Tex.
Ins. Code Section 1105.055
Use of Mortality Tables and Interest Rates with Nonforfeiture Net Level Premium Method
(a)
Subject to Subsections (c)-(i), an adjusted premium or present value computed under this subchapter must be computed:(1)
for a policy of ordinary insurance:(A)
on the basis of the Commissioners 1980 Standard Ordinary Mortality Table; or(B)
at the option of the company for any one or more specified plans of life insurance, on the basis of the Commissioners 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors; and(2)
for a policy of industrial insurance, on the basis of the Commissioners 1961 Standard Industrial Mortality Table.(b)
Subject to Subsections (c)-(i), computations on each policy issued in a particular calendar year must be made using a rate of interest not to exceed the nonforfeiture interest rate as defined by Section 1105.056 (Nonforfeiture Interest Rate) for a policy issued in that calendar year.(c)
At the option of the company, computations for each policy issued in a particular calendar year may be made using a rate of interest not to exceed the nonforfeiture interest rate, as defined by Section 1105.056 (Nonforfeiture Interest Rate), for a policy issued in the preceding calendar year.(d)
Under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any cash surrender value available, regardless of whether required by Section 1105.004 (Required Nonforfeiture Provisions), must be computed on the basis of the mortality table and rate of interest used to determine the amount of the paid-up nonforfeiture benefit and any paid-up dividend additions.(e)
A company may compute the amount of any guaranteed paid-up nonforfeiture benefit, including any paid-up additions under the policy, on the basis of an interest rate not less than the rate specified by the policy for computing cash surrender values.(f)
In the computation of the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than the rates shown in:(1)
the Commissioners 1980 Extended Term Insurance Table, for a policy of ordinary insurance; or(2)
the Commissioners 1961 Industrial Extended Term Insurance Table, for a policy of industrial insurance.(g)
For a policy issued on a substandard basis, the computation of any adjusted premium or present value may be based on appropriate modifications to a table described by Subsection (f).(h)
For a policy issued before the operative date of the valuation manual, any ordinary mortality table adopted after 1980 by the National Association of Insurance Commissioners that is approved by rules adopted by the commissioner for use in determining the minimum nonforfeiture standard may be substituted for:(1)
the Commissioners 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors; or(2)
the Commissioners 1980 Extended Term Insurance Table.(i)
For a policy issued before the operative date of the valuation manual, any industrial mortality table adopted after 1980 by the National Association of Insurance Commissioners that is approved by rules adopted by the commissioner for use in determining the minimum nonforfeiture standard may be substituted for:(1)
the Commissioners 1961 Standard Industrial Mortality Table; or(2)
the Commissioners 1961 Industrial Extended Term Insurance Table.(j)
Except as provided by Subsection (k), for a policy described by Subsection (h) issued on or after the operative date of the valuation manual, the valuation manual must provide the commissioners standard ordinary mortality table for use in determining the minimum nonforfeiture standard that may be substituted for:(1)
the Commissioners 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors; or(2)
the Commissioners 1980 Extended Term Insurance Table.(k)
If the commissioner by rule adopts a commissioners standard ordinary mortality table adopted by the National Association of Insurance Commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual, the minimum nonforfeiture standard determined in accordance with that table supersedes the standard provided by the valuation manual.(l)
Except as provided by Subsection (m), for a policy described by Subsection (i) issued on or after the operative date of the valuation manual, the valuation manual must include the commissioners standard industrial mortality table for use in determining the minimum nonforfeiture standard that may be substituted for:(1)
the 1961 Standard Industrial Mortality Table; or(2)
the Commissioners 1961 Industrial Extended Term Insurance Table.(m)
If the commissioner by rule adopts a commissioners standard industrial mortality table adopted by the National Association of Insurance Commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual, the minimum nonforfeiture standard determined in accordance with that table supersedes the standard provided by the valuation manual.
Source:
Section 1105.055 — Use of Mortality Tables and Interest Rates with Nonforfeiture Net Level Premium Method, https://statutes.capitol.texas.gov/Docs/IN/htm/IN.1105.htm#1105.055 (accessed Jun. 5, 2024).
