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 Commissioner’s reserve valuation method for life insurance contracts, other than annuity contracts, subject to NRS 681B.330;
(2) The Commissioner’s 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 company’s 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.
(Added to NRS by 2015, 3394)