806 KAR 12:110.
Merged gender mortality tables for life insurance.
RELATES TO: KRS
304.12-085, 304.15-342
STATUTORY AUTHORITY:
KRS Chapter 13A, 304.2-110, 304.15-342
NECESSITY, FUNCTION,
AND CONFORMITY: KRS 304.2-110 provides that the Executive Director of
Insurance may make reasonable regulations necessary for or as an aid to the
effectuation of any provision of the Kentucky Insurance Code. KRS 304.15-342
establishes the use of the 1980 CSO and 1980 CET Tables of Mortality, and
provides that any ordinary mortality tables adopted after 1980 by the National
Association of Insurance Commissioners (NAIC) may be approved
for use in Kentucky by administrative regulation promulgated by the executive
director. The NAIC has adopted certain modifications of the 1980
CSO and 1980 CET tables of mortality for use where necessary. This
administrative regulation permits individual life insurance policies to provide
the same cash surrender values and paid-up nonforfeiture benefits to both men
and women.
Section 1. Definitions.
As used in this administrative regulation:
(1) "1980 CSO
Table, with or without Ten (10) Year Select Mortality Factor" means that
mortality table, consisting of separate rates of mortality for male and female
lives, developed by the Society of Actuaries Committee to Recommend New
Mortality Tables for Valuation of Standard Individual Ordinary Life Insurance,
incorporated in the 1980 NAIC Amendments to the Model Standard Valuation Law
and Standard Nonforfeiture Law for Life Insurance, and referred to in those
models as the Commissioners 1980 Standard Ordinary Mortality Table, with or
without Ten (10) Year Select Mortality Factors.
(2) "1980 CSO
Table (M), with or without Ten (10) Year Select Mortality Factors" means
that mortality table consisting of the rates of mortality for male lives from
the 1980 CSO Table, with or without Ten (10) Year Select Mortality Factors.
(3) "1980 CSO
Table (F), with or without Ten (10) Year Select Mortality Factors" means
that mortality table consisting of the rates of mortality for female lives from
the 1980 CSO Table, with or without Ten (10) Year Select Mortality Factors.
(4) "1980 CET
Table" means that mortality table consisting of separate rates of
mortality for male and female lives, developed by the Society of Actuaries
Committee to Recommend New Mortality Tables for Valuation of Standard
Individual Ordinary Life Insurance, incorporated in the 1980 NAIC Amendments to
the Model Standard Valuation Law and Standard Nonforfeiture Law for Life
Insurance, and referred to in those models as the Commissioners 1980 Extended
Term Insurance Table.
(5) "1980 CET
Table (M)" means that mortality table consisting of the rates of mortality
for male lives from the 1980 CET Table.
(6) "1980 CET
Table (F)" means that mortality table consisting of the rates of mortality
for female lives from the 1980 CET Table.
Section 2. General
Rule. (1) For any policy of insurance on the life of either a male or female
insured delivered or issued for delivery in this state after the effective date
of KRS 304.15-342 for that policy form:
(a) A mortality
table which is a blend of the 1980 CSO Table (M) and the 1980 CSO Table (F)
with or without Ten (10) Year Select Mortality Factors may at the option of the
company be substituted for the 1980 CSO Table, with or without Ten (10) Year
Select Mortality Factors; and
(b) A mortality
table which is of the same blend as used in paragraph (a) of this subsection
but applied to form a blend of the 1980 CET Table (M) and the 1980 CET Table
(F) may at the option of the company be substituted for the 1980 CET Table for
use in determining minimum cash surrender values and amounts of paid-up
nonforfeiture benefits.
(2) Only the
following blended tables as have been adopted by the NAIC may be so used and
this administrative regulation formally approves those tables for use in this
state.
(a) 100 percent
male, zero percent female for tables to be designated as the "1980
CSO-A" and "1980 CET-A" tables.
(b) Eighty (80)
percent male, twenty (20) percent female for tables to be designated as the
"1980 CSO-B" and "1980 CET-B" tables.
(c) Sixty (60)
percent male, forty (40) percent female for tables to be designated as the
"1980 CSO-C" and "1980 CET-C" tables.
(d) Fifty (50)
percent male, fifty (50) percent female for tables to be designated as the
"1980 CSO-D" and "1980 CET-D" tables.
(e) Forty (40)
percent male, sixty (60) percent female for tables to be designated as the
"1980 CSO-E" and "1980 CET-E" tables.
(f) Twenty (20)
percent male, eighty (80) percent female for tables to be designated as the
"1980 CSO-F" and "1980 CET-F" tables.
(g) Zero percent
male, 100 percent female for tables to be designated as the "1980
CET-G" tables. Tables (a) and (g) are not to be used with respect to
policies issued on or after January 1, 1985, except where the proportion of
persons insured is anticipated to be ninety (90) percent or more of one (1) sex
or the other or except for certain policies converted from group insurance.
Such group conversions issued on or after January 1, 1986, must use Mortality
Tables based on the blend of lives by sex expected for such policies if such
group conversions are considered as extensions of the Norris decision. This
consideration has not been clearly defined by judicial or legislative action in
all jurisdictions.
(3) No change in
minimum valuation standards is implied by this administrative regulation.
Section 3. Unfair
Discrimination. (1) It shall not be a violation of KRS 304.12-085 for an
insurer to issue the same kind of policy of life insurance on both a sex
distinct and sex neutral basis. However, each such insurer shall establish
prior to issue of any such policies which are to be so offered the conditions
under which each type will be marketed. Such conditions, together with sufficient
information to establish that an unfairly discriminatory condition will not be
created, shall be filed with the executive director
for his approval.
(2) It shall,
however, be a violation of KRS 304.12-085 to substitute the 1980 CSO Table (M)
or 1980 CET Table (M) with ages set back (as permitted with the 1958 CSO Table)
for the 1980 CSO Table (F) or 1980 CET Table (F).
Section 4.
Severability. If any provision of this administrative regulation or the
application thereof to any person or circumstance is for any reason held to be
invalid, the remainder of the regulation and the application of such provision
to other persons or circumstances shall not be affected thereby.
Section 5. Effective
Date. This administrative regulation shall become effective upon completion of
its review pursuant to KRS Chapter 13A. (11 Ky.R. 683; eff. 11-13-84; 13 Ky.R.
2107; eff. 8-5-87; TAm eff. 8-9-2007.)