2023 Oklahoma Statutes › Title 36. Insurance › §36-4061. Definitions - Reserves and related actuarial items - Appropriate computation and adequacy - Periodic opinion and memorandum of qualified actuary - Requirements - Liability - Actuarial Opinion of Reserves - Confidentiality.

A. Definitions. For the purposes of this section, the following definitions shall apply on or after the operative date of the valuation manual:
1. "Accident and health insurance" means contracts that incorporate morbidity risk and provide protection against economic loss resulting from accident, sickness, or medical conditions and as may be specified in the valuation manual;
2. "Appointed actuary" means a qualified actuary who is appointed in accordance with the valuation manual to prepare the actuarial opinion required in this section;
3. "Company" means an entity which:
a.
has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in this state and has at least one such policy in force or on claim, or
b.
has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in any state and is required to hold a certificate of authority to write life insurance, accident and health insurance, or deposit-type contracts in this state;
4. "Deposit-type contract" means contracts that do not incorporate mortality or morbidity risks and as may be specified in the valuation manual;
5. "Life insurance" means contracts that incorporate mortality risk, including annuity and pure endowment contracts, and as may be specified in the valuation manual;
6. "NAIC" means the National Association of Insurance Commissioners;
7. "Principle-based valuation" means a reserve valuation that uses one or more methods or one or more assumptions determined by the insurer and is required to comply with subsection Q of Section 1510 of this title as specified in the valuation manual;
8. "Qualified actuary" means an individual who is qualified to sign the applicable statement of actuarial opinion in accordance with the American Academy of Actuaries qualification standards for actuaries signing such statements and who meets the requirements specified in the valuation manual; and
9. "Valuation manual" means the manual of valuation instructions adopted by the NAIC as specified in Section 1510 of this title or as subsequently amended.
B. Actuarial Opinion Beginning January 1, 1998, and Prior to the Operative Date of the Valuation Manual.
1. Every life insurance company doing business in this state shall annually, and quarterly if required by the Insurance Commissioner, 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 Insurance Commissioner by rule are computed appropriately, are based on assumptions which satisfy contractual provisions, are consistent with prior reported accounts and comply with applicable laws of this state. The Commissioner by rule shall define the specifics of this opinion and add any other items deemed to be necessary to its scope.
2.
a.
Every life insurance company, except as exempted by or pursuant to rule, shall also annually, and quarterly if required by the Insurance Commissioner, include in the opinion required by paragraph 1 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 Commissioner by rule, 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 Commissioner may provide by rule for a transition period for establishing any higher reserves which the qualified actuary may deem necessary in order to render the opinion required by this section.
3. Each opinion required by paragraph 2 of this subsection shall be accompanied by a memorandum, in form and substance acceptable to the Commissioner as specified by rule, prepared to support each actuarial opinion. If the insurance company fails to provide a supporting memorandum at the request of the Commissioner within a period specified by rule, or the Commissioner determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by the rules or is otherwise unacceptable to the Commissioner, the Commissioner 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 Commissioner.
4. Every opinion shall be governed by the following provisions:
a.
the opinion shall be submitted with the annual statement and quarterly statement, if a quarterly statement is required by the Commissioner, reflecting the valuation of such reserve liabilities for each year,
b.
the opinion shall apply to all business in force including individual and group health insurance plans, in form and substance acceptable to the Commissioner as specified by rule,
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 Commissioner may by rule prescribe,
d.
in the case of an opinion required to be submitted by a foreign or alien company, the Commissioner may accept the opinion filed by that company with the insurance supervisory official of another state if the Commissioner determines that the opinion reasonably meets the requirements applicable to a company domiciled in this state,
e.
except in cases of fraud or willful misconduct, the qualified actuary shall not be liable for damages to any person, other than the insurance company and the Commissioner, for any act, error, omission, decision or conduct with respect to the actuary's opinion, and
f.
disciplinary action by the Commissioner against the company or the qualified actuary shall be defined in rules by the Commissioner.
5.
a.
