Nebraska Administrative Code › Topic - INSURANCE, DEPARTMENT OF › Title 210 - NEBRASKA DEPARTMENT OF INSURANCE › Chapter 15 - VARIABLE LIFE INSURANCE CONTRACTS › Section 210-15-005 - Reserve liabilities for variable life insurance

Current through June 17, 2024
005.01 Reserve
				liabilities for variable life insurance policies
Reserve liabilities for variable life insurance policies
				  shall be established under the Standard Valuation Law in accordance with
				  actuarial procedures that recognize the variable nature of the benefits
				  provided and any mortality guarantees.
005.02 For scheduled premium policies reserve
				liabilities for the guaranteed minimum death benefit shall be the reserve
				needed to provide for the contingency of death occurring when the guaranteed
				minimum death benefit exceeds the death benefit that would be paid in the
				absence of the guarantee, and shall be maintained in the general account of the
				insurer and shall be not less than the greater of the following minimum
				reserves:
005.02A The aggregate total of the
				term costs, if any, covering a period of one full year from the valuation date,
				of the guarantee on each variable life insurance contract, assuming an
				immediate one-third depreciation in the current value of the assets of the
				separate account followed by a net investment return equal to the assumed
				investment rate; or
005.02B The
				aggregate total of the "attained age level" reserves on each variable life
				insurance contract. The "attained age level" reserve on each variable life
				insurance contract shall not be less than zero and shall equal the "residue",
				as described in
Subsection
005.02B(1), below, of the
				prior year's "attained age level" reserve on the contract, with any such
				"residue" increased or decreased by a payment computed on an attained age basis
				as described in
Subsection
005.02B2 below.
005.02B(1) the "residue" of the prior year's
				"attained age level" reserve on each variable life insurance contract shall not
				be less than zero and shall be determined by adding interest at the valuation
				interest rate to such prior year's reserve, deducting the tabular claims based
				on the "excess", if any, of the guaranteed minimum death benefit over the death
				benefit that would be payable in the absence of such guarantee, and dividing
				the net result by the tabular probability of survival. The "excess" referred to
				in the preceding sentence shall be based on the actual level of death benefits
				that would have been in effect during the preceding year in the absence of the
				guarantee, taking appropriate account of the reserve assumptions regarding the
				distribution of death claim payments over the year.
005.02B(2) the payment referred to in
Sub
section
				005.02B shall be
				computed so that the present value of a level payment of that amount each year
				over the future premium paying period of the contract is equal to (A) minus (B)
				minus (C), where (A) is the present value of the future guaranteed minimum
				death benefits, (B) is the present value of the future death benefits that
				would be payable in the absence of such guarantee, and (C) is any "residue", as
				described in Subsection
				005.02B, of the
				prior year's "attained age level" reserve on such variable life insurance
				contract. If the contract is paid-up, the payment shall equal (A) minus (B)
				minus (C). The amounts of future death benefits referred to in (B) shall be
				computed assuming a net investment return of the separate account which may
				differ from the assumed investment rate and/or the valuation interest rate but
				in no event may exceed the maximum interest rate permitted for the valuation of
				life contracts.
005.02C
				The valuation interest rate and mortality table used in computing the two
				minimum reserves described in Subsections
				005.02A and
				005.02B above
				shall conform to permissible standards for the valuation of life insurance
				contracts. In determining such minimum reserve, the company may employ suitable
				approximations and estimates, including but not limited to groupings and
				averages.