Utah Department of Administrative Services Division of Administrative Rules

Utah Administrative Code

The Utah Administrative Code is the body of all effective administrative rules as compiled and organized by the Division of Administrative Rules (Subsection 63G-3-102(5); see also Sections 63G-3-701 and 702).

NOTE: For a list of rules that have been made effective since July 1, 2014, please see the codification segue page.

NOTE TO RULEFILING AGENCIES: Use the RTF version for submitting rule changes.


R590. Insurance, Administration.

Rule R590-223. Rule to Recognize the 2001 CSO Mortality Table for Use in Determining Minimum Reserve Liabilities and Nonforfeiture Benefits.

As in effect on July 1, 2014

Table of Contents

R590-223-1. Authority.

This rule is promulgated by the insurance commissioner pursuant to Subsections 31A-2-201(3), 31A-17- 402(1) and 31A-22-408(11).

R590-223-2. Purpose.

The purpose of this rule is to recognize, permit and prescribe the use of the 2001 Commissioners Standard Ordinary (CSO) Mortality Table in accordance with Sections 31A-17-504, 31A-22-408 and R590-198-5.

R590-223-3. Definitions.

A. "2001 CSO Mortality Table" means mortality table, consisting of separate rates of mortality for male and female lives, developed by the American Academy of Actuaries CSO Task Force from the Valuation Basic Mortality Table developed by the Society of Actuaries Individual Life Insurance Valuation Mortality Task Force, and adopted by the NAIC in December 2002. The 2001 CSO Mortality Table is included in the Proceedings of the NAIC, 2nd Quarter 2002. Unless the context indicates otherwise, the "2001 CSO Mortality Table" includes both the ultimate form of that table and the select and ultimate form of that table and includes both the smoker and nonsmoker mortality tables and the composite mortality tables. It also includes both the age-nearest-birthday and age-last-birthday bases of the mortality tables.

B. "2001 CSO Mortality Table (F)" means mortality table consisting of the rates of mortality for female lives from the 2001 CSO Mortality Table.

C. "2001 CSO Mortality Table (M)" means mortality table consisting of the rates of mortality for male lives from the 2001 CSO Mortality Table.

D. "Composite mortality tables" means mortality tables with rates of mortality that do not distinguish between smokers and nonsmokers.

E. "Smoker and nonsmoker mortality tables" means mortality tables with separate rates of mortality for smokers and nonsmokers.

F. The tables identified in Subsections R590-223-3.A through E are hereby incorporated by reference within this rule and are available for public inspection at the Insurance Department during normal business hours.

R590-223-4. 2001 CSO Mortality Table.

A. At the election of the company for any one or more specified plans of insurance and subject to the conditions stated in this rule, the 2001 CSO Mortality Table may be used as the minimum standard for policies issued on or after July 1, 2003 and before the date specified in Subsection R590-223-4.B to which Subsections 31A-17-504(1)(c), 31A-22-408(6)(d)(viii)(VI), R590-198-5.A and R590-198-5.B are applicable. If the company elects to use the 2001 CSO Mortality Table, it shall do so for both valuation and nonforfeiture purposes.

B. Subject to the conditions stated in this rule, the 2001 CSO Mortality Table shall be used in determining minimum standards for policies issued on and after January 1, 2009, to which Subsections 31A-17-504(1)(c), 31A- 22-408(6)(d)(viii)(VI), R590-198-5.A and R590-198-5.B are applicable.

R590-223-5. Conditions.

A. 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, 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

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

B. For 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 company for each plan of insurance, be used in its ultimate or select and ultimate form, subject to the restrictions of Section R590-223-6 and Valuation of Life Insurance Policies Rule R590-198 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 a company, the actuarial opinion in the annual statement filed with the commissioner shall be based on an asset adequacy analysis in conformance with the requirements of Section R590-162-8. The commissioner may exempt a company from this requirement if it only does business in this state and in no other state.

