A. The report of valuation shall show, as reserve liabilities, the differencebetween the present midyear value of the promised benefits provided in thecertificates of the society in force and the present midyear value of thefuture net premiums as they are in practice actually collected, not includingany value for the right to make extra assessments and not including anyamount by which the present midyear value of future net premiums exceeds thepresent midyear value of promised benefits on individual certificates. At theoption of any society, the valuation may show the net tabular value insteadof the above value. The net tabular value as to certificates issued prior toJune 28, 1969, shall be determined in accordance with the provisions of lawapplicable prior to June 28, 1968, and as to certificates issued on or afterJune 28, 1969, shall not be less than the reserves determined according tothe Commissioners' reserve valuation method as defined in subsection C ofthis section. If the premium charged is less than the tabular net premiumaccording to the basis of valuation used, an additional reserve equal to thepresent value of the deficiency in the premiums shall be set up andmaintained as a liability. The reserve liabilities shall be properly adjustedin the event that the midyear or tabular values are not appropriate.
B. A society may value its certificates in accordance with valuationstandards authorized by the laws of this Commonwealth for the valuation ofpolicies issued by life insurers.
C. Reserves according to the Commissioners' reserve valuation method, for thelife insurance and endowment benefits of certificates providing for a uniformamount of insurance and requiring the payment of uniform premiums shall beany excess of the present value, at the date of valuation, of the futureguaranteed benefits provided for by those certificates, over the then presentvalue of any future modified net premiums therefor. The modified net premiumsfor any such certificate shall be a uniform percentage of the respectivecontract premiums for the benefits that the present value, at the date ofissue of the certificate, of all modified net premiums shall equal the sum ofthe then present value of the benefits provided for by the certificate andthe excess of 1 over 2, as follows:
1. A net-level premium equal to the present value, at the date of issue, ofthe benefits provided for after the first certificate year, divided by thepresent value, at the date of issue, of an annual annuity of one dollarpayable on each anniversary of the certificate on which a premium falls due.However, the net-level annual premium shall not exceed the net-level annualpremium on the nineteen-year premium whole life plan for insurance of thesame amount at any age one year higher than the age at issue of thecertificate; and
2. A net one-year term premium for the benefits provided for in the firstcertificate year. Reserves according to the Commissioners' reserve valuationmethod for (i) life insurance benefits for varying amounts of benefits orrequiring the payment of varying premiums, (ii) annuity and pure endowmentbenefits, (iii) disability and accidental death benefits in all certificatesand contracts, and (iv) all other benefits except life insurance andendowment benefits, shall be calculated by a method consistent with theprinciples of this subsection.
D. The present value of deferred payments due under incurred claims ormatured certificates shall be deemed a liability of the society and shall becomputed upon mortality and interest standards prescribed in subsections Ethrough G of this section.
E. The valuation and underlying data shall be certified by a competentactuary or, at the expense of the society, verified by the actuary of thedepartment of insurance of the state of domicile of the society.
F. The minimum standards of valuation for certificates issued prior to June28, 1969, shall be those provided by the law applicable immediately prior toJune 28, 1968, but not lower than the standards used in the calculating ofrates for those certificates.
G. The minimum standard of valuation for certificates issued after June 28,1969, shall be 3 1/2 percent interest and the following tables:
1. For certificates of life insurance, American Men Ultimate Table ofMortality, with Bowerman's or Davis' Extension thereof or with the consent ofthe Commission, the Commissioners 1941 Standard Ordinary Mortality Table, theCommissioners 1941 Standard Industrial Mortality Table or the Commissioners1958 Standard Ordinary Mortality Table, using actual age of the insured formale risks and an age not more than three years younger than the actual ageof the insured for female risks;
2. For annuity and pure endowment certificates, excluding any disability andaccidental death benefits in the certificates, the 1937 Standard AnnuityMortality Table or the Annuity Mortality Table for 1949, Ultimate, or anymodification of either of these tables approved by the Commission;
3. For total and permanent disability benefits in or supplementary to lifeinsurance certificates, Hunter's Disability Table, or the Class IIIDisability Table (1926) modified to conform to the contractual waitingperiod, or the tables of Period 2 disablement rates and the 1930 to 1950termination rates of the 1952 Disability Study of the Society of Actuarieswith due regard to the type of benefit. Any of these tables shall, for activelives, be combined with a mortality table permitted for calculating thereserves for life insurance certificates;
4. For accidental death benefits in or supplementary to life insurancecertificates, The Inter-Company Double Indemnity Mortality Table or the 1959Accidental Death Benefits Table. Either table shall be combined with amortality table permitted for calculating the reserves for life insurancecertificates; and
5. For noncancellable accident and health benefits, the Class III DisabilityTable (1926) with conference modifications or, with the consent of theCommission, tables based upon the society's own experience.
