New Mexico Statutes Chapter 59A. Insurance Code § 59A-8A-9. Requirements of a principle-based valuation

(1) quantifies 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 with a reasonable probability of occurring during the lifetime of the contracts and, for a policy or contract with significant tail risk, reflects conditions appropriately adverse to quantify the tail risk;

(2) incorporates assumptions, risk analysis methods, financial models and management techniques that are consistent with, but not necessarily identical to, those used in the company's overall risk assessment process and that recognize potential differences in financial reporting structures and prescribed assumptions or methods;

(3) incorporates assumptions that:

(4) provides margins for uncertainty, including adverse deviation and estimation error, whose sizes vary in proportion to the margin and resulting reserve.

(1) establish procedures for corporate governance and oversight of the actuarial valuation function that are consistent with those provided for in the valuation manual;

(2) design its internal controls of principle-based valuation 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;

(3) each year, provide to the superintendent and to the company's board of directors a certification of effectiveness of the internal controls of the company's principle-based valuation that are in place at the end of the preceding calendar year; and

(4) develop and, upon the request of the superintendent, file a principle-based valuation report that complies with the standards prescribed in the valuation manual.