TITLE 50: INSURANCE
CHAPTER I: DEPARTMENT OF INSURANCE SUBCHAPTER l: PROVISIONS APPLICABLE TO ALL COMPANIES
PART 935
THE MINIMUM MORTALITY STANDARD
FOR VALUATION OF ANNUITY AND PURE ENDOWMENT CONTRACTS
AUTHORITY: Implementing and authorized by Sections 223 and 401 of the Illinois Insurance Code [215 ILCS 5/223 and 401].
SOURCE: Adopted at 9 Ill. Reg. 16857, effective December 31, 1985; amended at 22 Ill. Reg. 16473, effective January 1, 1999; amended at 38 Ill. Reg. 12862, effective January 1, 2015; amended at 42 Ill. Reg. 14216, effective July 12, 2018.
Section 935.10 Authority
This Part is promulgated by the
Director of Insurance pursuant to Sections 223 and 401 of the Illinois
Insurance Code [215 ILCS 5/223 and 401].
(Source: Amended at 22 Ill. Reg. 16473, effective January 1, 1999)
Section 935.20 Purpose
The purpose of this Part is to
recognize the following mortality tables for use in determining the minimum
standard of valuation of annuity and pure endowment contracts: the 1983 Table
"a", the 1983 Group Annuity Mortality (1983 GAM) Table, the Annuity
2000 Mortality Table, 1994 Group Annuity Reserving (1994 GAR) Table, and the
2012 Individual Annuity Reserving (2012 IAR) Table.
(Source: Amended at 38 Ill.
Reg. 12862, effective January 1, 2015)
Section 935.30 Definitions
"1983
Table "a"" means that mortality table developed by the Society
of Actuaries Committee to Recommend a New Mortality Basis for Individual
Annuity Valuation and adopted as a recognized mortality table for annuities in
June 1982 by the National Association of Insurance Commissioners.
"1983
Group Annuity Mortality Table" or "GAM Table" means that
mortality table developed by the Society of Actuaries Committee on Annuities
and adopted as a recognized mortality table for annuities in December 1983 by
the National Association of Insurance Commissioners.
"1994
Group Annuity Reserving Table" or "GAR Table" means that
mortality table developed by the Society of Actuaries Group Annuity Valuation
Table Task Force and adopted as a recognized mortality table for annuities in
December 1996 by the National Association of Insurance Commissioners (NAIC) as
published in the Transactions of the Society of Actuaries, Vol. XLVII, pp.
866-867. No later amendments or editions shall be included.
"Annuity
2000 Mortality Table" means that mortality table developed by the Society
of Actuaries Committee on Life Insurance Research and adopted as a recognized
mortality table for annuities in December 1996 by the NAIC as published in the
Transactions of the Society of Actuaries, Vol. XLVII, p. 240. No later
amendments or editions shall be included.
"Period Table"
means a table of mortality rates applicable to a given calendar year (the
Period).
"Generational
Mortality Table" means a mortality table containing a set of mortality
rates that decrease for a given age from one year to the next based on a
combination of a Period table and a projection scale containing rates of
mortality improvement.
"2012 IAR
Table" means the Generational mortality table developed by the Society of
Actuaries Committee on Life Insurance Research and containing rates, , derived from a combination
of the 2012 IAM Period Table and Projection Scale G2, using the methodology
stated in Section 935.45.
"2012
Individual Annuity Mortality Period Life Table" or "2012 IAM
Period" means the Period table containing loaded mortality rates for
calendar year 2012. This table contains rates, ,
developed by the Society of Actuaries Committee on Life Insurance Research and
is shown in Illustrations A and B.
"Projection
Scale G2" or "Scale G2" is a table of annual rates, G2x,
of mortality improvement by age for projecting future mortality rates beyond
calendar year 2012. This table was developed by the Society of Actuaries
Committee on Life Insurance Research and is shown in Illustrations C and D.
(Source: Amended at 38 Ill.
