(1)Except as otherwise provided in
sections 10-7-310.5 and 10-7-313, reserves, according to the commissioners reserve
valuation method for the life insurance and endowment benefits of policies
providing for a uniform amount of insurance and requiring the payment of uniform
premiums, shall be the excess, if any, of the present value, at the date of valuation,
of such future guaranteed benefits provided for by such policies over the then
present value of any future modified net premiums therefor. The modified net
premiums for any such policy shall be such uniform percentage of the respective
contract premiums for such benefits that the present value, at the date of issue of
the policy, of all such modified net premiums shall be equal to the sum of the then
present value of such be
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(1) Except as otherwise provided in
sections 10-7-310.5 and 10-7-313, reserves, according to the commissioners reserve
valuation method for the life insurance and endowment benefits of policies
providing for a uniform amount of insurance and requiring the payment of uniform
premiums, shall be the excess, if any, of the present value, at the date of valuation,
of such future guaranteed benefits provided for by such policies over the then
present value of any future modified net premiums therefor. The modified net
premiums for any such policy shall be such uniform percentage of the respective
contract premiums for such benefits that the present value, at the date of issue of
the policy, of all such modified net premiums shall be equal to the sum of the then
present value of such benefits provided for by the policy and the excess of
paragraph (a) of this subsection (1) over paragraph (b) of this subsection (1), as
follows:
(a) A net level annual premium equal to the present value, at the date of
issue, of such benefits provided for after the first policy year, divided by the present
value, at the date of issue, of an annuity of one per annum payable on the first and
each subsequent anniversary of such policy on which a premium falls due; except
that such net level annual premium shall not exceed the net level annual premium
on the nineteen-year premium whole life plan for insurance of the same amount at
an age one year higher than the age at issue of such policy;
(b) A net one-year term premium for such benefits provided for in the first
policy year.
(1.5) For any life insurance policy issued on or after January 1, 1985, for which
the contract premium in the first policy year exceeds that of the second year and
for which no comparable additional benefit is provided in the first year for such
excess and which provides an endowment benefit, a cash surrender value, or a
combination thereof in an amount greater than such excess premium, the reserve
according to the commissioners reserve valuation method as of any policy
anniversary occurring on or before the assumed ending date, which for the
purposes of this subsection (1.5), means the first policy anniversary on which the
sum of any endowment benefit and any cash surrender value then available is
greater than such excess premium, shall, except as otherwise provided in section
10-7-313, be the greater of the reserve as of such policy anniversary calculated as
described in the introductory portion to and paragraphs (a) and (b) of subsection (1)
of this section and the reserve as of such policy anniversary calculated as
described in said portion and paragraphs of said subsection (1), but with:
(a) The value defined in said paragraph (a) being reduced by fifteen percent
of the amount of such excess first year premium;
(b) All present values of benefits and premiums being determined without
reference to premiums or benefits provided for by the policy after the assumed
ending date;
(c) The policy being assumed to mature on such date as an endowment; and
(d) The cash surrender value provided on such date being considered as an
endowment benefit. In making the comparison the mortality and interest bases
stated in sections 10-7-309 and 10-7-309.5 shall be used.
(2) Reserves according to the commissioners reserve valuation method for
life insurance policies providing for a varying amount of insurance or requiring the
payment of varying premiums, group annuity and pure endowment policies
purchased under a retirement plan or plan of deferred compensation, established or
maintained by an employer (including a partnership or sole proprietorship) or by an
employee organization, or by both, other than a plan providing individual retirement
accounts or individual retirement annuities under section 408 of the federal
Internal Revenue Code of 1986, as now or hereafter amended, disability and
accidental death benefits in all policies and contracts, and all other benefits,
except life insurance and endowment benefits in life insurance policies and
benefits provided by all other annuity and pure endowment contracts, shall be
calculated by a method consistent with the principles of subsection (1) of this
section; except that any extra premiums charged because of impairments or
special hazards shall be disregarded in the determination of modified net premiums.