(a)Contracts of life insurance bearing
dates of issue that are earlier than a transition date selected by the
company under IC 27-1-12-12, the transition date in no event to be
later than January 1, 1948, must be valued in accordance with the
following:
(1)As soon as practicable after the filing with the department
under IC 27-1-20-21 of the annual statement of a company
organized under this article or under another law of this state and
doing business in Indiana, the department shall ascertain the net
reserve value of each contract in force on the immediately
preceding December 31, on the basis of:
(A)the American Experience Table of Mortality and four
percent (4%) interest; or
(B)the Actuaries' Combined Experience Table of Mortality and
four percent (4%) interest;
as adopted by the c
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(a) Contracts of life insurance bearing
dates of issue that are earlier than a transition date selected by the
company under IC 27-1-12-12, the transition date in no event to be
later than January 1, 1948, must be valued in accordance with the
following:
(1) As soon as practicable after the filing with the department
under IC 27-1-20-21 of the annual statement of a company
organized under this article or under another law of this state and
doing business in Indiana, the department shall ascertain the net
reserve value of each contract in force on the immediately
preceding December 31, on the basis of:
(A) the American Experience Table of Mortality and four
percent (4%) interest; or
(B) the Actuaries' Combined Experience Table of Mortality and
four percent (4%) interest;
as adopted by the company. However, if the company issues a
contract based on a higher standard than the standards described
in clauses (A) and (B), the contract must be valued according to
the higher standard. The department may hire, at the company's
expense, an actuary to make the valuation or the department may
accept a valuation made by the company, as determined by the
department.
(2) In making a valuation under subdivision (1), the department
or a representative of the department shall compute the net
reserve value according to the terms of the contract. If a contract
provides term insurance, or for a valuation as term insurance for
any time covered by the contract, the valuation of the contract
must be in accordance with the provision in the contract.
However, a contract issued after March 5, 1909:
(A) may provide for not more than one (1) year of preliminary
term insurance; and
(B) if the premium charged for term insurance under:
(i) a limited payment life preliminary term contract providing
for the payment of less than twenty (20) annual premiums; or
(ii) an endowment preliminary term contract;
exceeds the premium charged for life insurance under twenty
(20) payment life preliminary term contracts of the same
company, the reserve on the contract at the end of any year,
including the first, must not be less than the reserve on a twenty
(20) payment life preliminary term contract issued in the same
year at the same age, together with an amount that is equivalent
to the accumulation of a net level premium sufficient to provide
for a pure endowment at the end of the premium payment
period equal to the difference between the value at the end of
the period of the twenty (20) payment life preliminary term
contract and the full reserve at the time of the limited payment
life or endowment contract.
(3) All contracts of life insurance, including contracts issued on
a reducing premium plan or a return premium plan, must be
valued according to this article. However, if the actual premium
charged for an insurance contract is less than the net premium for
the insurance contract, based on the American Men Ultimate
Table of Mortality with three and one-half percent (3 1/2%)
interest, the company must also establish an additional reserve
equal to the value of an annuity, the amount of which must be
equal to the difference between the premium charged and the net
premium for insurance based on the American Men Ultimate
Table with three and one-half percent (3 1/2%) interest and a term
in years that is equal to the number of future annual payments due
on the insurance at the date of valuation.
(4) Insurance against permanent mental or physical disability
resulting from accident or disease or against accidental death,
combined with a contract of life insurance, must be valued on a
basis of fifty percent (50%) of the additional annual premium
charged for the insurance.
(5) The department may at any time during the year ascertain the
net reserve value of the contracts of a company, as provided in
this section, to determine the solvency of the company.
(6) Reserves may be calculated, at the option of the company,
according to standards that produce greater aggregate reserves for
all contracts than the reserves produced by the standard specified
in this section.
(7) A company that has adopted a standard of valuation producing
greater aggregate reserves than the aggregate reserves calculated
according to the minimum standard provided for in this section
may, with the approval of the department, adopt a standard of
valuation producing lower aggregate reserves, but not lower in the
aggregate than the reserves produced by the standard specified in
the company's contracts.
(b) Subsection (a)(1) through (a)(3) applies only to the valuation of
life insurance contracts.