INSURANCE DEPARTMENT

6.6.6703 APPLICABILITY ARM 6.6.6701, 6.6.6703, 6.6.6705, 6.6.6707, 6.6.6709, 6.6.6711, and 6.6.6713 shall apply to all life insurance policies, with or without nonforfeiture values, issued on or after January 1, 2000, subject to the following exceptions: these rules shall not app…

6.6.6705 DEFINITIONS For purposes of ARM 6.6.6701 through 6.6.6713: "Basic reserves" means reserves calculated in accordance with 33-2-411, MCA. "Contract segmentation method" means the method of dividing the period from issue to mandatory expiration of a policy into successive s…

6.6.6707 GENERAL CALCULATION REQUIREMENTS FOR BASIC RESERVES AND PREMIUM DEFICIENCY RESERVES At the election of the insurer for any one or more specified plans of life insurance, the minimum mortality standard for basic reserves may be calculated using the 1980 CSO valuation tabl…

6.6.6709 CALCULATION OF MINIMUM VALUATION STANDARD FOR POLICIES WITH GUARANTEED NONLEVEL GROSS PREMIUMS OR GUARANTEED NONLEVEL BENEFITS (OTHER THAN UNIVERSAL LIFE POLICIES) Basic reserves shall be calculated as the greater of the segmented reserves and the unitary reserves. Both …

6.6.6711 CALCULATION OF MINIMUM VALUATION STANDARD FOR FLEXIBLE PREMIUM AND FIXED PREMIUM UNIVERSAL LIFE INSURANCE POLICIES THAT CONTAIN PROVISIONS RESULTING IN THE ABILITY OF A POLICYOWNER TO KEEP A POLICY Policies with a secondary guarantee include: a policy with a guarantee th…

6.6.6713 SELECT MORTALITY FACTORS This rule contains tables of select mortality factors that are the bases to which the respective percentage of ARM 6.6.6707(1)(b), (2)(b) and (2)(c) are applied. The six tables of select mortality factors contained herein include: male, aggregate…

6.6.6720 PURPOSE AND INTENT The purpose and intent ofARM 6.6.6720 through 6.6.6727is to establish uniform, national standards governing reserve financing arrangements pertaining to life insurance policies containing guaranteed nonlevel gross premiums, guaranteed nonlevel benefits…

6.6.6721 APPLICABILITY ARM 6.6.6720 through 6.6.6727pertain to all covered policies, in force as of and after September 1, 2022. ARM 6.6.6720 through 6.6.6727shall apply to reinsurance treaties that cede liabilities pertaining to covered policies, as that term is defined in ARM 6…

6.6.6722 EXEMPTIONS ARM 6.6.6720 through 6.6.6727do not apply to the situations described below: reinsurance of: Policies that satisfy the criteria for exemption set forth in ARM 6.6.6709(5) and (6) and (11) through (13) or ARM 6.6.6709(14), and which are issued before the later …

6.6.6723 DEFINITIONS For purposes of ARM 6.6.6720 through 6.6.6727: "Actuarial method" means the methodology used to determine the required level of primary security, as described in ARM 6.6.6725. "Covered policies" means, subject to the exemptions described in ARM 6.6.6722, thos…

6.6.6724 THE ACTUARIAL METHOD The actuarial method to establish the required level of primary security for each reinsurance treaty subject toARM 6.6.6720 through 6.6.6727shall be VM-20, applied on a treaty-by-treaty basis, including all relevant definitions, from the Valuation Ma…

6.6.6725 REQUIREMENTS APPLICABLE TO COVERED POLICIES TO OBTAIN CREDIT FOR REINSURANCE; OPPORTUNITY FOR REMEDIATION Subject to the exemptions described inARM 6.6.6722and the provisions of (2) below, credit for reinsurance shall be allowed with respect to ceded liabilities pertaini…

6.6.6726 PROHIBITION AGAINST AVOIDANCE No insurer that has covered policies as to whichARM 6.6.6720 through 6.6.6727apply (as set forth in ARM 6.6.6721) shall take any action or series of actions, or enter into any transaction or arrangement or series of transactions or arrangeme…

6.6.6727 SEVERABILITY If any provision ofARM 6.6.6720 through 6.6.6727is held invalid, the remainder shall not be affected. Authorizing statute(s): 33-1-313, 33-2-1517, MCA Implementing statute(s): 33-2-1216, 33-2-1217, MCA History: NEW, 2022 MAR p. 1691, Eff. 9/1/22.

