§ 508.36

508.36 Standard valuations. This section shall be known as the 'Standard Valuation Law'. 1. Definitions.a. As used in this section, unless the context otherwise requires:(1) 'Accident and health insurance' means policies or contracts that incorporate morbidity risk and provide protection against economic loss resulting from accident,sickness, or medical conditions and as may be specified in the valuation manual. (2) 'Appointed actuary' means a qualified actuary who is appointed in accordance with the valuation manual to prepare the actuarial opinion required in subsection 3, paragraph'b'. (3) 'Company' means an entity which has done any of the following: (a) Written, issued, or reinsured life insurance policies or contracts, accident and health insurance policies or contracts, or deposit-type policies or contracts in this state and has atleast one such policy or contract in force or on claim. (b) Written, issued, or reinsured life insurance policies or contracts, accident and health insurance policies or contracts, or deposit-type policies or contracts in any stateand is required to hold a certificate of authority to write life insurance, accident and healthinsurance, or

health insurance policies or contracts, or deposit-type policies or contracts in any stateand is required to hold a certificate of authority to write life insurance, accident and healthinsurance, or deposit-type policies or contracts in any state and is required to hold acertificate of authority to write life insurance, accident and health insurance, or deposit-typepolicies or contracts in this state. (4) 'Deposit-type policy or contract' means policies or contracts that do not incorporate mortality or morbidity risks and such policies or contracts as may be specified in the valuationmanual. (5) 'Life insurance' means policies or contracts that incorporate mortality risk, including annuity and pure endowment contracts, and such policies or contracts as may be specified inthe valuation manual. (6) 'NAIC' means the national association of insurance commissioners. (7) 'Operative date of the valuation manual' means the operative date of the valuation manual as provided in subsection 14. (8) 'Policyholder behavior' means any action a policyholder, contract holder, or any other person with the right to elect options, such as a certificate holder, may take under a policyor contract

14. (8) 'Policyholder behavior' means any action a policyholder, contract holder, or any other person with the right to elect options, such as a certificate holder, may take under a policyor contract subject to this section including but not limited to lapse, withdrawal, transfer,deposit, premium payment, loan, annuitization, or benefit elections prescribed by the policyor contract, but excluding events of mortality or morbidity that result in benefits prescribedin their essential aspects by the terms of the policy or contract. (9) 'Principle-based valuation' means a reserve valuation that uses one or more methods or one or more assumptions determined by the insurer and that is required to comply withsubsection 15 as specified in the valuation manual. (10) 'Qualified actuary' means an individual who is qualified to sign the applicable statement of actuarial opinion in accordance with the American academy of actuariesqualification standards for actuaries signing such statements and who meets therequirements specified in the valuation manual. (11) 'Tail risk' means a risk that occurs either where the frequency of low probability events is higher than expected under a normal

and who meets therequirements specified in the valuation manual. (11) '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 areobserved events of very significant size or magnitude. (12) 'Valuation manual' means the manual of valuation instructions adopted by the NAIC as specified in this section or as subsequently amended. b. This subsection is applicable on or after the operative date of the valuation manual. 2. Reserve valuation.a. Policies and contracts issued prior to operative date of valuation manual.(1) The commissioner shall annually value, or cause to be valued, the reserve liabilities, referred to in this section as reserves, for all outstanding life insurance policies and annuityand pure endowment contracts of every life insurance company doing business in this state,issued on or after July 1, 1973, and prior to the operative date of the valuation manual.In calculating the reserves, the commissioner may use group methods and approximate Sat Dec 23 00:40:49 2023 Iowa Code 2024, Section 508.36 (51, 0) §508.36, LIFE INSURANCE COMPANIES 2 averages for

al.In calculating the reserves, the commissioner may use group methods and approximate Sat Dec 23 00:40:49 2023 Iowa Code 2024, Section 508.36 (51, 0) §508.36, LIFE INSURANCE COMPANIES 2 averages for fractions of a year or otherwise. In lieu of the valuation of the reserves requiredin this section of any foreign or alien company, the commissioner may accept any valuationmade, or caused to be made, by the insurance supervisory official of any state or otherjurisdiction when such valuation complies with the minimum standard provided for in thissection. (2) The provisions set forth in subsections 4 through 13 shall apply to all policies and contracts, as appropriate, subject to this section that were issued on or after July 1, 1973, andprior to the operative date of the valuation manual and the provisions set forth in subsections14 and 15 shall not apply to any such policies or contracts. (3) The minimum standard for the valuation of policies and contracts issued prior to July 1, 1973, shall be the standard provided by the laws in effect immediately prior to that date. b. Policies and contracts issued on or after operative date of valuation manual.(1) The commissioner shall annually

hall be the standard provided by the laws in effect immediately prior to that date. b. Policies and contracts issued on or after operative date of valuation manual.(1) The commissioner shall annually value, or cause to be valued, the reserve liabilities for all outstanding life insurance policies or contracts, annuity and pure endowment policiesor contracts, accident and health insurance policies or contracts, and deposit-type policies orcontracts of every company issued on or after the operative date of the valuation manual. Inlieu of the valuation of the reserves required of a foreign or alien company, the commissionermay accept a valuation made, or caused to be made, by the insurance supervisory officialof any state or other jurisdiction when the valuation complies with the minimum standardprovided in this section. (2) The provisions set forth in subsections 14 and 15 shall apply to all policies or contracts issued on or after the operative date of the valuation manual. 3. Actuarial opinion of reserves.a. Actuarial opinion of reserves prior to operative date of valuation manual. This paragraph 'a' applies to an actuarial opinion of reserves submitted prior to the operativedate

l opinion of reserves.a. Actuarial opinion of reserves prior to operative date of valuation manual. This paragraph 'a' applies to an actuarial opinion of reserves submitted prior to the operativedate of the valuation manual. (1) General. A life insurance company doing business in this state shall annually submit the written opinion of a qualified actuary as to whether the reserves and related actuarialitems held in support of the policies and contracts specified by the commissioner by regulationare computed appropriately, are based on assumptions which satisfy contractual provisions,are consistent with prior reported amounts, and are in compliance with applicable laws of thisstate. The commissioner shall define by rule the requirements and content of this opinion andadd any other items deemed to be necessary. (2) Actuarial analysis of reserves and assets supporting such reserves.(a) Unless exempted by rule, a life insurance company shall also annually include in the opinion required by subparagraph (1), an opinion of the same qualified actuary as to whetherthe reserves and related actuarial items held in support of policies and contracts specified bythe commissioner by rule, when

y subparagraph (1), an opinion of the same qualified actuary as to whetherthe reserves and related actuarial items held in support of policies and contracts specified bythe commissioner by rule, when considered in light of the assets held by the company withrespect to the reserves and related actuarial items, including but not limited to the investmentearnings on the assets and the considerations anticipated to be received and retained underthe policies and contracts, make adequate provision for the company’s obligations under thepolicies and contracts, including but not limited to the benefits under and expenses associatedwith the policies and contracts. (b) The commissioner may provide by rule for a transition period for establishing any higher reserves which the qualified actuary may deem necessary in order to render theopinion required by this paragraph 'a'. (3) Requirements for opinions subject to subparagraph (2). An opinion required by subparagraph (2) shall be governed by the following provisions: (a) A memorandum, in form and substance acceptable to the commissioner as specified by rule, shall be prepared to support each actuarial opinion.

