New Jersey Administrative Code
Title 11 - INSURANCE
Chapter 4 - ACTUARIAL SERVICES
Subchapter 27A - PREFERRED MORTALITY TABLES FOR USE IN DETERMINING MINIMUM RESERVE LIABILITIES
Section 11:4-27A.3 - 2001 CSO Preferred Class Structure Mortality Table

Universal Citation: NJ Admin Code 11:4-27A.3

Current through Register Vol. 56, No. 24, December 18, 2024

(a) At the election of the insurer, for each calendar year of issue, for any one or more specified plans of insurance and subject to satisfying the conditions stated in this subchapter, the 2001 CSO Preferred Class Structure Mortality Table may be substituted in place of the 2001 CSO Smoker or Nonsmoker Mortality Table as the minimum valuation standard for policies issued on or after January 1, 2007. The 2001 CSO Preferred Class Structure Mortality Table is available on the NAIC's website at www.soa.org/research/individual-life/intl-2001-cso-preferred-class-structure-mortality-tables.aspx. The Department shall notify insurers of any changes to the 2001 CSO Preferred Class Structure Mortality Table by Bulletin. For policies issued on or after January 1, 2005, and prior to January 1, 2007, these tables may be substituted with the consent of the Commissioner and subject to the conditions of N.J.A.C. 11:4-27A.4. In determining such consent, the Commissioner may rely on the consent of the Commissioner of the company's state of domicile.

(b) No such election as described in (a) above shall be made until the insurer demonstrates to the Commissioner that at least 20 percent of the business to be valued on this table is in one or more of the preferred classes. A table from the 2001 CSO Preferred Class Structure Mortality Table used in place of a 2001 CSO Mortality Table, pursuant to the requirements of this subchapter, shall be treated as part of the 2001 CSO Mortality Table only for purposes of reserve valuation pursuant to the requirements of N.J.A.C. 11:4-27.

(c) If an insurer elects to use the 2001 CSO Preferred Class Structure Mortality Table for a plan of insurance in a particular calendar year of issue, the insurer shall use this table for that plan of insurance in all future calendar years of issue unless discontinuance is approved pursuant to rules promulgated by the Commissioner.

(d) 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 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 shall be the amount of the gross reinsurance premium that:
i. 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

ii. Would be refunded to the ceding entity upon the termination of the policy.

2. 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 this paragraph as Z. Z shall be 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.

3. For purposes of this subsection, 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 for the use of the 2001 CSO Preferred Class Structure Table.

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