40-608.Reserve funds; reports.On and after January 1, 1928,every assessment life association transacting business under the provisions ofthis article shall hold and maintain upon every contract of life insurancethereafter issued assets in excess of other liabilities to provide forreserves not less than the minimum reserves prescribed herein. The basisfor minimum reserves under this act shall be the American Experience Tableof Mortality and interest at four percentum per annum. Contracts mayprovide for not more than one-year preliminary-term insurance byincorporating therein a clause plainly showing that the first year'sinsurance under such contracts is term insurance, purchased by the whole ora part of the contribution to be received during the first contract year,and such contracts may be valued on the basis of the mortality table andinterest rate above prescribed by the preliminary-term plan modified asfollows: If the premium or contribution charged for any contract exceedsthat charged for like insurance under twenty-payment life preliminary-termcontracts of the same association, the reserve thereon at the end of anyyear, including the first, shall not be less than the reserve on atwenty-payment life preliminary-term contract issued in the same year andat the same age, together with an amount which shall be equivalent to theaccumulation of a level net premium sufficient to provide for a pureendowment at the end of the premium-paying period equal to the differencebetween the value at the end of such period of such a twenty-payment lifepreliminary-term contract and the full level net premium reserve at suchtime of such a contract.
The premium-paying period is the period during which premiums areconcurrently payable under such twenty-payment life preliminary-termcontract and such other contract. Under any contract providing, in additionto the regular contributions, for the payment concurrently of additionalcontributions to the extent needed to pay its share of claims and expensesand to maintain the tabular reserves required by this act, or requiring anysuch additional amount to be charged as an indebtedness not exceeding thetabular reserves on the contract and providing for terminating the contractwhenever such charges shall equal the tabular reserves, no liability shallbe charged in any valuation for any deficiency in future contributions solong as such payments are actually collected or such charges are actuallymade. If any contracts are issued on or after January 1, 1928, which do notcontain the aboveprovisions, theassociation shall maintain as to such contracts the reserves as provided inK.S.A. 40-409 and amendments thereto.
The assets representing the reserves on all contracts issued on andafter January 1, 1928, and onsuch othercontracts as the association shall designate upon which a reserve at leastequal to the minimum reserve prescribed herein has been accumulated, shallbe deposited in the form of approved securities in this state as provided inK.S.A. 40-229a or with the properofficial or institution of some other state, for the soleand separate use and benefit of such contracts and the insured andbeneficiaries thereunder, and no other contracts, insured, beneficiaries orclaimants shall have or acquire any right or interest therein; andprovisions shall be made for requiring during each calendar year from suchcontracts as are not included under this section, contributions, which,together with available assets not so held separate, shall be sufficient toprovide for the shares of claims, expenses and other current liabilities tobe borne by such contracts as are not included herein. No such separationshall be required whenever reserves on alloutstandingcontracts are maintained in accordance with the provisions of this code.Such association may accumulate, maintain and distribute a surplus orsurpluses over and above such reserves and shall do so as the bylaws of theassociation may provide in conformity with this code.
Nothing herein shall be construed as giving to any individual contract,insured or beneficiary any right or claim to any reserves or surplus or toany part thereof other than in the manner and to the extent provided in thecontract or bylaws of the association; nor as making any such reserves,except the reserves required herein, a liability in determining thesolvency of the association. Unless an association shall provide otherwise,the actual mortality experienced on all outstanding contracts shall bedetermined and distributed between all such outstanding contracts inproportion of the cost of insurance on the basis herein provided or suchother mortality table approximating the experience of the association as itmay provide. Every association may include in contracts issued hereunder,provisions for total and permanent disability benefits, accidental deathbenefits, and the payment of the benefits in installments or annuities. Itshall maintain for all such added benefits,anyadditional reserves as may be prescribed by the commissioner of insurance,which additional reserves shall be subject to the provisions herein forsegregation of reserves.