ph (2) shall be governed by the following provisions: (a) A memorandum, in form and substance acceptable to the commissioner as specified by rule, shall be prepared to support each actuarial opinion. (b) If the insurance company fails to provide a supporting memorandum at the request of the commissioner within a period specified by rule or the commissioner determines thatthe supporting memorandum provided by the insurance company fails to meet the standardsprescribed by the rules or is otherwise unacceptable to the commissioner, the commissionermay engage a qualified actuary at the expense of the company to review the opinion and Sat Dec 23 00:40:49 2023 Iowa Code 2024, Section 508.36 (51, 0) the basis for the opinion and prepare such supporting memorandum as is required by thecommissioner. (4) Requirement for all opinions subject to this paragraph. An opinion required under this paragraph 'a' is governed by the following provisions: (a) The opinion shall be submitted with the annual statement reflecting the valuation of such reserve liabilities for each year ending on or after December 31, 1995.

rned by the following provisions: (a) The opinion shall be submitted with the annual statement reflecting the valuation of such reserve liabilities for each year ending on or after December 31, 1995. (b) The opinion shall apply to all business in force, including individual and group health insurance plans, in form and substance acceptable to the commissioner as specified by rule. (c) The opinion shall be based on standards adopted from time to time by the actuarial standards board and on such additional standards as the commissioner may by rule prescribe. (d) 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 insurance supervisoryofficial of another state if the commissioner determines that the opinion reasonably meetsthe requirements applicable to a company domiciled in this state. (e) For the purposes of this paragraph 'a', 'qualified actuary' means a member in good standing of the American academy of actuaries who meets the requirements of thecommissioner as specified by rule. (f) Except in cases of fraud or willful misconduct, a qualified actuary is not liable for damages to

American academy of actuaries who meets the requirements of thecommissioner as specified by rule. (f) Except in cases of fraud or willful misconduct, a qualified actuary is not liable for damages to any person, other than to the insurance company and the commissioner, for anyact, error, omission, decision, or conduct with respect to the actuary’s opinion. (g) Disciplinary action which may be taken by the commissioner against the company or the qualified actuary shall be defined in rules adopted by the commissioner. (h) (i) Any memorandum in support of the opinion, and any other material provided by the company to the commissioner in connection with the opinion, shall be kept confidentialby the commissioner and shall not be made public and shall not be subject to subpoena, otherthan for the purpose of defending an action seeking damages from any person by reason ofany action required by this paragraph 'a' or by rules adopted pursuant to this paragraph'a'. Notwithstanding this subparagraph division, the memorandum or other material may bereleased by the commissioner if either of the following applies: (A) The commissioner receives the written consent of the company with which the

graph division, the memorandum or other material may bereleased by the commissioner if either of the following applies: (A) The commissioner receives the written consent of the company with which the opinion is associated. (B) The American academy of actuaries requests that the memorandum or other material is required for the purpose of professional disciplinary proceedings and settingforth procedures satisfactory to the commissioner for preserving the confidentiality of thememorandum or other material. (ii) Once any portion of the confidential memorandum is cited by the company in its marketing, is cited before any governmental agency other than a state insurancedepartment, or is released by the company to the news media, all portions of the confidentialmemorandum are no longer confidential. b. Actuarial opinion of reserves on or after operative date of valuation manual. This paragraph 'b' applies to an actuarial opinion of reserves submitted on or after the operativedate of the valuation manual. (1) General. Every company with outstanding life insurance policies or contracts, accident and health insurance policies or contracts, or deposit-type policies or contracts inthis state

ation manual. (1) General. Every company with outstanding life insurance policies or contracts, accident and health insurance policies or contracts, or deposit-type policies or contracts inthis state and subject to regulation by the commissioner shall annually submit the opinionof the appointed actuary as to whether the reserves and related actuarial items held insupport of the policies and contracts are computed appropriately, are based on assumptionsthat satisfy contractual provisions, are consistent with prior reported amounts, and complywith applicable laws of this state. The valuation manual shall prescribe the specifics of thisopinion including any items deemed to be necessary to its scope. (2) Actuarial analysis of reserves and assets supporting reserves. Every company with outstanding life insurance policies or contracts, accident and health insurance policies orcontracts, or deposit-type policies or contracts in this state and subject to regulation by thecommissioner, except as exempted in the valuation manual, shall annually include in theopinion required by subparagraph (1), an opinion of the same appointed actuary as to whetherthe reserves and related actuarial items

as exempted in the valuation manual, shall annually include in theopinion required by subparagraph (1), an opinion of the same appointed actuary as to whetherthe reserves and related actuarial items held in support of the policies and contracts specified Sat Dec 23 00:40:49 2023 Iowa Code 2024, Section 508.36 (51, 0) §508.36, LIFE INSURANCE COMPANIES 4 in the valuation manual, when considered in light of the assets held by the company withrespect to the reserves and related actuarial items, including but not limited to the investmentearnings on the assets and the considerations anticipated to be received and retained underthe policies and contracts, make adequate provision for the company’s obligations under thepolicies and contracts, including but not limited to the benefits under and expenses associatedwith the policies and contracts. (3) Requirements for opinions subject to subparagraph (2). An opinion required by subparagraph (2) shall be governed by the following provisions: (a) A memorandum, in form and substance as specified in the valuation manual, and that is acceptable to the commissioner, shall be prepared to support each actuarial opinion.

he following provisions: (a) A memorandum, in form and substance as specified in the valuation manual, and that is acceptable to the commissioner, shall be prepared to support each actuarial opinion. (b) If the company fails to provide a supporting memorandum at the request of the commissioner within a period specified in the valuation manual or the commissionerdetermines that the supporting memorandum provided by the company fails to meetthe standards prescribed by the valuation manual or is otherwise unacceptable to thecommissioner, the commissioner may engage a qualified actuary at the expense of thecompany to review the opinion and the basis for the opinion and prepare the supportingmemorandum required by the commissioner. (4) Requirements for all opinions subject to this paragraph. Every opinion subject to this paragraph 'b' shall be governed by the following provisions: (a) The opinion shall be in form and substance as specified in the valuation manual and acceptable to the commissioner. (b) The opinion shall be submitted with the annual statement reflecting the valuation of such reserve liabilities for each year ending on or after the operative date of the valuationmanual.

issioner. (b) The opinion shall be submitted with the annual statement reflecting the valuation of such reserve liabilities for each year ending on or after the operative date of the valuationmanual. (c) The opinion shall apply to all policies and contracts subject to subparagraph (2) plus other actuarial liabilities as may be specified in the valuation manual. (d) The opinion shall be based on standards adopted from time to time by the actuarial standards board or its successor, and on such additional standards as may be prescribed inthe valuation manual. (e) 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 insurance supervisoryofficial of another state if the commissioner determines that the opinion reasonably meetsthe requirements applicable to a company domiciled in this state. (f) Except in cases of fraud or willful misconduct, the appointed actuary shall not be liable for damages to any person, other than the company and the commissioner, for any act, error,omission, decision, or conduct with respect to the appointed actuary’s opinion.

