivisionafteraspecified
268datebeforeJanuary1,1980,whichshallbetheoperativedateofthissubdivisionforsuch
269company,providedacompanymayelectadifferentoperativedateforindividualannuityand
270pureendowmentcontractsfromthatelectedforgroupannuityandpureendowmentcontracts.
271Ifacompanymakesnosuchelection,theoperativedateofthissubdivisionforsuchcompany
272shallbeJanuary1,1980.
273 2.(1)Thecalendaryearstatutoryvaluationinterestratesasdefinedinthissubsection
274shallbetheinterestratesusedindeterminingtheminimumstandardforthevaluationof:
HB2145 8 275 (a)Alllifeinsurancepoliciesissuedinaparticularcalendaryear,onorafterthe
276operativedateofsubsection14ofsection376.670;
277 (b)Allindividualannuityandpureendowmentcontractsissuedinaparticular
278calendaryearonorafterJanuary1,1983;
279 (c)Allannuitiesandpureendowmentcontractspurchasedinaparticularcalendar
280yearonorafterJanuary1,1983,undergroupannuityandpureendowmentcontracts;and
281 (d)Thenetincrease,ifany,inaparticularcalendaryearafterJanuary1,1983,in
282amountsheldunderguaranteedinterestcontracts.
283 (2)Thecalendaryearstatutoryvaluationinterestrates,I,shallbedeterminedas
284followsandtheresultsroundedtothenearerone-quarterofonepercent:
285 (a)Forlifeinsurance:
286 I=.03+W(R
1
-.03)+W/2(R
2
-.09);
287 (b)Forsinglepremiumimmediateannuitiesandforannuitybenefitsinvolvinglife
288contingenciesarisingfromotherannuitieswithcashsettlementoptionsandfromguaranteed
289interestcontractswithcashsettlementoptions:
290 I=.03+W(R-.03),whereR
1
isthelesserofRand.09;R
2
isthegreaterofRand.09;
291Risthereferenceinterestratedefinedinthissubsection;andWistheweightingfactor
292definedinthissubsection;
293 (c)Forotherannuitieswithcashsettlementoptionsandguaranteedinterestcontracts
294withcashsettlementoptions,valuedonanissueyearbasis,exceptasstatedinparagraph(b)
295ofthissubdivision,theformulaforlifeinsurancestatedinparagraph(a)ofthissubdivision
296shallapplytoannuitiesandguaranteedinterestcontractswithguaranteedurationsinexcess
297oftenyearsandtheformulaforsinglepremiumimmediateannuitiesstatedinparagraph(b)
298ofthissubdivisionshallapplytoannuitiesandguaranteedinterestcontractswithguarantee
299durationsoftenyearsorless;
300 (d)Forotherannuitieswithnocashsettlementoptionsandforguaranteedinterest
301contractswithnocashsettlementoptions,theformulaforsinglepremiumimmediate
302annuitiesstatedinparagraph(b)ofthissubdivisionshallapply;
303 (e)Forotherannuitieswithcashsettlementoptionsandguaranteedinterestcontracts
304withcashsettlementoptions,valuedonachangeinfundbasis,theformulaforsingle
305premiumimmediateannuitiesstatedinparagraph(b)ofthissubdivisionshallapply.Ifthe
306calendaryearstatutoryvaluationinterestrateforanylifeinsurancepoliciesissuedinany
307calendaryeardeterminedwithoutreferencetothissentencediffersfromthecorresponding
308actualrateforsimilarpoliciesissuedintheimmediatelyprecedingcalendaryearbylessthan
309one-halfofonepercent,thecalendaryearstatutoryvaluationinterestrateforsuchlife
310insurancepoliciesshallbeequaltothecorrespondingactualratefortheimmediately
311precedingcalendaryear.Forpurposesofapplyingtheimmediatelyprecedingsentence,the
HB2145 9 312calendaryearstatutoryvaluationinterestrateforlifeinsurancepoliciesissuedinacalendar
313yearshallbedeterminedfor1980(usingthereferenceinterestratedefinedfor1979)andshall
314bedeterminedforeachsubsequentcalendaryearregardlessofwhensubsection14ofsection
315376.670becomesoperative.
