Connecticut Administrative Code › Title 38a - Insurance Department › 78 - Connecticut Standard Valuation Law Actuarial Opinion and Memorandum › Section 38a-78-7 - Statement of actuarial opinion based on an asset adequacy analysis

Current through July 10, 2024
(a)
General Description.
The
			 statement of actuarial opinion submitted in accordance with this section shall
			 consist of (1) a paragraph identifying the appointed actuary and his or her
			 qualifications consistent with the requirements of subdivision (1) of
			 subsection (b) of this section; (2) a scope paragraph identifying the subjects
			 on which the opinion is to be expressed and describing the scope of the
			 appointed actuary's work, including a tabulation delineating the reserves and
			 related actuarial items that have been analyzed for asset adequacy and the
			 method of analysis in accordance with subdivision (2) of subsection (b) of this
			 section and identifying the reserves and related actuarial items covered by the
			 opinion that may not have been so analyzed; (3) a reliance paragraph, in
			 accordance with subdivision (3) of subsection (b) of this section, describing
			 those areas, if any, where the appointed actuary has deferred to other experts
			 in developing data, procedures, or assumptions such as anticipated cash flows
			 from currently owned assets, including variation in cash flows according to
			 economic scenarios, supported by a statement of each such expert in the form
			 prescribed by subsection (e) of this section; (4) an opinion paragraph, in
			 accordance with subdivision (6) of subsection (b) of this section, expressing
			 the appointed actuary's opinion with respect to the adequacy of the supporting
			 assets to mature the liabilities; (5) one or more additional paragraphs in
			 individual company cases as follows; (A) if the appointed actuary considers it
			 necessary to state a qualification of his or her opinion; (B) if the appointed
			 actuary must disclose an inconsistency in the method of analysis or basis of
			 asset allocation used at the prior opinion date with that used for this
			 opinion; (C) if the appointed actuary must disclose whether additional reserves
			 as of the prior opinion date are released as of this opinion date, and the
			 extent of the release; (D) if the appointed actuary chooses to add a paragraph
			 briefly describing the assumptions that form the basis for the actuarial
			 opinion.
(b)
Recommended
			 Language.
The following language provided is that which in typical
			 circumstances would be included in a statement of actuarial opinion in
			 accordance with this section. The language may be modified as needed to meet
			 the circumstances of a particular case, but the appointed actuary shall use
			 language which clearly expresses his professional judgment. However, in any
			 event the opinion shall retain all pertinent aspects of the language provided
			 in this Section.
(1) The opening paragraph
			 shall indicate the appointed actuary's relationship to the company and his
			 qualifications to sign the opinion. For a company actuary, the opening
			 paragraph of the actuarial opinion shall include a statement such as:
"I, (name of actuary), am (title) of (name of company) and a
				member of the American Academy of Actuaries. I was appointed by, or by the
				authority of, the Board of Directors of said insurer to render this opinion as
				stated in the letter to the commissioner dated (insert date). I meet the
				Academy qualification standards for rendering the opinion and am familiar with
				the valuation requirements applicable to life and health companies."
For a consulting actuary, the opening paragraph of the
				actuarial opinion shall contain a sentence such as:
"I, (name and title of actuary), a member of the American
				Academy of Actuaries, am associated with the firm of (insert name of consulting
				firm). I have been appointed by, or by the authority of, the Board of Directors
				of (name of company) to render this opinion as stated in the letter to the
				commissioner dated (insert date). I meet the Academy qualification standards
				for rendering the opinion and am familiar with the valuation requirements
				applicable to life and health insurance companies."
(2) The scope paragraph shall contain a
			 sentence such as the following: "I have examined the actuarial assumptions and
			 actuarial methods used in determining reserves and related actuarial items
			 listed below, as shown in the annual statement of the company, as prepared for
			 filing with state regulatory officials, as of December 31, ( )."
Tabulated below are those reserves and related actuarial items
				that shall be subjected to asset adequacy analysis.
Asset Adequacy Tested Amounts - Reserves and
						  Liabilities
Statement Item
Formula Reserves (1)
Additional Actuarial Reserves (a)
						  (2)
Analysis Methods (b)
Other Amount (3)
Total Amount (1)+(2)+(3) (4)
Exhibit 5 Life
						  Insurance
Annuities
Supplementary Contracts with Line
						  Contingencies
Accidental Death
						  Benefits
Disability - Active
						  Lives
Disability - Disabled
						  Lives
Miscellaneous
						  Reserves
Total Exhibit 5 (Line 1, Page
						  3)
Exhibit 6 Active Life
						  Reserve
Claim
						  Reserve
Total Exhibit 6 (Line 2, Page
						  3)
Exhibit 7 Premium and Other Deposit Funds (Column 6,
						  Line 14)
Guaranteed Interest Contracts (Column 2, Line
						  14)
Annuities Certain (Column 3, Line
						  14)
Supplemental Contracts (Column 4, Line
						  14)
Dividend Accumulations or Refunds (Column 5, Line
						  14)
Total Exhibit 7 (Line 3, Page
						  3)
Exhibit 8 Part 1 1 Life (Line 4.1, Page
						  3)
2 Health (Line 4.2, Page
						  3)
Total Exhibit 8 Part
						  1
Separate Accounts (Page 3 of the Annual Statement of
						  the Separate Accounts, Lines 1 and 2)
TOTAL
						  RESERVES
IMR (General Account, Page _________ Line _________
						  )
(Separate Accounts, Page _________ Line
						  _________)
AVR (Page _________ Line _________ )
(c)
Net Deferred and Uncollected
						  Premium
Notes:
(a) The
			 additional actuarial reserves established under subdivision (2) of subsection
			 (e) of section
			 38a-78-5 of
			 the Regulations of the Connecticut State Agencies.
