Current through Register Vol. 49, No. 6, March 15, 2024
PURPOSE: The purpose of this regulation is to
establish minimum mortality standards for reserves and nonforfeiture values,
and to require the use of the 1980 Commissioners' Standard Ordinary (CSO) Life
Valuation Mortality Table for use in determining the minimum standard of
valuation of reserves and the minimum standard nonforfeiture values for
insurance products sold in conjunction with a preneed contract. The purpose of
this regulation is not to regulate the sale or contract of a preneed
arrangement, but rather, to regulate the values of the insurance sold in
conjunction with the preneed contract.
PUBLISHER'S NOTE: The secretary of state has
determined that the publication of the entire text of the material which is
incorporated by reference as a portion of this rule would be unduly cumbersome
or expensive. This material as incorporated by reference in this rule shall be
maintained by the agency at its headquarters and shall be made available to the
public for inspection and copying at no more than the actual cost of
reproduction. This note applies only to the reference material. The entire text
of the rule is printed here.
(1) Definitions.
(A) The term "2001 CSO Mortality Table" means
that mortality table, consisting of separate rates of mortality for male and
female lives, developed by the American Academy of Actuaries Commissioners'
Standard Ordinary (CSO) Task Force from the Valuation Basic Mortality Table
developed by the Society of Actuaries Individual Life Insurance Valuation
Mortality Task Force, and adopted by the National Association of Insurance
Commissioners (NAIC), located at 2301 McGee Street, Suite 800, Kansas City, MO
64108, in December 2002. The 2001 CSO Mortality Table is incorporated by
reference and included in the Proceedings of the NAIC (2nd Quarter
2002) and does not include any later amendments. Unless the context
indicates otherwise, the 2001 CSO Mortality Table includes both the ultimate
form of that table and the select and ultimate form of that table and includes
both the smoker and nonsmoker mortality tables and the composite mortality
tables. It also includes both the age-nearest-birthday and age-last-birthday
bases of the mortality tables. The 2001 CSO Mortality Table is available for
public inspection at the department's office or by mailing a written request to
the Department of Commerce and Insurance, PO Box 690, Jefferson City, MO 65102.
(B) The term "Ultimate 1980 CSO"
means the Commissioners' 1980 Standard Ordinary Life Valuation Mortality Tables
(1980 CSO) without ten (10) year selection factors, incorporated into the 1980
amendments to the NAIC Standard Valuation Law approved in December 1983. The
Ultimate 1980 CSO is incorporated by reference, published by the National
Association of Insurance Commissioners, located at 2301 McGee Street, Suite
800, Kansas City, MO 64108, and does not include any later amendments. The
Ultimate 1980 CSO is available for public inspection at the department's office
or by mailing a written request to the Department of Commerce and Insurance, PO
Box 690, Jefferson City, MO 65102.
(C) The term "preneed insurance" shall
include a life insurance contract sold in conjunction with a preneed contract
as defined in section
436.005(5),
RSMo.
(2) Minimum
Valuation Mortality Standards. For preneed insurance contracts and similar
policies and contracts, the minimum mortality standard for determining reserve
liabilities and nonforfeiture values for both male and female insureds shall be
the Ultimate 1980 CSO.
(3) Minimum
Valuation Interest Rate Standards.
(A) The
interest rates used in determining the minimum standard for valuation of
pre-need insurance shall be the calendar year statutory valuation interest
rates as defined in the Standard Valuation Law in section
376.380,
RSMo.
(B) The interest rates used
in determining the minimum standard for nonforfeiture values for preneed
insurance shall be the calendar year statutory nonforfeiture interest rates as
defined in the Standard Nonforfeiture Law in section
376.670,
RSMo.
(4) Minimum
Valuation Method Standards.
(A) The method
used in determining the standard for the minimum valuation of reserves of
preneed insurance shall be the method defined in the Standard Valuation Law in
section
376.380,
RSMo.
(B) The method used in
determining the standard for the minimum nonforfeiture values for preneed
insurance shall be the method defined in the Standard Nonforfeiture Law in
section
376.670,
RSMo.
(5) Transition
Rules.
(A) For preneed insurance policies
issued on or after the effective date of this regulation and before January 1,
2012, the 2001 CSO Mortality Table may be used as the minimum standard for
reserves and minimum standard for nonforfeiture benefits for both male and
female insureds.
(B) If an insurer
elects to use the 2001 CSO Mortality Table as a minimum standard for any policy
issued on or after the effective date of this regulation and before January 1,
2012, the insurer shall provide, as a part of the actuarial opinion memorandum
submitted in support of the company's asset adequacy testing, an annual written
notification to the domiciliary commissioner. The notification shall include:
1. A complete list of all preneed policy
forms that use the 2001 CSO Mortality Table as a minimum standard;
2. A certification signed by the appointed
actuary stating that the reserve methodology employed by the company in
determining reserves for the preneed policies issued after the effective date
and using the 2001 CSO Mortality Table as a minimum standard, develops adequate
reserves. For the purposes of this certification, the preneed insurance
policies using the 2001 CSO Mortality Table as a minimum standard cannot be
aggregated with any other policies; and
3. Supporting information regarding the
adequacy of reserves for preneed insurance policies issued after the effective
date of this regulation and using the 2001 CSO Mortality Table as a minimum
standard for reserves.
(C) Preneed insurance policies issued on or
after January 1, 2012, must use the Ultimate 1980 CSO in the calculation of
minimum nonforfeiture values and minimum reserves.
(6) Effective Date.
(A) This rule is applicable to preneed
insurance policies and certificates and similar contracts and certificates
issued on or after January 1, 2009.
*Original authority: 374.045, RSMo 1967, amended 1993,
1995; 376.380, RSMo 1939, amended 1943, 1947, 1959, 1961, 1965, 1971, 1975,
1979, 1982, 1993; 376.670, RSMo 1943, amended 1959, 1961, 1965, 1975, 1979,
1982; and 376.676, RSMo 2000.