316 (3)Theweightingfactorsreferredtointheformulasstatedinsubdivision(2)ofthis
317subsectionaregiveninthefollowingtables:
318 (a)Weightingfactorsforlifeinsurance:
319 Guarantee Weighting
320 Duration Factors
321 (Years)
322 10orless .50
323 Morethan10,butnotmorethan20 .45
324 Morethan20 .35
325
326Forlifeinsurance,theguaranteedurationisthemaximumnumberofyearsthelifeinsurance
327canremaininforceonabasisguaranteedinthepolicyorunderoptionstoconverttoplansof
328lifeinsurancewithpremiumratesornonforfeiturevaluesorbothwhichareguaranteedinthe
329originalpolicy;
330 (b)Weightingfactorforsinglepremiumimmediateannuitiesandforannuitybenefits
331involvinglifecontingenciesarisingfromotherannuitieswithcashsettlementoptionsand
332guaranteedinterestcontractswithcashsettlementoptions:.80;
333 (c)Weightingfactorsforotherannuitiesandforguaranteedinterestcontracts,except
334asstatedinparagraph(b)ofthissubdivision,shallbeasspecifiedinsubparagraphsa.,b.,and
335c.ofthisparagraph,accordingtotherulesanddefinitionsinsubparagraphsd.,e.,andf.of
336thisparagraph:
337 a.Forannuitiesandguaranteedinterestcontractsvaluedonanissueyearbasis:
338 Guarantee WeightingFactor
339 Duration forPlanType
340 (Years) A B C
341 5orless: .80.60.50
342 Morethan5,butnotmorethan10: .75.60.50
343 Morethan10,butnotmorethan20: .65.50.45
344 Morethan20: .45.35.35
345 b.Forannuitiesandguaranteedinterestcontractsvaluedonachangeinfundbasis,
346thefactorsshowninsubparagrapha.ofthisparagraphincreasedby:
347 PlanType
HB2145 10 348 ABC
349 .15.25.05
350 c.Forannuitiesandguaranteedinterestcontractsvaluedonanissueyearbasis(other
351thanthosewithnocashsettlementoptions)whichdonotguaranteeinterestonconsiderations
352receivedmorethanoneyearafterissueorpurchaseandforannuitiesandguaranteedinterest
353contractsvaluedonachangeinfundbasiswhichdonotguaranteeinterestrateson
354considerationsreceivedmorethantwelvemonthsbeyondthevaluationdate,thefactors
355showninsubparagrapha.ofthisparagraphorderivedinsubparagraphb.ofthisparagraph
356increasedby:
357 PlanType
358 ABC
359 .05.05.05
360 d.Forotherannuitieswithcashsettlementoptionsandguaranteedinterestcontracts
361withcashsettlementoptions,theguaranteedurationisthenumberofyearsforwhichthe
362contractguaranteesinterestratesinexcessofthecalendaryearstatutoryvaluationinterest
363rateforlifeinsurancepolicieswithguaranteedurationinexcessoftwentyyears.Forother
364annuitieswithnocashsettlementoptionsandforguaranteedinterestcontractswithnocash
365settlementoptions,theguaranteedurationisthenumberofyearsfromthedateofissueor
366dateofpurchasetothedateannuitybenefitsarescheduledtocommence;
367 e.Plantypeasusedinsubparagraphsa.,b.,andc.ofthisparagraphisdefinedas
368follows:
369 PlanTypeA:Atanytimepolicyholdermaywithdrawfundsonlywithanadjustment
370toreflectchangesininterestratesorassetvaluessincereceiptofthefundsbytheinsurance
371company,orwithoutsuchadjustmentbutininstallmentsoverfiveyearsormore,orasan
372immediatelifeannuity,ornowithdrawalpermitted;
373 PlanTypeB:Beforeexpirationoftheinterestrateguarantee,policyholdermay
374withdrawfundsonlywithanadjustmenttoreflectchangesininterestratesorassetvalues
375sincereceiptofthefundsbytheinsurancecompany,orwithoutsuchadjustmentbutin
376installmentsoverfiveyearsormore,ornowithdrawalpermitted.Attheendofinterestrate
377guarantee,fundsmaybewithdrawnwithoutsuchadjustmentinasinglesumorinstallments
378overfewerthanfiveyears;
379 PlanTypeC:Policyholdermaywithdrawfundsbeforeexpirationofinterestrate
380guaranteeinasinglesumorinstallmentsoverfewerthanfiveyearseitherwithoutadjustment
381toreflectchangesininterestratesorassetvaluessincereceiptofthefundsbytheinsurance
382company,orsubjectonlytoafixedsurrenderchargestipulatedinthecontractasapercentage
383ofthefund;
HB2145 11 384 f.Acompanymayelecttovalueguaranteedinterestcontractswithcashsettlement
385optionsandannuitieswithcashsettlementoptionsoneitheranissueyearbasisoronachange
386infundbasis.Guaranteedinterestcontractswithnocashsettlementoptionsandother
387annuitieswithnocashsettlementoptionsmustbevaluedonanissueyearbasis.Asusedin
388thissubsectionanissueyearbasisofvaluationreferstoavaluationbasisunderwhichthe
389interestrateusedtodeterminetheminimumvaluationstandardfortheentiredurationofthe
390annuityorguaranteedinterestcontractisthecalendaryearvaluationinterestratefortheyear
391ofissueoryearofpurchaseoftheannuityorguaranteedinterestcontract,andthechangein
392fundbasisofvaluationreferstoavaluationbasisunderwhichtheinterestrateusedto
393determinetheminimumvaluationstandardapplicabletoeachchangeinthefundheldunder
394theannuityorguaranteedinterestcontractisthecalendaryearvaluationinterestrateforthe
395yearofthechangeinthefund.
