Current through Register Vol. 48, 12, December 27, 2024
Section I.
Introduction.
A. Scope.
1. These standards apply to all individual
and group accident and health insurance coverages except credit
insurance.
2. When an insurer
determines that adequacy of its accident and health insurance reserves requires
reserves in excess of the minimum standards specified herein, such increased
reserves shall be held and shall be considered the minimum reserves for that
insurer.
3. With respect to any
block of contracts, or with respect to an insurer's accident and health
business as a whole, a prospective gross premium valuation is the ultimate test
of reserve adequacy as of a given valuation date. Such a gross premium
valuation will take into account, for contracts in force, in a claims status,
or in a continuation of benefits status on the valuation date, the present
value as of the valuation date of all expected benefits unpaid, all expected
expenses unpaid, and all unearned or expected premiums, adjusted for future
premium increases reasonably expected to be put into effect.
4. Such a gross premium valuation is to be
performed whenever a significant doubt exists as to reserve adequacy with
respect to any major block of contracts, or with respect to the insurer's
accident and health business as a whole. In the event inadequacy is found to
exist, immediate loss recognition shall be made and the reserves restored to
adequacy. Adequate reserves (inclusive of claim, premium, and contract
reserves, if any) shall be held with respect to all contracts, regardless of
whether contract reserves are required for such contracts under these
standards.
5. Whenever minimum
reserves, as defined in these standards, exceed reserve requirements as
determined by a prospective gross premium valuation, such minimum reserves
remain the minimum requirement under these standards.
B. Categories of Reserves.
1. The following sections set forth minimum
standards for three categories of accident and health insurance reserves:
a. Section II. Claim Reserves.
b. Section III. Premium Reserves.
c. Section IV. Contract Reserves.
2. Adequacy of an insurer's
accident and health insurance reserves is to be determined on the basis of all
three categories combined. However, these standards emphasize the importance of
determining appropriate reserves for each of the three categories
separately.
C.
Appendices.
1. These standards contain two
appendices which are an integral part of the standards, and one additional
"supplementary" appendix which is not part of the standards as such, but is
included for explanatory and illustrative purposes only.
2. Appendix A. Specific minimum standards
with respect to morbidity, mortality, and interest, which apply to claim
reserves according to year of incurral and to contract reserves according to
year of issue.
3. Appendix B.
Glossary of Technical Terms Used.
4. Appendix C. (Supplementary) Waiver of
Premium Reserves.
Section
II. Claim Reserves.
A. General.
1. Claim reserves are required for all
incurred but unpaid claims on all accident and health insurance
policies.
2. Appropriate claim
expense reserves are required with respect to the estimated expense of
settlement of all incurred but unpaid claims.
3. All such reserves for prior valuation
years are to be tested for adequacy and reasonableness along the lines of claim
runoff schedules in accordance with the statutory financial statement including
consideration of any residual unpaid liability.
B. Minimum Standards for Claim Reserves.
1. Disability Income.
a. Interest. The maximum interest rate for
claim reserves is specified in Appendix A.
b. Morbidity. Minimum standards with respect
to morbidity are those specified in Appendix A; except that, at the option of
the insurer: (i) For claims with a duration from date of disablement of less
than two years, reserves may be based on the insurer's experience, if such
experience is considered credible, or upon other assumptions designed to place
a sound value on the liabilities. (ii) For group disability income claims with
a duration from the date of disablement of more than two years but less than
five years, reserves may, with the approval of the Director of Insurance, be
based upon the insurer's experience for which the insurer maintains
underwriting and claim administration control. The request for such approval of
a plan of modification to the reserve basis must include:
(I) An analysis of the credibility of the
experience;
(II) A description of
how all of the insurer's experience is proposed to be used in setting
reserves;
(III) A description and
quantification of the margins to be included;
(IV) A summary of the financial impact that
the proposed plan of modification would have had on the insurer's last filed
annual statement;
(V) A copy of the
approval of the proposed plan of modification by the commissioner of the state
of domicile; and
(VI) Any other
information deemed necessary by the Director of Insurance.
DRAFTING NOTE: For experience to be considered credible for
purposes of (ii), the company should be able to provide claim termination
patterns over no more than six (6) years reflecting at least 5,000 claim
terminations during the third through fifth claim durations on reasonably
similar applicable policy forms.
