31.05.03.07

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 shall be set equal to the minimum of the value t, for which G_{t} is greater than R_{t} (if G_{t} never exceeds R_{t} the segment length is deemed to be the number of years from the beginning of the segment to the mandatory expiration date of the policy), where G_{t} and R_{t} are defined as follows:

(1) G_{t} = (GP_{x+k+t}/GP_{x+k+t-l})

where

x = original issue age;

k = The number of years from the date of issue to the beginning of the segment;

t = 1, 2, . . .; t is reset to 1 at the beginning of each segment;

GP_{x+k+t-l} = Guaranteed gross premium per thousand of face amount, ignoring policy fees only if level for the premium paying period of the policy, for year t of the segment.

R_{t} = q_{x+k+t}/q_{x+k+t-1} However, R_{t} may be increased or decreased by 1 percent in any policy year, at the company's option, but R_{t} may not be less than one;

where:

x, k, and t are as defined above, and

q_{x+k+t} = valuation mortality rate for deficiency reserves in policy year k+t but using the mortality of Regulation.10C(2) of this chapter if Regulation.10C(3) of this chapter is elected for deficiency reserves. If GP_{x+k+t} is greater than 0 and GP_{x+k+t-l} is equal to 0, G_{t} shall be deemed to be 1,000. If GP_{x+k+t} and GP_{x+k+t-1} are both equal to 0, G_{t} shall be deemed to be 0.

(2) When the 2001 CSO Mortality Table is elected or required to be used, the value of "q_{x+k+1}" is the valuation mortality rate for deficiency reserves in policy year k+t, but using the unmodified select mortality rates if modified select mortality rates are used in the computation of deficiency reserves.