396 (4)The"referenceinterestrate"referredtoinsubdivision(2)ofthissubsectionshall
397bedefinedasfollows:
398 (a)Foralllifeinsurance,thelesseroftheaverageoveraperiodofthirty-sixmonths
399andtheaverageoveraperiodoftwelvemonths,endingonJunethirtiethofthecalendaryear
400nextprecedingtheyearofissue,oftheMonthlyAverageoftheCompositeYieldonSeasoned
401CorporateBonds,aspublishedbyMoody'sInvestorsService,Inc.;
402 (b)Forsinglepremiumimmediateannuitiesandforannuitybenefitsinvolvinglife
403contingenciesarisingfromotherannuitieswithcashsettlementoptionsandguaranteed
404interestcontractswithcashsettlementoptions,theaverageoveraperiodoftwelvemonths,
405endingonJunethirtiethofthecalendaryearofissueorpurchase,oftheMonthlyAverageof
406theCompositeYieldonSeasonedCorporateBonds,aspublishedbyMoody'sInvestors
407Service,Inc.;
408 (c)Forotherannuitieswithcashsettlementoptionsandguaranteedinterestcontracts
409withcashsettlementoptions,valuedonayearofissuebasis,exceptasstatedinparagraph(b)
410ofthissubdivision,withguaranteedurationinexcessoftenyears,thelesseroftheaverage
411overaperiodofthirty-sixmonthsandtheaverageoveraperiodoftwelvemonths,endingon
412Junethirtiethofthecalendaryearofissueorpurchase,oftheMonthlyAverageofthe
413CompositeYieldonSeasonedCorporateBonds,aspublishedbyMoody'sInvestorsService,
414Inc.;
415 (d)Forotherannuitieswithcashsettlementoptionsandguaranteedinterestcontracts
416withcashsettlementoptions,valuedonayearofissuebasis,exceptasstatedinparagraph(b)
417ofthissubdivision,withguaranteedurationoftenyearsorless,theaverageoveraperiodof
418twelvemonths,endingonJunethirtiethofthecalendaryearofissueorpurchase,ofthe
419MonthlyAverageoftheCompositeYieldonSeasonedCorporateBonds,aspublishedby
420Moody'sInvestorsService,Inc.;
HB2145 12 421 (e)Forotherannuitieswithnocashsettlementoptionsandforguaranteedinterest
422contractswithnocashsettlementoptions,theaverageoveraperiodoftwelvemonths,ending
423onJunethirtiethofthecalendaryearofissueorpurchase,oftheMonthlyAverageofthe
424CompositeYieldonSeasonedCorporateBonds,aspublishedbyMoody'sInvestorsService,
425Inc.;
426 (f)Forotherannuitieswithcashsettlementoptionsandguaranteedinterestcontracts
427withcashsettlementoptions,valuedonachangeinfundbasis,exceptasstatedinparagraph
428(b)ofthissubdivision,theaverageoveraperiodoftwelvemonths,endingonJunethirtiethof
429thecalendaryearofthechangeinthefund,oftheMonthlyAverageoftheCompositeYield
430onSeasonedCorporateBonds,aspublishedbyMoody'sInvestorsService,Inc.
431 (5)IntheeventthattheMonthlyAverageoftheCompositeYieldonSeasoned
432CorporateBondsisnolongerpublishedbyMoody'sInvestorsService,Inc.,orintheevent
433thattheNAICdeterminesthattheMonthlyAverageoftheCompositeYieldonSeasoned
434CorporateBondsaspublishedbyMoody'sInvestorsService,Inc.,isnolongerappropriatefor
435thedeterminationofthereferenceinterestrate,thenanalternativemethodfordetermination
436ofthereferenceinterestrate,whichisadoptedbytheNAICandapprovedbyregulation
437promulgatedbythedirector,maybesubstituted.
438 3.Foraccidentandhealthinsurancecontractsissuedonoraftertheoperativedateof
439thevaluationmanual,thestandardprescribedinthevaluationmanualistheminimum
440standardofvaluationrequiredundersubsection2ofsection376.370.Fordisability,accident
441andsickness,andaccidentandhealthinsurancecontractsissuedonoraftertheoperativedate
442providedinsubsection20ofsection376.670andpriortotheoperativedateofthevaluation
443manual,theminimumstandardofvaluationisthestandardadoptedbythedirectorby
444regulation.
445 4.(1)Thissubsectionshallapplytoactuarialopinionsofreservespriortothedateof
446thevaluationmanual.
447 (2)Everylifeinsurancecompanydoingbusinessinthisstateshallannuallysubmit
448theopinionofaqualifiedactuaryastowhetherthereservesandrelatedactuarialitemsheldin
449supportofthepoliciesandcontractsspecifiedbythedirectorbyregulationarecomputed
450appropriately,arebasedonassumptionswhichsatisfycontractualprovisions,areconsistent
451withpriorreportedamountsandcomplywithapplicablelawsofthisstate.Thedirectorby
452regulationshalldefinethespecificsofthisopinionandaddanyotheritemsdeemedtobe
453necessarytoitsscope.
454 (3)(a)Everylifeinsurancecompany,exceptasexemptedbyorpursuantto
455regulation,shallalsoannuallyincludeintheopinionrequiredbysubdivision(2)ofthis
456subsection,anopinionofthesamequalifiedactuaryastowhetherthereservesandrelated
457actuarialitemsheldinsupportofthepoliciesandcontractsspecifiedbythedirectorby
HB2145 13 458regulation,whenconsideredinlightoftheassetsheldbythecompanywithrespecttothe
459reservesandrelatedactuarialitems,includingbutnotlimitedtotheinvestmentearningson
460theassetsandtheconsiderationsanticipatedtobereceivedandretainedunderthepoliciesand
461contracts,makeadequateprovisionforthecompany'sobligationsunderthepoliciesand
462contracts,includingbutnotlimitedtothebenefitsunderandexpensesassociatedwiththe
463policiesandcontracts.
464 (b)Thedirectormayprovidebyregulationforatransitionperiodforestablishingany
465higherreserveswhichthequalifiedactuarymaydeemnecessaryinordertorenderthe
466opinionrequiredbythissubsection.
467 (4)Eachopinionrequiredbysubdivision(3)ofthissubsectionshallbegovernedby
468thefollowingprovisions:
469 (a)Amemorandum,informandsubstanceacceptabletothedirectorasspecifiedby
470regulation,shallbepreparedtosupporteachactuarialopinion;and
471 (b)Iftheinsurancecompanyfailstoprovideasupportingmemorandumattherequest
472ofthedirectorwithinaperiodspecifiedbyregulationorthedirectordeterminesthatthe
473supportingmemorandumprovidedbytheinsurancecompanyfailstomeetthestandards
474prescribedbytheregulationsorisotherwiseunacceptabletothedirector,thedirectormay
475engageaqualifiedactuaryattheexpenseofthecompanytoreviewtheopinionandthebasis
476fortheopinionandpreparesuchsupportingmemorandumasisrequiredbythedirector.
