New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter III - Policy and Certificate Provisions
Subchapter A - Life, Accident and Health Insurance
Part 53 - Life And Annuity Cost Disclosure And Sales Illustrations
Subpart 53-2 - Disclosure Requirements
Section 53-2.4 - Rules for the calculation of the life insurance surrender cost index

(1) Determine the guaranteed cash surrender value, if any, available at the end of the 10th and 20th policy years.

(2) For participating policies, add the terminal dividend payable upon surrender, if any, to the accumulation of the annual cash dividends at five percent interest compounded annually to the end of the period selected and add this sum to the amount determined in paragraph (1) of this subdivision.

(3) Divide the result of paragraph (2) of this subdivision (paragraph [1] of this subdivision for guaranteed-cost policies) by an interest factor that converts it into an equivalent level annual amount that, if paid at the beginning of each year, would accrue to the value in paragraph (2) of this subdivision (paragraph [1] of this subdivision for guaranteed cost policies) over the respective periods stipulated in paragraph (1) of this subdivision. If the period is 10 years, the factor is 13.207 and if the period is 20 years, the factor is 34.719.

(4) Determine the equivalent level premium by accumulating each annual premium payable for the basic policy or rider at five percent interest compounded annually to the end of the period stipulated in paragraph (1) of this subdivision and dividing the result by the respective factors stated in paragraph (3) of this subdivision (this amount is the annual premium payable for a level premium plan).

(5) Subtract the result of paragraph (3) of this subdivision from paragraph (4) of this subdivision.

(6) Divide the result of paragraph (5) of this subdivision by the number of thousands of the equivalent level death benefit to arrive at the life insurance surrender cost index.