Current through Reg. 50, No. 187; September 24, 2024
(1) Authority.
This rule is adopted by the commission pursuant to Sections
625.121(5)(a)3. and 627.476(9),
F.S.
(2) Scope.
This rule applies to preneed life insurance policies and
certificates as defined in Section Four (4) of this rule, and similar policies
and certificates.
(3)
Purpose.
The purpose of this rule is to recognize the inadequacy of
the 2001 Commissioners Standard Ordinary Life Valuation Mortality Table for use
in determining the minimum standard of valuation and the minimum standard
nonforfeiture value, and to require the continued use of the 1980 Commissioners
Standard Ordinary Life Valuation Mortality Table for use in determining the
minimum standard of valuation and the minimum standard nonforfeiture
value.
(4) Definitions.
(a) The term "2001 CSO Mortality Table" means
the 2001 Commissioners Standard Ordinary Life Valuation Mortality Table,
consisting of separate rates of mortality for male and female lives, developed
by the American Academy of Actuaries CSO Task Force from the Valuation Basic
Mortality Table developed by the Society of Actuaries Individual Life Insurance
Valuation Mortality Task Force, and adopted by the NAIC in December 2002. The
2001 CSO Mortality Table is included in the Proceedings of the NAIC (2nd
Quarter 2002). Unless the context indicates otherwise, the "2001 CSO Mortality
Table" includes both the ultimate form of that table and the select and
ultimate form of that table and includes both the smoker and nonsmoker
mortality tables and the composite mortality tables. It also includes both the
age-nearest-birthday and age-last-birthday bases of the mortality
tables.
(b) The term "Ultimate 1980
CSO" means the Commissioners' 1980 Standard Ordinary Life Valuation Mortality
Tables (1980 CSO) without ten-year (10-year) selection factors, incorporated
into the 1980 amendments to the NAIC Standard Valuation Law approved in
December 1983.
(c) For the purposes
of this rule, preneed insurance is any life insurance policy or certificate
that is issued in combination with, in support of, with an assignment to, or as
a guarantee for a prearrangement agreement for goods and services to be
provided at the time of and immediately following the death of the insured.
Goods and services may include, but are not limited to embalming, cremation,
body preparation, viewing or visitation, coffin or urn, memorial stone, and
transportation of the deceased. The status of the policy or contract as preneed
insurance is determined at the time of issue in accordance with the policy form
filing.
(5) Minimum
Valuation Mortality Standards.
For preneed insurance contracts, as defined in paragraph
(4)(c), and similar policies and contracts, the minimum mortality standard for
determining reserve liabilities and non-forfeiture values for both male and
female insureds shall be the Ultimate 1980 CSO.
(6) Minimum Valuation Interest Rate
Standards.
(a) The interest rates used in
determining the minimum standard for valuation of preneed life insurance shall
be the calendar year statutory valuation interest rates as defined in Section
625.121(6),
F.S.
(b) The interest rates used in
determining the minimum standard for nonforfeiture values for preneed life
insurance shall be the calendar year statutory nonforfeiture interest rates as
defined in Section 627.476(9)(i),
F.S.
(7) Minimum
Valuation Method Standards.
(a) The method
used in determining the minimum standard for valuation of preneed life
insurance shall be the method as defined in Section
625.121(5),
F.S.
(b) The method used in
determining the minimum standard for nonforfeiture values for preneed life
insurance shall be the method as defined in Section
627.476(9),
F.S.
(8) Transition
Rules.
(a) For preneed insurance policies
issued on or after the effective date of this rule and before January 1, 2012,
the 2001 CSO may be used as the minimum standard for reserves and minimum
standard for non-forfeiture benefits for both male and female
insureds.
(b) If an insurer elects
to use the 2001 CSO as a minimum standard for any policy issued on or after the
effective date of this rule and before January 1, 2012, the insurer shall
provide, as a part of the actuarial opinion memorandum submitted in support of
the company's asset adequacy testing, an annual written notification to the
domiciliary commissioner. The notification shall include:
1. A complete list of all preneed policy
forms that use the 2001 CSO as a minimum standard;
2. A certification signed by the appointed
actuary stating that the reserve methodology employed by the company in
determining reserves for the preneed policies issued after the effective date
and using the 2001 CSO as a minimum standard, develops adequate reserves (For
the purposes of this certification, the preneed insurance policies using the
2001 CSO as a minimum standard cannot be aggregated with any other policies.);
and
3. Supporting information
regarding the adequacy of reserves for preneed insurance policies issued after
the effective date of this rule and using the 2001 CSO as a minimum standard
for reserves.
(c) Preneed
insurance policies issued on or after January 1, 2012, must use the Ultimate
1980 CSO in the calculation of minimum nonforfeiture values and minimum
reserves.
(9) This rule
is applicable to preneed life policies and certificates as defined in paragraph
(4)(c) issued on or after January 1, 2009.
Rulemaking Authority 624.308(1), 625.121(5)(a)3.,
627.476(9) FS.
Law Implemented 625.121(5)(a)3., 627.476(9)
FS.
New 9-30-09.
