Bill > S2450

This bill introduces a new framework for how life insurance companies calculate their financial reserves, which are funds set aside to cover future claims. It establishes "principle-based valuation" as the standard for policies issued on or after the "operative date of the valuation manual," a date determined by the National Association of Insurance Commissioners (NAIC) when a standardized manual of valuation instructions is adopted. This new method allows insurers more flexibility in choosing valuation methods and assumptions, as long as they comply with the valuation manual and ensure reserves are sufficient to cover potential future obligations, including adverse events. The bill also defines key terms like "accident and health insurance," "appointed actuary," "company," "deposit-type contract," "life insurance," "policyholder behavior," "principle-based valuation," "qualified actuary," "tail risk," and "valuation manual." It outlines requirements for actuarial opinions and supporting memorandums, specifies how these valuations will be overseen by the commissioner, and addresses the confidentiality of information shared during this process. Additionally, it updates provisions related to nonforfeiture benefits and cash surrender values for policies issued under the new valuation standards.