An association may provide in its contracts for cash surrender and loanvalues to an amount not exceeding the reserve, or for the equivalentpaid-up or extended term insurance based upon a rate of mortality not lowerthan and a rate of interest not higher than that used in determining thereserve provided herein. Whenever the assets held separately for contractsissued on and after January 1,1928, and such other contracts designated as provided herein, shall exceedthereserves thereon by not less than five percentum of such reserves, anyexcess assets derived from mortality savings, savings from expenseloadings, and investment gains may be apportioned, distributed and used asprovided by the association.
In addition to the annual report required by law, every such associationshall report annually to the commissioner of insurance on or before March 1,the valuation of outstanding contracts issued onandafter January 1, 1928, ordesignated as provided herein, and in force on the preceding December 31. Thereport shall contain a statement of the rate ofearning of the meaninvested assets, the interest earnings at such rate on the segregatedportion of the assets, the interest required to maintain the reserves, theexpected or tabular mortality, the actual mortality experienced, and theamount of reserve released by death and lapse, stated separately. Suchreport shall be certified by the actuary of the association. Such valuationshall be reported in such manner and such other reports shall be made andsuch information furnished as the commissioner of insurance may require.
History: L. 1927, ch. 231, 40-608;L. 1996, ch. 25, § 9; July 1.
40-608.Reserve funds; reports.On and after January 1, 1928,every assessment life association transacting business under the provisions ofthis article shall hold and maintain upon every contract of life insurancethereafter issued assets in excess of other liabilities to provide forreserves not less than the minimum reserves prescribed herein. The basisfor minimum reserves under this act shall be the American Experience Tableof Mortality and interest at four percentum per annum. Contracts mayprovide for not more than one-year preliminary-term insurance byincorporating therein a clause plainly showing that the first year'sinsurance under such contracts is term insurance, purchased by the whole ora part of the contribution to be received during the first contract year,and such contracts may be valued on the basis of the mortality table andinterest rate above prescribed by the preliminary-term plan modified asfollows: If the premium or contribution charged for any contract exceedsthat charged for like insurance under twenty-payment life preliminary-termcontracts of the same association, the reserve thereon at the end of anyyear, including the first, shall not be less than the reserve on atwenty-payment life preliminary-term contract issued in the same year andat the same age, together with an amount which shall be equivalent to theaccumulation of a level net premium sufficient to provide for a pureendowment at the end of the premium-paying period equal to the differencebetween the value at the end of such period of such a twenty-payment lifepreliminary-term contract and the full level net premium reserve at suchtime of such a contract.
The premium-paying period is the period during which premiums areconcurrently payable under such twenty-payment life preliminary-termcontract and such other contract. Under any contract providing, in additionto the regular contributions, for the payment concurrently of additionalcontributions to the extent needed to pay its share of claims and expensesand to maintain the tabular reserves required by this act, or requiring anysuch additional amount to be charged as an indebtedness not exceeding thetabular reserves on the contract and providing for terminating the contractwhenever such charges shall equal the tabular reserves, no liability shallbe charged in any valuation for any deficiency in future contributions solong as such payments are actually collected or such charges are actuallymade. If any contracts are issued on or after January 1, 1928, which do notcontain the aboveprovisions, theassociation shall maintain as to such contracts the reserves as provided inK.S.A. 40-409 and amendments thereto.
The assets representing the reserves on all contracts issued on andafter January 1, 1928, and onsuch othercontracts as the association shall designate upon which a reserve at leastequal to the minimum reserve prescribed herein has been accumulated, shallbe deposited in the form of approved securities in this state as provided inK.S.A. 40-229a or with the properofficial or institution of some other state, for the soleand separate use and benefit of such contracts and the insured andbeneficiaries thereunder, and no other contracts, insured, beneficiaries orclaimants shall have or acquire any right or interest therein; andprovisions shall be made for requiring during each calendar year from suchcontracts as are not included under this section, contributions, which,together with available assets not so held separate, shall be sufficient toprovide for the shares of claims, expenses and other current liabilities tobe borne by such contracts as are not included herein. No such separationshall be required whenever reserves on alloutstandingcontracts are maintained in accordance with the provisions of this code.Such association may accumulate, maintain and distribute a surplus orsurpluses over and above such reserves and shall do so as the bylaws of theassociation may provide in conformity with this code.
