Section 40. Conditions

A. For policies issued on or after July 1, 2004, with 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, required by § 38.2-1376 of the Code of Virginia and use composite mortality tables to determine the basic minimum reserves, minimum cash surrender values, and amounts of paid-up nonforfeiture benefits; or

3. Smoker and nonsmoker mortality tables to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits.

B. For policies issued on or after July 1, 2004, with plans of insurance without separate rates for smokers and nonsmokers the composite mortality tables shall be used.

C. For the purpose of determining minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits, the 2001 CSO Mortality Table may, at the option of the insurer for each such plan of insurance, be used in its ultimate or select and ultimate form, subject to the restrictions of 14VAC5-321-50 and 14VAC5-319 relative to use of the select and ultimate form.

D. When the 2001 CSO Mortality Table is the minimum reserve standard for any plan for an insurer, any actuarial opinion in the annual statement filed with the commission shall be based on an asset adequacy analysis that meets the standards and satisfies requirements for an asset adequacy analysis performed pursuant to subdivision A 2 of § 38.2-1367 of the Code of Virginia and rules governing actuarial opinions and memoranda at 14VAC5-310.

Historical Notes

Derived from Volume 20, Issue 16, eff. July 1, 2004;  amended, Virginia Register Volume 31, Issue 09, eff. January 1, 2015.

Statutory Authority

§§ 12.1-13 and 38.2-223 of the Code of Virginia.