actuary shall not be liable for damages to any person, other than the company and the commissioner, for any act, error,omission, decision, or conduct with respect to the appointed actuary’s opinion. (g) Disciplinary action by the commissioner against the company or the appointed actuary shall be defined in rules adopted by the commissioner pursuant to chapter 17A. 4. Computations of minimum standards. Except as otherwise provided in subsections 5, 6, and 13, the minimum standard for the valuation of all such policies and contracts issuedprior to July 1, 1994, shall be that provided by the laws in effect immediately prior to suchdate. Except as otherwise provided in subsections 5, 6, and 13, the minimum standard forthe valuation of all such policies and contracts shall be the commissioner’s reserve valuationmethods defined in subsections 7, 8, 11, and 12, five percent interest for group annuity andpure endowment contracts and three and one-half percent interest for all other policies andcontracts, or in the case of policies and contracts, other than annuity and pure endowmentcontracts, issued on or after July 1, 1974, four percent interest for such policies issued prior toJanuary

andcontracts, or in the case of policies and contracts, other than annuity and pure endowmentcontracts, issued on or after July 1, 1974, four percent interest for such policies issued prior toJanuary 1, 1980, five and one-half percent interest for single premium life insurance policiesand four and one-half percent interest for all other such policies issued on and after January1, 1980, and the following tables: a. For ordinary policies of life insurance issued on the standard basis, excluding any disability and accidental death benefits in the policies, the following: (1) The commissioners 1941 standard ordinary mortality table for policies issued prior to the operative date of section 508.37, subsection 6, paragraph 'a'. (2) The commissioners 1958 standard ordinary mortality table for such policies issued on or after the operative date of section 508.37, subsection 6, paragraph 'a', and prior to the Sat Dec 23 00:40:49 2023 Iowa Code 2024, Section 508.36 (51, 0) operative date of section 508.37, subsection 6, paragraph 'c', provided that for any categoryof policies issued on female risks, all modified net premiums and present values referred toin this section may be calculated

ection 508.37, subsection 6, paragraph 'c', provided that for any categoryof policies issued on female risks, all modified net premiums and present values referred toin this section may be calculated according to an age not more than six years younger thanthe actual age of the insured. (3) For policies issued on or after the operative date of section 508.37, subsection 6, paragraph 'c', any of the following: (a) The commissioners 1980 standard ordinary mortality table.(b) At the election of the company for any one or more specified plans of life insurance, the commissioners 1980 standard ordinary mortality table with ten-year select mortality factors. (c) Any ordinary mortality table, adopted after 1980 by the national association of insurance commissioners, that is approved by rule adopted by the commissioner for use indetermining 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 the policies, the following: (1) For policies issued prior to the operative date of section 508.37, subsection 6, paragraph 'b', the 1941 standard industrial mortality

nd accidental death benefits in the policies, the following: (1) For policies issued prior to the operative date of section 508.37, subsection 6, paragraph 'b', the 1941 standard industrial mortality table. (2) For policies issued on or after the operative date of section 508.37, subsection 6, paragraph 'b', the commissioners 1961 standard industrial mortality table, or any industrialmortality table adopted after 1980 by the national association of insurance commissioners,that is approved by rule adopted by the commissioner for use in determining the minimumstandard 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 theoption of the company, the annuity mortality table for 1949, ultimate, or any modification ofeither 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, or amodification of the table approved by the commissioner, or at the option of the company, anyof

sability and accidental death benefits in such policies, the group annuity mortality table for 1951, or amodification of the table approved by the commissioner, or at the option of the company, anyof the tables or modifications of tables specified for individual annuity and pure endowmentcontracts. e. (1) For total and permanent disability benefits in or supplementary to ordinary policies or contracts, the following: (a) 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 thesociety of actuaries, with due regard to the type of benefit, or any tables of disablementrates and termination rates adopted after 1980 by the national association of insurancecommissioners and approved by rule adopted by the commissioner for use in determiningthe minimum standard of valuation for such policies. (b) For policies or contracts issued on or after January 1, 1961, and prior to January 1, 1966, either of the tables identified under subparagraph division (a), or at the option of thecompany, the class (3) disability table (1926).

sued on or after January 1, 1961, and prior to January 1, 1966, either of the tables identified under subparagraph division (a), or at the option of thecompany, the class (3) disability table (1926). (c) For policies issued prior to January 1, 1961, the class (3) disability table (1926).(2) A table used under this paragraph 'e' shall, for active lives, be combined with a mortality table permitted for calculating the reserves for life insurance policies. f. (1) For accidental death benefits in or supplementary to policies, the following:(a) For policies issued on or after January 1, 1966, the 1959 accidental death benefits table, or any accidental death benefits table adopted after 1980 by the national associationof insurance commissioners and approved by rule adopted by the commissioner for use indetermining the minimum standard of valuation for such policies. (b) For policies issued on or after January 1, 1961, and prior to January 1, 1966, either of the tables identified under subparagraph division (a), or at the option of the company, theintercompany double indemnity mortality table.

fter January 1, 1961, and prior to January 1, 1966, either of the tables identified under subparagraph division (a), or at the option of the company, theintercompany double indemnity mortality table. (c) For policies issued prior to January 1, 1961, the intercompany double indemnity mortality table. (2) A table used under this paragraph 'f' shall be combined with a mortality table for calculating the reserves for life insurance policies. Sat Dec 23 00:40:49 2023 Iowa Code 2024, Section 508.36 (51, 0) §508.36, LIFE INSURANCE COMPANIES 6 g. For group life insurance, life insurance issued on the substandard basis, and other special benefits, tables approved by the commissioner. 5. Computation for minimum standards for annuities.a. Except as provided in subsection 6, the minimum standard for the valuation of all individual annuity and pure endowment contracts issued on or after the operative dateof this subsection, and for all annuities and pure endowments purchased on or after theoperative date of this subsection under group annuity and pure endowment contracts, shallbe the commissioner’s reserve valuation methods defined in subsections 7 and 8, and thefollowing tables and interest

ive date of this subsection under group annuity and pure endowment contracts, shallbe the commissioner’s reserve valuation methods defined in subsections 7 and 8, and thefollowing tables and interest rates: (1) For individual annuity and pure endowment contracts issued prior to January 1, 1980, excluding any disability and accidental death benefits in such contracts, both of the following: (a) The 1971 individual annuity mortality table, or any modification of this table approved by the commissioner. (b) Six percent interest for single premium immediate annuity contracts, and four percent interest for all other individual annuity and pure endowment contracts. (2) For individual single premium immediate annuity contracts issued on or after January 1, 1980, excluding any disability and accidental death benefits in such contracts, both of thefollowing: (a) One of the following tables:(i) The 1971 individual annuity mortality table.(ii) An individual annuity mortality table, adopted after 1980 by the national association of insurance commissioners and approved by rule adopted by the commissioner for use indetermining the minimum standard of valuation for such contracts.

adopted after 1980 by the national association of insurance commissioners and approved by rule adopted by the commissioner for use indetermining the minimum standard of valuation for such contracts. (iii) A modification of the tables identified in subparagraph subdivisions (i) and (ii) approved by the commissioner. (b) Seven and one-half percent interest.(3) For individual annuity and pure endowment contracts issued on or after January 1, 1980, other than single premium immediate annuity contracts, excluding any disability andaccidental death benefits in such contracts, both of the following: (a) One of the following tables:(i) The 1971 individual annuity mortality table.(ii) An individual annuity mortality table adopted after 1980 by the national association of insurance commissioners and approved by rule adopted by the commissioner for use indetermining the minimum standard of valuation for such contracts. (iii) A modification of the tables identified in subparagraph subdivisions (i) and (ii) approved by the commissioner. (b) Five and one-half percent interest for single premium deferred annuity and pure endowment contracts and four and one-half percent interest for all other

(i) and (ii) approved by the commissioner. (b) Five and one-half percent interest for single premium deferred annuity and pure endowment contracts and four and one-half percent interest for all other such individualannuity and pure endowment contracts. (4) For all annuities and pure endowments purchased prior to January 1, 1980, under group annuity and pure endowment contracts, excluding any disability and accidental deathbenefits purchased under such contracts, both of the following: (a) The 1971 group annuity mortality table or any modification of this table approved by the commissioner. (b) Six percent interest.(5) For all annuities and pure endowments purchased on or after January 1, 1980, under group annuity and pure endowment contracts, excluding any disability and accidental deathbenefits purchased under such contracts, both of the following: (a) One of the following tables:(i) The 1971 group annuity mortality table.(ii) A group annuity mortality table adopted after 1980 by the national association of insurance commissioners and approved by rule adopted by the commissioner for use indetermining the minimum standard of valuation for such annuities and pure endowments.

