N.M. Admin. Code § 13.9.13.7

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

Section 13.9.13.7 - DEFINITIONS

For purposes of this rule:

A."Basic reserves" means reserves calculated in accordance with the principles of Section 59A-8-5E NMSA 1978.

B."Contract segmentation method" means the method of dividing the period from issue to mandatory expiration of a policy into successive segments, with the length of each segment being defined as the period from the end of the prior segment (from policy inception, for the first segment) to the end of the latest policy year as determined in 13 nmac 9.13.8 [now 13.9.13.8 NMAC]. All calculations are made using the 1980 CSO valuation tables, (or any other valuation mortality table adopted by the NAIC after the effective date of this rule and promulgated by rule by the superintendent for this purpose), and, if elected, the optional minimum mortality standard for deficiency reserves stipulated in 13 nmac 9.13.13 [now 13.9.13.13 NMAC].

C."Deficiency reserves" means the excess, if greater than zero, of minimum reserves, calculated in accordance with the principles of Section 59A-8-5E(1)(e) NMSA 1978, over basic reserves.

D."Guaranteed gross premiums" means the premiums under a policy of life insurance that are guaranteed and determined at issue.

E."Maximum valuation interest rates" means the calendar year statutory valuation interest rates defined in Section 59A-8-5B(4) NMSA 1978 that are to be used in determining the minimum standard for valuation of life insurance policies.

F."NAIC" means the national association of insurance commissioners.

G."1980 CSO valuation tables" means the commissioners' 1980 standard ordinary mortality table (1980 CSO table) without ten-year selection factors, incorporated into the 1980 amendments to the NAIC Standard Valuation Law, and variations of the 1980 CSO table approved by the NAIC, such as the smoker and nonsmoker versions approved in December 1983.

H."Scheduled gross premium" means the smallest illustrated gross premium at issue for other than universal life insurance policies. For universal life insurance policies, scheduled gross premium means the smallest specified premium described in 13 NMAC 9.13.23.1.3 [now Paragraph (3) of Subsection A of 13.9.13.23 NMAC], if any, or the minimum premium described in 13 NMAC 9.13.23.1.4 [now Paragraph (4) of Subsection A of 13.9.12.23 NMAC].

I."Segmented reserves" means reserves, calculated using segments produced by the contract segmentation method, equal to the present value of all future guaranteed benefits less the present value of all future net premiums to the mandatory expiration of a policy, where the net premiums within each segment are a uniform percentage of the respective gross premiums within the segment.

J."Tabular cost of insurance" means the net single premium at the beginning of a policy year for one-year term insurance in the amount of the guaranteed death benefit in that policy year.

K."Ten-year select factors" means the select factors adopted with the 1980 amendments to the NAIC Standard Valuation Law.

L."Unitary reserves" means the present value of all future guaranteed benefits less the present value of all future modified net premiums.

M."Universal life insurance policy" means any individual life insurance policy under the provisions of which separately identified interest credits (other than in connection with dividend accumulations, premium deposit funds, or other supplementary accounts) and mortality or expense charges are made to the policy.

N.M. Admin. Code § 13.9.13.7

1/1/00; Recompiled 11/30/01