Section 9B1/2: Submission of opinion by appointed actuary as to adequacy of reserves and related actuarial items held in support of outstanding insurance contracts
Section 9B1/2. (a) For purposes of this section, the definitions in subsection (a) of section 91/2 shall apply unless the context clearly requires otherwise.
(b) After the effective date of this section, every company with outstanding life insurance contracts, accident and health insurance contracts or deposit-type contracts in the commonwealth and subject to regulation by the commissioner shall 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 shall prescribe the specifics of this opinion including items necessary to the scope of the opinion.
(c) Prior to the effective date of this section, the specifics of the opinion and the manner in which the confidentiality of the memorandum in support of the opinion shall be protected shall be as prescribed by section 9B.
(d) After the effective date of this section, every company with outstanding life insurance contracts, accident and health insurance contracts or deposit-type contracts in the commonwealth and subject to regulation by the commissioner, except as exempted in the valuation manual, shall also annually include in the opinion required by subsection (b) 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 company 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 company's obligations under the policies and contracts including, but not limited to, the benefits under and expenses associated with the policies and contracts.
(e) The commissioner may provide by regulation for a transition period for establishing higher reserves that the appointed actuary may deem necessary in order to render the opinion required by subsection (b).
(f) A memorandum, in form and substance as specified in the valuation manual, and acceptable to the commissioner, shall be prepared to support each actuarial opinion required by subsection (b).
If the insurance company fails to provide a supporting memorandum at the request of the commissioner within a period specified in the valuation manual or the commissioner 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 commissioner, the commissioner may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting memorandum required by the commissioner.
The opinion shall be in form and substance as specified in the valuation manual and acceptable to the commissioner.
The opinion shall be submitted with the annual statement reflecting the valuation of reserve liabilities for each year ending on or after the effective date of this section.
The opinion shall apply to all policies and contracts subject to subsection (d) in addition to any other actuarial liabilities specified in the valuation manual.
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.
In the case of an opinion required to be submitted by a foreign or alien company, the commissioner may accept the opinion filed by that company with the insurance supervisory official of another state if the commissioner determines that the opinion reasonably meets the requirements applicable to a company domiciled in the commonwealth.
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 commissioner for any act, error, omission, decision or conduct with respect to the appointed actuary's opinion.
Disciplinary action by the commissioner against the company or the appointed actuary shall be defined in regulations by the commissioner.
After the effective date of this section, a memorandum in support of an opinion submitted pursuant to section 9B1/2 and other documents, materials and information including, but not limited to, all working papers, and copies thereof, created, produced or obtained by or disclosed to the commissioner or other person in connection with the memorandum is deemed confidential information pursuant to clause (i) of paragraph (1) of subsection (j) of section 91/2 and shall be treated and protected as required pursuant to said section 91/2.
(g) The commissioner may, pursuant to chapter 30A, upon notice and opportunity for all interested parties to be heard, issue rules, regulations and orders as shall be necessary to carry out this section.