Any memorandum in support of the opinion, and any other material provided by the company to the Commissioner in connection therewith, shall be kept confidential by the Commissioner and shall not be made public and shall not be subject to subpoena, other than for the purpose of defending an action seeking damages from any person by reason of any action required by this section or by rules promulgated hereunder; provided, however, that the memorandum or other material may otherwise be released by the Commissioner as follows:
(1)
with the written consent of the company, or
(2)
to the American Academy of Actuaries upon request stating that the memorandum or other material is required for the purpose of professional disciplinary proceedings and setting forth procedures satisfactory to the Commissioner for preserving the confidentiality of the memorandum or other material.
b.
Once any portion of the confidential memorandum 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 the confidential memorandum shall be no longer confidential.
6. For the purposes of this section, "qualified actuary" means a member in good standing of the American Academy of Actuaries who meets the requirements set forth in rules promulgated by the Insurance Commissioner.
C. Actuarial Opinion of Reserves after the Operative Date of the Valuation Manual.
1. Every company with outstanding life insurance contracts, accident and health insurance contracts or deposit-type contracts in this state and subject to regulation by the commissioner shall annually, and quarterly if required by the Insurance Commissioner, submit the opinion of the appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts are computed appropriately, are based on assumptions which satisfy contractual provisions, are consistent with prior reported accounts and comply with applicable laws of this state. The valuation manual will prescribe the specifics of this opinion including any items deemed to be necessary to its scope.
2. Every life insurance company with outstanding life insurance contracts, accident health insurance contracts or deposit type contracts in this state and subject to regulation by the commissioner, except as exempted in the valuation manual, shall also annually, and quarterly if required by the Insurance Commissioner, include in the opinion required by paragraph 1 of this subsection, an opinion of the same appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified in the valuation manual, 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.
3. Each opinion required by paragraph 2 of this subsection shall be accompanied by a memorandum, in form and substance as specified in the valuation manual, and acceptable to the Commissioner, prepared to support each actuarial opinion. If the insurance company fails to provide a supporting memorandum at the request of the Commissioner within a period specified in the valuation manual or is otherwise unacceptable to the Commissioner, the Commissioner 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 Commissioner.
4. Every opinion shall be governed by the following provisions:
a.
the opinion shall be in form and substance as specified in the valuation manual and acceptable to the Commissioner,
b.
the opinion shall be submitted with the annual statement and quarterly statement, if a quarterly statement is required by the Commissioner, reflecting the valuation of such reserve liabilities for each year ending on or after the operative date of the valuation manual,
c.
the opinion shall apply to all policies and contracts subject to paragraph 2 of this subsection, plus other actuarial liabilities as may be specified in the valuation manual,
d.
the opinion shall be based on standards adopted from time to time by the Actuarial Standards Board or its successor, and on such additional standards as may be prescribed in the valuation manual,
e.
in the case of an opinion required to be submitted by a foreign or alien company, the Commissioner may accept the opinion filed by that company with the insurance supervisory official of another state if the Commissioner determines that the opinion reasonably meets the requirements applicable to a company domiciled in this state,
f.
except in cases of fraud or willful misconduct, the appointed actuary shall not be liable for damages to any person, other than the insurance company and the Commissioner, for any act, error, omission, decision or conduct with respect to the appointed actuary's opinion, and
g.
disciplinary action by the Commissioner against the company or the appointed actuary shall be defined in rules by the Commissioner.
D. Confidentiality.
1. For purposes of this subsection "confidential information" means:
a.
a memorandum in support of an opinion submitted under this section and any other documents, materials and other information, including, but not limited to, all working papers, and copies thereof, created, produced or obtained by or disclosed to the commissioner or any other person in connection with such memorandum,
b.
all documents, materials and other information, including, but not limited to, all working papers, and copies thereof, created, produced or obtained by or disclosed to the commissioner or any other person in the course of an examination made under paragraph 6 of subsection P of Section 1510 of this title; provided, however, that if an examination report or other material prepared in connection with an examination made under Sections 309.1 through 309.7 of this title is not held as private and confidential information under Sections 309.1 through 309.7 of this title, an examination report or other material prepared in connection with an examination made under paragraph 6 of subsection P of Section 1510 of this title shall not be "Confidential Information" to the same extent as if such examination report or other material had been prepared under Sections 309.1 through 309.7 of this title,
c.
any reports, documents, materials and other information developed by a company in support of, or in connection with, an annual certification by the company under subparagraph (b) of paragraph 2 of subsection Q of Section 1510 of this title evaluating the effectiveness of the company's internal controls with respect to a principle-based valuation and any other documents, materials and other information, including, but not limited to, all working papers, and copies thereof, created, produced or obtained by or disclosed to the commissioner or any other person in connection with such reports, documents, materials and other information,
d.
