Current through Register Vol. 48, No. 12, March 22, 2024
a) For each plan of
insurance with separate rates for preferred and standard nonsmoker lives, an
insurer may use the Super Preferred Nonsmoker, Preferred Nonsmoker, and
Residual Standard Nonsmoker Tables to substitute for the nonsmoker mortality
table found in the 2001 CSO Mortality Table to determine minimum reserves. At
the time of election and annually thereafter, except for business valued under
the Residual Standard Nonsmoker Table, the appointed actuary shall certify
that:
1) The present value of death benefits
over the next 10 years after the valuation date, using the anticipated
mortality experience without recognition of mortality improvement beyond the
valuation date for each class, is less than the present value of death benefits
using the valuation basic table corresponding to the valuation table being used
for that class.
2) The present
value of death benefits over the future life of the contracts, using
anticipated mortality experience without recognition of mortality improvement
beyond the valuation date for each class, is less than the present value of
death benefits using the valuation basic table corresponding to the valuation
table being used for that class.
b) For each plan of insurance with separate
rates for preferred and standard smoker lives, an insurer may use the Preferred
Smoker and Residual Standard Smoker Tables to substitute for the smoker
mortality table found in the 2001 CSO Mortality Table to determine minimum
reserves. At the time of election and annually thereafter, for business valued
under the Preferred Smoker Table, the appointed actuary shall certify that:
1) The present value of death benefits over
the next 10 years after the valuation date, using the anticipated mortality
experience without recognition of mortality improvement beyond the valuation
date for each class, is less than the present value of death benefits using the
preferred smoker valuation basic table corresponding to the valuation table
being used for that class.
2) The
present value of death benefits over the future life of the contracts, using
anticipated mortality experience without recognition of mortality improvement
beyond the valuation date for each class, is less than the present value of
death benefits using the preferred smoker valuation basic table.
c) Every authorized insurer using
the 2001 CSO Preferred Class Structure Table shall annually file with the
Director, or statistical agent designated by the Director, no sooner than
December 31, 2008, statistical reports showing mortality and such other
information as the Director may deem necessary or expedient for the
administration of the provisions of this Part.
d) For purposes of the cases described in
subsections (d)(1) and (2), the reserve for the mean reserve method shall be
defined as the mean reserve minus the deferred premium asset, and for the
mid-terminal reserve method shall include the unearned premium reserve. A
company may estimate and adjust its accounting on an aggregate basis in order
to meet the conditions to use the 2001 CSO Preferred Class Structure Table. The
use of the 2001 CSO Preferred Class Structure Table for the valuation of
policies issued prior to January 1, 2007 shall not be permitted in any
statutory financial statement in which a company reports, with respect to any
policy or portion of a policy coinsured, either of the following:
1) In cases in which the mode of payment of
the reinsurance premium is less frequent than the mode of payment of the policy
premium, a reserve credit that exceeds, by more than the amount specified in
this subsection (d)(1) as Y, the gross reserve calculated before reinsurance. Y
is the amount of the gross reinsurance premium that:
A) provides coverage for the period from the
next policy premium due date to the earlier of the end of the policy year and
the next reinsurance premium due date; and
B) would be refunded to the ceding entity
upon the termination of the policy.
2) In cases in which the mode of payment of
the reinsurance premium is more frequent than the mode of payment of the policy
premium, a reserve credit that is less than the gross reserve, calculated
before reinsurance, by an amount that is less than the amount specified in this
subsection (d)(2) as Z. Z is the amount of the gross reinsurance premium that
the ceding entity would need to pay the assuming company to provide reinsurance
coverage from the period of the next reinsurance premium due date to the next
policy premium due date minus any liability established for the proportionate
amount not remitted to the reinsurer.