by the national association of insurance commissioners and approved by rule adopted by the commissioner for use indetermining the minimum standard of valuation for such annuities and pure endowments. (iii) A modification of the tables identified in subparagraph subdivisions (i) and (ii) approved by the commissioner. (b) Seven and one-half percent interest. Sat Dec 23 00:40:49 2023 Iowa Code 2024, Section 508.36 (51, 0) b. After July 1, 1973, a company may file with the commissioner a written notice of its election to comply with the provisions of this subsection after a specified date before January1, 1979, which shall be the operative date of this section for such company, provided, if acompany makes no election, the effective date of this section for a company is January 1,1979. 6. Computation of minimum standard by calendar year of issue.a. Applicability of this subsection. The calendar year statutory valuation interest rates, as defined in this subsection, shall be used in determining the minimum standard for thevaluation of all of the following: (1) All life insurance policies issued in a particular calendar year, on or after the operative date of section 508.37, subsection

ining the minimum standard for thevaluation of all of the following: (1) All life insurance policies issued in a particular calendar year, on or after the operative date of section 508.37, subsection 6, paragraph 'c'. (2) All individual annuity and pure endowment contracts issued in a particular calendar year on or after January 1, 1995. (3) All annuities and pure endowments purchased in a particular calendar year on or after January 1, 1995, under group annuity and pure endowment contracts. (4) The net increase, if any, in a particular calendar year on or after January 1, 1995, in amounts held under guaranteed interest contracts. b. Calendar year statutory valuation interest rates.(1) The calendar year statutory valuation interest rates, referred to in this paragraph as 'I', shall be determined as follows and the results rounded to the nearer one-quarter of onepercent: (a) For life insurance, I equals .03 + W(R1 – .03) + (W/2) x (R2 – .09), where R1 is the lesser of R and .09, R2 is the greater of R and .09, R is the reference interestrate defined in paragraph 'd' of this subsection, and W is the weighting factor defined inparagraph 'c' of this subsection.

er of R and .09, R2 is the greater of R and .09, R is the reference interestrate defined in paragraph 'd' of this subsection, and W is the weighting factor defined inparagraph 'c' of this subsection. (b) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteedinterest contracts with cash settlement options, I equals .03 + W(R – .03), where R1 is the lesser of R and .09, R2 is the greater of R and .09, R is the reference interestrate defined in paragraph 'd' of this subsection, and W is the weighting factor defined inparagraph 'c' of this subsection. (c) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue-year basis, except as stated in subparagraphdivision (b), the formula for life insurance stated in subparagraph division (a) applies toannuities and guaranteed interest contracts with guarantee durations in excess of ten years,and the formula for single premium immediate annuities stated in subparagraph division (b)applies to annuities and guaranteed interest contracts with guarantee

rantee durations in excess of ten years,and the formula for single premium immediate annuities stated in subparagraph division (b)applies to annuities and guaranteed interest contracts with guarantee durations of ten yearsor less. (d) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the formula for single premium immediateannuities stated in subparagraph division (b) applies. (e) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change-in-fund basis, the formula for singlepremium immediate annuities stated in subparagraph division (b) applies. (2) However, if the calendar year statutory valuation interest rate for any life insurance policies issued in any calendar year determined under subparagraph (1), subparagraphdivision (a), without reference to this sentence differs from the corresponding actual ratefor similar policies issued in the immediately preceding calendar year by less than one-halfof one percent, the calendar year statutory valuation interest rate for the life insurancepolicies is equal to the corresponding actual rate

e immediately preceding calendar year by less than one-halfof one percent, the calendar year statutory valuation interest rate for the life insurancepolicies is equal to the corresponding actual rate for the immediately preceding calendaryear. For purposes of applying the immediately preceding sentence, the calendar year statutory valuation interest rate for life insurance policies issued in a calendar year shall Sat Dec 23 00:40:49 2023 Iowa Code 2024, Section 508.36 (51, 0) §508.36, LIFE INSURANCE COMPANIES 8 be determined for 1980, using the reference interest rate defined in 1979, and shall bedetermined for each subsequent calendar year regardless of the operative date of section508.37, subsection 6, paragraph 'c'. c. Weighting factors.(1) The weighting factors referred to in paragraph 'b' are given in the following tables:(a) (i) Weighting Factors for Life Insurance: Guarantee Duration (Years) Weighting Factors 10 or less .50 More than 10,but not more than 20 .45 More than 20 .35 (ii) For life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options toconvert to plans of life

5 (ii) For life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options toconvert to plans of life insurance with premium rates or nonforfeiture values or both whichare guaranteed in the original policy. (b) The weighting factors for single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options andguaranteed interest contracts with cash settlement options is .80. (c) Weighting factors for other annuities and for guaranteed interest contracts, except as stated in subparagraph division (b), shall be as specified in subparagraph subdivisions (i), (ii),and (iii) of this subparagraph division, according to the rules and definitions in subparagraphsubdivisions (iv), (v), and (vi) of this subparagraph division: (i) For annuities and guaranteed interest contracts valued on an issue-year basis: Weighting Factor for Plan Type Guarantee Duration (Years) 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 20 .45 .35 .35 (ii) For

tor for Plan Type Guarantee Duration (Years) 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 20 .45 .35 .35 (ii) For annuities and guaranteed interest contracts valued on a change-in-fund basis, the factors shown in subparagraph subdivision (i) of this subparagraph division increased by: Plan Type A B C .15 .25 .05 (iii) For annuities and guaranteed interest contracts valued on an issue-year basis, other than those with no cash settlement options, which do not guarantee interest onconsiderations received more than one year after issue or purchase and for annuities andguaranteed interest contracts valued on a change-in-fund basis which do not guaranteeinterest rates on considerations received more than twelve months beyond the valuationdate, the factors shown in subparagraph subdivision (i) of this subparagraph division orderived in subparagraph subdivision (ii) of this subparagraph division increased by: Plan Type A B C .05 .05 .05 (iv) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the guarantee duration is the number of years for

by: Plan Type A B C .05 .05 .05 (iv) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the guarantee duration is the number of years for which thecontract guarantees interest rates in excess of the calendar year statutory valuation interestrate for life insurance policies with guarantee durations in excess of twenty years. For otherannuities with no cash settlement options and for guaranteed interest contracts with no cash Sat Dec 23 00:40:49 2023 Iowa Code 2024, Section 508.36 (51, 0) settlement options, the guarantee duration is the number of years from the date of issue ordate of purchase to the date annuity benefits are scheduled to commence. (v) 'Plan type', as used in subparagraph subdivisions (i), (ii), and (iii) of this subparagraph division, is defined as follows: (A) 'Plan Type A': At any time, the policyholder may withdraw funds only with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by theinsurance company, or may withdraw funds without that adjustment but in installments overfive years or more, or may withdraw funds as in immediate life annuity; or no

since receipt of the funds by theinsurance company, or may withdraw funds without that adjustment but in installments overfive years or more, or may withdraw funds as in immediate life annuity; or no withdrawal ispermitted. (B) 'Plan Type B': Before expiration of the interest rate guarantee, the policyholder may withdraw funds only with an adjustment to reflect changes in interest rates or asset valuessince receipt of the funds by the insurance company, or may withdraw funds without thatadjustment but in installments over five years or more; or no withdrawal is permitted. At theend of interest rate guarantee, funds may be withdrawn without adjustment in a single sumor installments over less than five years. (C) 'Plan Type C': The policyholder may withdraw funds before expiration of interest rate guarantee in a single sum or installments over less than five years either withoutadjustment to reflect changes in interest rates or asset values since receipt of the funds bythe insurance company, or subject only to a fixed surrender charge stipulated in the contractas a percentage of the fund.

