reglab/statecodes huggingface dataset:
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:37 - Actuarial opinions and memorandums › Section 20:06:37:37 - Assumptions for new issues

Current through Register Vol. 51, page 10, July 15, 2024
The adoption for new issues or new claims or other new liabilities of an actuarial assumption which differs from a corresponding assumption used for prior new issues or new claims or other new liabilities is not a change in actuarial assumptions within the meaning of §§
									20:06:37:29  to 20:06:37:39, inclusive.
General Authority:
SDCL  58-26-46,  58-26-47,  58-26-50.
Law Implemented:
SDCL  58-26-46,  58-26-47,  58-26-50.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:37 - Actuarial opinions and memorandums › Section 20:06:37:38 - Adverse opinions

Current through Register Vol. 51, page 10, July 15, 2024
If the appointed actuary is unable to form an opinion, then the actuary shall refuse to issue a statement of actuarial opinion. If the appointed actuary's opinion is adverse or qualified, then the actuary shall issue an adverse or qualified actuarial opinion explicitly stating the reason or reasons for that opinion. This statement follows the scope paragraph and precedes the opinion paragraph.
General Authority:
SDCL  58-26-46,  58-26-47,  58-26-50.
Law Implemented:
SDCL  58-26-46,  58-26-47,  58-26-50.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:37 - Actuarial opinions and memorandums › Section 20:06:37:39 - Reliance on information furnished by other persons

Current through Register Vol. 51, page 10, July 15, 2024
If the appointed actuary relies on the certification of others on matters concerning the accuracy or completeness of any data underlying the actuarial opinion, or the appropriateness of any other information used by the appointed actuary in forming the actuarial opinion, the actuarial opinion shall indicate any person the actuary has relied upon and a precise identification of the items subject to reliance. In addition, any person on whom the appointed actuary has relied shall provide a certification that precisely identifies the items on which the person is providing information and a statement as to the accuracy, completeness, or reasonableness, as applicable, of the items. This certification shall include the signature, title, company, address, and telephone number of the person rendering the certification, as well as the date on which it is signed.
General Authority:
SDCL  58-26-46,  58-26-47,  58-26-50.
Law Implemented:
SDCL  58-26-46,  58-26-47,  58-26-50.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:37 - Actuarial opinions and memorandums › Section 20:06:37:40 - Description of actuarial memorandum including an asset adequacy analysis and a regulatory asset adequacy issues summary

Current through Register Vol. 51, page 10, July 15, 2024
In accordance with SDCL  58-26-46 to  58-26-55, inclusive, the appointed actuary shall prepare a memorandum to the company describing the analysis done in support of the actuary's opinion regarding the reserves under §§
									20:06:37:29  to 20:06:37:39, inclusive. The memorandum must be made available for examination by the director upon the request of the director. The director shall return the memorandum to the company after examining it. The memorandum is not considered a record of the insurance division or subject to automatic filing with the director.
In preparing the memorandum, the appointed actuary may rely on, and include as a part of the actuary's own memorandum, memoranda prepared and signed by other actuaries who are qualified within the meaning of §
									20:06:37:05  regarding the areas covered in the memoranda and who so state in their memoranda.
If the director requests a memorandum and no such memorandum exists or if the director finds that the analysis described in the memorandum fails to meet the standards of the Actuarial Standards Board or the standards and requirements of this chapter, the director may designate a qualified actuary to review the opinion and prepare a supporting memorandum. The reasonable and necessary expense of the independent review must be paid by the company but is directed and controlled by the director.
The reviewing actuary has the same status as an examiner for purposes of obtaining data from the company, and the work papers and documentation of the reviewing actuary are retained by the director. However, any information provided by the company to the reviewing actuary and included in the work papers is considered to be material provided by the company to the director and must be kept confidential to the same extent as prescribed by SDCL chapter 58-3 for other material provided by the company to the director. The reviewing actuary may not be an employee of a consulting firm involved with the preparation of any prior memorandum or opinion for the insurer pursuant to this chapter for either the current year or any of the preceding three years.
In accordance with SDCL  58-26-46 to  58-26-55, inclusive, the appointed actuary shall prepare a regulatory asset adequacy issues summary, the contents of which are specified in §
									20:06:37:41.01. The regulatory asset adequacy issues summary shall be submitted no later than March 15 of the year following the year for which a statement of actuarial opinion based on asset adequacy is required. The regulatory asset adequacy issues summary is to be kept confidential to the same extent and under the same conditions as the actuarial memorandum.
General Authority:
SDCL  58-26-49.
Law Implemented:
SDCL  58-26-46,  58-26-47.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:37 - Actuarial opinions and memorandums › Section 20:06:37:41 - Details of the memorandum section documenting asset adequacy analysis

