10478-10489
INSURANCE CODE
SECTION 10478-10489
10478. This article is applicable only to policies and contracts
issued prior to the operative date as to such policies or contracts
of Article 3a, Chapter 1, Part 2, Division 2.
10479. The commissioner shall annually value, or cause to be
valued, the reserve liabilities (hereinafter called reserves) for all
outstanding life insurance policies and annuity and pure endowment
contracts of every admitted life insurer, except that in the case of
an alien insurer such valuation shall be limited to its insurance
transactions in the United States, and may certify the amount of any
such reserves, specifying the mortality table or tables, rate or
rates of interest and methods (net level premium method or other)
used in the calculation of such reserves. In calculating such
reserves, he or she may use group methods and approximate averages
for fractions of a year or otherwise. In lieu of the valuation of the
reserves herein required of any foreign or alien insurer, he or she
may accept any valuation made, or caused to be made, by the insurance
supervisory official of any state or other jurisdiction when such
valuation complies with the minimum standard herein provided and if
the official of such state or jurisdiction accepts as sufficient and
valid for all legal purposes the certificate of valuation of the
commissioner when such certificate states the valuation to have been
made in a specified manner according to which the aggregate reserves
would be at least as large as if they had been computed in the manner
prescribed by the law of that state or jurisdiction.
10479.5. When the commissioner has valued the reserve liabilities
of an insurer as provided by this article, he or she may upon request
of the insurer issue his or her official certificate or certificates
describing the reserve liability and the valuation thereof as he or
she has determined. For issuing an original certificate, the
commissioner shall require, in advance, a fee as specified by the
commissioner in lawful money of the United States, plus the actual
cost to the department of making the valuation on which the
certificate is based including, but not limited to, the aggregate
salaries computed on an hourly basis for the time actually spent
thereon by all of the department personnel.
10480. On or before the first day of March of each year every
domestic incorporated life insurer shall furnish the commissioner the
necessary data for determining the valuation of all its policies
outstanding on the last preceding thirty-first of December.
10481. Every admitted foreign life insurer shall, upon the written
demand of the commissioner, furnish him or her, at such time as he
designates, the requisite data for determining the valuation of all
its policies then outstanding.
10482. Except as provided in Sections 10484 and 10485, and except
as provided in Section 10489.7 for benefits purchased under group
annuity and pure endowment contracts subject to this article,
valuations of life policies must be based on the standards set forth
in Section 986.
10483. When the laws of any other State require a valuation of the
outstanding policies of a domestic life insurer by any standard of
valuation different from that named in this article, the commissioner
may make such valuation for use in such other State, and issue his
certificate in accordance therewith.
10484. In the case of insurance issued by a domestic insurer
authorized to do business in a foreign country upon the lives of
residents of that country, the commissioner may vary the mortality
standard to a standard applicable to that country.
10485. Any life insurer issuing policies of group life insurance
may value such policies on any accepted table of mortality with
interest assumption adopted by the insurer for that purpose if such
standard is not lower than the American Men Ultimate Table of
Mortality with interest assumption at three and one-half per cent per
annum.
10486. All policies of group insurance shall be segregated by the
insurer into a separate class and the mortality experience kept
separate. The number of policies, amount of insurance, reserves,
premiums and payments to policyholders thereunder, together with the
mortality table and interest assumption adopted by the insurer, shall
be reported separately in its annual financial statement.
10486.9. (a) As prescribed in subdivision (b), an insurer may
maintain reserves on a one year preliminary term basis on a life,
term or endowment policy if by its terms such policy expressly
provides that the first year's insurance under such policy is term
insurance purchased by part or the whole of the premium to be
received during the first year.
(b) If the actuarial net preliminary term renewal premium in the
case of
(1) insurance under a limited-payment life preliminary term
policy providing for the payment of all premiums thereon within less
than 20 years from the date thereof; or
(2) endowment insurance under an endowment preliminary term
policy,
exceeds the actuarial net preliminary term renewal premium,
calculated on the same table of mortality and rate of interest, for a
20-payment life policy, the reserve on such policy specified under
(1) or (2) of this subdivision (b), as the case may be, at the end of
any year, including the first, shall not be less than the sum of the
reserve on a 20-payment life preliminary term policy issued at the
same time on a life of the same age, and the actuarial net level
premium reserve for a pure endowment maturing at the end of the
premium payment period, equal to the excess of the full net level
premium reserve, at the end of such premium payment period, on such
policy specified under (1) or (2) of this subdivision (b), as the
case may be, over the reserve, at the end of such premium payment
period, of such 20-payment life preliminary term policy.
The premium payment period herein referred to is 20 years or the
period, if less, during which premiums are actually payable under
such policy specified in (1) or (2) of this subdivision (b), as the
case may be.
(c) As used in this section, the term "20-payment life preliminary
term policy" means a life insurance policy embodying all of the
following attributes:
(1) It is whole-life insurance;
(2) The premium charged is payable annually or at lesser intervals
until 20 annual premiums or a proportionately greater number of
premiums payable at intervals less than one year shall have been
paid, or until the prior death of the insured;
(3) The first year's insurance is term insurance purchased by the
whole or part of the premium to be received during the first contract
year.
10488. Reserves for all policies and contracts to which this
article applies may be calculated, at the option of the insurer,
according to any standards which produce greater aggregate reserves
for all such policies and contracts than the minimum reserves
required by this article.
10489. Any insurer which at any time shall have adopted any
standard of valuation producing greater aggregate reserves than those
calculated according to the minimum standard provided in this
article or Article 3a of this chapter may, with the approval of the
commissioner, adopt any lower standard of valuation, but not lower
than the minimum therein provided.