For claim reserves to reflect "sound values" and/or reasonable
margins, reserve tables based on credible experience should be adjusted
regularly to maintain reasonable margins. Demonstrations may be required by the
commissioner of the state of domicile based on published literature (e.g.
Goldman, TSA XLII).
c. Duration of Disablement. For contracts
with an elimination period, the duration of disablement should be measured as
dating from the time that benefits would have begun to accrue had there been no
elimination period.
2.
All Other Benefits.
a. Interest. The maximum
interest rate for claim reserves is specified in Appendix A.
b. Morbidity or Other Contingency. The
reserve should be based on the insurer's experience, if such experience is
considered credible, or upon other assumptions designed to place a sound value
on the liabilities.
C. Claim Reserve Methods Generally.
1. Any generally accepted or reasonable
actuarial method or combination of methods may be used to estimate all claim
liabilities.
2. The methods used
for estimating liabilities generally may be aggregate methods, or various
reserve items may be separately valued. Approximations based on groupings and
averages may also be employed. Adequacy of the claim reserves, however, shall
be determined in the aggregate.
Section III. Premium Reserves.
A. General.
1. Unearned premium reserves are required for
all contracts with respect to the period of coverage for which premiums, other
than premiums paid in advance, have been paid beyond the date of
valuation.
2. If premiums due and
unpaid are carried as an asset, such premiums must be treated as premiums in
force, subject to unearned premium reserve determination. The value of unpaid
commissions, premium taxes, and the cost of collection associated with due and
unpaid premiums must be carried as an offsetting liability.
3. The gross premiums paid in advance for a
period of coverage commencing after the next premium due date which follows the
date of valuation may be appropriately discounted to the valuation date and
shall be held either as a separate liability or as an addition to the unearned
premium reserve which would otherwise be required as a minimum.
B. Minimum Standards for Unearned
Premium Reserves.
1. The minimum unearned
premium reserve with respect to any contract is the pro rata unearned modal
premium that applies to the premium period beyond the valuation date, with such
premium determined on the basis of:
a. The
valuation net modal premium on the contract reserve basis applying to the
contract; or
b. The gross modal
premium for the contract if no contract reserve applies.
2. However, in no event may the sum of the
unearned premium and contract reserves for all contracts of the insurer subject
to contract reserve requirements be less than the gross modal unearned premium
reserve on all such contracts, as of the date of valuation. Such reserve shall
never be less than the expected claims for the period beyond the valuation date
represented by such unearned premium reserve to the extent not provided for
elsewhere.
C. Premium
Reserve Methods Generally.
1. The insurer may
employ suitable approximations and estimates including, but not limited to
groupings, averages, and aggregate estimation, in computing premium
reserves.
2. Such approximations or
estimates should be tested periodically to determine their continuing adequacy
and reliability.
Section
IV. Contract Reserves.
A.
General.
1. Contract reserves are required,
unless otherwise specified in Section IV.A.2. for:
a. all individual and group contracts with
which level premiums are used; or
b. all individual and group contracts with
respect to which, due to the gross premium pricing structure at issue, the
value of the future benefits at any time exceeds the value of any appropriate
future valuation net premiums at that time. The values specified in this
subparagraph b. shall be determined on the basis specified in Section
IV.B.
2. Contracts not
requiring a contract reserve are:
a. contracts
which cannot be continued after one year from issue; or
b. contracts already in force on the
effective date of these standards for which no contract reserve was required
under the immediately preceding standards.
3. The contract reserve is in addition to
claim reserves and premium reserves.
4. The methods and procedures for contract
reserves should be consistent with those for claim reserves for any contract,
or else appropriate adjustment must be made when necessary to assure provision
for the aggregate liability. The definition of the date of incurral must be the
same in both determinations.
B. Minimum Standards for Contract
Reserves--Basis.
1. Morbidity or Other
Contingency.
a. Minimum standards with respect
to morbidity are those set forth in Appendix A. Valuation net premiums used
under each contract must have a structure consistent with the gross premium
structure at issue of the contract as this relates to advancing age of insured,
contract duration, and period for which gross premiums have been
calculated.
b. Contracts for which
tabular morbidity standards are not specified in Appendix A shall be valued
using tables established for reserve purposes by a qualified actuary and
acceptable to the Director of Insurance.
