South Dakota Administrative Rules
Title 20 - PUBLIC SAFETY
Article 20:06 - INSURANCE
Chapter 20:06:21 - Long-term care insurance
Section 20:06:21:62 - Reserve standards
Current through Register Vol. 50, page 114, March 25, 2024
(1) When long-term care benefits are provided through the acceleration of benefits under group or individual life policies or riders to such policies, policy reserves for the benefits shall be determined in accordance with accepted actuarial practices. Claim reserves shall also be established in the case when the policy or rider is in claim status.
Reserves for policies and riders subject to this section must be based on the multiple decrement model utilizing all relevant decrements except for voluntary termination rates. Single decrement approximations are acceptable if the calculation produces essentially similar reserves, if the reserve is clearly more conservative, or if the reserve is immaterial. The calculations may take into account the reduction in life insurance benefits due to the payment of long-term care benefits. However, in no event may the reserves for the long-term care benefit and the life insurance benefit be less than the reserves for the life insurance benefit assuming no long-term care benefit.
In the development and calculation of reserves for policies and riders subject to this section, due regard shall be given to the applicable policy provisions, marketing methods, administrative procedures, and all other considerations which have an impact on projected claim costs, including, but not limited to, the following:
Any applicable valuation morbidity table shall be certified as appropriate as a statutory valuation table by a member of the American Academy of Actuaries.
(2) When long-term care benefits are provided other than as in subdivision (1) of this section, reserves shall be determined in accordance with SDCL 58-6-75.
General Authority: SDCL 58-17B-4, 58-26-30.
Law Implemented: SDCL 58-6-75, 58-26-30.