New Jersey Administrative Code
Title 11 - INSURANCE
Chapter 4 - ACTUARIAL SERVICES
Subchapter 6 - MINIMUM RESERVE STANDARDS FOR INDIVIDUAL AND GROUP HEALTH INSURANCE CONTRACTS
Section 11:4-6.11 - Contract reserves-alternative valuation methods and assumptions generally
Universal Citation: NJ Admin Code 11:4-6.11
Current through Register Vol. 56, No. 6, March 18, 2024
(a) Provided the contract reserve on all contracts to which an alternative method or basis is applied is not less in the aggregate than the amount determined according to the applicable standards specified in 11:4-6.1 0, an insurer may use any reasonable assumptions as to interest rates, termination and mortality rates, and rates of morbidity or other contingency.
(b) Subject to the condition in (a) above, the insurer may employ methods other than the methods stated above in determining a sound value of its liabilities under such contracts, including, but not limited to the following:
1. The net
level premium method;
2. The
one-year full preliminary term method;
3. Prospective valuation on the basis of
actual gross premiums with reasonable allowance for future expenses;
4. The use of approximations such as those
involving age groupings, groupings of several years of issue, average amounts
of indemnity, or grouping of similar contract forms;
5. The computation of the reserve for one
contract benefit as a percentage of, or by other relation to, the aggregate
contract reserves exclusive of the benefit or benefits so valued; or
6. The use of a composite annual claim cost
for all or any combination of the benefits included in the contracts
valued.
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