Current through Register Vol. 51, page 10, July 15, 2024
If an actuarial opinion is provided, the memorandum must demonstrate that the analysis has been done in accordance with the standards for asset adequacy referred to in §
									20:06:37:07  and any additional standards under this chapter. It must specify the following:
(1) For reserves:
(a) Product descriptions, including a market description, underwriting and other aspects of a risk profile, and the specific risks the appointed actuary considers significant;
(b) Source of liability in force;
(c) Reserve method and basis;
(d) Investment reserves;
(e) Reinsurance arrangements;
(f) Identification of any explicit or implied guarantees made by the general account in support of benefits provided through a separate account or under a separate account policy or contract and the methods used by the appointed actuary to provide for the guarantees in the asset adequacy analysis;
(g) Documentation of assumptions to test reserves for the following:
(i) Lapse rates (both base and excess);
(ii) Interest crediting rate strategy;
(iii) Mortality;
(iv) Policyholder dividend strategy;
(v) Competitor or market interest rate;
(vi) Annuitization rates;
(vii) Commissions and expenses; and
(viii) Morbidity.
The documentation of the assumption shall be such that an actuary reviewing the actuarial memorandum could form a conclusion as to the reasonableness of the assumptions;
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:37 - Actuarial opinions and memorandums › Section 20:06:37:41.01 - Details of the regulatory asset adequacy issues summary

Current through Register Vol. 51, page 10, July 15, 2024
The regulatory asset adequacy issues summary shall be signed and dated by the appointed actuary rendering the actuarial opinion and shall include:
(1) Description of the scenarios tested, including whether those scenarios are stochastic or deterministic, and the sensitivity testing done relative to those scenarios. If negative ending surplus results under certain tests in the aggregate, the actuary should describe those tests and the amount of additional reserve as of the valuation date which, if held, would eliminate the negative aggregate surplus values. Ending surplus values shall be determined by either extending the projection period until the in-force and associated assets and liabilities at the end of the projection period are immaterial or by adjusting the surplus amount at the end of the projection period by an amount that appropriately estimates the value that can reasonably be expected to arise from the assets and liabilities in force;
(2) The extent to which the appointed actuary uses assumptions in the asset adequacy analysis that are materially different than the assumptions used in the previous asset adequacy analysis;
(3) The amount of reserves and the identity of the product lines that had been subjected to asset adequacy analysis in the prior opinion but were not subject to analysis for the current opinion;
(4) Comments on any interim results that may be of significant concern to the appointed actuary;
(5) The methods used by the actuary to recognize the impact of reinsurance on the company's cash flows, including both assets and liabilities, under each of the scenarios tested;
(6) Whether the actuary has been satisfied that all options whether explicit or embedded, in any asset or liability, including but not limited to those affecting cash flows embedded in fixed income securities, and equity-like features in any investments have been appropriately considered in the asset adequacy analysis; and
(7) The name of the company for which the regulatory asset adequacy issues summary is being supplied.
General Authority:
SDCL  58-26-49.
Law Implemented:
SDCL  58-26-46,  58-26-47.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:37 - Actuarial opinions and memorandums › Section 20:06:37:42 - Conformity to standards of practice

Current through Register Vol. 51, page 10, July 15, 2024
The memorandum must include the following statement concerning conformity to standards of practice:
Actuarial methods, considerations, and analyses used in the preparation of this memorandum conform to the applicable standards of practice, as promulgated by the Actuarial Standards Board, which form the basis for this memorandum.
General Authority:
SDCL  58-26-49.
Law Implemented:
SDCL  58-26-46,  58-26-47.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:37 - Actuarial opinions and memorandums › Section 20:06:37:45 - Use of assets supporting the interest maintenance reserve and the asset valuation reserve

