Nev. Rev. Stat. § 681B.001 Definitions.
As used in this chapter, unless the context otherwise requires, the words and terms defined in NRS 681B.0023 to 681B.0071, inclusive, have the meanings ascribed to them in those sections.
ASSETS AND LIABILITIES
Nev. Rev. Stat. 681B
in effectNev. Rev. Stat. § 681B.010 Assets.
In any determination of the financial condition of an insurer, there must be allowed as assets only such assets as are owned by the insurer and which consist of:
1. Cash in the possession of the insurer, or in transit under its control, and including the true balance of any deposit in a solvent bank, credit union or trust company.
2. Investments, securities, properties and loans acquired or held in accordance with this Code, and in connection therewith the following items:
(a) Interest due or accrued on any bond or evidence of indebtedness which is not in default and which is not valued on a basis including accrued interest.
(b) Declared and unpaid dividends on stock and shares, unless such amount has otherwise been allowed as an asset.
(c) Interest due or accrued upon a collateral loan in an amount not to exceed 1 years interest thereon.
(d) Interest due or accrued on deposits in solvent banks, credit unions and trust companies, and interest due or accrued on other assets, if such interest is, in the judgment of the Commissioner, a collectible asset.
(e) Interest due or accrued on a mortgage loan, in an amount not exceeding in any event the amount, if any, of the excess of the value of the property less delinquent taxes thereon over the unpaid principal; but in no event may interest accrued for a period in excess of 18 months be allowed as an asset.
(f) Rent due or accrued on real property if such rent is not in arrears for more than 3 months, and rent more than 3 months in arrears if the payment of such rent is adequately secured by property held in the name of the tenant and conveyed to the insurer as collateral.
(g) The unaccrued portion of taxes paid before the due date on real property.
3. Premium notes, policy loans and other policy assets and liens on policies and certificates of life insurance and annuity contracts and accrued interest thereon, in an amount not exceeding the legal reserve and other policy liabilities carried on each individual policy.
4. The net amount of uncollected and deferred premiums and annuity considerations in the case of a life insurer.
5. Premiums in the course of collection, other than for life insurance, not more than 3 months past due, less commissions payable thereon. The foregoing limitation does not apply to premiums payable directly or indirectly by the United States Government or by any of its instrumentalities.
6. Installment premiums other than life insurance premiums to the extent of the unearned premium reserve carried on the policy to which premiums apply.
7. Notes and like written obligations not past due, taken for premiums other than life insurance premiums, on policies permitted to be issued on such basis, to the extent of the unearned premium reserves carried thereon.
8. The full amount of reinsurance recoverable by a ceding insurer from a solvent reinsurer, which reinsurance is authorized under NRS 681A.110 .
9. Amounts receivable by an assuming insurer representing money withheld by a solvent ceding insurer under a reinsurance treaty.
10. Deposits or equities recoverable from underwriting associations, syndicates and reinsurance funds, or from any suspended financial institution, to the extent deemed by the Commissioner available for the payment of losses and claims and at values to be determined by the Commissioner.
11. All such assets, whether or not consistent with the provisions of this section, as may be allowed pursuant to the annual statement form approved by the Commissioner for the kinds of insurance to be reported upon therein.
12. As to a title insurer, its title plant and equipment reasonably necessary for the conduct of its abstract or title insurance business, at not to exceed the cost thereof.
13. Electronic and mechanical machines and related equipment constituting a data processing, recordkeeping or accounting system or systems if the cost of each such system is at least $25,000, which cost must be amortized in full over a period not to exceed 10 years. The aggregate amount invested in all such systems must not exceed 5 percent of the insurers assets.
14. Other assets, not inconsistent with the provisions of this section, deemed by the Commissioner to be available for the payment of losses and claims at values to be determined by the Commissioner.
Nev. Rev. Stat. § 681B.020 Assets not allowed.
1. In addition to assets impliedly excluded by the provisions of NRS 681B.010 , the following expressly may not be allowed as assets in any determination of the financial condition of an insurer:
(a) Goodwill, trade names and other like intangible assets.
(b) Advances to officers, other than policy loans, whether secured or not, and advances to employees, agents and other persons on personal security only.
(c) Stock of such insurer, owned by it, or any equity therein or loans secured thereby, or any proportionate interest in such stock acquired or held through the ownership by such insurer of an interest in another firm, corporation or business unit.
(d) Furniture, fixtures, furnishings, safes, vehicles, libraries, stationery, literature and supplies, other than data processing, recordkeeping and accounting systems authorized under subsection 13 of NRS 681B.010 , except such personal property as the insurer is permitted to hold pursuant to chapter 682A of NRS, or which is reasonably necessary for the maintenance and operation of real property lawfully acquired and held by the insurer other than real property used by it for home office, branch office and similar purposes.
(e) The amount, if any, by which the aggregate book value of investments as carried in the ledger assets of the insurer exceeds the aggregate value thereof as determined under this Code.
2. If any successor organization to the State Industrial Insurance System that was established by section 79 of chapter 642, Statutes of Nevada 1981, at page 1449 , wishes to transact in this state property or casualty insurance other than industrial insurance, the money required to be held in trust by that organization pursuant to NRS 616B.042 may not be allowed as assets of the successor organization in determining its financial condition to transact such insurance.
Nev. Rev. Stat. § 681B.0023 Accident and health insurance defined.
Accident and health insurance means a contract that incorporates morbidity risk and provides protection against economic loss resulting from accident, sickness or medical conditions, and as may further be specified in the Valuation Manual.
Nev. Rev. Stat. § 681B.0025 Applicable company defined.
Applicable company means an insurer that:
1. Has written, issued or reinsured life insurance, accident and health insurance or deposit-type contracts in this State and has at least one such policy in force or on claim; or
2. Has written, issued or reinsured life insurance, accident and health insurance or deposit-type contracts in any state and is required to hold a certificate of authority to write life insurance, accident and health insurance or deposit-type contracts in this State.
Nev. Rev. Stat. § 681B.0027 Appointed actuary defined.
Appointed actuary means a qualified actuary who is appointed in accordance with the Valuation Manual to prepare the actuarial opinion required by NRS 681B.350.
Nev. Rev. Stat. § 681B.030 Disallowance of asset arranged to deceive; disciplinary action.
1. The Commissioner shall disallow as an asset or as a credit against liabilities any reinsurance found by the Commissioner after a hearing thereon to have been arranged for the purpose principally of deception as to the ceding insurers financial condition as of the date of any financial statement of the insurer. Without limiting the general purport of the foregoing provision, reinsurance of any substantial part of the insurers outstanding risks contracted for in fact within 4 months prior to the date of any such financial statement and cancelled in fact within 4 months after the date of such statement, or reinsurance under which the reinsurer bears no substantial insurance risk or chance of net loss to itself, shall prima facie be deemed to have been arranged principally for the purpose of deception.
2. The Commissioner shall disallow as an asset any deposit, funds or other assets of the insurer found by the Commissioner after a hearing thereon:
(a) Not to be in good faith the property of the insurer;
(b) Not freely subject to withdrawal or liquidation by the insurer at any time for the payment or discharge of claims or other obligations arising under its policies; and
(c) To be resulting from arrangements made principally for the purpose of deception as to the insurers financial condition as at the date of any financial statement of the insurer.
3. The Commissioner may suspend or revoke the certificate of authority of any insurer which has knowingly been a party to any such deception or attempted deception.
Nev. Rev. Stat. § 681B.0033 Confidential information defined.
Confidential information means any information which qualifies as confidential under NRS 681B.400.
Nev. Rev. Stat. § 681B.0036 Deposit-type contract defined.
Deposit-type contract means a contract that does not incorporate mortality or morbidity risks, and as may further be specified in the Valuation Manual.
Nev. Rev. Stat. § 681B.040 Liabilities.
In any determination of the financial condition of an insurer, capital stock and liabilities to be charged against its assets shall include:
1. The amount of its capital stock outstanding, if any.
2. The amount, estimated to be consistent with the provisions of this Code, necessary to pay all of its unpaid losses and claims incurred on or prior to the date of the statement, whether reported or unreported, together with the expenses of adjustment or settlement thereof.
3. With reference to life insurance policies and annuity contracts, and disability and accidental death benefits in or supplemental thereto:
(a) The amount of reserves on life insurance policies and annuity contracts in force, valued according to the tables of mortality, rates of interest and methods adopted pursuant to this Code which are applicable thereto.
(b) Reserves for disability benefits, for both active and disabled lives.
(c) Reserves for accidental death benefits.
(d) Any additional reserves which may be required by the Commissioner consistent with applicable customary and general practice in insurance accounting.
