Wisconsin Legislature: Ins 50.79(3)(a)4.

Ins 50.79(2)(a)7.e. e. Competitor or market interest rate;

Ins 50.79(2)(a)7.f. f. Annuitization rates;

Ins 50.79(2)(a)7.g. g. Commissions and expenses; and

Ins 50.79(2)(b)1. 1. Portfolio descriptions, including a risk profile disclosing the quality, distribution and types of assets;

Ins 50.79(2)(b)2. 2. Investment and disinvestment assumptions;

Ins 50.79(2)(b)3. 3. Source of asset data;

Ins 50.79(2)(b)4. 4. Asset valuation bases; and

Ins 50.79(2)(b)5. 5. Documentation of assumptions made for:

Ins 50.79(2)(b)5.a. a. Default costs;

Ins 50.79(2)(b)5.b. b. Bond call function;

Ins 50.79(2)(b)5.c. c. Mortgage prepayment function;

Ins 50.79(2)(b)5.d. d. Determining market value for assets sold due to disinvestment strategy; and

Ins 50.79(2)(b)5.e. e. Determining yield on assets acquired through the investment strategy.

Ins 50.79(2)(c) (c) Analysis basis:

Ins 50.79(2)(c)1. 1. Methodology;

Ins 50.79(2)(c)2. 2. Rationale for inclusion/exclusion of different blocks of business and how pertinent risks were analyzed;

Ins 50.79(2)(c)3. 3. Rationale for degree of rigor in analyzing different blocks of business, including the rationale for the level of materiality that was used in determining how rigorously to analyze different blocks of business;

Ins 50.79(2)(c)4. 4. Criteria for determining asset adequacy, including the precise basis for determining if assets are adequate to cover reserves under moderately adverse conditions or other conditions as specified in relevant actuarial standards of practice; and

Ins 50.79(2)(c)5. 5. Whether the effect of federal income taxes was considered and the method of treating reinsurance in the asset adequacy analysis.

Ins 50.79(2)(d) (d) Summary of material changes in methods, procedures, or assumptions from prior year's asset adequacy analysis.

Ins 50.79(2)(e) (e) Summary of results.

Ins 50.79(2)(f) (f) Conclusions.

Ins 50.79(3) (3) Details of the regulatory asset adequacy issues summary.

Ins 50.79(3)(a)(a) The regulatory asset adequacy issues summary shall include all of the following:

Ins 50.79(3)(a)1. 1. Descriptions 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 shall 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 remaining in force.

Ins 50.79(3)(a)2. 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.

Ins 50.79(3)(a)3. 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.

Ins 50.79(3)(a)4. 4. Comments on any interim results that may be of significant concern to the appointed actuary, including, the impact of any insufficiency of assets to support the payment of benefits and expenses and the establishment of statutory reserves during one or more interim periods.

Ins 50.79(3)(a)5. 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.

Ins 50.79(3)(a)6. 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.

Ins 50.79(3)(b) (b) The regulatory asset adequacy issues summary shall contain the name of the company for which the regulatory asset adequacy issues summary is being supplied and shall be signed and dated by the appointed actuary rendering the actuarial opinion.

Ins 50.79(4) (4) Conformity to standards of practice. The memorandum shall include the following statement: “Actuarial methods, considerations and analyses used in the preparation of this memorandum conform to the appropriate standards of practice as promulgated by the actuarial standards board, which standards form the basis for this memorandum."

Ins 50.79(5) (5) Use of assets supporting the interest maintenance reserve and the asset valuation reserve. An appropriate allocation of assets in the amount of the interest maintenance reserve, whether positive or negative, shall be used in any asset adequacy analysis. Analysis of risks regarding asset default may include an appropriate allocation of assets supporting the AVR; these AVR assets may not be applied for any other risks with respect to reserve adequacy. Analysis of these and other risks may include assets supporting other mandatory or voluntary reserves available to the extent not used for risk analysis and reserve support. The amount of the assets used for the AVR shall be disclosed in the table of reserves and liabilities of the opinion and in the memorandum. The method used for selecting particular assets or allocated portions of assets shall be disclosed in the memorandum.

Ins 50.79(6) (6) Documentation. The appointed actuary shall retain on file, for at least 7 years, sufficient documentation so that it will be possible to determine the procedures followed, the analyses performed, the bases for assumptions and the results obtained.

Ins 50.79 History History: Cr. Register, December, 1995, No. 480, eff. 1-1-96; CR 04-071: cr. (1) (e), (2) (a) 6. and 7., (b) 5., (d), (3) and (5), am. (2) (intro.), (a) 4. and 5., (b) 3. and 4., (c) 3. to 5., renum. (2) (d), (e) and (3) to be (2) (e), (f) and (4), sub. (6) renum. from Ins 50.80 (5) Register December 2004 No. 588, eff. 12-31-05; CR 14-008: cr. (1) (f), am. (3) (a) 4. Register August 2014 No. 704, eff. 9-1-14.

subch. VI of ch. Ins 50 Subchapter VI — Risk Retention and Purchasing Groups

Ins 50.85 Ins 50.85 Risk retention groups and risk purchasing groups.

Ins 50.85(1)(1) The commissioner is constituted attorney to receive service of summons, notices, orders, pleadings and all other legal process relating to any court or administrative agency in this state for all risk retention groups and risk purchasing groups as to any proceeding arising out of the business of insurance in this state, insurance activities in this state, or out-of-state activities related to policies on risks within this state.

Ins 50.85(2) (2) A risk retention group or risk purchasing group may not conduct an insurance business or engage in any insurance activity in this state until it registers with the commissioner and designates the commissioner as its agent for the purposes described under sub. (1). If a risk retention group or risk purchasing group fails to designate the commissioner as required by this section, the commissioner is deemed appointed as provided by sub. (1).

Ins 50.85 History History: Cr. Register, December, 1995, No. 480, eff. 1-1-96.