40 Pa. C.S. § 7102

Current through Pa Acts 2024-53, 2024-56 through 2024-92

Section 7102 - Definitions

The following words and phrases when used in this chapter shall have the meanings given to them in this section unless the context clearly indicates otherwise:

"Accident and health insurance." A contract that incorporates morbidity risk and provides protection against economic loss resulting from accident, sickness or medical conditions and as may be specified in the valuation manual.

"Appointed actuary." A qualified actuary who is appointed in accordance with the valuation manual to prepare the actuarial opinion required by section 7114 (relating to actuarial opinion of reserves on or after operative date of valuation manual).

"Commissioner." The Insurance Commissioner of the Commonwealth.

"Company." An entity, including a fraternal benefit society, that:

(1) has written, issued or reinsured life insurance contracts, accident and health insurance contracts or deposit-type contracts in this Commonwealth and has at least one policy in force or on claim; or

(2) is required to hold a certificate of authority to write life insurance contracts, accident and health insurance contracts or deposit-type contracts in this Commonwealth.

"Department." The Insurance Department of the Commonwealth.

"Deposit-type contract." A contract that does not incorporate mortality or morbidity risks and as may be specified in the valuation manual.

"Experience data." Documents, materials, data and other information submitted by a company under section 7127 (relating to experience reporting for policies in force on or after operative date of valuation manual).

"Experience materials." Documents, materials, data and other information, including all working papers and copies of all these items created or produced in connection with experience data, which include any potentially company-identifying or personally identifiable information provided to or obtained by the commissioner.

"Fraternal benefit society." As provided for under Article XXIV of The Insurance Company Law of 1921.

"Group-wide supervisor." The chief insurance regulatory official who is:

(1) Authorized to engage in conducting and coordinating group-wide supervision activities.

(2) From the jurisdiction determined or acknowledged by the department under section 1406.2(c) of The Insurance Company Law of 1921 to have sufficient, significant contacts with the international insurance group.

"IAIS." The International Association of Insurance Supervisors or its successor organization.

"Life insurance." A contract that incorporates mortality risk, including an annuity or pure endowment contract, and as may be specified in the valuation manual.

"NAIC." The National Association of Insurance Commissioners, its subsidiaries or affiliates or its successor organization.

"Operative date of the valuation manual." The January 1 of the first calendar year following the first July 1 when all of the following have occurred:

(1) The valuation manual has been adopted by NAIC by an affirmative vote of at least 42 members or 75% of the members voting, whichever is greater.

(2) The Standard Valuation Law, as amended by NAIC in 2009, or legislation including substantially similar terms and provisions, has been enacted by both of the following:

(i) States representing more than 75% of the direct premiums written as reported for life, accident and health annual statements, health annual statements or fraternal annual statements submitted in 2008.

(ii) At least 42 of the 55 NAIC member jurisdictions, including the 50 states, American Samoa, the United States Virgin Islands, the District of Columbia, Guam and Puerto Rico.

"Policyholder behavior." An action taken by a policyholder, certificate holder, contract holder or any other person having the right to elect options as to a policy or contract subject to this chapter. The options shall:

(1) Include lapse, withdrawal, transfer, deposit, premium payment, loan, annuitization or benefit elections prescribed by the policy or contract.

(2) Exclude events of mortality or morbidity that result in benefits prescribed in their essential aspects by the terms of the policy or contract.

"Principle-based valuation." A reserve valuation that:

(1) Uses one or more methods or one or more assumptions determined by the insurer.

(2) Is required to comply with section 7126 (relating to requirements of principle-based valuation) as specified in the valuation manual.

"Qualified actuary." An individual who:

(1) Is qualified to sign the applicable statement of actuarial opinion in accordance with the American Academy of Actuaries qualification standards for actuaries signing these statements of actuarial opinion.

(2) Meets the requirements specified in the valuation manual.

"Reserve liabilities," "reserves" or "net value." An amount recorded in financial statements to reflect potential obligations.

"Tail risk." A risk that occurs where:

(1) the frequency of low probability events is higher than expected under a normal probability distribution; or

(2) there are observed events of very significant size or magnitude.

"The Insurance Company Law of 1921." The act of May 17, 1921 (P.L.682, No.284), known as The Insurance Company Law of 1921.

"Valuation manual." The manual of valuation instructions adopted by NAIC or as subsequently amended and adopted by NAIC. Unless a change in the valuation manual specifies a later effective date, a change to the valuation manual is effective on January 1 following the date when the change to the valuation manual has been adopted by NAIC by an affirmative vote representing both of the following:

(1) At least 75% of the members of NAIC voting, but not less than a majority of the total membership.

(2) Members of NAIC representing jurisdictions totaling more than 75% of the direct premiums written as reported in the most recently available life, accident and health annual statements, health annual statements or fraternal annual statements.

40 Pa.C.S. § 7102

Added by P.L. TBD 2016 No. 59, § 1, eff. 6/30/2016.