By: Hancock	S.B. No. 1379

	A BILL TO BE ENTITLED
	AN ACT
	relating to the standard valuation for life insurance, accident and
	health insurance, and annuities.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 425.052, Insurance Code, is amended by
	amending Subsection (a) and adding Subsection (c) to read as
	follows:
	(a)  In this subchapter:
	(1)  "Accident and health insurance" means contracts
	that incorporate morbidity risk and provide protection against
	economic loss resulting from accident, sickness, or medical
	conditions and as may be specified in the valuation manual.
	(2)  "Appointed actuary" means a qualified actuary who
	is appointed in accordance with the valuation manual to prepare the
	actuarial opinion required by Section 425.054.
	(3)  "Company" means an entity that:
	(A)  has written, issued, or reinsured life
	insurance contracts, accident and health insurance contracts, or
	deposit-type contracts in this state and has at least one such
	policy in force or on claim; or
	(B)  has written, issued, or reinsured life
	insurance contracts, accident and health insurance contracts, or
	deposit-type contracts in any state and is required to hold a
	certificate of authority to write life insurance, accident and
	health insurance, or deposit-type contracts in this state.
	(4)  "Deposit-type contract" means a contract that does
	not incorporate mortality or morbidity risk and as may be specified
	in the valuation manual.
	(5)  "Life insurance" means contracts that incorporate
	mortality risk, including annuity and pure endowment contracts, and
	as may be specified in the valuation manual.
	(6)  "Policyholder behavior" means any action a
	policyholder, a contract holder, or any other person with the right
	to elect options, such as a certificate holder, may take under a
	policy or contract subject to this subchapter, including lapse,
	withdrawal, transfer, deposit, premium payment, loan,
	annuitization, or benefit elections prescribed by the policy or
	contract but excluding events of mortality or morbidity that result
	in benefits prescribed in their essential aspects by the terms of
	the policy or contract.
	(7)  "Principle-based valuation" means the valuation
	described by Section 425.074.
	(8)  "Qualified actuary" means an individual who is
	qualified to sign the applicable statement of actuarial opinion in
	accordance with the American Academy of Actuaries' qualification
	standards for actuaries signing such statements and who meets the
	requirements specified in the valuation manual.
	(9)  "Reserves"[, "reserves"] means reserve
	liabilities.
	(10)  "Tail risk" means a risk that occurs either where
	the frequency of low probability events is higher than expected
	under a normal probability distribution or where there are observed
	events of very significant size or magnitude.
	(11)  "Valuation manual" means the manual of valuation
	instructions adopted by the commissioner by rule.
	(c)  The definitions under Subsection (a) of "accident and
	health insurance," "appointed actuary," "company," "deposit-type
	contract," "life insurance," "policyholder behavior,"
	"principle-based valuation," "qualified actuary," and "tail risk"
	apply only on and after the operative date of the valuation manual.
	SECTION 2.  The heading to Section 425.053, Insurance Code,
	is amended to read as follows:
	Sec. 425.053.  ANNUAL VALUATION OF RESERVES FOR POLICIES AND
	CONTRACTS ISSUED BEFORE OPERATIVE DATE OF VALUATION MANUAL.
	SECTION 3.  Section 425.053, Insurance Code, is amended by
	amending Subsections (a) and (c) and adding Subsections (d) and (e)
	to read as follows:
	(a)  The department shall annually value or cause to be
	[have] valued the reserves for all outstanding life insurance
	policies and annuity and pure endowment contracts of each life
	insurance company engaged in business in this state issued before
	the operative date of the valuation manual.  [The department may
	certify the amount of those reserves, specifying the mortality
	table or tables, rate or rates of interest, and methods, including
	the net level premium method or another method, used in computing
	those reserves.]
	(c)  Instead of valuing the reserves as required by
	Subsection (a) for a foreign or alien company, the department may
	accept any valuation made by or for the insurance supervisory
	official of another state or jurisdiction if[:
	[(1)]  the valuation complies with the minimum standard
	provided by this subchapter[; and
	[(2)     the official accepts as sufficient and valid for
	all legal purposes a certificate of valuation made by the
	department that states the valuation was made in a specified manner
	according to which the aggregate reserves would be at least as large
	as they would be if computed in the manner prescribed by the law of
	that state or jurisdiction].
