Section 10489.15.

(a) Every life and disability insurer doing business in this state shall annually submit 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 the commissioner by regulation are computed appropriately, are based on assumptions that satisfy contractual provisions, are consistent with prior reported amounts, and comply with applicable laws of this state. The commissioner, by regulation, shall define the specifics of this opinion and add any other items deemed to be necessary to its scope.

(b) (1) Every life and disability insurer, except as exempted by or pursuant to regulation, shall also annually include in the opinion required by subdivision (a), an opinion of the same qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the commissioner by regulation, when considered in light of the assets held by the insurer with respect to the reserves and related actuarial items, including, but not limited to, the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the insurer's obligations under the policies and contracts, including, but not limited to, the benefits under and expenses associated with the policies and contracts.

(2) The commissioner may provide by regulation for a transition period for establishing any higher reserves that the qualified actuary may deem necessary in order to render the opinion required by this section.

(c) The opinion required by either subdivision (a) or subdivision (b) shall be governed by all of the following provisions:

(1) The opinion shall be submitted with the annual statement reflecting the valuation of the reserve liabilities for each year ending on or after December 31, 1992.

(2) The opinion shall apply to all business in force, including individual and group life and disability insurance, in form and substance acceptable to the commissioner as specified by regulation.

(3) The opinion shall be based on standards adopted from time to time by the Actuarial Standards Board and on any additional standards that the commissioner may by regulation prescribe.

(4) In the case of an opinion required to be submitted by a foreign or alien insurer, the commissioner may accept the opinion filed by that insurer with the insurance supervisory official of another state if the commissioner determines that the opinion reasonably meets the requirements applicable to an insurer domiciled in this state.

(5) For the purposes of this section, "qualified actuary" means a member in good standing of the American Academy of Actuaries who meets the requirements set forth in regulations of the commissioner.

(6) The qualified actuary shall be liable for his or her negligence or other tortious conduct.

(7) Disciplinary action by the commissioner against the insurer or the qualified actuary shall be defined in regulations by the commissioner.

(8)  (A) Any memorandum or other material submitted by the insurer to the commissioner in support of the opinion shall be kept confidential by the commissioner and shall not be made public, provided, however, that the memorandum or the other material may be released by the commissioner (i) to any party, with the written consent of the insurer, or (ii) to the American Academy of Actuaries upon the academy's written request and statement that the memorandum or the material is required for professional disciplinary proceedings and that the academy will observe procedures satisfactory to the commissioner to preserve the confidentiality of the memorandum or the other material. The entirety of the confidential memorandum shall lose its confidential status on the occurrence of any of the following events: the citation of any part of the confidential memorandum by the insurer in its marketing efforts, the citation of any part of the confidential memorandum by the insurer before any governmental agency other than a state insurance department, or the release of any part of the confidential memorandum by the insurer to any news medium.

(B) Notwithstanding subparagraph (A), the confidential memorandum shall be subject to subpoena (i) on the commissioner's consent, or (ii) after notice to the commissioner and all other interested parties and a hearing in which the superior court determines that (I) the need for the subpoena outweighs the interests of the insurer or actuary in preventing release of the confidential memorandum and the other material, and (II) the public interest and any ongoing investigation or proceeding conducted by the commissioner will not be unnecessarily jeopardized by compliance with the subpoena.

(d) The opinion required by subdivision (b) shall be governed by all of the following provisions:

(1) A memorandum, in form and substance acceptable to the commissioner as specified by regulation, shall be prepared to support each actuarial opinion.

(2) If the insurer fails to provide a supporting memorandum at the request of the commissioner within a period specified by regulation or the commissioner determines that the supporting memorandum provided by the insurer fails to meet the standards prescribed by the regulations or is otherwise unacceptable to the commissioner, the commissioner may engage a qualified actuary at the expense of the insurer to review the opinion and the basis for the opinion and prepare supporting memorandum as is required by the commissioner.

(Amended by Stats. 1992, Ch. 737, Sec. 1. Effective January 1, 1993.)