Kentucky Administrative Regulations › Title 806 - PUBLIC PROTECTION CABINET - DEPARTMENT OF INSURANCE › Chapter 6 - Assets and Liabilities › Section 806 KAR 6:130 - Minimum standards for determining reserve liabilities and nonforfeiture values for preneed insurance

Current through Register Vol. 51, No. 1, July 1, 2024
RELATES TO:
				KRS
				304.1-040,
				304.6-130,
				304.6-140,
				304.6-170,
				304.6-171,
				304.6-180,
				304.12-085,
				304.12-240,
				304.15-342
NECESSITY, FUNCTION, AND CONFORMITY: EO 2008-507, signed June
				6, 2008, and effective June 16, 2008, created the Department of Insurance,
				headed by the Commissioner of Insurance.
				KRS
				304.2-110 authorizes the Commissioner of the
				Department of Insurance to promulgate administrative regulations necessary for
				or as an aid to the effectuation of any provision of the Kentucky Insurance
				Code,
				KRS 304.1-010
				through
				304.99-152.
				KRS 304.6-140
				provides that the commissioner may approve by administrative regulation any
				mortality table adopted by the National Association of Insurance Commissioners
				for use in determining the minimum standard for valuation of policies.
				KRS 304.15-410
				provides for reserves held under any plan of life insurance which provides for
				future premium determination to be appropriate in relation to the benefits and
				computed by a method which is consistent with the principles of the standard
				valuation law, as determined by regulations promulgated by the commissioner.
				This administrative regulation establishes minimum mortality standards for
				preneed insurance product reserves and nonforfeiture values, and requires the
				use of the 1980 Commissioners Standard Ordinary (CSO) Life Valuation Mortality
				table in determining the minimum standard of valuation of reserves and minimum
				standard nonforfeiture values for preneed insurance products.
Section 1. Definitions.
(1) "1980 CSO Table (F), with or without Ten
			 (10) Year Select Mortality Factors" means that mortality table consisting of
			 the rates of mortality for female lives from the 1980 CSO Table, with or
			 without Ten (10) Year Select Mortality Factors.
(2) "1980 CSO Table (M), with or without Ten
			 (10) Year Select Mortality Factors" means that mortality table consisting of
			 the rates of mortality for male lives from the 1980 CSO Table, with or without
			 Ten (10) Year Select Mortality Factors.
(3) "2001 CSO Mortality Table" means a
			 mortality table that:
(a) Consists of separate
			 rates of mortality for male and female lives;
(b) Was 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 National Association of Insurance Commissioners in
			 December 2002;
(c) Is published in
			 the Proceedings of the National Association of Insurance Commissioners (2nd
			 Quarter 2002) and supplemented by the 2001 CSO Preferred Class Structure
			 Mortality Table; and
(d) Includes,
			 unless the context indicates otherwise, both:
1. The ultimate form and the select and
			 ultimate form of the table;
2. The
			 smoker and nonsmoker mortality tables and the composite mortality tables;
			 and
3. The age-nearest-birthday and
			 the age-last-birthday bases of the mortality tables.
(4) "Commissioner" means the
			 Commissioner of the Department of Insurance.
(5) "Insurer" is defined in
			 KRS
			 304.1-040.
(6) "Merged Gender Ultimate 1980 CSO Table"
			 means any mortality table which is a blend of the 1980 CSO Table (M), without
			 Ten (10) Year Select Mortality Factors, and the 1980 CSO Table (F), without Ten
			 (10) Year Select Mortality Factors, which have been adopted by the National
			 Association of Insurance Commissioners.
(7) "Preneed insurance" means a life
			 insurance policy issued by an insurance company which:
(a) Whether by assignment or otherwise, has
			 for a purpose the funding of a preneed funeral contract or an insurance-funded
			 funeral or burial agreement; and
(b) Pays funds for the funeral or burial of
			 the insured.
(8)
			 "Ultimate 1980 CSO Table", means a mortality table, consisting of separate
			 rates of mortality for male and female lives, without Ten (10) Year Select
			 Mortality Factors, developed by the Society of Actuaries Committee to Recommend
			 New Mortality Tables for Valuation of Standard Individual Ordinary Life
			 Insurance, referenced in
			 KRS 304.6-140
			 and
			 304.15-342.