	(d)  Except as otherwise provided by this subchapter,
	policies and contracts issued on or after the operative date of the
	valuation manual are governed by Section 425.0535.
	(e)  The minimum standards for the valuation of policies and
	contracts issued before the operative date of the valuation manual
	are as provided by Sections 425.058 through 425.071 and Section
	425.072(b), as applicable.  Sections 425.072(a), 425.073, and
	425.074 do not apply to a policy or contract described by this
	subsection.
	SECTION 4.  Subchapter B, Chapter 425, Insurance Code, is
	amended by adding Section 425.0535 to read as follows:
	Sec. 425.0535.  ANNUAL VALUATION OF RESERVES FOR POLICIES
	AND CONTRACTS ISSUED ON OR AFTER OPERATIVE DATE OF VALUATION
	MANUAL. (a)  The commissioner shall annually value, or cause to be
	valued, the reserves for all outstanding life insurance contracts,
	annuity and pure endowment contracts, accident and health
	contracts, and deposit-type contracts of each company issued on or
	after the operative date of the valuation manual as provided by this
	section.
	(b)  In lieu of the valuation of the reserves required of a
	foreign or alien company, the commissioner may accept a valuation
	made, or caused to be made, by the insurance supervisory official of
	another state if the valuation complies with the minimum standard
	provided by this subchapter.
	(c)  Sections 425.072(a), 425.073, and 425.074 apply to all
	policies and contracts issued on or after the operative date of the
	valuation manual.
	SECTION 5.  The heading to Section 425.054, Insurance Code,
	is amended to read as follows:
	Sec. 425.054.  ACTUARIAL OPINION OF RESERVES BEFORE
	OPERATIVE DATE OF VALUATION MANUAL [REQUIRED].
	SECTION 6.  Section 425.054, Insurance Code, is amended by
	amending Subsection (a) and adding Subsections (a-1), (j), (k),
	(l), (m), (n), (o), (p), and (q) to read as follows:
	(a)  This section applies only to an actuarial opinion of
	reserves before the operative date of the valuation manual.
	Actuarial opinions of reserves on or after the operative date of the
	valuation manual are governed by Section 425.0545.
	(a-1)  For purposes of this section, "qualified actuary"
	means:
	(1)  a qualified actuary, as that term is defined by
	Section 802.002; or
	(2)  a person who, before September 1, 1993, satisfied
	the requirements of the former State Board of Insurance to submit an
	opinion under former Section 2A(a)(1), Article 3.28.
	(j)  Except as provided by Subsections (l), (n), (o), and
	(p), any document or other information in the possession or control
	of the department that is a memorandum in support of the opinion or
	other material provided by the company to the commissioner in
	connection with a memorandum is confidential and not subject to:
	(1)  disclosure under Chapter 552, Government Code;
	(2)  subpoena;
	(3)  discovery; or
	(4)  admissibility as evidence in a private civil
	action.
	(k)  The commissioner or any person who receives a document
	or other information described by Subsection (j) while acting under
	the authority of the commissioner may not testify and may not be
	compelled to testify in a private civil action concerning the
	document or other information.
	(l)  The commissioner may:
	(1)  share documents or other information, including
	the confidential documents or information described by Subsection
	(j), with another state, federal, or international regulatory
	agency, with the National Association of Insurance Commissioners
	and its affiliates and subsidiaries, and with state, federal, and
	international law enforcement authorities, provided that the
	recipient agrees to maintain the confidentiality of the document or
	information;
	(2)  receive documents or other information, including
	confidential documents or information, from the National
	Association of Insurance Commissioners and its affiliates and
	subsidiaries, and from regulatory and law enforcement officials of
	other foreign or domestic jurisdictions, provided that the
	commissioner shall maintain as confidential any document or
	information received with notice or understanding that it is
	confidential under the laws of the jurisdiction that is the source
	of the document or information; and
	(3)  enter into agreements governing sharing and use of
	documents and other information consistent with this section.