(b) The appointed actuary shall indicate the
			 method of analysis, determined in accordance with the standards for asset
			 adequacy analysis referred to in subsection (d) of section
			 38a-78-5 of
			 the Regulations of Connecticut State Agencies, by means of symbols that shall
			 be defined in footnotes to the table.
(c) Allocated amount of Asset Valuation
			 Reserve (AVR).
(3) If
			 the appointed actuary has relied on other experts to develop certain portions
			 of the analysis, the reliance paragraph shall include a statement such as:
"I have relied on (name), (title) for (e.g., "anticipated cash
				flows from currently owned assets, including variations in cash flows according
				to economic scenarios" or "certain critical aspects of the analysis performed
				in conjunction with forming my own opinion"), as certified in the attached
				statement. I have reviewed the information relied upon for
				reasonableness."
A statement of reliance on other experts shall be accompanied
				by a statement by each of the experts in the form prescribed by subsection (e)
				of this section.
(4) If the
			 appointed actuary has examined the underlying asset and liability records, the
			 reliance paragraph shall include a statement such as:
"My examination included such review of the actuarial
				assumptions and actuarial methods and of the underlying basic asset and
				liability records and such tests of the actuarial calculations as I considered
				necessary. I also reconciled the underlying basic asset and liability records
				to (exhibits and schedules listed as applicable) of the company's current
				annual statement."
(5) If
			 the appointed actuary has not examined the underlying records, but has relied
			 upon data such as listings and summaries of policies in force or asset records,
			 prepared by the company, the reliance paragraph shall include a statement such
			 as:
"In forming my opinion on (specify types of reserves) I relied
				upon data prepared by (name and title of company officer certifying in force
				records or other data) as certified in the attached statements. I evaluated
				that data for reasonableness and consistency. I also reconciled that data to
				(exhibits and schedules to be listed as applicable) of the company's current
				annual statement. In other respects, my examination included review of the
				actuarial assumptions and actuarial methods used and tests of the calculations
				I considered necessary."
The section shall be accompanied by a statement by each person
				relied upon in the form prescribed by subsection (e) of this section.
(6) The opinion paragraph shall
			 include a statement such as:
"In my opinion the reserves and related actuarial values
				concerning the statement items identified above:
(A) are computed in accordance with presently
			 accepted actuarial standards consistently applied and are fairly stated, in
			 accordance with sound actuarial principles;
(B) are based on actuarial assumptions that
			 produce reserves at least as great as those called for in any contract
			 provision as to reserve basis and method, and are in accordance with all other
			 contract provisions;
(C) meet the
			 requirements of the insurance laws of the state of (state of domicile) and are
			 at least as great as the minimum aggregate amounts required by the state in
			 which this statement is filed;
(D)
			 are computed on the basis of assumptions consistent with those used in
			 computing the corresponding items in the annual statement of the preceding
			 yearend (with any exceptions noted below); and
(E) include provision for all actuarial
			 reserves and related statement items which ought to be established.
The reserves and related items, when considered in light of the
				assets held by the company with respect to such 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 provisions, according to presently accepted
				actuarial standards of practice, for the anticipated cash flows required by the
				contractual obligations and related expenses of the company.
The actuarial methods, considerations and analyses used in
				forming my opinion conform to the appropriate Standards of Practice as
				promulgated by the Actuarial Standards Board, which standards form the basis of
				this statement of opinion.
(This opinion is updated annually as required by statute. To
				the best of my knowledge, there have been no material changes from the
				applicable date of the annual statement to the date of the rendering of this
				opinion which should be considered in reviewing this opinion.) or (The
				following material changes which occurred between the date of the statement for
				which this opinion is applicable and the date of this opinion should be
				considered in reviewing this opinion: (insert description of the change or
				changes).
Note: Choose one of the above two paragraphs, whichever is
				applicable.
The impact of unanticipated events subsequent to the date of
				this opinion is beyond the scope of this opinion. The analysis of asset
				adequacy portion of this opinion should be viewed recognizing that the
				company's future experience may not follow all the assumptions used in the
				analysis.
________________________________________________
Signature of Appointed Actuary
________________________________________________
Address of Appointed Actuary
________________________________________________
Telephone Number of Appointed Actuary
________________________________________________
Date"