Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO:
KRS
304.12-085,
304.15-342
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
304.2-110 provides that the Executive
Director of Insurance may make reasonable regulations necessary for or as an
aid to the effectuation of any provision of the Kentucky Insurance Code.
KRS
304.15-342 establishes the use of the 1980
CSO and 1980 CET Tables of Mortality, and provides that any ordinary mortality
tables adopted after 1980 by the National Association of Insurance
Commissioners (NAIC) may be approved for use in Kentucky by administrative
regulation promulgated by the executive director. The NAIC has adopted certain
modifications of the 1980 CSO and 1980 CET tables of mortality for use where
necessary. This administrative regulation permits individual life insurance
policies to provide the same cash surrender values and paid-up nonforfeiture
benefits to both men and women.
Section
1. Definitions. As used in this administrative regulation:
(1) "1980 CSO Table, with or without Ten (10)
Year Select Mortality Factor" means that mortality table, consisting of
separate rates of mortality for male and female lives, developed by the Society
of Actuaries Committee to Recommend New Mortality Tables for Valuation of
Standard Individual Ordinary Life Insurance, incorporated in the 1980 NAIC
Amendments to the Model Standard Valuation Law and Standard Nonforfeiture Law
for Life Insurance, and referred to in those models as the Commissioners 1980
Standard Ordinary Mortality Table, with or without Ten (10) Year Select
Mortality Factors.
(2) "1980 CSO
Table (M), with or without Ten (10) Year Select Mortality Factors" means that
mortality table consisting of the rates of mortality for male lives from the
1980 CSO Table, with or without Ten (10) Year Select Mortality
Factors.
(3) "1980 CSO Table (F),
with or without Ten (10) Year Select Mortality Factors" means that mortality
table consisting of the rates of mortality for female lives from the 1980 CSO
Table, with or without Ten (10) Year Select Mortality Factors.
(4) "1980 CET Table" means that mortality
table consisting of separate rates of mortality for male and female lives,
developed by the Society of Actuaries Committee to Recommend New Mortality
Tables for Valuation of Standard Individual Ordinary Life Insurance,
incorporated in the 1980 NAIC Amendments to the Model Standard Valuation Law
and Standard Nonforfeiture Law for Life Insurance, and referred to in those
models as the Commissioners 1980 Extended Term Insurance Table.
(5) "1980 CET Table (M)" means that mortality
table consisting of the rates of mortality for male lives from the 1980 CET
Table.
(6) "1980 CET Table (F)"
means that mortality table consisting of the rates of mortality for female
lives from the 1980 CET Table.
Section 2. General Rule.
(1) For any policy of insurance on the life
of either a male or female insured delivered or issued for delivery in this
state after the effective date of
KRS
304.15-342 for that policy form:
(a) A mortality table which is a blend of the
1980 CSO Table (M) and the 1980 CSO Table (F) with or without Ten (10) Year
Select Mortality Factors may at the option of the company be substituted for
the 1980 CSO Table, with or without Ten (10) Year Select Mortality Factors;
and
(b) A mortality table which is
of the same blend as used in paragraph (a) of this subsection but applied to
form a blend of the 1980 CET Table (M) and the 1980 CET Table (F) may at the
option of the company be substituted for the 1980 CET Table for use in
determining minimum cash surrender values and amounts of paid-up nonforfeiture
benefits.
(2) Only the
following blended tables as have been adopted by the NAIC may be so used and
this administrative regulation formally approves those tables for use in this
state.
(a) 100 percent male, zero percent
female for tables to be designated as the "1980 CSO-A" and "1980 CET-A"
tables.
(b) Eighty (80) percent
male, twenty (20) percent female for tables to be designated as the "1980
CSO-B" and "1980 CET-B" tables.
(c)
Sixty (60) percent male, forty (40) percent female for tables to be designated
as the "1980 CSO-C" and "1980 CET-C" tables.
(d) Fifty (50) percent male, fifty (50)
percent female for tables to be designated as the "1980 CSO-D" and "1980 CET-D"
tables.
(e) Forty (40) percent
male, sixty (60) percent female for tables to be designated as the "1980 CSO-E"
and "1980 CET-E" tables.
(f) Twenty
(20) percent male, eighty (80) percent female for tables to be designated as
the "1980 CSO-F" and "1980 CET-F" tables.
(g) Zero percent male, 100 percent female for
tables to be designated as the "1980 CET-G" tables. Tables (a) and (g) are not
to be used with respect to policies issued on or after January 1, 1985, except
where the proportion of persons insured is anticipated to be ninety (90)
percent or more of one (1) sex or the other or except for certain policies
converted from group insurance. Such group conversions issued on or after
January 1, 1986, must use Mortality Tables based on the blend of lives by sex
expected for such policies if such group conversions are considered as
extensions of the Norris decision. This consideration has not been clearly
defined by judicial or legislative action in all jurisdictions.
(3) No change in minimum valuation
standards is implied by this administrative regulation.
Section 3. Unfair Discrimination.
(1) It shall not be a violation of
KRS
304.12-085 for an insurer to issue the same
kind of policy of life insurance on both a sex distinct and sex neutral basis.
However, each such insurer shall establish prior to issue of any such policies
which are to be so offered the conditions under which each type will be
marketed. Such conditions, together with sufficient information to establish
that an unfairly discriminatory condition will not be created, shall be filed
with the executive director for his approval.
(2) It shall, however, be a violation of
KRS
304.12-085 to substitute the 1980 CSO Table
(M) or 1980 CET Table (M) with ages set back (as permitted with the 1958 CSO
Table) for the 1980 CSO Table (F) or 1980 CET Table (F).
Section 4. Severability. If any provision of
this administrative regulation or the application thereof to any person or
circumstance is for any reason held to be invalid, the remainder of the
regulation and the application of such provision to other persons or
circumstances shall not be affected thereby.
Section 5. Effective Date. This
administrative regulation shall become effective upon completion of its review
pursuant to KRS Chapter 13A.
STATUTORY AUTHORITY: KRS Chapter 13A, 304.2-110,
304.15-342