477 (5)Everyopinionrequiredbythissubsectionshallbegovernedbythefollowing
478provisions:
479 (a)Theopinionshallbesubmittedwiththeannualstatementreflectingthevaluation
480ofsuchreserveliabilitiesforeachyearendingonorafterDecember31,1993;
481 (b)Theopinionshallapplytoallbusinessinforceincludingindividualandgroup
482healthinsuranceplans,informandsubstanceacceptabletothedirectorasspecifiedby
483regulation;
484 (c)Theopinionshallbebasedonstandardsadoptedfromtimetotimebythe
485ActuarialStandardsBoardandonsuchadditionalstandardsasthedirectormaybyregulation
486prescribe;
487 (d)Inthecaseofanopinionrequiredtobesubmittedbyaforeignoraliencompany,
488thedirectormayaccepttheopinionfiledbythatcompanywiththeinsurancesupervisory
489officialofanotherstateifthedirectordeterminesthattheopinionreasonablymeetsthe
490requirementsapplicabletoacompanydomiciledinthisstate;
491 (e)Forthepurposesofthissection,"qualifiedactuary"meansamemberingood
492standingoftheAmericanAcademyofActuarieswhomeetstherequirementssetforthinsuch
493regulations;
HB2145 14 494 (f)Exceptincasesoffraudorwillfulmisconduct,thequalifiedactuaryshallnotbe
495liablefordamagestoanyperson,otherthantheinsurancecompanyandthedirector,forany
496act,error,omission,decisionorconductwithrespecttotheactuary'sopinion;
497 (g)Disciplinaryactionbythedirectoragainstthecompanyorthequalifiedactuary
498shallbedefinedinregulationsbythedirector;and
499 (h)Anymemoranduminsupportoftheopinion,andanyothermaterialprovidedby
500thecompanytothedirectorinconnectiontherewith,shallbekeptconfidentialbythedirector
501andshallnotbemadepublicandshallnotbesubjecttosubpoena,otherthanforthepurpose
502ofdefendinganactionseekingdamagesfromanypersonbyreasonofanyactionrequiredby
503thissectionorbyregulationspromulgatedhereunder;exceptthatthememorandumorother
504materialmayotherwisebereleasedbythedirector:
505 a.Withthewrittenconsentofthecompany;or
506 b.TotheAmericanAcademyofActuariesuponrequeststatingthatthememorandum
507orothermaterialisrequiredforthepurposeofprofessionaldisciplinaryproceedingsand
508settingforthproceduressatisfactorytothedirectorforpreservingtheconfidentialityofthe
509memorandumorothermaterial.
510
511Onceanyportionoftheconfidentialmemorandumiscitedbythecompanyinitsmarketingor
512iscitedbeforeanygovernmentalagencyotherthanastateinsurancedepartmentorisreleased
513bythecompanytothenewsmedia,allportionsoftheconfidentialmemorandumshallbeno
514longerconfidential.
515 5.(1)Thissubsectionshallapplytoactuarialopinionsofreservesaftertheoperative
516dateofthevaluationmanual.
517 (2)Everycompanywithoutstandinglifeinsurancecontracts,accidentandhealth
518insurancecontracts,ordeposit-typecontractsinMissouriandsubjecttoregulationbythe
519directorshallannuallysubmittheopinionoftheappointedactuaryastowhetherthereserves
520andrelatedactuarialitemsheldinsupportofthepoliciesandcontractsarecomputed
521appropriately,arebasedonassumptionsthatsatisfycontractualprovisions,areconsistentwith
522priorreportedamounts,andcomplywithapplicableMissourilaw.Thevaluationmanual
523shallprescribethespecificsofsuchopinion,includinganyitemsdeemedtobenecessaryto
524itsscope.
525 (3)Everycompanywithoutstandinglifeinsurancecontracts,accidentandhealth
526insurancecontracts,ordeposit-typecontractsinMissouriandsubjecttoregulationbythe
527director,exceptasexemptedinthevaluationmanual,shallalsoannuallyincludeinthe
528opinionrequiredundersubdivision(2)ofthissubsectionanopinionofthesameappointed
529actuaryastowhetherthereservesandrelatedactuarialitemsheldinsupportofthepolicies
530andcontractsspecifiedinthevaluationmanual,whenconsideredinlightoftheassetsheldby
HB2145 15 531thecompanywithrespecttothereservesandrelatedactuarialitemsincluding,butnotlimited
532to,theinvestmentearningsontheassetsandtheconsiderationsanticipatedtobereceivedand
533retainedunderthepoliciesandcontracts,makeadequateprovisionforthecompany's
534obligationsunderthepoliciesandcontractsincluding,butnotlimitedto,benefitsunderand
535expensesassociatedwiththepoliciesandcontracts.
536 (4)Eachopinionrequiredbysubdivision(3)ofthissubsectionshallbegovernedby
537thefollowingprovisions:
538 (a)Amemorandum,informandsubstanceasspecifiedinthevaluationmanualand
539acceptabletothedirector,shallbepreparedtosupporteachactuarialopinion;and
540 (b)Iftheinsurancecompanyfailstoprovideasupportingmemorandumattherequest
541ofthedirectorwithinaperiodspecifiedinthevaluationmanualorthedirectordetermines
542thatthesupportingmemorandumprovidedbytheinsurancecompanyfailstomeetthe
543standardsprescribedbythevaluationmanualorisotherwiseunacceptabletothedirector,the
544directormayengageaqualifiedactuaryattheexpenseofthecompanytoreviewtheopinion
545andthebasisfortheopinionandpreparethesupportingmemorandumrequiredbythe
546director.