Nothing herein shall be construed as giving to any individual contract,insured or beneficiary any right or claim to any reserves or surplus or toany part thereof other than in the manner and to the extent provided in thecontract or bylaws of the association; nor as making any such reserves,except the reserves required herein, a liability in determining thesolvency of the association. Unless an association shall provide otherwise,the actual mortality experienced on all outstanding contracts shall bedetermined and distributed between all such outstanding contracts inproportion of the cost of insurance on the basis herein provided or suchother mortality table approximating the experience of the association as itmay provide. Every association may include in contracts issued hereunder,provisions for total and permanent disability benefits, accidental deathbenefits, and the payment of the benefits in installments or annuities. Itshall maintain for all such added benefits,anyadditional reserves as may be prescribed by the commissioner of insurance,which additional reserves shall be subject to the provisions herein forsegregation of reserves.
An association may provide in its contracts for cash surrender and loanvalues to an amount not exceeding the reserve, or for the equivalentpaid-up or extended term insurance based upon a rate of mortality not lowerthan and a rate of interest not higher than that used in determining thereserve provided herein. Whenever the assets held separately for contractsissued on and after January 1,1928, and such other contracts designated as provided herein, shall exceedthereserves thereon by not less than five percentum of such reserves, anyexcess assets derived from mortality savings, savings from expenseloadings, and investment gains may be apportioned, distributed and used asprovided by the association.
In addition to the annual report required by law, every such associationshall report annually to the commissioner of insurance on or before March 1,the valuation of outstanding contracts issued onandafter January 1, 1928, ordesignated as provided herein, and in force on the preceding December 31. Thereport shall contain a statement of the rate ofearning of the meaninvested assets, the interest earnings at such rate on the segregatedportion of the assets, the interest required to maintain the reserves, theexpected or tabular mortality, the actual mortality experienced, and theamount of reserve released by death and lapse, stated separately. Suchreport shall be certified by the actuary of the association. Such valuationshall be reported in such manner and such other reports shall be made andsuch information furnished as the commissioner of insurance may require.
History: L. 1927, ch. 231, 40-608;L. 1996, ch. 25, § 9; July 1.
40-608.Reserve funds; reports.On and after January 1, 1928,every assessment life association transacting business under the provisions ofthis article shall hold and maintain upon every contract of life insurancethereafter issued assets in excess of other liabilities to provide forreserves not less than the minimum reserves prescribed herein. The basisfor minimum reserves under this act shall be the American Experience Tableof Mortality and interest at four percentum per annum. Contracts mayprovide for not more than one-year preliminary-term insurance byincorporating therein a clause plainly showing that the first year'sinsurance under such contracts is term insurance, purchased by the whole ora part of the contribution to be received during the first contract year,and such contracts may be valued on the basis of the mortality table andinterest rate above prescribed by the preliminary-term plan modified asfollows: If the premium or contribution charged for any contract exceedsthat charged for like insurance under twenty-payment life preliminary-termcontracts of the same association, the reserve thereon at the end of anyyear, including the first, shall not be less than the reserve on atwenty-payment life preliminary-term contract issued in the same year andat the same age, together with an amount which shall be equivalent to theaccumulation of a level net premium sufficient to provide for a pureendowment at the end of the premium-paying period equal to the differencebetween the value at the end of such period of such a twenty-payment lifepreliminary-term contract and the full level net premium reserve at suchtime of such a contract.
