Utah Code 31A-17-507. Reserve valuation method — Life insurance and endowment benefits
Current as of: 2024 | Check for updates
|
Other versions
(1) Except as otherwise provided in Sections 31A-17-508, 31A-17-511, and 31A-17-513, reserves according to the commissioner’s reserve valuation method, for the life insurance and endowment benefits of policies providing for a uniform amount of insurance and requiring the payment of uniform premiums shall be the excess, if any, of the present value, at the date of valuation, of such future guaranteed benefits provided for by such policies, over the then present value of any future modified net premiums therefor. The modified net premiums for any such policy shall be such uniform percentage of the respective contract premiums for such benefits that the present value, at the date of issue of the policy, of all such modified net premiums shall be equal to the sum of the then present value of such benefits provided for by the policy and the excess of Subsection (1)(a) over Subsection (1)(b), as follows:
Terms Used In Utah Code 31A-17-507
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Annuity: means an agreement to make periodical payments for a period certain or over the lifetime of one or more individuals if the making or continuance of all or some of the series of the payments, or the amount of the payment, is dependent upon the continuance of human life. See Utah Code 31A-1-301
- Contract: A legal written agreement that becomes binding when signed.
- Employee: means :(57)(a) an individual employed by an employer; or(57)(b) an individual who meets the requirements of Subsection (55)(b). See Utah Code 31A-1-301
- Equal: means , with respect to biological sex, of the same value. See Utah Code 68-3-12.5
- Individual: means a natural person. See Utah Code 31A-1-301
- Insurance: includes :
(96)(b)(i) a risk distributing arrangement providing for compensation or replacement for damages or loss through the provision of a service or a benefit in kind;(96)(b)(ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a business and not as merely incidental to a business transaction; and(96)(b)(iii) a plan in which the risk does not rest upon the person who makes an arrangement, but with a class of persons who have agreed to share the risk. See Utah Code 31A-1-301- life insurance: means a contract that incorporates mortality risk, including annuity and pure endowment contracts, and as may be specified in the valuation manual. See Utah Code 31A-17-501
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Policy: includes a service contract issued by:
(150)(b)(i) a motor club under Chapter 11, Motor Clubs;(150)(b)(ii) a service contract provided under Chapter 6a, Service Contracts; and(150)(b)(iii) a corporation licensed under:(150)(b)(iii)(A) Chapter 7, Nonprofit Health Service Insurance Corporations; or(150)(b)(iii)(B) Chapter 8, Health Maintenance Organizations and Limited Health Plans. See Utah Code 31A-1-301- Premium: includes , however designated:
(156)(b)(i) an assessment;(156)(b)(ii) a membership fee;(156)(b)(iii) a required contribution; or(156)(b)(iv) monetary consideration. See Utah Code 31A-1-301(1)(a) A net level annual premium equal to the present value, at the date of issue, of such benefits provided for after the first policy year, divided by the present value, at the date of issue, of an annuity of one per annum payable on the first and each subsequent anniversary of such policy on which a premium falls due; provided, however, that such net level annual premium may not exceed the net level annual premium on the 19 year premium whole life plan for insurance of the same amount at an age one year higher than the age at issue of such policy.(1)(b) A net one year term premium for such benefits provided for in the first policy year.(2)(2)(a) Provided that for any life insurance policy issued on or after January 1, 1997, for which the contract premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for such excess and which provides an endowment benefit or a cash surrender value or a combination thereof in an amount greater than such excess premium, the reserve according to the commissioner’s reserve valuation method as of any policy anniversary occurring on or before the assumed ending date defined in this Subsection (2) as the first policy anniversary on which the sum of any endowment benefit and any cash surrender value then available is greater than such excess premium shall, except as otherwise provided in Section 31A-17-511, be the greater of the reserve as of such policy anniversary calculated as described in Subsection (1) and the reserve as of such policy anniversary calculated as described in that subsection, but with:(2)(a)(i) the value defined in Subsection (1)(a) being reduced by 15% of the amount of such excess first year premium;(2)(a)(ii) the present values of benefits and premiums being determined without reference to premiums or benefits provided for by the policy after the assumed ending date;(2)(a)(iii) the policy being assumed to mature on such date as an endowment; and(2)(a)(iv) the cash surrender value provided on such date being considered as an endowment benefit.(2)(b) In making the comparison described in Subsection (2)(a), the mortality and interest bases stated in Sections 31A-17-504 and 31A-17-506 shall be used.(3) Reserves according to the commissioner’s reserve valuation method for:(3)(a) life insurance policies providing for a varying amount of insurance or requiring the payment of varying premiums;(3)(b) group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer, including a partnership or sole proprietorship, or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under Section 408, Internal Revenue Code;(3)(c) accident and health and accidental death benefits in all policies and contracts; and(3)(d) other benefits, except life insurance and endowment benefits in life insurance policies and benefits provided by other annuity and pure endowment contracts, shall be calculated by a method consistent with the principles of Subsections (1) and (2).