any principle-based valuation report developed under subparagraph (c) of paragraph 2 of subsection Q of Section 1510 of this title and any other documents, materials and other information, including, but not limited to, all working papers, and copies thereof, created, produced or obtained by or disclosed to the commissioner or any other person in connection with such report, and
e.
any documents, materials, data and other information submitted by a company under subsection R of Section 1510 of this title, collectively, "experience data", and any other documents, materials, data and other information, including, but not limited to, all working papers, and copies thereof, created or produced in connection with such experience data, in each case that include any potentially company-identifying or personally identifiable information, that is provided to or obtained by the commissioner, together with any "experience data", the "experience materials", and any other documents, materials, data and other information, including, but not limited to, all working papers, and copies thereof, created, produced or obtained by or disclosed to the commissioner or any other person in connection with such experience materials.
2. Privilege for, and Confidentiality of, Confidential Information.
a.
except as provided in this subsection, a company's Confidential Information is confidential by law and privileged, and shall not be subject to Oklahoma Open Records Act, shall not be subject to subpoena and shall not be subject to discovery or admissible in evidence in any private civil action; provided, however, that the commissioner is authorized to use the Confidential Information in the furtherance of any regulatory or legal action brought against the company as a part of the commissioner's official duties,
b.
neither the commissioner nor any person who received Confidential Information while acting under the authority of the commissioner shall be permitted or required to testify in any private civil action concerning any Confidential Information,
c.
in order to assist in the performance of the commissioner's duties, the commissioner may share Confidential Information:
(1)
with other state, federal and international regulatory agencies and with the NAIC and its affiliates and subsidiaries,
(2)
in the case of Confidential Information specified in subparagraphs (a) and (d) of paragraph 1 of this subsection, with the Actuarial Board for Counseling and Discipline or its successor upon request stating that the Confidential Information is required for the purpose of professional disciplinary proceedings and with state, federal and international law enforcement officials, and
(3)
in the case of (1) and (2), provided that such recipient agrees, and has the legal authority to agree, to maintain the confidentiality and privileged status of such documents, materials, data and other information in the same manner and to the same extent as required for the commissioner.
d.
the commissioner may receive documents, materials, data and other information, including otherwise confidential and privileged documents, materials, data or information, from the NAIC and its affiliates and subsidiaries, from regulatory or law enforcement officials of other foreign or domestic jurisdictions and from the Actuarial Board for Counseling and Discipline or its successor and shall maintain as confidential or privileged any document, material, data or other information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or other information,
e.
the commissioner may enter into agreements governing sharing and use of information consistent with paragraph 2 of this subsection,
f.
no waiver of any applicable privilege or claim of confidentiality in the Confidential Information shall occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subparagraph (c) of paragraph 2 of this subsection,
g.
a privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established under paragraph 2 of this subsection shall be available and enforced in any proceeding in, and in any court of, this state,
h.
in this subsection "regulatory agency", "law enforcement agency" and the "NAIC" include, but are not limited to, their employees, agents, consultants and contractors.
3. Notwithstanding paragraph 2 of this subsection, any Confidential Information specified in subparagraphs a and d of paragraph 1 of this subsection:
a.
may be subject to subpoena for the purpose of defending an action seeking damages from the appointed actuary submitting the related memorandum in support of an opinion submitted under this section or principle-based valuation report developed under subparagraph c of paragraph 2 of subsection Q of Section 1510 of this title by reason of an action required by Section 1510 of this title or by rules promulgated hereunder,
b.
may otherwise be released by the commissioner with the written consent of the company, and
c.
once any portion of a memorandum in support of an opinion submitted under this section or a principle-based valuation report developed under subparagraph c of paragraph 2 of subsection Q of Section 1510 of this title is cited by the company in its marketing or is publicly volunteered to or before a governmental agency other than a state insurance department or is released by the company to the news media, all portions of such memorandum or report shall no longer be confidential.
Added by Laws 1997, c. 273, § 4, eff. July 1, 1997. Amended by Laws 2001, c. 363, § 20, eff. July 1, 2001; Laws 2014, c. 50, § 2, eff. Nov. 1, 2014.