§ 26.1-35-09 — Reserve calculation - Valuation net premium exceeding the gross premium charged

premium charged.
1. If in any contract year the gross premium charged by an insurer on any policy or
contract is less than the valuation net premium for the policy or 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 policy or contract
is the greater of either the reserve calculated according to the mortality table, rate of
interest, and method actually used for the policy or contract, or the reserve calculated
by the method actually used for the policy or contract but using the minimum valuation
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. The minimum valuation standards of mortality and
rate of interest referred to in this section are those standards stated in sections
26.1-35-02 and 26.1-35-04.
2. For a life insurance policy issued after December 31, 1986, 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 the excess and which
provides an endowment benefit or a cash surrender value or a combination thereof 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 was the
method described in section 26.1-35-05, ignoring subsection 2 of that section. The
minimum reserve at each policy anniversary must be the greater of the minimum
reserve calculated in accordance with section 26.1-35-05, including subsection 2 of
that section, and the minimum reserve calculated in accordance with this section.