Wyoming Administrative Code › Agency 044 - Insurance Dept › Sub-Agency 0002 - General Agency, Board or Commission Rules › Chapter 67 - VARIABLE LIFE INSURANCE CONTRACT REGULATION › Section 67-5 - Reserve Liabilities For Variable Life Insurance

Current through July 13, 2024
(a)
Reserve Liabilities Under Standard
				Valuation Law
. Reserves liabilities for variable life insurance policies
				shall be established under W.S. §
									
										26-6-201 et seq. in accordance with actuarial
				procedures that recognize the variable nature of the benefits provided and any
				mortality guarantees.
(b)
Reserve Liabilities for the Guaranteed Minimum Death Benefit
.
				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 not be less than the greater of the following minimum
				reserves:
(i) The aggregate total of the term
				costs, if any, covering a period of one full year from the valuation date or,
				if less, covering the period provided for in the guarantee not otherwise
				provided for by the reserves held in the separate account, on each variable
				life insurance contract, assuming an immediate one-third depreciation in the
				current value of the assets in the separate account followed by a net
				investment return equal to the assumed investment rate; or
(ii) 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 Subparagraph (A) 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 Subparagraph (B) below.
(A) 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 the 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 a 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.
(B) The payment referred to in this paragraph
				shall be computed so that the present value of a level payment of that amount
				each year over the future period for which charges for this risk will be
				collected under 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 Subparagraph (A),
				of the prior year's "attained age level" reserve on such variable life
				insurance contract. If no future charges for this risk will be collected under
				the contract, the payment shall equal (A) minus (B) minus (C). The amounts of
				the 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 or the valuation interest but in no event may exceed the
				maximum interest rate permitted for the valuation of life contracts.
(iii) The valuation interest rate
				and mortality table used in computing the two minimum reserves described in
				Paragraph (i) and (ii) of this subsection shall conform to permissible
				standards for the valuation of life insurance contracts. In determining such
				minimum reserves, the company may employ suitable approximations and estimates,
				including but not limited to groupings and averages.