(215 ILCS 5/353) (from Ch. 73, par. 965)
Sec. 353.
Non-cancellable accident and health insurance reserves.
(1) The legal minimum standard for computing the active life reserve,
including the unearned premium reserve, of non-cancellable accident and
health policies issued on and after January 1 of the year following that
during which this Code becomes effective shall be based on Class III
Disability Experience with interest at not to exceed three and one-half per
centum per annum on the full preliminary term basis; and the minimum
standard for computing the active life reserve of such policies issued
prior to January 1 of the year following that during which this Code
becomes effective shall be such as to place an adequate value, as
determined by sound insurance practices, on the liabilities thereunder.
(2) For policies with a waiting period of less than three (3) months, or
providing benefits at ages beyond the limits of Class III Disability
Experience, such tables shall be extended to cover the provisions of such
policies on such basis as may be approved by the Director.
(3) The reserve for losses under non-cancellable accident and health
policies issued on and after January 1 of the year following that during
which this Code becomes effective shall be based on Class III Disability
Experience, except that for claims of less than twenty-seven months
duration the reserve may be taken as equivalent to the prospective claim
payments for three and one-half times the elapsed period of disability,
provided, that in no case shall the reserve be less than the equivalent of
seven weeks' claim payments; and the minimum standard for computing the
reserve for losses under such policies issued prior to January 1 of the
year following that during which the Code becomes effective shall be such
as to place an adequate value, as determined by sound insurance practices,
on such losses.
(4) The Director shall modify the application of the tables and
requirements prescribed in this section to policies or to claims arising
under policies in accordance with the waiting period contained in such
policies and in accordance with any limitation as to the time for which
indemnity is payable. The company shall give the notice required in section
234 on all non-cancellable accident and health policies.
This section shall apply only to accident and health policies issued
prior to the operative date under section 353a as defined therein.
(Source: Laws 1965, p. 740.)
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