	(m)  Disclosing information or providing a document to the
	commissioner under this section, or sharing information as
	authorized under this section, does not result in a waiver of any
	applicable privilege or claim of confidentiality that may apply to
	the document or information.
	(n)  A memorandum in support of the opinion, and any other
	material provided by the company to the commissioner in connection
	with the memorandum, may be subject to subpoena for the purpose of
	defending an action seeking damages from the actuary submitting the
	memorandum by reason of an action required by this section or rules
	adopted under this section.
	(o)  The memorandum or other material provided by the company
	to the commissioner in connection with the memorandum may otherwise
	be released by the commissioner with the written consent of the
	company, or to the American Academy of Actuaries on receipt of a
	request stating that the memorandum or other material is required
	for the purpose of professional disciplinary proceedings and
	setting forth procedures satisfactory to the commissioner for
	preserving the confidentiality of the memorandum or other material.
	(p)  The memorandum ceases to be confidential if:
	(1)  any portion of the memorandum is cited by the
	company in its marketing;
	(2)  the memorandum is cited by the company before a
	government agency other than a state insurance department; or
	(3)  the memorandum is released by the company to the
	news media.
	(q)  This section does not prohibit the commissioner from
	using information acquired under this section in the furtherance of
	a legal or regulatory action relating to the administration of this
	code.
	SECTION 7.  Subchapter B, Chapter 425, Insurance Code, is
	amended by adding Section 425.0545 to read as follows:
	Sec. 425.0545.  ACTUARIAL OPINION OF RESERVES AFTER
	OPERATIVE DATE OF VALUATION MANUAL. (a)  A company that has
	outstanding life insurance contracts, accident and health
	insurance contracts, or deposit-type contracts in this state and is
	subject to regulation by the department shall annually submit the
	opinion of the appointed actuary as to whether the reserves and
	related actuarial items held in support of the policies and
	contracts are computed appropriately, are based on assumptions that
	satisfy contractual provisions, are consistent with prior reported
	amounts, and are in compliance with applicable laws of this state.
	An opinion under this section must comply with provisions of the
	valuation manual, including in regard to any items necessary to its
	scope.
	(b)  Unless exempted by the valuation manual, a company
	described by Subsection (a) shall include with the opinion required
	by that subsection an opinion of the same appointed actuary
	concerning whether the reserves and related actuarial items held in
	support of the policies and contracts specified in the valuation
	manual, when considered in light of the assets held by the company
	with respect to the reserves and related actuarial items, including
	investment earnings on the assets and considerations anticipated to
	be received and retained under the policies and contracts, make
	adequate provision for the company's obligations under the policies
	and contracts, including benefits under and expenses associated
	with the policies and contracts.
	(c)  Each opinion required by this section must:
	(1)  be in the form and contain the substance that is
	specified by the valuation manual and is acceptable to the
	commissioner;
	(2)  be submitted with the annual statement reflecting
	the valuation of reserves for each year ending on or after the
	operative date of the valuation manual;
	(3)  apply to all policies and contracts subject to
	this section, plus other actuarial liabilities specified by the
	valuation manual; and
	(4)  be based on standards adopted from time to time by
	the Actuarial Standards Board or its successor, and on any
	additional standards prescribed by the valuation manual.
	(d)  In the case of an opinion required to be submitted by a
	foreign or alien company, the commissioner may accept the opinion
	filed by the company with the insurance supervisory official of
	another state if the commissioner determines that the opinion
	reasonably meets the requirements applicable to a company domiciled
	in this state.
	SECTION 8.  Subsection (a), Section 425.055, Insurance Code,
	is amended to read as follows:
	(a)  A memorandum [that, in form and substance, complies with
	the commissioner's rules] shall be prepared to support each
	actuarial opinion required by Section 425.054 or 425.0545.  The
	form and substance of each supporting memorandum must comply with
	the commissioner's rules and, for actuarial opinions subject to
	Section 425.0545, the valuation manual.
	SECTION 9.  Subsection (a), Section 425.056, Insurance Code,
	is amended to read as follows:
	(a)  Except in cases of fraud or wilful misconduct or as
	provided by Subsection (b), a person who certifies an opinion under
	Section 425.054 or 425.0545 is not liable for damages to a person,
	other than the life insurance company covered by the opinion, for an
	act, error, omission, decision, or other conduct with respect to
	the person's opinion.
