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Department of Insurance

Office of the Commissioner

Regulation Number 96―Prescribed Minimum Statutory Reserve Liability and Nonforfeiture Standard for Preneed Life Insurance (LAC 37:XIII.Chapter 131)

Under the authority of the Louisiana Insurance Code, R.S. 22:1 et seq., and in accordance with the provisions of the Administrative Procedure Act, R.S. 49:950 et seq., the Commissioner of the Louisiana Department of Insurance hereby promulgates its Regulation 96, establishing the 1980 Commissioners Standard Ordinary (CSO) Life Insurance Valuation Mortality Table as the required minimum statutory reserve valuation and nonforfeiture value standard for preneed life insurance policies.

Title 37

INSURANCE

Part XIII. Regulations

Chapter 131.Regulation Number 96―Prescribed Minimum Statutory Reserve Liability and Nonforfeiture Standard for Preneed Life Insurance

§13101.Authority

A.Regulation 96 is promulgated by the Commissioner of Insurance pursuant to authority granted under the Louisiana Insurance Code, Title 22, R.S. 22:1 et seq., particularly the Standard Valuation Law, R.S. 22:163.B.(1)(a) and the Standard Nonforfeiture Law for Life Insurance, R.S. 22:168.G.(8)(f).

AUTHORITY NOTE:Promulgated in accordance with R.S. 22:3, 22:163, 22:168 and the Administrative Procedure Act, R.S. 49:950 et seq.

HISTORICAL NOTE:Promulgated by the Department of Insurance, Office of the Commissioner, LR 34:2193 (October 2008).

§13103.Scope

A.Regulation 96 applies to preneed life insurance policies as defined in §13107 of this regulation. Any discrepancy as to whether a particular insurance contract meets the definition of preneed life insurance as it pertains to this regulation will be resolved by the Commissioner of Insurance.

AUTHORITY NOTE:Promulgated in accordance with R.S. 22:3, 22:163, 22:168 and the Administrative Procedure Act, R.S. 49:950 et seq.

HISTORICAL NOTE:Promulgated by the Department of Insurance, Office of the Commissioner, LR 34:2193 (October 2008).

§13105.Purpose

A.The purpose of Regulation 96 is to establish the 1980 Commissioners Standard Ordinary (CSO) Life Insurance Valuation Mortality Table, defined in §13107, as the required minimum statutory reserve valuation and nonforfeiture value standard for preneed life insurance policies.

AUTHORITY NOTE:Promulgated in accordance with R.S. 22:3, 22:163, 22:168 and the Administrative Procedure Act, R.S. 49:950 et seq.

HISTORICAL NOTE:Promulgated by the Department of Insurance, Office of the Commissioner, LR 34:2193 (October 2008).

§13107.Definitions

2001 CSO Mortality Tablethat mortality table, consisting of separate rates of mortality for male and female lives, developed by the American Academy of Actuaries CSO Task Force from the Valuation Basic Mortality Table developed by the Society of Actuaries Individual Life Insurance Valuation Mortality Task Force, and adopted by the NAIC in December 2002. The 2001 CSO Mortality Table is included in the Proceedings of the NAIC (2nd Quarter 2002). Unless the context indicates otherwise, the "2001 CSO Mortality Table" includes both the ultimate form of that table and the select and ultimate form of that table and includes both the smoker and nonsmoker mortality tables and the composite mortality tables. It also includes both the age-nearest-birthday and age-last-birthday bases of the mortality tables.

Home Service Contractsthose life insurance policies and certificates issued by a company that has a home service marketing distribution system as defined under Title 22, the Louisiana Insurance Code, R.S 22: 1141.C(2). These policies have generally lower life insurance policy face amounts with simplified issue and non-medically underwritten features. The proceeds of these policies are usually used to pay burial and other funeral expenses.

Preneed Life Insurancefor purposes of this regulation, is any life insurance policy or certificate that is issued in combination with, in support of, with an assignment to, or as a guarantee for a prearrangement agreement for goods and services to be provided at the time of, and immediately following, the death of the insured. Goods and services may include, but are not limited to, embalming, cremation, body preparation, viewing or visitation, coffin or urn, memorial stone, and transportation of the deceased. For the purpose of this regulation preneed life insurance shall include home service contracts and other similarly underwritten life insurance policies and certificates.

Ultimate 1980 CSOthe Commissioners' 1980 Standard Ordinary Life Valuation Mortality Tables (1980 CSO) without 10-year selection factors, incorporated into the 1980 amendments to the NAIC Standard Valuation Law approved in December 1983.

AUTHORITY NOTE:Promulgated in accordance with R.S. 22:3, 22:163, 22:168 and the Administrative Procedure Act, R.S. 49:950 et seq.

HISTORICAL NOTE:Promulgated by the Department of Insurance, Office of the Commissioner, LR 34:2193 (October 2008).

§13109.Minimum Valuation Mortality Standards

A.For preneed life insurance policies, as defined in §13107, the mortality standard to be used to determine the minimum statutory reserve liabilities and nonforfeiture values for both male and female insureds shall be the Ultimate 1980 CSO.

AUTHORITY NOTE:Promulgated in accordance with R.S. 22:3, 22:163, 22:168 and the Administrative Procedure Act, R.S. 49:950 et seq.

HISTORICAL NOTE:Promulgated by the Department of Insurance, Office of the Commissioner, LR 34:2193 (October 2008).

§13111.Minimum Valuation Interest Rate Standards

A.The minimum statutory valuation interest rate standard used in the valuation of preneed life insurance shall be the calendar year statutory valuation interest rates as defined in Title 22, the Louisiana Insurance Code, R.S.

Louisiana Register   Vol. 34, No. 10   October 20, 2008

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