054.00.98 Ark. Code R. 005

Current through Register Vol. 49, No. 10, October, 2024

Rule 054.00.98-005 - Rule and Regulation 38 - An Annuity Mortality Table for use in Determining Reserve Liabilities for Annuities

Section 1. Purpose

The purpose of this rule is to recognize the following mortality tables for use in determining the minimum standard of valuation for annuity and pure endowment contracts: the 1983 Table "a", the 1983 Group Annuity Mortality (1983 GAM) Table, the Annuity 2000 Mortality Table, and the 1994 Group Annuity Reserving (1994 GAR) Table.

Section 2. Authority

This rule is promulgated pursuant to the authority granted to the Arkansas Insurance Commissioner ("Commissioner") by Ark. Code Ann. §§ 23-84-101 et seq., 23-61-108 and 25-15-201 et seq. *

Section 3. Definitions

A. As used in this Rule "1983 Table "a"' means that mortality table developed by the Society of Actuaries Committee to Recommend a New Mortality Basis for Individual Annuity Valuation and adopted as a recognized mortality table for annuities in June 1982 by the National Association of Insurance Commissioners.

B. As Used in this Rule "1983 GAM Table" means that mortality table developed by the Society of Actuaries Committee on Annuities and adopted as a recognized mortality table for annuities in December 1983 by the National Association of Insurance Commissioners.

C. As used in this rule "1994 GAR Table" means that mortality table developed by the Society of Actuaries Group Annuity Valuation Task Force and shown on pages 866-867 of Volume XLVII of the Transactions of the Society of Actuaries (1995).

D. As used in this rule "Annuity 2000 Mortality Table" means that mortality table developed by the Society of Actuaries Committee on Life Insurance Research and shown on page 240 of Volume XLVII of the Transactions of the Society of Actuaries (1995).

Section 4. Individual Annuity or Pure Endowment Contracts

A. Except as provided in Subsection B and C of this section, the 1983 Table "a" is recognized and approved as an individual annuity mortality table for valuation and, at the option of the company, may be used for purposes of determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after March 18, 1977.

B. Except as provided in Subsection C of this section, either the 1983 * Table "a" or the Annuity 2000 Mortality Table shall be used for determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after December 16, 1985.

C. Except as provided in Subsection D of this section, the Annuity 2000 Mortality Table shall be used for determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after January 1, 1999.

D. The 1983 Table "a" without projection is to be used for determining the minimum standards of valuation for an individual annuity or pure endowment contract issued on or after January 1, 1999, solely when the contract is based on life contingencies and is issued to fund periodic benefits arising from:

(1) Settlements of various forms of claims pertaining to court settlements from tort actions;

(2) Settlements involving similar actions such as workers' compensation claims; or

(3) Settlements for long term disability claims where a temporary or life annuity has been used in lieu of continuing disability payments.

Section 5. Group Annuity or Pure Endowment Contracts

A. Except as provided in Subsections B and C of this section, the 1983 GAM Table, the 1983 Table "a", and the 1994 GAR Table are recognized and approved as group annuity mortality tables for valuation and, at the option of the company, any one of these tables may be used for purposes of valuation for any annuity or pure endowment purchased on or after March 18, 1977 under a group annuity or pure endowment contract.

B. Except as provided in Subsection C of this section, either the 1983 GAM Table or the 1994 GAR Table shall be used for determining the minimum standards of valuation for any annuity or pure endowment purchased on or after October 1, 1985 under a group annuity or pure endowment contract.

C. The 1994 GAR Table shall be used for determining the minimum standard of valuation for any annuity or pure endowment purchased on or after January 1, 1999, under a group annuity or pure endowment contract.

Section 6. Application of the 1994 GAR Table

In using the 1994 GAR Table, the mortality rate for a person age x in year (1994 + n) is calculated as follows:

where the q_x+¹⁹⁹⁴ and (1-AA_x)ⁿ are as specified in the 1994 GAR Table.

Section 7. Separability

Any section or provision of this regulation held by a court to be invalid or unconstitutional will not affect the validity of any other section or provision of this rule.

Section 8. Effective Date

The provisions of this rule shall be effective January 1, 1999, upon statutory filing per Arkansas law.

054.00.98 Ark. Code R. 005

7/9/1998