Reg. 12862, effective January 1, 2015)
Section 935.40 Individual
Annuity or Pure Endowment Contracts
a) Except as provided in subsections (b), (c), (d) and (e), the
1983 Table "a" is recognized and approved as an individual annuity
mortality table for valuation and, at the option of the company, may be used
for purposes of determining the minimum standard of valuation for any
individual annuity or pure endowment contract issued on or after September 8,
1977 and before January 1, 2017.
b) Except as provided in subsections (c), (d) and (e), the 1983
Table "a" or the Annuity 2000 Mortality Table shall be used for
determining the minimum standard of valuation for any individual annuity or
pure endowment contract issued on or after December 31, 1985 and before January
1, 2017.
c) Except as provided in subsections (d) and (e), the Annuity
2000 Mortality Table shall be used for determining the minimum standard of
valuation for any individual annuity or pure endowment contract issued on or
after January 1, 1999 and before January 1, 2017.
d) Except as provided in subsection (e), the 2012 IAR Mortality
Table shall be used for determining the minimum standard of valuation for any
individual annuity or pure endowment contract issued on or after January 1, 2015
and before January 1, 2017.
e) The 1983 Table "a" without projection is to be used
for determining the minimum standards of valuation for an individual annuity or
pure endowment contract issued on or after January 1, 1999 and before January
1, 2017, solely when the contract is based on life contingencies and is issued
to fund periodic benefits arising from:
1) Settlements of various forms of claims pertaining to court
settlements or out of court settlements from tort actions;
2) Settlements involving similar actions such as workers' compensation
claims; or
3) Settlements of long term disability claims where a temporary
or life annuity has been used in lieu of continuing disability payments.
(Source: Amended at 42 Ill.
Reg. 14216, effective July 12, 2018)
Section 935.45 Application
of the 2012 IAR Mortality Table
a) In using the 2012 IAR Mortality Table, the mortality rate for
a person age x in year (2012 + n) is calculated as follows:
b) The resulting shall be
rounded to three decimal places per 1,000, e.g., 0.741 deaths per 1,000. Also,
the rounding shall occur according to the formula in subsection (a), starting
at the 2012 period table rate.
c) For
example, for a male age 30, = 0.741.
= 0.741 * (1 – 0.010) ^ 1 =
0.73359, which is rounded to 0.734.
= 0.741 * (1 – 0.010) ^ 2 =
0.7262541, which is rounded to 0.726.
d) A method leading to incorrect rounding would be to calculate as * (1 – 0.010), or 0.734 * 0.99
= 0.727. It is incorrect to use the already rounded to
calculate .
(Source: Added at 38 Ill.
Reg. 12862, effective January 1, 2015)
Section 935.50 Group Annuity
and Pure Endowment Contracts
a) Except as provided in subsections (b) and (c), the 1983 GAM
Table, the 1983 Table "a" and the 1994 GAR Table are recognized and
approved as group annuity mortality tables for determining the minimum
standards of valuation and, at the option of the company, any one of these
tables may be used for purposes of valuation for any annuity or pure endowment
purchased on or after September 8, 1977 and before January 1, 2017 under a
group annuity or pure endowment contract.
b) Except as provided in subsection (c), either the 1983 GAM
Table or the 1994 GAR Table shall be used for determining the minimum standard
of valuation for any annuity or pure endowment purchased on or after December
31, 1985 and before January 1, 2017 under a group annuity or pure endowment
contract.
c) The 1994 GAR Table shall be used for determining the minimum
standard of valuation for any annuity or pure endowment purchased on or after
January 1, 1999 and before January 1, 2017 under a group annuity or pure
endowment contract.
(Source: Amended at 42 Ill. Reg. 14216, effective July 12, 2018)
Section 935.55 Application
of the 1994 GAR Table
In using the 1994 GAR Table, the
mortality rate for a person age x in year (1994 + n) is calculated as follows:
qx1994
+ n = qx1994(1-AAx)n
where the qx1994
and AAx are as specified in the 1994 GAR Table.
