This is the Final Public Hearing on the adoption of proposed Rule 69O-164.040, Florida Administrative Code, published on October 3, 2008 in Vol. 34, No. 40, of the Florida Administrative Weekly. One notice of change was published on December 5, 2008,...  

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    DEPARTMENT OF FINANCIAL SERVICES
    OIR – Insurance Regulation

    RULE NO: RULE TITLE
    69O-164.040: Determining Reserve Liabilities for Preneed Life Insurance

    The Financial Services Commission, Office of Insurance Regulation announces a hearing to which all persons are invited.

    DATE AND TIME: January 13, 2009, during a regular meeting of the Financial Services Commission

    PLACE: Cabinet Meeting Room, Lower Level, The Capitol, Tallahassee, Florida

    GENERAL SUBJECT MATTER TO BE CONSIDERED: This is the Final Public Hearing on the adoption of proposed Rule 69O-164.040, Florida Administrative Code, published on October 3, 2008 in Vol. 34, No. 40, of the Florida Administrative Weekly. One notice of change was published on December 5, 2008, in Vol. 34, No. 39.

    Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 5 days before the workshop/meeting by contacting: Kerry Krantz, Office of Insurance Regulation, E-mail kerry.krantz@floir.com. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).

    For more information, you may contact: Kerry Krantz, Office of Insurance Regulation, E-mail kerry.krantz@floir.com.

     

    THE FULL TEXT OF THE PROPOSED RULE IS:

    69O-164.040 Determining Reserve Liabilities for Preneed Life Insurance.

    (1) Authority.

    This rule is adopted by the commission pursuant to Sections 625.121(5)(a)3. and 627.476(9), Florida Statutes.

    (2) Scope.

    This rule applies to preneed life insurance policies and certificates as defined in Section Four (4) of this rule, and similar policies and certificates.

    (3) Purpose.

    The purpose of this rule is to recognize the inadequacy of the 2001 Commissioners Standard Ordinary Life Valuation Mortality Table for use in determining the minimum standard of valuation and the minimum standard nonforfeiture value, and to require the continued use of the 1980 Commissioners Standard Ordinary Life Valuation Mortality Table for use in determining the minimum standard of valuation and the minimum standard nonforfeiture value.

    (4) Definitions.

    (a) The term “2001 CSO Mortality Table” means the 2001 Commissioners Standard Ordinary Life Valuation 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 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) The term “Ultimate 1980 CSO” means the Commissioners’ 1980 Standard Ordinary Life Valuation Mortality Tables (1980 CSO) without ten-year (10-year) selection factors, incorporated into the 1980 amendments to the NAIC Standard Valuation Law approved in December 1983.

    (c) For the purposes of this rule, preneed insurance is any life insurance policy or certificate that is issued in combination with, in support of, with an assignment to, or as a guarantee for a prearrangement agreement for goods and services to be provided at the time of and immediately following the death of the insured. Goods and services may include, but are not limited to embalming, cremation, body preparation, viewing or visitation, coffin or urn, memorial stone, and transportation of the deceased. The status of the policy or contract as preneed insurance is determined at the time of issue in accordance with the policy form filing.

    (5) Minimum Valuation Mortality Standards.

    For preneed insurance contracts, as defined in section (4)(c), and similar policies and contracts, the minimum mortality standard for determining reserve liabilities and non-forfeiture values for both male and female insureds shall be the Ultimate 1980 CSO.

    (6) Minimum Valuation Interest Rate Standards.

    (a) The interest rates used in determining the minimum standard for valuation of preneed life insurance shall be the calendar year statutory valuation interest rates as defined in Section 625.121(6), F.S.

    (b) The interest rates used in determining the minimum standard for nonforfeiture values for preneed life insurance shall be the calendar year statutory nonforfeiture interest rates as defined in Section 627.476(9)(i), F.S.

    (7) Minimum Valuation Method Standards.

    (a) The method used in determining the minimum standard for valuation of preneed life insurance shall be the method as defined in Section 625.121(5), F.S.

    (b) The method used in determining the minimum standard for nonforfeiture values for preneed life insurance shall be the method as defined in Section 627.476(9),F.S.

    (8) Transition Rules.

    (a) For preneed insurance policies issued on or after the effective date of this rule and before January 1, 2012, the 2001 CSO may be used as the minimum standard for reserves and minimum standard for non-forfeiture benefits for both male and female insureds.

    (b) If an insurer elects to use the 2001 CSO as a minimum standard for any policy issued on or after the effective date of this rule and before January 1, 2012, the insurer shall provide, as a part of the actuarial opinion memorandum submitted in support of the company’s asset adequacy testing, an annual written notification to the domiciliary commissioner. The notification shall include:

    1. A complete list of all preneed policy forms that use the 2001 CSO as a minimum standard;

    2. A certification signed by the appointed actuary stating that the reserve methodology employed by the company in determining reserves for the preneed policies issued after the effective date and using the 2001 CSO as a minimum standard, develops adequate reserves (For the purposes of this certification, the preneed insurance policies using the 2001 CSO as a minimum standard cannot be aggregated with any other policies.); and

    3. Supporting information regarding the adequacy of reserves for preneed insurance policies issued after the effective date of this rule and using the 2001 CSO as a minimum standard for reserves.

    (c). Preneed insurance policies issued on or after January 1, 2012, must use the Ultimate 1980 CSO in the calculation of minimum nonforfeiture values and minimum reserves.

    (9) Effective Date.

    This rule is applicable to preneed life policies and certificates as defined in (2) issued on or after January 1, 2009.

    Specific Authority 625.121(5)(a)3., 627.476(9) FS. Law Implemented 625.121(5)(a)3., 627.476(a)(h)5. FS. History–New______.

     

    A copy of the agenda may be obtained by contacting: The Governor and Cabinet Website at http://www.myflorida.com/myflorida/cabinet/mart.html. The agenda should be available approximately one week before the cabinet meeting.

Document Information

Hearing Meeting:
Cabinet Meeting Room, Lower Level, The Capitol, Tallahassee, Florida
Subject:
This is the Final Public Hearing on the adoption of proposed Rule 69O-164.040, Florida Administrative Code, published on October 3, 2008 in Vol. 34, No. 40, of the Florida Administrative Weekly. One notice of change was published on December 5, 2008, in Vol. 34, No. 39.
Meeting:
hearing
Contact:
The Governor and Cabinet Website at http://www.myflorida.com/myflorida/cabinet/mart.html. The agenda should be available approximately one week before the cabinet meeting.
Related Rules: (1)
69O-164.040. Determining Reserve Liabilities for Preneed Life Insurance