BEFORE THE COMMISSIONER OF SECURITIES AND INSURANCE

MONTANA STATE AUDITOR

 

In the matter of the adoption of New Rule I pertaining to the adoption of the NAIC Valuation Manual

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NOTICE OF ADOPTION

 

TO: All Concerned Persons

 

1. On September 2, 2016, the Commissioner of Securities and Insurance (CSI), Montana State Auditor, published MAR Notice No. 6-223 pertaining to the proposed adoption of the above-stated rule at page 1494 of the 2016 Montana Administrative Register, Issue Number 17.

 

2. The department has adopted New Rule I (ARM 6.6.4501) as proposed, but with the following changes to the original proposal, new matter underlined, deleted matter interlined:

 

          NEW RULE I (ARM 6.6.4501) ADOPTION BY REFERENCE OF THE NAIC VALUATION MANUAL (1) The Commissioner of Securities and Insurance, Office of the State Auditor, adopts and incorporates by reference the Valuation Manual first adopted by the National Association of Insurance Commissioners (NAIC) on December 2, 2012, including subsequent amendments to the Valuation Manual through August 29, 2016, which sets forth and specifies a principle-based method for the valuation of insurance policies and contracts and the establishment of reserves. A copy of the Valuation Manual, as adopted by the NAIC on August 29, 2016, may be obtained from the NAIC web site at the following link: http://www.naic.org/documents/committees_a_latf_related_valuation_manual_noapf_adopted_by_a_cmte.pdf

http://www.naic.org/documents/committees_a_latf_related_valuation_manual_noapf_160829.pdf.

 

          AUTH:  33-1-313, 33-2-418, MCA

          IMP:  33-2-402, 33-2-403, 33-2-404, 33-2-405, MCA

 

3. No hearing was held, and the CSI received comments from one commenter raising two issues. The CSI has thoroughly considered the comments and testimony received. A summary of the comments received, and the CSI's responses are as follows:

 

COMMENT NO. 1: The commenter noted that there have been several amendments to the Valuation Manual since its adoption in 2012. The commenter proposed that the CSI should adopt the most current version of the Valuation Manual, and all future amendments adopted by the National Association of Insurance Commissioners.

 

RESPONSE NO. 1: The CSI agrees that it should adopt the most current version of the Valuation Manual, and has modified New Rule I (ARM 6.6.4501) accordingly. However, any future amendments to the Valuation Manual must be approved by a separate rulemaking procedure, pursuant to 2-4-307(4), MCA.   

 

COMMENT NO. 2: The commenter suggested that 33-2-404 and 33-2-405, MCA, should be included in the list of implemented statutes.

 

RESPONSE NO. 2: The CSI agrees that 33-2-404 and 33-2-405, MCA, are also statutes implemented by New Rule I (ARM 6.6.4501), and has modified the rule accordingly.

 

 

/s/ Michael A. Kakuk                              /s/ Jesse Laslovich                     

Michael A. Kakuk                                  Jesse Laslovich

Rule Reviewer                                      Chief Legal Counsel

         

Certified to the Secretary of State October 3, 2016.