.12 Actuarial Disclosure and Reserves.

A. Actuarial Memorandum.

(1) A qualified actuary shall describe the accelerated benefits, the risks, the expected costs, and the calculation of statutory reserves in an actuarial memorandum accompanying each filing.

(2) The insurer shall maintain in its files descriptions of the bases and procedures used to calculate benefits payable under this chapter. The descriptions shall be made available for examination by the Commissioner upon request.

B. Reserves.

(1) When benefits are provided through the acceleration of benefits under a group or individual life policy or a rider to such policies, an actuary shall determine policy reserves in accordance with the Standard Valuation Law referenced in Insurance Article, §§5-301—5-317, Annotated Code of Maryland.

(2) A member in good standing of the American Academy of Actuaries shall determine all valuation assumptions used in constructing the reserves as appropriate for statutory valuation purposes.

(3) Mortality tables and interest currently recognized for life insurance reserves by the National Association of Insurance Commissioners may be used by the actuary as appropriate assumptions for other provisions incorporated in the policy form.

(4) The actuary shall follow both actuarial standards and certification for good and sufficient reserves.

(5) Reserves in the aggregate shall be sufficient to cover:

(a) Policies upon which no claim has yet arisen; and

(b) Policies upon which an accelerated claim has arisen.

(6) The actuary is not required to establish additional reserves for policies and certificates that provide actuarially equivalent benefits.

(7) The insurer shall include policy liens and policy loans, including accrued interest, as assets of the company for reporting purposes as stated in Insurance Article, §5-101(3)—(7), Annotated Code of Maryland.

(8) For a policy on which the policy lien exceeds the policy’s statutory reserve liability, the insurer shall hold the excess as a non-admitted asset.