H. The Commission may, in its discretion, accept other standards forvaluation if it finds that the reserves produced by those standards will notbe less in the aggregate than reserves computed in accordance with theminimum valuation standard prescribed in this section. The Commission may,in its discretion, vary the standards of mortality applicable to allcertificates of insurance on substandard lives or other extra hazardous livesby any society licensed to do business in this Commonwealth. Whenever themortality experience under all certificates valued on the same mortalitytable exceeds the expected mortality according to that table for a period ofthree consecutive years, the Commission may require additional reserves thatit deems necessary on account of the certificates.
I. Any society, with the consent of the commissioner of insurance of thestate of domicile of the society and under any conditions he may impose, mayestablish and maintain reserves on its certificates in excess of the reservesrequired by the state. However, the contractual rights of any insured membershall not be affected by the excess reserves.
(Code 1950, §§ 38-316, 38.1-624; 1952, c. 317, § 38.1-638.45; 1968, c. 654;1975, c. 262; 1986, c. 562.)
A. The report of valuation shall show, as reserve liabilities, the differencebetween the present midyear value of the promised benefits provided in thecertificates of the society in force and the present midyear value of thefuture net premiums as they are in practice actually collected, not includingany value for the right to make extra assessments and not including anyamount by which the present midyear value of future net premiums exceeds thepresent midyear value of promised benefits on individual certificates. At theoption of any society, the valuation may show the net tabular value insteadof the above value. The net tabular value as to certificates issued prior toJune 28, 1969, shall be determined in accordance with the provisions of lawapplicable prior to June 28, 1968, and as to certificates issued on or afterJune 28, 1969, shall not be less than the reserves determined according tothe Commissioners' reserve valuation method as defined in subsection C ofthis section. If the premium charged is less than the tabular net premiumaccording to the basis of valuation used, an additional reserve equal to thepresent value of the deficiency in the premiums shall be set up andmaintained as a liability. The reserve liabilities shall be properly adjustedin the event that the midyear or tabular values are not appropriate.
B. A society may value its certificates in accordance with valuationstandards authorized by the laws of this Commonwealth for the valuation ofpolicies issued by life insurers.
C. Reserves according to the Commissioners' reserve valuation method, for thelife insurance and endowment benefits of certificates providing for a uniformamount of insurance and requiring the payment of uniform premiums shall beany excess of the present value, at the date of valuation, of the futureguaranteed benefits provided for by those certificates, over the then presentvalue of any future modified net premiums therefor. The modified net premiumsfor any such certificate shall be a uniform percentage of the respectivecontract premiums for the benefits that the present value, at the date ofissue of the certificate, of all modified net premiums shall equal the sum ofthe then present value of the benefits provided for by the certificate andthe excess of 1 over 2, as follows:
1. A net-level premium equal to the present value, at the date of issue, ofthe benefits provided for after the first certificate year, divided by thepresent value, at the date of issue, of an annual annuity of one dollarpayable on each anniversary of the certificate on which a premium falls due.However, the net-level annual premium shall not exceed the net-level annualpremium on the nineteen-year premium whole life plan for insurance of thesame amount at any age one year higher than the age at issue of thecertificate; and
2. A net one-year term premium for the benefits provided for in the firstcertificate year. Reserves according to the Commissioners' reserve valuationmethod for (i) life insurance benefits for varying amounts of benefits orrequiring the payment of varying premiums, (ii) annuity and pure endowmentbenefits, (iii) disability and accidental death benefits in all certificatesand contracts, and (iv) all other benefits except life insurance andendowment benefits, shall be calculated by a method consistent with theprinciples of this subsection.
D. The present value of deferred payments due under incurred claims ormatured certificates shall be deemed a liability of the society and shall becomputed upon mortality and interest standards prescribed in subsections Ethrough G of this section.
E. The valuation and underlying data shall be certified by a competentactuary or, at the expense of the society, verified by the actuary of thedepartment of insurance of the state of domicile of the society.
