The Texas Department of Insurance published a bulletin announcing they are adopting the recent changes to the NAIC’s valuation manual on reserving and related requirements.
Under Texas Insurance Code §425.073, the commissioner must adopt the valuation manual and any changes made. When the NAIC makes changes to the manual, TDI must adopt the changes or make similar changes. The NAIC made changes to the valuation manual on August 15, 2024, which TDI is also adopting.
The changes to the 2025 valuation manual include:
- Qualified actuaries are required for principle-based reserving
- Removal of a 12% increase to claim incidence rates for credit disability, based on more recent experience
- Authorize the valuation rate for contracts of less than $250 million (non-jumbo contracts) be determined daily as opposed to quarterly
- Allowing the valuation rate for funding agreements to be determined monthly rather than annually
- Addition of explicit requirements for international mortality to principle-based reserving for life products
- Allow for variable annuity principle-based reserving prescribed assumption updates
The adoption order was issued on December 3, 2024, and is effective immediately.
The adoption order can be found here.