3901-3-17 New annuity mortality tables for use in determining reserve liabilities for annuities.

(A) Purpose

The purpose of this rule is to recognize new annuity mortality tables for use in determining the minimum standard of valuation for annuity and pure endowment contracts.

(B) Authority

This rule is issued pursuant to section 3901.041 and section 3903.72 of the Revised Code.

(C) Definitions

(1) The "1983 table 'A'" means the 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 (NAIC). (see appendix A).

(2) The "1983 GAM table" means the mortality table developed by the society of actuaries committee on annuities and adopted as a recognized mortality table for annuities in December 1983 by the NAIC. (see appendix B).

(3) The "1994 GAR table" means the mortality table developed by the society of actuaries group annuity valuation task force and adopted as a recognized mortality table for annuities in December 1996 by the NAIC. (See appendix C for males and appendix D for females).

(4) The "Annuity 2000 Mortality Table" means the 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 NAIC. (See appendix E).

(D) Individual annuity or pure endowment contracts

(1) Except as provided in paragraph (D)(2) of this rule, the 1983 table "A" and the annuity 2000 mortality table are recognized and approved as individual annuity mortality tables for valuation, and, at the option of the company, may be used for purposes of determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after January 1, 1979.

(2) Except as provided in paragraph (D)(3) of this rule, 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.

(3) The 1983 table "A" without projection is to be used for determining the minimum standards of valuation for an individual annuity of 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:

(a) Settlements of various forms of claims pertaining to court settlements or out of court settlements from tort actions;

(b) Settlements involving similar actions such as worker's compensation claims; or

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

(E) Group annuity or pure endowment contracts

(1) The 1983 GAM table, 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, any one of these tables may be used for purposes of valuation for any annuity of pure endowment purchased on or after January 1, 1979 under a group annuity or pure endowment contract.

(2) 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.

(F) 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:

qx1994 + n= qx1994(1 - AAx)n

Where the Q x1994S and the AAxS are as specified in the 1994 GAR table.

(G) If any paragraph, term or provision of this rule is adjudged invalid for any reason, such judgment shall not affect, impair or invalidate any other paragraph, term or provision of this rule, and the remaining paragraphs, terms and provisions shall be and shall continue in full force and effect.

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R.C. 119.032 review dates: 09/02/2010 and 08/31/2015
Promulgated Under: 119.03
Statutory Authority: 3901.041, 3903.72
Rule Amplifies: 3903.72
Prior Effective Dates: 5/1/1998, 4/13/2006