§ 26-16-209 — Section applicability; premium adjustment for any policy; annual calculation; exception

(a) This section applies to policies issued on or after
the operative date in subsection (n) of this section.
(b) Except as provided in subsection (h) of this section,
the adjusted premiums for any policy shall be calculated on an
annual basis and shall be the uniform percentage of the premiums
specified in the policy for each policy year, excluding:
(i) Amounts payable as extra premiums to cover
impairments or special hazards; and
(ii) Any uniform annual contract charge or policy fee
specified in the policy in a statement of the method to be used
in calculating the cash surrender values and paid-up
nonforfeiture benefits, that the present value, at the date of
issue of the policy, of all adjusted premiums shall be equal to
the sum of:
(A) The then present value of the future
guaranteed benefits provided by the policy;
(B) One percent (1%) of either the amount of
insurance, if the insurance is uniform in amount, or the average
amount of insurance at the beginning of each of the first ten
(10) policy years; and
(C) One hundred twenty-five percent (125%) of
the nonforfeiture net level premium as otherwise defined in this
section. In applying this percentage, no nonforfeiture net level
premium is deemed to exceed four percent (4%) of either the
amount of insurance, if the insurance is uniform in amount, or
the average amount of insurance at the beginning of each of the
first ten (10) policy years.
(D) Repealed By Laws 2011, Ch. 176, § 2.
(c) The nonforfeiture net level premium shall be equal to
the present value, at the date of issue of the policy, of the
guaranteed benefits provided by the policy divided by the
present value, at the date of issue of the policy, of an annuity
of one (1) per annum payable on the date of issue of the policy
and on each policy anniversary on which a premium falls due.
(d) For policies which cause on a basis guaranteed in the
policy unscheduled changes in benefits or premiums, or which
provide an option for changes in benefits or premiums other than
a change to a new policy, the adjusted premiums and present
values shall initially be calculated on the assumption that
future benefits and premiums do not change from those stipulated
at the date of policy issue. At the time of any such change in
the benefits or premiums the future adjusted premiums,
nonforfeiture net level premiums and present values shall be
recalculated on the assumption that future benefits and premiums
do not change from those stipulated by the policy immediately
after the change.
(e) Except as provided in subsection (h) of this section
the recalculated future adjusted premiums for any such policy
shall be the uniform percentage of the future premiums specified
in the policy for each policy year, excluding amounts payable as
extra premiums to cover impairments and special hazards, and
also excluding any uniform annual contract charge or policy fee
specified in the policy in a statement of the method to be used
in calculating the cash surrender values and paid-up
nonforfeiture benefits, that the present value, at the time of
change to the newly defined benefits or premiums, of all the
future adjusted premiums shall be equal to the excess of: The
sum of the then present value of the then future guaranteed
benefits provided for by the policy and the additional expense
allowance, if any, over the then cash surrender value, if any,
or present value of any paid-up nonforfeiture benefit under the
policy.
(f) The additional expense allowance, at the time of the
change to the newly defined benefits or premiums, shall be the
sum of:
(i) One percent (1%) of the excess, if positive, of
the average amount of insurance at the beginning of each of the
first ten (10) policy years after the change over the average
amount of insurance prior to the change at the beginning of each
of the first ten (10) policy years after the time of the most
recent previous change, or, if there has been no previous
change, the date of issue of the policy; and
(ii) One hundred twenty-five percent (125%) of the
increase, if positive, in the nonforfeiture net level premium.
(g) The recalculated nonforfeiture net level premium shall
be equal to the result obtained by dividing (i) by (ii) where:
(i) Equals the sum of:
(A) The nonforfeiture net level premium
applicable prior to the change times the present value of an
annuity of one (1) per annum payable on each anniversary of the
policy on or after the date of the change on which a premium
would have fallen due had the change not occurred; and
(B) The present value of the increase in future
guaranteed benefits provided for by the policy; and
(ii) Equals the present value of an annuity of one
(1) per annum payable on each policy anniversary on or after the
date of change on which a premium falls due.
(h) Notwithstanding any provision of this section, for a
policy issued on a substandard basis which provides reduced
graded amounts of insurance so that, in each policy year, the
policy has the same tabular mortality cost as an otherwise
similar policy issued on the standard basis which provides
higher uniform amounts of insurance, adjusted premiums and
present values may be calculated as if the policy were issued to
provide the higher uniform amounts of insurance on the standard
basis.
