Section 934.10  Authority

 

This Part is promulgated by the Director of Insurance pursuant to Sections 223, 229.2 and 401 of the Illinois Insurance Code (Ill. Rev. Stat. 1983 and 1984 Supp., ch. 73, pars. 835, 841.2 and 1013).

 

Section 934.20  Purpose

 

The purpose of the Part is to permit the use of mortality tables that reflect differences in mortality between smokers and nonsmokers in determining minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits for plans of insurance with separate premium rates for smokers and nonsmokers.  This Part shall apply to any ordinary life insurance policy delivered or issued for delivery in this State after the operative date chosen by the company for the policy form pursuant to Section 229.2 of the Illinois Insurance Code.

 

Section 934.30  Definitions

 

a)         "1980 CSO Table, with or without Ten-Year Select Mortality Factor" means that mortality table, consisting of separate rates of mortality for male and female lives, developed by the Society of Actuaries Committee to Recommend New Mortality Tables for Valuation of Standard Individual Ordinary Life Insurance, incorporated in the 1980 NAIC Amendments to the Model Standard Valuation Law and Standard Nonforfeiture Law for Life Insurance, and referred to in those models as the Commissioners 1980 Standard Ordinary Mortality Table, with or without Ten-Year Select Mortality Factors.  The same select factors as published in the 1981 Proceedings for the NAIC, vol. II, pp. 842-844 will be used for both smokers and nonsmokers tables.  No later amendments or editions to these Select Factors shall be included.

 

b)         "1980 CET Table" means that mortality table consisting of separate rates of mortality for male and female lives, developed by the Society of Actuaries Committee to Recommend New Mortality Tables for Valuation of Standard Individual Ordinary Life Insurance, incorporated in the 1980 NAIC Amendments to the Model Standard Nonforfeiture Law for Life Insurance, and referred to in those models as the Commissioners 1980 Extended Term Insurance Table.

 

c)         "1958 CSO Table" means that mortality table developed by the Society of Actuaries Special Committee on New Mortality Tables, incorporated in the NAIC Model Standard Nonforfeiture Law for Life Insurance, and referred to in that model as the Commissioners 1958 Standard Ordinary Mortality Table.

 

d)         "1958 CET Table" means that mortality table developed by the Society of Actuaries Special Committee on New Mortality Tables, incorporated in the NAIC Model Standard Nonforfeiture Law for Life Insurance, and referred to in that model as the Commissioners 1958 Extended Term Insurance Table.

 

e)         "Smoker and Nonsmoker Mortality Tables" refers to mortality tables with separate rates of mortality for smokers and nonsmokers derived from the 1980 and 1958 CSO and CET mortality tables, which were developed by the Society of Actuaries Task Force on Smoker/Nonsmoker Mortality and the California Insurance Department and which were adopted by the NAIC in December, 1983.

 

f)         "Composite Mortality Tables" refers to the 1980 and 1958 CSO and CET mortality tables as they were originally published with rates of mortality that do not distinguish between smokers and nonsmokers.

 

g)         "NAIC" means the National Association of Insurance Commissioners.

 

h)         The Tables defined in subsections (a) through (f) of this Section shall not include any subsequent amendments or editions.

 

Section 934.40  Utilization of the 1958 CSO and CET Smoker and Nonsmoker Mortality Tables

 

a)         In determining minimum reserve liabilities, minimum cash surrender values and amounts of paid-up nonforfeiture benefits the 1958 CSO and CET Smoker and Nonsmoker Mortality Tables may only be used as set forth in this Section.  The requirements of this Section shall apply to any insurance policy to be delivered or issued for delivery in this State after the operative date chosen by the company for that policy form pursuant to Section 229.2(4c)(k) of the Illinois Insurance Code (Ill. Rev. Stat. 1983 and 1984 Supp., ch. 73, par. 841.2(4c)(k)) and before January 1, 1989.

 

b)         A company may elect to use the 1958 CSO Smoker and Nonsmoker Mortality Tables rather than the 1980 CSO Table, with or without Ten Year Mortality Factors.

 

c)         A company may elect to use 1958 CET Smoker and Nonsmoker Mortality Tables rather than the 1980 CET Table.

 

d)         For any category of insurance issued on female lives with minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits determined using the 1958 CSO or 1958 CET Smoker and Nonsmoker Mortality Tables, such minimum value may be calculated according to an age not more than six years younger than the actual age of the insured.

 

e)         The 1958 CSO and CET Smoker and Nonsmoker Mortality Tables shall be utilized only if they are applicable to every insurance policy corresponding to the policy form for which the company has elected to use these tables.

 

f)         A company's election to use the 1958 CSO and/or CET Smoker and Nonsmoker Mortality Tables is final and may not be reversed under any circumstance.

 

g)         Utilization of the 1958 CSO and CET Smoker Mortality Tables is subject to the conditions set forth in Section 934.60.

 

Section 934.50  Utilization of the 1980 CSO and CET Smoker and Nonsmoker Mortality Tables

 

a)         In determining minimum reserve liabilities, minimum cash surrender values and amounts of paid-up nonforfeiture benefits the 1980 CSO and CET Smoker and Nonsmoker Mortality Tables may only be used as set forth in this Section.  The requirements of this Section shall apply to any insurance policy to be issued or issued for delivery in this state after the operative date chosen by the company for that policy form pursuant to Section 229.2(4c) of the Illinois Insurance Code.

 

b)         A company may elect to use the 1980 CSO Smoker and Nonsmoker Mortality Tables rather than the 1980 CSO Table, with or without Ten-Year Select Mortality Factors.

 

c)         A company may elect to use the 1980 CET Smoker and Nonsmoker Mortality Tables rather than the 1980 CET Table.

 

d)         The 1980 CSO and CET Smoker and Nonsmoker Mortality Tables shall be utilized only if they are applicable to each policy issued under a plan of insurance of which the company has elected to use these tables.

 

e)         A company's election to use either 1980 CSO and/or CET Smoker and Nonsmoker Mortality Tables is final with respect to any plan of insurance and may not be reversed for in force business.

 

f)         Utilization of the 1980 CSO and CET Smoker and Nonsmoker Mortality Tables is subject to the conditions set forth in Section 934.60.

 

Section 934.60  Conditions

 

For each plan of insurance with separate rates for smokers and nonsmokers, an insurance company may:

 

a)         use composite mortality tables to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits, or

 

b)         use smoker and nonsmoker mortality tables to determine the valuation net premiums and additional minimum reserves, if any, required by Section 223(3)(e) of the Illinois Insurance Code and use composite mortality tables to determine the basic minimum reserves, minimum cash surrender values and amounts of paid-up nonforfeiture benefits, or

 

c)         use smoker and nonsmoker mortality tables to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits.

 

Section 934.70  Severability

 

If any Section or portion of a Section of this Part, or the applicability thereof to any person or circumstance, is held invalid by a court, the remainder of the Part, or the applicability of such provision or circumstance, shall not be affected thereby.