(Source: Added at 22 Ill. Reg. 16473, effective January 1, 1999)
Section 935.60 Severability
(Repealed)
(Source: Repealed at 22 Ill. Reg. 16473, effective January 1, 1999)
Section 935.70 Effective
Date (Repealed)
(Source: Repealed at 22 Ill. Reg. 16473, effective January 1, 1999)
Section 935.ILLUSTRATION A 2012 IAM Period
Table, Female, Age Nearest Birthday
2012 IAM Period Table
Female, Age Nearest
Birthday
AGE
AGE
AGE
AGE
0
1.621
30
0.300
60
3.460
90
88.377
1
0.405
31
0.321
61
3.916
91
97.491
2
0.259
32
0.338
62
4.409
92
107.269
3
0.179
33
0.351
63
4.933
93
118.201
4
0.137
34
0.365
64
5.507
94
130.969
5
0.125
35
0.381
65
6.146
95
146.449
6
0.117
36
0.402
66
6.551
96
163.908
7
0.110
37
0.429
67
7.039
97
179.695
8
0.095
38
0.463
68
7.628
98
196.151
9
0.088
39
0.504
69
8.311
99
213.150
10
0.085
40
0.552
70
9.074
100
230.722
11
0.086
41
0.600
71
9.910
101
251.505
12
0.094
42
0.650
72
10.827
102
273.007
13
0.108
43
0.697
73
11.839
103
295.086
14
0.131
44
0.740
74
12.974
104
317.591
15
0.156
45
0.780
75
14.282
105
340.362
16
0.179
46
0.825
76
15.799
106
362.371
17
0.198
47
0.885
77
17.550
107
384.113
18
0.211
48
0.964
78
19.582
108
400.000
19
0.221
49
1.051
79
21.970
109
400.000
20
0.228
50
1.161
80
24.821
110
400.000
21
0.234
51
1.308
81
28.351
111
400.000
22
0.240
52
1.460
82
32.509
112
400.000
23
0.245
53
1.613
83
37.329
113
400.000
24
0.247
54
1.774
84
42.830
114
400.000
25
0.250
55
1.950
85
48.997
115
400.000
26
0.256
56
2.154
86
55.774
116
400.000
27
0.261
57
2.399
87
63.140
117
400.000
28
0.270
58
2.700
88
71.066
118
400.000
29
0.281
59
3.054
89
79.502
119
400.000
120
1000.000
(Source: Added at 38 Ill.
Reg. 12862, effective January 1, 2015)
Section 935.ILLUSTRATION B 2012 IAM Period
Table, Male, Age Nearest Birthday
2012 IAM Period Table
Male, Age Nearest
Birthday
AGE
AGE
AGE
AGE
0
1.605
30
0.741
60
5.096
90
109.993
1
0.401
31
0.751
61
5.614
91
123.119
2
0.275
32
0.754
62
6.169
92
137.168
3
0.229
33
0.756
63
6.759
93
152.171
4
0.174
34
0.756
64
7.398
94
168.194
5
0.168
35
0.756
65
8.106
95
185.260
6
0.165
36
0.756
66
8.548
96
197.322
7
0.159
37
0.756
67
9.076
97
214.751
8
0.143
38
0.756
68
9.708
98
232.507
9
0.129
39
0.800
69
10.463
99
250.397
10
0.113
40
0.859
70
11.357
100
268.607
11
0.111
41
0.926
71
12.418
101
290.016
12
0.132
42
0.999
72
13.675
102
311.849
13
0.169
43
1.069
73
15.150
103
333.962
14
0.213
44
1.142
74
16.860
104
356.207
15
0.254
45
1.219
75
18.815
105
380.000
16
0.293
46
1.318
76
21.031
106
400.000
17
0.328
47
1.454
77
23.540
107
400.000
18
0.359
48
1.627
78
26.375
108
400.000
19
0.387
49
1.829
79
29.572
109
400.000
20
0.414
50
2.057
80
33.234
110
400.000
21
0.443
51
2.302
81
37.533
111
400.000
22
0.473
52
2.545
82
42.261
112
400.000
23
0.513
53
2.779
83
47.441
113
400.000
24
0.554
54
3.011
84
53.233
114
400.000
25
0.602
55
3.254
85
59.855
115
400.000
26
0.655
56
3.529
86
67.514
116
400.000
27
0.688
57
3.845
87
76.340
117
400.000
28
0.710
58
4.213
88
86.388
118
400.000
29
0.727
59
4.631
89
97.634
119
400.000
120
1000.000
(Source: Added at 38 Ill.
