S.D. Admin. R. 20:06:37:41.01

Current through Register Vol. 50, page 159, June 17, 2024

Section 20:06:37:41.01 - Details of the regulatory asset adequacy issues summary

The regulatory asset adequacy issues summary shall be signed and dated by the appointed actuary rendering the actuarial opinion and shall include:

(1) Description of the scenarios tested, including whether those scenarios are stochastic or deterministic, and the sensitivity testing done relative to those scenarios. If negative ending surplus results under certain tests in the aggregate, the actuary should describe those tests and the amount of additional reserve as of the valuation date which, if held, would eliminate the negative aggregate surplus values. Ending surplus values shall be determined by either extending the projection period until the in-force and associated assets and liabilities at the end of the projection period are immaterial or by adjusting the surplus amount at the end of the projection period by an amount that appropriately estimates the value that can reasonably be expected to arise from the assets and liabilities in force;

(2) The extent to which the appointed actuary uses assumptions in the asset adequacy analysis that are materially different than the assumptions used in the previous asset adequacy analysis;

(3) The amount of reserves and the identity of the product lines that had been subjected to asset adequacy analysis in the prior opinion but were not subject to analysis for the current opinion;

(4) Comments on any interim results that may be of significant concern to the appointed actuary;

(5) The methods used by the actuary to recognize the impact of reinsurance on the company's cash flows, including both assets and liabilities, under each of the scenarios tested;

(6) Whether the actuary has been satisfied that all options whether explicit or embedded, in any asset or liability, including but not limited to those affecting cash flows embedded in fixed income securities, and equity-like features in any investments have been appropriately considered in the asset adequacy analysis; and

(7) The name of the company for which the regulatory asset adequacy issues summary is being supplied.

S.D. Admin. R. 20:06:37:41.01

34 SDR 297, effective 6/2/2008.

General Authority: SDCL 58-26-49.

Law Implemented: SDCL 58-26-46, 58-26-47.