Current through Register Vol. 51, page 10, July 15, 2024
An appropriate allocation of assets in the amount of the interest maintenance reserve (IMR), whether positive or negative, must be used in any asset adequacy analysis. Analysis of risks regarding asset default may include an appropriate allocation of assets supporting the asset valuation reserve (AVR); these AVR assets may not be applied for any other risks related to reserve adequacy. Analysis of these and other risks may include assets supporting other mandatory or voluntary reserves available to the extent that these are not used for risk analysis and reserve support.
The amount of the assets used for the AVR must be disclosed in the table of reserves and liabilities of the opinion and in the memorandum. The method used for selecting particular assets or allocated portions of assets must be disclosed in the memorandum.
General Authority:
SDCL  58-26-46,  58-26-47,  58-26-50.
Law Implemented:
SDCL  58-26-46,  58-26-47,  58-26-50.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:37 - Actuarial opinions and memorandums › Section 20:06:37:47 - Documentation

Current through Register Vol. 51, page 10, July 15, 2024
The appointed actuary must retain on file, for at least seven years, sufficient documentation to determine the procedures followed, the analyses performed, the bases for assumptions, and the results obtained.
General Authority:
SDCL  58-26-46,  58-26-47,  58-26-50.
Law Implemented:
SDCL  58-26-46,  58-26-47,  58-26-50.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:37 - Actuarial opinions and memorandums › Appendix A - Asset Adequacy Tested Amounts - Reserves and Liabilities

Current through Register Vol. 51, page 10, July 15, 2024
APPENDIX A
ASSET ADEQUACY TESTED AMOUNTS - RESERVES AND LIABILITIES
Asset Adequacy Tested Amounts - Reserves and Liabilities
Statement Item
Formula
Reserves
(1)
Additional
Actuarial
Reserves
(a) (2)
Analysis
Method
(b)
Other
Amount
(3)
Total
Amount
(1)+(2)+(3)
(4)
Exhibit 5
A Life Insurance
-
-
-
-
-
B Annuities
-
-
-
-
-
C Supplementary Contracts Involving
Life Contingencies
-
-
-
-
-
D Accidental Death Benefit
-
-
-
-
-
E Disability - Active
-
-
-
-
-
F Disability - Disabled
-
-
-
-
-
G Miscellaneous
-
-
-
-
-
Total (Exhibit 5, Page 3, Line 1)
-
-
-
-
-
Exhibit 6
A Active Life Reserve
-
-
-
-
-
B Claim Reserve
-
-
-
-
-
Total (Exhibit 6,
Page 3, Line 1)
-
-
-
-
-
Exhibit 7
Premium and other
Deposit Funds
-
-
-
-
-
Guaranteed Interest
Contracts
-
-
-
-
-
Other
-
-
-
-
-
Supplemental
Contracts and
Annuities Certain
-
-
-
-
-
Dividend
Accumulations or
Refunds
-
-
-
-
-
Total Exhibit 7
(Page 3, Line 3)
-
-
-
-
-
Exhibit 8 Part 1
1 Life (Page 3, Line
4.1)
-
-
-
-
-
2 Health (Page 3,
Line 4.2)
-
-
-
-
-
Total Exhibit 8, Part 1
-
-
-
-
-
Separate Accounts
(Page 3 of the Annual
Statement of the
Separate Accounts,
Lines 1, 2, 3.1, 3.2, 3.3)
-
-
-
-
-
TOTAL RESERVES
-
-
-
-
-
IMR (General Account, Page _____ Line _____)
-
(Separate Accounts, Page _____ Line _____)
-
AVR (Page _____ Line _____)
(c)
Net Deferred and Uncollected Premium
-
(a) The additional actuarial reserves are the reserves established under paragraphs 2 and 3 of §
									20:06:37:08.
(b) The appointed actuary should indicate the method of analysis, determined in accordance with the standards for asset adequacy analysis referred to in §
									20:06:37:07, by means of symbols that should be defined in footnotes to the table.
(c) Allocated amount of Asset Valuation Reserve (AVR).
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:02 - Applicability and scope