	SECTION 10.  Section 425.057, Insurance Code, is amended to
	read as follows:
	Sec. 425.057.  DISCIPLINARY ACTION:  COMPANY OR PERSON
	CERTIFYING OPINION. A company or person that certifies an opinion
	under Section 425.054 or 425.0545 and that violates Section
	425.054, 425.0545, or 425.055 or rules adopted under those sections
	is subject to disciplinary action under Chapter 82.
	SECTION 11.  The heading to Section 425.058, Insurance Code,
	is amended to read as follows:
	Sec. 425.058.  COMPUTATION [VALUATION] OF MINIMUM STANDARD
	[POLICY OR CONTRACT]:  GENERAL RULE.
	SECTION 12.  The heading to Section 425.059, Insurance Code,
	is amended to read as follows:
	Sec. 425.059.  COMPUTATION [VALUATION] OF MINIMUM STANDARD
	FOR CERTAIN ANNUITIES AND PURE ENDOWMENT CONTRACTS.
	SECTION 13.  The heading to Section 425.064, Insurance Code,
	is amended to read as follows:
	Sec. 425.064.  COMMISSIONERS RESERVE VALUATION METHOD FOR
	LIFE INSURANCE AND ENDOWMENT BENEFITS.
	SECTION 14.  The heading to Section 425.065, Insurance Code,
	is amended to read as follows:
	Sec. 425.065.  COMMISSIONERS ANNUITY RESERVE VALUATION
	METHOD FOR ANNUITY AND PURE ENDOWMENT BENEFITS.
	SECTION 15.  Subchapter B, Chapter 425, Insurance Code, is
	amended by adding Sections 425.072, 425.073, 425.074, 425.075,
	425.076, and 425.077 to read as follows:
	Sec. 425.072.  MINIMUM STANDARD FOR ACCIDENT AND HEALTH
	INSURANCE CONTRACTS. (a)  The standard prescribed by the valuation
	manual for accident and health insurance contracts issued on or
	after the operative date of the valuation manual is the minimum
	standard of valuation required under Section 425.0535.
	(b)  For disability, accident and sickness, and accident and
	health insurance contracts issued before the operative date of the
	valuation manual, the minimum standard of valuation is the standard
	in existence before the operative date of the valuation manual.
	Sec. 425.073.  VALUATION MANUAL FOR CERTAIN POLICIES.
	(a)  Except as otherwise provided by this section, for policies
	issued on or after the operative date of the valuation manual, the
	standard prescribed by the valuation manual is the minimum standard
	of valuation required under Section 425.0535.
	(b)  The commissioner by rule shall adopt a valuation manual
	and determine the operative date of the valuation manual.  A
	valuation manual adopted by the commissioner under this section
	must be substantially similar to the valuation manual approved by
	the National Association of Insurance Commissioners.  The operative
	date must be January 1 of the first calendar year immediately
	following a year in which, on or before July 1, the commissioner
	determines that:
	(1)  the valuation manual has been adopted by the
	National Association of Insurance Commissioners by an affirmative
	vote of at least 42 members, or three-fourths of the members voting,
	whichever is greater;
	(2)  the National Association of Insurance
	Commissioners Standard Valuation Model Law, as amended by the
	National Association of Insurance Commissioners in 2009, or
	legislation including substantially similar terms and provisions,
	has been enacted by states representing greater than 75 percent of
	the direct premiums written as reported in the following annual
	statements submitted for 2008:
	(A)  life insurance and accident and health annual
	statements;
	(B)  health annual statements; or
	(C)  fraternal annual statements; and
	(3)  the National Association of Insurance
	Commissioners Standard Valuation Model Law, as amended by the
	National Association of Insurance Commissioners in 2009, or
	legislation including substantially similar terms and provisions,
	has been enacted by at least 42 of the following 55 jurisdictions:
	(A)  the 50 United States;
	(B)  American Samoa;
	(C)  the United States Virgin Islands;
	(D)  the District of Columbia;
	(E)  Guam; and
	(F)  Puerto Rico.
