Title 18 Insurance

1200 Life Insurance & Annuities

1218 Determining Reserve Liabilities For Credit Life Insurance

1.0 Authority

This regulation is promulgated by the Commissioner of Insurance pursuant to18 Del.C. §§1111, 1113, 1213, 1701 and29 Del.C. Ch. 101(Administrative Procedures Act).

2.0 Scope

This regulation applies to credit life insurance policies and certificates, and those similar policies and certificates where there is no identifiable charge made to the debtor.

3.0 Purpose

The purpose of this regulation is to:

1. 3.1 Recognize the 2001 CSO Male Composite Ultimate Mortality Table for use in determining the minimum standard of valuation.
2. 3.2 Specify the interest rate and method to be used in determining the minimum standard of valuation.

4.0 Definitions

"2001 CSO Mortality Table" means that mortality table, consisting 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 age-nearest-birthday and age-last-birthday bases of the mortality tables.

"Composite mortality tables" means mortality tables with rates of mortality that do not distinguish between smokers and nonsmokers.

"Credit life insurance" means life insurance as defined in18 Del.C. §3702.

5.0 2001 CSO Male Composite Ultimate Mortality Table

1. 5.1 The minimum standard for both male and female insureds shall be 2001 CSO Male Composite Ultimate Mortality Table.
2. 5.2 Where the credit life insurance policy or certificate insures two lives, the minimum standard shall be twice the mortality in the 2001 CSO Male Composite Ultimate Mortality Table based on the age of the older insured.

6.0 Minimum Standards

1. 6.1 18 Del.C. §1212 shall not apply to credit life insurance.
2. 6.2 The interest rates used in determining the minimum standard for valuation shall be the calendar year statutory valuation interest rates as defined in18 Del.C. §1113.
3. 6.3 The method used in determining the minimum standard for valuation shall be the Commissioners Reserve Valuation Method as defined in18 Del.C. §1113.

7.0 Effective Date

This regulation is applicable to credit life policies and certificates issued on or after January 1, 2010 and effective 10 days after publication of the final Order signed by the Commissioner.

14 DE Reg. 50 (07/01/10)