Reg. 12862, effective January 1, 2015)
Section 935.ILLUSTRATION C Projection Scale G2,
Female, Age Nearest Birthday
Projection Scale G2
Female, Age Nearest
Birthday
AGE
G2x
AGE
G2x
AGE
G2x
AGE
G2x
0
0.010
30
0.010
60
0.013
90
0.006
1
0.010
31
0.010
61
0.013
91
0.006
2
0.010
32
0.010
62
0.013
92
0.005
3
0.010
33
0.010
63
0.013
93
0.005
4
0.010
34
0.010
64
0.013
94
0.004
5
0.010
35
0.010
65
0.013
95
0.004
6
0.010
36
0.010
66
0.013
96
0.004
7
0.010
37
0.010
67
0.013
97
0.003
8
0.010
38
0.010
68
0.013
98
0.003
9
0.010
39
0.010
69
0.013
99
0.002
10
0.010
40
0.010
70
0.013
100
0.002
11
0.010
41
0.010
71
0.013
101
0.002
12
0.010
42
0.010
72
0.013
102
0.001
13
0.010
43
0.010
73
0.013
103
0.001
14
0.010
44
0.010
74
0.013
104
0.000
15
0.010
45
0.010
75
0.013
105
0.000
16
0.010
46
0.010
76
0.013
106
0.000
17
0.010
47
0.010
77
0.013
107
0.000
18
0.010
48
0.010
78
0.013
108
0.000
19
0.010
49
0.010
79
0.013
109
0.000
20
0.010
50
0.010
80
0.013
110
0.000
21
0.010
51
0.010
81
0.012
111
0.000
22
0.010
52
0.011
82
0.012
112
0.000
23
0.010
53
0.011
83
0.011
113
0.000
24
0.010
54
0.011
84
0.010
114
0.000
25
0.010
55
0.012
85
0.010
115
0.000
26
0.010
56
0.012
86
0.009
116
0.000
27
0.010
57
0.012
87
0.008
117
0.000
28
0.010
58
0.012
88
0.007
118
0.000
29
0.010
59
0.013
89
0.007
119
0.000
120
0.000
(Source: Added at 38 Ill.
Reg. 12862, effective January 1, 2015)
Section 935.ILLUSTRATION D Projection Scale G2,
Male, Age Nearest Birthday
Projection Scale G2
Male, Age Nearest
Birthday
AGE
G2x
AGE
G2x
AGE
G2x
AGE
G2x
0
0.010
30
0.010
60
0.015
90
0.007
1
0.010
31
0.010
61
0.015
91
0.007
2
0.010
32
0.010
62
0.015
92
0.006
3
0.010
33
0.010
63
0.015
93
0.005
4
0.010
34
0.010
64
0.015
94
0.005
5
0.010
35
0.010
65
0.015
95
0.004
6
0.010
36
0.010
66
0.015
96
0.004
7
0.010
37
0.010
67
0.015
97
0.003
8
0.010
38
0.010
68
0.015
98
0.003
9
0.010
39
0.010
69
0.015
99
0.002
10
0.010
40
0.010
70
0.015
100
0.002
11
0.010
41
0.010
71
0.015
101
0.002
12
0.010
42
0.010
72
0.015
102
0.001
13
0.010
43
0.010
73
0.015
103
0.001
14
0.010
44
0.010
74
0.015
104
0.000
15
0.010
45
0.010
75
0.015
105
0.000
16
0.010
46
0.010
76
0.015
106
0.000
17
0.010
47
0.010
77
0.015
107
0.000
18
0.010
48
0.010
78
0.015
108
0.000
19
0.010
49
0.010
79
0.015
109
0.000
20
0.010
50
0.010
80
0.015
110
0.000
21
0.010
51
0.011
81
0.014
111
0.000
22
0.010
52
0.011
82
0.013
112
0.000
23
0.010
53
0.012
83
0.013
113
0.000
24
0.010
54
0.012
84
0.012
114
0.000
25
0.010
55
0.013
85
0.011
115
0.000
26
0.010
56
0.013
86
0.010
116
0.000
27
0.010
57
0.014
87
0.009
117
0.000
28
0.010
58
0.014
88
0.009
118
0.000
29
0.010
59
0.015
89
0.008
119
0.000
120
0.000
(Source: Added at 38 Ill.
Reg. 12862, effective January 1, 2015)
, derived from a combination
of the 2012 IAM Period Table and Projection Scale G2, using the methodology
stated in Section 935.45.
