§ 38.2-3129. Minimum valuation standard for policies issued prior to certaindates.
This section shall apply only to those policies and contracts issued prior tothe operative date stated in § 38.2-3214.
1. The legal minimum standard for the valuation of life insurance contractsissued prior to January 1, 1937, shall be on the basis of the AmericanExperience Table of Mortality, with interest at four percent per year, andstrictly in accordance with the terms and conditions of such contracts, andfor life insurance contracts issued on and after that date shall be theone-year preliminary term method of valuation, as hereinafter modified, onthe basis of the American Experience Table of Mortality or at the option ofthe insurer, the American Men Ultimate Table of Mortality with interest at 31/2 percent per year.
2. If the net renewal premium under a limited payment life preliminary termpolicy providing for the payment of less than twenty annual premiums underthe policy, or under an endowment preliminary term policy, exceeds that undera twenty payment life preliminary term policy, the reserve for that policy atthe end of any year, including the first, shall be at least the reserve on atwenty payment life preliminary term policy issued in the same year and atthe same age, together with an amount equivalent to the accumulation of a netlevel premium sufficient to provide for a pure endowment maturing one yearafter the date on which the last annual premium is due, or at the end oftwenty years if the policy provides for the payment of premiums for more thantwenty years, equal to the difference between the value on the maturity dateof a twenty payment life preliminary term policy and the full net levelpremium reserve at such time of such a limited payment life or endowmentpolicy. Policies valued by the above method shall contain a clause specifyingeither that the reserve of the policies shall be computed in accordance withthe twenty payment life modification of the preliminary term method ofvaluation, or that the first year's insurance is term insurance.
3. Except as otherwise provided in § 38.2-3131 for group annuity and pureendowment contracts, the legal minimum standard for the valuation ofannuities issued on and after January 1, 1937, shall be the Combined AnnuityTable, with interest at four percent per year, but annuities deferred ten ormore years and written in connection with life insurance shall be valued onthe same basis as that used in computing the consideration or premium for thelife insurance, or upon any higher standard, at the insurer's option.
4. The legal minimum standard for the calculation of the reserve liabilityfor insurance against disability incorporated in life insurance policiesissued on and after January 1, 1937, shall be on the basis of any tableadopted by the insurer and approved by the Commission, with interest at 3 1/2percent per year. However, in no case shall such liability be less thanone-half of the net annual premium for the disability benefit computed by thetable.
5. The legal standard for the valuation of group insurance written as yearlyrenewable term insurance issued on and after January 1, 1937, shall be on thebasis of the American Men Ultimate Table of Mortality with interest at 3 1/2percent per year.
6. The legal minimum standard for the valuation of industrial policies issuedon and after January 1, 1937, shall be the American Experience Table ofMortality, with interest at 3 1/2 percent per year; however, any insurer mayvoluntarily value its industrial policies on the basis of the standardindustrial mortality table or the substandard industrial mortality table, andby the level net premium method or in accordance with their terms by themodified preliminary term method as described in subdivision 2 of thissection, or the full preliminary term method.
All industrial policies issued on and after January 1, 1937, shall be valuedunder the rules set forth in this section, whether or not the policiesprovide for surrender values, either in cash, paid-up insurance, or extendedinsurance.
7. The Commission may vary the standards of interest and mortality in thecase of alien insurers as to contracts issued by those insurers in countriesother than the United States, and in particular cases of invalid lives andother extra hazards.
8. If the actual annual premium charged for insurance is less than the netannual premium for the insurance, computed as specified in this section, theinsurer shall set up an additional reserve equal to the value of an annuityof the difference between the actual premium charged and the net premiumrequired by this section, and the term of which at the date of the valuationshall equal the period during which future premium payments are to become dueon the insurance. The annuity shall be valued according to the table ofmortality with the rate of interest at which the net annual premium iscalculated.
9. Reserves for all of these policies and contracts, or all of any class ofthese policies and contracts, may be calculated, at the insurer's option,according to any standards which produce greater aggregate reserves for allthe policies and contracts, or all of the class of the policies and contractsso valued, than the minimum reserves required by this section; and in eachcase the insurer shall report to the Commission in its annual statement thestandards it used in making the valuation.
(Code 1950, § 38-393; 1952, c. 317, § 38.1-455; 1975, c. 215; 1979, c. 437;1986, c. 562.)