	(c)  After a valuation manual has been adopted by the
	commissioner by rule, any changes to the valuation manual must be
	adopted by rule and must be consistent with changes adopted by the
	National Association of Insurance Commissioners.  Unless a change
	in the valuation specifies a later effective date, the effective
	date for changes to the valuation manual may not be earlier than
	January 1 of the year immediately following the date on which the
	commissioner determines that the changes to the valuation manual
	have been adopted by the National Association of Insurance
	Commissioners by an affirmative vote representing:
	(1)  at least three-fourths of the members of the
	National Association of Insurance Commissioners voting, but not
	less than a majority of the total membership; and
	(2)  members of the National Association of Insurance
	Commissioners representing jurisdictions totaling greater than 75
	percent of the direct premiums written as reported in the most
	recently available annual statements as provided by Subsection
	(b)(2).
	(d)  The valuation manual must specify:
	(1)  the minimum valuation standards for and
	definitions of the policies or contracts subject to Section
	425.0535, including:
	(A)  the commissioner's reserve valuation method
	for life insurance contracts subject to Section 425.0535;
	(B)  the  commissioner's annuity reserve
	valuation method for annuity contracts subject to Section 425.0535;
	and
	(C)  the minimum reserves for all other policies
	or contracts subject to Section 425.0535;
	(2)  the policies or contracts that are subject to the
	requirements of a principle-based valuation under Section 425.074
	and the minimum valuation standards consistent with those
	requirements, including:
	(A)  the requirements for the format of reports to
	the commissioner under Section 425.074(b)(3), which must include
	the information necessary to determine if a valuation is
	appropriate and in compliance with this subchapter;
	(B)  the assumptions prescribed for risks over
	which the company does not have significant control or influence;
	and
	(C)  the procedures for corporate governance and
	oversight of the actuarial function, and a process for appropriate
	waiver or modification of the procedures;
	(3)  the policies that are not subject to a
	principle-based valuation under Section 425.074;
	(4)  the data and form of data required under Section
	425.074, to whom the data must be submitted, and other desired
	requirements, including requirements concerning data analyses and
	reporting of analyses; and
	(5)  other requirements, including requirements
	relating to reserve methods, models for measuring risk, generation
	of economic scenarios, assumptions, margins, use of company
	experience, disclosure, certification, reports, actuarial opinions
	and memorandums, transition rules, and internal controls.
	(e)  With respect to policies that are not subject to a
	principle-based valuation under Section 425.074 as described by
	Subsection (d)(3), the minimum valuation standard specified in the
	valuation manual must:
	(1)  be consistent with the minimum valuation standard
	before the operative date of the valuation manual; or
	(2)  develop reserves that quantify the benefits and
	guarantees, and the funding, associated with the contracts and
	their risks at a level of conservatism that reflects conditions
	that include unfavorable events that have a reasonable probability
	of occurring.
	(f)  In the absence of a specific valuation requirement or if
	a specific valuation requirement in the valuation manual does not
	in the commissioner's opinion comply with this subchapter, the
	company shall, with respect to the requirement, comply with minimum
	valuation standards prescribed by the commissioner by rule.
	(g)  The commissioner may employ or contract with a qualified
	actuary, at the expense of the company, to perform an actuarial
	examination of the company and provide an opinion concerning the
	appropriateness of any reserve assumption or method used by the
	company, or to review and provide an opinion on a company's
	compliance with any requirement of this subchapter.  The
	commissioner may rely on the opinion, regarding provisions
	contained within this subchapter, of a qualified actuary engaged by
	the insurance supervisory official of another state.
	(h)  The commissioner may require a company to change an
	assumption or method as necessary in the commissioner's opinion to
	comply with a requirement of the valuation manual or this
	subchapter.
	(i)  The commissioner may take other disciplinary action as
	permitted under Chapter 82.
