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 21.949 - Definitions

Universal Citation: 3 AK Admin Code 21.949

Current through February 24, 2025

In 3 AAC 21.900 - 3 AAC 21.949,

(1) "basic reserves" means reserves calculated in accordance with AS 21.18.110(b)(2);

(2) "deficiency reserves" means the larger of the following amounts:

(A) zero;

(B) minimum reserves calculated in accordance with AS 21.18.110(b)(4), minus basic reserves;

(3) "guaranteed gross premiums" means the premiums under a life insurance policy that are guaranteed and determined at issue;

(4) "maximum valuation interest rates" means the interest rates defined in AS 21.18.110(c) that are used to determine the minimum reserves of a life insurance policy;

(5) "1980 CSO valuation tables" means the Commissioner's 1980 Standard Ordinary Mortality Table without 10-year selection factors and variations of the Commissioner's 1980 Standard Ordinary Mortality Table approved by the National Association of Insurance Commissioners;

(6) "scheduled gross premium" means

(A) for a life insurance policy that is not a universal life policy, the smallest illustrated gross premium at issue date of the policy;

(B) for a universal life policy,
(i) the smallest specified premium defined under 3 AAC 21.920(e) (5); or

(ii) if the policy does not have a specified premium, the minimum premium defined under 3 AAC 21.920(e) (1);

(7) "segment" means a subdivision of the period from issue to mandatory expiration of a policy, determined under the contract segmentation method set out in 3 AAC 21.925;

(8) "tabular cost of insurance" means the net single premium at the beginning of a policy year for one-year term insurance in the amount of the guaranteed death benefit in that policy year;

(9) "unitary reserves" means the present value of all future guaranteed benefits minus the present value of all future modified net premiums in which

(A) guaranteed benefits and modified net premiums are considered to the mandatory expiration of the policy;

(B) modified net premiums are a uniform percentage of the respective guaranteed gross premiums, with the uniform percentage determined so that at issue the present value of the net premiums equals the present value of all death benefits and pure endowments, plus 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 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 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; and

(C) the interest rate used in determining the present value for any policy is not greater than the maximum valuation interest rate determined with a guarantee duration equal to the length of time from the date of issue to the mandatory expiration of the policy;

(10) "universal life insurance policy" means an individual life insurance policy that provides for separately identified interest credits other than in connection with dividend accumulations, premium deposit funds, or other supplementary accounts, when separately identified mortality and expense charges are made to the policy.

Authority:AS 21.06.090

AS 21.18.110

AS 21.18.160

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