Current through Register Vol. 51, page 10, July 15, 2024
This chapter applies to all group and individual life policies and certificates sold on or after the effective date of this chapter except the following:
(1) Variable life insurance;
(2) Individual and group annuity contracts;
(3) Credit life insurance; and
(4) Life insurance policies with no illustrated death benefits on any individual exceeding $10,000.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:03 - Policies to be illustrated

Current through Register Vol. 51, page 10, July 15, 2024
Each insurer marketing policies to which this chapter is applicable shall notify the director whether a policy form is to be marketed with or without an illustration. For all policy forms being actively marketed on the effective date of this chapter, the insurer shall identify in writing those forms and whether or not an illustration will be used with them. For policy forms filed after the effective date of this chapter, the identification shall be made at the time of filing. Any previous identification may be changed by notice to the director.
If the insurer identifies a policy form as one to be marketed without an illustration, any use of an illustration for any policy using that form prior to the first policy anniversary is prohibited.
If a policy form is identified by the insurer as one to be marketed with an illustration, a basic illustration prepared and delivered in accordance with this chapter is required. However, a basic illustration need not be provided to individual members of a group or to individuals insured under multiple lives coverage issued to a single applicant unless the coverage is marketed to these individuals. The illustration furnished an applicant for a group life insurance policy or policies issued to a single applicant on multiple lives may be either an individual or composite illustration representative of the coverage on the lives of members of the group or the multiple lives covered.
Potential enrollees of nonterm group life subject to this chapter must be furnished a quotation with the enrollment materials. The quotation shall show potential policy values for sample ages and policy years on a guaranteed and nonguaranteed basis applicable to the group and the coverage. This quotation is not considered an illustration for purposes of this chapter, but all information provided must be consistent with the illustrated scale. A basic illustration must be provided at delivery of the certificate to enrollees for nonterm group life who enroll for more than the minimum premium necessary to provide pure death benefit protection. In addition, the insurer must make a basic illustration available to any non-term group life enrollee who requests it.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:04 - Information required in illustration

Current through Register Vol. 51, page 10, July 15, 2024
(1) The name of the insurer;
(2) The name and business address of the agent or the insurers authorized representative, if any;
(3) The name, age, and sex of the proposed insured, unless a composite illustration is permitted under this chapter;
(4) The underwriting or rating classification on which the illustration is based;
(5) The generic name of the policy, the company product name, if different, and the form number;
(6) The initial death benefit; and
(7) The dividend option election or application of nonguaranteed elements, if applicable.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:05 - Prohibited practices

Current through Register Vol. 51, page 10, July 15, 2024
When using an illustration in the sale of a life insurance policy, an insurer or its agents or other authorized representatives may not do any of the following:
(1) Represent the policy as anything other than a life insurance policy;
(2) Use or describe nonguaranteed elements in a manner that is misleading or has the capacity or tendency to mislead;
(3) State or imply that the payment or amount of nonguaranteed elements is guaranteed;
(4) Use an illustration that does not comply with the requirements of this chapter;
(5) Use an illustration that at any policy duration depicts policy performance more favorable to the policy owner than that produced by the illustrated scale of the insurer whose policy is being illustrated;
(6) Provide an applicant with an incomplete illustration;
(7) Represent in any way that premium payments will not be required for each year of the policy in order to maintain the illustrated death benefits, unless that is the fact;
(8) Use the term "vanish" or "vanishing premium," or a similar term that implies the policy becomes paid up, to describe a plan for using nonguaranteed elements to pay a portion of future premiums;
(9) Except for policies that can never develop nonforfeiture values, use an illustration that is lapse-supported; or
(10) Use an illustration that is not self-supporting.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5,  58-33-5.1,  58-33-6.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:06 - Interest rate illustrations

Current through Register Vol. 51, page 10, July 15, 2024
If an interest rate used to determine the illustrated non-guaranteed elements is shown, it may not be greater than the earned interest rate underlying the disciplined current scale.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:07 - Standards for basic illustrations - Format