2. Interest. The maximum interest rate is
specified in Appendix A.
3.
Termination Rates.
a. Termination rates used
in the computation of reserves shall be on the basis of a mortality table as
specified in Appendix A. except as noted in the following paragraph.
b. Under contracts for which premium rates
are not guaranteed, and where the effects of insurer underwriting are
specifically used by policy duration in the valuation morbidity standard or for
return of premium or other deferred cash benefits, total termination rates may
be used at ages and durations where these exceed specified mortality table
rates, but not in excess of the lesser of:
(1) Eighty percent of the total termination
rate used in the calculation of the gross premiums, or
c. Where a morbidity standard specified in
Appendix A is on an aggregate basis, such morbidity standard may be adjusted to
reflect the effect of insurer underwriting by policy duration. The adjustments
must be appropriate to the underwriting and be acceptable to the Director of
Insurance.
4. Reserve
Method.
a. For insurance except long-term
care and return of premium or other deferred cash benefits, the minimum reserve
is the reserve calculated on the two-year full preliminary term method; that
is, under which the terminal reserve is zero at the first and also the second
contract anniversary.
b. For
long-term care insurance, the minimum reserve is the reserve calculated as
follows:
(1) For individual policies and
group certificates issued on or before December 31, 1997, reserves calculated
on the two-year full preliminary term method.
(2) For individual policies and group
certificates issued on or after January 1, 1998, reserves calculated on the
one-year full preliminary term method.
c. For return of premium or other deferred
cash benefits, the minimum reserve is the reserve calculated as follows:
(1) On the one year preliminary term method
if such benefits are provided at any time before the twentieth
anniversary.
(2) On the two year
preliminary term method if such benefits are only provided on or after the
twentieth anniversary.
d. The preliminary term method may be applied
only in relation to the date of issue of a contract. Reserve adjustments
introduced later as a result of rate increases, revisions in assumptions (e.g.,
projected inflation rates) or for other reasons, are to be applied immediately
as of the effective date of adoption of the adjusted basis.
5. Negative Reserves. Negative
reserves on any benefit may be offset against positive reserves for other
benefits in the same contract, but the total contract reserve with respect to
all benefits combined may not be less than zero.
C. Alternative Valuation Methods and
Assumptions Generally.
1. 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 above, an insurer may use any reasonable
assumptions as to interest rates, termination and/or mortality rates, and rates
of morbidity or other contingency.
2. Also, subject to the preceding condition,
the insurer may employ methods stated above in determining a sound value of its
liabilities under such contracts, including, but not limited to the following:
a. The net level premium method;
b. The one-year full preliminary term
method;
c. Prospective valuation on
the basis of actual gross premiums with reasonable allowance for future
expenses;
d. The use of
approximations such as those involving age groupings, groupings of several
years of issue, average amounts of indemnity, grouping of similar contract
forms;
e. 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;
and
f. The use of a composite
annual claim cost for all or any combination of the benefits included in the
contracts valued.
D. Tests for Adequacy and Reasonableness of
Contract Reserves.
1. Annually, an
appropriate review shall be made of the insurer's prospective contract
liabilities on contracts valued by tabular reserves, to determine the
continuing adequacy and reasonableness of the tabular reserves giving
consideration to future gross premiums. The insurer shall make appropriate
increments to such tabular reserves if such tests indicate that the basis of
such reserves is no longer adequate; subject, however, to the minimum standards
of Section IV.B.
2. In the event a
company has a contract or a group of related similar contracts, for which
future gross premiums will be restricted by contract, insurance department
regulations, or for other reasons, such that the future gross premiums reduced
by expenses for administration, commissions, and taxes will be insufficient to
cover future claims, the company shall establish contract reserves for such
shortfall in the aggregate.
Section V. Reinsurance.
Increases to, or credits against reserves carried, arising
because of reinsurance assumed or reinsurance ceded, must be determined in a
manner consistent with these minimum reserve standards and with all applicable
provisions of the reinsurance contracts which affect the insurer's
liabilities.
Section VI.
Appendix A. Specific Standards for Morbidity, Interest and Mortality.
A. Morbidity.
1. Minimum morbidity standards for valuation
of specified individual contract accident and health insurance benefits are as
follows:
a. Disability Income Benefits Due to
Accident or Sickness.
