Alaska Administrative Code
Title 3 - Commerce, Community, and Economic Development
Part 2 - Division of Insurance
Chapter 21 - Insurer - Financial
Article 10 - Valuation of Life Insurance Policies
3 AAC 21.930 - Segmented reserves
Universal Citation: 3 AK Admin Code 21.930
Current through February 24, 2025
(a) Segmented reserves are equal to the present value of all future guaranteed benefits minus the present value of all future net premiums to the mandatory expiration date of a policy subject to the following:
(1) the reserves must be
calculated using segments produced by the contract segmentation
method;
(2) net premiums within
each segment must be a uniform percentage of the respective guaranteed gross
premiums within the segment;
(3)
the uniform percentage for each segment at the beginning of the segment must be
determined so that the present value of the net premiums within the segment is
equal to (PVDB) + (PVUCV) - (UGCV) + (NP), where
(A) (PVDB) is the present value of death
benefits within the segment;
(B)(PVUCV) is the present value of any
unusual guaranteed cash value as set out in
3
AAC 21.915(b) at the end of the
segment;
(C)(UGCV) is any unusual
guaranteed cash value as set out in
3
AAC 21.915(b) at the beginning of the
segment;
(D)(NP) is, for the first
segment only, the greater of zero and (NLP) ( OYTP), where
(i) (NLP) is a net level annual premium equal
to the present value at the date of issue of the benefits provided for in the
first segment after the first policy year divided by the present value at the
date of issue of an annuity of one per year payable on the first and each
subsequent anniversary date of the policy within the first segment on which a
premium is due, where the NLP may not exceed the NLP for a 19-year premium
whole life plan of insurance with the same renewal year equivalent level amount
at an age one year higher than the age at issue of the policy; and
(ii)(OYTP) is a net one-year term premium for
benefits provided in the first policy year;
(4) the interest rate used in determining the
present value for any policy may not be greater than the maximum valuation
interest rate determined with a guarantee duration equal to the sum Of the
lengths of all segments of the policy.
(b) Basic reserves and deficiency reserves calculated under (a) of this section must include future benefits and net premiums in all segments.
Authority:AS 21.06.090
AS 21.18.110
AS 21.18.160
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