4. As to health insurance policies, the reserves required under NRS 681B.080 .
5. With reference to insurance other than specified in subsections 3 and 4, and other than title insurance, the amount of the unearned premium reserves computed in accordance with NRS 681B.060 and 681B.070 .
6. Taxes, expenses and other obligations due or accrued at the date of the statement.
Nev. Rev. Stat. § 681B.0041 Life insurance defined.
Life insurance means a contract that incorporates mortality risk, including, without limitation, an annuity and pure endowment contract, and as may further be specified in the Valuation Manual.
Nev. Rev. Stat. § 681B.0045 NAIC defined.
NAIC means the National Association of Insurance Commissioners or its successor organization.
Nev. Rev. Stat. § 681B.0049 Operative date of the Valuation Manual defined.
Operative date of the Valuation Manual means the date determined pursuant to subsection 2 of NRS 681B.300.
Nev. Rev. Stat. § 681B.050 Reserves for losses from casualty insurance; regulations.
1. As to casualty insurance transacted by it, each insurer shall maintain at all times reserves in an amount estimated in the aggregate to provide for payment of all losses and claims incurred, whether reported or unreported, which are unpaid and for which the insurer may be liable and to provide for the expenses of adjustment or settlement of losses and claims. The reserves must be computed in accordance with regulations adopted from time to time by the Commissioner upon reasonable consideration of the ascertained experience and the character of such kind of business for the purpose of adequately protecting the insured and the solvency of the insurer.
2. Whenever the loss and loss expense experience of the insurer show that reserves, calculated in accordance with those regulations, are inadequate, the Commissioner may require the insurer to maintain additional reserves.
3. The Commissioner may, by regulation, prescribe the manner and form of reporting pertinent information concerning the reserves provided for in this section.
Nev. Rev. Stat. § 681B.0052 Policyholder behavior defined.
Policyholder behavior includes any action a policyholder, contract holder or any other person with the right to elect options, such as a certificate holder, may take pursuant to a policy or contract subject to this chapter, including, without limitation, lapse, withdrawal, transfer, deposit, premium payment, loan, annuitization or benefit elections prescribed by the policy or contract. The term does not include events of mortality or morbidity that result in benefits prescribed in their essential aspects by the terms of the policy or contract.
Nev. Rev. Stat. § 681B.0055 Principle-based valuation defined.
Principle-based valuation means a reserve valuation that uses one or more methods or one or more assumptions determined by the insurer and is required to comply with NRS 681B.360, 681B.370 and 681B.380, and as may further be specified in the Valuation Manual.
Nev. Rev. Stat. § 681B.0059 Qualified actuary defined.
Qualified actuary means a natural person who:
1. Is qualified to sign the applicable statement of actuarial opinion in accordance with the standards that are established by the American Academy of Actuaries, or its successor organization, to determine the qualification of an actuary to sign such a statement; and
2. Meets the applicable requirements set forth in the Valuation Manual .
Nev. Rev. Stat. § 681B.060 Reserve for unearned premiums; exception.
1. As to property, casualty and surety insurance the insurer shall maintain as a liability an unearned premium reserve on all policies in force.
2. Except as provided in NRS 681B.070 as to marine and transportation risks, the unearned premium reserve shall be equal to the unearned portion of gross premiums in force (after deduction of applicable reinsurance in solvent insurers) computed on an annual, monthly or more frequently pro rata basis.
Nev. Rev. Stat. § 681B.0065 Tail risk defined.
Tail risk means a risk that occurs either where the frequency of low probability events is higher than expected under a normal probability distribution or where there are observed events of very significant size or magnitude.
Nev. Rev. Stat. § 681B.070 Reserve for unearned premiums for marine and transportation insurance.
As to marine and transportation insurance, the entire amount of premiums on trip risks not terminated shall be deemed unearned; and the Commissioner may require the insurer to carry a reserve equal to 100 percent of premiums on trip risks written during the month ended as of the date of statement.
Nev. Rev. Stat. § 681B.0071 Valuation Manual defined.
Valuation Manual means the Valuation Manual adopted by the National Association of Insurance Commissioners on December 2, 2012, and as subsequently amended by the NAIC.
Nev. Rev. Stat. § 681B.080 Reserves for policies of health insurance.
For all health insurance policies the insurer shall maintain an active life reserve which shall place a sound value on its liabilities under such policies and be not less than the reserve according to appropriate standards set forth in regulations issued by the Commissioner and, in no event, less in the aggregate than the pro rata gross unearned premiums for such policies.
Nev. Rev. Stat. § 681B.100 Contingency reserves for insurance of repayment of debt secured by mortgage.
1. Casualty or surety insurers insuring real property mortgage lenders against loss by reason of nonpayment of the mortgage indebtedness by the borrower shall maintain a contingency reserve for the protection of policyholders against the effects of adverse economic cycles.
2. The insurer shall contribute to such contingency reserve 50 percent of net premiums (gross premiums less premiums returned to policyholders) written on such insurance remaining after establishment of the unearned premium reserve.
3. Subject to the Commissioners approval, the contingency reserve shall be available for payment of losses only when the insurers incurred losses in any 1 calendar year exceed the rate formula expected losses by 10 percent of the related earned premiums.
Nev. Rev. Stat. § 681B.105 Valuation of bonds.
1. Except as otherwise provided in subsection 5, all bonds or other evidences of debt having a fixed term and rate of interest held by an insurer may, if amply secured and not in default as to principal or interest, be valued as follows:
(a) If purchased at par, at the par value.
(b) If purchased above or below par, on the basis of the purchase price adjusted so as to bring the value to par at maturity and so as to yield in the meantime the effective rate of interest at which the purchase was made or, in lieu of that method, according to an accepted method of valuation that is approved by the Commissioner.
2. The purchase price must not be taken at a higher figure than the actual market value at the time of purchase, plus actual brokerage, transfer, postage or express charges paid in the acquisition of such securities.
3. Unless otherwise provided by a valuation established or approved by the Commissioner, the security must not be carried at above the call price for the entire issue during any period within which the security may be so called.
4. The Commissioner has full discretion in determining the method of calculating values pursuant to this section.
5. A valuation determined pursuant to this section must not be inconsistent with any applicable valuation or method then currently formulated or approved by the NAIC.
Nev. Rev. Stat. § 681B.106 Valuation of other securities.
1. Except as otherwise provided in subsection 4, securities, other than those specified in NRS 681B.105 , held by an insurer must be valued, in the discretion of the Commissioner, at their market value, or at their appraised value, or at prices determined by the Commissioner as representing their fair market value.
2. Preferred or guaranteed stocks or shares while paying full dividends may be carried at a fixed value in lieu of market value, at the discretion of the Commissioner and in accordance with a method of computation approved by the Commissioner.
3. The stock of a subsidiary of an insurer must be valued on the basis of the value of only those assets of the subsidiary as would constitute lawful investments of the insurer if acquired or held directly by the insurer.
4. A valuation determined pursuant to this section must not be inconsistent with any applicable valuation or method then currently formulated or approved by the NAIC.
Nev. Rev. Stat. § 681B.108 Valuation of property.
1. Real property acquired pursuant to a mortgage loan or contract for sale, in the absence of a recent appraisal deemed by the Commissioner to be reliable, must not be valued at an amount greater than the unpaid principal of the defaulted loan or contract plus interest due and accrued at the date of acquisition, together with any taxes and expenses paid or incurred in connection with the acquisition, and the cost of improvements thereafter made by the insurer and any amounts thereafter paid by the insurer on assessments levied for improvements in connection with the property.
2. Other real property held by an insurer must not be valued at an amount in excess of the lesser of the fair value as determined by recent appraisal or the actual cost, plus capitalized improvements, less normal depreciation. If valuation is based on an appraisal more than 3 years old, the Commissioner may, at his or her discretion, call for and require a new appraisal in order to determine fair value.
Nev. Rev. Stat. § 681B.109 Valuation of purchase money mortgages.
Purchase money mortgages on real property referred to in subsection 1 of NRS 681B.108 shall be valued in an amount not exceeding the acquisition cost of the real property covered thereby or 90 percent of the fair value of such real property, whichever is less.
Nev. Rev. Stat. § 681B.110 Valuation and calculation of reserves; acceptance of valuation by another state or jurisdiction; applicability.
1. The Commissioner shall, in the manner provided by NRS 681B.110 to 681B.150 , inclusive, annually value, or cause to be valued, the reserve liabilities (hereinafter called reserves) for all outstanding life insurance policies and annuity and pure endowment contracts of every life insurer doing business in this state, issued on or after January 1, 1972, and before the operative date of the Valuation Manual , except that in the case of an alien insurer, the valuation must be limited to its United States business.
2. The Commissioner may:
(a) Use any method, including group methods and the net level premium method, in the calculation of the reserves.
(b) Use approximate averages for fractions of a year or other period to calculate the reserves.