(1) Contract Reserves:
(a) Contracts issued on or after January 1,
1963, and prior to January 1, 1968: Conference Modification of Class III
Disability Table.
(b) Contracts
issued on or after January 1, 1968, and prior to January 1, 1990: The 1964
Commissioners Disability Table (64 CDT).
(c) Contracts issued on or after January 1,
1992: The 1985 Commissioners Individual Disability Tables A (85CIDA); or the
1985 Commissioners Individual Disability Tables B (85CIDB).
(1) Each insurer shall elect, with respect to
all individual contracts issued in any one statement year, whether it will use
Tables A or Tables B as the minimum standard.
(2) The insurer may, however, elect to use
the other tables with respect to any subsequent statement year.
(d) Contracts issued during 1990
or 1991: Optional use of either the 1964 Table or the 1985
Tables.
(2) Claim
Reserves: The minimum morbidity standard in effect for contract reserves on
currently issued contracts, as of the date the claim is incurred.
b. Hospital Benefits,
Surgical Benefits, and Maternity Benefits (Scheduled benefits or fixed time
period benefits only).
(1) Contract Reserves:
(a) Contracts issued on or after January 1,
1963, and before January 1, 1990: The1956 Intercompany Hospital-Surgical
Tables.
(b) Contracts issued on or
after January 1, 1992: The 1974 Medical Expense Tables, Table A, Transactions
of the Society of Actuaries, Volume XXX, page 63. Refer to the paper (in the
same volume, page 9) to which this table is appended, including its
discussions, for methods of adjustment for benefits not directly valued in
Table A: "Development of the 1974 Medical Expense Benefits," Houghton and
Wolf.
(c) Contracts issued during
1990 or 1991: Optional use of either the 1956 Tables or the 1974
Tables.
(2) Claim
Reserves: No specific standard. See Section VI.A.1.e.
c. Cancer Expense Benefits (Scheduled
benefits or fixed time period benefits only).
(1) Contract Reserves: Contracts issued on or
after January 1, 1992: The 1985 NAIC Cancer Claim Cost Tables.
(2) Claim Reserves: No specific standard. See
Section VI.A.1.e.
d.
Accidental Death Benefits.
(1) Contract
Reserves: Contracts issued on or after January 1, 1968: The 1959 Accidental
Death Benefits Table.
(2) Claim
Reserves: Actual amount incurred.
e. Other Individual Contract Benefits.
(1) Contract Reserves: For all other
individual contract benefits, morbidity assumptions are to be determined as
provided in the reserve standards.
(2) Claim Reserves: For all benefits other
than disability, claim reserves are to be determined as provided in the
standards.
2.
Minimum morbidity standards for valuation of specified group contract accident
and health insurance benefits are as follows:
a. Disability Income Benefits Due to Accident
or Sickness.
(1) Contract Reserves:
(a) Contracts issued prior to January 1,
1992: The same basis, if any, as that employed by the insurer as of January 1,
1992;
(b) Contracts issued on or
after January 1, 1992: The 1987 Commissioners Group Disability Income Table
(87CGDT).
(2) Claim
Reserves:
(a) For claims incurred on or after
January 1, 1992: The 1987 Commissioners Group Disability Income Table
(87CGDT);
(b) For claims incurred
prior to January 1, 1992: Use of the 87CGDT is optional.
b. Other Group Contract
Benefits.
(1) Contract Reserves: For all other
group contract benefits, morbidity assumptions are to be determined as provided
in the reserve standards.
(2) Claim
Reserves: For all benefits other than disability, claim reserves are to be
determined as provided in the standards.
B. Interest.
1. For contract reserves, the maximum
interest rate is the maximum rate permitted by law in the valuation of whole
life insurance issued on the same date as the accident and health insurance
contract.
2. For claim reserves, on
policies that require contract reserves, the maximum interest rate is the
maximum rate permitted by law in the valuation of whole life insurance issued
on the same date as the claim incurral date.
3. For claim reserves on policies not
requiring contract reserves, the maximum interest rate is the maximum rate
permitted by law in the valuation of single premium immediate annuities issued
on the same date as the claim incurred date, reduced by one hundred basis
points.
