836-031-0210 Definitions, Application and Explanation of Technical Terms Used As used in OAR 836-031-0200 to 836-031-0300, the following terms have the following definitions and applications and are explained as follows: (1) “Annual claim cost” means the net annual cost per unit of benefit before the addition of claim settlement expenses, other policy expenses or a margin for profit or contingencies. (2) “Date of disablement” means the earliest date on which the insured is considered as being disabled under the definition of disability in the contract, based on a doctor’s evaluation or other evidence. Normally this date will coincide with the start of any elimination period. (3) “Elimination period” means a number of days, weeks or months specified in a policy, starting at the beginning of each period of loss, during which no benefits are payable. (4) “Gross premium” means the amount of premium charged by the insurer and includes the net premium (based only on claim-cost) for the risk, together with any loading for expenses, profit or contingencies. (5) “Group insurance” includes blanket insurance and any other forms of group insurance, and franchise insurance. (6) “Level premium” means a premium calculated to remain unchanged throughout either the lifetime of the policy or some shorter projected period of years. The premium need not be guaranteed. If the premium is not guaranteed, although it is calculated to remain level, it may be changed if any of the assumptions on which it was based is revised at a later time. (7) “Long-term care insurance” has the meaning given that term in ORS 743.652. (8) “Modal premium” means the premium paid according to the billing frequency selected in the contract, which could be annual, semi-annual quarterly, monthly or weekly. (9) “Negative reserve” means a negative value of the terminal reserve, which occurs when the values of the benefits are decreasing with advancing age or duration. (10) “Preliminary term reserve method” means the method of valuation in which the valuation net premium for each year falling within the preliminary term period is exactly sufficient to cover the expected incurred claims of that year, so that the terminal reserves will be zero at the end of the year. At the end of the preliminary term period, a new constant valuation net premium (or stream of changing valuation premiums) becomes applicable such that the present value of all such premiums is equal to the present value of all claims expected to be incurred following the end of the preliminary term period. (11) “Reserve” includes all items of benefit liability, whether in the nature of incurred claim liability or in the nature of contract liability relating to future periods of coverage, and whether the liability is accrued or unaccrued. (12) “Terminal reserve” means the reserve at the end of a contract year equal to the present value of benefits expected to be incurred after that contract year minus the present value of future valuation net premiums. (13) “Unearned premium reserve” means the reserve that values that portion of the premium paid or due to the insurer that is applicable to the period of coverage extending beyond the valuation date. (14) “Valuation net modal premium” means the modal fraction of the valuation net annual premium that corresponds to the gross modal premium in effect on any contract to which contract reserves apply. Thus if the mode of payment in effect is quarterly, the valuation net modal premium is the quarterly equivalent of the valuation net annual premium. Statutory/Other Authority: ORS 731.244 & 733.080 Statutes/Other Implemented: ORS 733.080 History: ID 7-1995, f. & cert. ef. 11-15-95