(c) In lieu of the valuation of the reserves required of any foreign or alien company, accept any valuation made, or caused to be made, by an insurance supervisory officer of any other state or jurisdiction if the valuation by the insurance supervisory officer complies with the minimum standard required by NRS 681B.110 to 681B.150 , inclusive.
3. The provisions set forth in NRS 681B.110 to 681B.155 , inclusive, apply to all policies and contracts, as appropriate, issued on or after January 1, 1972, and before the operative date of the Valuation Manual . The provisions set forth in NRS 681B.300 , 681B.320 , 681B.360 , 681B.370 and 681B.380 do not apply to any such policies and contracts.
4. The minimum standard for the valuation of policies and contracts issued before January 1, 1972, must be that provided by the laws in effect immediately preceding that date.
5. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only to, or in connection with, policies and contracts issued on or after January 1, 1972, and before the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.120 Minimum standards for policies and contracts; applicability.
1. Except as otherwise provided in subsection 3 and in NRS 681B.125 , the minimum standards for the valuation of all policies and contracts issued before January 1, 1972, are as follows:
(a) The legal minimum standard for valuation of contracts issued before January 1, 1942, is a basis not lower than that used for the annual statement of the year during which the policies were issued, and for contracts issued on and after January 1, 1942, is the American Experience Table of Mortality with either Craigs or Buttolphs Extension for ages under 10, with interest at not more than 3.5 percent per annum. Annuities and pure endowments purchased under group annuity and pure endowment contracts must be valued in the same manner, with interest at not more than 5 percent. Such policies may provide for not more than 1-year preliminary term insurance by incorporating therein a clause plainly showing that the first years insurance under the contract is term insurance purchased by the whole or part of the premiums to be received during the first year of the contract.
(b) The legal minimum standard for the valuation of group life insurance policies under which the premium rates are not guaranteed for more than 5 years is the American Men Ultimate Table of Mortality with interest at not more than 3.5 percent per annum.
(c) The legal minimum standard for the valuation of industrial policies is the American Experience Table of Mortality or the Standard Industrial Mortality Table or the Substandard Industrial Mortality Table with interest at not more than 3.5 percent per annum by the net level premium method, or in accordance with their terms by the modified preliminary term method described in this section.
(d) Reserves for all such policies and contracts may be calculated, at the option of the insurer, according to any standards which produce greater aggregate reserves than the minimum reserves required by this subsection.
2. Except as otherwise provided in subsection 3 and in NRS 681B.125 , the minimum standards for the valuation of all policies and contracts issued on or after January 1, 1972, are the Commissioners reserve valuation methods defined in NRS 681B.130 and 681B.150 , 5 percent interest for group annuity and pure endowment contracts and 3.5 percent interest for all other such policies and contracts or, in the case of policies and contracts other than annuity and pure endowment contracts issued on or after July 1, 1973, 4 percent interest for such policies issued before July 1, 1977, 5.5 percent interest for single premium life insurance policies and 4.5 percent for all other such policies issued on and after July 1, 1977, and the following tables:
(a) For all ordinary policies of life insurance issued on the standard basis, excluding any disability and accidental death benefits in such policies, the Commissioners 1941 Standard Ordinary Mortality Table until the operative date of NRS 688A.340 , and, for all such policies issued on and after the operative date of NRS 688A.340 and before the operative date of NRS 688A.325 , the Commissioners 1958 Standard Ordinary Mortality Table, except that for any category of such policies issued on female risks all modified net premiums and present values referred to in NRS 681B.110 to 681B.150 , inclusive, may be calculated according to an age not more than 6 years younger than the actual age of the insured. For policies issued on or after the operative date of NRS 688A.325 :
(1) The Commissioners 1980 Standard Ordinary Mortality Table;
(2) At the election of the insurer for any one or more specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors; or
(3) Any ordinary mortality table which is adopted after 1980 by the NAIC and is approved by a regulation adopted by the Commissioner,
Ê may be used in determining the minimum standard of valuation for such policies.
(b) For all industrial life insurance policies issued on the standard basis, excluding any disability and accidental death benefits in such policies, the 1941 Standard Industrial Mortality Table for such policies issued before the operative date of NRS 688A.330 , and for such policies issued on or after that date, the Commissioners 1961 Standard Industrial Mortality Table or any industrial mortality table which is adopted after 1980 by the NAIC and is approved by a regulation adopted by the Commissioner for use in determining the minimum standard of valuation for such policies.
(c) For individual annuity and pure endowment contracts, excluding any disability and accidental death benefits in such policies, the 1937 Standard Annuity Mortality Table, or, at the option of the insurer, the Annuity Mortality Table for 1949, Ultimate, or any modification of either of these tables approved by the Commissioner.
(d) For group annuity and pure endowment contracts, excluding any disability and accidental death benefits in such policies, the Group Annuity Mortality Table for 1951, any modification of that table approved by the Commissioner, or, at the option of the insurer, any of the tables or modifications of tables specified for individual annuity and pure endowment contracts.
(e) For total and permanent disability benefits in or supplementary to ordinary policies or contracts, for policies or contracts issued on or after January 1, 1966, the tables of Period 2 disablement rates and the 1930 to 1950 termination rates of the 1952 Disability Study of the Society of Actuaries, with due regard to the type of benefit, or any tables of disablement rates and termination rates which are adopted after 1980 by the NAIC and are approved by a regulation adopted by the Commissioner for use in determining the minimum standard of valuation for such policies; and for policies or contracts issued on or after January 1, 1961, and before January 1, 1966, either such tables or, at the option of the insurer, the Class (3) Disability Table (1926).
(f) Benefits for accidental death in or supplementary to policies, for policies issued on or after January 1, 1966, the 1959 Accidental Death Benefits Table, or any accidental death benefits table which is adopted after 1980 by the NAIC and is approved by a regulation adopted by the Commissioner for use in determining the minimum standard of valuation for such policies; and for policies issued on or after January 1, 1961, and before January 1, 1966, either such table or, at the option of the insurer, the Inter-Company Double Indemnity Mortality Table. Either table must be combined with a mortality table permitted for calculating the reserves for life insurance policies.
(g) For group life insurance, for life insurance issued on the substandard basis and for special benefits, such tables as may be approved by the Commissioner.
3. Except as provided in NRS 681B.125 , the minimum standards for the valuation of all individual annuity and pure endowment contracts issued on or after the valuation operative date defined in subsection 4 and for all annuities and pure endowments purchased on or after that date, under group annuity and pure endowment contracts, are the Commissioners reserve valuation methods defined in NRS 681B.130 and the following tables and interest rates:
(a) For individual annuity and pure endowment contracts issued before July 1, 1977, excluding any disability and accidental death benefits in such contracts, the 1971 Individual Annuity Mortality Table, or any modification of the table approved by the Commissioner, and 6 percent interest for single premium immediate annuity contracts, and 4 percent interest for all other individual annuity and pure endowment contracts.
(b) For individual single premium immediate annuity contracts issued on or after July 1, 1977, excluding any disability and accidental death benefits in such contracts, the 1971 Individual Annuity Mortality Table, or any individual annuity mortality table which is adopted after 1980 by the NAIC and is approved by a regulation adopted by the Commissioner for use in determining the minimum standard of valuation for such contracts, or any modification of those tables approved by the Commissioner, and 7.5 percent interest.
(c) For individual annuity and pure endowment contracts issued on or after July 1, 1977, other than single premium immediate annuity contracts, excluding any disability and accidental death benefits in such contracts, the 1971 Individual Annuity Mortality Table or any individual annuity mortality table which is adopted after 1980 by the NAIC and is approved by a regulation adopted by the Commissioner for use in determining the minimum standard of valuation for such contracts, or any modification of those tables approved by the Commissioner, and 5.5 percent interest for single premium deferred annuity and pure endowment contracts and 4.5 percent interest for all other such individual annuity and pure endowment contracts.
(d) For all annuities and pure endowments purchased before July 1, 1977, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under such contracts, the 1971 Group Annuity Mortality Table, or any modification of that table approved by the Commissioner, and 6 percent interest.
(e) For all annuities and pure endowments purchased on or after July 1, 1977, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under such contracts, the 1971 Group Annuity Mortality Table, or any group annuity mortality table which is adopted after 1980 by the NAIC and is approved by a regulation adopted by the Commissioner for use in determining the minimum standard of valuation for such annuities and pure endowments, or any modification of those tables approved by the Commissioner, and 7.5 percent interest.
4. After July 1, 1973, any insurer may file with the Commissioner a written notice of its election to comply with the provisions of subsection 3 after a specified date before January 1, 1979, which then becomes the valuation operative date for the insurer, but an insurer may elect a different valuation operative date for individual annuity and pure endowment contracts from that elected for group annuity and pure endowment contracts. If an insurer makes no such election, the valuation operative date for the insurer is January 1, 1979.
5. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only to, or in connection with, policies and contracts issued before the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.125 Interest rates for minimum standard; applicability.
1. This section sets forth the interest rates used in determining the minimum standard for valuation of:
(a) All life insurance policies issued in a particular calendar year on or after the operative date of NRS 688A.325 ;
(b) All individual annuity and pure endowment contracts issued in a particular calendar year on or after January 1, 1984;
(c) All annuities and pure endowments purchased in a particular calendar year on or after January 1, 1984, under group annuity and pure endowment contracts; and
(d) The net increase, if any, in a particular calendar year after January 1, 1984, in amounts held under contract which have guaranteed interest.
2. The interest rates for valuation must be determined as follows, and the results rounded to the nearer one-quarter of 1 percent:
(a) For life insurance:
I = .03 + W (R 1 - .03) + W/2 (R 2 - .09)
(b) For single-premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with options for cash settlement and from contracts which have guaranteed interest with options for cash settlement:
I = .03 + W (R - .03)
where
R 1 is the lesser of R and .09,
R 2 is the greater of R and .09,
R is the reference interest rate defined in this
section, and
W is the weighting factor defined in this section.
(c) For other annuities with options for cash settlement and contracts which have guaranteed interest with options for cash settlement, valued on the basis of the year issued, except as stated in paragraph (b), the formula for life insurance set forth in paragraph (a) applies to annuities and contracts which have guaranteed interest with a guaranteed duration in excess of 10 years, and the formula for single-premium immediate annuities stated in paragraph (b) applies to annuities and contracts which have guaranteed interest with guaranteed durations of 10 years or less.
(d) For other annuities with no options for cash settlement and for contracts which have guaranteed interest with no options for cash settlement, the formula for single-premium immediate annuities set forth in paragraph (b) applies.
(e) For other annuities with options for cash settlement and contracts which have guaranteed interest with no options for cash settlement which are valued on the basis of a change in its fund the formula for single-premium immediate annuities stated in paragraph (b) applies.
(f) If the interest rate for valuation for any life insurance policies issued in any calendar year determined without reference to this sentence differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than one-half of 1 percent, the interest rate for the valuation of such life insurance policies is equal to the corresponding actual rate for the immediately preceding calendar year. The interest rate for the valuation of life insurance policies issued in a calendar year must be determined for 1980 using the reference interest rate defined for 1979 and must be determined for each subsequent calendar year regardless of when NRS 688A.325 becomes operative with respect to the insurer.
3. The weighting factors referred to in the formulas set forth in subsection 2 are given in the following tables:
(a) Weighting Factors for Life Insurance:
Guarantee
Duration Weighting
(Years) Factors
10 or less........................................................................................................... .50
More than 10 but not more than 20.............................................................. .45
More than 20.................................................................................................... .35
For life insurance, the duration of the guarantee is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance with premium rates or nonforfeiture values, or both, which are guaranteed in the original policy;
(b) The weighting factor for single-premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with options for cash settlement and contracts which have guaranteed interest with options for cash settlement is .80; and
(c) Weighting factors for other annuities and for contracts which have guaranteed interest except as stated in paragraph (b), are specified in the tables in subparagraphs (1), (2) and (3), according to the rules and definitions in subparagraphs (4), (5) and (6) as follows:
(1) For annuities and contracts which have guaranteed interest valued on the basis of the year issued:
Guarantee
Duration Weighting Factor
(Years) for Plan Type
A B C
5 or less.................................................................... .80 .60 .50
More than 5, but not more than 10...................... .75 .60 .50
More than 10, but not more than 20................... .65 .50 .45
More than 2............................................................. .45 .35 .35
(2) For annuities and contracts which have guaranteed interest valued on a change in fund basis, the factors shown in subparagraph (1):
Weighting Factor
for Plan Type
A B C
Increased by............................................................ .15 .25 .05
(3) For annuities and contracts which have guaranteed interest valued on the basis of the year issued, (other than those with no options for cash settlement) which do not guarantee interest on considerations received more than 1 year after issue or purchase and for annuities and contracts which have guaranteed interest valued on a change in fund basis which do not guarantee interest rates on considerations received more than 12 months beyond the valuation date, the factors shown in subparagraph (1) or derived in subparagraph (2) increased by .05.
(4) For other annuities with options for cash settlement and contracts which have guaranteed interest with options for cash settlement, the guaranteed duration is the number of years for which the contract guarantees interest rates in excess of the interest rate for the valuation of life insurance policies with a guaranteed duration in excess of 20 years. For other annuities with no options for cash settlement and for contracts which have guaranteed interest with no options for cash settlement, the guaranteed duration is the number of years from the date of issue or date of purchase to the date on which the annuity benefits are scheduled to commence.
(5) The types of plans listed in this subsection have the following characteristics:
Plan Type A
Under this plan the policyholder:
(I) May withdraw money only with an adjustment to reflect changes in interest rates or the value of assets since the insurers receipt of the money, or without such an adjustment but in installments payable over 5 years or more;
(II) May withdraw money as an immediate life annuity; or
(III) Is not permitted to withdraw money.
Plan Type B
Under this plan, before expiration of the guaranteed interest rate, the policyholder:
(I) May withdraw money only with an adjustment to reflect changes in interest rates or the value of assets since the insurers receipt of the money, or without such an adjustment but in installments payable over 5 years or more; or
(II) Is not permitted to withdraw money.
Ê At the end of the guaranteed interest rate, the policyholder may withdraw money without such an adjustment in a single sum or in installments over a period of less than 5 years.
Plan Type C
Under this plan the policyholder may withdraw money before expiration of the guaranteed interest rate in a single sum or in installments over a period of less than 5 years:
(I) Without any adjustment to reflect changes in interest rates or the value of assets since the insurers receipt of the money; or
(II) Subject only to a fixed charge for surrender which is stipulated in the contract as a percentage of the fund.
(6) An insurer may elect to value contracts which have guaranteed interest with options for cash settlement and annuities with options for cash settlement on the basis of the year issued or a change in fund basis. Contracts which have guaranteed interest but no options for cash settlement and annuities with no options for cash settlement must be valued on the basis of the year issued. As used in this section, valuation on the basis of the year issued means a basis of valuation under which the interest rate used to determine the minimum standard of valuation for the entire duration of an annuity or contract with guaranteed interest is the interest rate of valuation for the year of issue or the year of purchase of the annuity or contract, and change in fund basis of valuation means a basis of valuation under which the interest rate used to determine the minimum standard of valuation applicable to each change in the fund held under the annuity or contract is the interest rate for valuation for the year of the change in the fund.
4. For purposes of subsection 2, reference interest rate means:
(a) For all life insurance, the lesser of the average over 36 months and the average over 12 months, ending on June 30 of the calendar year next preceding the year of issue, of Moodys Corporate Bond Yield Average—Monthly Average Corporates, as published by Moodys Investors Service, Inc.
(b) For single-premium immediate annuities, annuity benefits involving life contingencies arising from other annuities with options for cash settlement and contracts which have guaranteed interest with options for cash settlement, the average over 12 months, ending on June 30 of the calendar year of issue or year of purchase, of Moodys Corporate Bond Yield Average—Monthly Average Corporates, as published by Moodys Investors Service, Inc.
(c) For other annuities with options for cash settlement and contracts which have guaranteed interest with options for cash settlement, valued on the basis of the year issued, except as stated in paragraph (b), with a guaranteed duration of more than 10 years, the lesser of the average over 36 months and the average over 12 months, ending on June 30 of the calendar year of issue or purchase, of Moodys Corporate Bond Yield Average—Monthly Average Corporates, as published by Moodys Investors Service, Inc.
(d) For other annuities with options for cash settlement and guaranteed interest with options for cash settlement, valued on the basis of the year issued, except as stated in paragraph (b), with a guaranteed duration of 10 years or less, the average over 12 months, ending on June 30 of the calendar year issued or purchased, of Moodys Corporate Bond Yield Average—Monthly Average Corporates, as published by Moodys Investors Service, Inc.
(e) For other annuities with no options for cash settlement and for contracts which have guaranteed interest with no option for cash settlement, the average over 12 months, ending on June 30 of the calendar year issued or purchased, of Moodys Corporate Bond Yield Average—Monthly Average Corporates, as published by Moodys Investors Service, Inc.
(f) For other annuities with options for cash settlement and contracts which have guaranteed interest with options for cash settlement valued on a change in fund basis, except as stated in paragraph (b), the average over 12 months, ending on June 30 of the calendar year of the change in the fund, of Moodys Corporate Bond Yield Average—Monthly Average Corporates, as published by Moodys Investors Service, Inc.