eflect changes in interest rates or asset values since receipt of the funds bythe insurance company, or subject only to a fixed surrender charge stipulated in the contractas a percentage of the fund. (vi) A company may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on either an issue-year basis or on achange-in-fund basis. Guaranteed interest contracts with no cash settlement options andother annuities with no cash settlement options must be valued on an issue-year basis. Asused in this section, an issue-year basis of valuation refers to a valuation basis under whichthe interest rate used to determine the minimum valuation standard for the entire durationof the annuity or guaranteed interest contract is the calendar year valuation interest rate forthe year of issue or year of purchase of the annuity or guaranteed interest contract, and thechange-in-fund basis of valuation refers to a valuation basis under which the interest rateused to determine the minimum valuation standard applicable to each change in the fundheld under the annuity or guaranteed interest contract is the calendar year valuation interestrate

e interest rateused to determine the minimum valuation standard applicable to each change in the fundheld under the annuity or guaranteed interest contract is the calendar year valuation interestrate for the year of the change in the fund. d. Reference interest rate. The reference interest rate referred to in paragraph 'b' is defined as follows: (1) For all life insurance, the lesser of the average over a period of thirty-six months and the average over a period of twelve months, ending on June 30 of the calendar yearnext preceding the year of issue, of the monthly average of the composite yield on seasonedcorporate bonds, as published by Moody’s investors service, inc. (2) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteedinterest contracts with cash settlement options, the average over a period of twelve months,ending on June 30 of the calendar year of issue or year of purchase, of the monthly averageof the composite yield on seasoned corporate bonds, as published by Moody’s investorsservice, inc.

ve months,ending on June 30 of the calendar year of issue or year of purchase, of the monthly averageof the composite yield on seasoned corporate bonds, as published by Moody’s investorsservice, inc. (3) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue-year basis, except as stated in subparagraph(2), with guarantee duration in excess of ten years, the lesser of the average over a period ofthirty-six months and the average over a period of twelve months, ending on June 30 of thecalendar year of issue or purchase, of the monthly average of the composite yield on seasonedcorporate bonds, as published by Moody’s investors service, inc. (4) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue-year basis, except as stated in subparagraph(2), with guarantee duration of ten years or less, the average over a period of twelve months,ending on June 30 of the calendar year of issue or purchase, of the monthly average of thecomposite yield on seasoned corporate bonds, as published by Moody’s investors service, inc.

of twelve months,ending on June 30 of the calendar year of issue or purchase, of the monthly average of thecomposite yield on seasoned corporate bonds, as published by Moody’s investors service, inc. (5) For other annuities with no cash settlement options and for guaranteed interest Sat Dec 23 00:40:49 2023 Iowa Code 2024, Section 508.36 (51, 0) §508.36, LIFE INSURANCE COMPANIES 10 contracts with no cash settlement options, the average over a period of twelve months,ending on June 30 of the calendar year of issue or purchase, of the monthly average of thecomposite yield on seasoned corporate bonds, as published by Moody’s investors service,inc. (6) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change-in-fund basis, except as stated insubparagraph (2), the average over a period of twelve months, ending on June 30 of thecalendar year of the change in the fund, of the monthly average of the composite yield onseasoned corporate bonds, as published by Moody’s investors service, inc. e. Alternative method for determining reference interest rates.

in the fund, of the monthly average of the composite yield onseasoned corporate bonds, as published by Moody’s investors service, inc. e. Alternative method for determining reference interest rates. In the event that the monthly average of the composite yield on seasoned corporate bonds is no longer publishedby Moody’s investors service, inc., or in the event that the national association of insurancecommissioners determines that the monthly average of the composite yield on seasonedcorporate bonds as published by Moody’s investors service, inc. is no longer appropriate forthe determination of the reference interest rate, an alternative method for determinationof the reference interest rate, which is adopted by the national association of insurancecommissioners and approved by rule adopted by the commissioner, may be substituted. 7. Reserve valuation method — life insurance and endowment benefits.a. Except as otherwise provided in subsections 8, 11, and 12, reserves calculated according to the commissioner’s reserve valuation method, for the life insurance andendowment benefits of policies providing for a uniform amount of insurance and requiringthe payment of uniform premiums,

ding to the commissioner’s reserve valuation method, for the life insurance andendowment benefits of policies providing for a uniform amount of insurance and requiringthe payment of uniform premiums, shall be the excess, if any, of the present value, at the dateof valuation, of future guaranteed benefits provided for by such policies, over the presentvalue, at the date of valuation, of any future modified net premiums for such policies. Themodified net premiums for such policy is the uniform percentage of the respective contractpremiums for the benefits such that the present value, at the date of issue of the policy, of allmodified net premiums shall be equal to the sum of the present value, at the date of valuation,of such benefits provided for by the policy and the excess of the amount determined insubparagraph (1) over the amount determined in subparagraph (2), as follows: (1) A net level annual premium equal to the present value at the date of issue, of the benefits provided for after the first policy year, divided by the present value at the date ofissue, of an annuity of one per annum payable on the first, and each subsequent, anniversaryof the policy on which a premium

or after the first policy year, divided by the present value at the date ofissue, of an annuity of one per annum payable on the first, and each subsequent, anniversaryof the policy on which a premium falls due. However, the net level annual premium shallnot exceed the net level annual premium on the nineteen-year premium whole life plan forinsurance of the same amount at an age one year more than the age of the insured at issueof the policy. (2) A net one-year term premium for the benefits provided for in the first policy year.b. (1) However, for a life insurance policy issued on or after January 1, 1998, for which the contract premium in the first policy year exceeds that of the second year and for which nocomparable additional benefit is provided in the first year for such additional premium andwhich provides an endowment benefit or a cash surrender value or a combination of suchbenefit or value in an amount greater than the additional premium, the reserve accordingto the commissioner’s reserve valuation method as of any policy anniversary occurring onor before the assumed ending date defined as the first policy anniversary on which the sumof any endowment benefit and any cash

ner’s reserve valuation method as of any policy anniversary occurring onor before the assumed ending date defined as the first policy anniversary on which the sumof any endowment benefit and any cash surrender value then available is greater than suchadditional premium shall be, except as otherwise provided in subsection 11, the greater ofthe reserve as of such policy anniversary calculated as described in paragraph 'a' and thereserve as of such policy anniversary calculated as described in paragraph 'a', but with thefollowing modifications: (a) The value defined in paragraph 'a' being reduced by fifteen percent of the amount of such excess first year premium. (b) 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. (c) The policy being assumed to mature on such date as an endowment.(d) The cash surrender value provided on such date being considered as an endowment benefit. Sat Dec 23 00:40:49 2023 Iowa Code 2024, Section 508.36 (51, 0) (2) In making the above comparison the mortality and interest bases stated in subsections 5 and 6 shall be used. c.

endowment benefit. Sat Dec 23 00:40:49 2023 Iowa Code 2024, Section 508.36 (51, 0) (2) In making the above comparison the mortality and interest bases stated in subsections 5 and 6 shall be used. c. Reserves according to the commissioner’s reserve valuation method shall be calculated pursuant to a method consistent with this subsection for all of the following: (1) Life insurance policies providing for a varying amount of insurance or requiring the payment of varying premiums. (2) Group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation established or maintained by an employer, including apartnership or sole proprietorship, or by an employee organization, or by both, other thana plan providing individual retirement accounts or individual retirement annuities undersection 408 of the Internal Revenue Code. (3) Disability and accidental death benefits in all policies and contracts.(4) All other benefits, except life insurance and endowment benefits in life insurance policies and benefits provided by all other annuity and pure endowment contracts. 8. Reserve valuation method — annuity and pure endowment benefits.a.

