§ 27-4-17 Annual valuation of policies andreserves. – (a) The director of business regulation shall make annual valuations of alloutstanding policies, additions to policies, unpaid dividends, and all otherobligations of every life insurance corporation doing business in this state.All valuations made by the director, or by his or her authority, shall be madeupon the net premium basis. The legal minimum standard for valuation ofcontracts issued before January 1, 1907, shall be the American experience tableof mortality with the interest at four percent (4%) per annum, and forcontracts issued on or after that date the same table of mortality withinterest at three and one-half percent (3 1/2%) per annum. Any company mayadopt as a legal minimum standard, for the valuation of life insurance policiesissued on or after January 1, 1948, the commissioners reserve valuation method,with interest at three and one-half percent (3 1/2%) per annum, or in the caseof policies issued on or after April 17, 1975, four percent (4%) per annum forpolicies issued prior to April 27, 1979, and four and one-half percent (41/2%) per annum for policies issued on or after April 27, 1979, and either thecommissioners 1941 standard ordinary mortality table or the commissioners 1958standard ordinary mortality table for ordinary policies, and either the 1941standard industrial mortality table or the commissioners 1961 standardindustrial mortality table or any industrial mortality table, adopted after1980 by the National Association of Insurance Commissioners, that is approvedby regulation promulgated by the commissioner for use in determining theminimum standard of valuation for industrial policies, for industrial policiesin lieu of the legal minimum standard allowed by this section.
(b) The interest rates used in determining the minimumstandard for the valuation of all life insurance policies issued in aparticular calendar year on or after May 15, 1981, shall be the calendar yearstatutory valuation interest rates as defined in this section.
(c) The calendar year statutory valuation interest ratesshall be determined as follows and the results rounded to the nearerone-quarter of one percent (.25%):
For life insurance:
I = .03 + W (R1 -.03) + W/2 (R1 -.09); where R1 is thelesser of R and .09, R2 is the greater of R and .09, R is the referenceinterest rate defined in this section, and W is the weighting factor defined inthis section;
(2) If the calendar year statutory valuation interest ratefor any life insurance policies issued in any calendar year determined withoutreference to subdivision (c)(1) differs from the corresponding actual rate forsimilar policies issued in the immediately preceding calendar year by less thanone-half of one percent (.5%), the calendar year statutory valuation interestrate for these life insurance policies shall be equal to the correspondingactual rate for the immediately preceding calendar year. For the purposes ofapplying the provisions in this subdivision, the calendar year statutoryvaluation interest rate for life insurance policies issued in a calendar yearshall be determined for 1980 using the reference interest rate defined for 1979and shall be determined for each subsequent calendar year.
(3) The weighting factors referred to in the formula statedin subdivision (c)(1) are given in the following table:
Weighting Factors for Life Insurance
Guarantee
Duration Weighting
(Years) Factors
10 or less.50
More than 10, but not more than 20.45
More than 20.35
For life insurance, the guarantee duration is the maximumnumber of years the life insurance can remain in force on a basis guaranteed inthe policy or under options to convert to plans of life insurance with premiumrates or non-forfeiture values or both which are guaranteed in the originalpolicy.
(4) The reference interest rate referred to in subdivision(c)(1) shall be defined as follows:
(i) For all life insurance, the lesser of the average over aperiod of thirty-six (36) months and the average over a period of twelve (12)months, ending on June 30 of the calendar year next preceding the year ofissue, of Moody's corporate bond yield average – monthly averagecorporates, as published by Moody's Investors Service, Inc., or any successor;or
(ii) In the event that the Moody's corporate bond yieldaverage – monthly average corporates is no longer published by Moody'sInvestors Service, Inc., or in the event that the National Association ofInsurance Commissioners determines that the Moody's corporate bond yieldaverage – monthly average corporates, as published by Moody's InvestorsService, Inc., is no longer appropriate for the determination of the referenceinterest rate, then an alternative method for determination of the referencesinterest rate, which is adopted by the National Association of InsuranceCommissioners and approved by regulation promulgated by the commissioner, maybe substituted.
(d) The mortality table used in determining the minimumstandard for the valuation of ordinary life insurance policies issued on orafter May 15, 1981, shall be:
(1) The commissioners 1980 standard ordinary mortality table;
(2) At the election of the company for any one or morespecified plans of life insurance, the commissioners 1980 standard ordinarymortality table with ten (10) year select mortality factors; or
(3) Any ordinary mortality table, adopted after 1980 by theNational Association of Insurance Commissioners, that is approved by regulationpromulgated by the commissioner for use in determining the minimum standard ofvaluation for these policies.
(e) Reserves for any category of policies or contracts may becalculated, at the option of the insurer, according to any standard orstandards which produce greater aggregate reserves for all policies orcontracts than the legal minimum standard or standards.