Current through Register Vol. 51, page 10, July 15, 2024
(1) The illustration must be labeled with the date on which it was prepared;
(2) Each page, including any explanatory notes or pages, must be numbered and show its relationship to the total number of pages in the illustration (e.g., the fourth page of a seven-page illustration must be labeled, "page 4 of 7 pages");
(3) The assumed dates of payment receipt and benefit payout within a policy year must be clearly identified;
(4) If the age of the proposed insured is shown as a component of the tabular detail, it must be the issue age plus the numbers of years the policy is assumed to have been in force;
(5) The assumed payments on which the illustrated benefits and values are based must be identified as premium outlay or contract premium, as applicable. For policies that do not require a specific contract premium, the illustrated payments must be identified as premium outlay;
(6) Guaranteed death benefits and values available upon surrender, if any, for the illustrated premium outlay or contract premium must be shown and clearly labeled guaranteed;
(7) If the illustration shows any nonguaranteed elements, they may not be based on a scale more favorable to the policy owner than the insurers illustrated scale at any duration. These elements must be clearly labeled nonguaranteed;
(8) The guaranteed elements, if any, must be shown before corresponding non-guaranteed elements and must be specifically referred to on any page of an illustration that shows or describes only the non-guaranteed elements (e.g., "see page one for guaranteed elements");
(9) The account or accumulation value of a policy, if shown, must be identified by the name this value is given in the policy being illustrated and shown in close proximity to the corresponding value available upon surrender;
(10) The value available upon surrender must be identified by the name this value is given in the policy being illustrated and must be the amount available to the policy owner in a lump sum after deduction of surrender charges, policy loans, and policy loan interest, as applicable;
(11) Illustrations may show policy benefits and values in graphic or chart form in addition to the tabular form;
(12) Any illustration of nonguaranteed elements must be accompanied by a statement indicating the following:
(a) The benefits and values are not guaranteed;
(b) The assumptions on which they are based are subject to change by the insurer; and
(c) Actual results may be more or less favorable;
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:08 - Standards for basic illustrations - Narrative summary

Current through Register Vol. 51, page 10, July 15, 2024
(1) A brief description of the policy being illustrated, including a statement that it is a life insurance policy;
(2) A brief description of the premium outlay or contract premium, as applicable, for the policy. For a policy that does not require payment of a specific contract premium, the illustration must show the premium outlay that must be paid to guarantee coverage for the term of the contract, subject to maximum premiums allowable to qualify as a life insurance policy under the applicable provisions of § 7702 of the Internal Revenue Code as in effect on June 1, 1997;
(3) A brief description of any policy features, riders, or options, guaranteed or nonguaranteed, shown in the basic illustration and the impact they may have on the benefits and values of the policy;
(4) Identification and a brief definition of column headings and key terms used in the illustration; and
(5) A statement containing in substance the following: "This illustration assumes that the currently illustrated nonguaranteed elements will continue unchanged for all years shown. This is not likely to occur, and actual results may be more or less favorable than those shown."
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:09 - Standards for basic illustrations - Numeric summary

Current through Register Vol. 51, page 10, July 15, 2024
(1) Policy guarantees;
(2) Insurers illustrated scale;
(3) Insurers illustrated scale used but with the nonguaranteed elements reduced as follows:
(a) Dividends at 50 percent of the dividends contained in the illustrated scale used;
(b) Nonguaranteed credited interest at rates that are the average of the guaranteed rates and the rates contained in the illustrated scale used; and
(c) All nonguaranteed charges, including charges for term insurance, mortality, and expenses, at rates that are the average of the guaranteed rates and the rates contained in the illustrated scale used.
In addition, if coverage would cease prior to policy maturity or age 100, the year in which coverage ceases must be identified for each of the three bases.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:10 - Standards for basic illustrations - Statements

Current through Register Vol. 51, page 10, July 15, 2024
(1) A statement to be signed and dated by the applicant or policy owner reading as follows: "I have received a copy of this illustration and understand that any nonguaranteed elements illustrated are subject to change and could be either higher or lower. The agent has told me they are not guaranteed."; and
(2) A statement to be signed and dated by the insurance agent or other authorized representative of the insurer reading as follows: "I certify that this illustration has been presented to the applicant and that I have explained that any nonguaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration."
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:11 - Standards for basic illustrations - Tabular detail

