1. (1) Scope. This rule shall govern mortality tables for use in reserves as set forth in Section 625.121, F.S.
2. (2) Purpose. The purpose of this rule is to recognize, permit, and prescribe the use of the 2001 Commissioners Standard Ordinary (CSO) Mortality Table in accordance with Sections 625.121(5)(a)3. and 627.476(9)(h)6., F.S., and paragraphs 69O-164.020(5)(a) and (b), F.A.C.

3. (3) Definitions.

   1. (a) “2001 CSO Mortality Table” means the 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), which is adopted herein and incorporated by reference. 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.
   2. (b) “2001 CSO Mortality Table (F)” means the mortality table consisting of the rates of mortality for female lives from the 2001 CSO Mortality Table.
   3. (c) “2001 CSO Mortality Table (M)” means the mortality table consisting of the rates of mortality for male lives from the 2001 CSO Mortality Table.
   4. (d) “Composite mortality tables” means mortality tables with rates of mortality that do not distinguish between smokers and nonsmokers.
   5. (e) “Smoker and nonsmoker mortality tables” means mortality tables with separate rates of mortality for smokers and nonsmokers.

4. (4) CSO Mortality Table.

   1. (a) 1. For policies not issued in this state, the 2001 CSO Mortality Table may be used as the minimum standard for valuation purposes on valuation dates on or after the date this rule becomes effective for policies issued on or after January 1, 2005, if that is the basis for nonforfeiture purposes and that is the basis permitted or required for the sale of policies in that state.

      2. For policies issued in this state, the 2001 CSO Mortality Table may be used as the minimum standard for valuation and nonforfeiture purposes for policies issued on or after the date this rule becomes effective.

   2. (b) Subject to the conditions stated in this rule, the 2001 CSO Mortality Table shall be used in determining minimum standards for policies issued on and after January 1, 2009, to which Sections 625.121(5)(a)3. and 627.476(9)(h)6., F.S., and paragraphs 69O-164.020(5)(a) and (b), F.A.C., are applicable.

   3. (c) 1. For policies not issued in this state, the 2001 CSO Mortality Table may be substituted for the 1980 Commissioners Extended Term (CET) Tables for use as the minimum standard for valuation purposes on valuation dates on or after the date this rule becomes effective for policies issued on or after January 1, 2005 if that is the basis for nonforfeiture purposes and that is the basis permitted or required for the sale of policies in that state.

      2. For policies issued in this state, the 2001 CSO Mortality Table may be substituted for the 1980 Commissioners Extended Term (CET) Tables for use as the minimum standard for valuation and nonforfeiture purposes for policies issued on or after the date this rule becomes effective if the same election is made with respect to paragraph (a) above.

5. (5) Conditions.

   1. (a) For each plan of insurance with separate rates for smokers and nonsmokers an insurer may use:

      1. Composite mortality tables to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits;

      2. Smoker and nonsmoker mortality tables to determine the valuation net premiums and additional minimum reserves, if any, required by Section 625.121(11), F.S., and use composite mortality tables to determine the basic minimum reserves, minimum cash surrender values and amounts of paid-up nonforfeiture benefits; or

      3. Smoker and nonsmoker mortality to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits.

   2. (b) For plans of insurance without separate rates for smokers and nonsmokers the composite mortality tables shall be used.
   3. (c) For the purpose of determining minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits, the 2001 CSO Mortality Table may, at the option of the company for each plan of insurance, be used in its ultimate or select and ultimate form, subject to the restrictions of subsection (6) of this rule and Rule 69O-164.020, F.A.C., relative to use of the select and ultimate form.

6. (6) Applicability of the 2001 CSO Mortality Table to Rule 69O-164.020, F.A.C.

