Nebraska Administrative Code › Topic - INSURANCE, DEPARTMENT OF › Title 210 - NEBRASKA DEPARTMENT OF INSURANCE › Chapter 40 - UNIVERSAL LIFE INSURANCE › Section 210-40-005 - Valuation

Current through June 17, 2024
005.01 Requirements
The minimum valuation standard for universal life insurance
				  policies shall be the Commissioners Reserve Valuation Method, as described
				  below for such policies, and the tables and interest rates specified below. The
				  terminal reserve for the basic policy and any benefits and/or 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:
Reserves by the net level premium method shall be equal to
				  ((A) - (B))r where (A), (B) and "r" are as defined below:
(A) is the present value of all future
				guaranteed benefits at the date of valuation.
(B) is the quantity PVFB äx+
				t/äv
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.
äx and
				  äx+ 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.
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.
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.
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.
(C) is the quantity ((a) - (b))
				äx + t 
				r ,/äx where
				(a) - (b) is as described in
NEB. REV. STAT. §
											44-404(d)
				   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.
äx+ t, and
				  äx are defined in (B) above.
(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 change.
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.
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.
All present values shall be determined using (i) an interest
				  rate (or rates) specified by the Neb. Rev. Stat. §
										44-404 for
				  policies issued in the same year; (ii) the mortality rates specified by §
										44-404 for
				  policies issued in the same year or contained in such other table as may be
				  approved by the Director for this purpose; and (iii) any other tables needed to
				  value supplementary benefits provided by a rider which is being valued together
				  with the policy.