Current through Register Vol. 51, page 10, July 15, 2024
(1) The premium outlay and mode the applicant plans to pay and the contract premium, as applicable;
(2) The corresponding guaranteed death benefit, as provided in the policy; and
(3) The corresponding guaranteed value available upon surrender, as provided in the policy.
For a policy that provides for a contract premium, the guaranteed death benefit and value available upon surrender must correspond to the contract premium. Nonguaranteed elements may be shown if described in the contract. In the case of an illustration for a policy on which the insurer intends to credit terminal dividends, they may be shown if the insurers current practice is to pay terminal dividends. If any nonguaranteed elements are shown, they must be shown at the same durations as the corresponding guaranteed elements, if any. If no guaranteed benefit or value is available at any duration for which a nonguaranteed benefit or value is shown, a zero must be displayed in the guaranteed column.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:12 - Standards for supplemental illustrations

Current through Register Vol. 51, page 10, July 15, 2024
(1) It is appended to, accompanied by, or preceded by a basic illustration that complies with this chapter;
(2) The nonguaranteed elements shown are not more favorable to the policy owner than the corresponding elements based on the scale used in the basic illustration;
(3) It contains the same statement required of a basic illustration that nonguaranteed elements are not guaranteed; and
(4) For a policy that has a contract premium, the contract premium underlying the supplemental illustration is equal to the contract premium shown in the basic illustration. For policies that do not require a contract premium, the premium outlay underlying the supplemental illustration must be equal to the premium outlay shown in the basic illustration.
The supplemental illustration may be presented in a format differing from the basic illustration, but may only depict a scale of nonguaranteed elements that is permitted in a basic illustration.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:13 - Basic illustration - Use in sale of policy

Current through Register Vol. 51, page 10, July 15, 2024
However, if the illustration is displayed on a computer screen, the insurance agent or other representative of the insurer may provide the applicant with an acknowledgment in lieu of the illustration. The acknowledgment must meet the following requirements:
(1) The acknowledgment must be signed by the applicant and the agent;
(2) One copy of the signed acknowledgment must be left with the applicant, and one copy must be submitted with the application. However, if the acknowledgement is presented electronically, the replacing insurer shall mail the applicant a copy of the acknowledgement within five business days after the application is submitted to the replacing insurer;
(3) The personal and policy information on which the computer screen illustration was based must be itemized in accordance with §
									20:06:38:04;
(4) The acknowledgment must list the guaranteed and nonguaranteed interest rates illustrated;
(5) The acknowledgment must include the generic name of any rider illustrated, the company product name, if different, and the form number;
(6) The acknowledgment must contain a certification by the agent that the illustration used conforms to the information in the acknowledgment; and
(7) The acknowledgment must state that an illustration conforming to the policy as issued will be prepared and personally delivered by the agent on or before delivery of the policy.
A sample acknowledgment is contained in Appendix B at the end of this chapter. If an acknowledgment is used, an illustration conforming to the policy as issued must be sent with the policy.
If the policy is issued other than as applied for, a revised basic illustration conforming to the policy as issued must be sent with the policy. The revised illustration must conform to the requirements of this chapter, must be labeled "Revised Illustration" and must be signed and dated by the applicant or policy owner and agent or another authorized representative of the insurer no later than the time the policy is delivered. A printed copy must be delivered to the insurer and the policy owner.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:14 - Basic illustration - Not used in sale of policy

Current through Register Vol. 51, page 10, July 15, 2024
If the policy is issued, a basic illustration conforming to the policy as issued shall be sent with the policy and signed no later than the time the policy is delivered. A copy must be delivered to the insurer and the policy owner.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:15 - Basic illustration - Delivery by mail

Current through Register Vol. 51, page 10, July 15, 2024
If the basic illustration or revised illustration is sent to the applicant or policy owner by mail from the insurer, it must include instructions for the applicant or policy owner to sign the duplicate copy of the numeric summary page of the illustration for the policy issued and return the signed copy to the insurer. The insurers obligation under this section is satisfied if it can demonstrate that it has made a diligent effort to secure a signed copy of the numeric summary page. The requirement to make a diligent effort is satisfied if the insurer includes in the mailing a self-addressed postage prepaid envelope with instructions for the return of the signed numeric summary page.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:16 - Basic illustration - Retention by insurer

Current through Register Vol. 51, page 10, July 15, 2024
A copy of the basic illustration and a revised basic illustration, if any, signed as applicable, along with any certification that either no illustration was used or that the policy was applied for other than as illustrated, must be retained by the insurer until three years after the policy is no longer in force. A copy need not be retained if no policy is issued.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:17 - Annual report - Requirement