5. If the publication of Moodys Corporate Bond Yield Average—Monthly Average Corporates by Moodys Investors Service, Inc., ends or the National Association of Insurance Commissioners determines that Moodys Corporate Bond Yield Average—Monthly Average Corporates is no longer appropriate for determination of the reference interest rate, an alternative method for determination of the reference interest rate which is adopted by the NAIC and approved by regulation of the Commissioner may be substituted.
6. The minimum standard for the valuation of policies and contracts issued before January 1, 1972, must be that provided by the laws in effect immediately preceding that date.
7. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only to, or in connection with, policies and contracts issued on or after January 1, 1972, and before the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.130 Reserves; modified net premiums; calculations; minimum aggregate reserves; applicability.
1. Except as otherwise provided in subsection 4 and in NRS 681B.150 , reserves, according to the Commissioners reserve valuation method, for the life insurance and endowment benefits of policies providing for a uniform amount of insurance and requiring the payment of uniform premiums must be the excess, if any, of the present value, at the date of valuation, of the future guaranteed benefits provided for by the policies over the then present value of any future modified net premiums therefor. The modified net premiums for the policy must be such a uniform percentage of the respective contract premiums for those benefits that the present value, at the date of issue of the policy, of all the modified net premiums are equal to the sum of the then present value of the benefits provided for by the policy and the excess of the premium set forth in paragraph (a) over that set forth in paragraph (b), as follows:
(a) A net level annual premium equal to the present value, at the date of issue, of such benefits provided for after the first policy year, divided by the present value, at the date of issue, of an annuity of one per annum payable on the first and each subsequent anniversary of such policy on which a premium falls due. The net level annual premium must not exceed the net level annual premium on the 19-year premium whole life plan for insurance of the same amount at an age 1 year higher than the age at the time the policy is issued.
(b) A net 1-year term premium for such benefits provided for in the first policy year.
2. If any life insurance policy issued on or after January 1, 1987, for which the contract premium in the first policy year exceeds that of the second year, and for which no comparable additional benefit is provided in the first year in return for the excess premium and which provides an endowment benefit or a cash surrender value or a combination thereof in an amount greater than the excess premium, the reserve according to the Commissioners reserve valuation method as of any policy anniversary occurring on or before the assumed ending date, which is the first policy anniversary on which the sum of any endowment benefit and any cash surrender value then available is greater than the excess premium, must, except as otherwise provided in NRS 681B.150 , be the greater of:
(a) The reserve as of the policy anniversary calculated as described in subsection 1; and
(b) The reserve as of the policy anniversary calculated as described in subsection 1, but with:
(1) The value defined in paragraph (a) of subsection 1 being reduced by 15 percent of the amount of the excess first-year premium;
(2) All present values of benefits and premiums being determined without reference to premiums or benefits provided for by the policy after the assumed ending date;
(3) The policy being assumed to mature on such date as an endowment; and
(4) The cash surrender value provided on that date being considered as an endowment benefit. In making the above comparison, the mortality and interest bases stated in NRS 681B.120 and 681B.125 must be used.
3. Reserves according to the Commissioners reserve valuation method for:
(a) Life insurance policies providing for a varying amount of insurance or requiring the payment of varying premiums;
(b) Group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer (including a partnership or sole proprietorship), by an employee organization or by both, other than a plan providing individual retirement accounts or individual retirement annuities under section 408 of the Internal Revenue Code, as amended;
(c) Disability and accidental death benefits in all policies and contracts; and
(d) All other benefits, except life insurance and endowment benefits in life insurance policies and benefits provided by all other annuity and pure endowment contracts,
Ê must be calculated by a method consistent with the principles of subsection 1 and this subsection, except that any extra premiums charged because of impairments or special hazards must be disregarded in the determination of modified net premiums.
4. This subsection applies to all annuity and pure endowment contracts except those group annuity and pure endowment contracts for which reserves according to the Commissioners reserve valuation method are to be calculated by a method consistent with the principles of subsections 1, 2 and 3. Reserves according to the Commissioners annuity reserve method for benefits under annuity or pure endowment contracts, excluding any disability and accidental death benefits in those contracts must be the greatest of the respective excesses of the present values, at the date of valuation, of the future guaranteed benefits, including guaranteed nonforfeiture benefits, provided for by those contracts at the end of each respective contract year, over the present value, at the date of valuation, of any future valuation considerations derived from future gross considerations, required by the terms of the contract, which become payable before the end of such respective contract year. The future guaranteed benefits must be determined by using the mortality table, if any, and the interest rate or rates specified in such contracts for determining guaranteed benefits. The valuation considerations are the portions of the respective gross considerations applied under the terms of the contracts to determine nonforfeiture values.
5. An insurers aggregate reserves for all life insurance policies, excluding disability and accidental death benefits, issued on or after January 1, 1972, must not be less than the aggregate reserves calculated in accordance with the methods set forth in this section, NRS 681B.145 and 681B.150 , and the mortality table or tables and rate or rates of interest used in calculating nonforfeiture benefits for those policies.
6. An insurers aggregate reserves for all policies, contracts and benefits must not be less than the aggregate reserves determined by a qualified actuary to be necessary for a favorable opinion under NRS 681B.210 and 681B.220 .
7. The minimum standard for the valuation of policies and contracts issued before January 1, 1972, must be that provided by the laws in effect immediately preceding that date.
8. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only to, or in connection with, policies and contracts issued on or after January 1, 1972, and before the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.140 Calculation of reserves on higher or lower standards; rate of interest; applicability.
1. Reserves for any category of policies, contracts or benefits as established by the Commissioner, issued on or after January 1, 1972, may be calculated, at the option of the insurer, according to any standards which produce greater aggregate reserves for the category than those calculated according to the minimum standards provided by subsections 2 and 3 of NRS 681B.120 and 681B.125 , but the rate or rates of interest used for policies and contracts other than the annuity and pure endowment contracts must not be higher than the corresponding rate or rates of interest used in calculating any nonforfeiture benefits provided for in such policies.
2. Any insurer which has adopted a standard of valuation producing greater aggregate reserves as described in subsection 1 may, with the approval of the Commissioner, adopt a lower standard of valuation, but not lower than the minimum described in subsection 1.
3. The minimum standard for the valuation of policies and contracts issued before January 1, 1972, must be that provided by the laws in effect immediately preceding that date.
4. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only to, or in connection with, policies and contracts issued on or after January 1, 1972, and before the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.145 Reserves for plan of life insurance; applicability.
1. For any plan of life insurance which provides for the determination of a future premium, the amounts of which are to be determined by the insurer based on estimates of future experience, or for any plan of life insurance or annuity which is of such a nature that the minimum reserves cannot be determined by the methods described in NRS 681B.130 and 681B.150 , the reserves which are held under the plan must be:
(a) Appropriate in relation to the benefits and the pattern of premiums for the plan; and
(b) Computed by a method which is consistent with the principles of standard valuation contained in this chapter.
2. The minimum standard for the valuation of policies and contracts issued before January 1, 1972, must be that provided by the laws in effect immediately preceding that date.
3. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only to, or in connection with, policies and contracts issued on or after January 1, 1972, and before the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.150 Minimum reserve; applicability.
1. If in any contract year the gross premium charged by any life insurer on any policy or contract issued on or after January 1, 1972, is less than the valuation net premium for the policy or contract calculated by the method used in calculating the reserve thereon but using the minimum valuation standards of mortality and rate of interest, the minimum reserve required for the policy or contract is the greater of:
(a) The reserve calculated according to the mortality table, rate of interest and method actually used for the policy or contract; or
(b) The reserve calculated by the method actually used for the policy or contract, but using the minimum valuation standards of mortality and rate of interest, and replacing the valuation net premium by the actual gross premium in each contract year for which the valuation net premium exceeds the actual gross premium. The minimum valuation standards of mortality and rate of interest referred to in this subsection are the standards stated in NRS 681B.120 and 681B.125 .
2. If any life insurance policy is issued on or after January 1, 1987, for which the gross premium in the first policy year exceeds that of the second year and no comparable additional benefit is provided in the first year in return for the excess premium, and which provides an endowment benefit or a cash surrender value, or a combination thereof, in an amount greater than the excess premium, the provisions of this section must be applied as if the method actually used in calculating the reserve for the policy were the method described in NRS 681B.130 other than in subsection 2 of that section. The minimum reserve required at each policy anniversary of such a policy is the greater of the minimum reserve calculated in accordance with NRS 681B.130 , including subsection 2 of that section, and the minimum reserve calculated in accordance with this subsection and subsection 1.
3. The minimum standard for the valuation of policies and contracts issued before January 1, 1972, must be that provided by the laws in effect immediately preceding that date.
4. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only to, or in connection with, policies and contracts issued on or after January 1, 1972, and before the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.155 Regulations regarding standards for valuation for health insurance contracts; applicability.
1. For health insurance contracts of any kind issued on or after January 1, 1972, and before the operative date of the Valuation Manual , by health insurers, corporations for hospital, medical and dental service, health maintenance organizations and plans for dental care, the minimum standard of valuation is the standard adopted by the Commissioner by regulation.
2. The minimum standard for the valuation of policies and contracts issued before January 1, 1972, must be that provided by the laws in effect immediately preceding that date.
3. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only before the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.200 Qualified actuary defined.
1. As used in NRS 681B.200 to 681B.260 , inclusive, qualified actuary means a natural person who is qualified to sign the applicable statement of actuarial opinion in accordance with the qualification standards set by the American Academy of Actuaries for an actuary signing such a statement.
2. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only before the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.210 Insurer required to submit annual opinion as to computation of reserves and related actuarial items; regulations; applicability.
1. Every 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 which satisfy contractual provisions, are consistent with prior reported amounts, and comply with applicable laws of this state. The Commissioner by regulation may further define or enlarge the scope of this opinion.
2. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only before the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.220 Insurer required to submit annual opinion as to sufficiency of reserves and related actuarial items; exception; regulations; applicability.
1. Every such insurer, unless exempted by or pursuant to regulation, shall also annually submit 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 the earnings on the assets invested and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the insurers obligations under the policies and contracts, including the benefits under and expenses associated with the policies and contracts.
2. The Commissioner may provide by regulation for a period of transition for establishing any higher reserves which the qualified actuary may deem necessary in order to render the opinion required by this section and NRS 681B.210 .
3. The holding of additional reserves determined by a qualified actuary to be necessary to render the opinion required by this section or NRS 681B.210 , shall not be deemed to be the adoption of a higher standard of valuation for the purposes of NRS 681B.120 or 681B.140 .
4. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only before the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.230 Opinion required to be supported by memorandum; Commissioner authorized to cause independent actuary to review opinion under certain circumstances; regulations; applicability.
1. Each opinion required by NRS 681B.220 must be supported by memorandum, in form and substance acceptable to the Commissioner as specified by regulation.
2. If an 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 such supporting memorandum as is required by the Commissioner.
3. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only before the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.240 Requirements for opinion; applicability.
1. Every opinion must:
(a) Be submitted with the annual statement reflecting the valuation of reserve liabilities for each year ending on or after December 31, 1996.
(b) Apply to all business in force including, without limitation, individual and group health insurance plans, in form and substance acceptable to the Commissioner as specified by regulation.
(c) Be based on standards adopted from time to time by the Actuarial Standards Board or a successor organization approved by the Commissioner and on such additional standards as the Commissioner may by regulation prescribe.
2. In the case of an opinion required to be submitted by a foreign or alien company, the Commissioner may accept the opinion filed by that company with the commissioner of insurance of another state if the Commissioner determines that the opinion reasonably meets the requirements applicable to an insurer domiciled in this state.
3. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only before the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.250 Liability of qualified actuary; disciplinary action; regulations; applicability.
1. Except in a case of fraud or willful misconduct, a qualified actuary who is appointed by an insurer to issue an opinion pursuant to this chapter or any regulation adopted pursuant thereto is not liable for damages to any person other than an affected insurer or the Commissioner for any act, error, omission, decision or conduct with respect to the actuarys opinion.
2. Disciplinary action by the Commissioner against an actuary must be prescribed by regulation by the Commissioner.
3. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only before the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.260 Confidentiality of documents, material and other information provided by insurer to Commissioner; applicability.
1. Except as otherwise provided in this section and NRS 239.0115 , 681B.400 , 681B.410 and 681B.420 , any documents and other material or information provided by an insurer to the Commissioner, which constitute a memorandum in support of an opinion, and any other material provided to the Commissioner in connection with such a memorandum, must be kept confidential by the Commissioner, is not open to the public, and is not subject to subpoena, except for the purpose of defending an action seeking damages from any person by reason of any action required by NRS 681B.200 to 681B.260 , inclusive, or by any regulation adopted under those sections.
2. A memorandum or other material may be released by the Commissioner with the written consent of the insurer or to the American Academy of Actuaries or its successor organization upon 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 of the memorandum or other material.
3. If any portion of a confidential memorandum is cited by the insurer in its marketing or is cited before any governmental agency other than a state commissioner of insurance or is released by an insurer to the public, all portions of the memorandum are no longer confidential.
4. The Commissioner may use the documents, materials and other information described in this section in the furtherance of any regulatory or legal action brought as part of the Commissioners official duties.
5. Neither the Commissioner nor any other person in receipt of documents, materials or other information obtained while acting under the authority of the Commissioner may be permitted or required to testify in any private civil action concerning any confidential documents, materials or information subject to this section.
6. No waiver of any applicable privilege or claim of confidentiality in the documents, materials or other information described in this section shall occur as a result of disclosure to the Commissioner pursuant to this section or as a result of sharing as authorized in subsection 8 of NRS 679B.190 .
7. A memorandum in support of an opinion, and any other material provided by the applicable company or insurer 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.
8. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only before the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.300 Valuation Manual : Applicability; operative date; notice by Commissioner of operative date; effective date of changes; required content; authority of Commissioner to adopt provisions by regulation to replace missing or noncompliant content; authority of Commissioner to engage actuary; authority of Commissioner to enforce compliance; applicability.
1. For policies issued on or after the operative date of the Valuation Manual , the standard prescribed in the Valuation Manual is the minimum standard of valuation required under NRS 681B.330 , except as otherwise provided in subsection 6 or 8.
2. The operative date of the Valuation Manual is January 1 of the first calendar year following the first July 1 as of which all of the following have occurred:
(a) The Valuation Manual has been adopted by the NAIC by an affirmative vote of at least 42 members, or three-fourths of the members voting, whichever is greater.
(b) The Standard Valuation Law, as amended by the NAIC in 2009, or legislation including substantially similar terms and provisions, has been enacted by states representing greater than 75 percent of the direct premiums written as reported in the following annual statements submitted for 2008:
(1) Life, accident and health annual statements;
(2) Health annual statements; or
(3) Fraternal annual statements.
(c) The Standard Valuation Law, as amended by the NAIC in 2009, or legislation including substantially similar terms and provisions, has been enacted by at least 42 of the following 55 jurisdictions:
(1) The 50 states of the United States;
(2) American Samoa;
(3) The American Virgin Islands;
(4) The District of Columbia;
(5) Guam; and
(6) Puerto Rico.
(d) The Valuation Manual is adopted in accordance with regulations adopted by the Commissioner.
3. Within 90 days after all the events described in paragraphs (a) to (d), inclusive, of subsection 2 have taken place, the Commissioner shall issue a bulletin to inform insurers and the public of that fact.
4. Unless a change in the Valuation Manual specifies a later effective date, changes to the Valuation Manual are effective on January 1 following the date when the change to the Valuation Manual is adopted by the NAIC by an affirmative vote representing:
(a) At least three-fourths of the members of the NAIC voting, but not less than a majority of the total membership; and
(b) Members of the NAIC representing jurisdictions totaling greater than 75 percent of the direct premiums written as reported in the following annual statements most recently available before the vote in paragraph (a):
(1) Life, accident and health annual statements;
(2) Health annual statements; or
(3) Fraternal annual statements.
5. The Valuation Manual must specify all of the following:
(a) Minimum valuation standards for and definitions of the policies or contracts subject to NRS 681B.330 , including:
(1) The Commissioners reserve valuation method for life insurance contracts, other than annuity contracts, subject to NRS 681B.330 ;
(2) The Commissioners annuity reserve valuation method for annuity contracts subject to NRS 681B.330 ; and
(3) Minimum reserves for all other policies or contracts subject to NRS 681B.330 ;
(b) Which policies or contracts or types of policies or contracts that are subject to the requirements of a principle-based valuation in NRS 681B.370 and the minimum valuation standards consistent with those requirements;
(c) For policies and contracts subject to a principle-based valuation under NRS 681B.360 , 681B.370 and 681B.380 :
(1) Requirements for the format of the reports provided to the Commissioner pursuant to paragraph (c) of subsection 1 of NRS 681B.360 and which must include information necessary to determine if the valuation is appropriate and in compliance with NRS 681B.110 to 681B.510 , inclusive;
(2) Assumptions must be prescribed for risks over which the company does not have significant control or influence; and
(3) Procedures for corporate governance and oversight of the actuarial function, and a process for appropriate waiver or modification of such procedures;
(d) For policies not subject to a principle-based valuation under NRS 681B.360 , 681B.370 and 681B.380 , the minimum valuation standard must:
(1) Be consistent with the minimum standard of valuation before the operative date of the Valuation Manual ; or
(2) Develop reserves that quantify the benefits and guarantees, and the funding, associated with the contracts and their risks at a level of conservatism that reflects conditions which include unfavorable events that have a reasonable probability of occurring during the lifetime of the contracts;
(e) Other requirements, including, but not limited to, those relating to reserve methods, models for measuring risk, generation of economic scenarios, assumptions, margins, use of company experience, risk measurement, disclosure, certifications, reports, actuarial opinions and memorandums, transition rules and internal controls; and
(f) The data and form of the data required pursuant to NRS 681B.500 , with whom the data must be submitted, and may specify other requirements including data analyses and reporting of such analyses.
