Principle-Based Reserving Operative Date; Notice 2016-10 [46 Pa.B. 5867]
[Saturday, September 10, 2016]With the passage of the act of June 30, 2016 (P.L. 399, No. 59) (Act 59), the Commonwealth enabled a new approach, referred to as ''Principle-Based Reserving,'' for calculating minimum reserves for newly-issued life insurance products and certain accident and health insurance contracts. Act 59 references a Valuation Manual adopted by the National Association of Insurance Commissioners (NAIC) that details reserve calculation procedures. Act 59 also provides that the Insurance Commissioner shall issue a notice confirming the ''operative date'' of the Valuation Manual, which will be the January 1st of the first calendar year following the first July 1 when all of the following have occurred:
(1) The Valuation Manual has been adopted by the NAIC by an affirmative vote of at least 42 members or 75% of the members voting, whichever is greater.
(2) The model Standard Valuation Law, as amended by the NAIC in 2009, or legislation including substantially similar terms and provisions, has been enacted by both of the following:
(i) States representing more than 75% of the direct premiums written as reported for life, accident and health annual statements, health annual statements or fraternal annual statements submitted in 2008.
(ii) At least 42 of the 55 NAIC member jurisdictions, including the 50 states, American Samoa, the United States Virgin Islands, the District of Columbia, Guam and Puerto Rico.
On June 10, 2016, the NAIC announced its determination that the previously-referenced thresholds for making the Valuation Manual operative have been met.
Under 40 Pa.C.S. § 7104 (relating to notice regarding operative date of valuation manual), the Insurance Commissioner issues this notice to confirm that the operative date of the Valuation Manual will be January 1, 2017.
TERESA D. MILLER,
Insurance Commissioner[Pa.B. Doc. No. 16-1582. Filed for public inspection September 9, 2016, 9:00 a.m.]
