13.9.13.16

DEFICIENCY RESERVES FOR POLICIES WITH GUARANTEED NONLEVEL GROSS PREMIUMS OR GUARANTEED NONLEVEL BENEFITS (OTHER THAN UNIVERSAL LIFE POLICIES):

1. A. The deficiency reserve at any duration shall be calculated:

   (1) on a unitary basis if the corresponding basic reserve determined by 13 nmac 9.13.15 [now 13.9.13.15 NMAC] is unitary;

   (2) on a segmented basis if the corresponding basic reserve determined by 13 nmac 9.13.15 [now 13.9.13.15 NMAC] is segmented; or

   (3) on a segmented basis if the corresponding basic reserve determined by 13 nmac 9.13.15 [now 13.9.13.15 NMAC] is equal to both the segmented reserve and the unitary reserve.

2. B. This section shall apply to any policy for which the guaranteed gross premium at any duration is less than the corresponding modified net premium calculated by the method used in determining the basic reserves, but using the minimum valuation standards of mortality (as specified in 13 nmac 9.13.13 [now 13.9.13.13 NMAC] and rate of interest.
3. C. Deficiency reserves, if any, shall be calculated for each policy as the excess if greater than zero, for the current and all remaining periods, of the quantity z over the basic reserve, where z is obtained as indicated in 13 nmac 9.13.13 [now 13.9.13.13 NMAC].

4. D. For deficiency reserves determined on a segmented basis, the quantity z is determined using segment lengths equal to those determined for segmented basic reserves.

   [1/1/00; Recompiled 11/30/01]