NEW YORK STATE
INSURANCE DEPARTMENT

REGULATION NO. 179
(11 NYCRR 100)

RECOGNITION OF THE 2001 CSO MORTALITY TABLE FOR USE IN DETERMINING MINIMUM RESERVE LIABILITIES AND NONFORFEITURE BENEFITS

I, Gregory V. Serio, Superintendent of Insurance of the State of New York, pursuant to the authority granted by Sections 201, 301, 1304, 4217, 4218, 4221, 4224, 4240, and 4517, and Articles 24 and 26 of the Insurance Law of the State of New York, do hereby promulgate the following new Part 100 of Title 11 of the Official Compilation of Codes, Rules and Regulations of the State of New York (Regulation No. 179), to take effect upon publication in the State Register to read as follows:

(All Material is New)

Section
100.1 Purpose
100.2 Applicability
100.3 Definitions
100.4 2001 CSO Mortality Table
100.5 Conditions
100.6 Applicability of the 2001 CSO Mortality Table to Part 98 of this Title
100.7 Gender-Blended Tables
100.8 Severability

SECTION 100.1 Purpose

The purpose of this Part is to recognize, permit and prescribe the use of the 2001 Commissioners Standard Ordinary (CSO) Mortality Table for life insurance in accordance with sections 4217, 4221, and 4517 of the Insurance Law.

SECTION 100.2 Applicability

This Part shall apply to every life insurance company and fraternal benefit society doing business in this State and every life insurance company and fraternal benefit society holding a certificate from the superintendent as being accredited for the reinsurance of life insurance, annuities or accident and health insurance (all hereafter referred to as insurers). It shall be applicable to all individual life insurance policies and all group life insurance certificates subject to Part 98 of this Title, whether funded in the general account or in a separate account, no matter where issued or assumed, and no matter where shown in the annual statement. Any nonforfeiture provision contained in this Part shall apply to only individual life insurance policies delivered or issued for delivery in this state. This Part shall be applicable to such insurers for all statements filed after the effective date of this Part and subject to the transition dates in section 100.4.

SECTION 100.3 Definitions

(a) "2001 CSO Mortality Table" means that 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. These tables are included in Appendix 25 of this Part as Tables 1-24. 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.

(b) "2001 CSO Mortality Table (F)" means that mortality table consisting of the rates of mortality for female lives from the 2001 CSO Mortality Table.

(c) "2001 CSO Mortality Table (M)" means that mortality table consisting of the rates of mortality for male lives from the 2001 CSO Mortality Table.

(d) "Composite mortality tables" means mortality tables with rates of mortality that do not distinguish between smokers and nonsmokers.

(e) "Smoker and nonsmoker mortality tables" means mortality tables with separate rates of mortality for smokers and nonsmokers.

(f) "Minimum mortality standard" means the standards prescribed in section 4217(c)(2)(A) of the Insurance Law and in regulations, promulgated pursuant to such section.

(g) "Superintendent" means the Superintendent of Insurance of the State of New York and any employee of the Department of Insurance authorized to act on behalf of the superintendent.

SECTION 100.4 2001 CSO Mortality Table

(a) At the election of the insurer for any one or more specified plans of insurance and subject to the conditions stated in this Part, the 2001 CSO Mortality Table may be used as the minimum mortality standard for policies issued on or after January 1, 2004 and before the date specified in subdivision (b) of this section to which sections 4217(c)(2)(A)(iii) and 4221(k)(9)(B)(vi) of the Insurance Law and Parts 98.4(a) and 98.4(b) of this Title are applicable. If the insurer elects to use the 2001 CSO Mortality Table, it shall do so for both valuation and nonforfeiture purposes.

(b) Subject to the conditions stated in this Part, the 2001 CSO Mortality Table shall be used in determining minimum mortality standards for policies issued on and after January 1, 2009, to which sections 4217(c)(2)(A)(iii) and 4221(k)(9)(B)(vi) of the Insurance Law and Parts 98.4(a) and 98.4(b) of this Title are applicable.

(c) There is no new Commissioners Extended Term (CET) Table being proposed to replace the 1980 CET Table. Therefore, the new minimum mortality standard for the computation of values related to extended term benefits will be the 2001 CSO Mortality Table.

