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Minnesota Legislature

Office of the Revisor of Statutes

61A.257 PREFERRED MORTALITY TABLES FOR USE IN DETERMINING MINIMUM
RESERVE LIABILITIES.
    Subdivision 1. Definitions. (a) For the purposes of this section only, the following terms
have the meanings given them.
(b) "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. The
2001 CSO Mortality Table is included in the Proceedings of the NAIC (2nd Quarter 2002) and
supplemented by the 2001 CSO Preferred Class Structure Mortality Table defined in paragraph
(c). 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. Mortality tables in the
2001 CSO Mortality Table include the following:
(1) "2001 CSO Mortality Table (F)" means that mortality table consisting of the rates of
mortality for female lives from the 2001 CSO Mortality Table;
(2) "2001 CSO Mortality Table (M)" means that mortality table consisting of the rates of
mortality for male lives from the 2001 CSO Mortality Table;
(3) "composite mortality tables" means mortality tables with rates of mortality that do not
distinguish between smokers and nonsmokers; and
(4) "smoker and nonsmoker mortality tables" means mortality tables with separate rates of
mortality for smokers and nonsmokers.
(c) "2001 CSO Preferred Class Structure Mortality Table" means mortality tables with
separate rates of mortality for Super Preferred Nonsmokers, Preferred Nonsmokers, Residual
Standard Nonsmokers, Preferred Smokers, and Residual Standard Smoker splits of the 2001
CSO Nonsmoker and Smoker Tables as adopted by the NAIC at the September 2006 national
meeting and published in the NAIC Proceedings (3rd Quarter 2006). Unless the context indicates
otherwise, the "2001 CSO Preferred Class Structure Mortality Table" includes both the ultimate
form of that table and the select and ultimate form of that table, the smoker and nonsmoker
mortality tables, both the male and female mortality tables and the gender composite mortality
tables, and both the age-nearest-birthday and age-last-birthday bases of the mortality table.
(d) "Statistical agent" means an entity with proven systems for protecting the confidentiality
of individual insured and insurer information; demonstrated resources for and history of ongoing
electronic communications and data transfer ensuring data integrity with insurers, which are
its members or subscribers; and a history of and means for aggregation of data and accurate
promulgation of the experience modifications in a timely manner.
    Subd. 2. 2001 CSO Preferred Class Structure Mortality Table. At the election of the
insurer, for each calendar year of issue, for any one or more specified plans of insurance and
subject to satisfying the conditions stated in this section, the 2001 CSO Preferred Class Structure
Mortality Table may be substituted in place of the 2001 CSO Smoker or Nonsmoker Mortality
Table as the minimum valuation standard under section 61A.25 for policies issued on or after
January 1, 2007. No such election must be made until the insurer demonstrates at least 20
percent of the business to be valued on this table is in one or more of the preferred classes. A
table from the 2001 CSO Preferred Class Structure Mortality Table used in place of a 2001
CSO Mortality Table, pursuant to the requirements of this section, will be treated as part of the
2001 CSO Mortality Table only for purposes of reserve valuation pursuant to section 61A.25
and Minnesota Rules, chapter 2748.
    Subd. 3. Conditions. (a) For each plan of insurance with separate rates for preferred
and standard nonsmoker lives, an insurer may use the Super Preferred Nonsmoker, Preferred
Nonsmoker, and Residual Standard Nonsmoker Tables to substitute for the Nonsmoker Mortality
Table found in the 2001 CSO Mortality Table to determine minimum reserves. At the time
of election and annually thereafter, except for business valued under the Residual Standard
Nonsmoker Table, the appointed actuary shall certify that:
(1) the present value of death benefits over the next ten years after the valuation date, using
the anticipated mortality experience without recognition of mortality improvement beyond the
valuation date for each class, is less than the present value of death benefits using the valuation
basic table corresponding to the valuation table being used for that class; and
(2) the present value of death benefits over the future life of the contracts, using anticipated
mortality experience without recognition of mortality improvement beyond the valuation date
for each class, is less than the present value of death benefits using the valuation basic table
corresponding to the valuation table being used for that class.
(b) For each plan of insurance with separate rates for preferred and standard smoker lives, an
insurer may use the Preferred Smoker and Residual Standard Smoker Tables to substitute for the
Smoker Mortality Table found in the 2001 CSO Mortality Table to determine minimum reserves.
At the time of election and annually thereafter, for business valued under the Preferred Smoker
Table, the appointed actuary shall certify that:
(1) the present value of death benefits over the next ten years after the valuation date, using
the anticipated mortality experience without recognition of mortality improvement beyond the
valuation date for each class, is less than the present value of death benefits using the Preferred
Smoker Valuation Basic Table corresponding to the valuation table being used for that class; and
(2) the present value of death benefits over the future life of the contracts, using anticipated
mortality experience without recognition of mortality improvement beyond the valuation date for
each class, is less than the present value of death benefits using the Preferred Smoker Valuation
Basic Table corresponding to the valuation table being used for that class.
(c) Unless exempted by the commissioner, every authorized insurer using the 2001 CSO
Preferred Class Structure Table shall annually file with the commissioner, the NAIC, or a
statistical agent designated by the NAIC and acceptable to the commissioner, statistical reports
showing mortality and such other information as the commissioner may deem necessary or
expedient for the administration of the provisions of this section. The form of the reports shall be
established by the commissioner or the commissioner may require the use of a form established
by the NAIC or by a statistical agent designated by the NAIC and acceptable to the commissioner.
History: 2007 c 104 s 5