Tex. Ins. Code Section 425.054
Actuarial Opinion of Reserves Issued Before Operative Date of Valuation Manual


(a)

This section applies only to an actuarial opinion of reserves issued before the operative date of the valuation manual.

(a-1)

For purposes of this section, “qualified actuary” means:

(1)

a qualified actuary, as that term is defined by Section 802.002 (Actuarial Opinion Required); or

(2)

a person who, before September 1, 1993, satisfied the requirements of the former State Board of Insurance to submit an opinion under former Section 2A(a)(1), Article 3.28.

(b)

In conjunction with the annual statement and in addition to other information required by this subchapter, each life insurance company engaged in business in this state shall annually submit to the department 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 commissioner rule:

(1)

are computed appropriately;

(2)

are based on assumptions that satisfy contractual provisions;

(3)

are consistent with prior reported amounts; and

(4)

comply with applicable laws of this state.

(c)

The commissioner by rule shall specify the requirements of an actuarial opinion under Subsection (b), including any matters considered necessary to the opinion’s scope.

(d)

The opinion required by this section must:

(1)

apply to all of the life insurance company’s business in force, including individual and group health insurance plans; and

(2)

be in the form and contain the substance specified by commissioner rule and be acceptable to the commissioner.

(e)

The commissioner may accept as an opinion required to be submitted under Subsection (b) by a foreign or alien company the opinion filed by that company with the insurance supervisory official of another state if the commissioner determines that the opinion filed in the other state reasonably meets the requirements applicable to a company domiciled in this state.

(f)

Except as exempted by or as otherwise provided by commissioner rule, a life insurance company shall include in the opinion required by Subsection (b) an opinion that states whether the reserves and related actuarial items held in support of the policies and contracts specified by commissioner rule adequately provide for the company’s obligations under the policies and contracts, including the benefits under and expenses associated with the policies and contracts.

(g)

In making the opinion under Subsection (f), the reserves and related actuarial items are considered in light of the assets held by the life insurance company with respect to the reserves and related actuarial items, including:

(1)

the investment earnings on the assets; and

(2)

the considerations anticipated to be received and retained under the policies and contracts.

(h)

The person who certifies the opinion required by Subsection (b) must make the opinion required by Subsection (f).

(i)

Rules adopted under this section may exempt life insurance companies that would be exempt from the requirements of this section under the most recently adopted regulation by the National Association of Insurance Commissioners entitled “Model Actuarial Opinion and Memorandum Regulation,” or a successor to that regulation, if the commissioner considers the exemption appropriate.

(j)

Except as provided by Subsections (n), (o), and (p), any document or other information in the possession or control of the department that is a memorandum in support of the opinion or other material provided by the company to the commissioner in connection with a memorandum is confidential and privileged and not subject to:

(1)

disclosure under Chapter 552 (Public Information), Government Code;

(2)

subpoena;

(3)

discovery; or

(4)

admissibility as evidence in a private civil action.

(k)

The commissioner or any person who receives a document or other information described by Subsection (j) while acting under the authority of the commissioner may not testify and may not be compelled to testify in a private civil action concerning the document or other information.

(l)

The commissioner may:

(1)

share documents or other information, including the confidential and privileged documents or information described by Subsection (j), with another state, federal, or international regulatory agency, with the National Association of Insurance Commissioners and its affiliates and subsidiaries, and with state, federal, and international law enforcement authorities, provided that the recipient agrees to maintain the confidentiality of the document or information; and

(2)

receive documents or other information, including confidential and privileged documents or information, from the National Association of Insurance Commissioners and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, provided that the commissioner shall maintain as confidential or privileged any document or information received with notice or understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document or information.

(m)

Disclosing information or providing a document to the commissioner under this section, or sharing information as authorized under this section, does not result in a waiver of any applicable privilege or claim of confidentiality that may apply to the document or information.

(n)

A memorandum in support of the opinion, and any other material provided by the company to the commissioner in connection with the memorandum, may be subject to subpoena for the purpose of defending an action seeking damages from the actuary submitting the memorandum by reason of an action required by this section or rules adopted under this section.

(o)

The memorandum or other material provided by the company to the commissioner in connection with the memorandum may otherwise be released by the commissioner with the written consent of the company, or to the Actuarial Board for Counseling and Discipline or its successor on receipt of a 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 and privileged status of the memorandum or other material.

