TITLE 13 INSURANCE
CHAPTER
9 LIFE INSURANCE AND ANNUITIES
PART
16 USE OF 2001 COMMISSIONERS
STANDARD ORDINARY MORTALITY TABLE
13.9.16.1 ISSUING AGENCY: New Mexico Public Regulation Commission, Insurance Division.
[13.9.16.1
NMAC - N, 1-1-04]
13.9.16.2 SCOPE: This
rule applies to all life insurance companies issuing life insurance policies.
[13.9.16.2
NMAC - N, 1-1-04]
13.9.16.3 STATUTORY AUTHORITY: Sections 59A-2-9, 59A-8-5 and 59A-20-31 NMSA 1978.
[13.9.16.3
NMAC - N, 1-1-04]
13.9.16.4 DURATION: Permanent.
[13.9.16.4
NMAC - N, 1-1-04]
13.9.16.5 EFFECTIVE DATE: January 1, 2004, unless a later date is cited at the
end of a section. [13.9.16.5 NMAC - N, 1-1-04]
13.9.16.6 OBJECTIVE: The purpose of this rule is to recognize, permit and
prescribe the use of the 2001 commissioners standard ordinary (CSO) mortality
table in accordance with Section 59A-8-5 NMSA 1978, Standard Valuation Law,
Life Insurance and Annuities, Section 59A-20-31 NMSA 1978, Standard
Nonforfeiture Law, Life Insurance, and 13.9.13 NMAC, Valuation of Life
Insurance Policies.
[13.9.16.6
NMAC - N, 1-1-04]
13.9.16.7 DEFINITIONS:
A. 2001 CSO Mortality Table means that mortality
table, consisting of separate rates of mortality for male and female lives,
developed by the American academy of actuaries CSO task force from the
valuation basic mortality table developed by the society of actuaries
individual life insurance valuation mortality task force, and adopted by the
national association of insurance commissioners (“NAIC”) in December 2002. The
2001 CSO mortality table is included in the proceedings of the NAIC (2nd
Quarter 2002). Unless the context indicates otherwise, the "2001 CSO
mortality table" includes both the ultimate form of that table and the
select and ultimate form of that table and includes both the smoker and
nonsmoker mortality tables and the composite mortality tables. It also includes
both the age-nearest-birthday and age-last-birthday bases of the mortality
tables.
B. 2001 CSO mortality table (F) means that mortality
table consisting of the rates of mortality for female lives from the 2001 CSO
Mortality Table.
C. 2001 CSO mortality table (M) means that mortality
table consisting of the rates of mortality for male lives from the 2001 CSO
mortality table.
D. Composite mortality tables means mortality tables
with rates of mortality that do not distinguish between smokers and nonsmokers.
E. Smoker and nonsmoker mortality tables means
mortality tables with separate rates of mortality for smokers and nonsmokers.
[13.9.16.7
NMAC - N, 1-1-04]
13.9.16.8 2001 CSO MORTALITY TABLE:
A. At the election of the company for any one or more
specified plans of insurance and subject to the conditions stated in this
regulation, the 2001 CSO mortality table may be used as the minimum standard
for policies issued on or after January 1, 2004 and before the date specified
in Subsection B to which Subparagraph (a) of Paragraph (1) of Subsection B of
Section 59A-8-5 NMSA 1978, Subparagraph (f) of Paragraph (7) of Subsection F of
Section 59A-20-31 NMSA 1978, and 13.9.13.12 and 13.9.13.13 NMAC are
applicable. If the company elects to
use the 2001 CSO mortality table, it shall do so for both valuation and
nonforfeiture purposes.
B. Subject to the conditions stated in this rule, the 2001
CSO mortality table shall be used in determining minimum standards for policies
issued on and after January 1, 2009, to which Subparagraph (a) of Paragraph (1)
of Subsection B of Section 59A-8-5 NMSA 1978, Subparagraph (f) of Paragraph (7)
of Subsection F of Section 59A-20-31 NMSA 1978, and 13.9.13.12 and 13.9.13.13
NMAC are applicable.
[13.9.16.8
NMAC - N, 1-1-04]
13.9.16.9 CONDITIONS:
A. For each plan of insurance with separate rates for
smokers and nonsmokers an insurer may use:
(1) composite mortality tables to determine
minimum reserve liabilities and minimum cash surrender values and amounts of
paid-up nonforfeiture benefits;
(2) smoker and nonsmoker mortality tables to
determine the valuation net premiums and additional minimum reserves, if any,
required by Subparagraph (e) of Paragraph (1) of Subsection E of Section
59A-8-5 NMSA 1978, and use composite
mortality tables to determine the basic minimum reserves, minimum cash
surrender values and amounts of paid-up nonforfeiture benefits; or
(3) smoker and nonsmoker mortality to
determine minimum reserve liabilities and minimum cash surrender values and
amounts of paid-up nonforfeiture benefits.
