department of insurance

FINAL

ORDER

1208 New Annuity Mortality Table for Use in Determining Reserve Liabilities for Annuities

Proposed Regulation 1208 relating to Annuity Mortality Tables was published in the Delaware Register of Regulations on May 1, 2010. The comment period remained open until June 7, 2010. There was no public hearing on proposed Regulation 1208. Public notice of the proposed Regulation 1208 in the Register of Regulations was in conformity with Delaware law.

Summary of the Evidence and Information Submitted

No comment was received on the proposed amendments.

Findings of Fact

Based on Delaware law and the record in this docket, I make the following findings of fact:

The requirements of the proposed amendments to Regulation 1208 best serve the interests of the public and of insurers and comply with Delaware law.

Decision and Effective Date

Based on the provisions of 18 Del.C. §§314, 1111 and 29 Del.C. §§10113-10118 and the record in this docket, I hereby adopt amended Regulation 1208 as may more fully and at large appear in the version attached hereto to be effective on July 11, 2010.

Text and Citation

The text of the proposed Regulation 1208 last appeared in the Register of Regulations Vol. 13, Issue 11, pages 1395-1397.

IT IS SO ORDERED this 8th day of June 2010.

Karen Weldin Stewart, CIR-ML

Insurance Commissioner

1208 New Annuity Mortality Table for Use in Determining Reserve Liabilities for Annuities

This rule is promulgated by the Commissioner of Insurance pursuant to 18 Del.C. §1113 and 29 Del.C. Ch. 101 (Administrative Procedures Act).

The purpose of this regulation is to recognize new the following mortality tables, 1983 Table "a" and 1983 GAM Table, the Annuity 2000 Mortality Table, and the Annuity 2000 Mortality Table and the 1994 Group Annuity Reserving (1994 GAR) Table for use in determining the minimum standard of valuation for annuity and pure endowment contracts.

3.1 As used in this regulation:

"1983 GAM Table" means that mortality table developed by the Society of Actuaries Committee on Annuities and adopted as recognized mortality table for annuities in December 1983 by the National Association of Insurance Commissioners.

"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.

"1994 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 in December 1996 by the National Association of Insurance Commissioners.

"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 National Association of Insurance Commissioners.

4.1 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 for valuation for any individual annuity or pure endowment contract issued on or after July 8, 1980 and prior to January 1, 2001.

4.2 The 1983 Table "A" is to be used for determining the minimum standard valuation for any individual annuity or pure endowment contract issued on or after January 1, 1987 and prior to January 1, 2001.

4.3 Except as provided in section 4.4, 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, 2001.

4.4 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, 2001, solely when the contract is based on life contingencies and is issued to fund periodic benefits arising from:

4.4.1 Settlements of various forms of claims pertaining to court settlements or out of court settlements from tort actions;

4.4.2 Settlements involving similar actions such as worker's compensation claims; or

4.4.3 Settlements of long term disability claims where a temporary or life annuity has been used in lieu of continuing disability payments.

5.1 The 1.983 GAM Table and the 1983 Table "a" are recognized and approved as group annuity mortality tables for valuation and, at the option of the company, either table may be used for purposes of valuation for any annuity or pure endowment purchased on or after July 8, 1980 and prior to January 1, 2001 under a group annuity or pure endowment contract.

5.2 The 1983 GAM Table is to be used for determining the minimum standard of valuation for any annuity or pure endowment purchased on or after January 1, 1987 and prior to January 1, 2001 under a group annuity or pure endowment contract.

5.3 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, 2001 under a group annuity or pure endowment contract.

In using the 1994 GAR Table, the mortality rate for a person age x in year (1994 + n) is calculated as follows:

qx 1994+n = qx 1994 (1 - AAx ) n

where the qx 1994 and AAxs are as specified in the 1994 GAR Table.

If any provision of this Regulation or the application thereof to any person or circumstances is for any reason held to be invalid, the remainder of the regulation and the application of such provision to other persons or circumstances shall not be affected thereby.

The effective date of this Regulation is December 31, 1985 July 11, 2010.

14 DE Reg. 48 (07/01/10) (Final)