New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter III - Policy and Certificate Provisions
Subchapter A - Life, Accident and Health Insurance
Part 54 - Variable Life Insurance
Section 54.8 - Reserve liabilities

(a) Reserve liabilities for variable life insurance policies shall be established in accordance with the provisions of section 4240 (d) of the Insurance Law.

(b) Reserve liabilities shall be at least equal to the cash surrender value.

(c) For scheduled premium policies, reserve liabilities for the guaranteed minimum death benefit shall be the reserve needed to provide for the contingency of death occurring when the guaranteed minimum death benefit exceeds the death benefit that would be paid in the absence of the guarantee, and shall be maintained in the general account of the insurer and shall be not less than the aggregate total of the term costs, if any, covering a period of one full year from the valuation date, of the guarantee on each variable life insurance contract, assuming an immediate one-third depreciation in the current value of the assets of the separate account followed by a net investment return equal to the assumed investment rate. The valuation interest rate and mortality table used in computing the minimum reserve shall conform to permissible standards for the valuation of life insurance contracts. In determining such reserve, the company may employ suitable approximations and estimates, including but not limited to groupings and averages.

(d) Reserve liabilities for all general account incidental insurance benefits, and any guarantees associated with variable incidental insurance benefits, shall be maintained in the general account, and reserve liabilities for all variable aspects of the variable incidental insurance benefits shall be maintained in a separate account, in amounts determined in accordance with the actuarial procedures appropriate to such benefit.

(e) For flexible premium policies, reserve liabilities for any guaranteed minimum death benefit shall be maintained in the general account of the insurer and shall not be less than the aggregate total of term costs, if any, covering the period provided in the guarantee not otherwise provided for by the reserves held in the separate account, assuming an immediate one-third depreciation in the current value of the assets of the separate account followed by a net investment return equal to the valuation interest rate.

(f) The valuation interest rate and mortality table used in computing this additional reserve, if any, shall conform to permissible standards for the valuation of life insurance contracts. In determining such minimum reserve, the company may employ approximations and estimates, acceptable to the superintendent, including but not limited to groupings and averages.