surance and endowment benefits in life insurance policies and benefits provided by all other annuity and pure endowment contracts. 8. Reserve valuation method — annuity and pure endowment benefits.a. This subsection applies to all annuity and pure endowment contracts other than group annuity and pure endowment contracts purchased under a retirement plan or plan ofdeferred compensation established or maintained by an employer, including a partnership orsole proprietorship, or by an employee organization, or by both, other than a plan providingindividual retirement accounts or individual retirement annuities under section 408 of theInternal Revenue Code. b. Reserves according to the commissioner’s annuity reserve method for benefits under annuity or pure endowment contracts, excluding any disability and accidental death benefitsin such contracts, shall be the greatest of the respective excesses of the present values, atthe date of valuation, of the future guaranteed benefits, including guaranteed nonforfeiturebenefits, provided for by such contracts at the end of each respective contract year, over thepresent value, at the date of valuation, of any future valuation considerations

g guaranteed nonforfeiturebenefits, provided for by such contracts at the end of each respective contract year, over thepresent value, at the date of valuation, of any future valuation considerations derived fromfuture gross considerations, required by the terms of such contract, that become payableprior to the end of such respective contract year. The future guaranteed benefits shall bedetermined by using the mortality table, if any, and the interest rate or rates, specified insuch contracts for determining guaranteed benefits. The valuation considerations are theportions of the respective gross considerations applied under the terms of such contracts todetermine nonforfeiture values. 9. Minimum reserves.a. A company’s aggregate reserves for all life insurance policies, excluding disability and accidental death benefits, issued on or after the operative date of section 508.37, shall notbe less than the aggregate reserves calculated in accordance with the methods set forth insubsections 7, 8, 11, and 12, and the mortality table or tables and rate or rates of interest usedin calculating nonforfeiture benefits for such policies. b.

n accordance with the methods set forth insubsections 7, 8, 11, and 12, and the mortality table or tables and rate or rates of interest usedin calculating nonforfeiture benefits for such policies. b. A company’s aggregate reserves for all policies, contracts, and benefits shall not be less than the aggregate reserves determined by the qualified actuary to be necessary to render theopinion required by subsection 3. 10. Optional reserve calculation.a. Reserves for all policies and contracts issued prior to the operative date of section 508.37, may be calculated, at the option of the company, according to any standards whichproduce greater aggregate reserves for all such policies and contracts than the minimumreserves required prior to July 1, 1994. b. Reserves for any category of policies, contracts, or benefits, as established by the commissioner, issued on or after the operative date of section 508.37, may be calculated,at the option of the company, according to any standards which produce greater aggregatereserves for such category than those calculated according to the minimum standard asprovided in this section, but the rate or rates of interest used for policies and contracts,

duce greater aggregatereserves for such category than those calculated according to the minimum standard asprovided in this section, but the rate or rates of interest used for policies and contracts, otherthan annuity and pure endowment contracts, shall not be higher than the corresponding rateor rates of interest used in calculating any nonforfeiture benefits as provided in this section. c. A company which at any time adopts a standard of valuation producing greater aggregate reserves than those calculated according to the minimum standard as provided Sat Dec 23 00:40:49 2023 Iowa Code 2024, Section 508.36 (51, 0) §508.36, LIFE INSURANCE COMPANIES 12 in this section may adopt, with the approval of the commissioner, any lower standard ofvaluation, not to be lower than the minimum as provided in this section, provided, however,that, for purposes of this section, the holding of additional reserves previously determinedby a qualified actuary to be necessary to render the opinion required by subsection 3 shallnot be deemed to be the adoption of a higher standard of valuation. 11. Reserve calculation — valuation net premium exceeding the gross premium charge.a.

der the opinion required by subsection 3 shallnot be deemed to be the adoption of a higher standard of valuation. 11. Reserve calculation — valuation net premium exceeding the gross premium charge.a. If in any contract year the gross premium charged by a company on a policy or contract is less than the valuation net premium for the policy or contract, as calculated by the methodused in calculating the reserve for such policy or contract but using the minimum valuationstandards of mortality and rate of interest, the minimum reserve required for such policy orcontract is the greater of either the reserve calculated according to the mortality table, rate ofinterest, and method actually used for such policy or contract, or the reserve calculated by themethod actually used for such policy or contract but using the minimum valuation standardsof mortality and rate of interest and replacing the valuation net premium by the actual grosspremium in each contract year for which the valuation net premium exceeds the actual grosspremium. The minimum valuation standards of mortality and rate of interest referred to inthis section are those standards established in subsections 5 and 6. b.

on net premium exceeds the actual grosspremium. The minimum valuation standards of mortality and rate of interest referred to inthis section are those standards established in subsections 5 and 6. b. However, for any life insurance policy issued on or after January 1, 1998, for which the gross premium in the first policy year exceeds that of the second year and for which nocomparable additional benefit is provided in the first year for such excess and which providesan endowment benefit or a cash surrender value, or a combination of such benefit and value,in an amount greater than the excess premium, the provisions of paragraph 'a' apply as if themethod actually used in calculating the reserve for such policy is the method established insubsection 7, excluding paragraph 'b' of that subsection. The minimum reserve of the policyat each policy anniversary shall be the greater of the minimum reserve calculated pursuantto subsection 7 and the minimum reserve calculated in accordance with this subsection. 12. Reserve calculation — indeterminate premium plans. In the case of any plan of life insurance which provides for future premium determination, the amounts of suchpremium which are to

s subsection. 12. Reserve calculation — indeterminate premium plans. In the case of any plan of life insurance which provides for future premium determination, the amounts of suchpremium which are to be determined by the insurance company based on estimates of futureexperience, or in the case of any plan of life insurance or annuity, the minimum reservesof which cannot be determined by the methods established in subsections 7, 8, and 11,the reserves which are held under the plan must be appropriate in relation to the benefitsand the pattern of premiums for that plan, and shall be computed by a method which isconsistent with this section, as determined by rules adopted by the commissioner. 13. Minimum standards for accident and health insurance policies or contracts. For accident and health insurance policies or contracts issued on or after the operative dateof the valuation manual, the standard prescribed in the valuation manual is the minimumstandard of valuation required under subsection 2, paragraph 'b'. For health, disability, andsickness and accident insurance policies or contracts issued on or after July 1, 1973, andprior to the operative date of the valuation manual, the

section 2, paragraph 'b'. For health, disability, andsickness and accident insurance policies or contracts issued on or after July 1, 1973, andprior to the operative date of the valuation manual, the minimum standard of valuation isthe standard adopted by the commissioner by rule. 14. Valuation manual for policies or contracts issued on or after operative date of valuation manual. a. For policies or contracts issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuationrequired under subsection 2, paragraph 'b', except as provided under paragraph 'e' or 'g'of this subsection. b. 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: (1) The valuation manual has been adopted by the NAIC by an affirmative vote of at least forty-two members, or three-fourths of the members voting, whichever is greater. (2) 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 greaterthan seventy-five