547 (5)Everyopinionrequiredbythissubsectionshallbegovernedbythefollowing:
548 (a)Theopinionshallbeinformandsubstanceasspecifiedinthevaluationmanual
549andacceptabletothedirector;
550 (b)Theopinionshallbesubmittedwiththeannualstatementreflectingthevaluation
551ofsuchreserveliabilitiesforeachyearendingonoraftertheoperativedateofthevaluation
552manual;
553 (c)Theopinionshallapplytoallpoliciesandcontractssubjecttosubdivision(3)of
554thissubsection,plusotheractuarialliabilitiesasmaybespecifiedinthevaluationmanual;
555 (d)Theopinionshallbebasedonstandardsadoptedfromtimetotimebythe
556ActuarialStandardsBoardoritssuccessor,andonsuchadditionalstandardsasmaybe
557prescribedinthevaluationmanual;
558 (e)Inthecaseofanopinionrequiredtobesubmittedbyaforeignoraliencompany,
559thedirectormayaccepttheopinionfiledbysuchcompanywiththeinsurancesupervisory
560officialofanotherstateifthedirectordeterminesthattheopinionreasonablymeetsthe
561requirementsapplicabletoacompanydomiciledinMissouri;
562 (f)Exceptincasesoffraudorwillfulmisconduct,theappointedactuaryshallnotbe
563liablefordamagestoanyperson,otherthantheinsurancecompanyandthedirector,forany
564act,error,omission,decision,orconductwithrespecttotheappointedactuary'sopinion;and
565 (g)Disciplinaryactionbythedirectoragainstthecompanyortheappointedactuary
566shallbedefinedinregulationsbythedirector.
HB2145 16 567 6.(1)Forpoliciesissuedonoraftertheoperativedateofthevaluationmanual,the
568standardprescribedinthevaluationmanualistheminimumstandardofvaluationrequired
569undersubsection2ofsection376.370,exceptasprovidedundersubdivision(5)or(7)ofthis
570subsection.
571 (2)TheoperativedateofthevaluationmanualisJanuaryfirstofthefirstcalendar
572yearfollowingthefirstJulyfirstasofwhichallofthefollowinghaveoccurred:
573 (a)ThevaluationmanualhasbeenadoptedbytheNAICbyanaffirmativevoteofat
574leastforty-twomembersorthree-fourthsofthemembersvoting,whicheverisgreater;
575 (b)ThestandardvaluationlawasamendedbytheNAICin2009orlegislation
576includingsubstantiallysimilartermsandprovisionshasbeenenactedbystatesrepresenting
577greaterthanseventy-fivepercentofthedirectpremiumswrittenasreportedinthefollowing
578annualstatementssubmittedfor2008:life,accident,andhealthannualstatements;health
579annualstatements;orfraternalannualstatements;
580 (c)ThestandardvaluationlawasamendedbytheNAICin2009orlegislation
581includingsubstantiallysimilartermsandprovisionshasbeenenactedbyatleastforty-twoof
582thefollowingfifty-fivejurisdictions:thefiftystatesoftheUnitedStates,AmericanSamoa,
583theAmericanVirginIslands,theDistrictofColumbia,Guam,andPuertoRico;and
584 (d)Thevaluationmanualbecomeseffectiveunderanorderofthedirector.
585 (3)Unlessachangeinthevaluationmanualspecifiesalatereffectivedate,changesto
586thevaluationmanualshallbeeffectiveonJanuaryfirstfollowingthedatewhenallofthe
587followinghaveoccurred:
588 (a)ThechangetothevaluationmanualhasbeenadoptedbytheNAICbyan
589affirmativevoterepresenting:
590 a.Atleastthree-fourthsofthemembersoftheNAICvoting,butnotlessthana
591majorityofthetotalmembership;and
592 b.MembersoftheNAICrepresentingjurisdictionstotalinggreaterthanseventy-five
593percentofthedirectpremiumswrittenasreportedinthefollowingannualstatementsmost
594recentlyavailablepriortothevoteinsubparagrapha.ofthisparagraph:life,accident,and
595healthannualstatements;healthannualstatements;orfraternalannualstatements;
596 (b)Thevaluationmanualbecomeseffectiveunderanorderofthedirector.
