(a) The net value of the stipulated form of insurance or the specified cash surrender value available under Section 1151.152 may not be less than the reserve on the policy at the end of the last completed quarter of the policy year for which premiums have been paid, less:
(1) an amount of not more than:
(A) 2-1/2 percent of the maximum amount insured under the policy and any dividend additions to the policy, if the age of the insured on the date the policy was issued is younger than 10 years; or
(B) 2-1/2 percent of the amount insured under the policy at the time the computation is made and any dividend additions to the policy, if the age of the insured on the date the policy was issued is 10 years or older; and
(2) any existing debt to the insurer on or secured under the policy.
(b) The reserve described by Subsection (a):
(1) includes:
(A) the reserve for any paid-up additions to the policy; and
(B) the amount of any dividends credited to the policy; and
(2) excludes any reserve on:
(A) total or permanent disability, as defined by the policy; and
(B) additional accidental death benefits.

(c) In computing the value of paid-up term insurance with any accompanying pure endowment, a rate of mortality may be assumed that is not more than:
(1) 130 percent of the rate of mortality according to the applicable table, if the 1941 Standard Industrial Mortality Table or the 1941 Sub-standard Industrial Mortality Table is adopted for computing the reserve; or
(2) the rate of mortality shown by:
(A) the Commissioners 1961 Industrial Extended Term Insurance Table, if the Commissioners 1961 Standard Industrial Mortality Table is adopted for computing the reserve; or
(B) any other mortality table specified by the insurer and approved by the department, if the policy is substandard.