R590. Insurance, Administration.R590-94. Smoker and Nonsmoker Mortality Tables for Determining Minimum Reserve Liabilities and Nonforfeiture Benefits.
R590-94-1. Authority.
This rule is promulgated by the commissioner pursuant to Sections 31A-2-201 and 31A-22-408.
R590-94-2. Purpose and Scope.
(1) The purpose of this rule is to permit the use of mortality tables that reflect differences in mortality between smokers and nonsmokers in determining minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits for life insurance policy forms with separate premium rates for smokers and nonsmokers.
(2) This rule applies to an insurer offering a life insurance policy.
R590-94-3. Definitions.
Terms used in this rule are defined in Section 31A-1-301. Additional terms are defined as follows:
(1) "1980 CSO Table, with or without Ten-Year Select Mortality Factor" means the mortality table, consisting of separate rates of mortality for male and female lives, developed by the Society of Actuaries Committee to Recommend New Mortality Tables for Valuation of Standard Individual Ordinary Life Insurance, incorporated in the 1980 NAIC Amendments to the Model Standard Valuation Law and Standard Nonforfeiture Law for Life Insurance, and referred to in those models as the Commissioner's 1980 Standard Ordinary Mortality table, with or without Ten-Year Select Mortality Factors. The same select factors will be used for both smokers and nonsmokers tables.
(2) "1980 CET Table" means the mortality table consisting of separate rates of mortality for male and female lives, developed by the Society of Actuaries Committee to Recommend New Mortality Tables for Valuation of Standard Individual Ordinary Life Insurance, incorporated in the 1980 NAIC Amendments to the Model Standard Nonforfeiture Law for Life Insurance, and referred to in those models as the Commissioner's 1980 Extended Term Insurance Table.
(3) "1958 CSO Table" means the mortality table developed by the Society of Actuaries Special Committee on New Mortality Tables, incorporated in the NAIC Model Standard Nonforfeiture Law for Life Insurance, and referred to in that model as the Commissioners 1958 Standard Ordinary Mortality Table.
(4) "1958 CET Table" means the mortality table developed by the Society of Actuaries Special Committee on New Mortality Tables, incorporated in the NAIC Model Standard Nonforfeiture Law for Life Insurance, and referred to in that model as the Commissioners 1958 Extended Term Insurance Table.
(5) "Composite mortality tables" refers to the mortality tables defined in Subsections (1) through (4) as they were originally published with rates of mortality that do not distinguish between smokers and nonsmokers.
(6) "NAIC" means the National Association of Insurance Commissioners.
(7) "Smoker and nonsmoker mortality tables" refers to the mortality tables with separate rates of mortality for smokers and nonsmokers derived from the tables defined in Subsections (1) through (4) of this section which were developed by the Society of Actuaries Task Force on Smoker/Nonsmoker Mortality and the California Insurance Department staff and recommended by the NAIC Technical Staff Actuarial Group.
R590-94-4. Alternate Tables.
(1) For any life insurance policy delivered or issued for delivery in this state after July 1, 1985, and before January 1, 1989, at the option of the company and subject to the conditions stated in Section R590-94-5:
(a) the 1958 CSO Smoker and Nonsmoker Mortality Tables may be substituted for the 1980 CSO Table, with or without Ten-Year Select Mortality Factors; and
(b) the 1958 CET Smoker and Nonsmoker Mortality Tables may be substituted for the 1980 CET Table for use in determining minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits.
(2) For any life insurance policy delivered or issued for delivery in this state after July 1, 1985, at the option of the company and subject to the conditions stated in Section R590-94-5:
(a) the 1980 CSO Smoker and Nonsmoker Mortality Tables, with or without Ten-Year Select Mortality Factors, may be substituted for the 1980 CSO Table, with or without Ten-Year Select Mortality Factors; and
(b) the 1980 CET Smoker and Nonsmoker Mortality tables may be substituted for the 1980 CET Table for use in determining minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits.
R590-94-5. Conditions.
(1) For each life insurance policy form with separate rates for smokers and nonsmokers an insurer may:
(a) use composite mortality tables to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits;
(b) use smoker and nonsmoker mortality tables to determine the valuation net premiums and additional minimum reserves, if any, required by Section 31A-17-511, and use composite mortality tables to determine the basic minimum reserves, minimum cash surrender values and amounts of paid-up nonforfeiture benefits; or
(c) use smoker and nonsmoker mortality tables to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits.