597 (4)Thevaluationmanualshallspecifyallofthefollowing:
598 (a)Minimumvaluationstandardsforanddefinitionsofthepoliciesorcontracts
599subjecttosubsection2ofsection376.370.Suchminimumstandardsshallbe:
600 a.Thecommissionersreservevaluationmethodforlifeinsurancecontracts,other
601thanannuitycontracts,subjecttosubsection2ofsection376.370;
602 b.Thecommissionersannuityreservevaluationmethodforannuitycontractssubject
603tosubsection2ofsection376.370;and
HB2145 17 604 c.Minimumreservesforallotherpoliciesandcontractssubjecttosubsection2of
605section376.370;
606 (b)Whichpoliciesorcontractsortypesofpoliciesorcontractsaresubjecttothe
607requirementsofaprinciple-basedvaluationundersubdivision(1)ofsubsection7ofthis
608sectionandtheminimumvaluationstandardsconsistentwithsuchrequirements;
609 (c)Forpoliciesandcontractssubjecttoprinciple-basedvaluationundersubsection7
610ofthissection:
611 a.Requirementsfortheformatofreportstothedirectorunderparagraph(c)of
612subdivision(2)ofsubsection7ofthissectionandwhichshallincludeinformationnecessary
613todetermineifthevaluationisappropriateandincompliancewithsections376.365to
614376.380;
615 b.Assumptionswhichshallbeprescribedforrisksoverwhichthecompanydoesnot
616havesignificantcontrolorinfluence;
617 c.Proceduresforcorporategovernanceandoversightoftheactuarialfunction,anda
618processforappropriatewaiverormodificationofsuchprocedures;
619 (d)Forpoliciesnotsubjecttoaprinciple-basedvaluationundersubsection7ofthis
620section,theminimumvaluationstandardshalleither:
621 a.Beconsistentwiththeminimumstandardofvaluationpriortotheoperativedateof
622thevaluationmanual;or
623 b.Developreservesthatquantifythebenefitsandguarantees,andthefunding,
624associatedwiththecontractsandtheirrisksatalevelofconservatismthatreflectsconditions
625thatincludeunfavorableeventsthathaveareasonableprobabilityofoccurring;
626 (e)Otherrequirementsincluding,butnotlimitedto,thoserelatingtoreserve
627methods,modelsformeasuringrisk,generationofeconomicscenarios,assumptions,
628margins,useofcompanyexperience,riskmeasurement,disclosure,certifications,reports,
629actuarialopinionsandmemorandums,transitionrules,andinternalcontrols;and
630 (f)Thedataandformofthedatarequiredundersubsection8ofthissection,towhom
631thedatashallbesubmitted,andmayspecifyotherrequirements,includingdataanalysesand
632reportingofanalyses.
633 (5)Intheabsenceofaspecificvaluationrequirementorifaspecificvaluation
634requirementinthevaluationmanualisnot,intheopinionofthedirector,incompliancewith
635sections376.365to376.380,thecompanyshall,withrespecttosuchrequirements,comply
636withminimumvaluationstandardsprescribedbythedirectorbyregulation.
637 (6)Thedirectormayengageaqualifiedactuary,attheexpenseofthecompany,to
638performanactuarialexaminationofthecompanyandopineontheappropriatenessofany
639reserveassumptionormethodusedbythecompany,ortoreviewandopineonacompany's
640compliancewithanyrequirementsetforthinsections376.365to376.380.Thedirectormay
HB2145 18 641relyupontheopinionregardingprovisionscontainedinsections376.365to376.380ofa
642qualifiedactuaryengagedbythedirectorofanotherstate,district,orterritoryoftheUnited
643States.Asusedinthissubdivision,engageincludesemploymentandcontracting.
644 (7)Thedirectormayrequireacompanytochangeanyassumptionormethodthatin
645theopinionofthedirectorisnecessaryinordertocomplywiththerequirementsofthe
646valuationmanualorsections376.365to376.380,andthecompanyshalladjustthereservesas
647requiredbythedirector.Thedirectormaytakeotherdisciplinaryactionaspermittedunder
648chapter354andchapters374to385.
649 7.(1)Acompanyshallestablishreservesusingaprinciple-basedvaluationthat
650meetsthefollowingconditionsforpoliciesorcontractsasspecifiedinthevaluationmanual:
651 (a)Quantifythebenefitsandguarantees,andthefunding,associatedwiththe
652contractsandtheirrisksatalevelofconservatismthatreflectsconditionsthatinclude
653unfavorableeventsthathaveareasonableprobabilityofoccurringduringthelifetimeofthe
654contracts.Forpoliciesorcontractswithsignificanttailrisk,thecompany'svaluationshall
655reflectconditionsappropriatelyadversetoquantifythetailrisk;
656 (b)Incorporateassumptions,riskanalysismethods,andfinancialmodelsand
657managementtechniquesthatareconsistentwith,butnotnecessarilyidenticalto,those
658utilizedwithinthecompany'soverallriskassessmentprocess,whilerecognizingpotential
659differencesinfinancialreportingstructuresandanyprescribedassumptionsormethods;
660 (c)Incorporateassumptionsthatarederivedinoneofthefollowingmanners:
661 a.Theassumptionisprescribedinthevaluationmanual;or
662 b.Forassumptionsthatarenotprescribed,theassumptionshall:
663 (i)Beestablishedutilizingthecompany'savailableexperiencetotheextentitis
664relevantandstatisticallycredible;or
665 (ii)Totheextentthatcompanydataisnotavailable,relevant,orstatisticallycredible,
666beestablishedutilizingotherrelevantstatisticallycredibleexperience;
667 (d)Providemarginsforuncertainty,includingadversedeviationandestimationerror,
668suchthatthegreatertheuncertaintythelargerthemarginandresultingreserve.
669 (2)Acompanyusingaprinciple-basedvaluationforoneormorepoliciesorcontracts
670subjecttothissectionasspecifiedinthevaluationmanualshall:
671 (a)Establishproceduresforcorporategovernanceandoversightoftheactuarial
672valuationfunctionconsistentwiththosedescribedinthevaluationmanual;
673 (b)Providetothedirectoranannualcertificationoftheeffectivenessoftheinternal
674controlswithrespecttotheprinciple-basedvaluation.Suchcontrolsshallbedesignedto
675ensurethatallmaterialrisksinherentintheliabilitiesandassociatedassetssubjecttosuch
676valuationareincludedinthevaluationandthatvaluationsaremadeinaccordancewiththe
HB2145 19 677valuationmanual.Thecertificationshallbebasedonthecontrolsinplaceasoftheendofthe
678precedingcalendaryear;
679 (c)Develop,andfilewiththedirectoruponrequest,aprinciple-basedvaluation
680reportthatcomplieswithstandardsprescribedinthevaluationmanual.