(j) All adjusted premiums and present values referred to
in this article shall be calculated for all policies of ordinary
insurance on the basis of the commissioners' 1980 standard
ordinary mortality table or, at the election of the company for
any one (1) or more specified life insurance plans, the
commissioners' 1980 standard ordinary mortality table with
ten-year select mortality factors; for all industrial insurance
policies on the basis of the commissioners' 1961 standard
industrial mortality table; and for all policies issued in a
particular calendar year on the basis of a rate of interest not
exceeding the nonforfeiture interest rate as defined in this
section for policies issued in that calendar year, except that:
(i) At the insurer's option, calculations for all
policies issued in a particular calendar year may be made on the
basis of a rate of interest not exceeding the nonforfeiture
interest rate, as defined in this subsection, for policies
issued in the immediately preceding calendar year;
(ii) Under any paid-up nonforfeiture benefit,
including any paid-up dividend additions, any cash surrender
value available, whether or not required by W.S. 26-16-202(a),
shall be calculated on the basis of the mortality table and rate
of interest used in determining the amount of the paid-up
nonforfeiture benefit and paid-up dividend additions, if any;
(iii) A company may calculate the amount of any
guaranteed paid-up nonforfeiture benefit including any paid-up
additions under the policy on the basis of an interest rate not
lower than that specified in the policy for calculating cash
surrender values;
(iv) In calculating the present value of any paid-up
term insurance with accompanying pure endowment, if any, offered
as a nonforfeiture benefit, the rates of mortality assumed shall
not be more than those shown in the commissioners' 1980 extended
term insurance table for policies of ordinary insurance and not
more than the commissioners' 1961 industrial extended term
insurance table for policies of industrial insurance;
(v) For insurance issued on a substandard basis, the
calculation of the adjusted premiums and present values may be
based on appropriate modifications of the tables specified in
this subsection;
(vi) For policies issued prior to the operative date
of the valuation manual, any commissioners' standard ordinary
mortality tables the NAIC adopts after 1980, that are approved
by regulation the commissioner promulgates, for use in
determining the minimum nonforfeiture standard, may be
substituted for the commissioners' 1980 standard ordinary
mortality table with or without ten-year select mortality
factors or for the commissioners' 1980 extended term insurance
table;
(vii) For policies issued on or after the operative
date of the valuation manual, the valuation manual shall provide
the commissioners' standard mortality table for use in
determining the minimum nonforfeiture standard that may be
substituted for the commissioners' 1980 standard ordinary
mortality table with or without ten-year select mortality
factors or for the commissioners' 1980 extended term insurance
table. If the commissioner approves by regulation any
commissioners' standard ordinary mortality table adopted by the
NAIC for use in determining the minimum nonforfeiture standard
for policies issued on or after the operative date of the
valuation manual then that minimum nonforfeiture standard
supersedes the minimum nonforfeiture standard provided by the
valuation manual;
(viii) For policies issued prior to the operative
date of the valuation manual, any commissioners' standard
industrial mortality tables the NAIC adopts after 1980, that are
approved by regulation the commissioner promulgates, for use in
determining the minimum nonforfeiture standard, may be
substituted for the commissioners' 1961 standard industrial
mortality table or the commissioners' 1961 industrial extended
term insurance table;
(ix) For policies issued on or after the operative
date of the valuation manual, the valuation manual shall provide
the commissioners' standard mortality table for use in
determining the minimum nonforfeiture standard that may be
substituted for the commissioners' 1961 standard industrial
mortality table or the commissioners' 1961 industrial extended
term insurance table. If the commissioner approves by regulation
any commissioners' standard industrial mortality table adopted
by the NAIC for use in determining the minimum nonforfeiture
standard for policies issued on or after the operative date of
the valuation manual then that minimum nonforfeiture standard
supersedes the minimum nonforfeiture standard provided by the
valuation manual.
(k) The nonforfeiture interest rate is defined as follows:
(i) For policies issued prior to the operative date
of the valuation manual, the nonforfeiture interest rate per
annum for any policy issued in a particular calendar year is
equal to one hundred twenty-five percent (125%) of the calendar
year statutory valuation interest rate for such policy as
defined in the standard valuation law rounded to the nearer
one-fourth percent (1/4%), provided the nonforfeiture interest
rate shall not be less than four percent (4%);
(ii) For policies issued on or after the operative
date of the valuation manual, the nonforfeiture interest rate
per annum for any policy issued in a particular calendar year
shall be provided by the valuation manual.
(m) Notwithstanding any other provision in this code to
the contrary, any refiling or nonforfeiture values or their
methods of computation for any previously approved policy form
which involves only a change in the interest rate or mortality
table used to compute nonforfeiture values shall not require
refiling of any other provisions of that policy form.
(n) After the effective date of this section, any insurer
may file with the commissioner a written notice of its election
to comply with this section after a specified date before
January 1, 1989, and the date specified is the operative date of
this section for the insurer, except that if an insurer does not
make the election, the operative date of this section for the
insurer is January 1, 1989. Before that date the election may be
made on a product-by-product basis.