C. Mortality.
1. Except as provided in subsection 2, the
mortality basis used shall be according to a table (but without use of
selection factors) permitted by law for the valuation of whole life insurance
issued on the same date as the accident and health insurance
contract.
2. Other mortality tables
adopted by the NAIC and promulgated by the Director of Insurance may be used in
the calculation of the minimum reserves if appropriate for the type of benefits
and if approved by the Director of Insurance. The request for such approval
must include the proposed mortality table and the reason that the standard
specified in Subsection 1 is inappropriate.
Section VII. Appendix B. Glossary of
Technical Terms Used.
A. Annual-Claim Cost.
The net annual cost per unit of benefit before the addition of expenses,
including claim settlement expenses, and a margin for profit or contingencies.
For example, the annual claim cost for a $100 monthly disability benefit, for a
maximum disability benefit period of one year, with an elimination period of
one week, with respect to a male at age 35, in a certain occupation might be
$12, while the gross premium for this benefit might be $18. The additional $6
would cover expenses and profit or contingencies.
B. Claims Accrued. That portion of claims
incurred on or prior to the valuation date which result in liability of the
insurer for the payment of benefits for medical services which have been
rendered on or prior to the valuation date, and for the payment of benefits for
days of hospitalization and days of disability which have occurred on or prior
to the valuation date, which the insurer has not paid as of the valuation date,
but for which it is liable, and will have to pay after the valuation date. This
liability is sometimes referred to as a liability for "accrued" benefits. A
claim reserve, which represents an estimate of this accrued claim liability,
must be established.
C. Claims
Reported. When an insurer has been informed that a claim has been incurred, if
the date reported is on or prior to the valuation date, the claim is considered
as a reported claim for annual statement purposes.
D. Claims Unaccrued. That portion of claims
incurred on or prior to the valuation date which result in liability of the
insurer for the payment of benefits for medical services expected to be
rendered after the valuation date, and for benefits expected to be payable for
days of hospitalization and days of disability occurring after the valuation
date. This liability is sometimes referred to as a liability for unaccrued
benefits. A claim reserve, which represents an estimate of the unaccrued claim
payments expected to be made (which may or may not be discounted with
interest), must be established.
E.
Claims Unreported. When an insurer has not been informed, on or before the
valuation date, concerning a claim that has been incurred on or prior to the
valuation date, the claim is considered as an unreported claim for annual
statement purposes.
F. Date of
Disablement. The earliest date the insured is considered as being disabled
under the definition of disability in the contract, based on a doctor's
evaluation or other evidence. Normally, this date will coincide with the start
of any elimination period.
G.
Elimination Period. A specified number of days, weeks, or months starting at
the beginning of each period of loss, during which no benefits are
payable.
H. Gross Premium. The
amount of premium charged by the insurer. It includes the net premium (based on
claim-cost) for the risk, together with any loading for expenses, profit, or
contingencies.
I. Level Premium. A
premium calculated to remain unchanged throughout either the lifetime of the
policy, or for some shorter projected period of years. The premium need not be
guaranteed, in which case, although it is calculated to remain level, it may be
changed if any of the assumptions on which it is based are revised at a later
time.
1. Generally, the annual claim costs
are expected to increase each year and the insurer, instead of charging
premiums that correspondingly increase each year, charges a premium calculated
to remain level for a period of years or for the lifetime of the contract. In
this case the benefit portion of the premium is more than needed to provide for
the cost of benefits during the earlier years of the policy and less than the
actual cost in the later years.
2.
The building of a prospective contract reserve is a natural result of level
premiums.
J. Long-Term
Care Insurance. Any insurance policy or rider advertised, marketed, offered or
designed to provide coverage for not less than twelve (12) consecutive months
for each covered person on an expense incurred, indemnity, prepaid or other
basis; for one or more necessary or medically necessary diagnostic, preventive,
therapeutic, rehabilitative, maintenance or personal care services, provided in
a setting other than an acute care unit of a hospital. Such term also includes
a policy or rider which provides for payment of benefits based upon cognitive
impairment or the loss of functional capacity. Long-term care insurance may be
issued by insurers; fraternal benefit societies; nonprofit health, hospital,
and medical service corporations; prepaid health plans; health maintenance
organizations or any similar organization to the extent they are otherwise
authorized to issue life or health insurance. Long-term care insurance shall
not include any insurance policy which is offered primarily to provide basic
Medicare supplement coverage, basic hospital expense coverage, basic
medical-surgical expense coverage, hospital confinement indemnity coverage,
major medical expense coverage, disability income or related asset-protection
coverage, accident only coverage, specified disease or specified accident
coverage, or limited benefit health coverage.