Current through Register Vol. 51, page 10, July 15, 2024
If a policy is designated as one for which illustrations will be used, the insurer must provide each policy owner with an annual report on the status of the policy.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:18 - Annual report - Content for universal life policies

Current through Register Vol. 51, page 10, July 15, 2024
(1) The beginning and end date of the current report period;
(2) The policy value at the end of the previous report period and at the end of the current report period;
(3) The total amounts that have been credited or debited to the policy value during the current report period, identifying each by type (e.g., interest, mortality, expense, and riders);
(4) The current death benefit at the end of the current report period on each life covered by the policy;
(5) The net cash surrender value of the policy as of the end of the current report period;
(6) The amount of outstanding loans, if any, as of the end of the current report period; and
(7) For fixed premium policies, assuming guaranteed interest, mortality, and expense loads and continued scheduled premium payments, the policys net cash surrender value is such that it would not maintain insurance in force until the end of the next reporting period, a notice to this effect must be included in the report; or
(8) For flexible premium policies, assuming guaranteed interest, mortality, and expense loads, the policys net cash surrender value will not maintain insurance in force until the end of the next reporting period unless further premium payments are made, a notice to this effect must be included in the report.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:19 - Annual report - Content for all other policies

Current through Register Vol. 51, page 10, July 15, 2024
(1) The current death benefit;
(2) The annual contract premium;
(3) The current cash surrender value;
(4) The current dividend;
(5) The application of current dividend; and
(6) The amount of outstanding loan.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:20 - Annual report - Policies without nonforfeiture values

Current through Register Vol. 51, page 10, July 15, 2024
Insurers writing life insurance policies that do not build nonforfeiture values must provide an annual report on these policies only for those years when a change has been made to nonguaranteed policy elements by the insurer.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:21 - Annual report - Notice if in-force illustration not included

Current through Register Vol. 51, page 10, July 15, 2024
If the annual report does not include an in-force illustration, it must contain the following notice displayed prominently: "
IMPORTANT POLICY OWNER NOTICE:
You should consider requesting more detailed information about your policy to understand how it may perform in the future. You should not consider replacement of your policy or make changes in your coverage without requesting a current illustration. You may annually request, without charge, such an illustration by calling [insurers phone number], writing to [insurers name] at [insurers address], or contacting your agent. If you do not receive a current illustration of your policy within 30 days from your request, you should contact your state insurance department." The insurer may vary the sequential order of the methods for obtaining an in-force illustration.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:22 - Annual report - Notice of change in nonguaranteed elements

Current through Register Vol. 51, page 10, July 15, 2024
If an adverse change in nonguaranteed elements that could affect the policy has been made by the insurer since the last annual report, the annual report must contain a notice of that fact and the nature of the change prominently displayed.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:23 - In-force illustration - Furnished at policy owner's request

Current through Register Vol. 51, page 10, July 15, 2024
Upon the request of the policy owner, the insurer must furnish an in-force illustration of current and future benefits and values based on the insurers present illustrated scale. This illustration must comply with the requirements of §§
									20:06:38:04, 20:06:38:05, 20:06:38:07, and 20:06:38:11. No signature or other acknowledgment of receipt of this illustration may be required.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:24 - Annual certification - Disciplined current scale and illustrated scales

Current through Register Vol. 51, page 10, July 15, 2024
(1) The disciplined current scale used in illustrations is in conformity with standards contained in the Actuarial Standard of Practice No. 24 - Compliance with the NAIC Life Insurance Illustrations Model Regulation, effective March 31, 1996, to the extent that those standards are consistent with provisions of this chapter; and
(2) The illustrated scales used in insurer-authorized illustrations meet the requirements of this chapter.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
Actuarial Standards of Practice
, American Academy of Actuaries. Copies may be obtained free of charge on the website: http://www.actuarialstandardsboard.org/asops.htm.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:25 - Illustration actuary requirements