F. The minimum standards of valuation for certificates issued prior to June28, 1969, shall be those provided by the law applicable immediately prior toJune 28, 1968, but not lower than the standards used in the calculating ofrates for those certificates.
G. The minimum standard of valuation for certificates issued after June 28,1969, shall be 3 1/2 percent interest and the following tables:
1. For certificates of life insurance, American Men Ultimate Table ofMortality, with Bowerman's or Davis' Extension thereof or with the consent ofthe Commission, the Commissioners 1941 Standard Ordinary Mortality Table, theCommissioners 1941 Standard Industrial Mortality Table or the Commissioners1958 Standard Ordinary Mortality Table, using actual age of the insured formale risks and an age not more than three years younger than the actual ageof the insured for female risks;
2. For annuity and pure endowment certificates, excluding any disability andaccidental death benefits in the certificates, the 1937 Standard AnnuityMortality Table or the Annuity Mortality Table for 1949, Ultimate, or anymodification of either of these tables approved by the Commission;
3. For total and permanent disability benefits in or supplementary to lifeinsurance certificates, Hunter's Disability Table, or the Class IIIDisability Table (1926) modified to conform to the contractual waitingperiod, or the tables of Period 2 disablement rates and the 1930 to 1950termination rates of the 1952 Disability Study of the Society of Actuarieswith due regard to the type of benefit. Any of these tables shall, for activelives, be combined with a mortality table permitted for calculating thereserves for life insurance certificates;
4. For accidental death benefits in or supplementary to life insurancecertificates, The Inter-Company Double Indemnity Mortality Table or the 1959Accidental Death Benefits Table. Either table shall be combined with amortality table permitted for calculating the reserves for life insurancecertificates; and
5. For noncancellable accident and health benefits, the Class III DisabilityTable (1926) with conference modifications or, with the consent of theCommission, tables based upon the society's own experience.
H. The Commission may, in its discretion, accept other standards forvaluation if it finds that the reserves produced by those standards will notbe less in the aggregate than reserves computed in accordance with theminimum valuation standard prescribed in this section. The Commission may,in its discretion, vary the standards of mortality applicable to allcertificates of insurance on substandard lives or other extra hazardous livesby any society licensed to do business in this Commonwealth. Whenever themortality experience under all certificates valued on the same mortalitytable exceeds the expected mortality according to that table for a period ofthree consecutive years, the Commission may require additional reserves thatit deems necessary on account of the certificates.
I. Any society, with the consent of the commissioner of insurance of thestate of domicile of the society and under any conditions he may impose, mayestablish and maintain reserves on its certificates in excess of the reservesrequired by the state. However, the contractual rights of any insured membershall not be affected by the excess reserves.
(Code 1950, §§ 38-316, 38.1-624; 1952, c. 317, § 38.1-638.45; 1968, c. 654;1975, c. 262; 1986, c. 562.)
A. The report of valuation shall show, as reserve liabilities, the differencebetween the present midyear value of the promised benefits provided in thecertificates of the society in force and the present midyear value of thefuture net premiums as they are in practice actually collected, not includingany value for the right to make extra assessments and not including anyamount by which the present midyear value of future net premiums exceeds thepresent midyear value of promised benefits on individual certificates. At theoption of any society, the valuation may show the net tabular value insteadof the above value. The net tabular value as to certificates issued prior toJune 28, 1969, shall be determined in accordance with the provisions of lawapplicable prior to June 28, 1968, and as to certificates issued on or afterJune 28, 1969, shall not be less than the reserves determined according tothe Commissioners' reserve valuation method as defined in subsection C ofthis section. If the premium charged is less than the tabular net premiumaccording to the basis of valuation used, an additional reserve equal to thepresent value of the deficiency in the premiums shall be set up andmaintained as a liability. The reserve liabilities shall be properly adjustedin the event that the midyear or tabular values are not appropriate.
B. A society may value its certificates in accordance with valuationstandards authorized by the laws of this Commonwealth for the valuation ofpolicies issued by life insurers.