. (2) 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 greaterthan seventy-five percent of the direct premiums written as reported in the following annualstatements submitted for 2008: (a) Life, accident, and health insurance annual statements. Sat Dec 23 00:40:49 2023 Iowa Code 2024, Section 508.36 (51, 0) (b) Health insurance annual statements.(c) Fraternal benefit society annual statements.(3) 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 forty-two of thefollowing fifty-five jurisdictions: the fifty states of the United States, American Samoa, theAmerican Virgin Islands, the District of Columbia, Guam, and Puerto Rico. c. Unless a change in the valuation manual specifies a later effective date, changes to the valuation manual shall be effective on January 1 following the date when all of the followinghave occurred: (1) The changes to the valuation manual have been adopted by the NAIC by an affirmative vote representing: (a) At least three-fourths of

y 1 following the date when all of the followinghave occurred: (1) The changes to the valuation manual have been 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. (b) Members of the NAIC representing jurisdictions totaling greater than seventy-five percent of the direct premiums written as reported in the following annual statements mostrecently available prior to the vote in subparagraph division (a): (i) Life, accident, and health insurance annual statements.(ii) Health insurance annual statements.(iii) Fraternal benefit society annual statements.d. The valuation manual shall specify all of the following:(1) Minimum valuation standards for and definitions of the policies or contracts subject to subsection 2, paragraph 'b'. Such minimum valuation standards shall include all of thefollowing: (a) The commissioner’s reserve valuation method for life insurance contracts, other than annuity contracts, subject to subsection 2, paragraph 'b'. (b) The commissioner’s annuity reserve valuation method for annuity contracts subject to subsection 2, paragraph 'b'.

contracts, other than annuity contracts, subject to subsection 2, paragraph 'b'. (b) The commissioner’s annuity reserve valuation method for annuity contracts subject to subsection 2, paragraph 'b'. (c) Minimum reserves for all other policies or contracts subject to subsection 2, paragraph 'b'. (2) Which policies or contracts or types of policies or contracts are subject to the requirements of a principle-based valuation in subsection 15, paragraph 'a', and theminimum valuation standards consistent with those requirements. (3) For policies and contracts subject to a principle-based valuation under subsection 15, specify all of the following: (a) Requirements for the format of reports to the commissioner under subsection 15 which shall include information necessary to determine if the valuation is appropriate andin compliance with this section. (b) Assumptions that are prescribed for risks over which the company does not have significant control or influence. (c) Procedures for corporate governance and oversight of the actuarial function, and a process for appropriate waiver or modification of such procedures.

es not have significant control or influence. (c) Procedures for corporate governance and oversight of the actuarial function, and a process for appropriate waiver or modification of such procedures. (4) For policies or contracts not subject to a principle-based valuation under subsection 15, the minimum valuation standard shall do either of the following: (a) Be consistent with the minimum standard of valuation prior to the operative date of the valuation manual. (b) Develop reserves that quantify the benefits and guarantees, and the funding, associated with the policies or contracts and their risks at a level of conservatism that reflectsconditions that include unfavorable events that have a reasonable probability of occurring. (5) Other requirements, including but not limited to those relating to reserve methods, models for measuring risk, generation of economic scenarios, assumptions, margins, use ofcompany experience, risk measurement, disclosure, certifications, reports, actuarial opinionsand memorandums, transition rules, and internal controls. (6) The data and form of the data required under subsection 16, to whom the data must be submitted, and other specified

ts, actuarial opinionsand memorandums, transition rules, and internal controls. (6) The data and form of the data required under subsection 16, to whom the data must be submitted, and other specified requirements, including data analyses and reporting ofanalyses. e. In the absence of a specific valuation requirement or if a specific valuation requirement Sat Dec 23 00:40:49 2023 Iowa Code 2024, Section 508.36 (51, 0) §508.36, LIFE INSURANCE COMPANIES 14 in the valuation manual is not, in the opinion of the commissioner, in compliance with thissubsection, then the company shall, with respect to such requirements, comply with minimumvaluation standards prescribed by the commissioner by rule. f. 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 anyreserve assumption or method used by the company, or to review and opine on a company’scompliance with any requirements set forth in this section. The commissioner may rely uponthe opinion, regarding provisions contained in this section, of a qualified actuary engaged bythe commissioner of another state, district, or

set forth in this section. The commissioner may rely uponthe opinion, regarding provisions contained in this section, of a qualified actuary engaged bythe commissioner of another state, district, or territory of the United States. As used in thisparagraph, 'engage' includes employment of and contracting with a qualified actuary. g. 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 thevaluation manual or this section and the company shall adjust the reserves as required by thecommissioner. The commissioner may take other disciplinary action as authorized pursuantto section 505.8. 15. Requirements of principle-based valuation.a. A company shall establish reserves using a principle-based valuation that meets all of the following conditions for policies or contracts as specified in the valuation manual: (1) Quantifies the benefits and guarantees, and the funding, associated with the policies or contracts and the risks of the policies or contracts at a level of conservatism that reflectsconditions that include unfavorable events that have a reasonable probability of

ated with the policies or contracts and the risks of the policies or contracts at a level of conservatism that reflectsconditions that include unfavorable events that have a reasonable probability of occurringduring the lifetime of the policies or contracts. For policies or contracts with a significant tailrisk, the valuation reflects conditions appropriately adverse to quantify the tail risk. (2) Incorporates assumptions, risk analysis methods, and financial models and management techniques that are consistent with, but not necessarily identical to, thoseutilized within the company’s overall risk assessment process, while recognizing potentialdifferences in financial reporting structures and any prescribed assumptions or methods. (3) Incorporates assumptions that are derived in one of the following manners:(a) The assumption is prescribed in the valuation manual.(b) For assumptions that are not prescribed in the valuation manual, the assumptions shall meet either of the following requirements: (i) Be established utilizing the company’s available experience, to the extent that the experience is relevant and statistically credible.

assumptions shall meet either of the following requirements: (i) Be established utilizing the company’s available experience, to the extent that the experience is relevant and statistically credible. (ii) To the extent that company data is not available, relevant, or statistically credible, be established utilizing other relevant, statistically credible experience. (4) Provides margins for uncertainty including adverse deviation and estimation error, such that the greater the uncertainty the larger the margin and resulting reserve. b. A company using a principle-based valuation for one or more policies or contracts subject to this subsection as specified in the valuation manual shall do all of the following: (1) Establish procedures for corporate governance and oversight of the actuarial valuation function consistent with those described in the valuation manual. (2) Provide to the commissioner and the board of directors an annual certification of the effectiveness of the company’s internal controls with respect to the principle-based valuation.Such controls shall be designed to assure that all material risks inherent in the liabilitiesand associated assets subject to such

ny’s internal controls with respect to the principle-based valuation.Such controls shall be designed to assure that all material risks inherent in the liabilitiesand associated assets subject to such valuation are included in the valuation, and that thevaluation is made in accordance with the valuation manual. The certification shall be basedon the internal controls in place as of the end of the preceding calendar year. (3) Develop, and file with the commissioner upon request, a principle-based valuation report that complies with standards prescribed in the valuation manual. c. A principle-based valuation may include a prescribed formulaic reserve component.16. Experience reporting for policies or contracts in force on or after operative date of valuation manual. A company shall submit mortality, morbidity, policyholder behavior, orexpense experience and other data as prescribed in the valuation manual. 17. Confidentiality.a. Definition. For purposes of this subsection, 'confidential information' means all of the following: Sat Dec 23 00:40:49 2023 Iowa Code 2024, Section 508.36 (51, 0) (1) A memorandum in support of an opinion submitted under subsection 3 and any other documents,

nformation' means all of the following: Sat Dec 23 00:40:49 2023 Iowa Code 2024, Section 508.36 (51, 0) (1) A memorandum in support of an opinion submitted under subsection 3 and any other documents, materials, or other information, including but not limited to all working papers,and copies thereof, created, produced, obtained by, or disclosed to the commissioner or anyother person in connection with the memorandum. (2) All documents, materials, or other information, including but not limited to all working papers, and copies thereof, created, produced, obtained by, or disclosed to thecommissioner or any other person in the course of an examination made under subsection14, paragraph 'f'; provided, however, that if an examination report or other materialsprepared in connection with an examination made under chapter 507 is not held as privateand confidential information under section 507.14, an examination report or other materialprepared in connection with an examination made under subsection 14, paragraph 'f', shallnot be 'confidential information' to the same extent as if such examination report or othermaterial had been prepared under chapter 507.

