New York Codes, Rules and Regulations › Title 11 - INSURANCE › Chapter III - Policy and Certificate Provisions › Subchapter A - Life, Accident and Health Insurance › Part 42 - Term Life Issuance And Renewal Restrictions; Nonforfeiture Values For Certain Life Insurance Policies › Subpart 42-2 - Term Life Issuance And Renewal Restrictions; Nonforfeiture Values For Certain Life Policies Issued On Or After January 1, 2008 › Section 42-2.11 - Calculation of minimum nonforfeiture values for polices with increases in either guaranteed death benefits or required premiums based on an index

Current through Register Vol. 46, No. 28, July 10, 2024
This section shall apply to policies of life insurance
						that provide for periodic adjustments in either the amount of the death benefit
						or in the required premium based on the Consumer Price Index or other cost of
						living index.
(a) For the purposes of
					 subdivision (b) of this section, the reasonable annual increase shall be based
					 on the amount of death benefit and the contractual limitations, if any, on the
					 annual increase in the death benefit.
(1)
					 Multiple policies on a single life shall be aggregated and only those policies
					 aggregating not more than $10,000 in death benefits shall be considered under
					 paragraph (4) of this subdivision.
(2) For the purposes of this section, the
					 limitations on the annual increase in death benefit shall be defined as
					 follows:
(i) Annual and non-cumulative
					 maximum means a maximum where each annual increase is limited to the lower of
					 the maximum or the increase in the index without carry forward of excess index
					 increases.
(ii) Annual and
					 cumulative maximum means a maximum where each annual increase is limited to the
					 lower of the maximum or the increase in the index with carry forward of excess
					 index increases.
(3) For
					 policies where any death benefit for any policy year would exceed $10,000 even
					 in the absence of any annual increases based on the index, the assumption as to
					 what is a reasonable annual increase in death benefits based on the index shall
					 not be less than the greater of:
(i) one
					 percent; and
(ii) maximum valuation
					 interest rate for the year of issue less:
(a)
					 two percent, if the annual increase is limited to an annual and non-cumulative
					 maximum of zero percent through five percent;
(b) one and one half percent, if the annual
					 increase is limited to an annual and cumulative maximum of zero percent through
					 five percent;
(c) one and one half
					 percent, if the annual increase is limited to an annual and non-cumulative
					 maximum of greater than five percent and less than or equal to 10
					 percent;
(d) one and one quarter
					 percent, if the annual increase is limited to an annual and cumulative maximum
					 greater than five percent and less than or equal to 10 percent; or
(e) one percent for all other
					 policies.
(4)
					 For policies where any death benefit for any policy year would not exceed
					 $10,000 in the absence of any annual increases based on the index, the
					 assumption as to what is a reasonable annual increase in death benefits based
					 on the index shall not be less than:
(i) four
					 and one half percent, if the annual increase based on the index is limited to a
					 maximum of zero percent through five percent;
(ii) four and one quarter percent, if the
					 annual increase based on the index is limited to a maximum of greater than five
					 percent and less than or equal to 10 percent; or
(iii) four percent for all other
					 policies.