HOUSE BILL NO. 459
AN ACT TO AMEND CHAPTER 11, TITLE 18 OF THE DELAWARE CODE RELATING TO THE INSURANCE CODE AND ASSETS AND LIABILITIES.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend §1111, Chapter 11, Title 18, Delaware Code by
redesignating subsections "(c)", "(d)" and "(e)" as "(d)", "(e)" and "(f)", respectively and by inserting a new subsection "(c)" to read as follows:
"(c) (1) General. Every life insurance company doing business in this State shall 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 Commissioner by regulation are computed appropriately, are based on assumptions which satisfy contractual provisions, are consistent with prior reported amounts and comply with applicable laws of this State. The Commissioner by regulation shall define the specifics of this opinion and add any other items deemed to be necessary to its scope.
(2) Actuarial analysis of reserves and assets supporting such
a. Every life insurance company, except exempted by or pursuant to regulation, shall also annually include in the opinion required by subsection (c) (1) of this section, 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 Commissioner by regulation, 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.
b. The Commissioner may provide by regulation for a transition period for establishing any higher reserves which the qualified actuary may deem necessary in order to render the opinion required by this subsection.
(3) Requirement for opinion under subsection (c) (2). Each opinion required by subsection (c) (2) shall be governed by the following provisions:
a. A memorandum, in form and substance acceptable to the Commissioner as specified by regulation, shall be prepared to support each actuarial opinion.
b. If the insurance company fails to provide a supporting memorandum at the request of the Commissioner within a period specified by regulation or the Commissioner 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 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 such supporting memorandum as is required by the Commissioner.
(4) Requirement for all opinions. Every opinion required by this
subsection shall be governed by the following provisions:
a. The opinion shall be submitted with the annual statement
reflecting the valuation of such reserve liabilities for each year ending on or after December 31, 1994.
b. The opinion shall apply to all business in force, including individual and group health insurance plans, in form and substance acceptable to the Commissioner as specified by regulation.
a. The opinion shall be based on standards adopted from time to time by the Actuarial Standards Board and on such additional standards as the Commissioner may by regulation prescribe.
a. 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 supervtsory official of another state if the Commissioner determines that the opinion reasonably meets the requirements applicable to a company domiciled in this State.
b. For the purposes of this section, "qualified actuary" means a
member in good standing of the American Academy of Actuaries who meets the requirements set forth in such regulations.
c. Except in cases of fraud or willful misconduct, the qualified
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 actuary's opinion.
a. Disciplinary action by the Commissioner against the company or the qualified actuary shall be defined in regulations by the Commissioner.
a. Any memorandum in support of the opinion, and any other material provided by the company to the Commissioner in connection therewith, shall be kept confidential by the Commissioner and shall not be made public and shall not be subject to subpoena, other than for the purpose of defending an action seeking damages from any person by reason of any action required by this section or by regulations promulgated hereunder; provided, however, that the memorandum or other material may otherwise be released by the Commissioner with the written consent of the company 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 Commissioner for preserving the confidentiality of the memorandum or other material. Once any portion of the confidential memorandum is cited by the company in its marketing or is cited before any governmental agency other than a state insurance department or is released by the company to the news media, all portions of the confidential memorandum shall be no longer confidential."
Section 2. Amend §1111(e) as designated by Section 1 of this Act, Chapter 11, Title 18, Delaware Code by striking said subsection in its entirety and by substituting in lieu thereof the following:
"(e) Any insurer which at any time shall have adopted any standard of valuation producing greater aggregate reserves than those calculated according to the minimum standard herein provided may, with the approval of the Commissioner, adopt any lower standard of valuation, but not lower than the minimum herein provided; provided, however, that, for the purposes of this subsection, the holding of additional reserves previously determined by a qualified actuary to be necessary to render the opinion required by subsection (c) of this section shall not be deemed to be the adoption of a higher standard of valuation."
Section 3. Amend §1113(e), Chapter 11, Title 18, Delaware Code by
redesignating the existing subsection "(e) as "(e)(1)" and by adding thereto a new paragraph to read as follows:
"(2) In no event shall the aggregate reserves for all policies, contracts and benefits be less than the aggregate reserves determined by the qualified actuary to be necessary to render the opinion required by subsection (c) of this Section."
Section 4. This Act shall become effective December 31 of the calendar
year of its enactment.
Approved July 12, 1994