North Dakota Administrative Code
Title 45 - Insurance, Commissioner of
Article 45-04 - Life Insurance
Chapter 45-04-12 - Valuation of Life Insurance Policies
Section 45-04-12-03 - General calculation requirements for basic reserves and premium deficiency reserves

1. At the election of the company for any one or more specified plans of life insurance, the minimum mortality standard for basic reserves may be calculated using the 1980 CSO valuation tables with select mortality factors, or any other valuation mortality table adopted by the national association of insurance commissioners after January 1, 2000, and promulgated by rule by the commissioner for this purpose. If select mortality factors are elected, they may be:

2. Deficiency reserves, if any, are calculated for each policy as the excess, if greater than zero, of the quantity A over the basic reserve. The quantity A is obtained by recalculating the basic reserve for the policy using guaranteed gross premiums instead of net premiums when the guaranteed gross premiums are less than the corresponding net premiums. At the election of the company for any one or more specified plans of insurance, the quantity A and the corresponding net premiums used in the determination of quantity A may be based upon the 1980 CSO valuation tables with select mortality factors, or any other valuation mortality table adopted by the national association of insurance commissioners after January 1, 2000, and promulgated by rule by the commissioner. If select mortality factors are elected, they may be:

3. This subsection applies to both basic reserves and deficiency reserves. Any set of select mortality factors may be used only for the first segment. However, if the first segment is less than ten years, the appropriate ten-year select mortality factors incorporated into the 1980 amendments to the national association of insurance commissioners standard valuation law may be used thereafter through the tenth policy year from the date of issue.

4. In determining basic reserves or deficiency reserves, guaranteed gross premiums without policy fees may be used when the calculation involves the guaranteed gross premium but only if the policy fee is a level dollar amount after the first policy year. In determining deficiency reserves, policy fees may be included in guaranteed gross premiums, even if not included in the actual calculation of basic reserves.

5. Reserves for policies that have changes to guaranteed gross premiums, guaranteed benefits, guaranteed charges, or guaranteed credits that are unilaterally made by the insurer after issue and that are effective for more than one year after the date of the change shall be the greatest of the following:

6. The commissioner may require that the company document the extent of the adequacy of reserves for specified blocks, including policies issued prior to January 1, 2000. This documentation may include a demonstration of the extent to which aggregation with other nonspecified blocks of business is relied upon in the formation of the appointed actuary opinion pursuant to and consistent with the requirements of 45-03-19.