Compilation of Rules and Regulations of the State of Georgia
Department 120 - OFFICE OF COMMISSIONER OF INSURANCE, SAFETY FIRE COMMISSIONER AND INDUSTRIAL LOAN COMMISSIONER
Chapter 120-2 - RULES OF COMMISSIONER OF INSURANCE
Subject 120-2-90 - STANDARD NONFORFEITURE AND VALUATION FOR USE IN DETERMINING MINIMUM RESERVE LIABILITIES AND NONFORFEITURE BENEFITS REGULATION
Rule 120-2-90-.06 - Applicability of the 2001 CSO Mortality Table and 2001 CSO Preferred Class Structure Mortality Table to Life Insurance Policies Valued Pursuant to Appendix A-830 of the NAIC Accounting Practices and Procedures Manual

(a) In determining the applicability of Appendix A-830 to any universal life policy, the net level reserve premium for the secondary guarantee period is based on the ultimate mortality rates in the 2001 CSO Mortality Table or the ultimate mortality rates in the 2001 CSO Preferred Class Structure Mortality Table.

(b) All calculations under the contract segmentation method are made using the 2001 CSO Mortality Rate, and, if elected, the optional minimum mortality standard for deficiency reserves stipulated in 120-2-90-.06(1)(d) of this regulation. The value of "qx+k+t-1" is the valuation mortality rate for deficiency reserves in policy year k+t, but using the unmodified select mortality rates if modified select mortality rates are used in the computation of deficiency reserves.

(c) For purposes of general calculation requirements for basic reserves, the 2001 CSO Mortality Table or 2001 CSO Preferred Class Structure Mortality Table is the minimum standard.

(d) For purposes of general calculation requirements for deficiency reserves, the 2001 CSO Mortality Table or 2001 CSO Preferred Class Structure Mortality Table is the minimum standard. If select mortality rates are used, they may be multiplied by X percent for durations in the first segment, subject to the conditions specified in § 17c of Appendix A-830. In demonstrating compliance with those conditions, the demonstrations may not combine the results of tests that utilize the 1980 CSO Mortality Table with those tests that utilize the 2001 CSO Mortality Table or 2001 CSO Preferred Class Structure Mortality Table, unless the combination is explicitly required by regulation or necessary to be in compliance with relevant Actuarial Standards of Practice.

(e) For calculating the minimum value of basic reserves for policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits (other than universal life policies), the valuation mortality table used in determining the tabular cost of insurance shall be the ultimate mortality rates in the 2001 CSO Mortality Table or 2001 CSO Preferred Class Structure Mortality Table.

(f) For determining the optional exemption for yearly renewable term reinsurance for policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits (other than universal life policies), the calculations shall use the maximum valuation interest rate and the ultimate mortality rates in the 2001 CSO Mortality Table or 2001 CSO Preferred Class Structure Mortality Table.

(g) For determining the optional exemption for attained-age-based yearly renewable term life policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits (other than universal life policies), the calculations shall use the maximum valuation interest rate and the ultimate mortality rates in the 2001 CSO Mortality Table or 2001 CSO Preferred Class Structure Mortality Table.

(h) For determining the exemption for unitary reserves for certain n-year renewable term life polices with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits (other than universal life policies), the calculations shall use the ultimate mortality rates in the 2001 CSO Mortality Table or 2001 CSO Preferred Class Structure Mortality Table.

(i) For flexible premium and fixed premium universal life policies that contain provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period, the one-year valuation premium for purposes of identifying policies with a secondary guarantee shall be calculated using the ultimate mortality rates in the 2001 CSO Mortality Table or 2001 CSO Preferred Class Structure Mortality Table.