Current through Register Vol. 51, page 10, July 15, 2024
(1) Be a member in good standing of the American Academy of Actuaries;
(2) Be familiar with the standard of practice regarding life insurance policy illustrations;
(3) Not have been found by the director, following notice and hearing, to have done any of the following:
(a) Violated any provision of, or any obligation imposed by, SDCL Title 58 or other law in the course of dealings as an illustration actuary;
(b) Been found guilty of fraudulent or dishonest practices;
(c) Demonstrated incompetence, lack of cooperation, or untrustworthiness to act as an illustration actuary; or
(d) Resigned or been removed as an illustration actuary within the past five years as a result of acts or omissions indicated in any adverse report on examination or as a result of a failure to adhere to generally acceptable actuarial standards;
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:26 - Change of illustration actuary

Current through Register Vol. 51, page 10, July 15, 2024
If an insurer changes the illustration actuary responsible for all or a portion of the companys policy forms, the insurer must notify the director of that fact promptly and disclose the reason for the change.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:27 - Annual certification - Currently payable scale

Current through Register Vol. 51, page 10, July 15, 2024
The illustration actuary must disclose in the annual certification whether, since the last certification, a currently payable scale applicable for business issued within the previous five years and within the scope of the certification has been reduced for reasons other than changes in the experience factors underlying the disciplined current scale. If nonguaranteed elements illustrated for new policies are not consistent with those illustrated for similar in-force policies, this must be disclosed in the annual certification. If nonguaranteed elements illustrated for both new and in-force policies are not consistent with the nonguaranteed elements actually being paid, charged, or credited to the same or similar forms, this must be disclosed in the annual certification.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:28 - Annual certification - Expenses

Current through Register Vol. 51, page 10, July 15, 2024
The illustration actuary must disclose in the annual certification the method used to allocate overhead expenses for all illustrations and the method of determining assumed expenses for all policy forms.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:29 - Annual certification - Additional certifications

Current through Register Vol. 51, page 10, July 15, 2024
If an error in a previous certification is discovered, the illustration actuary must notify the board of directors of the insurer and the director promptly.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:30 - Annual certification - Inability to certify scale

Current through Register Vol. 51, page 10, July 15, 2024
If an illustration actuary is unable to certify the scale for any policy form illustration the insurer intends to use, the actuary must notify the board of directors of the insurer and the director promptly of the inability to certify.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:31 - Annual certification - Officer of the insurer

Current through Register Vol. 51, page 10, July 15, 2024
A responsible officer of the insurer, other than the illustration actuary, must certify annually that the illustration formats meet the requirements of this chapter and that the scales used in insurer-authorized illustrations are those scales certified by the illustration actuary and that the company has provided its agents with information about the expense allocation method used by the company in its illustrations and disclosed as required in §
									20:06:38:28.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:32 - Annual certification - Date due

Current through Register Vol. 51, page 10, July 15, 2024
The annual certification must be provided to the director each year by a date determined by the insurer.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:33 - Disciplined current scale

Current through Register Vol. 51, page 10, July 15, 2024
The disciplined current scale is a scale of nonguaranteed elements constituting a limit on illustrations currently being illustrated by an insurer that is reasonably based on actual recent historical experience. The disciplined current scale must meet the following requirements:
(1) Be in conformity with actuarially accepted standards;
(2) Reflect only actions that have already been taken or events that have already occurred;
(3) Not permit a disciplined current scale to include any projected trends of improvements in experience or any assumed improvements in experience beyond the illustration date; and
(4) Not permit assumed expenses to be less than minimum assumed expenses.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.
South Dakota Administrative Rules › Title 20 - PUBLIC SAFETY › Article 20:06 - INSURANCE › Chapter 20:06:38 - Life insurance illustrations › Section 20:06:38:34 - Expenses

Current through Register Vol. 51, page 10, July 15, 2024
Each year, the insurer shall choose the method used to allocate overhead expenses for all illustrations and the method of determining assumed expenses for all policy forms from the following:
(1) Fully allocated expenses;
(2) Marginal expenses;
(3) The generally recognized expense table in Appendix A at the end of this chapter; or
(4) Another generally recognized expense table based on fully allocated expenses representing a significant portion of insurance companies and approved by the director pursuant to §
									20:06:38:35.
For the purpose of determining assumed expenses, marginal expenses may be used only if greater than a generally recognized expense table. If no generally recognized expense table is approved, fully allocated expenses must be used.
General Authority:
SDCL  58-33-5.1.
Law Implemented:
SDCL  58-33-5.1.