681 (3)Aprinciple-basedvaluationmayincludeaprescribedformulaicreserve
682component.
683 8.Forpoliciesinforceonoraftertheoperativedateofthevaluationmanual,a
684companyshallsubmitmortality,morbidity,policyholderbehavior,orexpenseexperienceand
685otherdataasprescribedinthevaluationmanual.
686 9.(1)Forpurposesofthissubsection,"confidentialinformation"means:
687 (a)Amemoranduminsupportofanopinionsubmittedundersubsection4or5of
688thissectionandanyotherdocuments,materials,andotherinformationincluding,butnot
689limitedto,allworkingpapersandcopiesthereofcreated,produced,orobtainedbyor
690disclosedtothedirectororanyotherpersoninconnectionwithsuchmemorandum;
691 (b)Alldocuments,materials,andotherinformationincluding,butnotlimitedto,all
692workingpapersandcopiesthereofcreated,produced,orobtainedbyordisclosedtothe
693directororanyotherpersoninthecourseofanexaminationmadeundersubdivision(6)of
694subsection6ofthissection;provided,however,thatifanexaminationreportorothermaterial
695preparedinconnectionwithanexaminationmadeundersection374.205isnotheldasprivate
696andconfidentialinformationundersection374.205,anexaminationreportorothermaterial
697preparedinconnectionwithanexaminationmadeundersubdivision(6)ofsubsection6of
698thissectionshallnotbeconfidentialinformationtothesameextentasifsuchexamination
699reportorothermaterialhadbeenpreparedundersection374.205;
700 (c)Anyreports,documents,materials,andotherinformationdevelopedbya
701companyinsupportoforinconnectionwithanannualcertificationbythecompanyunder
702paragraph(b)ofsubdivision(2)ofsubsection7ofthissectionevaluatingtheeffectivenessof
703thecompany'sinternalcontrolswithrespecttoaprinciple-basedvaluationandanyother
704documents,materials,andotherinformationincluding,butnotlimitedto,allworkingpapers
705andcopiesthereofcreated,produced,orobtainedbyordisclosedtothedirectororanyother
706personinconnectionwithsuchreports,documents,material,andotherinformation;
707 (d)Anyprinciple-basedvaluationreportdevelopedunderparagraph(c)of
708subdivision(2)ofsubsection7ofthissectionandanyotherdocuments,materials,and
709otherinformationincluding,butnotlimitedto,allworkingpapersandcopiesthereofcreated,
710produced,orobtainedbyordisclosedtothedirectororanyotherpersoninconnectionwith
711suchreport;and
712 (e)Anydocuments,materials,data,andotherinformationsubmittedbyacompany
713undersubsection8ofthissection(collectively,"experiencedata")andanyotherdocuments,
HB2145 20 714materials,data,andotherinformationincluding,butnotlimitedto,allworkingpapersand
715copiesthereofcreatedorproducedinconnectionwithsuchexperiencedata,ineachcasethat
716includeanypotentiallycompany-identifyingorpersonallyidentifiableinformation,thatis
717providedtoorobtainedbythedirector(togetherwithany"experiencedata",the"experience
718materials")andanyotherdocuments,materials,data,andotherinformationincluding,but
719notlimitedto,allworkingpapersandcopiesthereofcreated,produced,orobtainedbyor
720disclosedtothedirectororanyotherpersoninconnectionwithsuchexperiencematerials.
721 (2)(a)Exceptasprovidedinthissubsection,acompany'sconfidentialinformationis
722confidentialbylawandprivileged,andshallnotbesubjecttochapter610,shallnotbesubject
723tosubpoena,andshallnotbesubjecttodiscoveryoradmissibleinevidenceinanyprivate
724civilaction;provided,however,thatthedirectorisauthorizedtousetheconfidential
725informationinthefurtheranceofanyregulatoryorlegalactionbroughtagainstthecompany
726asapartofthedirector'sofficialduties.
727 (b)Neitherthedirectornoranypersonwhoreceivedconfidentialinformationwhile
728actingundertheauthorityofthedirectorshallbepermittedorrequiredtotestifyinany
729privatecivilactionconcerninganyconfidentialinformation.
730 (c)Inordertoassistintheperformanceofthedirector'sduties,thedirectormayshare
731confidentialinformationwith:
732 a.Otherstate,federal,andinternationalregulatoryagenciesandwiththeNAICand
733itsaffiliatesandsubsidiaries;and
734 b.Inthecaseofconfidentialinformationspecifiedinparagraphs(a)and(d)of
735subdivision(1)ofthissubsectiononly,theActuarialBoardforCounselingandDisciplineor
736itssuccessoruponrequeststatingthattheconfidentialinformationisrequiredforthepurpose
737ofprofessionaldisciplinaryproceedingsandwithstate,federal,andinternationallaw
738enforcementofficials.
739 (d)Thesharingofconfidentialinformationdetailedinparagraph(c)ofthis
740subdivisionshallbecontingentonsuchrecipientagreeingandhavingthelegalauthorityto
741agreetomaintaintheconfidentialityandprivilegedstatusofsuchdocuments,materials,data,
742andotherinformationinthesamemannerandtothesameextentasrequiredforthedirector.
743 (e)Thedirectormayreceivedocuments,materials,data,andotherinformation,
744includingotherwiseconfidentialandprivilegeddocuments,materials,data,orinformation,
745fromtheNAICanditsaffiliatesandsubsidiaries,fromregulatoryorlawenforcement
746officialsofotherforeignordomesticjurisdictions,andfromtheActuarialBoardfor
747CounselingandDisciplineoritssuccessorandshallmaintainasconfidentialorprivileged
748anydocument,material,data,orotherinformationreceivedwithnoticeortheunderstanding
749thatitisconfidentialorprivilegedunderthelawsofthejurisdictionthatisthesourceofthe
750document,material,orotherinformation.