K. Modal Premium. This refers to the premium
paid on a contract based on a premium term which could be annual, semi-annual,
quarterly, monthly, or weekly. Thus, if the annual premium is $100 and if,
instead, monthly premiums of $9 are paid, then the modal premium is
$9.
L. Negative Reserve. Normally
the terminal reserve is a positive value. However, if the values of the
benefits are decreasing with advancing age or duration it could be a negative
value, called a negative reserve.
M. Preliminary Term Reserve Method. Under
this method of valuation, the valuation net premium for each year falling
within the preliminary term period is exactly sufficient to cover the expected
incurred claims of that year, so that the terminal reserves will be zero at the
end of the year. As of the end of the preliminary term period, a new constant
valuation net premium (or stream of changing valuation premiums) becomes
applicable such that the present value of all such premiums is equal to the
present value of all claims expected to be incurred following the end of the
preliminary term period.
N. Present
Value of Amounts Not Yet Due on Claims. The reserve for "claims unaccrued" (see
definition), which may be discounted at interest.
O. Reserve. The term "reserve" is used to
include all items of benefit liability, whether in the nature of incurred claim
liability or in the nature of contract liability relating to future periods of
coverage, and whether the liability is accrued or unaccrued.
1. An insurer under its contracts promises
benefits which result in claims which have been incurred, that is, for which
the insurer has become obligated to make payment, on or prior to the valuation
date. On these claims, payments expected to be made after the valuation date
for accrued and unaccrued benefits are liabilities of the insurer which should
be provided for by establishing claim reserves; or
2. An insurer under its contracts promises
benefits which result in claims which are expected to be incurred after the
valuation date. Any present liability of the insurer for these future claims
should be provided for by the establishment of contract reserves and unearned
premium reserves.
P.
Terminal Reserve. This is the reserve at the end of a contract year, and is
defined as the present value of benefits expected to be incurred after that
contract year minus the present value of future valuation net
premiums.
Q. Unearned Premium
Reserve. This reserve values that portion of the premium paid or due to the
insurer which is applicable to the period of coverage extending beyond the
valuation date. Thus if an annual premium of $120 was paid on November 1, $20
would be earned as of December 31 and the remaining $100 would be unearned. The
unearned premium reserve could be on a gross basis as in this example, or on a
valuation net premium basis.
R.
Valuation Net Modal Premium. This is the modal fraction of the valuation net
annual premium that corresponds to the gross modal premium in effect on any
contract to which contract reserves apply. Thus, if the mode of payment in
effect is quarterly, the valuation net modal premium is the quarterly
equivalent of the valuation net annual premium.
Section VIII. Appendix C. Reserve for Waiver
of Premium--(Supplementary explanatory material).
A. Waiver of premium reserves involve several
special considerations. First, the disability valuation tables promulgated by
the NAIC are based on exposures that include contracts on premium waiver as
in-force contracts. Hence, contract reserves based on these tables are not
reserves on "active lives" but rather reserves on contracts "in force." This is
true for the 1964 CDT and for both the 1985 CIDA and CIDB tables.
B. Accordingly, tabular reserves using any of
these tables should value reserves on the following basis:
1. Claim reserves should include reserves for
premiums expected to be waived, valuing as a minimum the valuation net premium
being waived.
2. Premium reserves
should include contracts on premium waiver as in-force contracts, valuing as a
minimum the unearned modal valuation net premium being waived.
3. Contract reserves should include
recognition of the waiver of premium benefit in addition to other contract
benefits provided for, valuing as a minimum the valuation net premium to be
waived.
C. If an insurer
is, instead, valuing reserves on what is truly an active life table, or if a
specific valuation table is not being used but the insurer's gross premiums are
calculated on a basis that includes in the projected exposure only those
contracts for which premiums are being paid, then it may not be necessary to
provide specifically for waiver of premium reserves. Any insurer using such a
true "active life" basis should carefully consider, however, whether or not
additional liability should be recognized on account of premiums waived during
periods of disability or during claim continuation.