The premium-paying period is the period during which premiums areconcurrently payable under such twenty-payment life preliminary-termcontract and such other contract. Under any contract providing, in additionto the regular contributions, for the payment concurrently of additionalcontributions to the extent needed to pay its share of claims and expensesand to maintain the tabular reserves required by this act, or requiring anysuch additional amount to be charged as an indebtedness not exceeding thetabular reserves on the contract and providing for terminating the contractwhenever such charges shall equal the tabular reserves, no liability shallbe charged in any valuation for any deficiency in future contributions solong as such payments are actually collected or such charges are actuallymade. If any contracts are issued on or after January 1, 1928, which do notcontain the aboveprovisions, theassociation shall maintain as to such contracts the reserves as provided inK.S.A. 40-409 and amendments thereto.
The assets representing the reserves on all contracts issued on andafter January 1, 1928, and onsuch othercontracts as the association shall designate upon which a reserve at leastequal to the minimum reserve prescribed herein has been accumulated, shallbe deposited in the form of approved securities in this state as provided inK.S.A. 40-229a or with the properofficial or institution of some other state, for the soleand separate use and benefit of such contracts and the insured andbeneficiaries thereunder, and no other contracts, insured, beneficiaries orclaimants shall have or acquire any right or interest therein; andprovisions shall be made for requiring during each calendar year from suchcontracts as are not included under this section, contributions, which,together with available assets not so held separate, shall be sufficient toprovide for the shares of claims, expenses and other current liabilities tobe borne by such contracts as are not included herein. No such separationshall be required whenever reserves on alloutstandingcontracts are maintained in accordance with the provisions of this code.Such association may accumulate, maintain and distribute a surplus orsurpluses over and above such reserves and shall do so as the bylaws of theassociation may provide in conformity with this code.
Nothing herein shall be construed as giving to any individual contract,insured or beneficiary any right or claim to any reserves or surplus or toany part thereof other than in the manner and to the extent provided in thecontract or bylaws of the association; nor as making any such reserves,except the reserves required herein, a liability in determining thesolvency of the association. Unless an association shall provide otherwise,the actual mortality experienced on all outstanding contracts shall bedetermined and distributed between all such outstanding contracts inproportion of the cost of insurance on the basis herein provided or suchother mortality table approximating the experience of the association as itmay provide. Every association may include in contracts issued hereunder,provisions for total and permanent disability benefits, accidental deathbenefits, and the payment of the benefits in installments or annuities. Itshall maintain for all such added benefits,anyadditional reserves as may be prescribed by the commissioner of insurance,which additional reserves shall be subject to the provisions herein forsegregation of reserves.
An association may provide in its contracts for cash surrender and loanvalues to an amount not exceeding the reserve, or for the equivalentpaid-up or extended term insurance based upon a rate of mortality not lowerthan and a rate of interest not higher than that used in determining thereserve provided herein. Whenever the assets held separately for contractsissued on and after January 1,1928, and such other contracts designated as provided herein, shall exceedthereserves thereon by not less than five percentum of such reserves, anyexcess assets derived from mortality savings, savings from expenseloadings, and investment gains may be apportioned, distributed and used asprovided by the association.
In addition to the annual report required by law, every such associationshall report annually to the commissioner of insurance on or before March 1,the valuation of outstanding contracts issued onandafter January 1, 1928, ordesignated as provided herein, and in force on the preceding December 31. Thereport shall contain a statement of the rate ofearning of the meaninvested assets, the interest earnings at such rate on the segregatedportion of the assets, the interest required to maintain the reserves, theexpected or tabular mortality, the actual mortality experienced, and theamount of reserve released by death and lapse, stated separately. Suchreport shall be certified by the actuary of the association. Such valuationshall be reported in such manner and such other reports shall be made andsuch information furnished as the commissioner of insurance may require.
History: L. 1927, ch. 231, 40-608;L. 1996, ch. 25, § 9; July 1.