   1. (a) The 2001 CSO Mortality Table may be used in applying Rule 69O-164.020, F.A.C., in the following manner, subject to the transition dates for use of the 2001 CSO Mortality Table in subsection (4) of this rule. Unless otherwise noted, the references in this section are to Rule 69O-164.020, F.A.C.:

      1. Sub-subparagraph 69O-164.020(3)(a)2.b., F.A.C.: The net level reserve premium is based on the ultimate mortality rates in the 2001 CSO Mortality Table.

      2. Paragraph 69O-164.020(4)(b), F.A.C.: All calculations are made using the 2001 CSO Mortality Rate, and, if elected, the optional minimum mortality standard for deficiency reserves stipulated in subparagraph (6)(a)4. The value of “qx+k+t-1” is the valuation mortality rate for deficiency reserves in policy year k+t, but using the unmodified select mortality rates if modified select mortality rates are used in the computation of deficiency reserves.

      3. Paragraph 69O-164.020(5)(a), F.A.C.: The 2001 CSO Mortality Table is the minimum standard for basic reserves.

      4. Paragraph 69O-164.020(5)(b), F.A.C.: The 2001 CSO Mortality Table is the minimum standard for deficiency reserves. If select mortality rates are used, they may be multiplied by X percent for durations in the first segment, subject to the conditions specified in sub-sub-subparagraphs 69O-164.020(5)(b)2.c.(I)-(IX), F.A.C. In demonstrating compliance with those conditions, the demonstrations may not combine the results of tests that utilize the 1980 CSO Mortality Table with those tests that utilize the 2001 CSO Mortality Table, unless the combination is explicitly required by rule or necessary to be in compliance with relevant Actuarial Standards of Practice.

      5. Paragraph 69O-164.020(6)(c), F.A.C.: The valuation mortality table used in determining the tabular cost of insurance shall be the ultimate mortality rates in the 2001 CSO Mortality Table.

      6. Subparagraph 69O-164.020(6)(e)4., F.A.C.: The calculations specified in paragraph 69O-164.020(6)(e), F.A.C., shall use the ultimate mortality rates in the 2001 CSO Mortality Table.

      7. Subparagraph 69O-164.020(6)(f)4., F.A.C.: The calculations specified in paragraph 69O-164.020(6)(f), F.A.C., shall use the ultimate mortality rates in the 2001 CSO Mortality Table.

      8. Subparagraph 69O-164.020(6)(g)2., F.A.C.: The calculations specified in paragraph 69O-164.020(6)(g), F.A.C., shall use the ultimate mortality rates in the 2001 CSO Mortality Table.

      9. Sub-subparagraph 69O-164.020(7)(a)1.b., F.A.C.: The one-year valuation premium shall be calculated using the ultimate mortality rates in the 2001 CSO Mortality Table.

   2. (b) Nothing in this subsection shall be construed to expand the applicability of Rule 69O-164.020, F.A.C., to include life insurance policies exempted under paragraph 69O-164.020(3)(a), F.A.C.

7. (7) Gender-Blended Tables.

   1. (a) For any ordinary life insurance policy delivered or issued for delivery in this state on and after January 1, 2005, subject to the condition stated in Section 627.476(9)(h)5.c., F.S., a mortality table that is a blend of the 2001 CSO Mortality Table (M) and the 2001 CSO Mortality Table (F) may be substituted, at the option of the company for each plan of insurance, for the 2001 CSO Mortality Table for use in determining minimum cash surrender values and amounts of paid-up nonforfeiture benefits. No change in minimum valuation standards is implied by this subsection of the rule.
   2. (b) The company may choose from among the blended tables developed by the American Academy of Actuaries CSO Task Force and adopted by the NAIC in December 2002.
   3. (c) It shall not, in and of itself, be a violation of Section 626.9541, F.S., for an insurer to issue the same kind of policy of life insurance on both a sex-distinct and sex-neutral basis.

Specific Authority 624.308(1), 625.121, 627.476 FS. Law implemented 624.307(1), 625.121, 627.476 FS. History–New 6-8-05.