§ 27-4-17 Annual valuation of policies andreserves. – (a) The director of business regulation shall make annual valuations of alloutstanding policies, additions to policies, unpaid dividends, and all otherobligations of every life insurance corporation doing business in this state.All valuations made by the director, or by his or her authority, shall be madeupon the net premium basis. The legal minimum standard for valuation ofcontracts issued before January 1, 1907, shall be the American experience tableof mortality with the interest at four percent (4%) per annum, and forcontracts issued on or after that date the same table of mortality withinterest at three and one-half percent (3 1/2%) per annum. Any company mayadopt as a legal minimum standard, for the valuation of life insurance policiesissued on or after January 1, 1948, the commissioners reserve valuation method,with interest at three and one-half percent (3 1/2%) per annum, or in the caseof policies issued on or after April 17, 1975, four percent (4%) per annum forpolicies issued prior to April 27, 1979, and four and one-half percent (41/2%) per annum for policies issued on or after April 27, 1979, and either thecommissioners 1941 standard ordinary mortality table or the commissioners 1958standard ordinary mortality table for ordinary policies, and either the 1941standard industrial mortality table or the commissioners 1961 standardindustrial mortality table or any industrial mortality table, adopted after1980 by the National Association of Insurance Commissioners, that is approvedby regulation promulgated by the commissioner for use in determining theminimum standard of valuation for industrial policies, for industrial policiesin lieu of the legal minimum standard allowed by this section.
(b) The interest rates used in determining the minimumstandard for the valuation of all life insurance policies issued in aparticular calendar year on or after May 15, 1981, shall be the calendar yearstatutory valuation interest rates as defined in this section.
(c) The calendar year statutory valuation interest ratesshall be determined as follows and the results rounded to the nearerone-quarter of one percent (.25%):
For life insurance:
I = .03 + W (R1 -.03) + W/2 (R1 -.09); where R1 is thelesser of R and .09, R2 is the greater of R and .09, R is the referenceinterest rate defined in this section, and W is the weighting factor defined inthis section;
(2) If the calendar year statutory valuation interest ratefor any life insurance policies issued in any calendar year determined withoutreference to subdivision (c)(1) differs from the corresponding actual rate forsimilar policies issued in the immediately preceding calendar year by less thanone-half of one percent (.5%), the calendar year statutory valuation interestrate for these life insurance policies shall be equal to the correspondingactual rate for the immediately preceding calendar year. For the purposes ofapplying the provisions in this subdivision, the calendar year statutoryvaluation interest rate for life insurance policies issued in a calendar yearshall be determined for 1980 using the reference interest rate defined for 1979and shall be determined for each subsequent calendar year.
(3) The weighting factors referred to in the formula statedin subdivision (c)(1) are given in the following table:
Weighting Factors for Life Insurance
Guarantee
Duration Weighting
(Years) Factors
10 or less.50
More than 10, but not more than 20.45
More than 20.35
For life insurance, the guarantee duration is the maximumnumber of years the life insurance can remain in force on a basis guaranteed inthe policy or under options to convert to plans of life insurance with premiumrates or non-forfeiture values or both which are guaranteed in the originalpolicy.
(4) The reference interest rate referred to in subdivision(c)(1) shall be defined as follows:
(i) For all life insurance, the lesser of the average over aperiod of thirty-six (36) months and the average over a period of twelve (12)months, ending on June 30 of the calendar year next preceding the year ofissue, of Moody's corporate bond yield average – monthly averagecorporates, as published by Moody's Investors Service, Inc., or any successor;or
(ii) In the event that the Moody's corporate bond yieldaverage – monthly average corporates is no longer published by Moody'sInvestors Service, Inc., or in the event that the National Association ofInsurance Commissioners determines that the Moody's corporate bond yieldaverage – monthly average corporates, as published by Moody's InvestorsService, Inc., is no longer appropriate for the determination of the referenceinterest rate, then an alternative method for determination of the referencesinterest rate, which is adopted by the National Association of InsuranceCommissioners and approved by regulation promulgated by the commissioner, maybe substituted.
(d) The mortality table used in determining the minimumstandard for the valuation of ordinary life insurance policies issued on orafter May 15, 1981, shall be:
(1) The commissioners 1980 standard ordinary mortality table;
(2) At the election of the company for any one or morespecified plans of life insurance, the commissioners 1980 standard ordinarymortality table with ten (10) year select mortality factors; or
(3) Any ordinary mortality table, adopted after 1980 by theNational Association of Insurance Commissioners, that is approved by regulationpromulgated by the commissioner for use in determining the minimum standard ofvaluation for these policies.
(e) Reserves for any category of policies or contracts may becalculated, at the option of the insurer, according to any standard orstandards which produce greater aggregate reserves for all policies orcontracts than the legal minimum standard or standards.
