Filing of Data for Determining Life Insurer Valuation (California Insurance Code Section 10480); Issuance of Valuation Certificates

Bulletin No. 91-8

December 16, 1991

TO:

All Domestic Life Insurance Companies and Other Interested Persons

SUBJECT: Filing of Data for Determining Life Insurer Valuation (California Insurance

Code Section 10480); Issuance of Valuation Certificates

1.

Annually, on or before the first day of March, every domestic incorporated life

insurer shall furnish to the Commissioner the necessary data for determining the

valuation of all its policies outstanding on the last preceding thirty-first of

December (California Insurance Code Section 10480). Senate Bill 889 changed the

date from February 1 to March 1 effective with the 12/31/91 filing.

2.

Such data must be sent to the office of the

Chief Actuary

Department of Insurance

300 South Spring Street, South Tower

Los Angeles, CA 90013

3.

In addition, all companies are required to file an insurance company certificate as to

the valuation by the actuary (or consulting actuary) of the company in the form

attached to this Bulletin.

4.

The necessary data shall consist of tabulations by reserve valuation cells showing

the total amount or number of units of insurance in each cell, the unit reserve factor

applied and the reserve determined for the cell together with the appropriate

valuation key information (reserve basis, plan of insurance, issue year, issue age,

etc.) for all segments (life insurance, annuities, supplementary contracts with life

contingencies, miscellaneous and reinsurance) of the reserve; or, for special

reserves which are not determined by applying a unit reserve factor to an in-force

amount, the data shall consist of summary worksheets showing the essential

elements of the reserve calculation, the reserve basis used and a description as

needed to make clear the calculation methods and assumptions used to determine

these reserves

miscellaneous and reinsurance) of the reserve; or, for special

reserves which are not determined by applying a unit reserve factor to an in-force

amount, the data shall consist of summary worksheets showing the essential

elements of the reserve calculation, the reserve basis used and a description as

needed to make clear the calculation methods and assumptions used to determine

these reserves. The valuation cell and special reserves should be carried forward to

totals by reserve basis to agree with the reserves reported by valuation standard on

each line of Parts A, B, C & G of Exhibit 8 of the company’s annual statement and

to agree with amounts reported on the insurance company certificate. Each item in

the summary worksheet or intermediate summaries should be clearly referenced to

supporting data such as machine runs and other worksheets. Any codes (e.g. plan

codes, reserve basis codes) needed to interpret any of the data submitted should be

included in each annual filing.

5.

The Department will bill each company based on the number of valuation

certificates requested, any late filing fee and a charge to reimburse the Department

for the expense involved in the review of the valuation data submitted. Time and

expense can be saved by carefully tying in the data with the appropriate line in

Exhibit 8. A schedule of fees and charges is updated from time to time. This

information can be accessed on the Insurance Department’s Internet website

http://www.insurance.ca.gov. and looking under the Bulletins and Notices

Section.

6.

Where there is no business in force, the Insurer’s Certificate is not required. The

Company must submit a letter stating that it has no business in force.

7.

In the following cases an Insurer’s Certificate is required:

(a)

There is business in force but reserves are zero e.g. Group Life

with monthly premiums payable on the first of the month.

Supporting data is required.

ces

Section.

6.

Where there is no business in force, the Insurer’s Certificate is not required. The

Company must submit a letter stating that it has no business in force.

7.

In the following cases an Insurer’s Certificate is required:

(a)

There is business in force but reserves are zero e.g. Group Life

with monthly premiums payable on the first of the month.

Supporting data is required.

(b)

Because of reinsurance, net reserves are zero. Supporting data for

the gross reserves is required.

This Bulletin replaces Department Bulletin 77-4 dated December 20, 1977 and Bulletin 86-5

dated November 7, 1986.

JOHN GARAMENDI

Insurance Commissioner

____________________________________________

_____________________________

INSURER’S CERTIFICATE REGARDING LIFE INSURER VALUATION

(Name of Company)

AS OF DECEMBER 31, _____

I, ______________________________, (Officer title in company), acting in

the capacity of actuary, OR, a partner, member or employee of (Name of

Consulting Firm), acting in the capacity of consulting actuary:

(a)

Have valued all of the life policies and annuity contracts

outstanding in the company as of the date above in accordance

with the insurance laws and regulations of the State of

California, and

(b)

Certify

that

the

data

furnished

to

the

Commissioner

for

determining said valuation are correct, and

(c)

Certify

that

the

reserves

for

such

policies

and

annuity

contracts, in the aggregate amount of $_________________ (Exhibit

8, Line 999999, Column 2) are truly stated in Exhibit 8 of the

Annual Statement as of said date filed, or to be filed, with the

Insurance Commissioner of the State of California.

Summary of the aggregate reserves reported or to be reported in Parts A,

B, C, and G of said Exhibit 8, column 2:

Life Insurance Reserves . . . . $___________________ A Line 019997

Annuity Reserves . . . . . . . $___________________ B Line 029997

Sup Contracts with Life cont .. $___________________ C Line 039997

Misc. Reserves . . . . . .. .

nsurance Commissioner of the State of California.

Summary of the aggregate reserves reported or to be reported in Parts A,

B, C, and G of said Exhibit 8, column 2:

Life Insurance Reserves . . . . $___________________ A Line 019997

Annuity Reserves . . . . . . . $___________________ B Line 029997

Sup Contracts with Life cont .. $___________________ C Line 039997

Misc. Reserves . . . . . .. . . $___________________ G Line 079997

Total . . . . . . $___________________

Less Reinsurance . . . . . . .. $___________________ Lines 019998+

029998+039998

+079998

Net Reserve . . . . . . . . . . $___________________

(Signature and Credentials)

Subscribed and sworn to before

me this

day of

Notary Public in and for the County of

, State of California