(a) Standard in valuation manual.--Except as provided in subsection (c) or (e), for policies issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual shall be the minimum standard of valuation required under section 7112 (relating to reserve valuation for policies and contracts issued on or after operative date of valuation manual).

(b) Specific information in valuation manual.--The valuation manual shall specify:

(1) Minimum valuation standards for and definitions of the policies or contracts subject to section 7112, which shall be:

(i) The commissioners reserve valuation method for life insurance contracts other than annuity contracts.

(ii) The commissioners annuity reserve valuation method for annuity contracts.

(iii) Minimum reserves for all other policies or contracts.

(2) Which policies or contracts or types of policies or contracts are subject to the requirements of a principle-based valuation in section 7126(a) (relating to requirements of principle-based valuation) and the minimum valuation standards consistent with those requirements.

(3) For policies and contracts subject to a principle-based valuation under section 7126:

(i) Requirements for the format of reports to the commissioner under section 7126(b)(3), including information necessary to determine if the valuation is appropriate and in compliance with this chapter.

(ii) Assumptions prescribed for risks over which the company does not have significant control or influence.

(iii) Procedures for corporate governance and oversight of the actuarial function and a process for appropriate waiver or modification of those procedures.

(4) For policies not subject to a principle-based valuation under section 7126, the minimum valuation standard, which shall:

(i) be consistent with the minimum standard of valuation prior to the operative date of the valuation manual; or

(ii) develop reserves that quantify the benefits, guarantees and the funding associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events having a reasonable probability of occurring.

(5) Other requirements, including those relating to reserve methods, models for measuring risk, generation of economic scenarios, assumptions, margins, use of company experience, risk measurement, disclosure, certifications, reports, actuarial opinions and memorandums, transition rules and internal controls.

(6) The data and form of the data required under section 7127 (relating to experience reporting for policies in force on or after operative date of valuation manual) and with whom the data must be submitted. The valuation manual may specify other requirements, including data analyses and reporting of analyses.

(c) Absent or noncompliant valuation requirement.--In the absence of a specific valuation requirement or if a specific valuation requirement in the valuation manual is not, in the opinion of the commissioner, in compliance with this chapter, the company shall, with respect to those requirements, comply with minimum valuation standards prescribed by the commissioner by regulation.

(d) Actuarial examination and review.--The following shall apply:

(1) The commissioner may engage a qualified actuary, at the expense of a company, to:

(i) perform an actuarial examination of the company and opine on the appropriateness of any reserve assumption or method used by the company; or

(ii) review and opine on the company's compliance with any requirement under this chapter.

(2) The commissioner may rely on the opinion regarding provisions contained in this chapter of a qualified actuary engaged by the commissioner of another state, district or territory of the United States.

(3) As used in this subsection, the term "engage" shall include employment and contracting.

(e) Change, adjustment and disciplinary action.--The commissioner may require a company to change any assumption or method or adjust company reserves if, in the opinion of the commissioner, the change or adjustment is necessary to comply with the requirements of the valuation manual or this chapter. The commissioner may take disciplinary action as permitted by law.

Cross References. Section 7125 is referred to in sections 7103, 7112, 7131, 7141 of this title.