HB2145 21 751 (f)Thedirectormayenterintoagreementsgoverningsharinganduseofinformation
752consistentwiththissubdivision.
753 (g)Nowaiverofanyapplicableprivilegeorclaimofconfidentialityinthe
754confidentialinformationshalloccurasaresultofdisclosuretothedirectorunderthissection
755orasaresultofsharingasauthorizedinparagraph(c)ofthissubdivision.
756 (h)Aprivilegeestablishedunderthelawofanystateorjurisdictionthatis
757substantiallysimilartotheprivilegeestablishedunderthissubdivisionshallbeavailableand
758enforcedinanyproceedingin,andinanycourtof,Missouri.
759 (i)Inthissubsection,regulatoryagency,lawenforcementagency,andtheNAIC
760include,butarenotlimitedto,theiremployees,agents,consultantsandcontractors.
761 (3)Notwithstandingsubdivision(2)ofthissubsection,anyconfidentialinformation
762specifiedinparagraphs(a)and(d)ofsubdivision(1)ofthissubsection:
763 (a)Maybesubjecttosubpoenaforthepurposeofdefendinganactionseeking
764damagesfromtheappointedactuarysubmittingtherelatedmemoranduminsupportofan
765opinionsubmittedundersubsection4or5ofthissectionorprinciple-basedvaluationreport
766developedunderparagraph(c)ofsubdivision(2)ofsubsection7ofthissectionbyreasonof
767anactionrequiredbysections376.365to376.380orbyregulationspromulgatedhereunder;
768 (b)Mayotherwisebereleasedbythedirectorwiththewrittenconsentofthe
769company;and
770 (c)Onceanyportionofamemoranduminsupportofanopinionsubmittedunder
771subsection4or5ofthissectionoraprinciple-basedvaluationreportdevelopedunder
772paragraph(c)ofsubdivision(2)ofsubsection7ofthissectioniscitedbythecompanyinits
773marketing,orispubliclyvolunteeredtoorbeforeagovernmentalagencyotherthanastate
774insurancedepartment,orisreleasedbythecompanytothenewsmedia,allportionsofsuch
775memorandumorreportshallnolongerbeconfidential.
776 10.Thedirectormayexemptspecificproductformsorproductlinesofadomestic
777companythatislicensedanddoingbusinessonlyinMissourifromtherequirementsof
778subsection6ofthissectionprovided:
779 (1)Thedirectorhasissuedanexemptioninwritingtothecompanyandhasnot
780subsequentlyrevokedtheexemptioninwriting;and
781 (2)Thecompanycomputesreservesusingassumptionsandmethodsusedpriortothe
782operativedateofthevaluationmanualinadditiontoanyrequirementsestablishedbythe
783directorandpromulgatedbyregulation.
784
785Foranycompanygrantedanexemptionunderthissection,subsection3ofsection376.370
786andsubsections1to5ofthissectionshallbeapplicable.Withrespecttoanycompany
HB2145 22 787applyingthisexemption,anyreferencetosubsection6ofthissectionfoundinsubsection3of
788section376.370andsubsections1to5ofthissectionshallnotbeapplicable.
789 [11.(1)Acompanythathaslessthanthreehundredmilliondollarsofordinarylife
790premiumandthatislicensedanddoingbusinessinMissouriandthatissubjecttothe
791requirementsofsubsections6and7ofthissectionmayholdreservesbasedonthemortality
792tablesandinterestratesdefinedbythevaluationmanualfornetpremiumreservesandusing
793themethodologydefinedintheprovisionsofparagraphs(b)through(i)ofsubdivision(2)of
794subsection1ofthissectionandsubsection3ofsection376.370astheyapplytoordinarylife
795insuranceinlieuofthereservesrequiredbysubsections6and7ofthissection,providedthat:
796 (a)Ifthecompanyisamemberofagroupoflifeinsurers,thegrouphascombined
797ordinarylifepremiumsoflessthansixhundredmilliondollars;
798 (b)Thecompanyreportedtotaladjustedcapitalofatleastfourhundredfiftypercent
799ofauthorizedcontrollevelrisk-basedcapitalintherisk-basedcapitalreportfortheprior
800calendaryear;
801 (c)Theappointedactuaryhasprovidedanunqualifiedopiniononthereservesin
802accordancewithsubsections4and5ofthissectionforthepriorcalendaryear;
803 (d)Thecompanyhasprovidedacertificationbyaqualifiedactuarythatanyuniversal
804lifepolicywithasecondaryguaranteeissuedaftertheoperativedateofthevaluationmanual
805meetsthedefinitionofanonmaterialsecondaryguaranteeuniversallifeproductasdefinedin
806thevaluationmanual.
807 (2)Forpurposesofsubdivision(1)ofthissubsection,ordinarylifepremiumsare
808measuredasdirectpremiumplusreinsuranceassumedfromanunaffiliatedcompany,as
809reportedinthepriorcalendaryearannualstatement.
810 (3)Adomesticcompanymeetingalloftheaboveconditionsmayfileastatement
811priortoJulyfirstwiththedirectorcertifyingthattheseconditionsaremetforthecurrent
812calendaryearbasedonpremiumsandothervaluesfromthepriorcalendaryearfinancial
813statements.ThedirectormayrejectsuchstatementpriortoSeptemberfirstandrequirea
814companytocomplywiththevaluationmanualrequirementsforlifeinsurancereserves.]
âś”
HB2145 23