Current through Register Vol. 63, No. 9, September 1, 2024
As used in OAR
836-031-0750 to
836-031-0775:
(1) "Basic reserves" means reserves
calculated in accordance with ORS
733.306.
(2) "Contract segmentation method" means the
method of dividing the period from issue to mandatory expiration of a policy
into successive segments, with the length of each segment being defined as the
period from the end of the prior segment (from policy inception, for the first
segment) to the end of the latest policy year as determined in this section.
All calculations are made using the 1980 CSO valuation tables, as defined in
section (6) of this rule, (or any other valuation mortality table adopted by
the National Association of Insurance Commissioners (NAIC) after January 1,
2000, and adopted by rule by the Director of the Department of Consumer and
Business Services for this purpose), and, if elected, the optional minimum
mortality standard for deficiency reserves stipulated in OAR
836-031-0765(2).
[Example not included. See ED. NOTE.]
(3) "Deficiency reserves" means the excess,
if greater than zero, of minimum reserves calculated in accordance with ORS
733.320 over basic
reserves.
(4) "Guaranteed gross
premiums" means the premiums under a policy of life insurance that are
guaranteed and determined at issue.
(5) "Maximum valuation interest rates" means
the interest rates defined in ORS
733.310 (Computation of Minimum
Standard by Calendar Year of Issue) that are to be used in determining the
minimum standard for the valuation of life insurance policies.
(6) "1980 CSO Valuation tables" means the
Commissioners' 1980 Standard Ordinary Mortality Table (1980 CSO Table) without
ten-year selection factors, incorporated into the 1980 amendments to the NAIC
Standard Valuation Law, and variations of the 1980 CSO Table approved by the
NAIC, such as the smoker and nonsmoker versions approved in December
1983.
(7) "Scheduled gross premium"
means the smallest illustrated gross premium at issue for other than universal
life insurance policies. For universal life insurance policies, scheduled gross
premium means the smallest specified premium described in OAR
836-031-0775(1)(c),
if any, or else the minimum premium described in OAR
836-031-0775(1)(d).
(8)
(a)
"Segmented reserves" means reserves, calculated using segments produced by the
contract segmentation method, equal to the present value of all future
guaranteed benefits less the present value of all future net premiums to the
mandatory expiration of a policy, where the net premiums within each segment
are a uniform percentage of the respective guaranteed gross premiums within the
segment. The uniform percentage for each segment is such that, at the beginning
of the segment, the present value of the net premiums within the segment
equals:
(A) The present value of the death
benefits within the segment, plus
(B) The present value of any unusual
guaranteed cash value (according to OAR
836-031-0770(4))
occurring at the end of the segment, less
(C) Any unusual guaranteed cash value
occurring at the start of the segment, plus
(D) For the first segment only, the excess of
subparagraph (i) over subparagraph (ii), as follows:
(i) A net level annual premium equal to the
present value, at the date of issue, of the benefits provided for in the first
segment after the first policy year, divided by the present value, at the date
of issue, of an annuity of one per year payable on the first and each
subsequent anniversary within the first segment on which a premium falls due.
However, the net level annual premium shall not exceed the net level annual
premium on the nineteen-year premium whole life plan of insurance of the same
renewal year equivalent level amount at an age one year higher than the age at
issue of the policy.
(ii) A net one
year term premium for the benefits provided for in the first policy
year.
(b) The
length of each segment is determined by the "contract segmentation method," as
defined in this section.
(c) The
interest rates used in the present value calculations for any policy may not
exceed the maximum valuation interest rate, determined with a guarantee
duration equal to the sum of the lengths of all segments of the
policy.
(d) For both basic reserves
and deficiency reserves computed by the segmented method, present values shall
include future benefits and net premiums in the current segment and in all
subsequent segments.
(9)
"Tabular cost of insurance" means the net single premium at the beginning of a
policy year for one-year term insurance in the amount of the guaranteed death
benefit in that policy year.
(10)
"Ten-year select factors" means the select factors adopted with the 1980
amendments to the NAIC Standard Valuation Law.
(11)
(a)
"Unitary reserves" means the present value of all future guaranteed benefits
less the present value of all future modified net premiums, where:
(A) Guaranteed benefits and modified net
premiums are considered to the mandatory expiration of the policy;
and
(B) Modified net premiums are a
uniform percentage of the respective guaranteed gross premiums, where the
uniform percentage is such that, at issue, the present value of the net
premiums equals the present value of all death benefits and pure endowments,
plus the excess of subparagraph (i) over subparagraph (ii), as follows:
(i) A net level annual premium equal to the
present value, at the date of issue, of the benefits provided for after the
first policy year, divided by the present value, at the date of issue, of an
annuity of one per year payable on the first and each subsequent anniversary of
the policy on which a premium falls due. However, the net level annual premium
shall not exceed the net level annual premium on the nineteen-year premium
whole life plan of insurance of the same renewal year equivalent level amount
at an age one year higher than the age at issue of the policy.
(ii) A net one year term premium for the
benefits provided for in the first policy year.
(b) The interest rates used in the present
value calculations for any policy may not exceed the maximum valuation interest
rate, determined with a guarantee duration equal to the length from issue to
the mandatory expiration of the policy.
(12) "Universal life insurance policy" means
any individual life insurance policy under the provisions of which separately
identified interest credits (other than in connection with dividend
accumulations, premium deposit funds, or other supplementary accounts) and
mortality or expense charges are made to the policy.
Examples referenced available from the
agency.
Stat. Auth.: ORS
731.244
Stats. Implemented: ORS
733.030,
733.210 &
733.300 -
733.322