6.6.6801 PURPOSE The purpose of these rules is to set forth the financial and reporting requirements which the commissioner deems necessary for the regulation of captive insurance companies, as authorized by 33-28-206 , MCA. Authorizing statute(s): 33-28-206, MCA Implementing sta…

6.6.6802 DEFINITIONS For purposes of these rules: "Company" means captive insurance company or companies, unless otherwise specified. "Commissioner" means the Commissioner of Securities and Insurance, Montana State Auditor. Authorizing statute(s): 33-28-206, MCA Implementing stat…

6.6.6803 ORGANIZATIONAL EXAMINATION In addition to processing the application, the commissioner may perform an organizational investigation or examination before an applicant is licensed as a captive insurance company. This investigation or examination may consist of a general su…

6.6.6804 ADDITIONAL SECURITY If the commissioner deems that the financial condition of the company warrants additional security, the commissioner may require the company to deposit through the State Auditor's Office in the manner described in 33-2-604, MCA, cash or securities app…

6.6.6805 PERMITTED REINSURANCE A captive insurance company authorized to do business in this state may take credit for reserves on risks ceded to a reinsurer subject to the following conditions: no credit is allowed for reinsurance if the reinsurance contract does not result in t…

6.6.6806 INSURANCE MANAGERS AND INTERMEDIARIES No person shall, within the state of Montana, act as a manager, broker, agent, salesperson, or reinsurance intermediary for a company without the authorization of the commissioner. Application for such authorization must be in a form…

6.6.6807 CHANGES IN DIRECTORS - RESTRICTIONS ON FEES AND GIFTS Each company must report to the commissioner within 30 days after any change in its executive officers or directors, including in its report a statement of the business and professional affiliations of any new executi…

6.6.6808 CONFLICT OF INTEREST Each company must prepare and adopt a conflict of interest statement for officers, directors and key employees. This statement must disclose that the individual does not have outside commitments, personal or otherwise, that would inhibit the individu…

6.6.6809 ACQUISITION OF CONTROL OF OR MERGER WITH A DOMESTIC COMPANY No person, other than the issuer shall make a tender offer of or a request or invitation for tenders of, or enter into any agreement to exchange securities for, seek to acquire, or acquire in the open market or …

6.6.6810 CHANGE IN BUSINESS AND OTHER INFORMATION (REPEALED) Authorizing statute(s): 33-28-206, MCA Implementing statute(s): 33-28-102, MCA History: NEW, 2002 MAR p. 171, Eff. 2/1/02; REP, 2011 MAR p. 2516, Eff. 11/26/11.

6.6.6811 ANNUAL AUDIT Each company must have an annual audit by an independent certified public accountant, authorized by the commissioner, and must file the audited financial report with the commissioner within 180 days of the company's fiscal year end. The annual audit report i…

6.6.6812 THE OPINION OF THE CERTIFIED PUBLIC ACCOUNTANT Financial statements of the company furnished pursuant to these rules must be examined by a certified public accountant in accordance with generally accepted auditing standards. The opinion of the certified public accountant…

6.6.6813 REPORT OF EVALUATION OF INTERNAL CONTROLS Each company shall file with the commissioner a report that includes an evaluation, in accordance with generally accepted auditing standards, of the internal controls of the company relating to the methods and procedures used in …

6.6.6814 ACCOUNTANT'S LETTER The accountant who prepares the annual opinion for the company, must furnish the company, for inclusion in the filing of the audited annual report, a letter stating: that the accountant is independent with respect to the company and conforms to the st…

6.6.6815 FINANCIAL STATEMENTS The financial statements which must be filed annually with the commissioner must include the following: balance sheet; statement of gain or loss from operations; statement of changes in financial position; statement of changes in capital paid up, gro…

6.6.6816 CERTIFICATION OF LOSS RESERVES AND LOSS EXPENSE RESERVES The annual audit report must include an opinion of the adequacy of the company's loss reserves and loss expense reserves. The individual who certifies the adequacy of the reserves must be approved by the commission…

6.6.6817 DESIGNATION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT Each company, within 90 days after receiving its license, shall report to the commissioner in writing, the name and address of the independent certified public accountant retained to conduct the annual audit as requi…

6.6.6818 NOTIFICATION OF ADVERSE FINANCIAL CONDITION A company must require the certified public accountant to immediately notify in writing an officer and all members of the board of directors of the company of any determination by the independent certified public accountant tha…

