159 
NAIC, except that such investment standards shall 
not be bound by the provisions of the Model Act re-
lated to authorized classes of investments, class or 
individual investment limitations, or prohibited in-
vestments. 
(4) Risk-based capital standards for a national 
insurer, which are consistent with the ‘‘Risk-Based 
Capital (RBC) for Insurers Model Act’’ and the re-
lated ‘‘RBC Instructions’’ of the NAIC and non-
disclosure rules and remedies for failing to meet 
such standards. 
(5) Valuation standards for the obligations and 
liabilities of a national life insurer, which are con-
sistent with the statutory valuation practices pro-
mulgated by the NAIC in its ‘‘Accounting Practices 
and Procedures Manual’’. 
(6) Continuing and alternative (nonforfeiture) 
benefits standards applicable to national life insur-
ers, which are consistent with the ‘‘Standard Non-
forfeiture Law for Life Insurance, Variable Life In-
surance Model Regulation, Standard Nonforfeiture 
Law for Individual Deferred Annuities, Long-Term 
Care Insurance Model Act, and Long-Term Care In-
surance Model Regulation’’ of the NAIC. 
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160 
(7) Standards for the preparation and filing of 
an annual actuarial opinion on the adequacy of the 
assets of a national life insurer to meet its reason-
ably expected obligations and liabilities, which are 
consistent with the ‘‘Actuarial Opinion and Memo-
randum Regulation’’ of the NAIC. 
(8) Standards for the preparation and filing of 
an annual actuarial opinion on the loss and loss ad-
justment expense reserves of a national property/cas-
ualty insurer, which are consistent with the NAIC’s 
‘‘Property and Casualty Actuarial Opinion Model 
Law’’ and applicable ‘‘NAIC Property and Casualty 
Annual Statement Instructions’’. 
(b) NAIC STANDARDS, MODELS, PRACTICES, AND 
INSTRUCTIONS.—The NAIC standards, models, practices, 
and instructions referred to in subsection (a) shall be the 
standards, models, practices, and instructions adopted by 
the NAIC as of May 24, 2007. 
(c) EFFECTIVE DATE
AND FIVE-YEAR TRANSI-
TIONAL
PERIOD
FOR
INITIAL
FINANCIAL
REGULA-
TIONS.—The financial regulations specified in subsection 
(a) shall be issued in final form no later than 2 years fol-
lowing the initial appointment and confirmation of the 
Commissioner, and each regulation shall remain in effect 
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161 
for 5 years following the date upon which it becomes effec-
tive. 
(d) NAIC AMENDMENTS.—If, after May 24, 2007, 
the NAIC amends any standard, model, practice, or in-
struction upon which the initial financial regulations are 
based, the Commissioner shall determine, by regulation, 
whether such amendment shall apply to a national insurer. 
If the Commissioner determines that an NAIC amendment 
to a standard, model, practice, or instruction should apply 
to a national insurer, the Commissioner may specify, by 
regulation, whether the amendment applies in whole or in 
part. 
(e) REVISIONS OR MODIFICATIONS TO INITIAL FI-
NANCIAL REGULATIONS BY COMMISSIONER.— 
(1) IN GENERAL.—Subject to paragraph (2), 
after an initial financial regulation specified in sub-
section (a) has been in effect for 5 years, the Com-
missioner may, by regulation, revise or modify the 
regulation. 
(2) SPECIAL
CIRCUMSTANCE.—The Commis-
sioner may, by regulation, revise or modify an initial 
financial regulation at any time if the Commissioner 
determines that any such revision or modification is 
necessary to protect policyholders or prevent haz-
ardous conduct by a national insurer. 
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162 
(f) 
ACCOUNTING
PRINCIPLES.—Notwithstanding 
subsections (c), (d), and (e), accounting principles for a 
national property/casualty insurer shall be consistent with 
the statutory accounting practices promulgated by the 
NAIC for State property/casualty insurers in its ‘‘Ac-
counting Practices and Procedures Manual’’, including 
any amendments thereto. 
SEC. 1213. OTHER FINANCIAL REGULATIONS. 
In addition to the financial regulations specified in 
section 1212, the Commissioner may issue other financial 
regulations as the Commissioner determines necessary. 
SEC. 1214. PRODUCT REGULATION FOR NATIONAL LIFE IN-
SURERS. 
(a) APPLICABILITY.—This section shall apply to the 
insurance business of national life insurers. 
(b) UNDERWRITING STANDARDS.—A national in-
surer may classify or underwrite risks if any decision to 
refuse to insure, to continue to insure, to limit the amount, 
extent, or kind of coverage, or to charge a different rate 
for the same coverage is— 
(1) based on sound actuarial principles; or 
(2) related to actual or reasonably anticipated 
experience. 
(c) LAW APPLICABLE TO INSURANCE POLICIES OR 
OTHER PRODUCTS OF NATIONAL INSURERS.— 
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163 
(1) LAW SPECIFIED BY PARTIES.—Subject to 
any applicable Federal law, the provisions of any in-
surance policy or other product of a national insurer 
shall be interpreted in accordance with the law of 
the jurisdiction specified by the parties to the insur-
ance policy or other product if the parties have spec-
ified the law of— 
(A) the jurisdiction in which the main of-
fice of the national insurer is located; 
(B) the jurisdiction in which the principal 
place of business of the national insurer is lo-
cated; or 
(C) the jurisdiction in which the insurance 
policy or other product is delivered. 
(2) DEFAULT LAW.—If the parties to an insur-
ance policy or other product of a national insurer 
have not specified the jurisdiction whose law shall 
govern the provisions of the insurance policy or 
other product, such provisions shall be interpreted in 
accordance with the law of the jurisdiction in which 
the insurance policy or other product is delivered. 
(3) RULEMAKING.—The Commissioner shall es-
tablish, by regulation, choice of law rules and stand-
ards under this subsection. 
(d) STANDARDS FOR POLICIES.— 
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