Sec. 38a-77. (Formerly Sec. 38-130). Valuation of reserve.
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/ct/title-38a/chapter-698-insurers/38a-77·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)The commissioner, upon receipt of the annual report of each domestic, foreign and alien life insurance company doing business in this state, as determined under subsection
(b)of section 38a-76 , shall make a valuation of all its outstanding policies, additions thereto, unpaid dividends and other obligations. The provisions of this section shall not apply to policies or certificates in which the amount of insurance or benefit is determined by an assessment collected from the surviving and associated holders of like policies or certificates, and not by a guaranty or pledge of insurance irrespective of the amount thus collected; provided any amount collected upon such assessments, until expended for the purpose for which it was collected, shall be charged as a liability against the company or association holding the same.
(b)All valuations made by the commissioner or by his authority shall be made upon the net premium basis, according to the standard of valuations adopted by the company for the obligation to be valued, provided, in each case, the standard of valuation employed shall be stated in his annual report. Any company may adopt different standards for obligations of different dates or classes, but, if the total value determined by any such standard for the obligations for which it has been adopted is less than that determined by the legal minimum standard hereinafter prescribed, or, if the company adopts no standard, the legal minimum standard shall be used.
(c)The commissioner may vary the standards of interest and mortality in the case of corporations from foreign countries and in particular cases of invalid lives and other extra hazards, and may value policies in groups, use approximate averages for fractions of a year and otherwise and calculate value by net premiums or otherwise, and accept the valuation of the department of insurance of any other state in place of the valuation herein required if the insurance department of such state accepts as sufficient and valid for all purposes the certificate of valuation of the Insurance Commissioner of this state.
(d)Except as otherwise provided herein, the legal minimum standard for contracts issued before January 1, 1901, shall be the actuaries' or combined experience table of mortality with interest at four per cent per annum and, for contracts issued on or after said day, shall be the “American Experience Table of Mortality” with interest at three and one-half per cent per annum. Any company may adopt as a legal minimum standard the “American Men Ultimate Table of Mortality” with three and one-half per cent per annum interest for contracts issued on or after January 1, 1928, in lieu of said “American Experience Table of Mortality”. Any company may adopt as a legal minimum standard the “Commissioners' 1941 Standard Ordinary Table of Mortality” with three and one-half per cent per annum interest for contracts issued on or after January 1, 1945, in lieu of either of the legal minimum standards hereinabove allowed. Any company may adopt as a legal minimum standard any mortality table approved or adopted by the National Association of Insurance Commissioners and certified by the commissioner as adequate with three and one-half per cent per annum interest for contracts issued on or after January 1, 1957; and four per cent per annum interest for contracts issued on or after January 1, 1974, in lieu of any of the legal minimum standards hereinabove allowed. The valuation of contracts on female risks issued on or after January 1, 1957, may be calculated, at the option of the company with approval of the commissioner, according to an age not more than three years younger than the actual age of the insured. All annuity contracts written after January 1, 1973, and prior to January 1, 1981, other than single premium immediate annuity contracts and annuities purchased under group annuity contracts may be valued based on the 1971 individual annuity mortality table with the rate of interest not to exceed four per cent per annum. Single premium immediate annuity contracts and annuities purchased under group annuity contracts after January 1, 1973, and prior to January 1, 1981, may be valued based on the 1971 individual annuity mortality table for individual contracts and the 1971 group annuity mortality table for annuities issued under group contracts with interest not to exceed six per cent per annum. All annuity contracts, both individual and group, issued prior to January 1, 1973, will continue to be reserved on the tables in use prior to January 1, 1973, unless changes in the reserve bases of these annuity contracts are approved by the Insurance Commissioner.
(e)This section shall apply only to those contracts, policies, and annuities to which sections 38a-78 , 38a-439 and 38a-440 do not apply.