(p)

The memorandum ceases to be confidential and privileged if:

(1)

any portion of the memorandum is cited by the company in its marketing;

(2)

the memorandum is cited by the company before a government agency other than a state insurance department; or

(3)

the memorandum is released by the company to the news media.

(q)

This section does not prohibit the commissioner from using information acquired under this section in the furtherance of a legal or regulatory action relating to the administration of this code.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
Amended by:
Acts 2015, 84th Leg., R.S., Ch. 313 (S.B. 1654), Sec. 5, eff. September 1, 2015.
Acts 2015, 84th Leg., R.S., Ch. 313 (S.B. 1654), Sec. 6, eff. September 1, 2015.

Source: Section 425.054 — Actuarial Opinion of Reserves Issued Before Operative Date of Valuation Manual, https://statutes.­capitol.­texas.­gov/Docs/IN/htm/IN.­425.­htm#425.­054 (accessed Jun. 5, 2024).

425.001
Securities in Amount of Reserves Required
425.002
Certain Insurers: Deposit of Securities, Money, or Property in Amount of Legal Reserves
425.003
Certain Insurers: Required Deposits of Securities
425.004
Records of Securities Deposited with Department
425.005
Department Duties Regarding Deposited Securities
425.006
Additional Reserves Required: Substandard or Extra Hazardous Policies
425.007
Subscription to or Underwriting Purchase or Sale of Securities or Property Prohibited
425.008
Authorized Investments for Foreign Companies
425.009
Student Loans
425.051
Short Title
425.052
Definitions
425.053
Annual Valuation of Reserves for Policies and Contracts Issued Before Operative Date of Valuation Manual
425.054
Actuarial Opinion of Reserves Issued Before Operative Date of Valuation Manual
425.055
Supporting Memorandum for Actuarial Opinion
425.056
Limitation on Liability for Actuarial Opinion
425.057
Disciplinary Action: Company or Person Certifying Opinion
425.058
Computation of Minimum Standard: General Rule
425.059
Computation of Minimum Standard for Certain Annuities and Pure Endowment Contracts
425.060
Applicability of Calendar Year Statutory Valuation Interest Rates
425.061
Computation of Calendar Year Statutory Valuation Interest Rate: General Rule
425.062
Weighting Factors
425.063
Reference Interest Rate
425.064
Commissioners Reserve Valuation Method for Life Insurance and Endowment Benefits
425.065
Commissioners Annuity Reserve Valuation Method for Annuity and Pure Endowment Benefits
425.066
Minimum Aggregate Reserves
425.067
Optional Reserve Computations
425.068
Reserve Computation: Gross Premium Charged Less than Valuation Net Premium
425.069
Reserve Computation: Indeterminate Premium Plans and Certain Other Plans
425.070
Computation of Reserve for Certain Policies by Calendar Year of Issue
425.071
Lapse Rates in Minimum Standard of Valuation
425.072
Minimum Standard for Accident and Health Insurance Contracts
425.073
Valuation Manual for Policies Issued on or After the Operative Date of the Valuation Manual
425.074
Requirements of a Principle-based Valuation
425.075
Experience Reporting for Policies in Force on or After Operative Date of Valuation Manual
425.076
Confidentiality
425.077
Single State Exemption
425.101
Definitions
425.102
Inapplicability of Certain Law
425.103
Applicability of Subchapter
425.104
Purpose
425.105
Written Investment Plan
425.106
Investment Records
425.108
Authorized Investments and Transactions in General
425.109
Authorized Investments: Government Obligations
425.110
Authorized Investments: Obligations of and Other Investments in Business Entities
425.111
Authorized Investments: Bonds Issued, Assumed, or Guaranteed in International Market
425.112
Authorized Investments: Policy Loans
425.113
Authorized Investments: Deposits in Certain Financial Institutions
425.114
Authorized Investments: Insurance Company Investment Pools
425.115
Authorized Investments: Equity Interests
425.116
Authorized Investments: Preferred Stock
425.117
Authorized Investments: Collateral Loans
425.118
Authorized Investments: Obligations Secured by Real Property Loans
425.119
Authorized Investments: Real Property
425.120
Authorized Investments: Oil, Gas, and Minerals
425.121
Authorized Investments: Securities Lending, Repurchase, Reverse Repurchase, and Dollar Roll Transactions
