S.C. Code Ann. Regs. 69-57.2
Section 1. Authority
Section 2. Purpose
Section 3. Definitions
Section 4. 2001 CSO Preferred Class Structure Table
Section 5. Conditions
Section 6. Separability
Section 7. Effective Date
Section 1. Authority
This regulation is promulgated by the Director of Insurance pursuant to South Carolina Code of Laws Section 38-90-180, the Standard Valuation Law, and Sections 5A and 5B of South Carolina Regulation 69-57, Valuation of Life Insurance Policies.
Section 2. Purpose
The purpose of this regulation is to recognize, permit and prescribe the use of mortality tables that reflect differences in mortality between preferred and standard lives in determining minimum reserve liabilities in accordance with South Carolina Code of Laws Section 38-90-180, the Standard Valuation Law, and Sections 5A and 5B of South Carolina Regulation 69-57,Valuation of Life Insurance Policies.
Section 3. Definitions
A. “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) and supplemented by the 2001 CSO Preferred Class Structure Mortality Table defined below in Subsection B. 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. Mortality tables in the 2001 CSO Mortality Table include the following:
C. “Statistical agent” means an entity with proven systems for protecting the confidentiality of individual insured and insurer information; demonstrated resources for and history of ongoing electronic communications and data transfer ensuring data integrity with insurers, which are its members or subscribers; and a history of and means for aggregation of data and accurate promulgation of the experience modifications in a timely manner.
Section 4. 2001 CSO Preferred Class Structure Table
At the election of the company, for each calendar year of issue, for any one or more specified plans of insurance and subject to satisfying the conditions stated in this regulation, the 2001 CSO Preferred Class Structure Mortality Table may be substituted in place of the 2001 CSO Smoker or Nonsmoker Mortality Table as the minimum valuation standard for policies issued on or after January 1, 2007. No such election shall be made until the company demonstrates at least 20% of the business to be valued on this table is in one or more of the preferred classes. A table from the 2001 CSO Preferred Class Structure Mortality Table used in place of a 2001 CSO Mortality Table, pursuant to the requirements of this rule, will be treated as part of the 2001 CSO Mortality Table only for purposes of reserve valuation pursuant to the requirements of the NAIC model regulation, “Recognition of the 2001 CSO Mortality Table For Use In Determining Minimum Reserve Liabilities And Nonforfeiture Benefits Model Regulation.”
Section 5. Conditions
A. For each plan of insurance with separate rates for preferred and standard nonsmoker lives, an insurer may use the super preferred nonsmoker, preferred nonsmoker, and residual standard nonsmoker tables to substitute for the nonsmoker mortality table found in the 2001 CSO Mortality Table to determine minimum reserves. At the time of election and annually thereafter, except for business valued under the residual standard nonsmoker table, the appointed actuary shall certify that:
B. For each plan of insurance with separate rates for preferred and standard smoker lives, an insurer may use the preferred smoker and residual standard smoker tables to substitute for the smoker mortality table found in the 2001 CSO Mortality Table to determine minimum reserves. At the time of election and annually thereafter, for business valued under the preferred smoker table, the appointed actuary shall certify that:
C. Unless exempted by the Director, every authorized insurer using the 2001 CSO Preferred Class Structure Table shall annually file with the Director, with the NAIC, or with a statistical agent designated by the NAIC and acceptable to the Director, statistical reports showing mortality and such other information as the Director may deem necessary or expedient for the administration of the provisions of this regulation. The form of the reports shall be established by the Director or the Director may require the use of a form established by the NAIC or by a statistical agent designated by the NAIC and acceptable to the Director.
Section 6. Separability
If any provision of this regulation or its application to any person or circumstance is for any reason held to be invalid, the remainder of the regulation and the application of the provision to other persons or circumstances shall not be affected.
Section 7. Effective Date
The effective date of this regulation is January 1, 2007.
1976 Code Sections 38-9-180 and 1-23-10 et seq.
HISTORY: Added by State Register Volume 31, Issue No. 5, eff May 25, 2007.