Sec. 38a-77. (Formerly Sec. 38-130). Valuation of reserve.
Sec. 38a-77. (Formerly Sec. 38-130). Valuation of reserve. (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.
(1949 Rev., S. 6138; 1957, P.A. 133, S. 1; P.A. 73-181; P.A. 78-312, S. 5; P.A. 90-243, S. 54; P.A. 98-79, S. 3.)
History: P.A. 73-181 imposed 4% per annum interest for contracts issued on or after January 1, 1974, and added
provisions re contracts after January 1, 1973, and before January 1, 1981; P.A. 78-312 added provision limiting application
of provisions to "contracts, policies and annuities to which sections 38-130c to 38-130e, inclusive, do not apply"; P.A. 90-243 divided the section into Subsecs. and made technical corrections substituting "foreign" for "nonresident", "alien" for
"foreign", "the commissioner" for "him" and "the" for "said"; Sec. 38-130 transferred to Sec. 38a-77 in 1991; P.A. 98-79
amended Subsec. (a) to add reference to Subsec. 38a-76(b) re doing business in this state.
See Sec. 38a-78 re Standard Valuation Law.
See Secs. 38a-438 to 38a-440, inclusive, re Standard Nonforfeiture Law.
Annotation to former section 38-130:
Term "reinsurance reserve" discussed. 71 C. 751.