425.122
Authorized Investments: Premium Loans
425.123
Authorized Investments: Money Market Funds
425.124
Authorized Investments: Risk Control Transactions
425.125
Risk Control Transactions: Definitions
425.126
Risk Control Transactions: Derivative Use Plan
425.127
Risk Control Transactions: Internal Control Procedures
425.128
Risk Control Transactions: Oversight by Commissioner
425.129
Risk Control Transactions: Limitations on Income Generation Transactions
425.130
Risk Control Transactions: Limitations on Replication Transactions
425.131
Risk Control Transactions: Trading Requirements
425.132
Risk Control Transactions: Offsetting Transactions
425.151
Authorized Investments: Foreign Countries and United States Territories
425.152
Authorized Investments: Investments Not Otherwise Specified or Prohibited
425.153
Authorized Investments: Certain Previously Authorized Investments
425.154
Applicability of Percentage Authorizations and Limitations
425.155
Qualification of Investments
425.156
Distributions, Reinsurance, and Merger
425.157
Aggregate Diversification Requirements
425.158
Waiver by Commissioner of Quantitative Limitations
425.159
Accounting Provisions
425.160
Investments of Ceding Insurers
425.161
Acting as Real Estate Broker or Salesperson Prohibited
425.162
Rules
425.201
Definition
425.202
Applicability of Subchapter
425.203
Limitation on Funds and Other Assets
425.204
Approval of Investments and Loans Required
425.205
Authorized Investments for All Funds: Government Bonds
425.206
Authorized Investments for All Funds: Corporate Bonds, Notes, and Debentures
425.207
Authorized Investments for All Funds: Shares of Savings and Loan Associations
425.208
Authorized Investments for All Funds: Bank and Bank Holding Company Stocks
425.209
Authorized Investments for All Funds: Debentures of Public Utility Corporations
425.210
Authorized Investments for All Funds: Preferred Stock of Public Utility Corporations
425.211
Authorized Investments for All Funds: Bonds Issued, Assumed, or Guaranteed in International Market
425.212
Authorized Investments for All Funds: Securities or Investments Authorized or Described by Specific Statutory Provision
425.213
Authorized Investments for All Funds: Other Securities Specifically Authorized by Law
425.214
Authorized Investments for All Funds: Loans Secured by Real Property
425.215
Authorized Investments for All Funds: Loans Secured by Certain Collateral Secured by Real Property
425.216
Authorized Investments for All Funds: Policy Loans
425.217
Authorized Investments for All Funds: Loans Secured by Certain Securities
425.218
Authorized Investments for All Funds: Securities Not Otherwise Specified
425.219
Authorized Investments for Policy Reserves and Surplus: Bonds of Certain Water Control and Improvement Districts
425.220
Authorized Investments for Capital, Surplus, and Contingency Funds: Capital Stock, Bonds, and Other Corporate Obligations
425.221
Authorized Investments for Capital, Surplus, and Contingency Funds: Bonds or Notes of Educational or Religious Corporations
425.222
Authorized Investments for Capital, Surplus, and Contingency Funds: Life Income Interests in Qualified Trusts
425.223
Authorized Investments for Capital, Surplus, and Contingency Funds: Capital Stock of Reinsurer
425.224
Authorized Investments for Capital, Surplus, and Contingency Funds: Loans Secured by Corporate Stock
425.225
Investment in Foreign Securities
425.226
Investment in Stock Subject to Assessment Prohibited
425.227
Certain Investment Powers Not a Restriction
425.228
Investments of Ceding Insurer
425.229
Authorized Investments: Real Estate for Insurer’s Offices
425.230
Authorized Investments: Oil, Gas, and Minerals
425.231
Authorized Investments: Real Property Acquired Under Certain Circumstances
425.232
Authorized Investments: Improved Income-producing Real Property
425.0535
Annual Valuation of Reserves for Policies and Contracts Issued on or After Operative Date of Valuation Manual
425.0545
Actuarial Opinion of Reserves After Operative Date of Valuation Manual
425.1185
Authorized Investments: Mezzanine Real Estate Loans
425.1231
Authorized Investments: Bond Exchange-traded Funds
425.2061
Authorized Investments for All Funds: Bond Exchange-traded Funds

Accessed:
Jun. 5, 2024

§ 425.054’s source at texas​.gov