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(a) The board of directors of an insurer shall appoint one or more illustration actuaries. The illustration actuary or actuaries shall annually certify that the disciplined current scale used in each illustration in current use, as well as those used since the prior certification, conforms with the Actuarial Standards Board Actuarial Standard of Practice No. 24, and that the illustrated scales used in insurer-authorized illustrations meet the requirements of 3 AAC 28.800 - 3 AAC 28.849.
(b) The illustration actuary
(1) must be a member in good standing of the American Academy of Actuaries;
(2) must be familiar with the standard of practice regarding life insurance policy illustrations;
(3) may not have been found by the director, after a hearing under AS 21.06.170 - 21.06.230,
(A) to have violated any provision of, or any obligation imposed by AS 21 in the course of performing the duties of an illustration actuary;
(B) to be guilty of a fraudulent or dishonest practice;
(C) to have demonstrated incompetence, lack of cooperation, or untrustworthiness as an illustration actuary; or
(D) to have resigned or been removed as an illustration actuary within the past five years as a result of one or more acts or omissions indicated in any adverse report on examination or as a result of a failure to adhere to generally acceptable actuarial standards; and
(4) must notify the director within 30 days of an action taken by the chief insurance regulatory official in another jurisdiction that is similar to an action described in (3) of this subsection.
(c) The illustration actuary shall disclose in the annual certification
(1) whether, since the last annual 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 reasons other than changes in the experience factors underlying the disciplined current scale; if non-guaranteed elements illustrated for new policies are not consistent with those illustrated for similar in force policies, or if non-guaranteed elements illustrated for both new and in force policies are not consistent with the non-guaranteed elements actually being paid, charged, or credited to the same or similar forms, that information must be disclosed in the annual certification; and
(2) which of the following was used to allocate overhead expenses for an illustration:
(A) the marginal expense method;
(B) the fully allocated expense method; or
(C) a generally recognized expense table based on fully allocated expenses representing a significant portion of insurance companies that has been approved by the director.
(d) An illustration actuary shall file a certification with the insurer's board of directors and with the director before a policy form is illustrated and also annually for each policy form for which illustrations are used. Upon discovery, the illustration actuary shall promptly notify the board of directors of the insurer and the director of any error in a previous certification.
(e) An illustration actuary who is unable to certify the appropriate scale for any policy form illustration an insurer intends to use shall promptly notify the board of directors of the insurer and the director that the scale cannot be certified under (a) of this section.
(f) A responsible officer of an insurer, who is not employed as the insurer's illustration actuary, shall certify annually to the director that
(1) the illustration formats meet the requirements of 3 AAC 28.800 - 3 AAC 28.849 and that the scales used in insurer-authorized illustrations are those scales certified by the insurer's illustration actuary; and
(2) the company has provided the persons soliciting policies with information about the expense allocation method used by the company in its illustrations and made the disclosures required under (c)(2) of this section.
(g) An insurer that changes the illustration actuary responsible for any of the company's policy forms shall promptly notify the director of the change and the reason for the change.
History: Eff. 9/1/98, Register 147
Authority: AS 21.06.090
Editor's note: The Actuarial Standards Board Actuarial Standard of Practice No. 24 referenced in 3 AAC 28.840(a) may be obtained from the division of insurance, P.O. Box 110805, Juneau, Alaska 99811-0805.
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Last modified 7/05/2006