Section R590-177-10 - Annual Certifications(1) The board of directors of each insurer shall appoint one or more illustration actuaries.(2) The illustration actuary shall certify that:(a) the disciplined current scale used in any illustration conforms to the Actuarial Standard of Practice No. 24, Compliance with the NAIC Life Insurance Illustrations Model Regulation promulgated by the Actuarial Standards Board; and(b) the illustrated scale used in an insurer-authorized illustration meets the requirements of this rule.(3) The illustration actuary shall: (a) be a member in good standing of the American Academy of Actuaries;(b) be familiar with the standard of practice regarding life insurance policy illustrations;(c) not have been found by the commissioner, following appropriate notice and hearing, to have: (i) violated any provision of, or any obligation imposed by, the insurance law or other law in the course of dealings as an illustration actuary;(ii) been found guilty of fraudulent or dishonest practices;(iii) demonstrated incompetence, lack of cooperation, or untrustworthiness to act as an illustration actuary; or(iv) resigned or been removed as an illustration actuary within the past five years as a result of acts or omissions indicated in any adverse report on examination or as a result of a failure to adhere to generally acceptable actuarial standards;(d) notify the commissioner of any action taken by a commissioner of another state similar to that under Subsection (3)(c);(e) disclose in the annual certification whether, since the last certification, a currently payable scale applicable for business issued within the previous five years and within the scope of the certification has been reduced for a reason other than a change in the experience factors underlying the disciplined current scale; (i) if a non-guaranteed element illustrated for a new policy is not consistent with the illustration for a similar in force policy, this shall be disclosed in the annual certification; and(ii) if a non-guaranteed element illustrated for both a new and an in force policy is not consistent with the non-guaranteed element being paid, charged, or credited to the same or similar form, this shall be disclosed in the annual certification; and(f) disclose in the annual certification the method used to allocate overhead expenses for all illustrations: (i) fully allocated expenses;(ii) marginal expenses; or(iii) a generally recognized expense table based on fully allocated expenses representing a significant portion of insurance companies and approved by the NAIC or by the commissioner.(4)(a) The illustration actuary shall file a certification with the insurer's board of directors: (i) annually for all policy forms for which illustrations are used; and(ii) before a policy form is illustrated.(b) If the illustration actuary becomes aware of an error in a previous certification, the illustration actuary shall promptly notify the insurer's board of directors and the commissioner.(5) If an illustration actuary certify the scale for any policy form illustration the insurer intends to use, the actuary shall promptly notify the insurer's board of directors and the commissioner.(6) An officer of the insurer, other than the illustration actuary, shall certify annually: (a) that the illustration formats meet the requirements of this rule and that the scales used in any illustration are scales certified by the illustration actuary; and(b) that the company has provided each producer and authorized representative information about the expense allocation method used by the company in its illustrations and disclosed as required in Subsection (3)(f).(7) The annual certification shall be: (a) completed each year by a date determined by the insurer;(b) maintained by the insurer for a period of five years; and(c) available for inspection by the commissioner.(8) If an insurer changes the illustration actuary responsible for any portion of the company's policy forms, the insurer shall notify the commissioner and disclose the reason for the change.Utah Admin. Code R590-177-10
Amended by Utah State Bulletin Number 2023-03, effective 1/24/2023