Current through Register Vol. 56, No. 6, March
18, 2024
(a) The purpose
of this subchapter is to provide:
1. Tables
of select mortality factors and rules for their use;
2. Rules concerning a minimum standard for
the valuation of plans with non-level premiums or benefits; and
3. Rules concerning a minimum standard for
the valuation of plans with secondary guarantees.
(b) The method for calculating basic reserves
defined in this subchapter will constitute the Commissioners' Reserve Valuation
Method for policies to which this subchapter is applicable.
(c) This subchapter shall apply to all life
insurance policies, with or without nonforfeiture values, issued on or after
January 1, 2000, subject to the following exceptions:
1. This subchapter shall not apply to any
individual life insurance policy issued on or after January 1, 2000 if the
policy is issued in accordance with and as a result of the exercise of a
reentry provision contained in the original life insurance policy of the same
or greater face amount, issued before January 1, 2000, that guarantees the
premium rates of the new policy. This subchapter also shall not apply to
subsequent policies issued as a result of the exercise of such a provision, or
a derivation of the provision, in the new policy.
2. This subchapter shall not apply to any
universal life policy that meets all the following requirements:
i. The secondary guarantee period, if any, is
five years or less;
ii. The
specified premium for the secondary guarantee period is not less than the net
level reserve premium for the secondary guarantee period based on the 1980 CSO
valuation tables as defined at
11:4-32.2 and the applicable
valuation interest rate; and
iii.
The initial surrender charge is not less than 100 percent of the first year
annualized specified premium for the secondary guarantee period.
3. This subchapter shall not apply
to any variable life insurance policy that provides for life insurance, the
amount or duration of which varies according to the investment experience of
any separate account or accounts.
4. This subchapter shall not apply to any
variable universal life insurance policy that provides for life insurance, the
amount or duration of which varies according to the investment experience of
any separate account or accounts.
5. This subchapter shall not apply to a group
life insurance certificate unless the certificate provides for a stated or
implied schedule of maximum gross premiums required in order to continue
coverage in force for a period in excess of one year.
6. For policies issued after December 31,
1995 and prior to the operative date of this subchapter, where the methods and
assumptions described in this subchapter would produce lower reserves than were
previously required, an insurer may, with the approval of the Commissioner,
adopt lower reserves, but in no case lower than the reserves calculated in
accordance with the methods and assumptions described in this subchapter. The
Commissioner shall grant approval when the insurer has provided documentation
satisfactory to the Commissioner that the reserves established by the insurer
make adequate provision for obligations to policyholders. Such documentation
shall be accompanied by an actuarial certification as to the adequacy of the
methods and assumptions proposed.
(d) Calculation of the minimum valuation
standard for policies with guaranteed non-level gross premiums or guaranteed
non-level benefits (other than universal life policies), or both, shall be in
accordance with the provisions of
11:4-32.4.
(e) Calculation of the minimum valuation
standard for flexible premium and fixed premium universal life insurance
policies, that contain provisions resulting in the ability of a policyholder to
keep a policy in force over a secondary guarantee period, shall be in
accordance with the provisions of
11:4-32.5.