6. In the absence of a specific valuation requirement or if a specific valuation requirement in the Valuation Manual is not, in the opinion of the Commissioner, in compliance with NRS 681B.110 to 681B.510 , inclusive, the company must, with respect to such requirements, comply with minimum valuation standards prescribed by the Commissioner by regulation.
7. The Commissioner may engage a qualified actuary, at the expense of the company, to perform an actuarial examination of the company and opine on the appropriateness of any reserve assumption or method used by the company, or to review and opine on a companys compliance with any requirement set forth in NRS 681B.110 to 681B.510 , inclusive. The Commissioner may rely upon the opinion, regarding provisions contained within NRS 681B.110 to 681B.510 , inclusive, of a qualified actuary engaged by the Commissioner of another state, district or territory of the United States. As used in this subsection, engage includes employment and contracting.
8. The Commissioner may require a company to change any assumption or method that, in the opinion of the Commissioner, is necessary in order to comply with the requirements of the Valuation Manual or NRS 681B.110 to 681B.510 , inclusive, and the company shall adjust the reserves as required by the Commissioner. The Commissioner may take other disciplinary action as allowed pursuant to regulations adopted by the Commissioner.
9. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only to, or in connection with, policies and contracts issued on or after the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.310 Commissioner authorized to exempt certain policies and contracts from provisions of Valuation Manual ; alternate applicable provisions; applicability.
1. The Commissioner may exempt specific product forms or product lines of a domestic company that is licensed and doing business only in this State from the requirements of NRS 681B.300 , if:
(a) The Commissioner has issued to the company a written exemption and has not subsequently revoked that written exemption; and
(b) The company computes reserves using assumptions and methods that were used before the operative date of the Valuation Manual , in addition to complying with any applicable requirements established in regulations adopted by the Commissioner.
2. If a company is granted an exemption as described in subsection 1, the provisions of NRS 681B.110 to 681B.260 , inclusive, apply to that company.
3. The provisions of this section apply only on or after the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.320 Accident and health insurance policies: Minimum standard of valuation; applicability.
1. For accident and health insurance policies and contracts issued on or after the operative date of the Valuation Manual , the standard prescribed in the Valuation Manual is the minimum standard of valuation required under NRS 681B.330 .
2. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only to, or in connection with, policies and contracts issued on or after the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.330 Valuation and calculation of reserves; acceptance of valuation by another state or jurisdiction; applicability.
1. For policies and contracts issued on or after the operative date of the Valuation Manual :
(a) The Commissioner shall annually value, or cause to be valued, the reserve liabilities (hereinafter called reserves) for all outstanding life insurance contracts, annuity and pure endowment contracts, accident and health contracts, and deposit-type contracts of every applicable company doing business in this State.
(b) In lieu of the valuation of the reserves required of a foreign or alien applicable company, the Commissioner may accept a valuation made, or caused to be made, by the insurance supervisory official of any state or other jurisdiction when the valuation complies with the minimum standard provided in NRS 681B.110 to 681B.510 , inclusive.
2. The provisions set forth in NRS 681B.300 , 681B.320 , 681B.360 , 681B.370 and 681B.380 apply to all policies and contracts issued on or after the operative date of the Valuation Manual .
3. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only to, or in connection with, policies and contracts issued on or after the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.350 Opinion of actuary: Requirements; applicability.
1. For actuarial opinions of reserves prepared after the operative date of the Valuation Manual :
(a) Every company with outstanding life insurance contracts, accident and health insurance contracts or deposit-type contracts in this State and subject to regulation by the Commissioner shall annually submit the opinion of the appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts 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 Valuation Manual will prescribe the specifics of this opinion including any items deemed to be necessary to its scope.
(b) Every applicable company with outstanding life insurance contracts, accident and health insurance contracts or deposit-type contracts in this State and subject to regulation by the Commissioner, except as exempted in the Valuation Manual , must also annually include in the opinion required by paragraph (a), an opinion of the same appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified in the Valuation Manual , when considered in light of the assets held by the company 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 companys obligations under the policies and contracts, including, but not limited to, the benefits under and expenses associated with the policies and contracts.
(c) Each opinion required by paragraphs (a) and (b) must be governed by the following provisions:
(1) A memorandum, in the form and substance as specified in the Valuation Manual , and acceptable to the Commissioner, must be prepared to support each actuarial opinion.
(2) If the insurance company fails to provide a supporting memorandum at the request of the Commissioner within a period specified in the Valuation Manual or the Commissioner determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by the Valuation Manual or is otherwise unacceptable to the Commissioner, the Commissioner may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting memorandum required by the Commissioner.
(d) In addition to the requirements of paragraph (c), each opinion required by paragraphs (a) and (b) must be governed by the following provisions:
(1) The opinion must be in the form and substance as specified in the Valuation Manual and acceptable to the Commissioner.
(2) The opinion must be submitted with the annual statement reflecting the valuation of the reserve liabilities for each year ending on or after the operative date of the Valuation Manual .
(3) The opinion must apply to all policies and contracts subject to paragraph (b) plus other actuarial liabilities as may be specified in the Valuation Manual .
(4) The opinion must be based on standards adopted from time to time by the Actuarial Standards Board, or its successor organization, and on such additional standards as may be prescribed in the Valuation Manual .
(5) In the case of an opinion required to be submitted by a foreign or alien applicable company, the Commissioner may accept the opinion filed by that company with the insurance supervisory official of another state if the Commissioner determines that the opinion reasonably meets the requirements applicable to a company domiciled in this State.
(6) Except in cases of fraud or willful misconduct, the appointed actuary is not liable for damages to any person, other than the insurance company and the Commissioner, for any act, error, omission, decision or conduct with respect to the appointed actuarys opinion.
(7) Disciplinary action by the Commissioner against the company or the appointed actuary must be defined in regulations by the Commissioner.
2. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only on or after the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.360 Principle-based valuation: Requirements; applicability.
1. An applicable company using a principle-based valuation for one or more policies or contracts subject to this chapter, and as specified in the Valuation Manual , shall:
(a) Establish procedures for corporate governance and oversight of the actuarial valuation function consistent with those described in the Valuation Manual .
(b) Provide to the Commissioner, and the companys board of directors, an annual certification of the effectiveness of the internal controls with respect to the principle-based valuation. Such controls must be designed to ensure that all material risks inherent in the liabilities and associated assets subject to such valuation are included in the valuation, and that valuations are made pursuant to the Valuation Manual . The certification must be based on the controls in place as of the end of the preceding calendar year.
(c) Develop and, upon request, provide to the Commissioner a principle-based valuation report that complies with the standards prescribed in the Valuation Manual .
2. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only on or after the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.370 Principle-based valuation: Required reserves; applicability.
1. An applicable company using a principle-based valuation must establish reserves that:
(a) Quantify the benefits and guarantees, and the funding, associated with the contracts and their risks at a level of conservatism that reflects conditions which include unfavorable events that have a reasonable probability of occurring during the lifetime of the contracts. For policies or contracts with significant tail risk, the valuation must reflect conditions appropriately adverse to quantify the tail risk.
(b) Incorporate assumptions, risk analysis methods and financial models and management techniques that are consistent with, but not necessarily identical to, those utilized within the companys overall risk assessment process while recognizing potential differences in financial reporting structures and any prescribed assumptions or methods.
(c) Incorporate assumptions that are:
(1) Prescribed in the Valuation Manual ; or
(2) Established utilizing the companys available experience, to the extent that it is relevant and statistically credible or established utilizing other relevant, statistically credible experience.
(d) Provide margins for uncertainty, including adverse deviation and estimation error, such that the greater the uncertainty the larger the margin and resulting reserve.
2. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only on or after the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.380 Principle-based valuation: Prescribed formulaic reserve component allowed; applicability.
1. A principle-based valuation may include a prescribed formulaic reserve component.
2. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only to, or in connection with, policies and contracts issued on or after the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.400 Confidential information.
