N.M. Admin. Code § 13.10.14.16

Current through Register Vol. 35, No. 24, December 23, 2024

Section 13.10.14.16 - CONTRACT RESERVES

The contract reserve is in addition to claim reserves and premium reserves.

A. Contract reserves required. Contract reserves are required, unless otherwise specified in Subsection B of 13.10.14.16 NMAC, for:

(1) all individual and group contracts with which level premiums are used; or

(2) all individual and group contracts with respect to which, due to the gross premium pricing structure at issue, the value of the future benefits at any time exceeds the value of any appropriate future valuation net premiums at that time. The values specified in this Paragraph (2) of Subsection A of 13.10.14.16 NMAC shall be determined on the basis specified in 13.10.14.17 NMAC.

B. Contracts not requiring a contract reserve:

(1) contracts which cannot be continued after one year from issue; or

(2) contracts already in force on the effective date of these standards for which no contract reserve was required under the immediately preceding standards.

C. Consistent method required. The methods and procedures for contract reserves should be consistent with those for claim reserves for any contract, or else appropriate adjustment must be made when necessary to assure provision for the aggregate liability. The definition of the date of incurral must be the same in both determinations.

N.M. Admin. Code § 13.10.14.16

13.10.14.16 NMAC - Rp 13 NMAC 10.14.16, 10-1-03