Current through Register Vol. 56, No. 18, September 16, 2024
(a) Because the
smoker and nonsmoker mortality tables do not extend below age 15, the
Department shall permit the following uses of the composite and smoker and
nonsmoker mortality tables for juvenile insureds, as hereafter provided:
1. Insurers may use the composite mortality
table for juvenile issues and continue to use such table for all future
attained ages; or
2. Insurers may
use the composite mortality table for juvenile issues and change to use of a
smoker and nonsmoker mortality table when the insured's attained age is a
specified age between 15 and 23.
i. When the
insured reaches the attained age, the insurer shall notify the insured in
writing at least 30 days prior to the effective date of the change in mortality
tables of his or her option to elect smoker or nonsmoker status.
ii. Each insurer shall adopt a uniform
default classification of either smoker or nonsmoker to which the insurer shall
assign an insured who fails to respond to the notice described in (a)2i
above.
iii. An insurer may only
apply a default classification of smoker pursuant to ii above to an insured
whose attained age is at least 18.
iv. The insurer shall identify such adopted
uniform default classification in the notice described in (a)2i above and
advise the insured therein that the insured shall be assigned the uniform
default classification if the insured fails to respond to the notice.
v. Alternatively, at the insurer's option,
the insurer may reclassify the insured as a nonsmoker upon reaching the
attained age.
3.
Insurers may use a reasonable extrapolation of the smoker and nonsmoker
mortality tables for ages 15 and below. The submission shall include an
actuarial memorandum which describes the basis for the extrapolation.
(b) Insurers may classify a
juvenile as a smoker only if, at the time of the application, the juvenile
responds to a smoking question in the affirmative.
1. Insurers may contest the response to the
question concerning smoking status only if the contract specifically reserves
such right, there is an entire contract provision in the policy which states
that the application for the change in smoking status is attached to and made a
part of the policy and the submission describes the settlement payable upon a
successful contest. A contest shall be limited to the amount of coverage which
is purchased by the difference between the smoker and nonsmoker
rates.
2. If the insurer intends to
waive the right to contest, the submission should include a statement to that
effect from a company officer.
(c) The policy must accurately describe all
mortality tables used as composite, smoker and nonsmoker, or extrapolation for
all ages.
(d) The policy form shall
accurately describe the process set forth at (a)2 above relating to insurer
notification, insured election of smoker or nonsmoker status, the default
classification resulting from failure to elect, and any automatic
reclassification to nonsmoker.
(e)
In fixed premium contracts, a change in smoker/nonsmoker classification
pursuant to (a)2 above shall affect premium rates only and not the guaranteed
nonforfeiture benefits. A fixed premium contract which provides for changes in
smoker/nonsmoker classification pursuant to (a)2 above shall specify the
guaranteed maximum smoker and nonsmoker premium.