§ 38.2-3129. Minimum valuation standard for policies issued prior to certaindates.
This section shall apply only to those policies and contracts issued prior tothe operative date stated in § 38.2-3214.
1. The legal minimum standard for the valuation of life insurance contractsissued prior to January 1, 1937, shall be on the basis of the AmericanExperience Table of Mortality, with interest at four percent per year, andstrictly in accordance with the terms and conditions of such contracts, andfor life insurance contracts issued on and after that date shall be theone-year preliminary term method of valuation, as hereinafter modified, onthe basis of the American Experience Table of Mortality or at the option ofthe insurer, the American Men Ultimate Table of Mortality with interest at 31/2 percent per year.
2. If the net renewal premium under a limited payment life preliminary termpolicy providing for the payment of less than twenty annual premiums underthe policy, or under an endowment preliminary term policy, exceeds that undera twenty payment life preliminary term policy, the reserve for that policy atthe end of any year, including the first, shall be at least the reserve on atwenty payment life preliminary term policy issued in the same year and atthe same age, together with an amount equivalent to the accumulation of a netlevel premium sufficient to provide for a pure endowment maturing one yearafter the date on which the last annual premium is due, or at the end oftwenty years if the policy provides for the payment of premiums for more thantwenty years, equal to the difference between the value on the maturity dateof a twenty payment life preliminary term policy and the full net levelpremium reserve at such time of such a limited payment life or endowmentpolicy. Policies valued by the above method shall contain a clause specifyingeither that the reserve of the policies shall be computed in accordance withthe twenty payment life modification of the preliminary term method ofvaluation, or that the first year's insurance is term insurance.
3. Except as otherwise provided in § 38.2-3131 for group annuity and pureendowment contracts, the legal minimum standard for the valuation ofannuities issued on and after January 1, 1937, shall be the Combined AnnuityTable, with interest at four percent per year, but annuities deferred ten ormore years and written in connection with life insurance shall be valued onthe same basis as that used in computing the consideration or premium for thelife insurance, or upon any higher standard, at the insurer's option.
4. The legal minimum standard for the calculation of the reserve liabilityfor insurance against disability incorporated in life insurance policiesissued on and after January 1, 1937, shall be on the basis of any tableadopted by the insurer and approved by the Commission, with interest at 3 1/2percent per year. However, in no case shall such liability be less thanone-half of the net annual premium for the disability benefit computed by thetable.
5. The legal standard for the valuation of group insurance written as yearlyrenewable term insurance issued on and after January 1, 1937, shall be on thebasis of the American Men Ultimate Table of Mortality with interest at 3 1/2percent per year.
6. The legal minimum standard for the valuation of industrial policies issuedon and after January 1, 1937, shall be the American Experience Table ofMortality, with interest at 3 1/2 percent per year; however, any insurer mayvoluntarily value its industrial policies on the basis of the standardindustrial mortality table or the substandard industrial mortality table, andby the level net premium method or in accordance with their terms by themodified preliminary term method as described in subdivision 2 of thissection, or the full preliminary term method.
All industrial policies issued on and after January 1, 1937, shall be valuedunder the rules set forth in this section, whether or not the policiesprovide for surrender values, either in cash, paid-up insurance, or extendedinsurance.
7. The Commission may vary the standards of interest and mortality in thecase of alien insurers as to contracts issued by those insurers in countriesother than the United States, and in particular cases of invalid lives andother extra hazards.
8. If the actual annual premium charged for insurance is less than the netannual premium for the insurance, computed as specified in this section, theinsurer shall set up an additional reserve equal to the value of an annuityof the difference between the actual premium charged and the net premiumrequired by this section, and the term of which at the date of the valuationshall equal the period during which future premium payments are to become dueon the insurance. The annuity shall be valued according to the table ofmortality with the rate of interest at which the net annual premium iscalculated.
9. Reserves for all of these policies and contracts, or all of any class ofthese policies and contracts, may be calculated, at the insurer's option,according to any standards which produce greater aggregate reserves for allthe policies and contracts, or all of the class of the policies and contractsso valued, than the minimum reserves required by this section; and in eachcase the insurer shall report to the Commission in its annual statement thestandards it used in making the valuation.
(Code 1950, § 38-393; 1952, c. 317, § 38.1-455; 1975, c. 215; 1979, c. 437;1986, c. 562.)
