Section 0780-01-52-.02 - SMOKER/NON-SMOKER MORTALITY TABLES(1) Purpose - The purpose of rule 0780-01-52-.02 is to permit the use of mortality tables that reflect differences in mortality between smokers and non-smokers in determining minimum reserve liabilities and minimum cash surrender values and amounts of paid-up non-forfeiture benefits for plans of insurance with separate premium rates for smokers and non-smokers.(2) Definitions. (a) As used in rule 0780-01-52-.02, "1980 CSO Table, with or without Ten-Year Select Mortality Factor" means that mortality table, consisting of separate rates of mortality for male and female lives, developed by the Society of Actuaries Committee to Recommend New Mortality Tables for Valuation of Standard Individual Ordinary Life Insurance, incorporated in the 1980 NAIC Amendments to the Model Standard Valuation Law and Standard Non-forfeiture Law for Life Insurance, and referred to in those models as the Commissioners 1980 Standard Mortality Table, with or without Ten-Year Select Mortality Factors. The same select factors will be used for both smokers and non-smokers tables.(b) As used in rule 0780-01-52-.02, "1980 CET Table" means that mortality table consisting of separate rates of mortality for male and female lives, developed by the Society of Actuaries Committee to Recommend New Mortality Tables for Valuation of Standard Individuals Ordinary Life Insurance, incorporated in the 1980 NAIC Amendments to the Model Standard Non-forfeiture Law for Life Insurance, and referred to in those models as the Commissioners 1980 Extended Term Insurance Table.(c) As used in rule 0780-01-52-.02, "1958 CSO Table" means that mortality table developed by the Society of Actuaries Special Committee on New Mortality Tables, incorporated in the NAIC Model Standard Non-forfeiture Law for Life Insurance, and referred to in that model as the Commissioners 1958 Standard Ordinary Mortality Table.(d) As used in rule 0780-01-52-.02, "1958 CET Table" means that mortality table developed by the Society of Actuaries Special Committee on New Mortality Tables, incorporated in the NAIC Model Standard Non-forfeiture Law for Life Insurance, and referred to in that model as the Commissioners 1958 Extended Term Insurance Table.(e) As used in rule 0780-01-52-.02, the phrase "smoker and non-smoker mortality tables" refers to the mortality tables with separate rates of mortality for smokers and non-smokers derived from the tables defined in (a) through (d) of this section.(f) As used in rule 0780-01-52-.02, the phrase "composite mortality tables" refers to the mortality tables defined in (a) through (d) of this section as they were originally published with rates of mortality that do not distinguish between smokers and non-smokers.(3) Alternate Tables. (a) For any policy of insurance delivered or issued for delivery in this state after the operative date of T.C.A. §56-7-401(h)(11), for that policy form and before January 1, 1989, at the option of the company and subject to the conditions stated in section 4 of rule 0780-01-52-.02,1. the 1958 CSO Smoker and Non-smoker Mortality Tables may be substituted for the 1980 CSO Table, with or without Ten-Year Select Mortality Factors, and2. the 1958 CET Smoker and Non-smoker Mortality Tables may be substituted for the 1980 CET Table, for use in determining minimum reserve liabilities and minimum cash surrender values and amounts of paid-up non-forfeiture benefits; Provided that for any category of insurance issued on female lives with minimum reserve liabilities and minimum cash surrender values and amounts of paid-up non-forfeiture benefits determined using the 1958 CSO or 1958 CET Smoker and Non-smoker Mortality Tables, such minimum values may be calculated according to an age not more than six years younger than the actual age of the insured; Provided further that the substitution of the 1958 CSO or 1958 CET Smoker and Non-smoker Mortality Tables is available only if made for each policy of insurance on a policy form delivered or issued for delivery on or after the operative date for that policy form and before a date not later than January 1, 1989.(b) For any policy of insurance delivered or issued for delivery in this state after the operative date of T.C.A. §56-7-401(h)(11), for that policy form, at the option of the company and subject to the conditions stated in section 4 of rule 0780-01-52-.02,1. the 1980 CSO Smoker and Non-smoker Mortality Tables, with or without Ten-Year Select Mortality Factors, may be substituted for the 1980 CSO Table, with or without Ten-Year Select Mortality Factors, and2. the 1980 CET Smoker and Non-smoker Mortality Tables may be substituted for the 1980 CET Table for use in determining minimum reserve liabilities and minimum cash surrender values and amounts of paid-up non-forfeiture benefits.(4) Conditions - For each plan of insurance with separate rates for smokers and non-smokers an insurer may:(a) use composite mortality tables to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up non-forfeiture benefits,(b) use smoker and non-smoker mortality tables to determine the valuation net premiums and additional minimum reserves, if any, required by T.C.A. §56-1-403(d)(5), and use composite mortality tables to determine the basic minimum reserves, minimum cash surrender values and amounts of paid-up non-forfeiture benefits, or(c) use smoker and non-smoker mortality to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up non-forfeiture benefits.Tenn. Comp. R. & Regs. 0780-01-52-.02
Original rule filed March 29, 1985; effective July 1, 1985. Amendment filed October 17, 2003; effective December 31, 2003.Authority: T.C.A. §§ 56-1-403, 56-2-301, and 56-7-401.