SECTION 100.5 Conditions

(a) For each plan of insurance with separate rates for smokers and nonsmokers an insurer may use:

(1) Composite mortality tables to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits;

(2) Smoker and nonsmoker mortality tables to determine the valuation net premiums and additional minimum reserves, if any, required by section 4218 of the Insurance Law and use composite mortality tables to determine the basic minimum reserves, minimum cash surrender values and amounts of paid-up nonforfeiture benefits; or

(3) Smoker and nonsmoker mortality to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits.

(b) For plans of insurance without separate rates for smokers and nonsmokers the composite mortality tables shall be used.

(c) For the purpose of determining minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits, the 2001 CSO Mortality Table may, at the option of the insurer for each plan of insurance, be used in its ultimate or select and ultimate form, subject to the restrictions of section 100.6 of this Part and Part 98 of this Title relative to use of the select and ultimate form.

(d) When the 2001 CSO Mortality Table is the minimum reserve mortality standard for any plan for a insurer, the actuarial opinion in the annual statement filed with the superintendent shall be based on an asset adequacy analysis as specified in Part 95 of this Title (Regulation 126).

SECTION 100.6 Applicability of the 2001 CSO Mortality Table to Part 98 of this Title

(a) The 2001 CSO Mortality Table may be used in applying Part 98 of this Title in the following manner, subject to the transition dates for use of the 2001 CSO Mortality Table in section 100.4 of this Part.:

(1) Part 98.4(a)(1)(i) of this Title: The valuation mortality table used in determining the tabular cost of insurance shall be the ultimate mortality rates in the 2001 CSO Mortality Table.

(2) Part 98.4(a)(3) of this Title: The 2001 CSO Mortality Table is the minimum mortality standard for basic reserves.

(3) Part 98.4(b)(5) of this Title: The 2001 CSO Mortality Table is the minimum mortality standard for deficiency reserves. If select mortality rates are used, they may be multiplied by X percent for durations in the first segment, subject to the conditions specified in Parts 98.4(b)(5)(i) - 98.4(b)(5)(ix) of this Title. In demonstrating compliance with those conditions, the demonstrations may not combine the results of tests that utilize the 1980 CSO Mortality Table with those tests that utilize the 2001 CSO Mortality Table, unless the combination is explicitly required by regulation or necessary to be in compliance with relevant Actuarial Standards of Practice.

(4) Part 98.4(f)(2)(i) of this Title: The calculations specified in Part 98.4(f)(2) of this Title shall use the ultimate mortality rates in the 2001 CSO Mortality Table.

(5) Part 98.4(j)(2) of this Title: The calculations specified in Part 98.4(j) of this Title shall use the ultimate mortality rates in the 2001 CSO Mortality Table.

(6) Part 98.5 of this Title: All calculations are made using the 2001 CSO Mortality rate, and, if elected, the optional minimum mortality standard for deficiency reserves stipulated in paragraph (4) of this subdivision. The value of "qx+k+t-1" is the valuation mortality rate for deficiency reserves in policy year k+t, but using the unmodified select mortality rates if modified select mortality rates are used in the computation of deficiency reserves.

(7) Part 98.6(a)(4) of this Title: The select and ultimate mortality rates in the 2001 CSO Mortality Table may only be used for the first segment. Ultimate mortality rates in the 2001 CSO Mortality Table must be used for the second and later segments.

(8) Part 98.6(b)(4) of this Title: The select and ultimate mortality rates in the 2001 CSO Mortality Table may only be used for the first segment. Ultimate mortality rates in the 2001 CSO Mortality Table must be used for the second and later segments.

(9) Part 98.6(e)(2) of this Title: The calculations specified in Part 98.6(e) of this Title shall use the ultimate mortality rates in the 2001 CSO Mortality Table.

(10) Part 98.7(b)(1)(vii)(b) of this Title: The net level reserve premium is based on the ultimate mortality rates in the 2001 CSO Mortality Table.

(11) Part 98.7(b)(2)(i) of this Title: The one-year valuation premium shall be calculated using the ultimate mortality rates in the 2001 CSO Mortality Table.

(b) Nothing in this section shall be construed to expand the applicability of Part 98 of this Title to include life insurance policies exempted under Parts 98.2(b), 98.2(c), and 98.7(b)(1)(vii) of this Title.