1. The following types of information shall qualify as confidential information:
(a) A memorandum in support of an opinion submitted pursuant to NRS 681B.200 to 681B.260 , inclusive, or 681B.350 and any other documents, materials and other information, including, without limitation, all working papers, and copies thereof, created, produced or obtained by or disclosed to the Commissioner or any other person in connection with such memorandum;
(b) All documents, materials and other information, including, without limitation, all working papers, and copies thereof, created, produced or obtained by or disclosed to the Commissioner or any other person in the course of an examination authorized by subsection 4 of NRS 679B.230 or subsection 7 of NRS 681B.300 , provided that if an examination report or other material prepared in connection with an examination authorized by NRS 679B.230 to 679B.300 , inclusive, is not held as private and confidential information in accordance with the provisions of NRS 679B.230 to 679B.300 , inclusive, an adopted examination report created in accordance with the provisions of subsection 4 of NRS 679B.230 or subsection 7 of NRS 681B.300 shall not be deemed confidential information;
(c) Any reports, documents, materials and other information developed by an applicable company in support of, or in connection with, an annual certification by the applicable company in accordance with the provisions of paragraph (b) of subsection 1 of NRS 681B.360 evaluating the effectiveness of the companys internal controls with respect to a principle-based valuation, and any other documents, materials and other information, including, without limitation, all working papers, and copies thereof, created, produced or obtained by or disclosed to the Commissioner or any other person in connection with such reports, documents, materials and other information;
(d) Any principle-based valuation report developed in accordance with paragraph (c) of subsection 1 of NRS 681B.360 , and any other documents, materials and other information, including, without limitation, all working papers, and copies thereof, created, produced or obtained by or disclosed to the Commissioner or any other person in connection with such report; and
(e) Any experience data and experience materials, and any other documents, materials, data and other information, including, without limitation, all working papers, and copies thereof, created, produced or obtained by or disclosed to the Commissioner or any other person in connection with such data and materials.
2. As used in this section:
(a) Experience data means all documents, materials, data and other information submitted by an applicable company to the Commissioner, a designated experience reporting agent or other such person authorized to act on behalf of the Commissioner pursuant to NRS 681B.500 and 681B.510 .
(b) Experience materials means all documents, materials, data and other information, including, without limitation, all working papers, and copies thereof, created or produced in connection with experience data including, without limitation, any potentially company-identifying or personally identifiable information, that is provided to or obtained by the Commissioner, a designated experience reporting agent or other such person authorized to act on behalf of the Commissioner pursuant to NRS 681B.500 and 681B.510 .
Nev. Rev. Stat. § 681B.410 Confidentiality and privilege of information deemed to be confidential; applicability.
1. Except as otherwise provided in this section and NRS 239.0115 , 681B.400 and 681B.420 , an applicable companys confidential information is confidential by law and privileged, and is not:
(a) Subject to subpoena or other forms of civil discovery; or
(b) Admissible in evidence in any private civil action.
2. Neither the Commissioner nor any person who received confidential information while acting under the authority of the Commissioner may be permitted or required to testify in any private civil action concerning the confidential information.
3. To assist in the performance of the Commissioners duties, the Commissioner may share confidential information with other state, federal and international regulatory agencies and the NAIC, provided that the recipient agrees, and has the legal authority to agree, to maintain the confidentiality and privileged status of such confidential information in the same manner and to the same extent as required of the Commissioner.
4. To assist in the performance of the Commissioners duties, the Commissioner may share confidential information specified in paragraphs (a) and (d) of subsection 1 of NRS 681B.400 with state, federal and international law enforcement officials or the Actuarial Board for Counseling and Discipline, or its successor, if the confidential information is provided for the purpose of professional disciplinary hearings and the recipient agrees, and has the legal authority to agree, to maintain the confidentiality and privileged status of such confidential information in the same manner and to the same extent as required of the Commissioner.
5. The Commissioner may receive documents, materials, data and other information, including, without limitation, confidential information and privileged documents, materials, data or other information from the NAIC, and its affiliates and subsidiaries, from regulatory or law enforcement officials of other foreign or domestic jurisdictions and from the Actuarial Board for Counseling and Discipline, or its successor, and shall maintain as confidential or privileged any document, material, data or other information received with notice, or the understanding, that the information is confidential or privileged under the laws of the jurisdiction which is the source of the document, material, data or other information.
6. The Commissioner may enter into agreements governing the sharing and use of confidential information consistent with this section.
7. No waiver of any applicable privilege or claim of confidentiality in confidential information shall occur as a result of the disclosure of the confidential information to the Commissioner pursuant to this section or as a result of sharing as authorized in subsections 3 and 4.
8. A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established under this section may be available and enforced in any proceeding in, and in any court of, this State.
9. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only on or after the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.420 Exceptions to confidentiality; applicability.
1. Notwithstanding any provisions of NRS 681B.410 to the contrary, any confidential information specified in subsections 1 and 5 of NRS 681B.410 :
(a) May be subject to subpoena for the purpose of defending an action seeking damages from the appointed actuary submitting the related memorandum in support of an opinion submitted in accordance with the provisions of NRS 681B.200 to 681B.260 , inclusive, or a principle-based valuation report developed in accordance with paragraph (c) of subsection 1 of NRS 681B.360 by reason of an action required by NRS 681B.300 to 681B.510 , inclusive, or any regulations adopted pursuant thereto;
(b) May otherwise be released by the Commissioner with the written consent of the applicable company; and
(c) Is no longer confidential if any portion of a memorandum in support of an opinion submitted in accordance with the provisions of NRS 681B.200 to 681B.260 , inclusive, or a principle-based valuation report developed in accordance with paragraph (c) of subsection 1 of NRS 681B.360 , is:
(1) Cited by the applicable company in its marketing;
(2) Publicly volunteered to or before a government agency other than the Division or an insurance department of another state; or
(3) Released by the applicable company to the news media.
2. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only on or after the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.500 Data required to be submitted; applicability.
1. An applicable company shall submit to the Commissioner, to an appropriately appointed experience reporting agent or to such other person authorized to act on behalf of the Commissioner pursuant to NRS 681B.510 , and as specified in the Valuation Manual , mortality, morbidity, policyholder behavior or expense experience and other data as prescribed in the Valuation Manual .
2. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only on or after the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.510 Commissioner authorized to designate agent to assist in compilation of required data; applicability.
1. The Commissioner may designate a person to act as the experience reporting agent of the Commissioner and to assist the Commissioner in compiling relevant mortality, morbidity, policyholder behavior or expense experience and other data pursuant to NRS 681B.500 and as prescribed in the Valuation Manual .
2. Except as otherwise provided in NRS 681B.310 , the provisions of this section apply only on or after the operative date of the Valuation Manual .
Nev. Rev. Stat. § 681B.540 Insurers required to report material acquisition or disposition of assets; regulations; confidentiality.
Each insurer shall report to the Commissioner every material acquisition or disposition of assets within 15 days after the end of the month in which the transaction occurs. The Commissioner shall define by regulation what transactions are material, prescribe what information must be reported and specify any person to whom a copy must be sent. Except as otherwise provided in NRS 239.0115, such a report is confidential and is not subject to subpoena.
Nev. Rev. Stat. § 681B.550 Insurer required to report its level of risk-based capital; regulations; exemptions.
1. Except as otherwise provided in subsection 3, on or before March 1 of each year, each domestic insurer, and each foreign insurer domiciled in a state which does not have requirements for reporting risk-based capital, that transacts property, casualty, life or health insurance in this state shall prepare and submit to the Commissioner, and to each person designated by the Commissioner, a report of the level of the risk-based capital of the insurer as of the end of the immediately preceding calendar year. The report must be in such form and contain such information as required by the regulations adopted by the Commissioner pursuant to this section.
2. The Commissioner shall adopt regulations concerning the amount of risk-based capital required to be maintained by each insurer licensed to do business in this state that is transacting property, casualty, life or health insurance in this state. The regulations must be consistent with the instructions for reporting risk-based capital adopted by the NAIC, as those instructions existed on January 1, 1997. If the instructions are amended, the Commissioner may amend the regulations to maintain consistency with the instructions if the Commissioner determines that the amended instructions are appropriate for use in this state.
3. The Commissioner may exempt from the provisions of this section:
(a) A domestic insurer who:
(1) Does not transact insurance in any other state;
(2) Does not assume reinsurance that is more than 5 percent of the direct premiums written by the insurer; and
(3) Writes annual premiums of not more than $2,000,000.
(b) A prepaid limited health service organization that provides or arranges for the provision of limited health services to fewer than 1,000 enrollees.
4. As used in this section, prepaid limited health service organization has the meaning ascribed to it in NRS 695F.050 .
Source: NV Statutes (Official Site)URL: https://www.leg.state.nv.us/nrs/NRS-681B.htmlFetched: 10/4/2026