6.6.6819 AVAILABILITY AND MAINTENANCE OF WORKING PAPERS OF THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT Each company shall require the independent certified public accountant to make available for review by the commissioner the working papers prepared in the conduct of the audit o…

6.6.6820 REVOCATION OF THE COMPANY'S LICENSE The commissioner may revoke the license of a company in accordance with 33-28-109, MCA, including, but not limited to, the following reasons: if the company has not commenced business in accordance with its plan of operation within two…

6.6.6821 LIMIT OF RISK -- CAPTIVE RISK RETENTION GROUPS A captive risk retention group shall not retain any risk on any one occurrence in an amount exceeding 10% of its surplus as regards policyholders. The maximum retained risk on any one occurrence pursuant to (1) may be increa…

6.6.6901 PURPOSE The purpose of ARM 6.6.6901 through 6.6.6904 is to provide rules that interpret statutes and define terms within the Insurance Information and Privacy Protection Act, Title 33, chapter 19, MCA. The goals of these rules are to ensure that the purpose and scope of …

6.6.6902 NOTICE EXCEPTIONS FOR CERTIFICATE HOLDERS "Personally identifiable information" sufficient to trigger a notice to certificate holders as described in 33-19-202 (2) (a) , MCA, does not include names, addresses, birth dates and identification numbers, used in any combinati…

6.6.6903 NOTICE REQUIREMENTS A licensee is not subject to the notice requirements set forth in 33-19-202 , MCA, if the licensee is an employee, agent or other representative of an insurance institution and: the insurance institution otherwise complies with, and provides the notic…

6.6.6904 DEIDENTIFICATION FOR GROUP POLICYHOLDER AUDITS For purposes of 33-19-306 (14) , MCA, medical record information provided to a group policyholder is deemed to be "edited to prevent the identification of the applicant, policyholder, or certificate holder" if the following …

6.6.7001 PURPOSE The purpose of these rules is to establish standards for developing and implementing administrative, technical and physical safeguards to protect the security, confidentiality and integrity of an individual's personal information requiring protection pursuant to …

6.6.7002 DEFINITIONS For purposes of this subchapter, the following definitions apply: "Individual" is defined in 33-19-104 , MCA. Any reference to the term "customer" in this subchapter means "individual." "Information systems" means the electronic or physical methods used to ac…

6.6.7003 EXEMPTION BASED ON FEDERAL STANDARDS FOR PRIVACY AND SECURITY OF INDIVIDUALLY IDENTIFIABLE HEALTH INFORMATION The obligations imposed under this subchapter do not apply to a licensee that is a covered entity under the provisions of federal regulations that are part of th…

6.6.7007 INFORMATION SECURITY PROGRAM Each licensee shall implement a comprehensive written information security program that includes administrative, technical and physical safeguards for the protection of personal information. The administrative, technical and physical safeguar…

6.6.7008 OBJECTIVE OF INFORMATION SECURITY PROGRAM A licensee's information security program shall be designed to: ensure the security and confidentiality of personal information; protect against any anticipated threats or hazards to the security or integrity of the information; …

6.6.7009 EXAMPLES OF METHODS OF DEVELOPMENT AND IMPLEMENTATION The actions and procedures described in ARM 6.6.7010 through 6.6.7013 are examples of methods of implementation of the requirements of ARM 6.6.7007 and 6.6.7008. These examples are non-exclusive illustrations of actio…

6.6.701 PURPOSE The purpose of this subchapter is to provide rules for life insurance policy illustrations that will protect consumers and foster consumer education. The rules provide illustration formats, prescribe standards to be followed when illustrations are used, and specif…

6.6.7010 ASSESS RISK The licensee: identifies reasonable foreseeable internal or external threats that could result in unauthorized disclosure, misuse, alteration or destruction of an individual's personal information or a licensee's information systems; assesses the likelihood a…

6.6.7011 MANAGE AND CONTROL RISK The licensee: designs its information security program to control the identified risks, commensurate with the sensitivity of the information, as well as the complexity and scope of the licensee's activities; trains staff, as appropriate, to implem…

6.6.7012 OVERSEE SERVICE PROVIDER ARRANGEMENTS The licensee: exercises appropriate due diligence in selecting its service providers; and requires its service providers to implement appropriate measures designed to meet the objectives of this rule, and where indicated by the licen…

6.6.7013 ADJUST THE PROGRAM The licensee monitors, evaluates and adjusts, as appropriate, the information security program in light of any relevant changes in technology, the sensitivity of an individual's personal information, internal or external threats to information, and the…