§ 27-1-12.8-31 — Minimum reserve requirement related to gross premium

Indiana § 27-1-12.8-31

• Jurisdiction: Indiana
• Title 27: INSURANCE
• Art. 1: DEPARTMENT OF INSURANCE
• Ch. 12.8: Standard Valuation Law

Text

(a) If in any contract year the gross
premium charged by a company on a contract is less than the valuation
net premium for the contract calculated by the method used in
calculating the reserve, but using the minimum valuation standards of
mortality and rate of interest, the minimum reserve required for the
contract is the greater of:
(1) the reserve calculated according to the mortality table, rate of
interest, and method actually used for the contract; or
(2) the reserve calculated by the method actually used for the
contract, but using the minimum valuation standards of mortality
and rate of interest and replacing the valuation net premium with
the actual gross premium in each contract year for which the
valuation net premium exceeds the actual gross premium.
(b) The minimum valuation standards of mortality and rate of
interest referred to in this section are the standards specified in sections
24 and 26 of this chapter.
(c) For a life insurance contract issued on or after January 1, 1985:
(1) for which:
(A) the gross premium in the first contract year exceeds the
gross premium in the second contract year; and
(B) no comparable additional benefit is provided in the first
contract year for the excess; and
(2) that provides an endowment benefit, a cash surrender value,
or a combination, in an amount greater than the excess premium;
this section applies as if the method actually used in calculating the
reserve for the contract were the method described in section 27(a),
27(b), and 27(d) of this chapter. The minimum reserve on each contract
anniversary of a contract described in this subsection is the greater of
the minimum reserve calculated in accordance with section 27 of this
chapter and the minimum reserve calculated under this section.

Legislative History

As added by P.L.276-2013, SEC.10.