2023 New York Laws › ISC - Insurance › Article 42 - Life Insurance Companies and Accident and Health Insurance Companies and Legal Services Insurance Companies › 4218 - When Actual Premium Is Less Than Net Premium; Minimum Reserve.

§ 4218. When actual premium is less than net premium; minimum reserve.
(a)  (1)  When  the  actual  premium  or  consideration charged for life
insurance under any life insurance policy, issued by any life  insurance
company  doing  business  in  this  state, is less than the modified net
premium calculated on the basis of the commissioners  reserve  valuation
method  as  defined  in  paragraph six of subsection (c) of section four
thousand two hundred seventeen of this article and  using  the  rate  of
interest  and  mortality  tables  contained  in  the  minimum  valuation
standards in paragraphs two and four of such subsection, or in the  case
of  future renewals under a renewable term insurance policy issued prior
to the operative date of subsection (k) of  section  four  thousand  two
hundred  twenty-one  of  this  article,  the  Modern CSO Mortality Table
published in the Transactions of the Society of  Actuaries,  Vol.  XXVII
(1975),  the  minimum  reserve  required  for  such  policy shall be the
greater of either the reserve  calculated  according  to  the  mortality
table,  rate  of  interest, and method actually used for such policy, or
the reserve calculated by the commissioners reserve valuation method  as
defined  in paragraph six of subsection (c) of section four thousand two
hundred seventeen of this article and using the mortality table and rate
of interest prescribed in this section for calculating the commissioners
reserve  valuation  method  modified  net  premium  and  replacing  such
modified  net  premium  by  the actual premium charged for the policy in
each contract year for which  such  modified  net  premium  exceeds  the
actual premium.
(2)  This  section  shall  not authorize any such company to issue any
policy or contract in violation of any other provision of this chapter.
(b) (1) In the case of any life insurance policy issued  on  or  after
January first, nineteen hundred eighty-six, for which the actual premium
in  the  first policy year exceeds that of the second year and for which
no comparable additional benefit is provided in the first year for  such
excess and which provides an endowment benefit or a cash surrender value
or  a combination thereof in an amount greater than such excess premium,
the foregoing provisions of subsection (a) hereof shall be applied as if
the method actually used in calculating the reserve for such policy were
the method described in paragraph six of subsection (c) of section  four
thousand  two hundred seventeen of this article, ignoring the proviso of
such paragraph.
(2) The minimum reserve at each policy anniversary of  such  a  policy
shall  be  the  greater  of the minimum reserve calculated in accordance
with paragraph six of  subsection  (c)  of  section  four  thousand  two
hundred  seventeen  of  this  article,  including  the  proviso  of that
paragraph, and the minimum reserve calculated in  accordance  with  this
section.