New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

The Office of General Counsel issued the following opinion on April 20, 2001 representing the position of the New York State Insurance Department.

Re: Requirements for Filing Actuarial Opinions with Annual Statements for Property/Casualty Insurance Companies.

Question Presented:

What are the requirements for filing actuarial opinions with annual statements for property/casualty insurance companies?

Conclusion:

The Insurance Department requires that property/casualty insurance company annual statements conform to the requirements of the National Association of Insurance Commissioners (NAIC), which mandates the filing of actuarial opinions with annual statements.

Facts:

The inquirer did not provide any specific facts relative to the above question.

Analysis:

The Insurance Department requires property/casualty insurers to file the form of the annual statement conforming to the requirements of the National Association of Insurance Commissioners (NAIC). Pursuant to the NAIC Annual Statement Instructions for Property/Casualty Insurers, a Statement of Actuarial Opinion must be included with the annual statement setting forth a "qualified actuary’s" opinion relative to loss and loss adjustment expense reserves. See NAIC Annual Statement Instructions, Property/Casualty Insurers 8-14 (1999), regarding the format for actuarial opinions; see also The New York State Insurance Department’s web site at http://www.ins.state.ny.us for further information on filing an annual statement.

Additionally, N.Y. Ins. Law § 4117 (g) (1) (McKinney 2000), which applies to property/casualty insurers, provides as follows:

(g) (1) Effective with the nineteen hundred ninety annual statement, every licensed property/casualty insurer required to file such annual statement with the superintendent by the following April first, shall unless exempted by the superintendent, engage a qualified independent loss reserve specialist for the following year to render an opinion as to the adequacy of its loss and loss adjustment expense reserves when two of three of such insurer’s results of its loss and loss adjustment expense ratios . . . are outside of the indicated acceptable ranges . . .

N.Y. Ins. Law § 4117 (g) (2) (McKinney 2000) provides as follows:

(g) (2) Such opinion shall be submitted by the qualified loss reserve

specialist to the insurer and the superintendent, by such date established by the superintendent. For the purposes of this section, a "qualified independent loss reserve specialist" shall mean a person who is not an employee, principal or direct or indirect owner of the insurer and is a member of the Casualty Actuarial Society, or has such other experience as is acceptable to the superintendent to assure a professional

opinion on the adequacy of loss and loss adjustment expense ratios.

Thus, unless exempted by the superintendent, a licensed property/casualty insurer is required to engage a "qualified independent loss reserve specialist" for the following year to render an opinion as to the adequacy of its loss and loss adjustment expense reserves when two or three of its loss and loss adjustment expense ratios, as indicated by the statute, are outside of the acceptable ranges.

For further information, you may contact Attorney Pascale Joasil at the New York City office.