(a)
Reserve Liabilities Under Standard
Valuation Law. Reserves liabilities for variable life insurance policies
shall be established under W.S. §
26-6-201 et seq. in accordance with actuarial
procedures that recognize the variable nature of the benefits provided and any
mortality guarantees.
(b)
Reserve Liabilities for the Guaranteed Minimum Death Benefit.
Reserve liabilities for the guaranteed minimum death benefit shall be the
reserve needed to provide for the contingency of death occurring when the
guaranteed minimum death benefit exceeds the death benefit that would be paid
in the absence of the guarantee, and shall be maintained in the general account
of the insurer and shall not be less than the greater of the following minimum
reserves:
(i) The aggregate total of the term
costs, if any, covering a period of one full year from the valuation date or,
if less, covering the period provided for in the guarantee not otherwise
provided for by the reserves held in the separate account, on each variable
life insurance contract, assuming an immediate one-third depreciation in the
current value of the assets in the separate account followed by a net
investment return equal to the assumed investment rate; or
(ii) The aggregate total of the "attained age
level" reserves on each variable life insurance contract. The "attained age
level" reserve on each variable life insurance contract shall not be less than
zero and shall equal the "residue," as described in Subparagraph (A) below, of
the prior year's "attained age level" reserve on the contract, with any such
"residue," increased or decreased by a payment computed on an attained age
basis as described in Subparagraph (B) below.
(A) The "residue" of the prior year's
"attained age level" reserve on each variable life insurance contract shall not
be less than zero and shall be determined by adding interest at the valuation
interest rate to the prior year's reserve, deducting the tabular claims based
on the "excess," if any, of the guaranteed minimum death benefit over the death
benefit that would be payable in the absence of a guarantee, and dividing the
net result by the tabular probability of survival. The "excess" referred to in
the preceding sentence shall be based on the actual level of death benefits
that would have been in effect during the preceding year in the absence of the
guarantee, taking appropriate account of the reserve assumptions regarding the
distribution of death claim payments over the year.
(B) The payment referred to in this paragraph
shall be computed so that the present value of a level payment of that amount
each year over the future period for which charges for this risk will be
collected under the contract, is equal to (A) minus (B) minus (C), where (A) is
the present value of the future guaranteed minimum death benefits, (B) is the
present value of the future death benefits that would be payable in the absence
of such guarantee, and (C) is any "residue," as described in Subparagraph (A),
of the prior year's "attained age level" reserve on such variable life
insurance contract. If no future charges for this risk will be collected under
the contract, the payment shall equal (A) minus (B) minus (C). The amounts of
the future death benefits referred to in (B) shall be computed assuming a net
investment return of the separate account which may differ from the assumed
investment rate or the valuation interest but in no event may exceed the
maximum interest rate permitted for the valuation of life contracts.
(iii) The valuation interest rate
and mortality table used in computing the two minimum reserves described in
Paragraph (i) and (ii) of this subsection shall conform to permissible
standards for the valuation of life insurance contracts. In determining such
minimum reserves, the company may employ suitable approximations and estimates,
including but not limited to groupings and averages.
(c)
Incidental Insurance
Benefit. Reserve liabilities for all fixed incidental insurance benefits
and any guarantees associated with variable incidental insurance benefits shall
be maintained in the general account and reserve liabilities for all variable
aspects of the variable incidental insurance benefits shall be maintained in a
separate account, in amounts determined in accordance with the actuarial
procedures appropriate to the benefit.
