Iowa Administrative Code › Agency 191 - Insurance Division › Insurance Coverage for Pediatric Preventive Services › Chapter 92 - Universal Life Insurance › Rule 191-92.4 - Valuation

Current through Register Vol. 47, No. 3, July 24, 2024
Requirements.
The minimum valuation
				  standard for universal life insurance policies shall be the commissioners
				  reserve valuation method, as specified in paragraphs
"a "
through
"m "
below for such policies, and the tables and
				  interest rates specified below. The terminal reserve for the basic policy and
				  any benefits and riders for which premiums are not paid separately as of any
				  policy anniversary shall be equal to the net level premium reserves less (C)
				  and less (D), where:
a. Reserves by
				the net level premium method shall be equal to
((A) - (B)) x r,
where (A), (B) and "r" are as defined below;
b. (A) is the present value of all future
				guaranteed benefits at the date of valuation;
c. (B) is the quantity PVFB *
(Ã¤x+t/Ã¤x)
,
				where PVFB is the present value of all benefits guaranteed at issue assuming
				future guaranteed maturity premiums are paid by the policyowner and taking into
				account all guarantees contained in the policy or declared by the insurer;
d.
Ã¤x
and
Ã¤x+t
are present values of an
				annuity of one per year payable on policy anniversaries beginning at ages x and
				x+t, respectively, and continuing until the highest attained age at which a
				premium may be paid under the policy. The letter "x" is defined as the issue
				age and the letter "t" is defined as the duration of the policy;
e. The guaranteed maturity premium for
				flexible premium universal life insurance policies shall be that level gross
				premium, paid at issue and periodically thereafter over the period during which
				premiums are allowed to be paid, which will mature the policy on the latest
				maturity date, if any, permitted under the policy (otherwise at the highest age
				in the valuation mortality table) for an amount which is in accordance with the
				policy structure. The guaranteed maturity premium is calculated at issue based
				on all policy guarantees at issue (excluding guarantees linked to an external
				referent). The guaranteed maturity premium for fixed premium universal life
				insurance policies shall be the premium defined in the policy which at issue
				provides the minimum policy guarantees;
f. The letter "r" is equal to one, unless the
				policy is a flexible premium policy and the policy value is less than the
				guaranteed maturity fund, in which case "r" is the ratio of the policy value to
				the guaranteed maturity fund;
g.
				The guaranteed maturity fund at any duration is that amount which, together
				with future guaranteed maturity premiums, will mature the policy based on all
				policy guarantees at issue;
h. (C)
				is the quantity
((a)-(b))
*
				(Ã¤x+t/Ã¤x)* r, where
				(a)-(b) is as described in Iowa Code section
				50836(6). for
				the plan of insurance defined at issue by the guaranteed maturity premiums and
				all guarantees contained in the policy or declared by the insurer;
i.
Ã¤x+t
and
Ã¤x
are defined in
				paragraph
"d"
above;
j. (D) is the sum of any additional
				quantities analogous to (C) which arise because of structural changes in the
				policy, with each such quantity being determined on a basis consistent with
				that of (C) using the maturity date in effect at the time of the change;
k. The guaranteed maturity
				premium, the guaranteed maturity fund and (B) above shall be recalculated to
				reflect any structural changes in the policy. This recalculation shall be done
				in a manner consistent with the descriptions above;
l. Future guaranteed benefits are determined
				by:
(1) projecting the greater of the
				guaranteed maturity fund and the policy value, taking into account future
				guaranteed maturity premiums, if any, and using all guarantees of interest,
				mortality, expense deductions, etc. contained in the policy or declared by the
				insurer; and
(2) taking into account
				any benefits guaranteed in the policy or by declaration which do not depend on
				the policy value;