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31.05.03.00.htm 31.05.03.00. Title 31 MARYLAND INSURANCE ADMINISTRATION Subtitle 05 ASSETS, LIABILITIES, RESERVES, AND INVESTMENTS OF INSURERS Chapter 03 Valuation of Life Insurance Policies Authority: Insurance Article, §2-109, Title 5, Subtitle 3, and §16-309, Annotated Code of Maryland
31.05.03.01.htm 31.05.03.01. 01 Purpose.. A. The purpose of this chapter is to provide:. 1) Tables of select mortality factors and rules for their use;. 2) Rules concerning a minimum standard for the valuation of plans with nonlevel premiums or benefits;3) Rules concerning a minimum standard for the valuation of plans with secondary guarantees;. 4) Mortality tables to determine minimum valuation standards and minimum nonforfeiture standards for life insurance policies; and
31.05.03.02.htm 31.05.03.02. 02 Applicability.. A. In General. Except as provided in §B of this regulation, this chapter applies to all life insurance policies, with or without nonforfeiture values, issued on or after the effective date of this chapter, subject to the conditions of §C of this regulation.B. Exceptions. Regulations .07―13 of this chapter do not apply to:. 1) An individual life insurance policy:. a) Issued on or after the effective date of this chapter; and. b) Issued in accordance w
31.05.03.03.htm 31.05.03.03. 03 Definitions.. A. In this chapter, the following terms have the meanings indicated.. B. Terms Defined.. 1) "Basic reserves" means reserves calculated in accordance with the principles of Insurance Article, §5-307, Annotated Code of Maryland.2) "Commissioner" means the Maryland Insurance Commissioner.. 3) "Composite mortality tables" means mortality tables with rates of mortality that do not distinguish between smokers and nonsmokers.4) "Contract segmentation
31.05.03.04.htm 31.05.03.04. 04 Incorporation by Reference.. A. The Select Mortality Factors Tables from pages 830-17―830-36 of the NAIC Valuation of Life Insurance Policies Model Regulation, as adopted in March 1999, are incorporated by reference.B. The 2001 CSO Mortality Table, as adopted by the NAIC in December 2002 and included in the Proceedings of the NAIC (2nd Quarter 2002) is incorporated by reference.C. The 2001 CSO Preferred Class Structure Mortality Table, as adopted by the NAIC in September 2006
31.05.03.05.htm 31.05.03.05. 05 Application of Mortality Tables.. A. Policies Issued Before January 1, 2009.. 1) At the election of an insurer for any one or more specified plans of insurance, an insurer may use the 1980 CSO valuation table or the 2001 CSO Mortality Table as the minimum standard for a policy issued before January 1, 2009.2) If an insurer elects to use the 2001 CSO Mortality Table as the minimum standard, the insurer shall do so for both valuation and nonforfeiture purpB. Policies Issued on or
31.05.03.06.htm 31.05.03.06. 06 Conditions for Use of Mortality Tables.. A. Plans of Insurance With Separate Rates for Smokers and Nonsmokers. For each plan of insurance with separate rates for smokers and nonsmokers, an insurer may use:1) Composite mortality tables to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits;2) Smoker and nonsmoker mortality tables to determine the valuation net premiums and additional minimum reserves, if any, req
31.05.03.07.htm 31.05.03.07. 07 General Calculation Requirements for Contract Segmentation Method.. A. All calculations are made using:. 1) For policies issued before January 1, 2009, the 1980 CSO valuation table or the 2001 CSO Mortality Table;2) For policies issued on or after January 1, 2009, the 2001 CSO Mortality Table; and. 3) If elected, the optional minimum mortality standard for deficiency reserves stipulated in Regulation .10B―D of this chapter.B. The length of a particular contract segment sha
31.05.03.08.htm 31.05.03.06. 08 General Calculation Requirements for Segmented Reserves.. A. The net premiums within each segment are a uniform percentage of the respective guaranteed gross premiums within the segment. The uniform percentage for each segment is such that, at the beginning of the segment, the present value of the net premiums within the segment equals:1) The present value of the death benefits within the segment; plus. 2) The present value of any unusual guaranteed cash value, as specified in
31.05.03.09.htm 31.05.03.09. 09 General Calculation Requirements for Unitary Reserves.. A. Guaranteed benefits and modified net premiums are considered to the mandatory expiration of the policy.B. Modified net premiums are a uniform percentage of the respective guaranteed gross premiums, where the uniform percentage is such that, at issue, the present value of the net premiums equals the present value of all death benefits and pure endowments, plus the excess of §B(1) over §B(2) of this regulation as follows:
31.05.03.10.htm 31.05.03.10. 10 General Calculation Requirements for Basic Reserves and Premium Deficiency Reserves.. A. Basic Reserves.. 1) At the election of the company for any one or more specified plans of life insurance, the minimum mortality standard for basic reserves may be calculated using:a) For policies issued before January 1, 2009, the 1980 CSO valuation table with select mortality factors or the 2001 CSO Morb) For policies issued on or after January 1, 2009, the 2001 CSO Mortality Table..
