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Florida Administrative Code (Last Updated: April 18, 2024) |
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69. Department of Financial Services |
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69O. OIR – Insurance Regulation |
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69O-164. Valuation And Nonforfeiture |
169O-164.040 2Determining Reserve Liabili5ties for Preneed Life Insurance.
10This rule is adopted by the commission pursuant to 19Sections 20625.121(5)(a)321. 22and 23627.476(9), 24F.S25.
26(2) 27Scope28.
29This rule applies to preneed life insurance policies and certificates as defined in 42Section Four 44(4) of this rule, and similar policies and certificates.
53(3) 54Purpose55.
56T57he 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.
123(4) 124Definitions125.
126(a) The term “2001 CSO Mortality Table” means 134the 2001 Commissioners Standard Ordinary Life Valuation Mortality Table, 143consisting 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 age254-255nearest-birthday and age-last-birthday bases of the mortality tables.
263(b) 264T265he 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.
302(c) 303For 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.
409(5) 410Minimum Valuation Mortality Standards414.
415For preneed insurance contracts, as defined in 422paragraph 423(4)(424c425), 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.
454(6) 455Minimum Valuation Interest Rate Standards460.
461(a) 462The 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 489Section 490625.121(6), 491F.S492.
493(b) 494The 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 522Section 523627.476(9)(i), 524F.S525.
526(7) 527Minimum Valuation Method Standards531.
532(a) 533T534he method used in determining the minimum standard for valuation of preneed life insurance shall be the method as defined in 555Section 556625.121(5), 557F.S558.
559(b) 560T561he method used in determining the minimum standard for nonforfeiture values for preneed life insurance shall be the method as defined in 583Section 584627.476(9), 585F.S586.
587(8) 588Transition Rules590.
591(a) 592For 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.
635(b) 636If 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:
7001. 701A 702complete list of all preneed policy forms that use the 2001 CSO as a minimum standard;
7182. 719A 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
7853. 786Supporting 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.
816(c) 817Preneed 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.
843(9) 844This rule is applicable to preneed life policies and certificates as defined in 857paragraph 858(8594860)861(c) 862issued on or after January 1, 2009.
869Rulemakin870g 871Authority 872624.308(1), 873625.121(5)(a)3874., 875627.476(9) 876FS877. 878Law Implemented 880625.121(5)(a)3881., 882627.476(9) 883FS884. 885History–New 9-30-09.
