SB 696 Summary

• Establishes the "Standard Valuation Law" requiring life insurance companies to incorporate principle-based valuation methodology from the National Association of Insurance Commissioners (NAIC) valuation manual for determining reserve requirements and minimum valuation standards for policies issued on or after the operative date.

• Requires companies to establish reserves using principle-based valuation that quantifies benefits, guarantees, and funding associated with contracts while reflecting conditions including unfavorable events with reasonable probability of occurrence, and to file principle-based valuation reports upon request.

• Authorizes the Insurance Commissioner to impose annual assessments on insurance companies ranging from $5,000 to $75,000 based on gross annual life insurance premiums written in California to fund implementation of principle-based valuation requirements.

• Exempts actuarial opinions, memoranda supporting those opinions, principle-based valuation reports, and experience data submitted to the commissioner from disclosure under the California Public Records Act and from subpoena or discovery in private civil actions.

• Allows the commissioner to hire department staff and retain nondepartment actuaries and consultants to implement principle-based valuation, and establishes an Office of Principle-Based Reserving within the Department of Insurance.