Court Opinion

ID: 9514815
Source: CourtListenerOpinion
Date Created: 2023-08-06 22:51:51.005973+00
Date Added: 2024-06-11T09:06:21.143142
License: Public Domain

SABERS, Justice
(concurring in part and dissenting in part).
[¶ 36.] It was an abuse of discretion to use a unisex mortality table in determining the present value of Andrew’s life estate.
[¶ 37.] I dissent to the majority opinion’s determination that the use of a unisex mortality table, as opposed to a gender-specific table, is not an abuse of discretion.
[¶ 38.] When dealing with life estates, a present value must be determined. The valuation date is the date of the decedent’s death. SDCL 29A-2-207(b). SDCL 10-40-14 provides how to value the estate:
The value of every future or limited estate, ... dependent upon any life or lives in being, shall be determined by rule, method, and standard of mortality and value employed by the director of the division of insurance in ascertaining the value of policies of life insurance and annuities for the determination of liabilities of life insurance companies....
(emphasis added). In determining the liabilities of life insurance companies, the director “shall annually value the reserve liabilities for all outstanding life insurance policies ... of every life insurance company doing business in this state, and may certify the amount of any of the reserves, specifying the mortality table or tables....” SDCL 58-26-45.
[¶ 39.] The mortality tables that can be used are specified under SDCL 58-26-57.11 The division of insurance and life insurance companies are allowed to use one of three different mortality tables to determine the value of life insurance policies issued after July 1, 1982.12 The first table is the Commissioners 1980 Standard Ordinary Mortality Table. This table is unquestionably gender-specific. It is based on male lives, with a six-year variation for females. See Telles v. Commissioner of *42Ins., 410 Mass. 560, 574 N.E.2d 359, 362 (1991) (stating that this table “treated males and females as distinct classes, with separate mortality tables.”); McGill’s Life Insurance 315-17 (Edward E. Graves ed., American College 1994).
[¶ 40.] The second table listed in SDCL 58-26-57, the Commissioners 1980 Standard Ordinary Mortality Table with 10-year select mortality factors, expanded the first table to allow an insurer to consider factors that affect a person’s risk of death. See National Association of Insurance Commissioners, Valuation of Life Insurance Policies (visited February 9, 2000)(setting forth select factors that distinguish between female smokers, male smokers, female non-smokers and male non-smokers). Therefore, it is also a gender-specific table. McGill’s, supra, at 314, 318-19.
[¶ 41.] The third possibility is a broad categorization of “any ordinary mortality table, adopted after 1980 by the [NAIC]....”
[¶ 42.] Unisex, or sex-neutral, mortality tables are based on the average life expectancies of both male and female. The different life expectancies are not calculated or even recognized. Instead, the mortality rates for men and women are combined at a ratio of % and then averaged. Therefore, the gender-specific table is significantly more accurate than simple comprehensive unisex tables. See In re Darrin, 11 N.J.Tax 482, 495 (1991) (stating “the degree of accuracy associated with the use of gender-based tables for males as a class and females as a class is greater than that associated with the use of the gender-neutral table.... ”).
[¶ 43.] The Supreme Court of Massachusetts noted the problem associated with the adoption of unisex tables in the issuance of individual life insurance policies:
The mortality rates for males are generally higher, than those for females. In the case of ordinary life insurance, which involves periodic premium payments until the policy matures, a woman would likely make payments for a longer period of time before death. Therefore, pri- or to these regulations, life insurance premiums were lower for females than they were for males. Pursuant to the unisex regulations, insurance companies must ignore gender in the determination of insurance rates, benefits, conditions, or requirements. The regulations, therefore, have resulted in higher life insurance premiums for women than for men.
Telles, 574 N.E.2d at 360-61.
[¶ 44.] More specifically, one study revealed that if unisex tables replaced the gender-specific tables, the aggregate female class would pay $1060 million more for life and automobile insurance per year than the male class. George J. Benston, Discrimination and Economic Efficiency in Employee Fringe Benefits: A Clarification of Issues and a Response to Professors Brilmayer, Laycock and Sullivan, 50 UChiLRev 250, 275-77 (1983) (citing Hearings on S. 2201 Before the Senate Comm. On Commerce, Science and Transportation, 97th Cong., 2d Sess. 8-9 (1982) (statement of the American Academy of Actuaries, Committee on Risk Classification)). Obviously, the use of the unisex tables results in disparate treatment between the genders and is not the correct table to use in valuing individual life insurance policies.
[¶ 45.] Our statutes base the valuation of a life estate on the methods of valuation of life insurance policies. A life tenant, especially a male life tenant, should not be prejudiced by a value computed pursuant to unisex tables. Under a unisex table, the male life tenant receives less than what he is entitled to because males do not live as long as females. Although precise accuracy can not be determined when valuing a life estate at the time of transfer, it is clear that the gender-specific mortality table produces a much more accurate valuation than a unisex table.
[¶ 46.] In failing to use a gender-specific table, the trial court abused its discretion. *43An abuse of discretion has been determined to exist “when a judge, within the effective limits of authorized judicial power, elects to act or refrain from acting, but the selected option results in a decision which is untenable and unfairly deprives a litigant of a substantial right or a just result in matters submitted for disposition through a judicial system.” Pellegrin v. Pellegrin, 1998 SD 19, ¶ 31, 574 N.W.2d 644, 650 (Konenkamp, J., concurring in part and dissenting in part) (quoting Tyler v. Tyler, 253 Neb. 209, 570 N.W.2d 317, 319 (1997)). The trial court’s decision to use a unisex table instead of a gender-specific table in determining the present value of Andrew’s life estate prejudiced him. Thus, it was an abuse of discretion.
[¶ 47.] I vote to reverse the trial court’s use of the unisex table and remand for a correct valuation under a gender-specific table.

. This statute is derived, essentially verbatim, from the National Association of Insurance Commissioners (NAIC), Model Regulation 820-1.

."Since we construe statutes according to their intent, the intent must be determined from the statute as a whole, as well as other statutes relating to the same subject.” Maynard v. Heernn, 1997 SD 60, ¶ 13, 563 N.W.2d 830, 835 (citing U.S. West Communications, Inc. v. Public Utils. Comm’n, 505 N.W.2d 115, 123 (S.D.1993)). SDCL 58-26-45 and 58-26-57 both relate to the valuation of life insurance policies. The plain language of both statutes is clear, certain and unequivocal, and those statutes, when read together, show that only specific mortality tables are acceptable, whether used by the life insurance companies or the division of insurance.