C. Reserves according to the Commissioners' reserve valuation method, for thelife insurance and endowment benefits of certificates providing for a uniformamount of insurance and requiring the payment of uniform premiums shall beany excess of the present value, at the date of valuation, of the futureguaranteed benefits provided for by those certificates, over the then presentvalue of any future modified net premiums therefor. The modified net premiumsfor any such certificate shall be a uniform percentage of the respectivecontract premiums for the benefits that the present value, at the date ofissue of the certificate, of all modified net premiums shall equal the sum ofthe then present value of the benefits provided for by the certificate andthe excess of 1 over 2, as follows:
1. A net-level premium equal to the present value, at the date of issue, ofthe benefits provided for after the first certificate year, divided by thepresent value, at the date of issue, of an annual annuity of one dollarpayable on each anniversary of the certificate on which a premium falls due.However, the net-level annual premium shall not exceed the net-level annualpremium on the nineteen-year premium whole life plan for insurance of thesame amount at any age one year higher than the age at issue of thecertificate; and
2. A net one-year term premium for the benefits provided for in the firstcertificate year. Reserves according to the Commissioners' reserve valuationmethod for (i) life insurance benefits for varying amounts of benefits orrequiring the payment of varying premiums, (ii) annuity and pure endowmentbenefits, (iii) disability and accidental death benefits in all certificatesand contracts, and (iv) all other benefits except life insurance andendowment benefits, shall be calculated by a method consistent with theprinciples of this subsection.
D. The present value of deferred payments due under incurred claims ormatured certificates shall be deemed a liability of the society and shall becomputed upon mortality and interest standards prescribed in subsections Ethrough G of this section.
E. The valuation and underlying data shall be certified by a competentactuary or, at the expense of the society, verified by the actuary of thedepartment of insurance of the state of domicile of the society.
F. The minimum standards of valuation for certificates issued prior to June28, 1969, shall be those provided by the law applicable immediately prior toJune 28, 1968, but not lower than the standards used in the calculating ofrates for those certificates.
G. The minimum standard of valuation for certificates issued after June 28,1969, shall be 3 1/2 percent interest and the following tables:
1. For certificates of life insurance, American Men Ultimate Table ofMortality, with Bowerman's or Davis' Extension thereof or with the consent ofthe Commission, the Commissioners 1941 Standard Ordinary Mortality Table, theCommissioners 1941 Standard Industrial Mortality Table or the Commissioners1958 Standard Ordinary Mortality Table, using actual age of the insured formale risks and an age not more than three years younger than the actual ageof the insured for female risks;
2. For annuity and pure endowment certificates, excluding any disability andaccidental death benefits in the certificates, the 1937 Standard AnnuityMortality Table or the Annuity Mortality Table for 1949, Ultimate, or anymodification of either of these tables approved by the Commission;
3. For total and permanent disability benefits in or supplementary to lifeinsurance certificates, Hunter's Disability Table, or the Class IIIDisability Table (1926) modified to conform to the contractual waitingperiod, or the tables of Period 2 disablement rates and the 1930 to 1950termination rates of the 1952 Disability Study of the Society of Actuarieswith due regard to the type of benefit. Any of these tables shall, for activelives, be combined with a mortality table permitted for calculating thereserves for life insurance certificates;
4. For accidental death benefits in or supplementary to life insurancecertificates, The Inter-Company Double Indemnity Mortality Table or the 1959Accidental Death Benefits Table. Either table shall be combined with amortality table permitted for calculating the reserves for life insurancecertificates; and
5. For noncancellable accident and health benefits, the Class III DisabilityTable (1926) with conference modifications or, with the consent of theCommission, tables based upon the society's own experience.
H. The Commission may, in its discretion, accept other standards forvaluation if it finds that the reserves produced by those standards will notbe less in the aggregate than reserves computed in accordance with theminimum valuation standard prescribed in this section. The Commission may,in its discretion, vary the standards of mortality applicable to allcertificates of insurance on substandard lives or other extra hazardous livesby any society licensed to do business in this Commonwealth. Whenever themortality experience under all certificates valued on the same mortalitytable exceeds the expected mortality according to that table for a period ofthree consecutive years, the Commission may require additional reserves thatit deems necessary on account of the certificates.
I. Any society, with the consent of the commissioner of insurance of thestate of domicile of the society and under any conditions he may impose, mayestablish and maintain reserves on its certificates in excess of the reservesrequired by the state. However, the contractual rights of any insured membershall not be affected by the excess reserves.
(Code 1950, §§ 38-316, 38.1-624; 1952, c. 317, § 38.1-638.45; 1968, c. 654;1975, c. 262; 1986, c. 562.)