R590-223-6. Applicability of the 2001 CSO Mortality Table to Rule R590-198.

A. The 2001 CSO Mortality Table may be used in applying R590-198 in the following manner, subject to the transition dates for use of the 2001 CSO Mortality Table in Section R590-223-4:

(1) Subsection R590-198-3.A.(2)(b): The net level reserve premium is based on the ultimate mortality rates in the 2001 CSO Mortality Table.

(2) Subsection R590-198-4.B: All calculations are made using the 2001 CSO Mortality Table, and, if elected, the optional minimum mortality standard for deficiency reserves stipulated in Subsection R590-223-6.A.(4). The value of "qx+k+t-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.

(3) Subsection R590-198-5.A: The 2001 CSO Mortality Table is the minimum standard for basic reserves.

(4) Subsection R590-198-5.B: The 2001 CSO Mortality Table is the minimum standard for deficiency reserves. If select mortality rates are used, they may be multiplied by X percent for durations in the first segment, subject to the conditions specified in Subsections R590-198-5.B.(3)(a) through (i). In demonstrating compliance with those conditions, the demonstrations may not combine the results of tests that utilize the 1980 CSO Mortality Table with those tests that utilize the 2001 CSO Mortality Table, unless the combination is explicitly required by rule or necessary to be in compliance with relevant Actuarial Standards of Practice.

(5) Subsection R590-198-6.C: The valuation mortality table used in determining the tabular cost of insurance shall be the ultimate mortality rates in the 2001 CSO Mortality Table.

(6) Subsection R590-198-6.E.(4): The calculations specified in Subsection R590-198-6.E shall use the ultimate mortality rates in the 2001 CSO Mortality Table.

(7) Subsection R590-198-6.F.(4): The calculations specified in Subsection R590-198-6.F shall use the ultimate mortality rates in the 2001 CSO Mortality Table.

(8) Subsection R590-198-6.G.(2): The calculations specified in Subsection R590-198-6.G shall use the ultimate mortality rates in the 2001 CSO Mortality Table.

(9) Subsection R590-198-7.A.(1)(b): The one-year valuation premium shall be calculated using the ultimate mortality rates in the 2001 CSO Mortality Table.

B. Nothing in this section shall be construed to expand the applicability of R590-198 to include life insurance policies exempted under Subsection R590-198-3.A.

R590-223-7. Gender-Blended Tables.

A. For any ordinary life insurance policy delivered or issued for delivery in this state on and after July 1, 2003, that utilizes the same premium rates and charges for male and female lives or is issued in circumstances where applicable law does not permit distinctions on the basis of gender, a mortality table that is a blend of the 2001 CSO Mortality Table (M) and the 2001 CSO Mortality Table (F) may, at the option of the company for each plan of insurance, be substituted for the 2001 CSO Mortality Table for use in determining minimum cash surrender values and amounts of paid-up nonforfeiture benefits. No change in minimum valuation standards is implied by this Section of the rule.

B. The company may choose from among the blended tables developed by the American Academy of Actuaries CSO Task Force and adopted by the NAIC in December 2002

C. It shall not, in and of itself, be a violation of Subsection 31A-23-302(3) for an insurer to issue the same kind of policy of life insurance on both a sex-distinct and sex-neutral basis.

R590-223-8. Separability.

If any provision of this rule or its application to any person or circumstance is for any reason held to be invalid, the remainder of the rule and the application of the provision to other persons or circumstances shall not be affected.

KEY

insurance reserves and nonforfeitures

Date of Enactment or Last Substantive Amendment

June 13, 2003

Notice of Continuation

May 7, 2013

Authorizing, Implemented, or Interpreted Law

31A-2-201; 31A-17-402; 31A-22-408


Additional Information

Contact

For questions regarding the content or application of rules under Title R590, please contact the promulgating agency (Insurance, Administration). A list of agencies with links to their homepages is available at http://www.utah.gov/government/agencylist.html or from http://www.rules.utah.gov/contact/agencycontacts.htm.