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, G2_x, 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:

 

            q_x^{1994 + n} = q_x¹⁹⁹⁴(1-AA_x)ⁿ

 

where the q_x¹⁹⁹⁴ and AA_x 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

 

 

 

(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

 

 

 

(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)