NY Ins L § 4217 (2021)
2021 New York Laws ISC - Insurance Article 42 - Life Insurance Companies and Accident and Health Insurance Companies and Legal Services Insurance Companies 4217 - Valuation of Insurance Policies and Contracts.

§  4217.  Valuation  of  insurance policies and contracts. (a) (1) The superintendent shall annually value, or cause to be valued, the  reserve liabilities  (hereinafter called reserves) for all outstanding insurance policies and contracts of every life insurance company doing business in this state, except that, in the case of an alien company, such valuation shall be limited to its United States  business,  and  may  certify  the amount  of  any such reserves, specifying the mortality table or tables, rate or rates of interest and  methods  (net  level  premium  method  or other)  used  in  the  calculation of such reserves. In calculating such reserves, the superintendent  may  use  group  methods  and  approximate averages for fractions of a year or otherwise.  (2)  In  lieu  of the valuation of the reserves herein required of any foreign or alien company, the superintendent may  accept  any  valuation made, or caused to be made, by the insurance supervisory official of any state  or  other  jurisdiction  when  such  valuation  complies with the minimum standard herein provided and if the official of  such  state  or jurisdiction  accepts as sufficient and valid for all legal purposes the certificate of valuation of the  superintendent  when  such  certificate states  the  valuation to have been made in a specified manner according to which the aggregate reserves would be at least as large  as  if  they had  been  computed in the manner prescribed by the law of that state or jurisdiction.  (3) (A) The superintendent may, in his discretion, vary the  standards of  mortality  applicable  to policies of insurance on substandard lives and other extra-hazardous lives issued by  any  life  insurance  company doing business in this state.  (B) He may also, in his discretion, vary the standards of interest and mortality  applicable  to  contracts  issued  by  an  alien  insurer  in countries other than the United States, if such alien insurer  maintains the  trusteed  surplus  prescribed by section one thousand three hundred twelve of this chapter.  (4) (A) Any life insurance company doing business in this state  which has  adopted  as a basis for the valuation of its insurance policies and contracts standards producing greater reserves in the aggregate than the minimum standards herein prescribed may  continue  to  use  such  higher standards as a basis of valuation.  (B)  After  January  first, nineteen hundred forty, any life insurance company doing business in this state may, subject to the  provisions  of paragraph  eight  of  subsection (c) of this section, adopt as the basis for the valuation of its  insurance  policies  and  contracts  standards producing  greater  reserves in the aggregate than the minimum standards herein prescribed; and any such company which shall  have  at  any  time adopted such higher standards of valuation may, with the approval of the superintendent, adopt lower standards of valuation, but in no case lower than  the  minimum standards herein prescribed, provided, however, that, for the purposes of this paragraph, the holding of  additional  reserves determined  by a qualified actuary to be necessary to render the opinion required by subsection (e) of this section shall not be deemed to be the adoption of a higher standard of valuation.  (C) The superintendent may approve any such change if  he  finds  that the  proposed standards are for the best interests of the holders of the policies and contracts and annuitants of such company.  (D) Nothing contained herein shall be deemed to affect the contractual rights or obligations of the holder of any such policy or contract.  (b) (1) This  subsection  shall  apply  only  to  those  policies  and contracts  issued  prior  to the operative date of section four thousand two hundred twenty-one of this article.  (2) Except as provided in  paragraph  six  hereof  the  legal  minimum standards  for  the  valuation  of  life insurance contracts shall be as follows:  (A)  For  the  valuation of all such contracts issued before the first day of January, nineteen hundred one, it  shall  be  the  Actuaries'  or Combined Experience Table of Mortality with interest at four percent per annum.  (B)  For  the valuation of such contracts issued on or after said day, except as provided in subparagraphs (C) and (D) hereof, it shall be  the American  Experience  Table of Mortality with Craig's extension for ages under ten years and with interest at  three  and  one-half  percent  per annum.  (C)  For  the  valuation  of group term insurance policies under which premium rates are not guaranteed for a period in excess of  five  years, it  shall  be the American Men Ultimate Table of Mortality with interest at three and one-half percent per annum.  (D) Any life insurance company may, at  its  option,  value  its  life insurance  contracts  issued  on  or  after  the  first  day of January, nineteen hundred thirty, in accordance with their terms on the basis  of the  American  Men  Ultimate  Table  of  Mortality, supplemented by such extension and modification for  ages  under  twenty  years,  as  may  be approved  by  the  superintendent,  with  interest at three and one-half percent per annum by the level net premium method  or  by  the  modified preliminary term method prescribed in paragraph four hereof.  (3)  Life  insurance  policies  issued  on  or  after the first day of January, nineteen hundred seven, may, at the option of the  insurer,  be valued  in  accordance with their terms by the modified preliminary term method prescribed in paragraph four hereof, or in  accordance  with  the select  and  ultimate  method  on  the  basis that the rate of mortality during the first  five  years  after  the  issuance  of  said  contracts respectively  shall be calculated according to the following percentages of the rates shown by the American Experience Table of Mortality:   For the first insurance year, fifty percent thereof;  for  the  second insurance  year,  sixty-five  percent  thereof;  for the third insurance year, seventy-five percent  thereof;  for  the  fourth  insurance  year, eighty-five   percent   thereof;  and  for  the  fifth  insurance  year, ninety-five percent thereof.  (4) (A) Life insurance policies may provide for not more than one year of preliminary term insurance by incorporating in the provisions thereof specifying the premium consideration to be received by  the  insurer,  a clause  plainly  showing  that  the  first  year's  insurance under such policies is term insurance, purchased by the whole  or  a  part  of  the premium to be received during the first policy year.  (B)  Such  policies  may, in accordance with their terms, be valued on the basis of the mortality  tables  and  interest  rates  prescribed  in paragraph two hereof, by the modified preliminary term plan described as follows:    If  the  premium  charged for term insurance under a limited payment life preliminary term policy providing for the  payment  of  all premiums  thereon in less than twenty years from the date of the policy, or under an endowment preliminary term policy, exceeds that charged  for like  insurance  under  twenty payment life preliminary term policies of the same company, the reserve thereon at the end of any year,  including the  first,  shall be not less than the reserve on a twenty payment life preliminary term policy issued in the same year and  at  the  same  age, together with an amount which shall be equivalent to the accumulation of a  level  net  premium sufficient to provide for a pure endowment at the end of the premium paying period equal to the difference  between  items (i)  and (ii) hereof as follows: (i) the value at the end of such period  of such a twenty payment life preliminary term policy and (ii) the  full level net premium reserve at such time of such a limited payment life or endowment policy.  (C)  The  premium paying period referred to above is the period during which premiums are concurrently payable under such twenty  payment  life preliminary  term  policy  and  such  limited  payment life or endowment policy.  (5) (A) The legal minimum standard for the valuation of all individual annuity contracts issued on or after  January  first,  nineteen  hundred forty  (including  life  annuities  provided or available under optional modes of settlement in insurance contracts issued on or after such date) shall be the Combined Annuity Tables with age set back  one  year,  with interest at three and one-half percent per annum.  (B)  The  legal  minimum  standard for the valuation of all individual annuity contracts issued prior to January first, nineteen hundred  forty (including  annuities  provided  or  available  under  optional modes of settlement in insurance contracts issued prior to such date) shall be in accordance with the provisions of law applicable thereto as of the  date of issuance.  (C)  Except  as  otherwise  provided  in  paragraphs three and four of subsection (c) hereof for group annuity and  pure  endowment  contracts, the  legal  minimum  standard  for  the  valuation  of all group annuity contracts shall be the  1971  Group  Annuity  Mortality  Table,  or  any modification  of  this  table  approved  by the superintendent, and five percent interest.  (D) Annuities, annuity benefits and guaranteed interest  contracts  to which  this  subsection  applies  shall  be  subject  to  item  (vi)  of subparagraph (B) of paragraph four of subsection (c) of this section.  (6) (A) The legal minimum standard for the valuation of all industrial life insurance policies issued  on  or  after  January  first,  nineteen hundred  forty  shall,  at  the option of the company, be either (i) the 1941  Standard  Industrial  Mortality  Table  or  the  1941  Substandard Industrial  Mortality Table, with interest at three and one-half percent per annum by the net level premium method, or (ii) either of the  tables specified  in  item  (i) hereof, by the modified preliminary term method prescribed in paragraph four hereof, in accordance with the terms of the policy, or (iii) in the case of policies issued on the  monthly  premium plan, the New York Standard Intermediate Table of Mortality (1907 Table) with  interest  at three and one-half percent per annum. In lieu of such tables, at the option of the company, the Standard Industrial  Mortality Table (1907) or the Substandard Industrial Mortality Table (1907) may be used  with  respect  to  such  policies  issued  prior to January first, nineteen hundred forty-two.  (B) The legal minimum standard for the  valuation  of  all  industrial life  insurance policies issued prior to January first, nineteen hundred forty shall be the minimum standard required by the law of this state in force at the date of issuance.  (7) The legal minimum standard for the  valuation  of  all  accidental death  benefits  and disability benefits, provided in connection with or supplemental to life insurance policies or annuity  contracts  shall  be such tables as the superintendent may prescribe.  (c)  (1)  This  subsection  shall apply only to policies and contracts issued on or after the operative  date  of  section  four  thousand  two hundred  twenty-one  of  this  article,  except as otherwise provided in paragraphs three and four of this subsection for group annuity and  pure endowment contracts issued prior to such operative date.  (2)  Except as otherwise provided in paragraphs three, four and ten of this subsection, the minimum standard for  the  valuation  of  all  such  policies  and  contracts  shall  be  the commissioners reserve valuation method defined in paragraph six of this subsection and in  section  four thousand  two  hundred  eighteen of this article, three percent interest for  all life insurance policies issued prior to January first, nineteen hundred sixty-six and for all  individual  annuity  and  pure  endowment contracts  issued  prior  to  January  first, nineteen hundred sixty, or three and one-half percent interest  for  all  life  insurance  policies issued  on  or after January first, nineteen hundred sixty-six and prior to June thirteenth, nineteen hundred seventy-four and for all individual annuity and pure endowment contracts issued on or after  January  first, nineteen  hundred  sixty,  and  prior to the operative date of paragraph three of  this  subsection,  or  four  percent  interest  for  all  life insurance  policies issued on or after June thirteenth, nineteen hundred seventy-four and prior to January first, nineteen hundred  seventy-nine, or  four  and one-half percent interest for all life insurance policies, issued on or after January first, nineteen hundred seventy-nine, or five percent interest for all annuities purchased or to  be  purchased  under group annuity contracts, and the following tables:  (A) For all ordinary policies of life insurance issued on the standard basis,  excluding  any  disability and accidental death benefits in such policies, the Commissioners 1941 Standard Ordinary Mortality  Table  for such  policies  issued  prior to the operative date of subsection (h) of section four thousand  two  hundred  twenty-one  of  this  article,  the Commissioners  1958  Standard Ordinary Mortality Table for such policies issued on or after such operative date and prior to the  operative  date of  subsection  (k)  of  such section; provided that for any category of such policies issued on female  risks  all  modified  net  premiums  and present  values  may be calculated according to an age not more than six years younger than the actual age of the insured, and for such  policies issued  on  or  after the operative date of such subsection, and, at the option of the company, for such policies not providing for nonforfeiture benefits which are issued on or after nineteen  hundred  eighty-one  and prior  to  the  operative date of such subsection, (i) the Commissioners 1980 Standard Ordinary Mortality Table, or (ii) at the election  of  the company  for  any  one  or  more  specified plans of life insurance, the Commissioners 1980  Standard  Ordinary  Mortality  Table  with  Ten-Year Select Mortality Factors, or (iii) any ordinary mortality table, adopted after  nineteen  hundred eighty by the National Association of Insurance Commissioners, that  is  approved  by  the  superintendent  for  use  in determining the minimum standard of valuation for such policies, or (iv) any  other  ordinary  mortality table, or any modification of any of the foregoing tables, approved by the superintendent for any specified class or classes of risks.  (B) For all industrial life insurance policies issued on the  standard basis,  excluding  any  disability and accidental death benefits in such policies, the 1941 Standard Industrial Mortality Table for such policies issued prior to the operative date of subsection  (i)  of  section  four thousand  two  hundred twenty-one of this article, and for such policies issued on or after  such  operative  date  (i)  the  Commissioners  1961 Standard  Industrial  Mortality  Table, or (ii) any industrial mortality table, adopted after nineteen hundred eighty by the National Association of Insurance Commissioners, that is approved by the  superintendent  for use  in determining the minimum standard of valuation for such policies, or (iii) any other industrial mortality table, or  any  modification  of any  of  the  foregoing  tables,  approved by the superintendent for any specified class or classes of risks.  (C) For individual annuity and pure endowment contracts, excluding any disability and accidental death benefits in  such  contracts,--the  1937  Standard  Annuity  Mortality Table or, at the option of the company, the Annuity Mortality Table for  1949,  Ultimate,  or  any  modification  of either of these tables approved by the superintendent.  (D)  For  group  annuity  and  pure endowment contracts, excluding any disability and accidental death benefits in  such  contracts,--the  1971 Group Annuity Mortality Table or any modification of this table approved by the superintendent.  (E) For total and permanent disability benefits in or supplementary to ordinary  policies  or contracts--for policies or contracts issued on or after January first, nineteen hundred sixty-six, the tables of Period  2 disablement  rates  and  the  1930 to 1950 termination rates of the 1952 Disability Study of the Society of Actuaries, with  due  regard  to  the type  of  benefits  or  any  tables of disablement rates and termination rates, adopted after nineteen hundred eighty by the National Association of Insurance Commissioners, that are approved by the superintendent  for use  in  determining the minimum standard of valuation for such policies or any other tables of disablement rates and termination rates,  or  any modification   of   any   of  the  foregoing  tables,  approved  by  the superintendent for any specified class or classes of risks; for policies or contracts issued prior to January first, nineteen hundred  sixty-six, either  such  tables  or,  at  the  option of the company, the Class (3) Disability Table (1926). Any such table  shall,  for  active  lives,  be combined  with  a mortality table permitted for calculating the reserves for life insurance policies.  (F) For accidental death benefits in or  supplementary  to  policies-- for  policies  issued  on  or  after  January  first,  nineteen  hundred sixty-six, the 1959 Accidental Death Benefits Table  or  any  accidental death  benefits  table,  adopted  after  nineteen  hundred eighty by the National Association of Insurance Commissioners, that is approved by the superintendent for use in determining the minimum standard of  valuation for  such  policies or any other accidental death benefits table, or any modification  of  any  of  the  foregoing  tables,   approved   by   the superintendent for any specified class or classes of risks; for policies issued  prior  to January first, nineteen hundred sixty-six, either such table or, at  the  option  of  the  company,  the  Inter-Company  Double Indemnity  Mortality  Table.  Any  such  table  shall be combined with a mortality  table  permitted  for  calculating  the  reserves  for   life insurance policies.  (G) For group life insurance, life insurance issued on the substandard basis,  annuities  involving  life  contingencies  provided or available under optional modes of settlement in life insurance policies or annuity contracts and other special benefits--such tables as may be approved  by the superintendent.  (3)  Except as provided in paragraph four hereof, the minimum standard for the valuation of all individual annuity and pure endowment contracts issued on or after the operative date  of  this  paragraph,  as  defined herein,  and  for  all  annuities and pure endowments purchased or to be purchased on or after the operative date under group  annuity  and  pure endowment contracts, shall be the commissioners reserve valuation method defined  in  paragraph  six hereof and the following tables and interest rates:  (A) For individual annuity and pure endowment contracts  issued  prior to   January   first,   nineteen  hundred  seventy-nine,  excluding  any disability and accidental death benefits in such contracts and excluding any annuities, purchased under individual deferred annuity contracts, to which the company has elected to have subparagraph (B) hereof apply--the 1971 Individual Annuity Mortality Table, or  any  modification  of  this table  approved  by  the  superintendent,  and  six percent interest for  single premium immediate annuity contracts, and  four  percent  interest for  all  other individual annuity and pure endowment contracts, or such higher rate or rates of interest for any of such  contracts  as  may  be approved from time to time by the superintendent.  (B)  For  individual annuity and pure endowment contracts issued on or after  January  first,  nineteen  hundred  seventy-nine,  excluding  any disability  and accidental death benefits in such contracts, and, at the election of the company, for annuities purchased on or after  such  date under individual deferred annuity contracts--the 1971 Individual Annuity Mortality  Table,  or  any  individual  annuity mortality table, adopted after nineteen hundred eighty by the National Association  of  Insurance Commissioners,  that  is  approved  by  the  superintendent  for  use in determining the minimum standard of valuation for such contracts, or any other individual annuity mortality table, or any modification of any  of the  foregoing  tables,  approved  by  the superintendent, and seven and one-half percent interest for all single  premium  individual  immediate annuity contracts and all annuities, purchased under individual deferred annuity  contracts,  to  which  the  company  has  elected  to have this subparagraph apply and five and one-half percent interest for all  other individual   annuity   and   pure  endowment  contracts,  excluding  any annuities, purchased under deferred annuity  contracts,  for  which  the interest rate is seven and one-half percent or such higher rate or rates of  interest  for  any  of  such  contracts or annuities purchased under deferred annuity contracts as may be approved from time to time  by  the superintendent.  (C) For all annuities and pure endowments purchased or to be purchased prior  to  January  first,  nineteen  hundred  seventy-seven under group annuity and pure  endowment  contracts,  excluding  any  disability  and accidental  death  benefits  purchased  under  such contracts,--the 1971 Group Annuity  Mortality  Table,  or  any  modification  of  this  table approved by the superintendent, and six percent interest, or such higher rate  or rates of interest for any of such annuities and pure endowments as may be approved from time to time by the superintendent.  (D) For all annuities and pure endowments purchased or to be purchased on or after January first, nineteen hundred  seventy-seven  under  group annuity  and  pure  endowment  contracts,  excluding  any disability and accidental death benefits purchased under such contracts--the 1971 Group Annuity Mortality Table, or any group annuity mortality  table,  adopted after  nineteen  hundred eighty by the National Association of Insurance Commissioners, that  is  approved  by  the  superintendent  for  use  in determining  the  minimum  standard  of valuation for such annuities and pure endowments, or any other group  annuity  mortality  table,  or  any modification   of   any   of  the  foregoing  tables,  approved  by  the superintendent, and seven and one-half percent interest, or such  higher rate  or rates of interest for any such annuities and pure endowments as may be approved from time to time by the superintendent.  (E) After June thirteenth, nineteen hundred seventy-four, any  company may  file  with  the  superintendent a written notice of its election to comply with the provisions of this  paragraph  after  a  specified  date before  January first, nineteen hundred seventy-nine, which shall be the operative date of this paragraph for  such  company,  provided  that  an insurer  may elect a different operative date for individual annuity and pure endowment contracts from that elected for group  annuity  and  pure endowment  contracts. If a company makes no such election, the operative date of this paragraph for such company shall be January first, nineteen hundred seventy-nine.  (F) Annuities, annuity benefits and guaranteed interest  contracts  to which  this  subsection  applies  shall  be  subject  to  item  (vi)  of subparagraph (B) of paragraph four of this subsection.  (4)  (A)  The  interest rates used in determining the minimum standard for the valuation of:  (i) all life insurance policies issued in a particular calendar  year, on or after January first, nineteen hundred eighty-two,  (ii)  all  individual annuity and pure endowment contracts issued in a particular calendar year on or after  January  first,  nineteen  hundred eighty-two,  and,  at the option of the company, all annuities purchased in a particular calendar year on or after  such  date  under  individual deferred annuity contracts issued prior thereto,  (iii)  all  annuities  and  pure  endowments purchased in a particular calendar year on or after January  first,  nineteen  hundred  eighty-two under group annuity and pure endowment contracts, and  (iv)  the  net  increase,  if any, in a particular calendar year after January first,  nineteen  hundred  eighty-two,  in  amounts  held  under guaranteed interest contracts, shall be the calendar year statutory valuation interest rates as defined in  this subsection, or such higher rate or rates of interest for any of such policies, contracts or annuities as may be approved  from  time  to time by the superintendent.  (B)  The  calendar year statutory valuation interest rates ("I") shall be determined in accordance with the following formulae (where R is  the reference  interest rate, and W is the weighting factor, defined in this paragraph) and the results rounded to  the  nearer  one-quarter  of  one percent:  (i)   For  life  insurance,  except  as  otherwise  provided  in  this subparagraph,                I = .03 + W(R1 - .03) + W/2 (R2 - .09);                where R1 is the lesser of R and .09,                R2 is the greater of R and .09,  (ii) For single premium immediate annuities and for  annuity  benefits arising from life insurance policies and annuity and guaranteed interest contracts with cash settlement options,                           I = .03 + W(R - .03)  (iii)  For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue year basis, except as stated in item (ii), the  formula  for  life  insurance stated  in  item  (i)  shall  apply to annuities and guaranteed interest contracts with guarantee durations  in  excess  of  ten  years  and  the formula for single premium immediate annuities stated in item (ii) shall apply  to  annuities  and  guaranteed  interest contracts with guarantee durations of ten years or less, and to  single  premium  life  insurance policies  of the kind referred to in item (vi) valued on a year of issue basis with guarantee durations of ten years or less,  (iv) For other annuities with  no  cash  settlement  options  and  for guaranteed  interest  contracts  with  no  cash  settlement options, the formula for single premium immediate annuities stated in item (ii) shall apply,  (v) For other annuities with cash settlement  options  and  guaranteed interest  contracts with cash settlement options, and for single premium life insurance policies of the kind referred to in item (vi), valued  on a  change  in  fund  basis,  the  formula  for  single premium immediate annuities stated in item (ii) shall apply,  (vi) Single premium life insurance policies of the kind referred to in this item are all single premium life insurance policies, issued  on  or after  January first, nineteen hundred eighty-two, which provide for the  crediting of additional amounts pursuant to subsection  (b)  of  section four  thousand  two  hundred  thirty-two of this article and under which interest rates provided in, or declared pursuant to, the policy are, for some  period,  guaranteed  to  exceed the greater of (I) six percent per annum and (II) the calendar year statutory valuation interest  rate  for other  life  insurance  policies  with  guarantee durations in excess of twenty years.  (C) If the calendar year statutory valuation  interest  rate  for  any life  insurance  policies,  other  than  single  premium  life insurance policies of the kind referred to in item (vi)  of  subparagraph  (B)  of this paragraph, issued in any calendar year determined without reference to  this sentence differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less  than one-half  of  one percent the calendar year statutory valuation interest rate  for  such  life  insurance  policies  shall  be   equal   to   the corresponding  actual  rate for the immediately preceding calendar year. For  purposes  of  applying  the  immediately  preceding  sentence,  the calendar  year  statutory  valuation  interest  rate  for life insurance policies issued in a calendar year  shall  be  determined  for  nineteen hundred  eighty, (using the reference interest rate defined for nineteen hundred seventy-nine)  and  shall  be  determined  for  each  subsequent calendar year regardless of when subsection (k) of section four thousand two hundred twenty-one of this article becomes operative.  (D) The weighting factors referred to in the formulas stated above are given in the following tables:  (i) Weighting factors for life insurance:       Guarantee Duration (Years)               Weighting Factors         10 or less                                    .50         More than 10, but not more than 20            .45         More than 20                                  .35 except  that  the  factors  shown  above  shall  be increased for single premium policies of the kind referred to in item  (vi)  of  subparagraph (B)  of  this  paragraph  valued  on  an issue year basis by .05 and for single premium policies of such kind valued on a change in fund basis by .10.   For life insurance, other than single premium  policies  of  the  kind referred  to  in  item  (vi)  of subparagraph (B) of this paragraph, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options  to convert  to  plans of life insurance with premium rates or nonforfeiture values or both which are guaranteed in the  original  policy;  for  such single  premium  policies  of  the  kind  referred  to  in  item (vi) of subparagraph (B) of this paragraph, the guarantee duration is the number of years for which interest rates provided in, or declared pursuant  to, the  policy  are guaranteed to exceed the greater of (I) six percent per annum and (II) the calendar year statutory valuation interest  rate  for life  insurance  policies, other than such single premium policies, with guarantee durations in excess of twenty years;  (ii) Weighting factor for single premium immediate annuities, and  for annuity  benefits  arising  from life insurance policies and annuity and guaranteed interest contracts with cash settlement options:   .80  (iii)  Weighting  factors  for  other  annuities  and  for  guaranteed interest contracts, except as stated in item (ii), shall be as specified in  tables  (I),  (II), (III), according to the rules and definitions in tables (IV) and (V):                                                      Weighting Factor                                                        for Plan Type     Guarantee Duration (Years)                         A    B    C  (I) For annuities and guaranteed interest contracts valued on an issue year basis:     5 or less:                                         .80  .60  .50     More than 5, but not more than 10:                 .75  .60  .50     More than 10, but not more than 20:                .65  .50  .45     More than 20:                                      .45  .35  .35  (II)   For  annuities  and  guaranteed interest contracts valued on a change in fund basis, the factor  shown  in  table (I) above increased by:                                .15  .25  .05  (III)  For  annuities  and  guaranteed interest contracts valued  on  an  issue year  basis  (other  than  those with no cash settlement options)  which  do  not guarantee   interest  on  considerations received more than one year after  issue or   purchase   and  for  annuities  and guaranteed interest contracts valued  on a  change  in  fund  basis  which do not guarantee     interest     rates      on considerations received more than twelve months  beyond  the  valuation date, the factors shown in table (I) or derived in table (II) increased by:                               .05  .05  .05  (IV) For other annuities with cash settlement options  and  guaranteed interest  contracts with cash settlement options, the guarantee duration is the number of years for which the  interest  rates  provided  in,  or declared pursuant to, the contract are guaranteed to exceed the calendar year statutory valuation interest rate for life insurance policies other than  single  premium  policies  of the kind referred to in item (vi) of subparagraph (B) of this paragraph, with guarantee durations  in  excess of twenty years.   For other annuities with no cash settlement options and for guaranteed interest  contracts  with  no  cash  settlement  options,  the guarantee duration is the number of years from  the  date  of  issue  or  date  of purchase to the date annuity benefits are scheduled to commence.  (V) Plan type as used in the above tables is defined as follows:   Plan  Type  A:  The  policyholder  may withdraw funds only (i) with an adjustment to reflect changes in interest rates or  asset  values  since receipt  of  the  funds  by  the insurance company, or (ii) without such adjustment but in installments over five years or more, or (iii)  as  an immediate life annuity.   Plan  Type  B:  The  policyholder  may  not  withdraw funds before the expiration of  the  interest  rate  guarantee  or,  if  withdrawals  are permitted  before  the  expiration of such guarantee, may withdraw funds only (i) with an adjustment to reflect  changes  in  interest  rates  or asset  values  since  receipt  of the funds by the insurance company, or (ii) without such adjustment but in  installments  over  five  years  or more.  At the end of the interest rate guarantee, funds may be withdrawn without such adjustment in a single sum or installments over  less  than five years.   Plan Type C: The policyholder may withdraw funds before the expiration of the interest rate guarantee in a single sum or installments over less than  five  years  either  (i)  without adjustment to reflect changes in interest rates or asset  values  since  receipt  of  the  funds  by  the insurance  company,  or  (ii)  subject  only to a fixed surrender charge stipulated in the contract as a percentage of the fund.  (E) A company  may  elect  to  value  single  premium  life  insurance policies  of  the  kind  referred to in item (vi) of subparagraph (B) of this paragraph,  guaranteed  interest  contracts  with  cash  settlement options  or  other  annuities  with cash settlement options on either an issue  year  basis  or  on  a  change in fund basis. Guaranteed interest contracts with no cash settlement options and other  annuities  with  no cash  settlement  options must be valued on an issue year basis. As used in  this  paragraph,  and  except  as   otherwise   permitted   by   the superintendent,  an  issue year basis of valuation refers to a valuation basis under which the  interest  rate  used  to  determine  the  minimum valuation standard for the entire duration of the life insurance policy, annuity  contract  or  guaranteed interest contract is the calendar year valuation interest rate for the year of issue or year of purchase of the policy or contract, and the change in fund basis of valuation refers  to a  valuation  basis  under which the interest rate used to determine the minimum valuation standard applicable to each change in  the  fund  held under  the  policy  or  contract is the calendar year valuation interest rate for the year of the change in the fund.  (F) The reference interest rate referred to above shall be defined  as follows:  (i) For all life insurance, except single premium policies of the kind referred  to  in  item  (vi)  of subparagraph (B) of this paragraph, the lesser of the average over a period of thirty-six months and the average over a period of twelve months, ending on June thirtieth of the calendar year next preceding the year of issue, of Moody's Corporate  Bond  Yield Average  - Monthly Average Corporates, as published by Moody's Investors Service, Inc.  (ii) For single premium immediate annuities and for  annuity  benefits arising from life insurance policies and annuity and guaranteed interest contracts  with  cash  settlement  options, the average over a period of twelve months, ending on June thirtieth of the calendar year of issue or year of purchase, of Moody's Corporate  Bond  Yield  Average  -  Monthly Average Corporates, as published by Moody's Investors Service, Inc.  (iii)  For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, and for single  premium life  insurance  policies  of  the  kind  referred  to  in  item (vi) of subparagraph (B) of this paragraph, valued on a  year  of  issue  basis, except as stated in item (ii) hereof, with guarantee durations in excess of  ten  years,  the  lesser  of the average over a period of thirty-six months and the average over a period of twelve  months  ending  on  June thirtieth  of  the  calendar  year  of  issue  or  purchase,  of Moody's Corporate Bond Yield Average  -  Monthly  Corporates,  as  published  by Moody's Investors Service, Inc.  (iv)  For  other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, and for single  premium life  insurance  policies  of  the  kind  referred  to  in  item (vi) of subparagraph (B) of this paragraph, valued on a  year  of  issue  basis, except  as  stated  in item (ii) hereof, with guarantee durations of ten years or less, the average over a period of  twelve  months,  ending  on June  thirtieth  of  the  calendar year of issue or purchase, of Moody's Corporate Bond Yield Average - Monthly Average Corporates, as  published by Moody's Investors Service, Inc.  (v)  For  other  annuities  with  no  cash  settlement options and for guaranteed interest contracts  with  no  cash  settlement  options,  the average  over a period of twelve months, ending on June thirtieth of the calendar year of issue or purchase,  of  Moody's  Corporate  Bond  Yield Average  - Monthly Average Corporates, as published by Moody's Investors Service, Inc.  (vi) For other annuities with cash settlement options  and  guaranteed interest  contracts with cash settlement options, and for single premium life insurance policies  of  the  kind  referred  to  in  item  (vi)  of subparagraph  (B)  of  this paragraph, valued on a change in fund basis, except  as  stated  in  item  (ii)  hereof, the average over a period of twelve months, ending on June thirtieth of  the  calendar  year  of  the change  in  the  fund, of Moody's Corporate Bond Yield Average - Monthly Average Corporates, as published by Moody's Investors Service, Inc.  (G) In the event that Moody's Corporate Bond Yield Average  -  Monthly Average  Corporates is no longer published by Moody's Investors Service, Inc., or in  the  event  that  the  National  Association  of  Insurance Commissioners  determines  that  Moody's  Corporate Bond Yield Average - Monthly Average Corporates as published by  Moody's  Investors  Service, Inc.,  is  no  longer appropriate for the determination of the reference interest rate, then an  alternative  method  for  determination  of  the reference interest rate, which is adopted by the National Association of Insurance  Commissioners  and  approved  by  the  superintendent, may be substituted.  (H) The provisions of  this  subparagraph  shall  apply  to  any  life insurance  company  which has life insurance policies or annuity or pure endowment contracts in effect which were issued in a foreign country and under which premiums and benefits, and the assets supporting reserves in respect thereof, are denominated in the currency of  a  foreign  country which  is  rated  in  one  of  the  two  highest rating categories by an independent, nationally recognized United States rating agency. For  the purpose of determining the reference interest rate to be used in valuing such  policies  and  contracts,  the  superintendent may permit any such company, or may by regulation require  all  such  companies  (except  as exempted  pursuant  to  such regulation), to adjust the yield average of the applicable index published by Moody's Investors  Service,  Inc.  (or the  yield  average  determined  on  the  basis of any substitute method applicable  to  such  policies  or  contracts  and   approved   by   the superintendent in accordance with subparagraph (G) of this paragraph) in accordance   with  a  method  approved  by  the  superintendent,  or  to substitute an alternative method approved by the superintendent in place of the applicable index published by Moody's Investors Service, provided that  any  such  substitute  or   alternative   method   shall   produce year-to-year  consistency  in  reserving methods and shall appropriately reflect the difference between the  yield  average  on  corporate  bonds issued  in  the  United  States and the yield average on corporate bonds issued in such foreign country. Any company which adjusts yield averages in accordance with a method approved by the superintendent  pursuant  to this  subparagraph shall continue to use such method with respect to the valuation of  such  policies  and  contracts  until  the  superintendent permits or requires such company to cease using such method.  (6)  (A)  Except  as  otherwise  provided in section four thousand two hundred  eighteen  of  this   article,   reserves   according   to   the commissioners  reserve  valuation  method  for  the  life  insurance and endowment benefits  of  policies  providing  for  a  uniform  amount  of insurance  and  requiring  the  payment of uniform premiums shall be the excess, if any, of the present value, at the date of valuation, of  such future  guaranteed benefits provided for by such policies, over the then present value of any future modified net premiums therefor. The modified net premiums for any such policy shall be such uniform percentage of the respective contract premiums for such benefits that the  present  value, at  the  date  of issue of the policy, of all such modified net premiums shall be equal to the sum of the then present  value  of  such  benefits  provided for by the policy and the excess of item (i) over item (ii), as follows:  (i) A net level annual premium equal to the present value, at the date of  issue,  of  such  benefits provided for after the first policy year, divided by the present value, at the date of issue, of an annuity of one per annum payable on the first and each subsequent anniversary  of  such policy  on  which  a premium falls due; provided, however, that such net level annual premium shall not exceed the net level  annual  premium  on the  nineteen  year  premium  whole  life plan for insurance of the same amount at an age one year higher than the age at issue of such policy.  (ii) A net one year term premium for such benefits provided for in the first policy year.  (B) Provided that for any life insurance policy  issued  on  or  after January  first,  nineteen  hundred  eighty-six  for  which  the contract premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for such excess and which provides an endowment benefit or a cash  surrender value  or  a  combination  thereof in an amount greater than such excess premium, the reserve according to the  commissioners  reserve  valuation method  as  of any policy anniversary occurring on or before the assumed ending date defined herein as the first policy anniversary on which  the sum of any endowment benefit and any cash surrender value then available is  greater than such excess premium shall, except as otherwise provided in section four thousand two hundred eighteen of this  article,  be  the greater  of  the  reserve  as  of  such policy anniversary calculated as described in the preceding paragraph and the reserve as of  such  policy anniversary  calculated as described in that paragraph, but with (i) the value defined in item (i) of subparagraph (A) hereof  being  reduced  by fifteen  percent  of  the amount of such excess first year premium, (ii) all present values of benefits and  premiums  being  determined  without reference  to  premiums or benefits provided for by the policy after the assumed ending date, (iii) the policy being assumed to  mature  on  such date as an endowment, and (iv) the cash surrender value provided on such date  being  considered  as  an  endowment  benefit. In making the above comparison, the mortality and interest bases stated  in  paragraphs  two and four shall be used.  (C)  Reserves  according to the commissioners reserve valuation method for (i) life insurance  policies  providing  for  a  varying  amount  of insurance  or requiring the payment of varying premiums, (ii) disability and accidental death benefits in all policies and contracts,  and  (iii) all other benefits, except life insurance and endowment benefits in life insurance   policies   and  benefits  in  annuity,  pure  endowment  and guaranteed  interest  contracts,  shall  be  calculated  by   a   method consistent  with the principles of this paragraph, except that any extra premiums charged because of impairments  or  special  hazards  shall  be disregarded in the determination of modified net premiums.  (D)  The  superintendent  may, by regulation, issue guidelines for the application of the reserve valuation provisions of this section to  such policies  and  contracts  as  the superintendent deems appropriate. Such guidelines may provide that the minimum standard for  the  valuation  of single  premium  life insurance policies of the kind referred to in item (vi) of subparagraph (B) of paragraph four of  this  subsection  may  be based  on interest rates determined in accordance with paragraph four of subsection (c) of this section for the first  ten  years  following  the date  of  valuation  and  thereafter  on  interest  rates  determined in accordance with the formula stated in item (i) of  subparagraph  (B)  of paragraph   four   of   this  subsection.  Such  guidelines  may  permit recognition of surrender charges in determining reserves to  the  extent  and  under  the  conditions specified in the regulation. With respect to annuity, pure endowment,  or  guaranteed  interest  contracts  providing allocation  of  assets  to a separate account which qualifies under item (iii)  of  paragraph five of subsection (a) of section four thousand two hundred forty of this article and in which  the  assets  are  valued  at their  market value in accordance with the terms of such contracts, such guidelines may provide for  the  valuation  of  the  reserves  for  such contracts in a consistent manner.  (7)  In  no  event  shall  a company's aggregate reserves for all life insurance policies, excluding disability and accidental death  benefits, be  less  than  the aggregate reserves calculated in accordance with the methods set forth in paragraphs six and nine hereof  and  the  mortality table  or  tables  and  rate  or  rates  of interest used in calculating nonforfeiture benefits for such policies, nor less  than  the  aggregate reserves calculated in accordance with section four thousand two hundred eighteen  of  this  article.  This  paragraph  shall not apply to single premium life insurance policies of the kind referred to in item (vi)  of subparagraph  (B)  of  paragraph  four  of  this  subsection nor to life insurance policies that provide for the crediting of additional  amounts pursuant  to  subsection  (b)  of  section  four  thousand  two  hundred thirty-two of this article  if  the  aggregate  reserves  for  all  such policies  are  at  least equal to the greatest of present values, at the date of valuation, of the future guaranteed cash surrender values at any time under all such  policies,  assuming  no  future  premiums  and  the mortality  tables and interest rates prescribed under paragraphs two and four of this subsection.  (8) Notwithstanding  the  provisions  of  subsection  (a)  hereof  and notwithstanding  the  provisions  of  subsection  (g)  of  section  four thousand two hundred twenty-one of this article, after a life  insurance company  has  established  reserves  for  participating  life  insurance policies in accordance with a method consistent with the  provisions  of this  chapter,  it  may  calculate  such reserves according to a rate of interest lower than the rate of interest previously used in  calculating reserves   for   the   same  policies  only  with  the  consent  of  the superintendent, subject to such conditions, if any, as he may impose.  (9) In the case of any plan  of  life  insurance  which  provides  for future  premium determination, the amounts of which are to be determined by the insurance company based on then estimates of  future  experience, or in the case of any plan of life insurance or annuity which is of such a  nature  that the minimum reserves cannot be determined by the methods described in paragraph six hereof and section four thousand two  hundred eighteen  of  this  article,  the reserves which are held under any such plan must:  (A) be appropriate in relation to the  benefits  and  the  pattern  of premiums for that plan, and  (B) be computed by a method which is consistent with the principles of such paragraph and such section as determined by the superintendent.  (10) (A) The superintendent shall, by regulation, issue guidelines for the  determination of the minimum reserve value required by this section for any plan or plans  of  life  insurance  policies  under  which  cash surrender  values and policy loan values are adjusted in accordance with a market-value adjustment formula.  (B) The regulation may require any company issuing or delivering  such policies  in this state to submit to the superintendent with each annual report  an  opinion,  in  form  and  substance   satisfactory   to   the superintendent,  of  a  qualified actuary that the reserves for all such policies in force at the end of the year, and the  assets  held  by  the company  in  support  of  such reserves, make adequate provision for the  liabilities of the company with respect  thereto,  such  opinion  to  be accompanied  by a memorandum, also in form and substance satisfactory to the superintendent, of the qualified actuary describing the calculations made  in  support  of  such  opinion  and  the  assumptions  used in the calculations. The regulation may prescribe the calculations required  to support such opinions and may provide that if the company has designated particular  assets  primarily to support reserves for a class or classes of policies, including reserves for policies  determined  in  accordance with  the regulation, the opinion of the company's qualified actuary may apply to the policies whose reserves are supported by such  assets.  For purposes  hereof,  "qualified actuary" has the meaning ascribed to it by subparagraph (E) of paragraph four of subsection (e) of this section.  (C) With respect to  any  policies  covered  by  the  regulation  that provide  for  the  allocation  of  assets  to  a  separate account which qualifies under item (iii)  of  paragraph  five  of  subsection  (a)  of section  four  thousand  two  hundred forty of this article and in which assets are valued at their market value in accordance with the terms  of such  policies,  the  regulation  may  provide  for the valuation of the reserves for such policies in a consistent manner.  (d) The company shall maintain reserves for all individual  and  group accident  and  health  insurance policies which reserves shall reflect a sound value placed on its liabilities under such policies and  shall  be not   less   than   the  reserves  required  by  regulations  which  the superintendent shall promulgate.  (e) Actuarial opinion of reserves.  (1) General. Every life insurance company doing business in this state shall annually submit the opinion of a qualified actuary as  to  whether the reserves and related actuarial items held in support of the policies and contracts specified by the superintendent by regulation are computed appropriately,  are  based  on  assumptions  which  satisfy  contractual provisions, are consistent with prior reported amounts and  comply  with applicable  laws  of  this state. The superintendent by regulation shall define the specifics of this opinion and add any other items  deemed  to be necessary to its scope.  (2)  (A)  Actuarial  analysis  of  reserves and assets supporting such reserves. Every  life  insurance  company,  except  as  exempted  by  or pursuant  to  regulation,  shall  also  annually  include in the opinion required by paragraph one of this subsection, an  opinion  of  the  same qualified actuary as to whether the reserves and related actuarial items held  in  support  of  the  policies  and  contracts  specified  by  the superintendent by regulation, when considered in  light  of  the  assets held  by  the company with respect to the reserves and related actuarial items, including but not limited  to  the  investment  earnings  on  the assets  and  the  considerations anticipated to be received and retained under the policies  and  contracts,  make  adequate  provision  for  the company's  obligations  under  the policies and contracts, including but not limited to the benefits  under  and  expenses  associated  with  the policies and contracts.  (B)  The  superintendent  may  provide  by regulation for a transition period for establishing any  additional  reserves  which  the  qualified actuary  may  deem  necessary in order to render the opinion required by this paragraph.  (3) Requirement for actuarial memorandum. (A) Except as exempted by or pursuant to regulation, a memorandum, in form and  substance  acceptable to  the  superintendent as specified by regulation, shall be prepared to support each actuarial opinion submitted pursuant to subparagraph (A) of paragraph two of this subsection. Each company required to prepare  such memorandum shall submit such memorandum to the superintendent as part of  its  submission of the opinion of the qualified actuary pursuant to such subparagraph (A), except as otherwise provided in  subparagraph  (B)  of this  paragraph  and  except  that  if  a  foreign  or alien company has submitted  a  memorandum in support of an opinion of a qualified actuary for the prior year to the commissioner of  a  state  accredited  by  the National  Association  of Insurance Commissioners and if that memorandum was in form and substance acceptable to  the  commissioner  and  was  in support  of  an opinion of a qualified actuary that was required by laws or regulations of that state to meet standards adopted from time to time by the Actuarial Standards Board and such additional  standards  as  the superintendent  has prescribed, the foreign or alien company need submit the memorandum required by this subparagraph only at the request of  the superintendent or as the superintendent may by regulation require.  (B)  In lieu of preparing a memorandum as required by subparagraph (A) of this paragraph, a company may increase its  reserves  in  the  manner provided  by the superintendent by regulation. If a company that has not so increased its reserves fails  to  file  a  supporting  memorandum  as required  by  subparagraph  (A)  of this paragraph or fails to provide a supporting memorandum at the request  of  the  superintendent  within  a period specified by regulation or the superintendent determines that the supporting  memorandum  provided  by  the  company  fails  to  meet  the standards prescribed by the regulations or is otherwise unacceptable  to the superintendent, the superintendent may engage a qualified actuary at the  expense  of the company to review the opinion and the basis for the opinion and prepare such supporting memorandum as  is  required  by  the superintendent.  (4)  Requirement  for all opinions. Every opinion shall be governed by the following provisions:  (A)  The  opinion  shall  be  submitted  with  the  annual   statement reflecting  the  valuation  of  such  reserve  liabilities for each year ending on or after December thirty-first, nineteen hundred ninety-four.  (B) The opinion  shall  apply  to  all  business  in  force  including individual  and  group  health  insurance  plans,  in form and substance acceptable to the superintendent as specified by regulation.  (C) The opinion shall be based on standards adopted from time to  time by the Actuarial Standards Board and on such additional standards as the superintendent may by regulation prescribe.  (D) In the case of an opinion required to be submitted by a foreign or alien  company,  the  superintendent may accept the opinion submitted by that company to the commissioner of a state accredited by  the  National Association  of Insurance Commissioners if the superintendent determines that the opinion reasonably  meets  the  requirements  applicable  to  a company domiciled in this state.  (E)  For  the purposes of this subsection, "qualified actuary" means a member in good standing of the American Academy of Actuaries  who  meets the requirements prescribed by the superintendent by regulation.  (F)  Except in cases of fraud, willful misconduct or gross negligence, the qualified actuary shall not be liable  for  damages  to  any  person (other  than  the  insurance company or the superintendent) for any act, error, omission, decision or  conduct  with  respect  to  the  actuary's opinion  and  memorandum.  The provisions of this subparagraph shall not operate to remove, condition or limit any rights, remedies or actions at law or equity which the insurance company or the superintendent may have or take against or with respect to the qualified actuary.  (G) Disciplinary action by the superintendent against the  company  or the   qualified   actuary   shall  be  defined  in  regulations  by  the superintendent.  (H)  Non-public  information  (meaning   information   not   otherwise available  from public documents or records) contained in any memorandum in support of the opinion, or in any  other  material  provided  by  the company  to  the  superintendent  in  connection therewith, shall at the written   request   of   the   company   be  kept  confidential  by  the superintendent and shall not be made public, other than for the  purpose of  enabling any person to defend against an action seeking damages from such person by reason of any action  required  by  this  section  or  by regulations   promulgated   hereunder;   provided,  however,  that  such non-public information may otherwise be released by  the  superintendent (i)  with  the written consent of the company or (ii) for the purpose of professional disciplinary proceedings conducted by the superintendent or by any professional body, provided that steps deemed appropriate by  the superintendent  are  taken  to  preserve  the  confidentiality  of  such non-public   information.      Notwithstanding   the   foregoing,    the superintendent  shall  release  the  non-public  information  to persons making demand therefor in  a  criminal  proceeding  pursuant  to  lawful subpoena,  warrant  or  court  order or in response to a subpoena from a grand jury served upon the superintendent.   Any  such  request  by  the company  for confidentiality shall designate with reasonable specificity the portion of such memorandum or other material with respect  to  which confidentiality  is  requested  pursuant to this subparagraph. Once such memorandum or other material, or any portion thereof containing  matters with  respect  to  which confidentiality has been requested, is cited by the company in its marketing or is cited before any governmental  agency (other  than a state insurance department) or is released by the company to the news media, all portions of such  memorandum  or  other  material shall be no longer confidential.  (f)  (1)  An  insurer shall be deemed to meet the minimum standard for the valuation of life insurance, if the amount of its aggregate reserves for group life insurance, for ordinary life insurance and for industrial life insurance, whether or not held in  separate  accounts  pursuant  to section four thousand two hundred forty of this article, is in each case at  least  equal  to  the  aggregate  minimum  standard required by this section for the respective valuation thereof.  (2) An insurer shall be deemed to meet the minimum  standard  for  the valuation  of  annuities and guaranteed interest contracts if the amount of its aggregate reserves therefor, whether  or  not  held  in  separate accounts  pursuant  to  such  section  forty-two  hundred  forty of this article, is at least equal to the aggregate minimum standard required by this section for the valuation thereof.  (3) An insurer shall be deemed to meet the minimum  standard  for  the valuation of individual and group accident and health insurance policies if  the  amount  of its aggregate reserves therefor is at least equal to the  aggregate  minimum  standard  required  by  this  section  for  the valuation thereof.  (4)  Without  the  specific  approval of the superintendent subject to such conditions as he may prescribe and as provided  by  regulation,  an insurer  shall  not aggregate the reserves referred to in two or more of paragraph one, two or three of  this  subsection.  Such  regulation  may prescribe  the  conditions  under  which  the  valuation  of two or more classes of business  of  insurance  or  the  valuation  of  all  of  its insurance business to which this section applies may be combined.  (5)  For  purposes  of this subsection, the aggregate minimum standard required by this section for the valuation of any insurance policies  or contracts  shall  be  deemed  to include such additional reserves as the qualified actuary deems necessary, taking into  account  any  transition rules  provided  by regulation pursuant to subparagraph (B) of paragraph  two of subsection (e) of this section, in order to  render  the  opinion required  by subsection (e) of this section and such additional reserves as may be necessary  to  comply  with  regulations  promulgated  by  the superintendent pursuant to this section.   * (g)(1) This subsection shall apply only to individual and group life insurance  policies  and  annuity  contracts  issued  on  or  after  the operative  date  of  the  valuation  manual   as   prescribed   by   the superintendent  by regulation, provided that the operative date shall be no sooner than January first, two thousand nineteen.  (2) For the  purposes  of  this  subsection,  "NAIC"  shall  mean  the National Association of Insurance Commissioners.  (3) For purposes of this subsection, "principle-based valuation" shall mean  a  reserve valuation that uses methods and assumptions required by paragraph eleven of  this  subsection  as  specified  in  the  valuation manual.  (4)  For purposes of this subsection, "qualified actuary" shall mean a member in good standing of the American Academy of Actuaries  who  meets the requirements prescribed by the superintendent by regulation.  (5) For purposes of this subsection, "valuation manual" shall mean the valuation  manual  adopted  by the NAIC on December second, two thousand twelve, as subsequently amended, and as approved by  the  superintendent upon a finding that such manual is for the best interests of the holders of  policies  and contracts and annuitants of this state and which meets the requirements as set forth in this subsection.  (6) Notwithstanding subsection (c) of this section  and  section  four thousand  two hundred eighteen of this article, the minimum standard for the valuation of all such policies and contracts shall be  the  standard prescribed in the valuation manual.  (7)  The  valuation  manual  shall  not become operative in this state unless and until the superintendent has approved of such manual and  has adopted all necessary regulations to effectuate this subsection.  (8) (A) No amendment to the valuation manual shall take effect in this state  unless  the  superintendent  finds that such amendment is for the best interests of the holders of policies and contracts  and  annuitants of this state.  (B)  The  superintendent  may  deviate,  through regulations, from the reserve  standards,  valuation   methods,   assumptions,   and   related requirements   in   the   valuation  manual,  including  for  individual companies, provided, however, that such deviation shall  not  result  in reserve  valuations that are lower than the minimum standards prescribed in the valuation manual and may be based on a percentage of the reserves being held for the policies and contracts  subject  to  this  subsection prior to the operative date of such manual.  (9) The valuation manual shall specify all of the following:  (A)  Minimum  valuation  standards for and definitions of the policies and  contracts  subject  to  this  subsection  as  determined   by   the superintendent. Such minimum valuation standards shall be:  (i)  The  commissioners  reserve  valuation  method for life insurance policies subject to this subsection; and  (ii) The commissioners annuity reserve valuation  method  for  annuity contracts subject to this subsection.  (B) Requirements for the format of reports to the superintendent under item  (iii)  of  subparagraph (B) of paragraph eleven of this subsection and which shall  include  information  necessary  to  determine  if  the valuation is appropriate and in compliance with this subsection;  (C)  Assumptions  for  risks  over  which  a  company  does  not  have significant control or influence;  (D) Procedures for corporate governance and oversight of the actuarial function, and a process for appropriate waiver or modification  of  such procedures;  (E)  Other requirements, including, but not limited to, those relating to reserve methods, models for measuring risk,  generation  of  economic scenarios,   assumptions,  margins,  use  of  company  experience,  risk measurement, disclosure, certifications, reports, actuarial opinions and memorandums, transition rules and internal controls; and  (F) The data and form of the data required under paragraph  twelve  of this  subsection,  with  whom  the  data  shall  be submitted, and other requirements including data analyses and reporting of analyses.  (10) The superintendent may engage a qualified actuary, at the expense of a company, to perform an actuarial examination of  such  company  and opine on the appropriateness of any reserve assumption or method used by such  company,  or to review and opine on such company's compliance with any requirement set forth in this subsection.  (11) (A) A company that issues policies and contracts subject to  this subsection  shall  establish  reserves using a principle-based valuation that meets the following conditions for such policies and  contracts  as specified in the valuation manual:  (i)  Quantify the benefits and guarantees, and the funding, associated with  the  policies  or  contracts  and  their  risks  at  a  level   of conservatism  that  reflects  conditions that include unfavorable events that have a reasonable probability of occurring during the  lifetime  of the  policies and contracts. For policies and contracts with significant tail risk, reflect conditions appropriately adverse to quantify the tail risk.  (ii) Incorporate assumptions,  risk  analysis  methods  and  financial models  and  management  techniques  that  are  consistent with, but not necessarily identical to, those utilized within  the  company's  overall risk  assessment  process,  while  recognizing  potential differences in financial  reporting  structures  and  any  prescribed  assumptions   or methods.  (iii) Incorporate assumptions that are derived in one of the following manners:  (I) The assumption is prescribed in the valuation manual.  (II) For assumptions that are not prescribed, the assumptions shall:   a. be established utilizing the company's available experience, to the extent it is relevant and statistically credible; or   b.  to  the extent that company experience is not available, relevant, or statistically credible,  be  established  utilizing  other  relevant, statistically credible experience.  (iv)  Provide  margins for uncertainty including adverse deviation and estimation error, such that the greater the uncertainty the  larger  the margin and resulting reserve.  (B)  A  company  that  issues  policies  and contracts subject to this subsection shall:  (i) Establish procedures for corporate governance and oversight of the actuarial valuation function consistent  with  those  described  in  the valuation manual.  (ii)  Provide  to  the superintendent, annually on or before a date as determined by the superintendent, and the  board  of  directors  of  the company  an  annual  certification  of the effectiveness of the internal controls with respect to the principle-based  valuation.  Such  controls shall  be  designed  to  assure  that all material risks inherent in the liabilities and associated assets subject to such valuation are included in the valuation, and that valuations are made in  accordance  with  the  valuation  manual.  The  certification shall be based on the controls in place as of the end of the preceding calendar year.  (iii)  Develop,  and  file  with  the  superintendent  upon request, a principle-based valuation report that complies with standards prescribed in the valuation manual.  (C) A principle-based valuation shall include a  prescribed  formulaic reserve component.  (12)  A  company  that  issues  policies and contracts subject to this subsection shall submit mortality, morbidity, policyholder behavior,  or expense  experience and other data as prescribed in the valuation manual to the superintendent annually on or before a date as determined by  the superintendent.  (13)  (A)  The  superintendent  may  exempt  specific product forms or product lines of a domestic company that is licensed and doing  business only in this state from the requirements of this subsection provided:  (i)  The  superintendent  has  issued  an  exemption in writing to the company and has not subsequently revoked the exemption in writing; and  (ii) The company computes reserves using assumptions and methods  used prior  to  the operative date of the valuation manual in addition to any requirements  established  by  the  superintendent  and  promulgated  by regulation.  (B)  For  any  company  granted  an  exemption  under  this paragraph, subsections (c), (d), (e) and (f)  of  this  section  and  section  four thousand  two hundred eighteen of this article shall be applicable. With respect to any company applying for this  exemption,  any  reference  to subsection  (g)  found  in  subsections  (c),  (d),  (e) and (f) of this section and section four thousand two hundred eighteen of  this  article shall not be applicable.   * NB Repealed December 7, 2028