                                 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.