§ 38.2-3129. Minimum valuation standard for policies issued prior to certaindates.
This section shall apply only to those policies and contracts issued prior tothe operative date stated in § 38.2-3214.
1. The legal minimum standard for the valuation of life insurance contractsissued prior to January 1, 1937, shall be on the basis of the AmericanExperience Table of Mortality, with interest at four percent per year, andstrictly in accordance with the terms and conditions of such contracts, andfor life insurance contracts issued on and after that date shall be theone-year preliminary term method of valuation, as hereinafter modified, onthe basis of the American Experience Table of Mortality or at the option ofthe insurer, the American Men Ultimate Table of Mortality with interest at 31/2 percent per year.
2. If the net renewal premium under a limited payment life preliminary termpolicy providing for the payment of less than twenty annual premiums underthe policy, or under an endowment preliminary term policy, exceeds that undera twenty payment life preliminary term policy, the reserve for that policy atthe end of any year, including the first, shall be at least the reserve on atwenty payment life preliminary term policy issued in the same year and atthe same age, together with an amount equivalent to the accumulation of a netlevel premium sufficient to provide for a pure endowment maturing one yearafter the date on which the last annual premium is due, or at the end oftwenty years if the policy provides for the payment of premiums for more thantwenty years, equal to the difference between the value on the maturity dateof a twenty payment life preliminary term policy and the full net levelpremium reserve at such time of such a limited payment life or endowmentpolicy. Policies valued by the above method shall contain a clause specifyingeither that the reserve of the policies shall be computed in accordance withthe twenty payment life modification of the preliminary term method ofvaluation, or that the first year's insurance is term insurance.
3. Except as otherwise provided in § 38.2-3131 for group annuity and pureendowment contracts, the legal minimum standard for the valuation ofannuities issued on and after January 1, 1937, shall be the Combined AnnuityTable, with interest at four percent per year, but annuities deferred ten ormore years and written in connection with life insurance shall be valued onthe same basis as that used in computing the consideration or premium for thelife insurance, or upon any higher standard, at the insurer's option.
4. The legal minimum standard for the calculation of the reserve liabilityfor insurance against disability incorporated in life insurance policiesissued on and after January 1, 1937, shall be on the basis of any tableadopted by the insurer and approved by the Commission, with interest at 3 1/2percent per year. However, in no case shall such liability be less thanone-half of the net annual premium for the disability benefit computed by thetable.
5. The legal standard for the valuation of group insurance written as yearlyrenewable term insurance issued on and after January 1, 1937, shall be on thebasis of the American Men Ultimate Table of Mortality with interest at 3 1/2percent per year.
6. The legal minimum standard for the valuation of industrial policies issuedon and after January 1, 1937, shall be the American Experience Table ofMortality, with interest at 3 1/2 percent per year; however, any insurer mayvoluntarily value its industrial policies on the basis of the standardindustrial mortality table or the substandard industrial mortality table, andby the level net premium method or in accordance with their terms by themodified preliminary term method as described in subdivision 2 of thissection, or the full preliminary term method.
All industrial policies issued on and after January 1, 1937, shall be valuedunder the rules set forth in this section, whether or not the policiesprovide for surrender values, either in cash, paid-up insurance, or extendedinsurance.
7. The Commission may vary the standards of interest and mortality in thecase of alien insurers as to contracts issued by those insurers in countriesother than the United States, and in particular cases of invalid lives andother extra hazards.
8. If the actual annual premium charged for insurance is less than the netannual premium for the insurance, computed as specified in this section, theinsurer shall set up an additional reserve equal to the value of an annuityof the difference between the actual premium charged and the net premiumrequired by this section, and the term of which at the date of the valuationshall equal the period during which future premium payments are to become dueon the insurance. The annuity shall be valued according to the table ofmortality with the rate of interest at which the net annual premium iscalculated.
9. Reserves for all of these policies and contracts, or all of any class ofthese policies and contracts, may be calculated, at the insurer's option,according to any standards which produce greater aggregate reserves for allthe policies and contracts, or all of the class of the policies and contractsso valued, than the minimum reserves required by this section; and in eachcase the insurer shall report to the Commission in its annual statement thestandards it used in making the valuation.
(Code 1950, § 38-393; 1952, c. 317, § 38.1-455; 1975, c. 215; 1979, c. 437;1986, c. 562.)
