Colorado § 10-7-313 Minimum reserves

Colorado Statutes

§ 10-7-313 — Minimum reserves

Colorado·Title 10 Insurance·Art. Life Insurance

(1)If in any contract year the gross premium charged by a company on any policy is less than the valuation net premium for the policy calculated by the method used in calculating the reserve on the policy but using the minimum standards of mortality and rate of interest, the minimum reserve required for the policy is the greater of either the reserve calculated according to the mortality table, rate of interest, and method actually used for the policy or the reserve calculated by the method actually used for the policy but using the minimum standards of mortality and rate of interest and replacing the valuation net premium by the actual gross premium in each contract year for which the valuation net premium exceeds the actual gross premium.

(2)The minimum valuation standards of

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(1) If in any contract year the gross premium
charged by a company on any policy is less than the valuation net premium for the
policy calculated by the method used in calculating the reserve on the policy but
using the minimum standards of mortality and rate of interest, the minimum reserve
required for the policy is the greater of either the reserve calculated according to
the mortality table, rate of interest, and method actually used for the policy or the
reserve calculated by the method actually used for the policy but using the
minimum standards of mortality and rate of interest and replacing the valuation net
premium by the actual gross premium in each contract year for which the valuation
net premium exceeds the actual gross premium.

(2) The minimum valuation standards of mortality and rate of interest
referred to in this section are those standards stated in sections 10-7-309 and 10-7-309.5; except that for any life insurance policy issued on or after January 1, 1985,
for which the gross 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 that provides an endowment benefit, a cash surrender value, or a
combination of endowment benefit and cash surrender value in an amount greater
than the excess premium, the provisions of this section must be applied as if the
method actually used in calculating the reserve for the policy were the method
described in section 10-7-310, ignoring subsection (1.5) of that section. The
minimum reserve at each policy anniversary of the policy must be the greater of the
minimum reserve calculated in accordance with section 10-7-310, including
subsection (1.5) of that section, and the minimum reserve calculated in accordance
with this section.

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Legislative History

Source: L. 61: p. 469, � 17. CRS 53: � 72-20-13. C.R.S. 1963: � 72-19-13. L. 77: Entire section amended, p. 527, � 9, effective July 1. L. 81: Entire section amended, p. 557, � 13, effective July 1. L. 2015: Entire section amended, (HB 15-1048), ch. 63, p. 164, � 10, effective August 5.