	Sec. 425.074.  PRINCIPLE-BASED VALUATION REQUIRED. (a)  A
	company shall establish reserves using a principle-based valuation
	that meets the conditions for policies or contracts provided by the
	valuation manual.  At a minimum, the valuation shall:
	(1)  quantify the benefits and guarantees, and the
	funding, associated with the contracts and their risks at a level of
	conservatism that reflects conditions that include unfavorable
	events that have a reasonable probability of occurring during the
	terms of the contracts;
	(2)  with respect to policies and contracts with
	significant tail risk, reflect conditions appropriately adverse to
	quantify the tail risk;
	(3)  incorporate assumptions, risk analysis methods,
	and financial models and management techniques that are consistent
	with those used in the company's overall risk assessment process,
	while recognizing potential differences in financial reporting
	structures and any prescribed assumptions or methods;
	(4)  incorporate assumptions:
	(A)  prescribed by the valuation manual; or
	(B)  established:
	(i)  using the company's available
	experience, to the extent that data is relevant and statistically
	credible; or
	(ii)  to the extent that the company data is
	not available, relevant, or statistically credible, using other
	relevant, statistically credible experience; and
	(5)  provide margins for uncertainty including adverse
	deviation and estimation error, such that the greater the
	uncertainty the larger the margin and resulting reserve.
	(b)  A company using a principle-based valuation for one or
	more policies or contracts subject to this section and as specified
	by the valuation manual shall:
	(1)  establish procedures for corporate governance and
	oversight of the actuarial valuation function consistent with
	procedures specified by the valuation manual;
	(2)  provide to the commissioner and the company's
	board of directors an annual certification of the effectiveness of
	the internal controls with respect to the principle-based
	valuation; and
	(3)  develop, and file with the commissioner on
	request, a principle-based valuation report that complies with
	standards prescribed in the valuation manual.
	(c)  A company's internal controls with respect to the
	principle-based valuation must be designed to ensure that all
	material risks inherent in the liabilities and associated assets
	subject to the valuation are included in the valuation, and that
	valuations are made in accordance with the valuation manual. The
	certification described by Subsection (b)(2) must be based on the
	controls in place as of the end of the preceding calendar year.
	(d)  A principle-based valuation may include a prescribed
	formulaic reserve component.
	Sec. 425.075.  EXPERIENCE REPORTING FOR POLICIES IN FORCE ON
	OR AFTER OPERATIVE DATE OF VALUATION MANUAL. A company shall submit
	mortality, morbidity, policyholder behavior, or expense experience
	and other data as prescribed in the valuation manual.
	Sec. 425.076.  CONFIDENTIALITY. (a)  This section applies
	to:
	(1)  a memorandum in support of an opinion submitted
	under Section 425.0545;
	(2)  a principle-based valuation report developed
	under Section 425.074(b)(3);
	(3)  any documents or other information, produced or
	obtained by or disclosed to the commissioner or any other person:
	(A)  in connection with the memorandum or
	principle-based valuation report;
	(B)  in the course of an examination made under
	Section 425.073(g), except that if an examination report or other
	material prepared in connection with an examination made under
	Subchapter B, Chapter 401, is not held as privileged and
	confidential under Chapter 401, an examination report or other
	material prepared in connection with an examination made under
	Section 425.073(g) is not confidential to the same extent as if the
	examination report or other material had been prepared under
	Subchapter B, Chapter 401;
	(C)  in support of, or in connection with, an
	annual certification by the company under Section 425.074(b)(2)
	evaluating the effectiveness of the company's internal controls
	with respect to a principle-based valuation; or
	(D)  in the development of a principle-based
	valuation report developed under Section 425.074(b)(3); and
	(4)  any documents or other information submitted by
	the company under Section 425.074, or documents or information
	created, produced, or obtained by the commissioner in connection
	with the submissions, including experience data to the extent that
	the data contain information that could potentially identify a
	company or individual.
	(b)  Except as provided by this section, a memorandum and any
	documents or other information described by Subsection (a) are:
	(1)  confidential and not subject to disclosure under
	Chapter 552, Government Code;
	(2)  privileged from subpoena; and
	(3)  privileged from discovery and inadmissible as
	evidence in a private civil action.
	(c)  This section does not prohibit the commissioner from
	using information acquired under this section in the furtherance of
	a legal or regulatory action relating to the administration of this
	code.
	(d)  The commissioner or any person who receives a document
	or other information described by Subsection (a) while acting under
	the authority of the commissioner may not testify and may not be
	compelled to testify in a private civil action concerning the
	content of the document or other information.
