(a) A company calculating reserves under this section shall calculate reserves for ordinary life insurance, accident and health insurance contracts, credit life contracts, group life contracts, annuities, or deposit-type contracts in this state as if the policies were issued before the operative date of the valuation manual. For such policies issued after the operative date of the valuation manual, any mortality and interest rates defined by the valuation manual for net premium reserves shall be used. A company calculating reserves under this section shall comply with Section 27-36A-4(a) instead of Section 27-36A-4(b) and meet all of the following conditions:

(1) The company has less than three hundred million dollars ($300,000,000) of ordinary life premium.

(2) If the company is a member of a group of life insurers, the group has combined ordinary life premium of less than six hundred million dollars ($600,000,000).

(3) The company reported total adjusted capital of at least 450 percent of authorized control level risk capital in the risk-based capital report for the prior calendar year.

(4) The appointed actuary has provided an unqualified opinion on the reserves in accordance with Section 27-36A-4 for the prior calendar year.

(5) The company has provided a certification by a qualified actuary that any universal life policy with a secondary guarantee issued after the operative date of the valuation manual meets the definition of a non-material secondary guarantee universal life product as defined in the valuation manual.

(b) For purposes of subdivisions (1) and (2) of subsection (a), ordinary life premium is measured as direct premium plus reinsurance assumed from an unaffiliated company, as reported in the prior calendar year annual statement.

(c) An Alabama-domiciled company intending to calculate reserves as described in this section must file a statement with the commissioner prior to July 1 of each year certifying that these conditions are met for the current calendar year based on premiums and other values from the prior financial statements. The commissioner may reject the statement prior to September 1 if the commissioner specifically identifies risk in the affected policies that requires a principle-based valuation and require the company to comply with the valuation manual requirements.

(d) A company that reports reserves using the alternative valuation shall also be exempt from the principle-based reserves corporate governance requirements, certification of effectiveness of principle-based reserves internal controls, and a principle-based reserves valuation report.