SECTION 100.7 Gender-Blended Tables

(a) For any ordinary life insurance policy delivered or issued for delivery in this state on and after January 1, 2004, that utilizes the same premium rates and charges for male and female lives or is issued in circumstances where applicable law does not permit distinctions on the basis of gender, a mortality table that is a blend of the 2001 CSO Mortality Table (M) and the 2001 CSO Mortality Table (F) may, at the option of the insurer for each plan of insurance, be substituted for the 2001 CSO Mortality Table for use in determining minimum cash surrender values and amounts of paid-up nonforfeiture benefits. No change in minimum valuation standards is implied by this subdivision.

(b) The insurer may choose from among the blended tables developed by the American Academy of Actuaries CSO Task Force and adopted by the NAIC in December 2002. Gender-blended tables are included in Appendix 25 as tables 25-84.

(c) It shall not, in and of itself, be a violation of Article 24, Article 26, or any other provision of the Insurance Law for an insurer to issue the same kind of policy of life insurance on both a sex-distinct and sex-neutral basis.

SECTION 100.8 Severability

If any provision of this Part or the application thereof to any person or circumstance is adjudged invalid by a court of competent jurisdiction, such judgment shall not affect or impair the validity of the other provisions of this Part or the application thereof to other persons and circumstances.

I, GREGORY V. SERIO, Superintendent of Insurance of the State of New York, do hereby certify that the following is the new Part 100 of Title 11 (Regulation 179), promulgated by me on, May 26, 2004, pursuant to the authority granted by Sections 201, 301, 1304, 4217, 4218, 4221, 4224, 4240, and 4517, and Articles 24 and 26, of the Insurance Law, to take effect upon publication in the State Register.

Pursuant to the provisions of the State Administrative Procedure, prior notice of the proposed rule making was published in the State Register on April 7, 2004. No other publication or prior notice is required by statute.

 

__________________________________________

Gregory V. Serio
Superintendent of Insurance

Dated: May 26, 2004

 

Appendix 25

The rates of mortality in Tables 1 – 84 of this Appendix are per 1,000 lives. Tables for both Age Nearest Birthday (ANB) and Age Last Birthday (ALB) have been provided for Composite, Nonsmoker, and Smoker based on Select and Ultimate (S&U) and Ultimate Only (Ult).

Table 1 – 24 are not gender-blended. Tables 25-84 are gender-blended versions where (X) is the percentage of males assumed.

Table 1 2001 CSO – Male – Composite – S&U – ANB
Table 2 2001 CSO – Female – Composite – S&U – ANB
Table 3 2001 CSO – Male – Nonsmoker – S&U – ANB
Table 4 2001 CSO – Female – Nonsmoker – S&U – ANB
Table 5 2001 CSO – Male – Smoker – S&U – ANB
Table 6 2001 CSO – Female – Smoker – S&U – ANB

Table 7 2001 CSO – Male – Composite – S&U – ALB
Table 8 2001 CSO – Female – Composite – S&U – ALB
Table 9 2001 CSO – Male – Nonsmoker – S&U – ALB
Table 10 2001 CSO – Female – Nonsmoker – S&U – ALB
Table 11 2001 CSO – Male – Smoker – S&U – ALB
Table 12 2001 CSO – Female – Smoker – S&U – ALB

Table 13 2001 CSO – Male – Composite – Ult – ANB
Table 14 2001 CSO – Female – Composite – Ult – ANB
Table 15 2001 CSO – Male – Nonsmoker – Ult – ANB
Table 16 2001 CSO – Female – Nonsmoker – Ult – ANB
Table 17 2001 CSO – Male – Smoker – Ult – ANB
Table 18 2001 CSO – Female – Smoker – Ult – ANB

Table 19 2001 CSO – Male – Composite – Ult – ALB
Table 20 2001 CSO – Female – Composite – Ult – ALB
Table 21 2001 CSO – Male – Nonsmoker – Ult – ALB
Table 22 2001 CSO – Female – Nonsmoker – Ult – ALB
Table 23 2001 CSO – Male – Smoker – Ult – ALB
Table 24 2001 CSO – Female – Smoker – Ult – ALB

Table 25 2001 CSO – (80) – Composite – S&U – ANB
Table 26 2001 CSO – (60) – Composite – S&U – ANB
Table 27 2001 CSO – (50) – Composite – S&U – ANB
Table 28 2001 CSO – (40) – Composite – S&U – ANB
Table 29 2001 CSO – (20) – Composite – S&U – ANB