§ 27-4-17 Annual valuation of policies andreserves. – (a) The director of business regulation shall make annual valuations of alloutstanding policies, additions to policies, unpaid dividends, and all otherobligations of every life insurance corporation doing business in this state.All valuations made by the director, or by his or her authority, shall be madeupon the net premium basis. The legal minimum standard for valuation ofcontracts issued before January 1, 1907, shall be the American experience tableof mortality with the interest at four percent (4%) per annum, and forcontracts issued on or after that date the same table of mortality withinterest at three and one-half percent (3 1/2%) per annum. Any company mayadopt as a legal minimum standard, for the valuation of life insurance policiesissued on or after January 1, 1948, the commissioners reserve valuation method,with interest at three and one-half percent (3 1/2%) per annum, or in the caseof policies issued on or after April 17, 1975, four percent (4%) per annum forpolicies issued prior to April 27, 1979, and four and one-half percent (41/2%) per annum for policies issued on or after April 27, 1979, and either thecommissioners 1941 standard ordinary mortality table or the commissioners 1958standard ordinary mortality table for ordinary policies, and either the 1941standard industrial mortality table or the commissioners 1961 standardindustrial mortality table or any industrial mortality table, adopted after1980 by the National Association of Insurance Commissioners, that is approvedby regulation promulgated by the commissioner for use in determining theminimum standard of valuation for industrial policies, for industrial policiesin lieu of the legal minimum standard allowed by this section.
(b) The interest rates used in determining the minimumstandard for the valuation of all life insurance policies issued in aparticular calendar year on or after May 15, 1981, shall be the calendar yearstatutory valuation interest rates as defined in this section.
(c) The calendar year statutory valuation interest ratesshall be determined as follows and the results rounded to the nearerone-quarter of one percent (.25%):
For life insurance:
I = .03 + W (R1 -.03) + W/2 (R1 -.09); where R1 is thelesser of R and .09, R2 is the greater of R and .09, R is the referenceinterest rate defined in this section, and W is the weighting factor defined inthis section;
(2) If the calendar year statutory valuation interest ratefor any life insurance policies issued in any calendar year determined withoutreference to subdivision (c)(1) differs from the corresponding actual rate forsimilar policies issued in the immediately preceding calendar year by less thanone-half of one percent (.5%), the calendar year statutory valuation interestrate for these life insurance policies shall be equal to the correspondingactual rate for the immediately preceding calendar year. For the purposes ofapplying the provisions in this subdivision, the calendar year statutoryvaluation interest rate for life insurance policies issued in a calendar yearshall be determined for 1980 using the reference interest rate defined for 1979and shall be determined for each subsequent calendar year.
(3) The weighting factors referred to in the formula statedin subdivision (c)(1) are given in the following table:
Weighting Factors for Life Insurance
Guarantee
Duration Weighting
(Years) Factors
10 or less.50
More than 10, but not more than 20.45
More than 20.35
For life insurance, the guarantee duration is the maximumnumber of years the life insurance can remain in force on a basis guaranteed inthe policy or under options to convert to plans of life insurance with premiumrates or non-forfeiture values or both which are guaranteed in the originalpolicy.
(4) The reference interest rate referred to in subdivision(c)(1) shall be defined as follows:
(i) For all life insurance, the lesser of the average over aperiod of thirty-six (36) months and the average over a period of twelve (12)months, ending on June 30 of the calendar year next preceding the year ofissue, of Moody's corporate bond yield average – monthly averagecorporates, as published by Moody's Investors Service, Inc., or any successor;or
(ii) In the event that the Moody's corporate bond yieldaverage – monthly average corporates is no longer published by Moody'sInvestors Service, Inc., or in the event that the National Association ofInsurance Commissioners determines that the Moody's corporate bond yieldaverage – monthly average corporates, as published by Moody's InvestorsService, Inc., is no longer appropriate for the determination of the referenceinterest rate, then an alternative method for determination of the referencesinterest rate, which is adopted by the National Association of InsuranceCommissioners and approved by regulation promulgated by the commissioner, maybe substituted.
(d) The mortality table used in determining the minimumstandard for the valuation of ordinary life insurance policies issued on orafter May 15, 1981, shall be:
(1) The commissioners 1980 standard ordinary mortality table;
(2) At the election of the company for any one or morespecified plans of life insurance, the commissioners 1980 standard ordinarymortality table with ten (10) year select mortality factors; or
(3) Any ordinary mortality table, adopted after 1980 by theNational Association of Insurance Commissioners, that is approved by regulationpromulgated by the commissioner for use in determining the minimum standard ofvaluation for these policies.
(e) Reserves for any category of policies or contracts may becalculated, at the option of the insurer, according to any standard orstandards which produce greater aggregate reserves for all policies orcontracts than the legal minimum standard or standards.