h an examination made under subsection 14, paragraph 'f', shallnot be 'confidential information' to the same extent as if such examination report or othermaterial had been prepared under chapter 507. (3) Any reports, documents, materials, or other information developed by a company in support of, or in connection with, an annual certification by the company under subsection15, paragraph 'b', subparagraph (2), evaluating the effectiveness of the company’s internalcontrols with respect to a principle-based valuation and any other documents, materials, orother information, including but not limited to all working papers, and copies thereof, created,produced, obtained by, or disclosed to the commissioner or any other person in connectionwith such reports, documents, materials, or other information. (4) Any principle-based valuation report developed under subsection 15, paragraph 'b', subparagraph (3), and any other documents, materials, or other information, including butnot limited to all working papers, and copies thereof, created, produced, obtained by, ordisclosed to the commissioner or any other person in connection with such report.

er information, including butnot limited to all working papers, and copies thereof, created, produced, obtained by, ordisclosed to the commissioner or any other person in connection with such report. (5) Any documents, materials, data, or other information submitted by a company under subsection 16, collectively known as 'experience data' or 'experience materials',and any other documents, materials, data, or other information, including but not limitedto all working papers, and copies thereof, created or produced in connection with suchexperience data, in each case that includes any potentially company-identifying or personallyidentifiable information, that is provided to or obtained by the commissioner, together withany 'experience data' or 'experience materials', and any other documents, materials, data,or other information, including but not limited to all working papers, and copies thereof,created, produced, obtained by, or disclosed to the commissioner or any other person inconnection with such experience data or experience materials. b. Privilege for, and confidentiality of, confidential information.(1) Except as provided in this subsection, a company’s confidential

inconnection with such experience data or experience materials. b. Privilege for, and confidentiality of, confidential information.(1) Except as provided in this subsection, a company’s confidential information is confidential by law and privileged, and shall not be subject to chapter 22, shall not be subjectto subpoena, and shall not be subject to discovery or admissible in evidence in any privatecivil action; provided, however, that the commissioner is authorized to use the confidentialinformation in the furtherance of any regulatory or legal action brought against the companyas a part of the commissioner’s official duties. (2) Neither the commissioner nor any person who received confidential information while acting under the authority of the commissioner shall be permitted or required to testify in anyprivate civil action concerning any confidential information. (3) In order to assist in the performance of the commissioner’s duties, the commissioner may share confidential information as follows: (a) With other state, federal, or international regulatory agencies and with the NAIC and its affiliates and subsidiaries.

er’s duties, the commissioner may share confidential information as follows: (a) With other state, federal, or international regulatory agencies and with the NAIC and its affiliates and subsidiaries. (b) In the case of confidential information specified in paragraph 'a', subparagraphs (1) and (4) only, with the actuarial board for counseling and discipline or its successor uponrequest stating that the confidential information is required for the purpose of professionaldisciplinary proceedings, and with state, federal, and international law enforcement officials. (c) The sharing of confidential information under subparagraph division (a) or (b) requires that the recipient of the confidential information agrees, and has the legal authorityto agree to maintain the confidentiality and privileged status of such documents, materials, Sat Dec 23 00:40:49 2023 Iowa Code 2024, Section 508.36 (51, 0) §508.36, LIFE INSURANCE COMPANIES 16 data, and other information in the same manner and to the same extent as required for thecommissioner. (4) The commissioner may receive documents, materials, data, and other information, including otherwise confidential and privileged documents, materials,

same extent as required for thecommissioner. (4) The commissioner may receive documents, materials, data, and other information, including otherwise confidential and privileged documents, materials, data, or information,from the NAIC and its affiliates and subsidiaries, from regulatory or law enforcement officialsof other foreign or domestic jurisdictions, and from the actuarial board for counseling anddiscipline, or its successor, and shall maintain as confidential or privileged any documents,materials, data, or other information received with notice or the understanding that itis confidential or privileged under the laws of the jurisdiction that is the source of thedocuments, materials, data, or other information. (5) The commissioner may enter into agreements governing the sharing and use of information consistent with this paragraph 'b'. (6) No waiver of any applicable privilege or claim of confidentiality in the confidential information shall occur as a result of disclosure to the commissioner under this subsectionor as a result of sharing as authorized in subparagraph (3). (7) A privilege established under the law of any state or jurisdiction that is substantially similar

the commissioner under this subsectionor as a result of sharing as authorized in subparagraph (3). (7) A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established in this paragraph 'b' shall be available and enforced inany proceeding in, and in any court of, this state. (8) For the purposes of this subsection, 'regulatory agency', 'law enforcement agency', and the 'NAIC', include but are not limited to their employees, agents, consultants, andcontractors. c. Sharing of confidential information. Notwithstanding paragraph 'b', any confidential information specified in paragraph 'b' may be shared as follows: (1) 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 opinionsubmitted under subsection 3 or a principle-based valuation report developed undersubsection 15, paragraph 'b', subparagraph (3), by reason of an action required by thissection or by rules promulgated under this section. (2) May otherwise be released by the commissioner with the written consent of the company.

subparagraph (3), by reason of an action required by thissection or by rules promulgated under this section. (2) May otherwise be released by the commissioner with the written consent of the company. (3) Once any portion of a memorandum in support of an opinion submitted under subsection 3 or a principle-based valuation report developed under subsection 15, paragraph'b', subparagraph (3), is cited by a company in its marketing or is publicly volunteered to orbefore a governmental agency other than a state insurance department or is released by thecompany to the news media, all portions of such memorandum or report shall no longer beconfidential information. 18. Single state exemption.a. 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 ofsubsection 14 provided that all of the following have occurred: (1) The commissioner has issued an exemption in writing to the company and has not subsequently revoked the exemption in writing. (2) The company computes reserves using assumptions and methods used prior to the operative date of the valuation manual in addition to any

and has not subsequently revoked the exemption in writing. (2) The company computes reserves using assumptions and methods used prior to the operative date of the valuation manual in addition to any requirements established by thecommissioner and promulgated by rule. b. For any company granted an exemption under this subsection, subsections 3 through 13 shall be applicable. With respect to any company applying this exemption, any referenceto subsection 14 found in subsections 3 through 13 shall not be applicable. [C73, §1169; C97, §1774; C24, 27, 31, 35, 39, §8654; C46, 50, 54, 58, 62, §508.12; C66, 71, 73, 75, 77, 79, 81, §508.36; 82 Acts, ch 1072, §1, 2] 94 Acts, ch 1176, §7, 8; 95 Acts, ch 67, §36; 2009 Acts, ch 41, §148 – 156; 2012 Acts, ch 1023, §104, 157; 2013 Acts, ch 30, §121 – 123; 2014 Acts, ch 1020, §1 – 9, 15; 2014 Acts, ch 1141,§23, 24; 2021 Acts, ch 76, §124 Referred to in §508.33A, 508.37, 521B.105 Sat Dec 23 00:40:49 2023 Iowa Code 2024, Section 508.36 (51, 0)