§431:10D-409 - Annual certifications.

§431:10D-409 Annual certifications. (a) The board of directors of each insurer shall appoint one or moreillustration actuaries.

(b) The illustration actuary shall certifythat the disciplined current scale used in illustrations is in conformity withthe Actuarial Standard of Practice for Compliance with the National Associationof Insurance Commissioners' Model Regulation on Life Insurance Illustrationspromulgated by the Actuarial Standards Board, and that the illustrated scalesused in insurer-authorized illustrations meet the requirements of this part.

(1) Be a member in good standing of the AmericanAcademy of Actuaries;

(2) Be familiar with the standard of practiceregarding life insurance policy illustrations;

(3) Not have been found by the commissioner,following appropriate notice and hearing, to have:

(A) Violated any provision of, or anyobligation imposed by, the insurance law or other law in the course of actingas an illustration actuary;

(B) Been found guilty of fraudulent ordishonest practices;

(D) Resigned or been removed as anillustration actuary within the past five years as a result of acts oromissions indicated in any adverse report on examination or as a result of afailure to adhere to generally acceptable actuarial standards;

(4) Not fail to notify the commissioner of any actiontaken by a commissioner of another state similar to that under paragraph (3);

(5) Disclose in the annual certification whether,since the last certification, a currently payable scale applicable for businessissued within the previous five years and within the scope of the certificationhas been reduced for reasons other than changes in the experience factorsunderlying the disciplined current scale. If nonguaranteed elementsillustrated for new policies are not consistent with those illustrated forsimilar in force policies, this must be disclosed in the annual certification. If nonguaranteed elements illustrated for both new and in force policies arenot consistent with the nonguaranteed elements actually being paid, charged, orcredited to the same or similar forms, this must be disclosed in the annualcertification; and

(6) Disclose in the annual certification the methodused to allocate overhead expenses for all illustrations:

(A) Fully allocated expenses;

(B) Marginal expenses; or

(C) A generally recognized expense table basedon fully allocated expenses representing a significant portion of insurancecompanies and approved by the commissioner.

(d) The illustration actuary shall file acertification with the board and with the commissioner:

(1) Annually for all policy forms for whichillustrations are used; and

(2) Before a new policy form is illustrated.

(e) If an error in a previous certification isdiscovered, the illustration actuary shall immediately notify the board ofdirectors of the insurer and the commissioner.

(f) If an illustration actuary is unable tocertify the scale for any policy form illustration the insurer intends to use,the actuary shall immediately notify the board of directors of the insurer andthe commissioner of the inability to certify.

(g) A responsible officer of the insurer,other than the illustration actuary, shall certify annually:

(1) That the illustration formats meet therequirements of this part and that the scales used in insurer-authorizedillustrations are those scales certified by the illustration actuary; and

(2) That the company has provided its producers orother representatives with information about the expense allocation method usedby the company in its illustrations and disclosed as required in subsection(c)(6).

(h) The annual certifications shall beprovided to the commissioner each year by a date determined by the insurer.

(i) If an insurer changes the illustrationactuary responsible for all or a portion of the company's policy forms, theinsurer shall notify the commissioner of that fact promptly and disclose thereason for the change. [L 2000, c 252, pt of §2; am L 2003, c 212, §90]