NOTICE OF PUBLIC HEARING
INSURANCE COMMISSIONER DONNA LEE H. WILLIAMS hereby gives notice that a PUBLIC HEARING will be held on Monday, May 24th at 9:30 a.m. in the 2nd Floor Conference Room of the Delaware Insurance Department at 841 Silver Lake Boulevard, Dover, DE 19904.
The purpose of the Hearing is to solicit comments from the insurance industry and the general public on the proposed revisions to existing Insurance Department Regulation 53, New Annuity Mortality Table for Use in Determining Reserve Liabilities for Annuities.
The hearing will be conducted in accordance with the Delaware Administrative Procedures Act, 29 Del.C. Chapter 101. Comments are being solicited from any interested party. Comments may be in writing or may be presented orally at the hearing. Written comments must be received by the Department of Insurance no later than Monday, May 17, 1999 and should be addressed to Fred A. Townsend, III, Deputy Insurance Commissioner, 841 Silver Lake Boulevard, Dover, DE 19904. Those wishing to testify or those intending to provide oral testimony must notify Fred A. Townsend, III at 302.739.4251, ext. 157 or 800.282.8611 no later than Monday, May 17, 1999.
Regulation No. 53, New Annuity Mortality Table for Use in Determining Reserve Liabilities for Annuities
Table of Contents
Section
1. Authority
2. Purpose
3. Definitions
4. Individual Annuity or Pure Endowment Contract
5. Group Annuity or Pure Endowment Contracts
6. Separability
7. Effective Date
SECTION 1. AUTHORITY
This rule is promulgated by the Commissioner of Insurance pursuant to 18 Delaware Code Section 1113 and 29 Delaware Code Chapter 101 (Administrative Procedures Act).
SECTION 2. PURPOSE
The purpose of this regulation is to recognize new the following mortality tables, for use in determining the minimum standard of valuation for annuity and pure endowment contracts: the1983 Table "a," and the 1983 Group Annuity (1983 GAM) Table, 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.
SECTION 3. DEFINITIONS
A. As used in this regulation, "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.
B. 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.
C. As used in this regulation, “1994 GAR Table” means that mortality table developed by the Society of Actuaries Group Annuity Valuation Table Task Force and shown at XLVII Transactions of the Society of Actuaries 866-867 (1995) and adopted as a recognized mortality table for annuities in December 1996 by the National Association of Insurance Commissioners.
D. As used in this regulation, “Annuity 2000 Mortality Table” means that mortality table developed by the Society of Actuaries Committee on the Life Insurance Research and shown at XLVII Transactions of the Society of Actuaries 240 (1995) and adopted as a recognized mortality table for annuities in December 1996 by the National Association of Insurance Commissioners.
SECTION 4. INDIVIDUAL ANNUITY OR PURE ENDOWMENT CONTRACTS
A. Except as provided in Subsections B and C of this section, Tthe 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.
B. 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.
C. Except as provided in subsection D. of this section, 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.
D. The 1983 Table “a” without projection is to be used for determining the minimum standards for valuation for any individual or pure endowment contract issued on or after January 1, 1999, 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 worker’s 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.
SECTION 5. GROUP ANNUITY OR PURE ENDOWMENT CONTRACTS
A. Except as provided in Subsections B and C of this section, The 1983 GAM Table, and the 1983 Table "a" and the 1994 GAR Table are recognized and approved as group annuity mortality tables for valuation and, at the option of the company, either any one of such tables may be used for purposes of valuation for any annuity or pure endowment purchased on or after July 8, 1980 under a group annuity or pure endowment contract.
B. Except as provided in Subsection C of this section, either tThe 1983 GAM Table or the 1994 GAR Table shall is to be used for determining the minimum standard of valuation for any annuity or pure endowment purchased on or after January 1, 1987 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 under a group annuity or pure endowment contract.
SECTION 6. 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:
qx 1994+n = qx 1994 (1-AAx)n
where the qx1994 and AAxs are as specified in the 1994 GAR Table.
SECTION 6 7. SEPARABILITY
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.
SECTION 7 8. EFFECTIVE DATE
The effective date of this Regulation is December 31, 1985. Subsequent revisions hereto are effective 45 days following the Commissioner’s signature.
David N. Levinson Donna Lee H. Williams
Insurance Commissioner