Current through August 31, 2023
01.
Basic Reserves. Reserves
calculated per Section
41-612(5), Idaho
Code. (4-6-23)
02.
Contract
Segmentation Method. Method of dividing the period from issue to
mandatory expiration of a policy into successive segments, where each segment's
length is the period from the end of the prior segment (from policy inception,
for the first segment) to the end of the latest policy year as determined
below. All calculations are made using the 1980 CSO Valuation Tables, and, if
elected, the optional minimum mortality standard for deficiency reserves set
forth in Subsection 011.02.
(4-6-23)
03.
Deficiency
Reserves. Excess, if greater than zero (0), of (4-6-23)
a. Minimum reserves calculated per Section
41-612(10), Idaho
Code, over (4-6-23)
b. Basic
reserves. (4-6-23)
04.
Guaranteed Gross Premiums. Life insurance policy premiums that are
guaranteed and determined at issue. (4-6-23)
05.
Maximum Valuation Interest
Rates. Interest rates defined in Section
41-612(4b), Idaho
Code (Computation of Minimum Standard by Calendar Year of Issue), used to
determine the minimum standard for valuating life insurance policies.
(4-6-23)
06.
1980 CSO
Valuation Tables. Commissioners' 1980 Standard Ordinary Mortality Table
(1980 CSO Table) without "ten year select factors," and variations of the 1980
CSO Table approved by the NAIC, such as the smoker and nonsmoker versions
approved in December 1983. (4-6-23)
07.
Scheduled Gross Premium.
Smallest illustrated gross premium at issue for other than universal life
insurance policies. For universal life insurance policies, scheduled gross
premium means the smallest specified premium described in Paragraph 013.01.c.,
if any, or else the minimum premium described in Paragraph 013.01.d.
(4-6-23)
08.
Segmented
Reserves. (4-6-23)
a. Reserves
calculated using segments produced by the contract segmentation method, equal
to the present value of all future guaranteed benefits less the present value
of all future net premiums to the policy's mandatory expiration, where the net
premiums in each segment are a uniform percentage of the respective guaranteed
gross premiums within the segment. The uniform percentage for each segment is
such that, at the start of the segment, the present value of the net premiums
within the segment equals: (4-6-23)
i. The
present value of the death benefits within the segment, plus (4-6-23)
ii. The present value of any unusual,
guaranteed cash value (see Subsection
012.04) occurring at the end of
the segment, less (4-6-23)
iii. Any
unusual guaranteed cash value occurring at the start of the segment, plus
(4-6-23)
iv. For the first segment
only, the excess of the Item one (1) over Item two (2), as follows: (4-6-23)
(1) 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 (1) per year payable on the first and each
subsequent anniversary within the first segment on which a premium falls due.
But the net level annual premium will not exceed the net level annual premium
on the nineteen (19) year premium whole life plan of insurance of the same
renewal year equivalent level amount at an age one (1) year higher than the age
at issue of the policy. (4-6-23)
(2) A net one (1) year term premium for the
benefits provided for in the first policy year.
(4-6-23)
b.
Each segment's length is determined by the "contract segmentation method."
(4-6-23)
c. The interest rates in a
policy's present value calculations cannot exceed the maximum valuation
interest rate, determined with a guarantee duration equal to the sum of the
lengths of the policy's segments. (4-6-23)
d. For both basic reserves and deficiency
reserves computed by the contract segmentation method, present values will
include future benefits and net premiums in the current segment and in all
subsequent segments. (4-6-23)
09.
Tabular Cost of Insurance.
The net single premium at the start of a policy year for one (1) year term
insurance in the amount of the guaranteed death benefit in that policy year.
(4-6-23)
10.
Ten Year Select
Factors. The factors adopted with the 1980 amendments to the NAIC
Standard Valuation Law. (4-6-23)
11.
Unitary Reserves. (4-6-23)
a. The present value of all future guaranteed
benefits less the present value of all future modified net premiums, where:
(4-6-23)
i. Guaranteed benefits and modified
net premiums are considered to the mandatory expiration of the policy; and
(4-6-23)
ii. Modified net premiums
are a uniform percentage of the respective guaranteed gross premiums, where the
uniform percentage is such that, at issue, the present value of the net
premiums equals the present value of all death benefits and pure endowments,
plus the excess of Item one (1) over Item two (2), as follows: (4-6-23)
(1) 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 (1) per year payable on the first and each subsequent
anniversary of the policy on which a premium falls due. But the net level
annual premium will not exceed the net level annual premium on the nineteen
(19) year premium whole life plan of insurance of the same renewal year
equivalent level amount at an age one (1) year higher than the age at issue of
the policy. (4-6-23)
(2) A net one
(1) year term premium for the benefits provided for in the first policy year.
(4-6-23)
b. The
interest rates used in the present value calculations for any policy will not
exceed the maximum valuation interest rate, determined with a guarantee
duration equal to the length from issue to the mandatory expiration of the
policy. (4-6-23)
12.
Universal Life Insurance Policy. Any individual life insurance
policy for which separately identified interest credits (other than in
connection with dividend accumulations, premium deposit funds, or other
supplementary accounts) and mortality or expense charges are made to the
policy. (4-6-23)
