Current through Register 1531, September 27, 2024
(1) 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:
(a) The present value of death benefits over
the next ten 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.
(b) 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.
(2) 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:
(a) The present value of death
benefits over the next ten 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 basis table corresponding
to the valuation table being used for that class.
(b) 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.
(3) Unless exempted by the commissioner,
every authorized insurer using the 2001 CSO Preferred Class Structure Table
shall annually file with the commissioner, with the NAIC, or with a statistical
agent designated by the NAIC and acceptable to the commissioner, statistical
reports showing mortality and such other information as the commissioner may
deem necessary or expedient for the administration of the provisions of
211 CMR 58.00. The form of
the reports shall be established by the commissioner or the commissioner may
require the use of a form established by the NAIC or by a statistical agent
designated by the NAIC and acceptable to the commissioner.
(4) 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:
(a) In cases where 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 paragraph as Y, the gross reserve calculated before
reinsurance. Y is the amount of the gross reinsurance premium that 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 would
be refunded to the ceding entity upon termination of the policy.
(b) In cases where 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 211
CMR 58.05(4)(b) 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.
For purposes of this condition, both the reserve credit and the
gross reserve before reinsurance:
1.
for the mean reserve method shall be defined as the mean reserve minus the
deferred premium asset; and
2. 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.
