New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 9 - LIFE INSURANCE AND ANNUITIES › Part 13 - VALUATION OF LIFE INSURANCE POLICIES › Section 13.9.13.7 - DEFINITIONS

Current through Register Vol. 35, No. 13, July 16, 2024
For purposes of this rule:
A.
"Basic reserves"
means
				reserves calculated in accordance with the principles of Section 59A-8-5E NMSA
				1978.
B.
"Contract
				segmentation method"
means the method of dividing the period from issue
				to mandatory expiration of a policy into successive segments, with the length
				of each segment being defined as the period from the end of the prior segment
				(from policy inception, for the first segment) to the end of the latest policy
				year as determined in 13 nmac 9.13.8 [now 13.9.13.8 NMAC]. All calculations are
				made using the 1980 CSO valuation tables, (or any other valuation mortality
				table adopted by the NAIC after the effective date of this rule and promulgated
				by rule by the superintendent for this purpose), and, if elected, the optional
				minimum mortality standard for deficiency reserves stipulated in 13 nmac
				9.13.13 [now 13.9.13.13 NMAC].
C.
"Deficiency reserves"
means the excess, if greater than zero, of
				minimum reserves, calculated in accordance with the principles of Section
				59A-8-5E(1)(e) NMSA 1978, over basic reserves.
D.
"Guaranteed gross premiums"
means the premiums under a policy of life insurance that are guaranteed and
				determined at issue.
E.
"Maximum valuation interest rates"
means the calendar year
				statutory valuation interest rates defined in Section 59A-8-5B(4) NMSA 1978
				that are to be used in determining the minimum standard for valuation of life
				insurance policies.
F.
"NAIC"
means the national association of insurance
				commissioners.
G.
"1980 CSO
				valuation tables"
means the commissioners' 1980 standard ordinary
				mortality table (1980 CSO table) without ten-year selection factors,
				incorporated into the 1980 amendments to the NAIC Standard Valuation Law, and
				variations of the 1980 CSO table approved by the NAIC, such as the smoker and
				nonsmoker versions approved in December 1983.
H.
"Scheduled gross premium"
means the smallest illustrated gross premium at issue for other than universal
				life insurance policies. For universal life insurance policies, scheduled gross
				premium means the smallest specified premium described in 13 NMAC 9.13.23.1.3
				[now Paragraph (3) of Subsection A of 13.9.13.23 NMAC], if any, or the minimum
				premium described in 13 NMAC 9.13.23.1.4 [now Paragraph (4) of Subsection A of
				13.9.12.23 NMAC].
I.
"Segmented reserves"
means reserves, calculated using segments
				produced by the contract segmentation method, equal to the present value of all
				future guaranteed benefits less the present value of all future net premiums to
				the mandatory expiration of a policy, where the net premiums within each
				segment are a uniform percentage of the respective gross premiums within the
				segment.
J.
"Tabular cost of
				insurance"
means the net single premium at the beginning of a policy
				year for one-year term insurance in the amount of the guaranteed death benefit
				in that policy year.
K.
"Ten-year select factors"
means the select factors adopted with
				the 1980 amendments to the NAIC Standard Valuation Law.
L.
"Unitary reserves"
means the
				present value of all future guaranteed benefits less the present value of all
				future modified net premiums.
M.
"Universal life insurance policy"
means any individual life
				insurance policy under the provisions of which separately identified interest
				credits (other than in connection with dividend accumulations, premium deposit
				funds, or other supplementary accounts) and mortality or expense charges are
				made to the policy.