                                 CODE OF VIRGINIA

ACTUARIAL OPINION OF RESERVES (§ 38.2-1367)

A. The actuarial opinion prior to the operative date of the valuation manual
shall require:

   1. Every life insurance company doing business in the Commonwealth to annually
   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 Commission by regulation are computed appropriately, are
   based on assumptions that satisfy contractual provisions, are consistent with
   prior reported amounts, and comply with applicable laws of the Commonwealth.
   The Commission shall define by regulation the specifics of this opinion and
   add any other items deemed to be necessary to its scope.

   2. Every life insurance company, except as exempted by regulation, to annually
   include in the opinion required by subdivision 1, 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 Commission by
   regulation, when considered in light of the assets held by the insurer 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 insurer&#8217;s obligations under the policies and
   contracts, including but not limited to the benefits under and expenses
   associated with the policies and contracts. The Commission shall specify by
   regulation the types of reserves and related actuarial items on which the
   opinion is to be expressed.
   				The Commission may provide by regulation for a transition period for
   establishing any higher reserves that the qualified actuary may deem necessary
   in order to render the opinion required by this section.

   3. Each opinion required by subdivision 2 to be governed by the following
   provisions:
   				a. A memorandum, in form and substance acceptable to the Commission as
   specified by regulation, shall be prepared to support each actuarial opinion;
   and
   				b. If the insurance company fails to provide a supporting memorandum at
   the request of the Commission within a period specified by regulation or the
   Commission determines that the supporting memorandum provided by the insurance
   company fails to meet the standards prescribed by the regulations or is
   otherwise unacceptable to the Commission, the Commission may engage a
   qualified actuary at the expense of the insurance company to review the
   opinion and the basis for the opinion and prepare the supporting memorandum
   required by the Commission.

   4. Every opinion required by this subsection to be governed by the following
   provisions:
   				a. The opinion shall be submitted with the annual statement filed pursuant
   to § 38.2-1300 and shall reflect the valuation of such reserve liabilities
   for each year ending on or after December 31, 1992.
   				b. The opinion shall apply to all business in force including individual
   and group health insurance plans, in form and substance acceptable to the
   Commission as specified by regulation.
   				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
   Commission may by regulation prescribe.
   				d. In the case of an opinion required to be submitted by a foreign or
   alien insurer, the Commission may accept the opinion filed by that insurer
   with the insurance supervisory official of another state if the Commission
   determines that the opinion reasonably meets the requirements applicable to an
   insurer domiciled in the Commonwealth.
   				e. For the purposes of this section, &#8220;qualified actuary&#8221; means
   a member in good standing of the American Academy of Actuaries who meets the
   requirements set forth in regulations adopted by the Commission.
   				f. Except in cases of fraud or willful misconduct, the qualified actuary
   shall not be liable for damages to any person, other than the insurer and the
   Commission, for any act, error, omission, decision, or conduct with respect to
   the actuary&#8217;s opinion.
   				g. Disciplinary action by the Commission against the insurer or the
   qualified actuary shall be defined in regulations adopted by the Commission.
   				h. Except as provided in subdivisions 4 l, m, and n, documents, materials,
   or other information in the possession or control of the Commission that is a
   memorandum in support of the opinion, and any other material provided by the
   insurer to the Commission in connection with the memorandum, shall be
   confidential by law and privileged, shall not be subject to subpoena, and
   shall not be subject to discovery or admissible in evidence in any private
   civil action. However, the Commission is authorized to use the documents,
   materials, or other information in the furtherance of any regulatory or legal
   action brought as a part of the Commission&#8217;s official duties.
   				i. Neither the Commission nor any person who received documents,
   materials, or other information while acting under the authority of the
   Commission shall be permitted or required to testify in any private civil
   action concerning any confidential documents, materials, or information
   subject to subdivision 4 h.
   				j. In order to assist in the performance of the Commission&#8217;s duties,
   the Commission:

      1. May share documents, materials, or other information, including the
      confidential and privileged documents, materials, or information subject to
      subdivision 4 h, with other state, federal, and international regulatory
      agencies, with the NAIC and its affiliates and subsidiaries, and with state,
      federal, and international law-enforcement authorities, provided that the
      recipient agrees to maintain the confidentiality and privileged status of
      the document, material, or other information;

      2. May receive documents, materials, or information, including otherwise
      confidential and privileged documents, materials, or information, from the
      NAIC and its affiliates and subsidiaries, and from regulatory and
      law-enforcement officials of other foreign or domestic jurisdictions, and
      shall maintain as confidential or privileged any document, material, or
      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 information; and

      3. May enter into agreements governing sharing and use of information
      consistent with subdivisions 4 h, i, and j.
      					k. No waiver of any applicable privilege or claim of confidentiality in
      the documents, materials, or information shall occur as a result of
      disclosure to the Commission under this section or as a result of sharing as
      authorized in subdivision 4 j.
      					l. A memorandum in support of the opinion, and any other material
      provided by the insurer to the Commission in connection with the memorandum,
      may be subject to subpoena for the purpose of defending an action seeking
      damages from the actuary submitting the memorandum by reason of an action
      required by this section or by regulations adopted hereunder.
      					m. The memorandum or other material may otherwise be released by the
      Commission with the written consent of the insurer or 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 Commission for
      preserving the confidentiality of the memorandum or other material.
      					n. Once any portion of the confidential memorandum is cited by the
      insurer in its marketing, is cited before a governmental agency other than a
      state insurance department, or is released by the insurer to the news media,
      all portions of the confidential memorandum shall be no longer confidential.

B. The actuarial opinion of reserves after the operative date of the valuation
manual shall require:

   1. Every insurer with outstanding life insurance contracts, accident and
   health insurance contracts, or deposit-type contracts in the Commonwealth and
   subject to regulation by the Commission to annually 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 that satisfy contractual provisions, are consistent with prior
   reported amounts, and comply with applicable laws of the Commonwealth. The
   valuation manual will prescribe the specifics of this opinion, including any
   items deemed to be necessary to its scope.

   2. Every insurer with outstanding life insurance contracts, accident and
   health insurance contracts, or deposit-type contracts in the Commonwealth and
   subject to regulation by the Commission, except as exempted in the valuation
   manual, to annually include in the opinion required by subdivision 1 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 insurer
   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 insurer&#8217;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 subdivision 2 to be governed by the following
   provisions:
   				a. A memorandum, in form and substance as specified in the valuation
   manual, and acceptable to the Commission, shall be prepared to support each
   actuarial opinion.
   				b. If the insurance company fails to provide a supporting memorandum at
   the request of the Commission within a period specified in the valuation
   manual or the Commission determines that the supporting memorandum provided by
   the insurance company fails to meet the standards prescribed by the valuation
   manual or is otherwise unacceptable to the Commission, the Commission may
   engage a qualified actuary at the expense of the insurer to review the opinion
   and the basis for the opinion and prepare the supporting memorandum required
   by the Commission.

   4. Every opinion required by this subsection to 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 Commission;
   				b. The opinion shall be submitted with the annual statement 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
   subdivision 2, 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 insurer, the Commission may accept the opinion filed by that insurer
   with the insurance supervisory official of another state if the Commission
   determines that the opinion reasonably meets the requirements applicable to an
   insurer domiciled in the Commonwealth;
   				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 Commission, for any act, error, omission, decision, or conduct
   with respect to the appointed actuary&#8217;s opinion; and
   				g. Disciplinary action by the Commission against the insurer or the
   appointed actuary shall be defined in regulations adopted by the Commission.

HISTORY: 2014, c. 571.