Table 30 2001 CSO – (80) – Composite – S&U – ALB
Table 31 2001 CSO – (60) – Composite – S&U – ALB
Table 32 2001 CSO – (50) – Composite – S&U – ALB
Table 33 2001 CSO – (40) – Composite – S&U – ALB
Table 34 2001 CSO – (20) – Composite – S&U – ALB

Table 35 2001 CSO – (80) – Nonsmoker – S&U – ANB
Table 36 2001 CSO – (60) – Nonsmoker – S&U – ANB
Table 37 2001 CSO – (50) – Nonsmoker – S&U – ANB
Table 38 2001 CSO – (40) – Nonsmoker – S&U – ANB
Table 39 2001 CSO – (20) – Nonsmoker – S&U – ANB

Table 40 2001 CSO – (80) – Nonsmoker – S&U – ALB
Table 41 2001 CSO – (60) – Nonsmoker – S&U – ALB
Table 42 2001 CSO – (50) – Nonsmoker – S&U – ALB
Table 43 2001 CSO – (40) – Nonsmoker – S&U – ALB
Table 44 2001 CSO – (20) – Nonsmoker – S&U – ALB

Table 45 2001 CSO – (80) – Smoker – S&U – ANB
Table 46 2001 CSO – (60) – Smoker – S&U – ANB
Table 47 2001 CSO – (50) – Smoker – S&U – ANB
Table 48 2001 CSO – (40) – Smoker – S&U – ANB
Table 49 2001 CSO – (20) – Smoker – S&U – ANB

Table 50 2001 CSO – (80) – Smoker – S&U – ALB
Table 51 2001 CSO – (60) – Smoker – S&U – ALB
Table 52 2001 CSO – (50) – Smoker – S&U – ALB
Table 53 2001 CSO – (40) – Smoker – S&U – ALB
Table 54 2001 CSO – (20) – Smoker – S&U – ALB

Table 55 2001 CSO – (80) – Composite – Ult – ANB
Table 56 2001 CSO – (60) – Composite – Ult – ANB
Table 57 2001 CSO – (50) – Composite – Ult – ANB
Table 58 2001 CSO – (40) – Composite – Ult – ANB
Table 59 2001 CSO – (20) – Composite – Ult – ANB

Table 60 2001 CSO – (80) – Composite – Ult – ALB
Table 61 2001 CSO – (60) – Composite – Ult – ALB
Table 62 2001 CSO – (50) – Composite – Ult – ALB
Table 63 2001 CSO – (40) – Composite – Ult – ALB
Table 64 2001 CSO – (20) – Composite – Ult – ALB

Table 65 2001 CSO – (80) – Nonsmoker – Ult – ANB
Table 66 2001 CSO – (60) – Nonsmoker – Ult – ANB
Table 67 2001 CSO – (50) – Nonsmoker – Ult – ANB
Table 68 2001 CSO – (40) – Nonsmoker – Ult – ANB
Table 69 2001 CSO – (20) – Nonsmoker – Ult – ANB

Table 70 2001 CSO – (80) – Nonsmoker – Ult – ALB
Table 71 2001 CSO – (60) – Nonsmoker – Ult – ALB
Table 72 2001 CSO – (50) – Nonsmoker – Ult – ALB
Table 73 2001 CSO – (40) – Nonsmoker – Ult – ALB
Table 74 2001 CSO – (20) – Nonsmoker – Ult – ALB

Table 75 2001 CSO – (80) – Smoker – Ult – ANB
Table 76 2001 CSO – (60) – Smoker – Ult – ANB
Table 77 2001 CSO – (50) – Smoker – Ult – ANB
Table 78 2001 CSO – (40) – Smoker – Ult – ANB
Table 79 2001 CSO – (20) – Smoker – Ult – ANB

Table 80 2001 CSO – (80) – Smoker – Ult – ALB
Table 81 2001 CSO – (60) – Smoker – Ult – ALB
Table 82 2001 CSO – (50) – Smoker – Ult – ALB
Table 83 2001 CSO – (40) – Smoker – Ult – ALB
Table 84 2001 CSO – (20) – Smoker – Ult – ALB