	(e)  Subject to Subsection (f), the commissioner may share
	information described by Subsection (a) with:
	(1)  another state, federal, or international
	regulatory agency;
	(2)  the National Association of Insurance
	Commissioners and its affiliates and subsidiaries;
	(3)  in the case of information described by Subsection
	(a)(1) or (2), the Actuarial Board for Counseling and Discipline or
	its successor on receipt of a request stating that the information
	is required for the purpose of professional disciplinary
	proceedings; and
	(4)  state, federal, and international law enforcement
	officials.
	(f)  With respect to Subsections (e)(1), (2), and (3), the
	commissioner may not share documents or other information described
	by Subsection (a) unless the recipient agrees and has the legal
	authority to agree to maintain the confidentiality and privileged
	status of the documents or information in the same manner and to the
	same extent as is required for the commissioner.
	(g)  The commissioner may receive documents and other
	information, including otherwise confidential and privileged
	documents or information, from the National Association of
	Insurance Commissioners and its affiliates and subsidiaries, from
	regulatory or law enforcement officials of other foreign or
	domestic jurisdictions, and from the Actuarial Board for Counseling
	and Discipline or its successor, and shall maintain as confidential
	or privileged any document or other information received with
	notice or the understanding that it is confidential or privileged
	under the laws of the jurisdiction that is the source of the
	document or other information.
	(h)  The commissioner may enter agreements governing sharing
	and use of information consistent with this section.
	(i)  Disclosing information or providing a document to the
	commissioner under this section, or sharing information as
	authorized under this section, does not result in a waiver of any
	applicable privilege or claim of confidentiality that may apply to
	the document or information.
	(j)  A privilege established under the law of any state or
	jurisdiction that is substantially similar to the privilege
	established under this section is enforceable in any proceeding in,
	and in any court of, this state.
	(k)  In this section, a reference to a regulatory agency, law
	enforcement agency, or the National Association of Insurance
	Commissioners includes an employee, agent, consultant, or
	contractor of the agency or association, as applicable.
	(l)  Notwithstanding this section, any confidential
	information specified in Subsection (a) may be:
	(1)  subject to subpoena for the purpose of defending
	an action seeking damages from the appointed actuary submitting the
	related memorandum in support of an opinion submitted under Section
	425.054 or 425.0545 or a principle-based valuation report developed
	under Section 425.074(b)(3) by reason of an action required by this
	subchapter or by rules adopted under this subchapter; and
	(2)  released by the commissioner with the written
	consent of the company.
	(m)  A memorandum in support of an opinion submitted under
	Section 425.0545 or a principle-based valuation report developed
	under Section 425.074(b)(3) ceases to be confidential if:
	(1)  any portion of the memorandum or report is cited by
	the company in its marketing;
	(2)  the company publicly volunteers the memorandum or
	report to a government agency other than a state insurance
	department; or
	(3)  the memorandum or report is released by the
	company to the news media.
	Sec. 425.077.  SINGLE STATE EXEMPTION. (a)  The
	commissioner may exempt specific product forms or product lines of
	a domestic company that is licensed and doing business only in this
	state from the requirements of Section 425.073 if:
	(1)  the commissioner has issued an exemption in
	writing to the company and has not subsequently revoked the
	exemption in writing; and
	(2)  the company computes reserves using assumptions
	and methods used before the operative date of the valuation manual
	in addition to any requirements established by the commissioner and
	adopted by rule.
	(b)  Sections 425.058 through 425.071 and Section 425.072(b)
	apply to a company granted an exemption under this section.
	SECTION 16.  The commissioner of insurance shall determine
	whether the National Association of Insurance Commissioners and a
	sufficient number of states and other jurisdictions have adopted a
	valuation manual as required by Subsection (b), Section 425.073,
	Insurance Code, as added by this Act.  As soon as practicable after
	the commissioner of insurance determines that the National
	Association of Insurance Commissioners and a sufficient number of
	states and other jurisdictions have adopted the valuation manual as
	required by that section, the commissioner of insurance shall adopt
	rules necessary to implement this Act.
	SECTION 17.  This Act takes effect January 1, 2014.