(1) PURPOSE. The
purpose of this section is to allow insurers who have elected an operative date
under s.
632.43(6m) (h), Stats., to provide for cash surrender
and paid-up nonforfeiture benefits which do not vary with the sex of the life
insured. Some life insurance policies are subject to the decision of the United
States supreme court in Arizona Governing Committee v.
Norris,103 Supreme Court Reporter 3492, which makes it illegal for an
employer to make contributions after August 1, 1983, to a defined contribution
pension plan if the benefits derived from those contributions differ by sex.
Separate provisions are set forth in this section for unisex policies that may
be subject to that decision and for unisex policies in general.
(2) SCOPE. Except as provided for in sub. (4)
(b), this section applies only to those policies issued in this state for which
the insurer or employer has determined that the implications of
Norris would prohibit the use of cash surrender and paid-up
nonforfeiture benefits which vary with the sex of the insured.
(3) DEFINITIONS.
(a) "lx" means the number of lives surviving
to age x.
(b) "1000 qx" means the
yearly death rate per thousand at age x.
(c)
1.
"Table A" means the 1980 CSO Mortality Table and the 1980 CET Mortality Table
for male lives, with or without 10-Year Select Mortality Factors. The yearly
death rate per thousand, 1000 qx, for these tables is published in Appendix A
and Appendix B, pages 618 and 619, Volume 33, Transactions of the Society of
Actuaries.
2. "Tables NA and SA"
means the corresponding 1980 nonsmoker and smoker mortality tables for male
lives.
(d)
1. "Table G" means the 1980 CSO Mortality
Table and the 1980 CET Mortality Table for female lives, with or without
10-Year Select Mortality Factors. The yearly death rate per thousand, 1000 qx,
from these tables is published in Appendix A and Appendix B, pages 618 and 619,
Volume 33, Transactions of the Society of Actuaries.
2. "Tables NG and SG" means the corresponding
1980 nonsmoker and smoker mortality tables for female lives.
(e)
1. "Tables B through F" means the blended
1980 CSO and 1980 CET Mortality Tables for policies issued on an age nearest
birthday basis with varying proportions of male lives to total lives. The ratio
of male lives to total lives is 80% for Table B, 60% for Table C, 50% for Table
D, 40% for Table E and 20% for Table F. These tables are published in the
proceedings of the National Association of Insurance Commissioners for the 1983
December meeting, pages 396 last birthday basis, the tables shall be modified
by interpolation between values of lx.
2. "Tables NB through NF and SB through SF"
means the corresponding 1980 blended nonsmoker and smoker mortality
tables.
(f) "1980 CSO
and CET Nonsmoker and Smoker Mortality Tables" means the mortality tables with
separate rates of mortality for nonsmokers and smokers derived from the 1980
CSO and 1980 CET Mortality Tables and adopted by the NAIC in December 1983.
Mortality rates for these tables are published on pp. 406-409, Proceedings of
the National Association of Insurance Commissioners, 1984, Vol. 1, and pp.
521-530 Proceedings of the National Association of Insurance Commissioners,
1987, Vol. 1.
(4) CASH
VALUE AND PAID-UP NONFORFEITURE BENEFITS.
(a)
1. For any policy of life insurance which
falls within sub. (2) of this section and is delivered or issued for delivery
in this state after the operative date of s.
632.43(6m) (h), Stats., applicable to the policy, the
cash surrender and paid-up nonforfeiture benefits provided under the policy may
be calculated using one of the sets of tables designated as Table A through
Table G. Tables A and G may not be used for policies issued on or after January
1, 1985 except where the proportion of persons insured is anticipated to be 90%
or more of one sex or the other or except for certain policies converted from
group insurance. Such group conversions issued on or after January 1, 1986,
shall use mortality tables based on the blend of lives by sex expected for such
policies if such group conversions are considered extensions of the Norris
decision.
2. In place of Tables A
through G under sub. (1), corresponding Tables NA through NG and SA through SG
may be used in situations where separate rates for nonsmokers and smokers are
used.
(b)
1. An insurer may elect one of the Tables B
through F in lieu of the 1980 CSO and CET tables for all life insurance
policies under which all contractual requirements and guarantees are
independent of the sex of the life insured, without regard to any opinion as to
the applicability of Norris; provided that the Table so elected may not be
changed unless the insurer can demonstrate to the satisfaction of the
commissioner that a different Blend is more appropriate.
2. In lieu of the above, corresponding Tables
NB through NF and SB through SF may be used in situations where separate rates
for nonsmokers and smokers are used.
(5) RESERVES. The minimum reserve standards
for life insurance policies are set forth in s.
623.06,
Stats., and are not affected by this section.