B. For plans of insurance without separate rates for smokers
and nonsmokers the composite mortality tables shall be used.
C. For the purpose of determining minimum reserve
liabilities and minimum cash surrender values and amounts of paid-up
nonforfeiture benefits, the 2001 CSO mortality table may, at the option of the
company for each plan of insurance, be used in its ultimate or select and
ultimate form, subject to the restrictions of 13.9.16.10 NMAC and 13.9.13 NMAC
relative to use of the select and ultimate form.
D. When the 2001 CSO mortality table is the minimum reserve
standard for any plan for a company, the actuarial opinion in the annual
statement filed with the commissioner shall be based on an asset adequacy
analysis as specified in 13.2.6.8 NMAC, actuarial opinions and memoranda. A commissioner may exempt a company from
this requirement if it only does business in this state and in no other state.
[13.9.16.9
NMAC - N, 1-1-04]
13.9.16.10 APPLICABILITY OF THE 2001 CSO
MORTALITY TABLE TO 13.9.13 NMAC:
A. The 2001 CSO mortality table may be used in applying
13.9.13 NMAC in the following manner, subject to the transition dates for use
of the 2001 CSO mortality table in Section 4 of this rule (unless otherwise
noted, the references in this section are to 13.9.13 NMAC):
(1) Subparagraph
(b) of Paragraph (2) of Subsection B of Section 2: The net level reserve premium is based on
the ultimate mortality rates in the 2001 CSO Mortality Table.
(2) Subsection B of Section 7: All calculations are made using the 2001 CSO
mortality rate, and, if elected, the optional minimum mortality standard for
deficiency reserves stipulated in Paragraph 4. The value of
"qx+k+t-1" is the valuation mortality rate for deficiency reserves in
policy year k+t, but using the unmodified select mortality rates if modified
select mortality rates are used in the computation of deficiency reserves.
(3) Section 12: The 2001 CSO mortality table is the minimum
standard for basic reserves.
(4) Section 13: The 2001 CSO mortality table is the minimum standard for
deficiency reserves. If select mortality rates are used, they may be multiplied
by X percent for durations in the first segment, subject to the conditions specified
in Sections 5B(3)(a) to (i). In demonstrating compliance with those conditions,
the demonstrations may not combine the results of tests that utilize the 1980
CSO mortality table with those tests that utilize the 2001 CSO mortality table,
unless the combination is explicitly required by regulation or necessary to be
in compliance with relevant actuarial standards of practice.
(5) Section 17: The valuation mortality table used in determining the tabular
cost of insurance shall be the ultimate mortality rates in the 2001 CSO
mortality table.
(6) Subsection E of Section 19: The calculations specified in Section 19
shall use the ultimate mortality rates in the 2001 CSO mortality table.
(7) Subsection E of Section 20: The calculations specified in Section 20
shall use the ultimate mortality rates in the 2001 CSO mortality table.
(8) Subsection B of Section 21: The calculations specified in Section 21
shall use the ultimate mortality rates in the 2001 CSO mortality table.
(9) Subparagraph (b) of Paragraph (1) of
Subsection A of Section 23: The
one-year valuation premium shall be calculated using the ultimate mortality
rates in the 2001 CSO mortality table.
B. Nothing in this section shall be construed to expand the
applicability of 13.9.13 NMAC to include life insurance policies exempted by
Subsection B of 13.9.13.2 NMAC.
[13.9.16.10
NMAC - N, 1-1-04]
13.9.16.11 GENDER-BLENDED TABLES:
A. For any ordinary life insurance policy delivered or
issued for delivery in this state on and after January 1, 2004, that utilizes
the same premium rates and charges for male and female lives or is issued in
circumstances where applicable law does not permit distinctions on the basis of
gender, a mortality table that is a blend of the 2001 CSO mortality table (M)
and the 2001 CSO mortality table (F) may, at the option of the company for each
plan of insurance, be substituted for the 2001 CSO mortality table for use in
determining minimum cash surrender values and amounts of paid-up nonforfeiture
benefits. No change in minimum
valuation standards is implied by this subsection.
B. The company may choose from among the blended tables
developed by the American academy of actuaries CSO task force and adopted by
the NAIC in December 2002.
C. It shall not, in and of itself, be a violation of Section
59A-16-13 NMSA 1978 for an insurer to issue the same kind of policy of life
insurance on both a sex-distinct and sex-neutral basis.
[13.9.16.11
NMAC - N, 1-1-04]
HISTORY
OF 13.9.16 NMAC: [RESERVED]