31.05.03.11.htm 31.05.03.11. 11 Calculation of Minimum Valuation Standard for Policies with Guaranteed Nonlevel Gross Premiums or Guaranteed Nonlevel Benefits (Other than Universal Life Policies)A. Basic Reserves. Basic reserves shall be calculated as the greater of the segmented reserves and the unitary reserves. Both the segmented reserves and the unitary reserves for any policy shall use the same valuation mortality table and selection factors. At the option of the insurer, in calculatin
31.05.03.12.htm 31.05.03.12. 12 Calculation of Minimum Valuation Standard for Flexible Premium and Fixed Premium Universal Life Insurance Policies that Contain Provisions Resulting in the Ability of a Policyowner to Keep a Policy in Force over a Secondary Guarantee Period.A. General.. 1) Policies with a secondary guarantee include a policy:. a) With a guarantee that the policy remains in force at the original schedule of benefits, subject only to the payment of specified premiums;b) In which the minimum p
31.05.03.13.htm 31.05.03.13. 13 Select Mortality Factors.. A. The tables of the Select Mortality Factors, which are incorporated by reference under Regulation .04 of this chapter, are the bases to which the respective percentage of Regulation .10C(2) and (3) of this chapter are applied.B. The six tables of base select mortality factors, which are incorporated by reference, include:. 1) Male aggregate;. 2) Male nonsmoker;. 3) Male smoker;. 4) Female aggregate;. 5) Female nonsmoker; and. C. These tables apply to
31.05.03.14.htm 31.05.03.14. 14 Gender-Blended Tables.. An insurer that issues an ordinary life insurance policy for delivery in this State on or after January 1, 2004, that utilizes the same premium rates charged for male and female lives may:A. Substitute a mortality table that is a blend of the 2001 CSO Mortality Table (F) and the 2001 CSO Mortality Table (M) instead of the 2001 CSO Mortality Table for use in determining:1) Minimum cash surrender values; and. 2) Amounts of paid-up nonforfeiture benefits;.
31.05.03.15.htm 31.05.03.15. 15 2001 CSO Preferred Class Structure Mortality Tables.. A. This regulation applies to policies issued on or after January 1, 2004.. B. Election of Minimum Valuation Standard.. 1) At the election of the insurer for any one or more specified plans of insurance and subject to satisfying the conditions stated in this chapter, the 2001 CSO Preferred Class Structure Mortality Table may be substituted in place of the 2001 CSO smoker or nonsmoker Mortality Table as the minimum va
31.05.03.9999.htm 31.05.03.9999. Administrative History Effective date: May 5, 1997 (24:9 Md. R. 656) Annotation: Implementation of this chapter is described in Regulation .02D. Notice that this chapter is being implemented will be published in the Maryland Register. ―Chapter recodified from COMAR 09.31.16 to COMAR 31.05.03, July 1998 ―. Chapter revised as an emergency provision effective January 1, 2000 (27:3 Md. R. 326) revised permanently effective May 15, 2000 (27:8 Md. R. 860) ―
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