Virginia Law

A. The following requirements apply to all companies submitting a statement of actuarial opinion in compliance with § 38.2-1367 of the Code of Virginia.

1. There is to be included on or attached to page 1 of the annual statement for each year ending on or after December 31, 1992, the statement of an appointed actuary, entitled "Statement of Actuarial Opinion," setting forth an opinion relating to reserves and related actuarial items held in support of policies and contracts, in accordance with 14VAC5-310-80.

2. Upon written request by the company, the commission may grant an extension of the date for submission of the statement of actuarial opinion.

B. A "qualified actuary" is an individual who:

1. Is a member in good standing of the American Academy of Actuaries;

2. Is qualified to sign statements of actuarial opinion for life and health insurance company annual statements in accordance with the American Academy of Actuaries qualification standards for actuaries signing such statements;

3. Is familiar with the valuation requirements applicable to life and health insurance companies;

4. Has not been found by the commission (or if so found has subsequently been reinstated as a qualified actuary), following appropriate notice and hearing, to have:

a. Violated any provision of, or any obligation imposed by Title 38.2 of the Code of Virginia or other law in the course of his dealings as a qualified actuary;

b. Been found guilty of fraudulent or dishonest practices;

c. Demonstrated his incompetency, lack of cooperation, or untrustworthiness to act as a qualified actuary;

d. Submitted to the commission during the past five years, pursuant to this chapter, an actuarial opinion or memorandum that the commission rejected because it did not meet the provisions of this chapter, including standards set by the Actuarial Standards Board; or

e. Resigned or been removed as an 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 failure to adhere to generally acceptable actuarial standards; and

5. Has not failed to notify the commission of any action taken by the commissioner of any other state similar to that under subdivision 4 of this subsection.

C. An "appointed actuary" is a qualified actuary who is appointed or retained to prepare the statement of actuarial opinion required by this chapter, either directly by or by the authority of the board of directors through an executive officer of the company other than the qualified actuary. The company shall give the commission timely written notice of the name, title (and, in the case of a consulting actuary, the name of the firm) and manner of appointment or retention of each person appointed or retained by the company as an appointed actuary and shall state in such notice that the person meets the requirements set forth in 14VAC5-310-50 B. Once notice is furnished, no further notice is required with respect to this person, provided that the company shall give the commission timely written notice in the event the actuary ceases to be appointed or retained as an appointed actuary or to meet the requirements set forth in 14VAC5-310-50 B. If any person appointed or retained as an appointed actuary replaces a previously appointed actuary, the notice shall so state and give the reasons for replacement.

D. The asset adequacy analysis required by this chapter shall:

1. Conform to the Actuarial Standards of Practice as promulgated from time to time by the Actuarial Standards Board and on any additional standards under this chapter, which standards are to form the basis of the statement of actuarial opinion in accordance with this chapter; and

2. Be based on methods of analysis as are deemed appropriate for such purposes by the Actuarial Standards Board.

E. Liabilities shall be covered in conformity with the following:

1. Under authority of § 38.2-1367 of the Code of Virginia, the statement of actuarial opinion shall apply to all in-force business on the statement date, whether directly issued or assumed, regardless of when or where issued (e.g., reserves reportable for 2002 in Exhibits 5, 5A, 6, and 7 of the NAIC annual statement for life insurers; claim liabilities reported in Exhibit 8 (2002) in Part I of the life insurer's annual statement, and equivalent items in any separate account statement, or other annual financial statements filed pursuant to § 38.2-1300, 38.2-1301 or 38.2-4126 of the Code of Virginia).

2. If the appointed actuary determines as the result of asset adequacy analysis that a reserve should be held in addition to the aggregate reserve held by the company and calculated in accordance with methods set forth in § 38.2-1311, 38.2-3923, 38.2-4010, 38.2-4011, or § 38.2-4125 of the Code of Virginia; Article 10 (§ 38.2-1365 et seq.) of Chapter 13 of Title 38.2 of the Code of Virginia; a rule or regulation of the commission applicable to the company; or any additional or further guidance provided by the NAIC Accounting Practices and Procedures Manual, whether in a Statement of Statutory Accounting Principle or in an actuarial guideline or other appendix, the company shall establish the additional reserve.

3. Additional reserves established under subdivision 2 of this subsection and deemed not necessary in subsequent years may be released. Any amounts released shall be disclosed in the actuarial opinion for the applicable year. The release of such reserves would not be deemed an adoption of a lower standard of valuation.